Monday, August 31, 2026
Sunday, August 30, 2026
Deportation advocate Milo Yiannopoulos deported to the UK for overstaying his visa granted in May 2019
His majesty's subject advocated for what amounts to a totalitarian police state where you have to produce your papers:
... "California needs ICE checkpoints at supermarket entrances, gas
stations, strip malls, intersections and government buildings, with on
the spot deportation for anyone who can't prove they are in the US
legally," he posted on social media in June 2025.
Saturday, August 29, 2026
Friday, August 28, 2026
Thursday, August 27, 2026
Real GDP today might have been $35 trillion instead of $24 trillion had it not been for Ronald Reagan
Real GDP today might have been $35 trillion instead of $24 trillion had it not been for Ronald Reagan.
From 1Q1947 to 1Q1984, real GDP grew at a compound annual rate of 3.585% from $2.18268 trillion to $8.03484 trillion.
Since 1Q1984 through 2Q2026, updated yesterday, the compound annual growth rate fell to 2.651% so that real GDP today is $24.26961 trillion when at the previous rate it might have achieved $35.58524 trillion.
The 26% cut to the growth rate resulted in underperformance of nearly 32%, represented by $11.3 trillion in missing real GDP after 42.25 years.
Did recipients of massive ordinary income tax rate cuts know best what to do with their own money?
The answer in China is Shì de.
The calculation is 35585.24 = 8034.84 * (1 + 0.03585) ^42.25
Wednesday, August 26, 2026
Yields at these levels are dang near dead on the money
Both are within a whisker of their respective long term averages of 4.64 and 5.16.
Same sucky 2Q2026 real GDP in the second estimate as in the first, same sucky real GDP trend since Reagan
Real gross domestic product (GDP) increased at an annual rate of 1.5 percent in the second quarter of 2026 (April, May, and June), according to the second estimate released today by the U.S. Bureau of Economic Analysis (BEA). In the first quarter, real GDP increased 2.1 percent. ... Real GDP increased at the same rate as in the advance estimate. ...
More.
Tuesday, August 25, 2026
Druckenmiller: WWII debt was paid for by suppressing yields, causing double-digit inflation which was paid for by the people, and it's still a bad idea
Druckenmiller understands our predicament very well, but even he won't call for raising taxes, which we must.
How much government spends is NOT the only variable.
That is the Big Lie of our time.
Commentary: Let the Bond Market Speak By Stanley F. Druckenmiller (Wall Street Journal) -- Aug. 24, 2026 05:27 PM
The Treasury Department announced on Aug. 19 that it would double the size of its long-dated bond buybacks, from $2 billion to at least $4 billion per operation, aimed at the 10- to 30-year sector and running from Sept. 9 through Nov. 4.
The announcement came after the 30-year yield touched a 19-year high.
Yields fell within minutes.
By the next afternoon they had round-tripped to levels above where they started.
The market's verdict was swift and correct: This wasn't liquidity management, it was price management-and a mistake far larger than $4 billion suggests.
Treasury's announcement gave the game away.
It justified the larger operations as liquidity support in sectors with "consistent strong sponsorship from market participants," but strong sponsorship is the definition of a healthy, working market.
There were no failed auctions, no dealer balance-sheet seizure, no forced unwinds, nothing resembling Treasurys in March 2020 or U.K. gilts in September 2022, the sort of genuine dysfunctional episodes that justify official action.
Volatility was contained, and trading was orderly-not a malfunction but the machine doing its job.
Consider what the machine was pricing.
Inflation is 3% to 4% and has been above the Fed's target since 2021.
Unemployment is 4.1%, full employment by any definition.
The deficit is running near 6% of gross domestic product, a number America has never before produced in peacetime at full employment.
The national debt crossed $40 trillion the same week Treasury intervened.
Net interest will exceed $1.1 trillion this fiscal year, more than the defense budget.
The 10-year yield, even after the summer selloff, sits at or below the economy's nominal growth rate.
That means a borrower (federal government) running 6% deficits at full employment, with above-target inflation, still funds itself at roughly the rate its economy grows.
Historically, that configuration is accommodative, not restrictive, of financial conditions.
The bond market wasn't being a vigilante, as some would argue.
It was being a pushover that had finally begun to clear its throat, and Treasury moved to quiet even that.
I have spent five decades trading on a simple premise: Markets aggregate information no committee possesses, and prices are how that information reaches decision makers.
The long-term Treasury yield is the most important price in the world.
It is also the only fiscal disciplinarian the U.S. has left.
Neither party will run on entitlement reform.
Both have spent the past decade expanding commitments while ignoring arithmetic.
Democracies don't repair their finances because a budget office publishes a table.
They repair them only when the cost of inaction becomes visible and immediate, when mortgage rates bite, when auctions tail, when the political price of a rising long bond finally exceeds the political price of touching spending.
Every basis point of artificial yield suppression is a subsidy to procrastination.
Suppressed long rates sugarcoat the interest-cost projections, shrink the apparent urgency, and let incumbents assure voters the debt is someone else's problem.
If Congress and the administration are unlikely to touch entitlements even with the market's signal, they are certain not to touch them without one.
Whatever this operation saves in basis points, it will cost multiples in delay.
Yield management always begins as a technical operation and ends as a policy commitment.
From 1942 to 1951, the Federal Reserve capped long Treasury yields to finance World War II.
The cap outlived the war, financed deficits with printed money, and fueled double-digit inflation.
It took the 1951 Treasury-Fed Accord to dismantle the cap, followed by years of financial repression that quietly taxed a generation of savers.
U.S. policymakers built the wall between debt management and price management for a reason.
This intervention starts dissolving it.
Within a day of the announcement, Treasury Secretary Scott Bessent indicated the operations could grow beyond $4 billion, and analysts observed that Treasury can double them again and again.
When the bond market didn't respond to this threat, senior Treasury officials told reporters that the department could use the Treasury General Account to intervene.
Once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests.
There is a quieter cost, too.
Buying back long bonds while funding the purchases with bills shifts duration, or long-term interest-rate risk, out of public hands-economically, a small dose of quantitative easing run out of the Treasury rather than the Fed, easing financial conditions while inflation sits above target.
These enlarged operations happen to run through the final stretch of a midterm campaign.
Debt management that even appears to follow the political calendar spends the one asset that took two centuries to accumulate: the credibility of the Treasury market.
That asset doesn't regain its value so easily.
During the debt-ceiling fight in 2011, I said a brief technical delay in payments would be terrible, but less terrible than another decade of can-kicking without reform.
In 2013, Geoffrey Canada and I toured college campuses calling the entitlement trajectory what it is: generational theft.
Transfers that accounted for roughly a quarter of federal outlays in 1960 consume 70% today.
I told students, "I love entitlements, but I want them for you guys," when they turn 65, not merely for my generation at their expense.
In 2023 I said Washington was spending like drunken sailors, with federal outlays up from 20% of GDP before Covid to 25% after, and I called Secretary Janet Yellen's failure to term out the debt at generational-low rates the biggest blunder in Treasury history.
Every household and corporation in America locked in low rates, and the one borrower that needed to most, didn't.
At prevailing rates, interest expense reaches 4.5% of GDP by 2033 and 144% of all discretionary spending by 2043.
We are tracking those markers early.
Anyone who tells you entitlements won't be cut is lying-not about the outcome but about who decides it.
Either we restructure the promises deliberately, on our terms, protecting those who most need them, or the bond market restructures them for us, all at once, on its terms.
The defense of the buybacks writes itself: It is a routine tool, introduced in 2024 for liquidity and cash management, trivial against a marketable debt stock approaching $30 trillion.
All true but beside the point.
Routine operations aren't announced off-cycle, at double size, on the heels of the long bond's hitting a two-decade high, with a signal that they can grow without limit.
Judge an intervention by what it responds to.
This one responded to a price, not to plumbing, which is exactly how the market read it, and why the effect evaporated within a day.
You can't buy your way out of a solvency conversation with liquidity tools.
You can only postpone the conversation and raise the eventual price.
What should happen instead is straightforward.
Return buybacks to their stated purpose: small, scheduled, off-the-run liquidity operations announced at quarterly refundings, never off-cycle responses to yield levels.
Term out the debt honestly and pay the price the market sets.
If the 30-year must trade at 5.5% to clear, that isn't a crisis.
It is an invoice.
Then do the only thing that durably lowers long-term yields: address the primary deficit.
Reform entitlements gradually and honestly, through means testing, indexing changes, eligibility adjustments phased in over decades-so that the burden is shared across generations instead of dumped on the youngest.
The reward is enormous: A credible fiscal package would do more for the long end of the curve than a buyback program 1,000 times this size.
Governments defending prices against fundamentals always lose.
The only variable is how much they spend before conceding.
The U.S. shouldn't put itself on the wrong side of that trade, not with the most important price in the world, and not when that price is trying to say the one thing Washington most needs to hear: Let the bond market speak.
https://www.wsj.com/opinion/let-the-bond-market-speak-81529d74?mod=hp_opin_pos_1
Adults make rare appearance to defend the message being sent to Trump and Congress by the bond market
Unfortunately taxes are already baked into the cake, and taxes need to rise.
But Republicans will insist otherwise, and rearrange the spending chairs on the Titanic.
So higher yields it will be until politics intervenes in November, or in 2028.
The fixes by the Treasury Department will be temporary and ineffective, pushing on a string.
Stanley Druckenmiller leads doubters who think Bessent’s bond ploys will fail
... “If the 30-year must trade at 5.5% to clear, that isn’t a crisis. It is an invoice,” he wrote in a Wall Street Journal op-ed piece. “Then do the only thing that durably lowers long-term yields: address the primary deficit.”
... Like some others, [Ryan] Swift doesn’t see anything terribly alarming about the recent rise in yields, saying the 30-year long bond is near “fundamental fair value” based on the Fed’s benchmark rate and expectations for the central bank, along with inflation, unemployment and market volatility.
The 30-year bond is only trading slightly above its 50-year average around 5.16%. The benchmark 10-year note as of Tuesday morning actually traded exactly in line with its 4.64% historical average going back to the early 1960s. ...
Middle East tanker transits August 18-24, 2026: Strait of Hormuz 2.3/day, Bab-el-Mandeb Strait 13.3/day
https://www.ukmto.org/-/media/ukmto/products/update-089-jmic-advisory-note-25-august.pdf?rev=2ead1ce051fa4c21be1cc8daf7925ef4
Grand Rapids' own Democrat Hillary Scholten (MI-3) will not be associated with Abdul El-Sayed because of Hasan Piker
Scholten has much higher standards than Haley Stevens.
They are also the correct standards.
Respect.
VGPMX vs. SPX since May 1984
Vanguard Global Capital Cycles Fund, now invests at least 25% in precious metals and mining securities but also in high quality but scarce utility and telecom infrastructure, average annual since inception 5/23/1984 through July 2026:
6.10% (10 years 9.10%, 5 years 20.54%, 3 years 27.34%, 1 year 56.05%!)
SPX average per annum nominal, dividends reinvested, same period:
12.01%
VGENX vs. SPX since May 1984
Vanguard Energy Opportunities Fund Investor Shares average annual since inception 05/23/1984 through July 2026:
10.01% (last 10 years 7.71%, 5 years 19.86%, 3 years 19.06%, 1 year 32.72%!)
S&P 500 average per annum nominal, dividends reinvested, same period:
12.01%
VGSIX vs. SPX since May 1996
Vanguard Real Estate Index Fund Investor Shares average annual since inception 5/13/1996 through July 2026 (single-family residential REITs are just 3.35% of the current holdings):
9.07% (last 10 years 4.61%, 5 years 2.28%, 3 years 9.15%, 1 year 15.04%)
S&P 500 average per annum nominal, dividends reinvested, same period:
10.30%
Monday, August 24, 2026
Sunday, August 23, 2026
Increases to the Federal Debt since 4Q2000, as horrible as they may seem, are part of a macroeconomic growth trend for federal debt which is lower since 1984
If the macroeconomic growth trend for federal debt as a percentage of GDP were higher, however, that would be different, but that too was arrested in the early 1980s.
Of course, that picture would look so, so much better if the real GDP growth trend since 1983 weren't so disappointing.
The Reagan Revolution delivered on reducing the federal debt growth trend, but not on increasing the economic growth trend.
The biggest failure of the Reagan Revolution was its misplaced faith in human nature.
We liked hearing that we knew best what to do with our own money. "Tax cuts will boost economic growth". It made us feel so good, so optimistic.
But owners of capital promptly pocketed the windfalls and ultimately invested them elsewhere.
Federal Debt:
4Q2000 $5.662T
4Q2008 $10.699T: +$5.037T (+88.9%) Bush 43
4Q2016 $19.976T: +$9.277T (+86.7%) Obama
4Q2020 $27.747T: +$7.771T (+38.9%) Trump I
4Q2024 $36.218T: +$8.471T (+30.5%) Biden
Now $40T: +$3.782T (+10.4%) Trump II to date
OK, I charted four months of Strait of Hormuz tanker transits as reported in UKMTO JMIC Updates even though some people have thought the data is . . . Wei Tu Lo
It is what it is.
You know the score. Gasoline isn't $5, but it isn't a buck seventy-five, either.
Meanwhile, the US Navy is spending vast sums everyday to maintain whatever it is we're supposed to be calling this black hole into which we are flushing billion$ down the drain.
Saturday, August 22, 2026
Middle East tanker transits August 13-19, 2026: Strait of Hormuz 1.9/day, Bab-el-Mandeb Strait 11.0/day
WTI is $86
Brent is $94
Gasoline averages $4.10
Diesel averages $5.59
U.S. Petroleum Balance Sheet, Total Stocks, year over year:
Jan 23 +107.7 million barrels
Aug 14 -127.8 million barrels
Friday, August 21, 2026
Well, it is Minnesota
Could Michele Tafoya be the key to the first statewide GOP victory in Minnesota since 2006?
 |
| Michele Tafoya? |
 |
| Or crazy lady with a knife? |
Thursday, August 20, 2026
Larry Kudlow is back touting a non-existent booming economy just like he did during Trump's first administration
This Is the Best 'Hard Goods' Boom in Decades
... Tuesday’s industrial production report showed back-to-back gains in June and July for both total production and manufacturing production. ...
Larry is rightly happy about the increase in the durable manufacturing index.
No doubt about it, it is up, but notice that it is still not as high as it was in Trump 2018 or Obama 2014.
More importantly, percent change in the index for 1H2026 was 1.94, lower than the 2.28 in 1H2018 when Trump was president the first time.
But this isn't an economic boom, and neither was that.
Those are welcome highpoints but in a long-term trend all down hill since the 1980s when Reagan was president, and no one asks why.
Kudlow & Co. never go back in the data as far as they should, even though they served in the Reagan Revolution and touted the results for the economy of the posthumous JFK tax cut in the Revenue Act of 1964, which cut the top marginal rate from 91% to 70%.
Today they use these data sets which go back only to the beginning of 1972, but even at that there is a giant durable goods growth spike of 9.02% in 2H1983 which we have been unable to reproduce since then, which should make them ask themselves, What went wrong?, but it doesn't.
Socrates said that the unexamined life isn't worth living.
So let's examine it.
Robust post-war growth is a truism which is true!
Industrial production generally, and for manufacturing specifically, grew robustly year over year, and the trend for those growth rates was itself strongly positive, as the chart for 1948 to 1984 shows.
But look at what happens after 1984.
You still get positive growth rates year over year, but not as robust as before, and the trend for those growth rates becomes strongly negative.
Something changed in the 1980s to cause this.
I say it's the Reagan Revolution in ordinary income tax rate reductions which caused this, not because tax cuts for rich people is bad, but because Reagan unintentionally sabotaged the tax rate arbitrage which before those tax cuts existed had pushed rich people for decades to make long term capital investments here at home in order to get low capital gains taxes in return.
In other words, Reagan destroyed the negative incentives which drove domestic investment. Take away the penalty of high ordinary income tax rates, and suddenly there's no reason to plow your money into the investments which drive business, jobs, and GDP, especially as enthusiasm for regulations of all kinds began to grow and hamstring profits.
The new tax cut windfalls freed up a lot of money to seek return wherever it could be found, and in the aftermath of the Reagan era that money increasingly went abroad. For people who lived through it, the one persistent theme of the business news was one business after another closing up shop in America and moving production overseas. After China entered the WTO, the steady departure of businesses from America became a flood.
And that's why that last chart, for 1984 to the present, looks like hell.
It has nothing to do with the U.S. Dollar being the world's reserve currency either. That is the dumbest thing I've heard in years, and I can't tell you how amusing that is coming out of the mouth of a Yalie. I guess they don't teach 'em at Yale that the dollar was the world's reserve currency 1948-1984.
I am not an economist. I do not know how to wave a magic wand of policy to make it all right again.
I am just a scholar in the humanities who wanted to know what turned my world upside down in 2007 and why I and millions like me have never recovered.
I have made a life for myself in spite of it all, as people do, but I tell you what, America was pretty great once, so don't tell me this is an economic boom.
I knew the economic boom. The economic boom was a friend of mine. And Larry, this isn't an economic boom.
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