Stocks are up, yields are down lol

 

 Bessent floats extending tariff pause for countries in ‘good faith’ trade talks

I guess stocks didn't like the monthly Treasury statement indicating worsening fiscal conditions lol

 

Five months in, the Trump administration still doesn't have spending under control with the fiscal year to date deficit running 13.5% higher than last year to this point

Deficit FY 2024 through May: $1.202 trillion

Deficit FY 2025 through May: $1.364 trillion

Difference: $162 billion MORE in the hole than last year at this time

I don't care what Elon Musk's DOGE claims, the May numbers from the US Department of the Treasury do not lie.

A tax increase was never more needed. 

 

 

Treasury Secretary Scott Bessent tells Congress to shift or get off the lot

 

Treasury Dept. asks Congress to raise debt ceiling before August to avert default

 

... “However, after receiving receipts for the recent April tax filing season, there is a reasonable probability that the federal government’s cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess,” Bessent wrote. “Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States.” ...

No DOGE savings show up in March US Treasury Statement of Receipts and Outlays of the Federal Government, but higher deficits sure do, $242 billion higher year to date than last year

 

 The fiscal year to date deficit last year was $1.064691 trillion.

The fiscal year to date deficit this year is $1.307132 trillion, $242.441 billion higher. 

The monthly US Treasury statement may be found here.

Former S&P sovereign bond unit executive who participated in the Obama era 2011 credit downgrade basically calls Trump's America a banana republic, and DOGE not a proper government department

 WSJ: What about DOGE’s accessing the Treasury Department’s payment system?

Kraemer: We don’t have all the details of what they took and on what basis. It seems highly irregular. People from a department, which is not even a proper government department, that have gone and gotten access to data, that we have to assume is quite, I should say sensitive, which doesn’t belong in the hands of unelected individuals. 

WSJ: Have you ever seen anything like this before?

Kraemer: Yes, I think I have seen this. Regimes that don’t respect checks and balances. But they tend to be more in the emerging markets. This is exactly what sets rich and poor countries apart, right? It’s the qualities of institutions, the rule of law, the transparency of decision-making. 

So have I seen this? Yes. But have I seen it in an advanced economy, in an OECD member country? No, I have not.

The whole thing is here.

Obama appointed judge, Paul Engelmayer, issues sweeping order banning Musk and his allies from accessing the US Department of Treasury payments system

 Federal Judge Blocks Elon Musk’s DOGE From Treasury System: Order requires those who have accessed payment records without proper security clearance to destroy them

A federal judge in New York temporarily restricted the ability of Elon Musk’s Department of Government Efficiency to access the Treasury Department payment system, saying that doing so was necessary to prevent the potential disclosure of sensitive and confidential information. 

The early Saturday order by Judge Paul Engelmayer, an Obama appointee, precludes officials without proper background checks and security clearances from accessing the payment system through at least next Friday, including political appointees and special government appointees. It also orders any prohibited person who has had access to the records since President Trump’s inauguration to destroy them. The judge set a hearing for Friday.

Some 19 blue-state attorneys general filed the case Friday evening, saying that Musk’s DOGE initiative risks interference with the payment of funds appropriated by Congress. 

Engelmayer said the states were likely to win on arguments that the Trump administration exceeded its authority in allowing broader access to the payment system. He also said the states faced irreparable harm without court intervention for now, including “the heightened risk that the systems in question will be more vulnerable than before to hacking.” ...

Well thank God.

None of these people have security clearances. The say so of President Trump is not a security clearance.

Trump's new Treasury Secretary, Scott Bessent, has given Elon Musk control of the payment systems which control everyone's Social Security and Medicare benefits

 

 Billionaire Elon Musk’s deputies have gained access to a sensitive Treasury Department system responsible for trillions of dollars in U.S. government payments after the administration ousted a top career official at the department, according to three people who spoke on the condition of anonymity to describe government deliberations.  

On Friday, Treasury Secretary Scott Bessent approved access to the Treasury’s payments system for a team led by Tom Krause, a Silicon Valley executive working in concert with Musk’s “Department of Government Efficiency,” the people said. 

David A. Lebryk, who served in nonpolitical roles at Treasury for several decades and had been the acting secretary before Bessent’s confirmation, had refused to turn over access to Musk’s surrogates, people familiar with the situation told The Washington Post. Trump officials placed Lebryk on administrative leave, and then he announced his retirement Friday in an email to colleagues. 

Spokespeople for Treasury and DOGE declined to comment. 

The sensitive systems, run by the Bureau of the Fiscal Service, control the flow of more than $6 trillion annually. Tens of millions of people across the country rely on the systems. They are responsible for paying Social Security and Medicare benefits, salaries for federal personnel, payments to government contractors and grant recipients, and tax refunds, among tens of thousands of other functions.

More.

These guys are up against the debt ceiling and are obviously looking for other ways than the customary "extraordinary measures" to cut spending under the circumstances of a new administration trying to pass new tax and spending legislation. That's why Trump has offered buyouts to government workers so they quit, among other novel spending gambits like freezing program spending for 90-days.

The Treasury stopped paying into certain accounts from January 17th, before Trump and Musk took over, as part of the extraordinary measures undertaken by Treasury Secretary Janet Yellen to keep from hitting it.

She's been keeping the national debt at $36 trillion to $36.2 trillion ever since Thanksgiving.

It's all very troubling, as elected officials like to say.

Typically, only a small group of career employees control the payment systems, and former officials have said it is extremely unusual for anyone connected to political appointees to access them. 

The obscenity of US national debt at $34.5 trillion notwithstanding, the value of grand total foreign ownership of it is up almost $529 billion year over year in March 2024 to a record high of . . .

. . . $8.091 trillion.

An almost 7% increase.

Here.

Meanwhile:

Bridgewater Associates founder Ray Dalio told the Financial Times a few days ago that he is concerned the soaring U.S. debt levels will make Treasurys less attractive “particularly from international buyers worried about the US debt picture and possible sanctions.”

So far, that hasn’t been the case: Foreign holdings of U.S. federal debt stood at $8.1 trillion in March, up 7% from a year ago, according to Treasury Department data released Wednesday. Risk-free Treasurys are still seen as an attractive place to park cash, but that could change if the U.S. doesn’t rein in its finances.

On an average monthly basis, yields on all UST peaked for this cycle last October, save for 1Y which peaked last September.

What, me worry?

 

Lyin' Joe Biden's IRS is auditing the middle class, not the rich as promised

 Discussed here:

 "As of last summer, 63% of new audits targeted taxpayers with income of less than $200,000," reports the Journal. "Only a small overall share reached the very highest earners, while 80% of audits covered filers earning less than $1 million." ... 

Treasury Secretary Janet Yellen was a bit sassier. "Contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited," she wrote in a letter to Rettig. ...

The IRS had set a goal of hiring 3,700 new agents in the first year of boosted funding. Instead, in the first six months, they'd hired 34.

Awkwardly, "revenue agent staffing had actually decreased by 8%, or more than 650 employees, between the end of fiscal 2019 and March 2023," per a previous watchdog report. And it's not just hiring that's in trouble: The agency has completed just 33 percent of its fiscal year 2023 milestones outlined in its strategic operating plan, which is…tough given that the year is over.

Compromise spending bill passes US House 286-134 bringing fiscal year 2024 federal discretionary spending to $1.659 trillion through September

 WASHINGTON — The House voted 286-134 on Friday to pass a sweeping $1.2 trillion government funding bill, sending it to the Senate just hours before the deadline to prevent a shutdown. ...

The bill, released early Thursday, funds the departments of Homeland Security, State, Labor, Defense, Health and Human Services and various other agencies. Together with the $459 billion bill passed earlier this month, it fully funds the federal government to the tune of $1.659 trillion through September, after months of stopgap bills and negotiations.

More here.

The Roll Call Vote is here, if you want to check how your representative voted. 

The argument is perennially NOT about deficit spending, but deficit spending on WHAT. 

The projected tax shortfall for all programs for fiscal 2024 is $1.582 trillion, more than half of which will be net interest expense of $0.870 trillion on the exploding national debt. Interest payments on what we have already borrowed now exceed defense outlays of $0.822 trillion.

CBO in early February estimated fiscal 2024 discretionary spending at $1.739 trillion, so today's bill "saves" a mere $80 billion off that.

Mandatory spending on Social Security, Medicare, Medicaid, etc. is estimated at $3.908 trillion for fiscal 2024.

It's obvious that spending should be cut and taxes raised, but no one has the courage for either.

They should just agree to do both and let the chips fall where they may. Everyone out here will be pissed, vote accordingly, and it would be a wash politically.

Current national debt is $34.5612 trillion and rising.

Despite US Treasury department manipulation of the yield curve last week and another Fed pause, yields still average above five in the aggregate

 We saw a much bigger surge into bonds in March, but yields persisted.

With inflation, employment, and nominal GDP all still strong, Treasury tricks are unlikely to unravel this.

Cash such as VMFXX at 4.21% ytd and total stock market such as VTSAX at 13.92% ytd continue to trounce bonds ytd. VBTLX is still down 0.39% ytd. AGG is down 3.46% ytd.

 

US pandemic debt orgy described as fiscal slippage lol

It's so indicative of our degeneracy how economic profligacy must not be described that way in this day and age where anything and everything is great, awesome, and epic but that.

Oh well, at least they still pay a modicum of respect with huge, swelled, and deluge.

If only all that cash were a tsunami, inundating the shore with ruinous inflation.

 

 

 

CNBC, here:

. . . investors are also pricing in surprising economic resilience alongside fiscal slippage.

 The U.S. federal government ended its fiscal year in September with a fiscal deficit of almost $1.7 trillion, the Treasury Department announced on Friday, adding to a huge national debt totaling $33.6 trillion. The country’s debt has swelled by more than $10 trillion since the onset of the Covid-19 pandemic in the first quarter of 2020, prompting a deluge of fiscal stimulus to help prop up the economy.

US Treasury Department in fiscal 2021 said US fiscal policy is unsustainable because debt to GDP will reach 700% by 2096

 Caused by deficit spending.

In other words, required spending by legislated programs is not being matched by required tax increases to fund that spending. The gap produces the deficits naturally year after year.

Eventually it goes to the moon.

 

Here.

Taliban blunders story by NBC is complete rubbish designed to absolve the Taliban: What the Taliban did was intentional and precisely gives them the cover these naive reporters bought hook, line and sinker

In their push to retake Afghanistan, the Taliban made the security situation much more precarious by breaking prisoners out of prisons — including hardcore fighters housed at Bagram Air Base, Taliban officials acknowledged to NBC News.

Two Taliban leaders said in an interview that their biggest blunder was “releasing thousands of prisoners, among them hardcore Islamic State commanders, master trainers and bomb-makers. They were very trained people, and they are now organizing themselves.”

The Taliban itself was never designated by the U.S. government as a terrorist organization, but the Haqqani network, which has close ties to Al Qaeda and Pakistani intelligence, has long held that distinction.

More. 

The idea that the Taliban is not a terror organization is a lie, a fiction maintained by our lunatic US State Department and its friends in the press.

White House: Yes, The Taliban Is a Terrorist Organization   

GOP accuse Obama of "negotiating with terrorists," WH says Bergdahl was POW.

By JOHN PARKINSON and LEE FERRAN

June 4, 2014, 6:19 PM

But Tuesday White House National Security Council spokesperson Caitlin Hayden noted that the Taliban was added to the list of Specially Designated Global Terrorists (SDGT) by executive order in July 2002, even if it is not listed as a Foreign Terrorist Organization (FTO) by the State Department. Either designation triggers asset freezes, according to the State Department, though they can differ on other restrictions imposed on the target organization. The Treasury Department told ABC News the Taliban is still on their SDGT list.

Illegal Treasury Dept. financial spying on Americans began under Obama and Jack Lew

From the story here:

Sources said the spying had been going on under President Barack Obama . . .. In October of 2016, Rep. Sean Duffy, the chairman of the House Subcommittee on Oversight and Investigations, sent a letter to then-Treasury Secretary Jacob Lew asking for OIA’s legal authority to collect and retain domestic information.

Nearly one year later, the Congressman has yet to receive an answer, according to a committee staffer.

Maxine Waters is a discredited has been, got a federal TARP bailout for husband's bank

From the story in March, here:

During the height of the 2008 fiscal crisis, Waters helped arrange a meeting between the Treasury Department and top executives of a bank where her husband was a shareholder. Using her post on the House Financial Committee as leverage, she called Treasury Secretary Henry Paulson personally, asking him to meet with minority-owned banks.

When Treasury followed through, there was only one financial institution present: OneUnited. Had that bank gone under, the New York Times reported, Waters' husband would've lost as much as $350,000. Luckily for the Waters family, OneUnited received a cool $12 million in bailout funds.

After three years of special investigation, the ethics committee eventually ruled that Waters didn't technically break any rules. But that ruling came after unearthing her more than questionable family business practices, like making her grandson, Mikael Moore, her chief of staff.

AP finally runs story detailing Treasury's leadership of Trump-Russia investigation

Gee, how does the Treasury Dept. "collect a vast repository of records" in order to "piece money trails together and identify leads for criminal investigators", huh?

You don't suppose they ever wiretap anybody, do you?

Here:

U.S. Treasury Department agents have recently obtained information about offshore financial transactions involving President Donald Trump's former campaign chairman, Paul Manafort, as part of a federal anti-corruption probe into his work in Eastern Europe, The Associated Press has learned.

Information about Manafort's transactions was turned over earlier this year to U.S. agents working in the Treasury Department's Financial Crimes Enforcement Network by investigators in Cyprus at the U.S. agency's request, a person familiar with the case said, speaking on condition of anonymity because the person was not authorized to publicly discuss a criminal investigation. ...

Manafort, who was Trump's unpaid campaign chairman from March until August last year, has been a leading focus of the U.S. government's investigation into whether Trump associates coordinated with Moscow to meddle in the 2016 campaign. This week, the AP revealed his secret work for a Russian billionaire to advance the interests of Russian President Vladimir Putin a decade ago. ...

The Financial Crimes Enforcement Network, known as FinCEN, was established in 1990 and became a Treasury Department bureau soon after the Sept. 11, 2001, terror attacks. It collects a vast repository of records that financial institutions are required to report under the Bank Secrecy Act, such as suspicious activity reports and currency transaction reports, and assists law enforcement agencies in helping analyze complex data.

The agency is a part of an international network of so-called financial intelligence units that share information with each other in money laundering and terrorism financing investigations. Its work has been critical in helping officials piece money trails together and identify leads for criminal investigators.

If the surveillance of Trump was about "financial transactions" (NYT) and "money from the Kremlin" (McClatchy) maybe the Treasury Dept. spearheaded it

I still haven't read anyone saying this.

Instead of obsessing on the FBI, the CIA, the NSA and the DNI, and on the process, maybe journalists ought to be focusing their efforts on the last named agency instead, and the substance.

If it's about the money, the Treasury Dept. might very well have led the investigation for the government of Barack Obama, and the spying.

McClatchy, January 19th, 2017:

The FBI and five other law enforcement and intelligence agencies have collaborated for months in an investigation into Russian attempts to influence the November election, including whether money from the Kremlin covertly aided President-elect Donald Trump, two people familiar with the matter said.

The agencies involved in the inquiry are the FBI, the CIA, the National Security Agency, the Justice Department, the Treasury Department’s Financial Crimes Enforcement Network and representatives of the director of national intelligence, the sources said.

The New York Times, January 19th, 2017:

American law enforcement and intelligence agencies are examining intercepted communications and financial transactions as part of a broad investigation into possible links between Russian officials and associates of President-elect Donald J. Trump, including his former campaign chairman Paul Manafort, current and former senior American officials said. ...

The F.B.I. is leading the investigations, aided by the National Security Agency, the C.I.A. and the Treasury Department’s financial crimes unit.

Justin Raimondo is so close and yet so far:

So the FISA issue is, I believe, a false trail . . ..

Jack Lew has been awfully quiet.

Assuming Clapper's denial that there was a FISA investigation is true, maybe everyone ought to consider they've been had

James Clapper, who lied to Congress about surveillance in the past and was never prosecuted but should be, has stated over the weekend that there was no FISA investigation at all, contrary to the New York Times and everybody else, as reported here:

For the part of the national security apparatus that he oversaw, "there was no such wiretap activity mounted against the president, the president-elect at the time, or as a candidate, or against his campaign," Clapper told Chuck Todd in an exclusive interview on Sunday's "Meet The Press."

So . . ..

Either Clapper is lying again, or there's an alternative explanation.

The New York Times etc. have been reporting a narrative based on anonymous sources, a narrative which derives from the Obama Administration and which it wanted everyone to believe.

I say it's an "Oh look! A deer!" narrative. It was designed to get the bloodhounds off the trail and follow to an inconclusive nowhere.

The real story instead might be that Obama was using the Treasury Dept. to investigate Manafort, giving the FBI, CIA and the NSA the plausible deniability they have asserted. So far Comey and Clapper have denied any spying on Trump.

Well, the Treasury Dept. was involved according to news reports, but so far no one's asked Jack Lew to comment as far as I know.

It was Manafort's financial connections in Ukraine which the Times reported in the summer which caused Manafort to have to bail from the Trump campaign, and Bannon and Conway to be tapped by Trump in August 2016.

The spying on Trump by the Treasury Dept. might have then continued, quite lawfully, endeavoring to uncover evidence of Trump financial wrongdoing in connection with Russia, or some one else, in order to finish him off, but it failed.

Jack Lew served Obama at Treasury to the bitter end.

[T]he Inspector General of the Department of the Treasury shall be under the authority, direction, and control of the Secretary of the Treasury with respect to audits or investigations, or the issuance of subpenas, which require access to sensitive information concerning— ...
(E) intelligence or counterintelligence matters; or
(F) other matters the disclosure of which would constitute a serious threat to national security or to the protection of any person or property authorized protection by section 3056 of title 18, United States Code, section 3056A of title 18, United States Code, or any provision of the Presidential Protection Assistance Act of 1976 (18 U.S.C. 3056 note ; Public Law 94–524).