Replies

Economy –

10-Year Note Yield hits 4.70% for the first time since October 2007, now up 430 basis points since the March 2020 low.
This comes with massive issuances of US Treasury bonds to cover deficit spending which are flooding bond markets and sending yields higher.

JPMorgan’s Lebovitz: “If rates continue to rise the way they’ve been rising, there will be a financial accident. Something will break and that will get the Fed moving in the other direction.”

OBSERVATION - These rates have spiked strongly upward over the past few days causing much concern in the markets. Some wonder if we see 8% mortgages this month? Others see that things are swinging grossly out of balance.

Gold / Silver prices also dropped sharply in response to the data.

****
The US national debt is growing faster than the economy, per CNBC. Although the debt-to-GDP ratio has receded slightly, the total federal debt still amounts to 120% of GDP, according to the Office of Management and Budget.

OBSERVATION - Some talking heads are poo-pooing these numbers but that doesn’t deny the fact that the US is getting behind on its debt or that the interest on the national debt is exceeding that spent on the military. Throw in an extended recessionary period and things only compound.

***
The UAW’s simultaneous yet limited strike against all Detroit’s Big Three automakers continues with no end in sight. Ford executives warned Friday in a media briefing that a prolonged work stoppage at its assembly plants would not only hurt the company, but could lead to as many as 500,000 workers at suppliers being laid off.

OBSERVATION - UAW perhaps sees that its all or nothing demands are not going to gain a lot of traction, nor will an industry destroying full fronted strike. The current tactic may be close to maintaining pressure for concessions without killing the goose that laid the golden eggs. The effects are now beginning to spill outward with the potential layoffs of workers for parts suppliers. That could trigger other layoffs and economic impacts to the communities they reside in.

CW2 / Domestic violence -

The police chief who led an August raid on a small weekly newspaper in central Kansas resigned Monday, just days after he was suspended from his post and following the release of body camera video of the raid showing an officer searching the desk of a reporter investigating the chief’s past.
Marion Police Chief Gideon Cody’s resignation was confirmed to The Associated Press both by Mayor Dave Mayfield and City Council member Ruth Herbel, following an announcement by Mayfield at Monday’s council meeting. Mayfield had suspended Cody on Thursday for reasons that have not been made public. In a text message Monday night to the AP, he said he couldn’t answer questions about the chief’s resignation “as it is a personnel matter.”
Cody stepped down weeks after a local prosecutor said that there wasn’t sufficient evidence to justify the search of the Marion County Record or searches at the same time of the publisher’s home and Herbel’s home.

OBSERVATION - This is a continuation of the search and seizure in a little 1,700 person town. That this would happen shows that police corruption can actually be deeper in small towns versus big cities. The ‘Boss Hogg” effect. Citizens must be vigilant to keep thugs like this out of power. Cody is facing one civil rights trial with others pending.

Military / Strategic Activity / Deployments –

Pentagon Comptroller Michael McCord told House and Senate leaders that the Department of Defense is running out of funds to replenish U.S. military stocks that have been sent to Ukraine, and only $1.6 billion of the appropriated $25 billion for Ukraine is left.

POLITICAL FRONT –

Donald Trump appeared for his trial in New York City on the civil fraud charges that were brought against him by Democratic Party activist Letitia James. The judge essentially threw out 80% of the case because the statute of limitations was exceeded. Much of the remaining lawsuit surrounds the absurd valuation of Trumps property in Florida.

***
The republican civil war in the house has gone hot with Gaetz making good on his threats and filed a motion to vacate the chair against Speaker Kevin McCarthy.

OBSERVATION - Pundits already suggesting that this move will fail and that democrats will pull his fat out of the fire only to use it as a tool to push for a congressional swing back to the democrats in 2024. Democrats know full well to let their opponents destroy themselves on their own and not get involved.

Cyber attacks/warfare –

Johnson Controls International (JCI) this week reported in a filing with the US Securities and Exchange Commission (SEC) that it had suffered a cyberattack that caused disruptions to its internal IT infrastructure.
Gameel Ali, a researcher at Nextron Systems, shared a tweet including a ransom note from cybergang Dark Angels in its VMware ESXi encryptor, stating: “HELLO dear Management of Johnson Controls International! If you are reading this message, it means that: your network infrastructure has been compromised, critical data was leaked, files are encrypted, backups are deleted.” The note went on to say, “The best and only thing you can do is to contact us to settle the matter before any losses occurs.”

The gang has allegedly stolen over 27TB of data and encrypted the company’s VMware ESXi machines in a ransomware attack.

Johnson Controls serves as a government contractor, providing building automation services to facilities, such as HVAC, fire, and security equipment. Due to the nature of those services, officials at DHS are raising concerns about compromised information such as DHS floor plans. According to media reports, officials detailed in an internal memo that Johnson Controls holds “classified/sensitive contracts for DHS that depict the physical security of many DHS facilities.”

OBSERVATION - Damage assessment ongoing.

Illegal Immigration –

Significant impacts across major, blue citys as they are running out of places to house these illegals and they are running out of time as winter approaches.

Russia -

WAR WATCH - into the second year of Russia’s invasion of Ukraine - Feb 24th, 2022

CURRENT ASSESSMENT - Updated Sept 27, 2023

Russia is on a defensive footing across most of Ukraine, relying on Russian doctrinal defense in depth to blunt the Ukrainian offensive. However, Russian forces continue increasingly stretched and undermanned, with increasingly insufficient artillery support.

Ukranian action has forced Russia to move forces laterally to meet the Ukraine advance - thinning critical portions of the line and making them vulnerable to assault.

Russia’s strategic ballistic and cruise missiles continue to show evidence of massively reduced inventories. Recent attacks indicate the Russia has started to produce its own Shahed drones with Iranian assistance. Russia capable of continued, though limited, attacks in this arena. The majority of Russian strikes are with these Iranian drones. Major targets are grain shipping facilities in the Odesa region as well as trying to hit logistical targets across the rest of the country.

Supplemental cruise missile attacks using old models will be occasionally used to supplement the drones.

The Russian Black Sea fleet is increasingly hesitant to deploy into now contested waters. Ukraine’s mixture of seaborne and airborne drones and anti-ship missiles beginning to render areas more or less off limits to Russia. The fleet is reportedly in the process of redeploying out of Crimea and moving east to Russian bases, about 600 Km further away from the front lines.

Russia is capable of launching small scale attacks in various sectors of company and small sized elements, but any large scale offensive action in the face of the heavy demands from defending against the Ukrainian offensive are essentially nil.

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NUCLEAR THREATS –
Russia may be planning to test a new nuclear powered missile in the Artic, according to the New York Times. The 9M730 Burevestnik (NATO designation SSC-X-9 Skyfall) is believed to be a nuclear-capable AND nuclear-powered missile that Russia has been unsuccessfully testing over the past years. All of the previous test failed, as the mini-nuclear engine failed to engage. It theoretically, could clear 23,000 km according to the Nuclear Threat Initiative.

RUMINT-
RUMINT. Russian forces have suffered extremely heavy losses during failed counterattacks at Adriivka, Klishchiivka and Bakhmut. Russian Milbloggers suggest Russian Western Dist. Commander, LTGEN Andrei Ivanovich Sychevoi, may have been relieved for cause.

Kerch Bridge update –
Satellite photos show Russia working to replace the final section of the bridge damaged in the latest attack. This raised the potential that the bridge may be fully reopened soon.

Ukraine –

WEATHER FORECAST – Temperatures varying between the 50s and 70s with chances of rain showers for the forecast period.

24 HOUR ROUND UP –
Ukrainian air defense shot down 29 of 31 Shahed drones and Iskander-K missile, attacks focused on Odesa and Kryvyi Rih areas.

Virtually little to no solid information on the progress of the war on the ground. That which is rising to the top indicates that Russian forces are conducting numerous counter attacks to push Ukrainian forces back in the Tokmok sector as well as around Bakhmut.

Evidence growing that Russia has replaced at least 2 of the S400 batteries in Crimea with new systems. These systems theoretically provide coverage of all Crimea, but are located on the west coast of the territory. Not sure if Russia has corrected the vulnerabilities of those locations from the last time.

OUTLOOK –
Pretty slow getting info on ground ops. It is evident that Russia is trying to force counter attacks to close off Ukrainian advances. Sources on the Russian side indicate that these attacks have been largely unsuccessful and costly in men and material. This raises the possibility that Ukraine is in a temporary defensive posture pending exhaustion of Russian forces before its next surge.

Both sides appear to be taking a breather on their deeper game - drone and missile strikes. Speculation on how Ukraine will use ATACMS once they get it and if it is only the cluster munitions version or singular warhead model or combination thereof.

Part of Ukraine’s slow down on its Crimea deep game is the reappearance of new S400 sites. They will have to be dealt with as in the past to insure successful penetration into Crimea.

Belarus -

Another stage of combat readiness inspection of the Belarusian Armed Forces has begun. This was reported by the Ministry of Defense of Belarus. The Security Council is responsible for the general management of the inspection.

OBSERVATION - The Belarus army has been undergoing routine training. Training of Russian forces has remained at low levels since most were pulled out to address the Ukraine offensive.

Europe / NATO General –

Another major IED bomb destroyed a house in Stockholm this morning. Swedes are on the edge as an unprecedentedly violent gang war is taking place, with the PM recently announcing that the Army will be called in to support the police. It’s the 132nd bombing this year.

Sweden has for much of the last decade been the leading bastion of liberal immigration policies in Europe, having welcomed hundreds of thousands of migrants and asylum-seekers from the Middle East and Africa.

OBSERVATION - The fruits of ‘diversity’. The same is coming to the US as we are reaching our saturation point for illegals.

***
AFP: Poland and Ukraine reached an agreement on the outstanding issues in transporting Ukrainian grain

OBSERVATION - The grain dispute that flared tensions between Ukraine and Poland (as well as several other EU/NATO countries) looks to be getting worked out.

***
Slovakia’s president asked the newly elected populist Robert Fico to form a government following the country’s parliamentary elections over the weekend.

OBSERVATION - This election moved Slovakia towards Hungary and more into Russia’s sphere of influence.

Iran –

According to a series of emails between Iranian diplomats and analysts, the Iranian government used the Iran Experts Initiative (IEI) and former Biden Iran Envoy Robert Malley to infiltrate influence agent Ariane Tabatabai into sensitive positions in the State and Defense Departments. This influence operation, intended to influence U.S. policy to be favorable to Iran, has infiltrated and influenced U.S. foreign policy and defense officials since at least 2014. Malley himself has been influential on U.S. foreign policy since the Clinton administration. (FO)

OBSERVATION - Willingly selling out to a declared enemy of the US. In today’s soros influenced democrat environment nothing is going to happen to him.

Misc of Note –

This Wednesday, a nationwide *TEST* will be sent across cell phones, wireless devices, radio, and TV.

ET: 2:20pm
CT: 1:20 pm
MT: 12:20 pm
PT: 11:20 am
AK: 10:20 am

Again, I am not expecting any surprises from this test.

Globalism / Great Reset –

International Monetary Fund (IMF) said in a presentation this week that carbon pricing – government charges for emitting carbon – can reduce global greenhouse gas emissions and generate government revenue to relieve debt burdens.

OBSERVATION - Carbon tax credits scam has already been shown to be a literal waste of money here in the US and has done the opposite of reducing debt burdens and cleaning up the air. This is just another method to remove fossil fuels off the chart by the WEF et al.

Economy –

Interest rates will likely need to be higher to eliminate inflation from the U.S. economy, says Federal Reserve Gov. Michelle Bowman.
Speaking at a business conference in Alberta, Canada, on Oct. 2, the central bank official argued that policymakers would need to pull the trigger on additional rate hikes to tackle price pressures, particularly as the recent spike in energy prices threatens the institution’s gains over the past year. “Inflation continues to be too high, and I expect it will likely be appropriate for the Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2 percent goal in a timely way,” Ms. Bowman said.

OBSERVATION - Recent economic news is strongly suggesting that the wheels of the economy are about to fall off. The fed’s myopic fix on inflation is missing the effects of the current high rates on other sectors of the economy.

***
The IBD/TIPP Economic Optimism Index plummeted to 36.3 in October 2023, compared to September’s 43.2 and well below market forecasts of 41.6. It was the 26th consecutive month in which the reading stayed in pessimistic territory, hitting its lowest point since August 2011, amid growing concerns about the effects of a prolonged period of elevated interest rates on the US economy. The six-month economic outlook index cratered 9.6 points to 28.7, a record low since the survey began in early 2001; and the personal finances subindex slid 6 points to 46.8, returning to pessimistic territory. Meanwhile, the IBD/TIPP Financial-Related Stress Index jumped 2.4 points to 70.5, the highest level since December 2008, when the country was mired in a recession. At the same time, the gauge of support for federal economic policies plunged 5.1 points to a still-dismal 33.5, a nine-year low.
source: Technometrica Market Intelligence/The Investor’s Business Daily

https://tradingeconomics.com/united-states/economic-optimism-index

OBSERVATION - these numbers also track with the timeframe that the fed bond rates have spiked. At the fed level, something seems to have cracked on the national economic world during the 4th Q FY 2023.

***
Office CMBS Delinquency Rate Spikes to Nightmare Levels.
The delinquency rate of commercial mortgages on office properties that had been securitized into CMBS spiked to 5.6% by loan balance in September, having more than tripled so far this year, from a delinquency rate of 1.6% in December

OBSERVATION - Lack of recovery from wuhan shutdowns combined with malaise in economic growth have created a parallel mortgage monster with private mortgages. Throw in the recent significant numbers of major retailers closing stores in crime ridden hell holes like San Fran and elsewhere are placing further pressure on the commercial market.

***
U.S. Money Supply is continuing to contract and is down 3.69% and falling. In the past 150 years, the US Money Supply has only contracted five (5) times; and they were Recessions and the Great Depression. It is happening again.
Two U.S. money supply metrics that investors tend to pay close attention to are M1 and M2. The former accounts for the cash and coins in circulation, as well as the demand deposits within an individual’s checking account. Meanwhile, M2 factors in everything in M1 and adds money market accounts, savings accounts, and certificates of deposit (CDs) below $100,000. The main difference is that M2 factors in cash that takes a little extra work to get your hands on.

Over the past 153 years, there have only been five instances where M2 has declined by at least 2% on a year-over-year basis: the 1870s, 1893, 1921, 1931-1933, and 2023. In order, these instances resulted in a depression, panic, depression, Great Depression, and now todays situation.. In the previous four instances, it was an ominous sign for Wall Street.

OBSERVATION - I’m no money guru, but multiple things are hitting at the same time. 10 yr Treasury spikes, the M2 situation and Economic Optimism Index all hitting major spikes/declines on nearly the same time frame and reaching near record levels in a very short period of time. As I said above, It seems like something snapped during the 4th Q and it is just beginning to surface in the economy in general. Most concerning is the correlation of the current M2 to past depressions/recession.

***
The average rate on the popular 30-year fixed mortgage rose to 7.72%, according to Mortgage News Daily. Mortgage rates follow loosely the yield on the 10-year Treasury, which has been climbing this week. Analysts are expecting it to penetrate the 8% threashold soon. Rates have not been this high since the end of 2000.

Military / Strategic Activity / Deployments –

The head of NATO’s Military Committee, Admiral Rob Bauer, sounded the alarm on Tuesday that NATO has depleted its stockpiles of weapons and ammunition. At the Warsaw Security Forum, Bauer urged Western defense industries to ramp up production at a much higher tempo and produce larger volumes of war materials.
On Monday, the Pentagon warned Congress in a letter that it was running out of money to replace weapons and ammunition sent to Ukraine.

OBSERVATION - Like in so many other sectors, a large component of the war in Ukraine is to not only deplete weapons and ammo used by Russia, but by NATO allies as well, weakening the military forces as a whole. This while China continues to grow its military by leaps and bounds.

***
According to Reuters, the US currently has just 17 days of supply left in the Strategic Petroleum Reserves (SPR). This is roughly half the historical average of ~33 days dating back to 1990.
Meanwhile, oil prices are still almost 30% above the target price the US set to refill them.

OBSERVATION - biden’s drawdown was a deliberate action designed to weaken the US’ ability to respond to a major global situation.

POLITICAL FRONT –

McCarthy was voted out of his speakership position with 8 republicans, led by Gaetz, joining all democrats. Now the scrum begins for his replacement, currently scheduled deliberations net Tuesday-Wednesday of next week.

IN RELATED - As one of his first acts as the acting speaker, Rep. Patrick McHenry ordered former Speaker Nancy Pelosi to vacate her Capitol hideaway office by Wednesday, according to an email sent to her office viewed by POLITICO.

“Please vacate the space tomorrow, the room will be re-keyed,” wrote a top aide on the Republican-controlled House Administration Committee. The room was being reassigned by the acting speaker “for speaker office use,” the email said.

***
NY Judge Engoron backtracked on claim that he effectively tossed out 80% of the claim against Trump.

***
Historian Victor Davis Hanson sat down with Tucker Carlson to discuss his perspective on the current political climate in the US, asserting that American liberalism is characterized by dishonesty, and warning about what he sees as liberal efforts to introduce a highly intolerant age.

Most specifically, Hanson told Carlson that:
“I think they’ve come to the conclusion that Trump is an existential threat and by association, half the country is to their vision of what they want to transform us into, and so they feel that whatever means necessary are justified.”

“The next 12 months will be the most explosive in history”

https://www.americanpartisan.org/2023/10/were-in-the-middle-of-a-revolution-victor-davis-hanson-warns-tucker-the-next-12-months-will-be-the-most-explosive-in-history/

OBSERVATION - I’m a fan of VDH - he is one of the clearest presenters of the dangers of modern progressivism there is out there. Key words here are “whatever means necessary are justified” I’ve said it a lot - democrats are more than willing to burn it all down as long as they rule over the ashes. This willingness to resort to violence - seen especially in their urban base voters - cheered on by rich, white liberals is especially worrisome as we enter the 2024 election year.

China –

The rumored loss of Chinese PLA Navy submarine ‘093-417’ , an event I posted on months ago, has resurfaced (no pun intended) in news. According to a UK intelligence report:

“Incident happened at 08.12 local resulting in the death of 55 crew members: 22 officers, 7 officer cadets, 9 petty officers, 17 sailors. Dead include the captain Colonel Xue Yong-Peng.

‘Our understanding is death caused by hypoxia due to a system fault on the submarine. The submarine hit a chain and anchor obstacle used by the Chinese Navy to trap US and allied submarines.”

OBSERVATION - The resurgence of this incident is attributed in part to unconfirmed reports that families of the sailors have been seeking to find out what has happened given that they have not returned now long after they were suppose to. Not surprising China is closed lipped as well. Still listed as RUMINT.

Russia -

WAR WATCH - into the second year of Russia’s invasion of Ukraine - Feb 24th, 2022

CURRENT ASSESSMENT - Updated Sept 27, 2023

Ukranian action has forced Russia to move forces laterally to meet the Ukraine advance - thinning critical portions of the line and making them vulnerable to assault.

Supplemental cruise missile attacks using old models will be occasionally used to supplement the drones.

********

Economic Impact –
Russia plans to spend 10.8tn rubles ($110bn) on defense next year, finance minister Anton Siluanov says. “That’s more than this year, but the money is essential to achieve our main goal: making sure we win,” he says

Ukraine –

WEATHER FORECAST – Temperatures varying between the 50s and 70s with chances of rain showers for the forecast period.

24 HOUR ROUND UP –
Continued limited verified reports on the action. Even missile/drone active is apparently at a low.

Tokmak Axis -.
Ukranian reports of widening the salient westward from Robotyne.

Bakhmut Axis -
Ukraine claiming advances in the towns of Klischiyivka and Andriyivka located south of Bakhmut. Ukraine forces have reportedly breached the Russian line set up along the N-S rail line. This opens up deeper cuts into supply routes into Bakhmut.

Russian Territory –
Ukraine reportedly hit a S-400 SAM in Belgorod region of Russia overnight

OUTLOOK –
I expect continued small gains by Ukraine along both the Tokmok and Bakhmut fronts. if the limited reports bear out, both could see a rapid breakout at any time. However, it seems the cycle is that of Russian counter attacks trying to recover gains made by Ukraine. With the current, local Ukrainian artillery advantage, these attacks are reportedly turning into disasters for Russia.

SERBIA / KOSOVO -

Romania has announced that it will be deploying additional military forces to Kosovo due to rising tensions in the region.

Serbian FM says Belgrade wants deescalation in Kosovo.

The US confirms that the Serbs are withdrawing their troops from the borders of Kosovo.

OBSERVATION - Reinforcements of KFOR appear to have served their purpose in deterring Serbia from escalating matters in Kosovo. For warplanners in Serbia, this also gives them data to gauge NATO responses and times.

Middle East / N. Africa General -

Protests erupted in Egypt after President Sissi announced his intention to run for a 3rd term in office. Sissi and the military took power after clamping down on the government of the Muslim Brotherhood, which was formed after the Arab Spring.

OBSERVATION - Will need to see if these protests gain any traction. Egypt has been pretty stable since Sissi took power.

Misc of Note –

Today, a nationwide *TEST* will be sent across cell phones, wireless devices, radio, and TV.

ET: 2:20pm
CT: 1:20 pm
MT: 12:20 pm
PT: 11:20 am
AK: 10:20 am

Again, I am not expecting any surprises from this test.