It’s the Economy, Donald!

Yes, Kamala is horrid, but attacking her cackling, stupidity, and loose morals is a losing strategy. August 15, 2024 [WEBSITE]( | [UNSUBSCRIBE]( It’s the Economy, Donald! SEAN RING Dear Reader, I know how you feel, Donald. It must be an intellectual insult to be running against such an idiotic candidate. And what’s worse is that the Main Street media is protecting her. The liberal left refuses to acknowledge her idiocy because they want her in the White House. They’ve ignored that she is the least popular vice president in US history. She’s less popular than Spiro Agnew or Dan Quayle. It’s breathtaking. But the truth is, Donald, you’re blowing it. The reason you’re blowing this election is because you can’t believe that you actually have to deal with this imbecile before you get back behind the Resolute Desk. I completely understand. I watch her speeches and smack my head in shocked incredulity at the nonsense that comes out of her mouth. Donald, it's time to shift the focus of your campaign. Let's stop the personal attacks and start discussing policies. This will help in gaining voter trust and winning the election. But… for one last time, let’s lay out her offenses. The Case Against Her greatest accomplishment in her 20s was doing the horizontal mambo with then-San Francisco mayor Willie Brown. From [Capitalism.com]( In 1994, Harris started dating Willie Brown, a powerhouse in California politics. He was then the state assembly speaker and was 30 years older than Harris. Almost inevitably, Brown appointed Harris to two boards, the California Unemployment Insurance Appeals Board and the Medical Assistance Commission. These positions paid Harris about $80,000 per year in addition to her prosecutor's salary. It just looked terrible, though Harris defended her record at the time. As for the rest of her California career, let’s hear from Tulsi Gabbard: There's reason for concern about this record of Senator Harris. She put over 1,500 people in jail for marijuana violations and laughed about it when asked if she ever smoked marijuana. Harris blocked evidence that would have freed an innocent man from death row. She kept people in prison beyond their sentences to use them as cheap labor for California, and she fought to keep the cash bail system in place that impacts poor people in the worst kind of way. These words knocked Harris out of the 2020 Democratic primaries. It’s self-evident that she can’t think on her feet. She has nowhere near the skill you have during debates or interviews, and the mainstream media protect her. Donald, you and I judge each other and other people based on how quick we are. We like wit, sarcasm, the one-liners… She can do none of them. Harris has a nervous reflex called cackling, which happens whenever her brain is empty of thoughts… which is quite often. She recently asked for donations while wearing a $62,000 necklace. That’s an offense you would never commit. And yet, what did white, liberal women say? “If her husband wants to buy her that, what business it is of yours?” The message couldn’t be more confusing. I’m sure there’s more we could cover, but generally, she’s just unlikable. Ok, we got all that out of the way. Now, let’s talk about the two issues that will win you this election, courtesy of my Paradigm Press colleague Aaron Gentzler. [Could Elon Musk’s New Project be worth trillions of dollars?]( Elon Musk has predicted that his new venture “[X-9840” could be “a multi trillion dollar company…”]( As big as Microsoft… Apple…and Nvidia… Companies gave their early investors a chance to become millionaires over the long term, starting with just $1,000. [Click here to see the details]( because this has nothing to do with electric vehicles…Self-driving cars, rockets, brain chips, or satellites. [Click Here To Learn More]( The Economy You need to pound this issue into the heads of the American electorate. The people who will already vote for you and understand things like inflation are not the people you need to convince. You need to sell this to the upper-middle-class people who are trying to look intelligent in front of their friends by voting Democrat. Under Biden and Harris, American people have suffered – the correct verb – inflation in a way not since the days of Jimmy Carter. It’s simply unacceptable. Remember, if you have 10% inflation per year (which we don’t… yet), prices will double in only seven years. You need to hammer into their heads that you’re not going to open the fiscal spigot, that you’re going to be disciplined, and that you're going to fix the economy. The Border Donald, you should’ve built that goddamn wall. It was only going to cost $5.2 billion. It would’ve saved America a boatload of money. But even with your master negotiating skills, you couldn’t get it through Congress. How much better would the country be? You need to wear that. You need to apologize and say you’re going to get it done. Harris was the border czar, though they say she was a minister without a portfolio. She did nothing on the border… other than let 11 million people in, all of which will be registered Democratic voters. It’s a problem, and you need to solve it. You need to talk about the crimes committed when the border is open. You need also to say that you’re unopposed to legal migration. It’s OK to enter legally and not jump in the queue. This may piss off the far right of your party, but they’ll vote for you anyway. Wrap Up Donald, you need to trust me: you’re losing. I actually believe these polls. I believe them because nobody likes a bully, and you’re bullying her. She may deserve it. She’s awful, but telling the world that doesn’t win elections. Restraint, statesmanship, and eloquence: that’s what the American people need right now. Whatever we may think of her, attacking her will not win this election. The opposite is happening right now. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… From Poland With Concern SEAN RING Greetings from a gorgeous Wroclaw (pronounced VROTS-wahf, not ROW-claw), Poland, where I’ll teach a banking course for new operations hires for the next two weeks. American, British, and European banks established a presence here years ago when they realized they could get brilliant, English-speaking, technically proficient talent on the cheap… or at least more affordable than in London, Paris, or Frankfurt. It’s a fascinating place. Let me give you a bit of history for your edification since this isn’t the sort of stuff they teach you in the States. The 10th Century Start Wroclaw was initially established as a Slavic settlement in the 10th century. It became part of the Kingdom of Poland in 992. During the Middle Ages, Wroclaw developed as an important trade center due to its strategic location along the Oder River. Control over the city changed hands several times over the centuries. From 1335, it was part of the Kingdom of Bohemia (now part of Czechia) and later came under the control of the Habsburg Monarchy in 1526. In 1741, during the Silesian Wars, the Kingdom of Prussia annexed Wroclaw. Under Prussian rule, the city was renamed Breslau and became heavily Germanized. During the 19th and early 20th centuries, Breslau grew rapidly, becoming the third-largest city in the German Empire by the early 1900s. The city was a significant cultural and industrial center, with a large population of Germans, Poles, and Jews. Name Change and Post-War Era The most significant turning point in Wroclaw's modern history came at the end of World War II. In 1945, after the defeat of Nazi Germany, the city was transferred from Germany to Poland as part of the Potsdam Agreement, and its German population was largely expelled. The city was repopulated by Poles, many of whom were themselves displaced from areas in the east the Soviet Union had annexed. With this shift, the city’s name was changed back to Wroclaw. The Polish government embarked on a major effort to rebuild the city, which had been heavily damaged during the war. Over the decades, Wroclaw became a major Polish city, blending its diverse cultural heritage with Polish traditions. Modern Wroclaw Today, Wroclaw is known for its stunning Old Town, Gothic architecture, numerous bridges and islands—and the beer is fabulous! It’s a bustling academic and economic hub, home to several universities and a growing tech industry, which the banks raid for IT talent. Wroclaw is also renowned for its cultural scene, hosting numerous festivals and events, including the European Capital of Culture in 2016. It’s simply beautiful. Having not been here for over a decade, what will I discuss with these kids, finance-wise? [Urgent: Claim Your Copy Of This New Book From America’s #1 Retirement Expert!]( Forget everything you’ve ever been told about retirement. According to [this new book]( – written by America’s #1 retirement expert – you don’t have to wait until you’re 65+… and you don’t need millions of dollars. [The strategy you’ll find outlined inside this book]( is completely different… All you have to do is tap into the little-known income streams revealed inside this book… And you’ll learn exactly how you can generate almost effortless income every month… instantly, in some cases! [And today, for a limited only, you have the chance to claim a copy of this book for just $1. Click here now to claim your special book offer.]( [Click Here To Learn More]( High Rates Finally Bite Almost a year ago, [I published an edition of the Rude]( detailing how big companies avoided the pain of rate hikes by reversing their borrowing strategy. Let me refresh your memory. The USG Interest Expense It’s just ludicrous when you think about it. The US is supposed to be the wealthiest country in the world. But this generation of politicians has squandered it. “Deficits don’t matter,” said the appropriately named Dick Cheney. Credit: [Zero Hedge]( Welp, the national debt is nothing more than accumulated unpaid deficits. They sure look like they matter, Dick. But Corporate Interest Payments Fall Now, here’s where it gets cheeky. Albert Edwards, the famous permabear of Societe Generale, a French bank, noticed that corporate interest payments kept falling as the Fed was hiking rates. That’s not supposed to happen. Here’s the chart: Credit: [Zero Hedge]( Edwards explained the above chart thusly: We can see clearly from the Fed’s Z1 (table L103) that the US corporate sector is a massive net borrower. Normally when interest rates rise, so too do net debt payments, squeezing profit margins and slowing the economy. BUT NOT THIS TIME. Corporate net interest payments have instead collapsed (H/T my derivatives colleague, Jitesh Kumar). What on earth is going on? Edwards said he was “so surprised when I saw Jitesh’s chart (above), I assumed it was a mistake and emailed the SG macro-network for help. No, the chart is correct. The data comes from the BEA GDP press release (Table 11, line 9). Raw net interest payments in $bn are shown as the red line below." Credit: [Zero Hedge]( On the right-hand side of the chart, corporate net interest payments (red line) sharply declined when the Fed Funds rate went up (blue line). What new financial devilry is this? Companies Played the Yield Curve in Reverse A few things have happened recently that have delayed (even more than usual) the effect of Fed rate hikes. First, in the mortgage market, everyone with a house and a brain refinanced a few years ago when mortgage rates were under 3%. So, if you’ve got a 30-year fixed mortgage at 2.75%, you’re set for life and relatively immune to rate hikes. But what big companies did and are doing is positively sublime. Usually, big companies and banks (mainly) will borrow short and lend long. This makes sense with a normal yield curve. If the curve inverts, you’d expect the difference to be a loss, as the borrowing rate would be higher than the lending rate. But companies wised up to this and simply reversed their strategy. Since the curve was inverted, they’d borrow long and lend short. My goodness. That gives me morning wood in the early afternoon. Succinctly, big companies with access to the debt capital markets took Chairman Pow’s rate hikes and used them to their advantage. They’ve told Jay Powell, as Annette Benning told Warren Beatty in Bugsy, “Why don’t you run outside and jerk yourself a soda.” Ok, back to today. You may recall that it takes between 18 and 36 months for interest rate moves to filter through the system. Well, it looks like they’re finally arriving. [Economist James K. Galbraith writes]( The market meltdown and impending recession come over two full years after the Federal Reserve started hiking interest rates to “fight inflation.” They are the direct, but delayed, consequence of that policy. So, the Fed’s policy is finally having its intended effect – over two years after inflation peaked and began to fall, for reasons unrelated to the Fed’s policy. He continues: Unemployment is up almost a full percentage point over the past year, and job creation is way down. The number of newly unemployed, newly employed part-time for economic reasons, and those not in the labor force but wanting a job increased by over a million from June to July. Claudia Sahm’s indicator of recession – a half-point increase in unemployment on a three-month moving average basis – is blinking red. The Sahm rule has held since at least 1960. More Americans Own Stock Than Ever I’ll also let them know that, unlike in Europe, many Americans own stock. In fact, [41.6% of Americans own stock, an all-time high](. Europeans like to invest in houses and bonds. It’s an entirely different culture. Of course, with rates catching up to us, this will be a risky strategy going forward. Own Gold! Just take a look at this beauty: We’re going to $2,600 first, then to $3,000. We’re leaving the Age of Overfinancialization and returning to the Age of Stuff. Wrap Up I’ll be reporting from Poland until next Thursday. In the meantime, keep your eye on gold and the miners. I’m still hoping for a long sought-after rally. Have a great day! All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting Rude Awakening.](