- Here we go again with the “Trump cut the national debt!” business
- How career bureaucrats are accelerating a Trump default…
- … at the very time the debt ceiling is about to return
- The self-driving car and Intel’s big buy
- India’s cash ban: They got away with it
- An unusual Wal-Mart protest… the TSA working for tips… Russia as the most “serious threat” since 1983… and more!
This is getting real old, real quick…
The preceding appeared Friday at one of the more infamous websites that belong to a portion of the mediasphere that one wag labeled “InfoTrump” — a funhouse mirror image of the blinkered mainstream in which the “outsider” president can do no wrong.
Now, it’s true that if you look at the U.S. Treasury’s “Debt to the Penny” website, the national debt has declined since Trump took office.
But as we said when this subject came up two weeks ago, the numbers fluctuate from day to day and week to week. Golly gee, the Treasury just happens to be taking in billions right now as people file their 1040s. And this year, in an effort to crack down on fraud, the feds are delaying refunds to people claiming the earned-income tax credit.
We’re confident the numbers will resume their usual trajectory soon enough.
But that’s not the whole story today. The rest of the story is far more interesting… and we daresay the president’s most loyal supporters ignore it at their own peril.
The rest of the story is this: The Deep State is monkeying with Uncle Sam’s books to push the government toward an imminent default and spark a crisis for Trump.
You won’t see that looking at the Debt to the Penny page. Our own David Stockman — who knows this stuff inside-out, having been Reagan’s first budget director — tells us you have to go to a more obscure portion of the Treasury’s website, the Daily Treasury Statement.
Under an entry that says “Federal Reserve Account — Closing balance today,” you find the Treasury’s cash balance. These are the liquid funds Uncle Sam has to work with on any given day.
For much of last year, the number had been rising. By Oct. 24, when it seemed Trump was toast, the total was $435 billion.
As of last Thursday, the most recent report available, the total had dwindled to only $34 billion.
If you’re wondering whether this drain on Uncle Sam’s funds has something to do with the pending expiration of the debt ceiling, the answer’s yes. It has everything to do with it.
Remember… President Obama cut a “zombie budget” deal with House Speaker Paul Ryan in October 2015, suspending the debt ceiling until after the election. The debt ceiling comes back into force on Wednesday.
Throughout 2016, the Obama Treasury Department was building up that closing balance on the Daily Treasury Statement. “The department’s bureaucrats,” David explains, “had been issuing debt hand over fist and piling up a cash hoard, apparently, for the time after March 15, 2017, when President Hillary Clinton would need to coax another debt ceiling increase out of the Congress.”
But since the election, the career civil servants have reversed the process. They’re tapping this cash hoard to pay down maturing Treasury debt.
“The bureaucrats,” says David, “have apparently decided to sabotage what they undoubtedly believe to be the usurper in the White House. To this end, they’ve been draining Trump’s bank account rather than borrowing the money to pay Uncle Sam’s monumental bills.”
What’s more, this drain on the Treasury’s cash hoard is one of the reasons stocks have been flying so high since the election.
Wall Street owns scads of Treasury debt. If the Treasury is paying that off as it matures, that’s a huge new pile of money Wall Street can put to work bidding up stocks.
“Uncle Sam pumped a veritable tsunami of cash into the canyons of Wall Street,” David says. “And it was that ‘stimulus’ which fueled the Trump-O-Mania rally — even as the talking heads peddled the Trump Stimulus meme and the second coming of Ronald Reagan.”
But that stimulus “begins to die on Wednesday,” David explains, “and the screaming aberration of the past four months — that is, a broke Uncle Sam paying down his debt — goes into reverse.”
As always, the Treasury can perform further accounting tricks to stay under the debt ceiling… but David says those tricks will have run their course not long after Memorial Day. After that, if you’ve been reading us for a while, you know David expects an ugly showdown between the White House and fiscal “hawks” in Congress.
And don’t forget… Not only does the debt ceiling come back into effect on Wednesday, the Federal Reserve also meets on Wednesday to raise interest rates.
Result: “Both the Fed and the U.S. Treasury,” says David, “will be draining hundreds of billions from Wall Street on a recurring basis for the first time in 20 years.”
If you suspect that will send the stock market into a tail spin, David says you’re right… but it’s even worse than that.
David wants to draw your attention to a curious chart formation that’s reaching a crucial turning point on Wednesday — at the same time the Fed’s raising rates and the debt ceiling returns.
It’s a perilous moment. But David says based on previous moments this chart formation has appeared… it’s possible to seize the moment and generate gains of 2,839% in a matter of months.
David presents the evidence when you follow this link. For obvious reasons, we urge you to check it out before Wednesday.
To the markets… where the buzz is all about Intel’s big acquisition.
Intel just snagged Mobileye — the Israeli-based pioneer of self-driving car technology — for $15 billion. Mobileye is one of Ray Blanco’s picks in Technology Profits Confidential.
“Intel needs growth,” explains Ray. “The company is adapting by moving aggressively into fast-growing tech areas. To accomplish this, Intel has been on a buying spree, buying up tech in fields such as artificial intelligence and autonomous driving.”
Mobileye is up 55% since Ray’s recommendation last April; he’s recommending readers sell today and pocket the gain.
Intel is selling off this morning — as often happens when a big company buys a smaller one. As far as Ray’s concerned, that only makes INTC a better buy; he likes how the company is reinventing itself after missing out on the smartphone boom. For more where that came from, look here.
Elsewhere, the markets are quiet. The Dow and S&P 500 are slightly in the red; the Nasdaq and Russell 2000 are slightly in the green.
Gold is holding the line on $1,200; the 10-year Treasury rate is back at recent highs of 2.6%.
India’s Prime Minister Narendra Modi got away with his brazen cash ban.
As we documented while it was happening, back on Election Day in the U.S., India banned its most commonly used bank notes, making up 85% of all currency in use. The new bank notes intended to replace them were available only in limited quantities… and even when they were available, they were a different size than the old ones and the ATMs had to be retrofitted. Long lines ensued in many places, and riots in a few.
Modi first said the objective was to crack down on tax evasion in India’s huge, cash-based economy. Later he said he also wanted to nudge Indians into a cashless society.
Over the last month, elections have been taking place in India’s most populous state, Uttar Pradesh. The results came in over the weekend — Modi’s party winning in a landslide.
So much for any backlash. Indeed, India’s government is moving on to the next phase, moving to ban all cash transactions greater than $4,500.
Reminder: As we showed in January, India’s cash ban scheme was hatched in conjunction with USAID — the U.S. Agency for International Development. Will you be ready when it happens here?
How much do some people hate Wal-Mart?
Enough that a common instance of Wal-Mart “photoshoppery” finds its way into a TV news story in Montana about a new Wal-Mart store. Look closely at the slogan beneath the logo…
Your editor, a recovering TV news pro, can’t resist retelling a similar story of bungled graphic blandishment: In 1996, Albert “Cubby” Broccoli, the producer of the early James Bond movies, died at age 87. On the NBC station in Chicago, an anchor read the story accompanied by an over-the-shoulder graphic depicting… a head of broccoli.
It being early days for the web back then, the video remains sequestered in the station’s archives and has not made it online…
“Perhaps the TSA could be a bit more creative and take a page from the dining-out business,” a reader quips after we noted the prospect of TSA budget cuts and fee increases.
“Cut all TSA agents’ wages by 20%,” the reader suggests, “and give them all tastefully printed plastic buckets emblazoned ‘I work for tips.’ (Not the more truthful ‘I work better for tips.’)”
“If you think that the ‘Russian business’ re Trump is nonsense,” a reader writes, “you’ve either got to be a rabid partisan or obtuse. I’d cancel my subscription, but I really like what you do with The 5. Nobody’s perfect, after all.
[Since we’re not only nonpartisan but anti-partisan around here, it must be the latter. But please, go on…]
“I believe that the already existing evidence indicates that Trump is up to his bunghole in nefarious Putin influence. Thoreau once wrote that a trout in the milk is powerful circumstantial evidence that the milk has been watered down. I gather that you don’t put much credence in the dossier put together by the ‘former’ British MI6 agent, which day by day, piece by piece, is being confirmed. Unfortunately, we’ll never see the Russian-made tape of Trump debauching himself with prostitutes (unless he crosses Vladimir, which ain’t likely).
“I’m a retired psychologist (as I said, nobody’s perfect), and I can tell you that Trump’s character profile is such that he would sell out the U.S. in order not to be revealed for the poor excuse for a human being that he is.
“By the way, I’m not a Democrat. If at some point I become persuaded that I’m wrong, I’ll let you know with an abject apology for believing in this ‘Russian nonsense.’ If you ever come over from the dark side, let me know.”
The 5: Here’s what the Russian nonsense has wrought: CNN is out with a poll that says more Americans view Russia as a “very serious threat” than at any time since 1983. Seriously?
Which got us to wondering what happened that marked the peak in 1983…
It was late that year that ABC aired its nuclear holocaust made-for-TV movie The Day After — which had a profound impact on, among others, President Ronald Reagan. A few weeks later in his 1984 State of the Union address, Reagan said the “only sane policy” for the United States and Soviet Union was to assure that “a nuclear war cannot be won and must never be fought.”
Two years later, the new Soviet leader Mikhail Gorbachev proposed eliminating all nuclear weapons by 2000. Reagan told his aides, “Why wait until the year 2000?”
But the Deep State of that day, represented by Defense Secretary Caspar Weinberger and CIA Director William Casey, would have none of it. The most they’d let Reagan get away with was eliminating a single class of nuclear weapons — the intermediate-range nuclear forces in Europe.
Here in the present era, the danger we face that is that Trump, to somehow prove to the Deep State that he’s not in Putin’s pocket, will do something reckless to provoke Putin — egged on by his two alarmingly hawkish appointments last week, ambassador to NATO Richard Grenell and ambassador to Russia Jon Huntsman.
Oh, the dossier? Far as we know, the only thing that’s been “proved” to date is that a few of the people named in it made phone calls to other people named in it — nothing that compromises Trump. But hope springs eternal, right?
The 5 Min. Forecast
P.S. One more time… If you have any money invested in the markets, please take one minute to watch this short video from former Wall Street insider David Stockman.
According to him, something BIG is happening on Wednesday.
And it could mean the difference between getting wiped out and walking away with a retirement fortune.
We just have a few days to prepare.