Headlines

Pompeo: U.K. must look after its own ships

Elizabeth Warren’s recession scare seems long on fear, short on facts

Poll: Even most DEMs don’t want border crossings demilitarized ...

Pete Buttigieg: White supremacy threatens to end United States

Rashida Tlaib: ‘I’m not going nowhere, not until I impeach this president’

Lawmakers strike two-year US debt ceiling and budget deal

Venezuela blames ‘electromagnetic attack’ on blackout ...

Brexit leader Boris Johnson wins race for UK prime minister

DOJ tells Mueller to limit testimony to his report

The market has a technical problem, making it ‘vulnerable’ to a rapid sell-off, JP Morgan

Lights go out in NYC — again ...

Huawei hopes Google will influence White House

Headlines

Acosta stepping down as labor secretary

Treasury may run out of cash in early September, urges Congress to raise debt ceiling before recess

Levee danger New Orleans ... 25” of rain?

Trump signs executive order on collection of citizenship data

House Democrats unite to pass $733B defense bill

House passes 9/11 victims bill, sends it to Senate

Pentagon races to track U.S. rare earths output amid China trade dispute ...

Trump: Ocasio-Cortez should treat Pelosi with respect

Beijing  to impose sanctions on U.S. firms involved in $2.2B Taiwan arms deal

How Trump could use tariffs to fight back against France’s tax on US technology giants

Biden vows to restore world order ... Stumbles, slurs, coughs through speech ...

Watch: Crowd boos Clintons at Billy Joel concert

Headlines

All from Internet news sites. Guess which from Politico?

McConnell: No December debt ceiling vote

Supreme Court hands Trump another travel ban win

Harvey/Irma benefit concert: Left-wing sermon ...

... Report: Ryan says no chance for border wall at private dinner

Ted Cruz blames staffer for 'liking' porn tweet

Officers in Freddie Gray case won't face Federal charges

Apple $999 IPhone X launch ... Embarrassing demo fail ...

Alien families, minors cross [U.S.] borders in record numbers ...

Seattle mayor resigns after 5th sex abuse claim

Apple's IPhone X 'FaceID' facial recognition system sparks racism fears

Wall St jumps $2 trillion since Trump ...

Stevie Wonder: Global-warming non-believers 'must be blind'

Dirty Little Secret

The Obummer administration has once again circumvented the Constitution in dramatic fashion ... this time by end-running this cherished document's provision about Congress setting national debt limits. It has enlisted the help of the Federal Reserve Bank of New York to enable it to ignore statutory spending constraints. I have in the past wondered that the government seemed to keep operating when theoretically it should be shut down ... see: Verklempt. Now we find out how this fiscal trick was played in cahoots with the supposedly "independent" Federal Reserve Bank ... see: Daily Caller Article.

Basically, together with the New York Fed, Treasury Secretary Jack Lew worked out an accrual schedule of not paying government bills while continuing to "spend" far beyond the debit limit that had be set by Congress FOR NINE MONTHS.  So, the day that the debt ceiling was once again upped, our national debt jumped $339 billion ... IN ONE DAY! (See: USA Today Article.) This financial slight of hand proves two things:

1) The Obummer administration has been circumventing the Constitution by using the scheduling of payments of government obligations so as to allow actual total spending to far exceed what the statutory debt ceiling would otherwise allow.

2) Obammer's government "shutdowns" have been public relations stunts to embarrass the Republican Congress into giving it free rein over its sprawling spending. In other words, our founding fathers notion that the "power of the purse" gives Congress a balancing power has been neutered by this administration's financial accrual jiggering ... with the help of the Federal Reserve Bank.

Maybe Rand Paul's notion that the Federal Reserve Bank needs to have some of its power cut back makes a lot of sense. It also might be worthwhile for a law to be enacted restricting the administration's accrual spending.

Afterward: As smart as they were, I'm not sure that the framers of the Constitution knew the difference between cash and accrual accounting.

After afterward: In order to restore our federal balance of powers, we might even need an amendment to the Constitution that decrees that the entire federal government use the cash accounting method.

Blink

There are oodles of pundits who think they know how the current U.S. federal financial impasse will turn out.  Right now it does look as though this year’s government funding (aka the “continuing resolution”) and the raising of our government’s debt ceiling on October 17^th are going to be rolled together into one gigantic fiscal conundrum.  Both the Republicans and the Democrats are vying for media headlines in order to force their opponents to capitulate.  It’s kinda like that old children’s game of fake-slapping of another’s face ... trying to get the other to blink.

The Republicans’ feints involve the House of Representatives passing a series of funding resolutions and then pointing out how the Senate won’t even consider them … even if this means helping to cure a child with cancer or the opening of the World War II Memorial to returning veterans.  The Democrats’ ploys include bellicose statements on their refusal to negotiate, attempts to talk down the stock market, and the use of their allies in the media to smear Republicans with playground taunts.  Both sides also keep pointing to polling surveys, however skewed, that support their positions.

Who’s going to flinch first?  I’ll be damned if I know.  If I could extrapolate President Obama’s behavior when dealing with international adversaries, I would easily expect him to back down first.  But for some strange reason, he is much more resolute here at home than he is on the world stage.  Maybe if Speaker Boehner could get Iran’s new President, Hassan Rouhani, to make the Republicans' fiscal case for him?

Bending the Curve

The words keep echoing in my head from Obama’s rhetoric surrounding the passage of Obamacare … “With this law we are bending down the health-care cost curve.”  Now anyone with enough sense to tie their shoes knew then that this was a lie.  How could the country pick up the cost of health insurance for 16 million more people, insure children on their parents’ policies up to age 26, and force insurance companies to accept any new policyholder even with a preexisting condition … and have this all cost less?  Now guess what?  As this legislation is being phased in (conveniently after our last Presidential election), American health-care insurance premiums are skyrocketing ... in some states by as much as a 100% … see: Wall Street Journal Story,  ABC News Story, and Forbes Magazine Story  (Read as many of these as you can up until the time you start crying.)

There is a new term circulating on the right ... the “low information voter” which is a polite way of recasting what Stalin used to call a “useful idiot.”  Yes, the cold light of dawn will eventually reach those people who believed our “Bullsh..tter-in Chief” and they will then wonder what happened to them.  But it will be too late.  As they say … you can’t unscramble an egg.  So we will have to try to live with one more crushing social entitlement program … up until the time when we can’t.  And then the fiscal cliff and debt ceiling brouhahas will appear as though they were nothing more than tremors prior to the 9.5 fiscal earthquake that will swallow up this country … except, that is, for that little oasis somewhere near Chicago.

Wall Street Speaks

Dow Jones Industrial Average YTD

Recently we were told that, if the U.S. debt ceiling was not raised, the stock market would immediately crash by at least 1,000 points.  Now, the debt ceiling has indeed been raised and The Barry has inked the compromise bill ... and what has happened?  The Dow Jones Index has dropped almost 800 points over the last week ... almost 260 points of which happened today ... even after this supposed "catastrophe" has been averted.  Now, Wall Street typifies cynicism and contrary-ism, but why have buyers, in euphoric relief,  not rushed back into the stock market?  May I offer a few possible reasons for this Wall Street swoon:

- Despite the stated objectives of this deal, there is a strong likelihood that this current administration will not live up to the compromise's terms that are contain therein ... just like the Democrats did not live up to the early-on deal that they struck with Ronald Reagan wherein tax rates were cut but somehow the bigger spending cuts never occurred (see Reagan's Deal).

- This compromise did nothing to address the elephant in the room, entitlement reform.

- The debt ceiling, being raised by this deal, results in immediate (profligate) government spending whereas the "equivalent cuts" will take place over ten years.

- This next round of before-Thanksgiving budget cuts dictated by this deal will be designed by a "bipartisan committee."  If we thought that the political theater was farcical for these last sweltering weeks, just wait until this committee starts its deliberations ... quickly followed by dueling press leaks.

- This bill contains no serious path to achieve a balanced-budget amendment to our Constitution.

- This grand compromise enables The Barry to avoid another debt ceiling battle before next year's election.  This likely increases his chances of having another 4 years of waygu beef, White House festivities, and frequent family vacations.

So, those talking heads who had opined about the financial markets positive reaction to this deal (or the negative reaction to the "no-deal" alternative) were dead wrong ... perhaps because the words coming from their heads were stifled by about a yard of their bowels.