Individual Economists

YoY Measures of Inflation: Services, Goods and Shelter

Calculated Risk -

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned two years ago when services less rent of shelter was up around 8% year-over-year.  This declined and is now up 3.8% YoY.

Services ex-ShelterClick on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through June 2025.
Services were up 3.8% YoY as of June 2025, up from 3.7% YoY in May.

Services less rent of shelter was up 3.8% YoY in June, up from 3.5% YoY in April.
Goods CPIThe second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.

Durables were up 0.6% YoY as of June 2025, up from unchanged YoY in May.

Commodities less food and energy commodities were at 0.6% YoY in June, up from 0.3% YoY in May.
ShelterHere is a graph of the year-over-year change in shelter from the CPI report (through June) and housing from the PCE report (through May)

Shelter was up 3.8% year-over-year in June, down from 3.9% in May. Housing (PCE) was up 4.1% YoY in June, down from 4.2% in May.
This is still catching up with private new lease data (this includes renewals whereas private data is mostly for new leases).
Core CPI ex-shelter was up 2.1% YoY in June, up from 1.9% in May.

Transcript: Richard Bernstein, CEO / CIO of RBA

The Big Picture -

 

 

The transcript from this week’s, MiB: Richard Bernstein, CEO / CIO of RBA, is below.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, SpotifyYouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

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This is Masters in Business with Barry Ritholtz on Bloomberg Radio

Barry Ritholtz: This week on the podcast. What can I say? Rich Bernstein Rockstar, former Chief strategist at Merrill Lynch. Just an incredibly storied career who has managed to put together such a straightforward and intelligent way to approach asset management. Rather than me babble. I’m just gonna say this is a fascinating conversation. With no further ado, my discussion with Rich Bernstein Advisors. Rich Bernstein.

Richard Bernstein: Thanks, Barry. Great to be here. Thanks for the invitation.

Barry Ritholtz: I’m, I’m thrilled to have you. I thought you would be the perfect person to talk about what’s been going on these days. But before we get to that, let’s start with Bachelor’s in economics from Hamilton, MBA from NYU. What was the career plan?

Richard Bernstein: So, the career plan was, was kind of foiled, I would say, six months after graduation. So, oddly enough, when I graduated Hamilton, I wanted to be a labor economist. And people say, like, today they go labor economist. Like, what’s that all about?

Barry Ritholtz: That was a big thing at one point, right?

Richard Bernstein: It was a big deal. And so it was, you gotta remember, labor unions were very powerful in the late seventies, early eighties. There was rampant inflation. And every company had a labor relations department. Huh? It was, it was a growth industry. And so I decided I wanted to be a labor economist and got myself a job with a prestigious economic consulting firm in their labor economics department doing all kinds of government related work, private sector, but government related work. And we were consultants, which is very critical because consultants billed by the hour and literally the day after. So election day is Tuesday in 1980, November, 1980, Wednesday, 50% of our business basically went away because

Richard Bernstein: Ronald Reagan took over elected president.

Richard Bernstein: Everybody called up and said, stop billing. We wanna see what’s gonna happen under the Reagan administration. Wow. Now, I wasn’t the smartest guy in the room, but it was pretty clear to me that this was no longer a growth industry. I had taught myself Fortran, dating myself here quite a bit. I taught myself Fortran and was a pretty good computer programmer. And a friend of mine who had gotten fired from this economic consulting firm, got a job at Chase Econometrics, IDC, and said, you have to come over here. You’re a great programmer. You’re gonna love this stuff. They had the largest set of economic and financial databases in the world at the time. Goes, you have to come here. I said, I don’t, what do I wanna go to Wall Street for? I mean, like, I have no interest in Wall Street. Why would I go to Wall Street?

And he said, well, let’s be honest here. The salary is twice what you’re making. Wow. I said, I said, well, I’ll go for the interview. You know, I’ll see what happens. Well, I went for the interview. I got the job. My biggest client turned out to be the Merrill Lynch Investment Strategy Group. Huh. And that’s how I got involved in Wall Street. And I found through time that I really liked it. Went back and got my MBA, and after a while, without sounding stupid about this, realized I was a, I knew more about this stuff than many of my clients did. And so I just worked my way through Wall Street and, and eventually, you know, but if you had said to me when I graduated at Hamilton that I was gonna end up being the Chief Investment strategist at Merrill Lynch, I would’ve said, you’re crazy.

Barry Ritholtz: You would’ve laughed. It’s crazy. So, so I, I have to ask about Fort Tran. You, you’re undergraduate, your focus is economics, you get an MBA in finance. Where did the computer programming skills come from?

Richard Bernstein: So, I am the poster child for the liberal arts education. So I almost double majored in philosophy. I didn’t, I was too lazy to be perfectly frank, and didn’t want to take one of the intro courses. But I took like, I don’t know, 5, 6, 7 philosophy courses, something like that. And for all the philosophy majors out there, I’m sure they know that a good part of philosophy is symbolic logic and symbolic logic. What is computer programming? What is computer languages? It’s just symbolic logic. So when I got introduced to fortran the first day I realized I could actually read a lot of the code because it was just symbolic logic.

Barry Ritholtz: It’s so funny you say that philosophy of symbolic logic, study of law is a lot of symbolic logic. Absolutely. Obviously math, there’s a ton of symbolic logic wherever you look, that classic syllogism, right? Here’s the fact pattern, here’s the applicable Absolutely. Set of rules, programs, parameters, like this seems to be a very constant thread in a lot of areas. Right. How surprising was it to you that hey, philosophy has been really helpful on Wall Street?

Richard Bernstein: It’s, it’s been amazing. In fact, in one of the books I wrote many, many moons ago, I specifically thanked one of my philosophy professors for, you know, I took symbolic logic with him. I think I took a course in relativism with him. You know, all these different things, which have definitely been influential in my career, without a doubt. Alright,

Barry Ritholtz: So you end up at what could be my favorite advertisement, which was the EF Hutton ads. Yes. Back in the, was that the 1980s when EF Hutton talk?

Richard Bernstein: I think it was actually the seventies into the eighties. Yeah.

Barry Ritholtz: “When EF Hutton talks, right. People listen.” Yes. Like these, you can find these ads all over YouTube. There’s seminal. It was fantastic. Yeah. How did you make your way to EF Hotten from Chase Econometrics?

Richard Bernstein: So what happened was that at the time, a lot of people at Chase, IDC were very in very high demand. We were the beginning of the quant movement on Wall Street. Right. And so there were a lot of people were getting hired away. One of my friends who was more an economist as opposed to a quant guy, got hired by the Chief Economist at EF Hutton at the time, and there was an opening in the investment strategy group, and he said similar. Like, why don’t you come and interview,

Barry Ritholtz:  Come double your salary again.

Richard Bernstein: Well, it didn’t do that, but, but it was, it was an opportunity. So I, I grabbed the opportunity, I worked at the time with a, a wonderful guy named Jeff Applegate, who unfortunately passed away recently. But, but Jeff was a great role model in terms of how to make Wall Street understandable to non Wall Street people.

Barry Ritholtz: Really, really interesting. And then we get the 87 crash. Right. And then the following year, you joined Mother Merrill. Right. Tell us how, how you found your way to Merrill Lynch. So,

Richard Bernstein:  Merrill, you know, Hutton went outta business on basically 19 end of 87. I think it was December of 87

Barry Ritholtz: What was that? Did they go out a bit? Wasn’t it Shearon, Lehman Hutton, American Express or something like that?

Richard Bernstein: Yeah. It was like, it was became Shearon Leman Hutton, the irony of which I once worked at Shearon when they merged with Lehman Brothers. And I lost my job there. And now Shearon Lehman was merging with Hutton, and I lost my job again. So I was on the losing end of many, many mergers in the 1980s. But it was, getting to Merrill was, you know, I was out of work for a while after Hutton went outta business, I had met with a, a headhunter, and the headhunter had set me up with a, an interview with Meryl and Meryl kind of passed on me, but then called me back about four months later.

Barry Ritholtz:  So their first choice turned them down? Is that what you’re saying?

Richard Bernstein: I found my personnel file years later. Yeah. I found my personnel file, and this is actually kind of funny. And in it was the headhunter letter to the hiring manager. And it described me as being the cheapest of the lot. Oh my God. With the most potential. That was the way the guy described me.

Barry Ritholtz:  You’re a value stock.

Richard Bernstein: I was a value stock. And so I think what happened was the everybody else they were talking to wanted too much money, and they worked their way down and they found they got me.

00:07:45 [Speaker Changed] That’s, that’s Unbeliev. How did you get access to your personnel

00:07:48 [Speaker Changed] File? It was by accident. It was, I was, I was, it was like switching managers type thing, and somehow it got, it got put into the wrong file. Oh. The wrong set of files. That’s, and there was mine, so of course I read it.

00:07:59 [Speaker Changed] So you were at Merrill for 20 years, is that that

00:08:02 [Speaker Changed] Right? Yeah. That’s almost 20 plus. Yeah. Right. Wow,

00:08:04 [Speaker Changed] That’s amazing. You were there right up into the financial crisis. I was, what was Merrill Lynch like right in the middle of that storm?

00:08:13 [Speaker Changed] So it was, you know, I think it was, it was, it was an interesting time. And, and you know, I should say, first of all, the Merrill was a fantastic place to work. Totally. It was, you know, anybody out there who has worked at Merrill, you know, knows, knows the feeling that I have for the firm and ’cause they feel it too. And, and it was a great place to work. The corporate culture began to change in the few years before the financial crisis. And we got a little bit of ways from, from our roots. You know, our roots were very much as a, a private client oriented firm that also had great trading and investment banking and everything else. But the heart of the firm was still on the private client side for any number of strategic reasons. The firm decided that we wanted to change that emphasis. And I think, you know, it’s kind of dangerous to take a lot of risk when you don’t really have the experience doing it. Sure. And so I think that’s kind of what happened to Merrill.

00:09:06 [Speaker Changed] You know, I mentioned the EF Hutton ads, but for the people who were listening who are younger, I I wanna say in the 1970s, maybe even in the 1960s, Merrill Lynch ran a series of television ads. Merrill Lynch is bullish on America. Absolutely. With, with the thundering herd and the big bull and Right. It was pretty amazing. When we talk about the democratization of investing, that Merrill is arguably the, one of the first companies that absolutely dove into that head first. Yeah.

00:09:39 [Speaker Changed] If I’m not mistaken, Charlie Merrill was, his whole philosophy was bringing Wall Street to Main Street. I think he actually coined that phrase

00:09:45 [Speaker Changed] That, I think that’s right. Yeah. And later on, we had a number of the discount brokers had come out in places like Schwab and Muriel Seabert, but I always felt they had followed Meryl’s lead to Absolutely. We we’re gonna push into Main Street. Yeah. So you start out essentially as an analyst, how do you, how do you work your way up to market strategists and then chief investment strategist for, for the thundering

00:10:11 [Speaker Changed] Herd? It’s, you know, it, it’s funny, one of the things I always tell recent graduates of colleges is, don’t try to plan out your future. ’cause when you’re 21 or 22, you have no idea what you’re gonna do when you’re 25 or 27 or 30. You know, you really don’t know. And my example of, you know, the changes after the Reagan Carter election are, are pretty clear on that one. But the same thing was at Merrill. You know, I kind of, I came in as a quant analyst. I was there not for any other reason, to be perfectly frank. And I think the people involved at the time would agree with this, that in institutional investor, there was a quantitative analysis slot. Merrill had nobody who was there. They thought, well, let’s, let’s get somebody who can maybe run for this slot. We’ll get another II vote and we’ll see what happens. And I was their choice to just kind of become this quant guy. I don’t think they knew what to do with me. I don’t think they were thinking anything else other than like, you know, go do your thing and, you know, hopefully this will all

00:11:08 [Speaker Changed] Work out. Is an empty desk rich, see what you can do with this. Exactly.

00:11:10 [Speaker Changed] Right. Huh. And it was, it was actually kind of funny. I I, truth be told, now I can tell this, I lied about my age to get the job

00:11:18 [Speaker Changed] Saying You were younger saying you were older. Older, older.

00:11:21 [Speaker Changed] Oh, really? Because I was 29 when I was interviewing for this position. Yeah. And I knew that, and everybody, and back then you could ask people how old you were.

00:11:28 [Speaker Changed] Right. And they couldn’t Google you and find out.

00:11:31 [Speaker Changed] Right. And they couldn’t find out. So there was all kinds of, all kinds of stuff that they could do back then that you can’t do now or can do now. Did,

00:11:37 [Speaker Changed] Did you really get an MBA from NYU that, did you just pad your resume?

00:11:41 [Speaker Changed] No, I’m, that’s legit. That’s a hundred percent legit. But so what was happening was, I knew that if I went to these interviews and I told people I was 29, they would think I was a kid.

00:11:50 [Speaker Changed] But 30 sounds older,

00:11:51 [Speaker Changed] But 30, it’s like 29 99. Right. Like, you just round up, you know,
00:11:55 [Speaker Changed] It’s, it was a six month fib, that’s all it was.

00:11:57 [Speaker Changed] Yeah. Well, by the time I actually got the job and showed up at Merrill, I was 30. So I didn’t feel, I’ve never felt bad about it, because I was asked in every single, like, why would they ask? They wouldn’t ask unless they thought maybe I was too young. That would be the impetus for asking the que, nobody’s gonna ask the question,

00:12:12 [Speaker Changed] Well, how much are you, how much experience and seasoning

00:12:15 [Speaker Changed] Do you have? I don’t think that was the root of the question, because they had my resume. They knew exactly. And so it was really like, how old is this guy? You know, can he really do this? And so I lied. So I told everybody I was 30. And so, and, but, but

00:12:28 [Speaker Changed] That’s hilarious.

00:12:29 [Speaker Changed] Yeah, it is. It is kind of funny.

00:12:30 [Speaker Changed] And, and nobody ever figured out. Don’t, don’t they, when you’re filling out your paperwork and nobody took the time. Nobody can, nobody, if you’re a W2 employee Yeah. They get your date of birth and your social security number. Absolutely. It’s, it’s not like the data isn’t there, but

00:12:44 [Speaker Changed] By the time I got to Merrill, I was 30,

00:12:47 [Speaker Changed] So nobody thought

00:12:48 [Speaker Changed] Twice about it. Nobody, nobody thought twice about it. Yeah.

00:12:49 [Speaker Changed] That, that’s, that’s really funny. So you’re at Merrill for 20 plus years. We have the financial crisis, and you decide to launch Rich Bernstein Advisors in 2009. So in hindsight, it turns out to be perfect timing. Right. What sort of pushback did you get when you’re like, I think I’m gonna stand up my own shop into this mess?

00:13:14 [Speaker Changed] Yeah. You know, I left Merrill because I’d gotten burned out. I mean, one of the things that people don’t realize is, as a sell side analyst, the, the, the better you get at your job, the demands on your time grow exponentially. And so I was traveling all over the world. I was, I was nonstop writing. I mean, it was, I, I had burned out and I tried to leave Merrill several years before, and they had, they convinced me to stay. They said, you know, like, no, it’s okay. You know, we’ll, you know, we’ll, we’ll take care of you. Everything will be fine. Don’t worry about it. But in 2008 in the financial crisis, I turned 50. And so I’m not lying about my age. I actually did turn 50 and, and I was pretty burned out. And then the financial crisis hit and I thought, you know, it’s the wrong time to leave.

00:14:00 It’d be irresponsible for the chief strategist of Merrill Lynch to leave in the midst of a crisis. That’s, that’s just very unfair to our clients. Very unfair to the firm. You know, I rose to this level. I have a certain amount of responsibility. I can’t be selfish on this. So I stuck it out for a while. And then Bank of America bought, bought Merrill, and, and they were great. And, you know, everything was good, but it was clear to me I wasn’t gonna have more fun. Right, right. That the burned out nature was gonna continue

00:14:26 [Speaker Changed] In potentially worse. This was only gonna get worse. It

00:14:28 [Speaker Changed] Was gonna get worse. So I just figured like, why do this? So I just thought I was leaving again. Merrill was fantastic. They encouraged me to stay. I just said, no, no, no, thanks, but I’m, I’m done. You know, stick a fork in me. I’m done.

00:14:39 [Speaker Changed] Hey, 20 years is a long time. Yeah. Being a road warrior. Yeah,

00:14:43 [Speaker Changed] Exactly. And so then the question was, what was I gonna do? I had toyed with the idea of opening a, an independent research shop and that sort of thing, but that was gonna be equal amount of travel all around the world. And I, I had just done that for 20 years. Didn’t sound like a lot of fun. But then the idea came to me, well, maybe we should put some of these things that we’ve, we’ve developed through the year, put it into practice and see if we can manage money doing it. And we were kind of forming the firm and we were like, really in its infancy. And then all of a sudden, I remember exactly where I was, I was in our, our den weekly initial jobless claims had just come out, this is like in July of 2009. And the number came out and it was a blowout good number. Right. And I said to myself, this, this is a rogue number. And then I said to myself, well, wait a minute. Why is it a rogue number? Maybe things are just getting better. Because I was listening to all the talking heads who were all

00:15:41 [Speaker Changed] Still,

00:15:42 [Speaker Changed] And they were all negative as, as all get out. And I said, let,

00:15:45 [Speaker Changed] Let me stop you right there, because my next question is, I very vividly remember March oh nine. Right. And saying, Hey, US equity’s down 50%, usually pretty good entry point. I think we finished down 56, down 50, whatever, 57%. And, but the bearishness, the negativity persisted and it felt like people were really suffering from a little post-traumatic stress. A hundred percent. I, I’m curious exactly how, as you were starting to tell us how you were thinking around that, because everybody was so negative, and yet the data was clearly improving.

00:16:25 [Speaker Changed] It was definitely improving. And so, you know, the way I described to people is I said, like, you know, markets don’t move on the absolutes of good or bad markets move on better or worse. And things were horrible in an absolute sense, but they were getting better

00:16:38 [Speaker Changed] And certainly better than consensus felt like it was.

00:16:41 [Speaker Changed] Absolutely. And so, you know, I I just, I remember exactly where I was and I said, well, gee, you know, this could be like a big bull market. And, and you know, I actually at one point said to potential investors, I thought that we were entering the biggest bull market of our careers. And so

00:16:58 [Speaker Changed] You were only off by a tiny little bit. It was, it was Oh, of our careers.

00:17:03 [Speaker Changed] Of our careers. Yeah. If you think that was

00:17:06 [Speaker Changed] Thousand nine, look

00:17:07 [Speaker Changed] Nine to today.

00:17:08 [Speaker Changed] Rolling 15 year periods from oh nine to oh four was 16% a year. Yep. From the 15 year period, ending in 99 was 17% a year. And you go to the 15 years after World War II was 18. So

00:17:24 [Speaker Changed] We’re right

00:17:25 [Speaker Changed] Up there, but one of the best Yeah. Periods in modern history for sure. Absolutely. So you, you are like, Hey, this is gonna be

00:17:31 [Speaker Changed] Good. So if you’re gonna start a firm dead on, if you’re gonna start a firm, this is the time to start. For sure. So that, that’s kind of how it began. And, and, you know, I don’t wanna say that everything went swimmingly at the beginning. No. You’re starting a firm, you hem you know, like any, any startup you have, you have pluses and minuses and you, you hem and haw and you do different things. But through time it’s worked out pretty well.

00:17:53 [Speaker Changed] So what was, you know, we stood up a firm in 2013, I’m curious, and that experience was kind of surprising. I’m curious, what was the most surprising things about launching your own firm? What was like, I didn’t expect to be doing this?

00:18:09 [Speaker Changed] So two things. One was that I was getting into an area that I didn’t know. And I knew, I didn’t know the buy side. The way I knew the sell side, I knew that. And what I didn’t know was how much I didn’t know. And so the early fits and starts were trying to hire the right people. I didn’t even know enough to hire the right people. Eventually that did happen. And we hired a, a guy named John McComb, who’s still the president of the firm. But it was, it was kind of, you know, off and on. We were not doing all that well at the beginning because, largely because I didn’t even know who to hire and who not to hire because I was so inexperienced on the buy side. So that was surprise number one, surprise number two, was that people would not invest with us at the time because we were too bullish. And that was fascinating. Fascinating. That was really,

00:19:01 [Speaker Changed] That just makes you more bullish,

00:19:02 [Speaker Changed] Doesn’t it? Oh, it did, without a doubt. I mean, but if it, it, it was, it was incredible. We were, you know, at the time people were very cautious on the United States if they wanted growth, whatever they determined that was, it had to be in the emerging markets. It could not be in the United States. And we were bullish and we wanted to invest in the United States, and people just couldn’t deal with that.

00:19:21 [Speaker Changed] I’m, I’m gonna put a little flash on what you’re describing. I vividly recall writing a, a market commentary, I wanna say September, but maybe it was October oh nine. And the title was the most hated bull rally in market history. Yeah, same experience.

00:19:38 [Speaker Changed] Absolutely. It was, it was very frustrating. If you look at our early marketing materials, you will find thing comments about what we called fire extinguishers. Right. And fire extinguishers were positions we would take in the portfolio that we could pull off the wall and put out the fire in the portfolio. Right. Like having, you know, cash or gold or all these different things that we would include in our multi-asset portfolios so that people would feel more confident in what was going on. No, it worked, but it didn’t really work because it, it

00:20:07 [Speaker Changed] Worked psychologically. It worked, but it didn’t work performance wise. It,

00:20:10 [Speaker Changed] No, it worked for, it worked for us. Fine. But it didn’t get people across the goal line. They, they would not, they, they were too scared.

00:20:17 [Speaker Changed] How long did it take before people started to say, oh, maybe this Bernstein guy is onto something? Yeah.

00:20:23 [Speaker Changed] Well, you know, everybody talks about it being like a, a hockey stick. You know, the raising assets is sort of like a hockey stick where, where like of, as a turbocharger where you’re, you’re kind of going along and all of a sudden the turbocharger kicks in, you start really accelerating. That was the experience that we had in the firm. We had, we had people who knew us as a group were reasonably willing to invest with us, but to the broader audience, it was, it was much more difficult. And then as they got more confident, yeah, of course the, the turbocharger started, started revving up. Yeah.

00:20:51 [Speaker Changed] So was that six months, 12 months? How long did

00:20:54 [Speaker Changed] It take? I would measure two years. I would say I would measure it in years, I think. Really? Yeah. I think, I don’t remember the date of when we hit 5 billion, but I’m gonna say it probably took us five or six years at least to get to 5 billion.

00:21:07 [Speaker Changed] And now you’re over, well over 15 billion.

00:21:09 [Speaker Changed] Yeah, we’re about almost 16.

00:21:10 [Speaker Changed] Right. Wow. So that, that’s amazing. And, and this is now 15 years later, correct? Right. So it took you 15 years to get to $15 billion. Yeah. So a billion a year. Not, not too, not too bad, right? No, not, not, not bad at all. So we were talking about launching the firm in oh nine, and there’s a quote of yours that has always stayed with me, which is, quote, when the sell side indicator turns positive, leaving the firm is preferable to going on the call and telling everybody about it. Explain that, because we were talking earlier about the sort of bearish PTSD pushback Yep. To anything remotely positive. Your indicator, this cell side indicator has a pretty long and story track record. It does at Merrill.

00:22:02 [Speaker Changed] It does.

00:22:03 [Speaker Changed] Hey, this turned positive. You guys have to change your views. That carries no weight.

00:22:08 [Speaker Changed] So lemme explain what it, what it is. The sell side indicator is a sentiment indicator that’s based on Wall Street’s consensus, recommended asset allocation. So stock bonds, cash, how much has you put in stocks at any point in time? I started that all the way back at EF Hutton. You mentioned Hutton before. And, and we continued it through Merrill and Merrill still runs it today. It, it’s really just looks at the equity allocation and puts basically standard deviation bans around that. And as you might expect from Wall Street gets really bullish, that’s a bearer sign. Right. Wall Street gets really bearish. That’s a bullish sign.

00:22:41 [Speaker Changed] So when you said this turned positive, it was because the street was so bad,

00:22:44 [Speaker Changed] The street got incredibly negative. Incredibly negative. And so from my point of view, and what you’re referring to was that, do I stay at Merrill and try to convince everybody to be more bullish? Or do I go off and start my own firm? And I just thought it’d be better given every, given all the other things we’ve discussed, it was better to start my own firm

00:23:02 [Speaker Changed] Preferable to going on the call and telling everybody about it. Yeah. Like I could just imagine the sort of pushback Bernstein is he’s now a permeable, he’s crazy how we, we just are in the middle of this crisis. How on earth can we recommend clients buying equities? Yeah. Right. That’s the sort of stuff you,

00:23:21 [Speaker Changed] And, and it was the kind of thing where, you know, certainly on the private client side, for those of you to remember, you know, in, in 2008, 9, 10, 11, 12, the story was all about bonds, bonds, bonds, bonds, bonds. Right. Nobody wanted the risk of equities. And if you twisted their arm, maybe they would invest in large cap, high quality dividend paying stocks. Right. But there was no way that they were gonna take any kind of beta risk

00:23:45 [Speaker Changed] With market. So no technology, no growth firms, nothing. Nothing with any amount of potential volatility.

00:23:52 [Speaker Changed] No, no. Volatility was, was terrible. Risk taking was terrible. They were under their desk in the fetal position.

00:23:58 [Speaker Changed] And in hindsight, was there a better time ever to put money into those sort of stocks?

00:24:02 [Speaker Changed] I’m not sure In our careers there has been maybe, maybe 82. Right. If you think back to

00:24:06 [Speaker Changed] 82, right, right. In the beginning of maybe,

00:24:08 [Speaker Changed] Maybe 82 was, was a time. And I do remember that I’m old enough where I do remember, you know, what, what the sentiment was like. And certainly I was, I had very little experience on Wall Street. I know what my sentiment was like in 82. I couldn’t believe that the market would be going up. And, but I

00:24:24 [Speaker Changed] Used, well, you just had a 16 year bear market. Yeah. You finally got over a thousand on the Dow, which I wanna say we first kissed in 66, something like that. Right? Yeah. And so it’s 16 years later. Yeah. Again, everybody seems to always be looking backwards, not forward.

00:24:40 [Speaker Changed] Absolutely. And so the lesson, the lesson from that, you know, when I was a young pup was, you know, gee, I really didn’t know what I was talking about. And, you know, I learned that from, from various people working on Wall Street. And, you know, so when it came to oh nine, I was kind of determined not to make the same mistake again. So

00:24:58 [Speaker Changed] It’s funny because another quote of yours kind of cracked me up that I always found this intriguing. You suggest always have a 10% annual target for the s and p 500, despite being bearish. I love that, that optimism. But how can you maintain that bullishness when you’re bearish?

00:25:19 [Speaker Changed] Yeah. So what Barry, as, as I’m sure you know, the sell side strategists are always pestered for their target. Right? What’s your target on the s and p? And I used to think that was the most watched, least important thing I ever did. Right. And so I would never put a number out, I would never give people a firm number. But I, I would always answer the question by saying, well, we don’t really have an official target, but we have a 10% expected return. And nobody ever noticed that 10% is roughly the long term average return of the

00:25:50 [Speaker Changed] SB with dividend reinvesting vestment 10 and change

00:25:52 [Speaker Changed] 10%. So I used to always say 10% and, and that would make everybody happy. And so, regardless whether it was bullish or bearish, I always answer the question saying, oh, I don’t know. We have a 10% expected return. And, and that kept people satisfied. But I, I really don’t think that the notion of what is your target is an appropriate thing to discuss as an investor. Look, if you wanna be a trader and you want to, you want to, you know, do a lot of short term trading, I get that. And I understand it for an true investor, I think it’s kind of a silly discussion, huh.

00:26:23 [Speaker Changed] Really, really amusing on your website and elsewhere, I’ve seen the phrase from you Pactiv Yes. Investing Yes. Define what pactiv investing is.

00:26:35 [Speaker Changed] Right? So pactiv, which is a trademark

00:26:37 [Speaker Changed] Term of, so that literally my next question. Yeah. I saw the registered trademark.

00:26:41 [Speaker Changed] Yeah. It is a trademark term of RBA. You,

00:26:43 [Speaker Changed] You literally did that. That’s great.

00:26:44 [Speaker Changed] We did that. And so PACTIV stands for the active use of passive investors in investments. And what we’re really referring to here, a lot of ETFs and you know, we’re a macro firm, we claim to know nothing about Coke versus Pepsi. Right. But rather, you know, we look at size, style, geography, and, you know, asset allocation, things like that. And ETFs are right in our wheelhouse. It’s, it is been a, a great invention. And we’re very big users of ETFs. Jack Vogel, I met many times when he was alive, and I always thought he was one of the smartest guys I ever met in my career. But one of the things that, and Jack would always say, don’t, don’t talk to an active manager. Just go buy an index. Okay, fine. But what Jack would, and that’s an interesting discussion. We can have the discussion all day long as to why that happens or doesn’t happen, whether he’s right or wrong.

00:27:31 But the one thing that Jack would never tell anybody is what index to buy and when. Right. And you know, one may say, well, that sounds silly, but there’s been many times in the past where if you had bought the wrong index at the wrong time, your portfolio suffered dramatically for an extended period of time. For instance, if you had bought Nasdaq, or even the S and PETF in March of 2000 for sure. Right. You then entered the lost decade inequities. Right. And your return for a decade was slightly negative. If you had been in other things like emerging markets or energy or, you know, all kinds of small caps, all these different things, you would’ve done fabulously. Well, you know, if you bought small caps at the peak of the small cap bull market in 1983, it took you 17 years to catch up to the s and p. Wow. So you would’ve been neutral. So, you know, everybody says, oh, I’m a, I’m a long-term investor, I’m just gonna buy an index. If you buy the wrong index at the wrong time, it, it can have a real detrimental effect. And that’s what Pactiv Investing’s supposed to be all about is the active decision making around these passive investments.

00:28:40 [Speaker Changed] So, so let’s delve into that decision making. How do you decide which index is the one that you wanna own? What data are you looking at? How, how you crunching numbers for this?

00:28:52 [Speaker Changed] Right. So Barry, I I mentioned that we are macro investors. You know, we’re not, we’re not looking at individual stocks. So everything we do is gonna fall into some macro umbrella of one form or another. And the way to think about it is it’s gonna fall into three categories. Everything we’ll look at, it’s gonna fall into three categories. Number one would be corporate profits. One of the things that I wrote about extensively, even when I was at Maryland through my entire career, is I’ve argued that equity investors spend too much time worrying about the economy and not enough time worrying about corporate profits. The stock market doesn’t really care about GDP, the stock market cares about corporate profits

00:29:25 [Speaker Changed] Because the GDP is reflected in profits if it’s trending the right way.I

00:29:29 [Speaker Changed] Mean, GGDP is gonna be a contributor, but a lot of other things contribute right to, to corporate profits. We’re looking at corporate profits and profit cycles, not economic cycles. Number two category is going to be what we call liquidity. And liquidity is gonna be anything from central banks, central bank actions to lending standards from banks, anything that’s gonna allow more leverage in greater liquidity in, in investible assets in the, in, in a stock market. And then number three is gonna be sentiment and valuation. Now, sometimes people say sentiment and valuation, why are they together? And the my answer to that is, one, one

00:30:08 [Speaker Changed] Drives the other. Right?

00:30:08 [Speaker Changed] Yeah. My answer is that valuation is a reflection of sentiment

00:30:11 [Speaker Changed] Has to be,

00:30:12 [Speaker Changed] Yeah. You can’t have an overvalued asset that people hate or an undervalued asset that people love. That, that doesn’t make any sense. So, so valuation is going to reflect sentiment. And so what we’re basically looking for, if you think about those three categories I just mentioned, we’re looking for situations where fundamentals are improving, liquidity is, is adequate or getting better and everybody hates it. Where vice versa, where fundamentals are deteriorating, liquidity is drawing up and everybody loves it. We’re gonna try and stay away from that. That’s, that’s a maybe a gross simplification of what we do, but, but that’s kind of what we do.

00:30:45 [Speaker Changed] But, but that’s pactiv that’s how you’re selecting from broad indexes, just the right index at the right time. Correct. And avoiding the wrong index at the wrong time. Correct.

00:30:54 [Speaker Changed] That’s exactly what

00:30:55 [Speaker Changed] We’re trying to do. Huh. Really interesting. One of the things that comes up when we’re talking about various style investing comes right from one of your books. Hmm. And it’s about media noise. Yes. How do you focus on the right index when there’s so much noise and so much stuff going on? And it’s, especially with algorithmic social media, it’s just a fire hose. It’s crazy nonsense. It is

00:31:23 [Speaker Changed] Crazy.

00:31:24 [Speaker Changed] How do you separate the signal from the noise?

00:31:26 [Speaker Changed] Yeah, so I, I wrote a book in 2000, so 25 years ago. Wow. I wrote a book that was called Navigate the Noise, invest, I remember that. That invest investing in the new age of media and Hype. 25 years ago I wrote about the new Age of media and Hype.

00:31:40 [Speaker Changed] You were ahead of the curve.

00:31:41 [Speaker Changed] It’s, you think it is gotten a bit worse since in the last 25 years. So, so

00:31:46 [Speaker Changed] To just as a reminder, this is pret Twitter, pre Facebook, pre LinkedIn, oh, forget Instagram, TikTok. Like, this was just like message boards and websites.

00:31:58 [Speaker Changed] Yeah. I mean, you’re just beginning to, to get websites in, in depth, but we’re really still talking about a period of hard copy research reports and television. Wow. That’s really what, you know, the mainstay of what, what, what, what people were looking at. The point of the book was to say that building wealth for an individual investor is actually not that difficult. Why don’t people do it? Why don’t people do this? Is is kind of silly and well

00:32:23 [Speaker Changed] Wait, when you say it’s not that difficult, we, we intellectually understand, like my friend Dave Tic loves to say investing is a problem that’s been solved. But the problem that hasn’t been solved is the human behavior around it.

00:32:38 [Speaker Changed] Exactly. Exactly. And so what the book tries to argue is that there’s some very sound principles that everybody should be following to build wealth. But yet there’s this siren song, if you will, if you’re into Greek mythology, there’s a siren song of things telling you of, of noise, telling you that there’s something newer, better get rich quick, you know, all these kind of things that are going on. And to continue with that, your portfolio follows that sound and crashes on the rocks if you want the mythology example. And so what the book says is, the way to solve this problem of this incessant noise is to hardcore follow a process and come hell or high water, you’re gonna stick to that process no

00:33:22 [Speaker Changed] Matter what. That’s the mask. You tie yourself to

00:33:23 [Speaker Changed] That. Exactly Right. And put the wax in your ears, the whole routine. Right. And, and that’s, that’s what we do as a firm. We have a very hardcore process. It’s macro driven, but we’re gonna follow that process, come hell or high water, you know, it’s, it’s funny People understand that and they understand what we do. We understand why they do, they understand the, the, the notion of the book. But yet they get very angry when we’re not following the siren song of what’s the newest, baddest, you know,

00:33:52 [Speaker Changed] Shiniest object. Yeah. That’s out there. It’s crazy. So, so walk us through the process. I know you have a couple of core beliefs in your process. Tell us about it.

00:34:01 [Speaker Changed] So I mentioned profit cycles. I think for us, that is, that is the most important part of our process. And as I said before, people spend too much time worrying about economic cycles and not enough time worrying about profit cycles. Now

00:34:14 [Speaker Changed] What’s the difference? Define profit cycle and, and ’cause we are all familiar with the business cycle and the economic cycle. Exactly. What is a profit cycle?

00:34:22 [Speaker Changed] So, so, you know, whereas people look at GDP growth or, or industrial production growth, and they say this is the economic cycle. Well, we’re looking at as corporate profits growth. Now let’s just as an example, we look at profit cycles all around the world. But let’s take for example, the s and p 500, the US profit cycle. What happens is the, the difference between an economic cycle and a profit cycle, number one is that profit cycles tend to boom and bust. Fortunately, the overall economy does not do that on a regular basis. And secondly, profit cycles have a shorter periodicity. So you can get multiple profit cycles in one economic cycle.

00:34:55 [Speaker Changed] Periodicity meaning

00:34:57 [Speaker Changed] The amount of time,

00:34:58 [Speaker Changed] Right? Got it.

00:34:59 [Speaker Changed] Right. So whereas an economic cycle, maybe it’s gonna take four or eight years, you could have multiple profit cycles in that four or eight year period.

00:35:06 [Speaker Changed] And so, so how do you define the peak and the trough of a profit cycle?

00:35:10 [Speaker Changed] So, so what happens is, you know, if you look at the growth rate of corporate profits, you will see it follows a pretty normal cycle through time. And our challenge as investors is to find indicators that will allow us to effectively forecast that profit cycle. Now we don’t really care whether the profit cycle, whether earnings growth is gonna be 7% or 8% or 10%, which is a very common question people get asked, or minus five or minus six or minus seven. We kind of want to know is it getting better or is it getting worse?

00:35:41 [Speaker Changed] Trending up or down.

00:35:42 [Speaker Changed] Exactly. So if profits go this 5%, what’s the probability of it going to 10% as opposed to going to zero. So we spend an awful lot of time with a lot of indicators that, that look at that. What are the indicators look at, well look, profitability is a pretty simple formula. It’s how many, how much stuff are you selling and what’s your margin per item? I mean, that’s really all profitability is.

00:36:05 [Speaker Changed] Well, but there’s a couple of factors that go in. What is the cost of capital and credit? Exactly. The inflation rates.

00:36:11 [Speaker Changed] But that would be in your margin, right? I mean, and, and so

00:36:14 [Speaker Changed] Which affects profits,

00:36:15 [Speaker Changed] Which affects profits. So all our indicators are either gonna try to figure out how much stuff is, is let’s take the s and p 500, our s and p 500 company’s gonna sell, and what’s gonna be their margin per product. So margin as you point out, could be interest rates. It could be labor costs, it could be pricing power because of inflation. People forget inflation isn’t bad for a lot of corporate profits, for

00:36:36 [Speaker Changed] Equities for sure. Right. Because we certainly learned that during the pandemic.

00:36:39 [Speaker Changed] Exactly. So, so those are the type of things that we’re looking at in terms of profit cycle. And as I said, we look at profit cycles all around the world. We look at them by region, by country, we look at by sectors, you know, we look at profit cycles for say the tech sector for the consumer staples sector or something like that as well.

00:36:56 [Speaker Changed] So, so profit cycle is a one of the key triads the key. It’s the key. All right. What, what are the other elements that you’re considering in addition to the profit cycle? So

00:37:06 [Speaker Changed] Next would be liquidity. Okay. And liquidity is a function of, of several different things. It’s obviously a function of monetary policy. We follow monetary policy in 43 countries around the world. I know that sounds silly and, and obviously in the G seven or G 10 you get a lot more information than you would in, but you know, some weird emerging market country. But we do follow central bank policy. We follow yield curves. The slope of the yield curves, right? Whether you’ve got a bullish steepening of the curve, in other words are, are interest rates coming down, but the curve is steepening interest rates going up, but the curve is steepening or is the curve inverting? I mean, we look at all these different things. They have different implications for sector rotation and things like that as well. So, and then we follow things like bank lending standards. Now that’s obviously you can only get that in the most developed countries, right? But that’s an important consideration as well. Are banks tightening credit or, or easing credit? People say, well, doesn’t, doesn’t the central bank control that? Well, not really. You can kind of lead a horse to water, but you can’t make it lend. And, and so, so you wanna look at both central bank policies and the willingness of banks to lend,

00:38:16 [Speaker Changed] How, how does the role of fiscal stimulus and spending play into liquidity issues?

00:38:22 [Speaker Changed] Yeah. So to some extent it does, and it, it’s gonna affect more, it’s gonna feed into our more through the corporate profit side in terms of how much stuff are you going to sell, right? Because fiscal stimulus is trying to stimulate consumption or, or aggregate demand. If you prefer to be a real economist here, it’s gonna try and stimulate aggregate demand. And that’ll show up in our stuff, type type

00:38:47 [Speaker Changed] Variables. Alright, so, so we have the profit cycle, we have liquidity, and what’s the third part of the

00:38:52 [Speaker Changed] Project? The third is sentiment and valuation. Right? Okay. So obviously we want, we prefer to look at, at more undervalued situations, sentiment, we’re trying to look for basically assets that people hate. Valuation will reflect that if something’s really undervalued, something’s really cheap, it reflects that people don’t like it. You know? And, and it’s just like any other good in any other market. If something’s really expensive, it means people like it.

00:39:19 [Speaker Changed] So two questions from that. The first is how do you distinguish, and I already know the answer to this, but how do you distinguish between a stock that is disliked and cheap and a stock that’s cheap because it’s in trouble?

00:39:35 [Speaker Changed] Yeah. So what you’re referring to now, we wouldn’t do this for individual stocks. So we would do it for, for regions or sectors or whatever, you know, the, the commonly called the value trap. Yes. The value trap is something that’s cheap for good reason. And so what we do, we have models that try to look at various industry sectors, countries, whatever, that are trying to look for not only cheapness, but some acceleration in corporate profits. Right? And, and we won’t invest in anything just ’cause it’s cheap. That doesn’t mean anything to us. It’s,

00:40:03 [Speaker Changed] It’s cheap plus some other indicator. Correct. So, and then, and then the la other question is, consumer sentiment seems to have gone off the rails post pandemic. If you look at where, and I suspect this is a measurement problem, but I want to get your sense. So if you look at the University of Michigan consumer sentiment data for the better part of the past five years, it’s worse than the worst part of the pandemic, worse than the financial crisis, the 87 crash, like on and on, it’s shocking worse than nine 11. And the.com implosion like, wait, things aren’t that bad.

00:40:41 [Speaker Changed] No, they’re not that bad at all.

00:40:42 [Speaker Changed] What’s going on with that sort of sentiment? And what, how do you use sentiment when you’re trying to manage around this?

00:40:50 [Speaker Changed] You’re asking I think a more complicated question. Maybe even you, you think you’re asking, but you know, everybody knows that we’re in a very uncertain environment. And I think that those consumer sentiment readings right now reflect that immense uncertainty. If you were to ask normal people, they might not use the word uncertainty. They might use the word chaos, they might use, there’s all kinds of different words that people would use. I think that’s what’s being reflected in those consumer sentiment numbers right now is is the uncertainty, the impact that’s having, you know, there’s other surveys out there that are showing similar type levels of uncertainty or concern that aren’t related to the consumer. But, but I think it’s a reflection of this. It’s become a hackneyed word, uncertainty, right? I think that’s what you’re

00:41:35 [Speaker Changed] Seeing. I, I prefer the la lack of clarity to uncertainty. But let me bring this back to your book. Navigate the Noise. How much of this is a function of algorithmic social media? Which there was recently a study, I wanna say it was Oxford Reuters, that said, Americans now get more of their news from social media than anywhere else. Yeah, yeah, yeah. Big, big issue. And then secondly, it seems like in, in the world of clickbait absolutely crazy headlines. The media itself, if, if not the news stories or columns, but the headlines certainly seem to be more and more extreme.

00:42:15 [Speaker Changed] Unbelievable. So, you know, I, I don’t, I don’t know how to answer that from a societal point of view, but I can answer it from my point of view as sort of a fiduciary and, and an investor of other people’s money. I think it is my obligation, two things. It is my obligation, number one, to be as dispassionate about my politics as I possibly can. I mean, if you wanna go have a beer, we can talk politics, that’s fine. But I’m saying when I’m investing, you have to be as dispassionate as you can possibly be. And number two, I think it’s incumbent all of us who manage money to search for truly unbiased sources. Not who’s gonna give us the most frequent news, but who’s gonna give us news that is unbiased. And I think it’s incumbent on all of us to do that. And I have found that in the last year or so, that my choices of news media and what I read and what I pay attention to has changed because of that. Flesh

00:43:17 [Speaker Changed] That out a little bit. Give feel free to name names.

00:43:19 [Speaker Changed] You know, a lot of people, I, I think one of the questions you would plan to ask me was, what are you reading these days? My answer is, I don’t read an awful lot really of these days because there’s so much going on. But what I, what I have begun to do is listen to podcasts.

00:43:35 [Speaker Changed] Okay, go on. Tell me about

00:43:37 [Speaker Changed] This

00:43:37 [Speaker Changed] Podcast thing. Like this one.

00:43:39 [Speaker Changed] No, but I, I’m, I’m buttering you up here. All

00:43:41 [Speaker Changed] Right. But go on. More, more, more slaking up. Sure. There’s

00:43:45 [Speaker Changed] Three that I would, I would recommend to everybody. One is actually right here at Bloomberg, Bloomberg Law. And you’d say like, why

00:43:52 [Speaker Changed] Bloomberg Grasso? Yeah, yeah, yeah, exactly. Why would you listen

00:43:55 [Speaker Changed] Really good? Why would you listen to Bloomberg Law? No,

00:43:57 [Speaker Changed] It’s, it’s fascinating.

00:43:58 [Speaker Changed] And my answer is because everything these days is ending up in the courts, right? Have we ever had more issues with government in the courts than ever before? Certainly I’m not a lawyer. I don’t know squat about, you know, constitutional theory and everything else. I, and I’m sure most people don’t either, but they’re gonna listen to some wackadoodle guy, right. Talk about this. I’d rather listen to people who have, are well-grounded opinions and understand the history of law in terms of doing that. So this is

00:44:27 [Speaker Changed] One I’m so, I’m so glad you brought that up because we went through a, a run starting in 2020 where every talking pundit Yahoo first they were an epidemiologist. Yeah, exactly. Then they were A-A-A-A-A virologist, then there were a constitutional scholar, then there were a military strategist. You know, when someone asked you was COVID from the wet lab or wet wet market or escape from the lab. Yeah. It’s okay to say, how the hell do I know? Who knows? Have, have no expertise in that. Exactly. Why are you

00:44:59 [Speaker Changed] Asking me? Right? But everybody had an opinion,

00:45:00 [Speaker Changed] So it seemed

00:45:01 [Speaker Changed] Right. Yeah, exactly. Exactly. And so, yeah, the other thing along with that, that I love is that Wellknown epidemiologists or idiots, but the guy down at GNC who sells me protein powder, he’s a genius. And he knows my health better than anybody there.

00:45:15 [Speaker Changed] I mean, it’s just

00:45:16 [Speaker Changed] Like,

00:45:16 [Speaker Changed] Come on. There was a New Yorker cartoon that I vividly remember right in the middle of a pandemic. It’s the body of an airplane and there’s a guy standing up in row 17 B right. Saying, ah, we’re tired of these pilots telling us what to do, who’s with me? And it was like that just sort of Exactly. Let the pilots fly the plane. Exactly. Just sit down. So

00:45:38 [Speaker Changed] Bloomberg Law is one that I listen to. I, I’m not gonna say regularly because I, I don’t have the time to listen to every single one all the time.

00:45:46 [Speaker Changed] Yeah. I think that’s,

00:45:46 [Speaker Changed] But if I get a chance, I, I listen to

00:45:48 [Speaker Changed] It. And that’s a fascinating show. I’m, I’m like, you’re, you’re surprising me. ’cause I I do the same as you. Yeah. I listen to let me, a lot of ’em tell us the other two.

00:45:56 [Speaker Changed] Yeah. So the other two are actually on NPR, which I realize people have now suddenly decided I’m a wide IED liberalism.

00:46:04 [Speaker Changed] Can I tell you my wife, every time I get into the car and she’s been driving my car, it’s on NPR on satellite radio. And I had the same thought until you listen to a few of them. Yeah. And they’re fascinating. They are.

00:46:17 [Speaker Changed] And there’s two shows in particular that I would recommend, two podcasts in particular that I would recommend from NPR. One is called Left Right and Center, which is the name implies you have three people talking about issues, one from the left, one to the right and one from the center.

00:46:31 [Speaker Changed] Wait, they’re gonna give us all views. Who, who could have imagined such?

00:46:34 [Speaker Changed] Who could imagined that? Exactly. And they pick a topic. And sometimes I’m really interested in topics, sometimes I’m not. But whatever. The fact that you’ve got left, right, and center in the same podcast is extraordinarily rare. You don’t get that a lot. So that’s number one. And the other one is another NPR podcast called Open to Debate. Huh. Which is very similar. They pick a topic and, and this is more like a traditional debate where they have debating rules and all kinds of things, but it’s a, it’s a debate and, and you’re gonna hear two sides of, of an issue. Now look, sometimes the issues you don’t care about, sometimes they’re very important, sometimes they’re really cool, sometimes they’re not. I get that. But I, I think it’s incumbent on, on us as a class of money managers and, and fiduciaries to search out those kind of shows. I, I would argue if you are a fiduciary and you are constantly listening to M-S-N-B-C or Fox or newsmax or whatever Right. You’re, you’re doing a disservice to your clients.

00:47:35 [Speaker Changed] For sure. So, so there are two things I have to share with you. ’cause you’re, you’re right, right. In my favorite space, one is Planet money on NPR Yeah. Is something that they take this obscure, fascinating little topic and we’ll do a whole like way down the rabbit hole. Yeah. Deep dive. I don’t know if you recall during the Clinton administration, hey, we’re having problems with wealth equality and so we’re gonna cap how much we can pay CEOs in cash. Right. If you wanna give them risky stock options, you can. Yeah. Yeah. And the unintended consequences, is it 10 xd the wealth gap and just stories like that that are fascinating. The other thing is, you, you raise a a point, I know you are not a lawyer, but I’m a recovering attorney and the most applicable thing to investing you learn in law school is you have to be able to not just argue your case, you need to know the other side’s case better than they do.

00:48:40 Yeah. And that translates into equities as you can’t be bullish unless you can really state the bearish case. Right, exactly. And vice versa. Correct. You wanna be bearish, you better know what, what are the best arguments for being bullish here? And I can’t tell you how many people fail that test. Yeah. And I bet you see it back to post oh nine. Yeah. If you are super bearish, the only question I have for those people give me what the bull case is and if they can’t even imagine it, well now I’m going leveraged long. Yeah. ’cause that failure of imagination Yeah, yeah, yeah. Means everybody’s too bearish. Yep,

00:49:17 [Speaker Changed] Yep. And it is interesting you said that there are times we don’t do this regularly, but there are times where we do point counterpoint in our investment committee meetings Exactly. For that reason.

00:49:28 [Speaker Changed] Just so you’re making both sides of the So we’re,

00:49:30 [Speaker Changed] We’re, we’re being seen

00:49:31 [Speaker Changed] It, it’s, it’s one of these things that until you go through the exercise Yeah. It it, like if you have an extreme position and you come out the other side of that discussion and you still have that extreme position, either someone wasn’t making the argument well or hey, maybe the world really is coming to an end. Yeah. But most, so far that’s been the losing the losing bet. Yeah. Yeah. Yeah. So given what’s going on with technology and AI and automation and all the latest, greatest newfangled things, is anybody today a better investor than they were 10, 20, 30 years ago, 50 years ago? Has the bar since Charles Dow launched Barron’s in 1890, has anything improved for the average investor?

00:50:22 [Speaker Changed] I think, I think the amount, the amount of information that an investor can get obviously has gotten greater. Right? I mean, even if you think private,

00:50:30 [Speaker Changed] But it’s all public, it’s Reg fd. So does it help them?

00:50:33 [Speaker Changed] No, I don’t think it does. And I think, I think that, you know, the notion that somehow we have evolved and we are smarter, better investors than ever before. I think that’s hogwash. I think that’s complete hogwash. People are still underperforming, like they always did

00:50:50 [Speaker Changed] So it, it, it’s not, it’s not the strategies, it’s not the vehicles. Although we get great tax and cost benefits with ETFs, how much of this is just simply comes down to human behavior and human nature. Right. And people are still people and we’re still making the same mistakes over and over and

00:51:07 [Speaker Changed] Over again. Yeah. Yeah. I mean, there is something to be said for behavioral finance, right? And, and the biases that we bring to the table, it’s pretty hard to not be human.

00:51:16 [Speaker Changed] It, it very much is. So let’s bring this back to, you know, where we are in the market today and what’s going on. We just made new all time highs in the s and p and in the nasdaq. I always learn that all time highs are the most bullish thing you can see, perhaps not the very last one, but the hundred before it Yeah. Right. Are super bullish. How do you look at the market and say, everybody seems to dislike this market and yet we made fresh all time eyes.

00:51:46 [Speaker Changed] Yeah. So I think Barry, I think that we’ve said a number of times that we think it is a mistake right now. Do you think of the market sort of in quotes, that that’s what people are, are very, very focused on right now? And we think that’s a mistake. Why is it a mistake? Because the market is dominated by seven or 10 or 15 companies and, and we really have an extraordinarily bifurcated market in that respect. And I’m not saying anything that people don’t know. Of course, everybody, everybody knows about the Magnificent seven who doesn’t.

00:52:19 [Speaker Changed] Although they’ve, I think they’ve, the Mag seven have been the lag seven for most of this year.

00:52:24 [Speaker Changed] Correct? Correct. Now that’s, that’s, that’s where I was going exactly right. The, that, but the enthusiasm surrounding those, those seven stocks is, is not changing. And, and our view has been that, okay, you wanna go play those seven stocks, go play those seven stocks. Right? You don’t need us. We’re looking at everything else in the world. And, and I’ve just, I’ve, I’ve said to our investors many times, are there really only seven growth stories in the entire global equity market? Of course not. There’s tons of them. And, and we’ve shown people how many companies are actually growing earnings 25% or more, and how the Mag seven doesn’t really even fit into that group. That there are companies that are growing, you know, much faster for, and with, with, you know, similar consistency. And so I think if you’re invested in an s and p index fund, or you are invested solely in the Mag seven or solely in nasdaq, I think the next 3, 5, 10 years might be very disappointing.

00:53:21 [Speaker Changed] Huh.

00:53:22 [Speaker Changed] I think if you’re in everything else, and we could define, you know, that’s, I’ll leave it to everybody else to define how they def define everything else. But, but I think if you’re in everything else, I think you’re gonna do just fine. I think you’re gonna have a great time.

00:53:35 [Speaker Changed] So, so let’s talk about, not everything else, but one of the else things which has been international stocks. When we look at either developed X US or emerging markets, these are areas that have underperformed the US for 10, 15 years. Yeah, absolutely. And over the past year, we’ve started to see signs that, hey, maybe this underperformance isn’t gonna persist. Yeah. Persist. ex-US stocks have been doing much better than us certainly year to date in 2025. And we are recording this late June, maybe it’s been about a year or more about performance. How, how do you look at the world of international stocks? Yeah. What parts of the world look interesting to you?

00:54:19 [Speaker Changed] So I will, I will twist your question a little bit. And I will say that one of the thing, one of the aspects, one of the segments of the global equity markets that we are very bullish on is what I will call international quality non-US quality stocks. That’s

00:54:34 [Speaker Changed] Not a twist. That’s,

00:54:35 [Speaker Changed] Well, I’m just saying, as opposed to a country, right. Or something people like to talk about countries. But, but I think the reason I say this is that the median projected growth rate among high quality non-US stocks is actually equal, maybe even a touch higher than the median growth rate among the magnificent seven. Wow. So we’ll talk basically similar type growth. They offer dividend yields of three, four, maybe a little percent, maybe even four and a half percent depending on how you look at this. But let’s say three to 4% dividend yield, and they sell for a third to a half of the valuation of the magnificent seven. So the way I describe it to people is if somebody came to you and offered you a Maserati for the price of a Chevy, or to be fair here, if somebody offered you, Manolo belongs for the price of hush puppies, right? I think we would all say, yes, I will do that. By the way, can I have two? Right? But when we get to the stock market, this is like an unimportant to people. They don’t understand that, that there’s a value assessment made in everything we do all the time. But for some reason it stocks, it, it doesn’t appear. So the, the way I describe it is, you know, the niks and the Maseratis are on sale. We think that’s a great thing to do. We’ll take two. Thank you.

00:55:49 [Speaker Changed] So, so you’re naming two Italian company. Well, I, it’s just

00:55:55 [Speaker Changed] Paris, I just chose them because, because

00:55:57 [Speaker Changed] Everybody knows. But, but the reason I bring that up is you are not stock pickers, you are geography sector. Correct. Style selectors, right? So if someone says, Hey, that Rich Bernstein is onto something, I want exposure to fast growing high quality, inexpensive companies, what sectors are they looking

00:56:18 [Speaker Changed] At? So, so for us, I will, I will name the ETF that we hold with all due legal disclaimers here, right? That we hold the CTF, we have held it, we still hold it, blah, blah, blah. You know, however I can alert people that we, I’m, I’m talking my book a little bit here. The, the, it’s, it’s the IQLT is the ticker symbol, the international quality ETF. And it’s a great way, it’s actually, I believe EFA based. So you’re getting multiple countries.

00:56:49 [Speaker Changed] It’s probably about, so that’s Europe in the far far east and Asia. Asia,

00:56:52 [Speaker Changed] Correct. It’s probably gonna be Australia, it’s probably gonna be about 60 to 70% Europe. I don’t have the stats in front of me, but something like that. So I think, you know, that’s, that’s an area that people aren’t thinking about at all.

00:57:06 [Speaker Changed] So here’s the macro pushback, and I’m not saying this is, let me just play devil’s advocate. Europe has structural problems. Brexit is an issue. Now with the Trump administration, Europe’s gonna have to step up and fund more of their own military and defense Europe is, has problems and they’re not gonna be clear these for decades.

00:57:27 [Speaker Changed] And that could be true or that might not be true. Okay. But is it relevant? But notice, notice what I said was that they offer earnings growth

00:57:35 [Speaker Changed] That

00:57:35 [Speaker Changed] Is comparable to that of the Mag seven. And I think that’s the point that I’m trying to make, that despite all these problems that everybody is well familiar with, somehow these companies are putting, you know, are or have earnings growth, projected earnings growth that’s roughly similar, a little bit more than the magnificent seven.

00:57:53 [Speaker Changed] And these are quality companies and they’re X US, XU US all. And so if you have a huge home country bias and you want a little diversification, it’s, it’s, you can look overseas to, to correct reasonably price quality companies.

00:58:06 [Speaker Changed] And if you think the dollar’s gonna weaken, it’s

00:58:08 [Speaker Changed] All the better What we down eight, eight point a half percent. So like that year date, something like that. Yeah. So I know you’re not a currency analyst and you don’t make those sort of calls. How do you look at what happens post April 2nd liberation day and the ongoing weakness in the dollar? Does this come into your calculus or is this just more noise that nobody is, is

00:58:33 [Speaker Changed] It does not, not in terms of, of, you know, the, the short intermediate term, the way most people would think. But we think there are structural issues in the United States that transcend the current politics, transcend the current politics, and have been around for longer than people think and are detrimental to the US economy. And, and we find that very interesting that, you know, you hear all the time about debt and deficits and there’s some day of reckoning coming

00:58:58 [Speaker Changed] My entire adult life I’ve been hearing.

00:59:00 [Speaker Changed] Yeah. And I, I love that because the, the speaker usually is saying, I have some insight and for some reason the markets don’t appreciate my insight. Right. And I love that, like, you know, we’re all so smart and the market’s stupid. No, it’s actually the other way around. The markets have figured this out over the past 10 to 15 years. And what I’m talking about is, if you look at the spread between treasuries and AAA rated sovereign debt through time, what you will find is when the United States was rated aaa, our guilds were roughly in line with other AAA rated sovereign debt since the initial downgrade in 2011. And since then, nonstop, we have sold at a risk premium yield. In other words, we’re trading more like a lower quality bond relative to AAA rated sovereigns,

00:59:46 [Speaker Changed] Meaning all this negativity is in the price, right?

00:59:49 [Speaker Changed] It’s, it’s, it’s, it’s there, the markets have been well aware of it. There’s no day of reckoning. It’s like a slow bleed, right? And so what’s been, if you think about how everything in the United States priced off the 10 year mortgages, right? Munis corporate bonds, everything’s priced off the 10 year, the fact that we’re paying it at, you know, right now it’s just under 200 basis points of extra yield because of our lack of fiscal discipline that’s translating through to higher interest costs throughout the entire economy. It’s not just the government, it’s through the entire economy. Why don’t people, why aren’t people aware of this? Well, because over the past five to 10 years, we’ve had low absolute rates of interest. The point I’m trying to make is we’ve still been penalized relative to other countries, despite that absolute low rate of interest. And people haven’t realized that. So we’re already being penalized. And I think there’s, there’s a a, a real, I think everybody should be concerned about that. It’s clear that neither party has a real interest in fiscal discipline right now. So we should assume that, that that penalty against the United States is going to continue to exist, if not expand.

01:00:58 [Speaker Changed] So let me push back and, and play a little devil’s advocate about that. Hey, uncle Sam was borrowing it next to nothing. We’ve been running up deficits for a hundred years. COVID happens. Everybody’s stuck at Home Cares Act one is the biggest fiscal stimulus as at least as a percentage of gdp p right. Since World War ii. Then you add the second Cares Act under Trump, the third Cares Act under Biden to say nothing of the other tenure. Fiscal stimulus plans passed under Biden. And that pig working its way through the Python caused a giant spike in inflation plus supply chains, blah, blah, blah. And now that, that’s come out the other end. And so the Fed had a response whether, whether, whether the Fed brought inflation down or it was simply unwinding naturally is another debate. But once the Fed brings rates back down, this penalty will go away if and when the Fed finally does that. Well,

01:01:58 [Speaker Changed] The, the, that’s important because remember in the period I’m talking about, which is almost 15 years now, you’ve got periods, you’ve got multiple, multiple presidents, you’ve got multiple fed regimes, and the penalty doesn’t go away. And I think that’s, that’s so

01:02:14 [Speaker Changed] No matter, even at zero we were paying a pen because other Absolutely. Other countries had negative interest rates and negatives. Right. So there was still the penalty there. We were

01:02:21 [Speaker Changed] Still being penalized. It’s, it’s crazy. And that, that I think is something that’s lurking in the background that people are not paying attention to, especially people who say that there a day of reckoning is coming.

01:02:30 [Speaker Changed] You saying it came and it’s still here, it’s been here, it’s ongoing. It’s

01:02:34 [Speaker Changed] Ongoing. It’s just not big enough for anybody to notice. It’s, it’s like, it’s, as I said, it’s like water torture,

01:02:39 [Speaker Changed] The slow bleed, the slow bleed. That’s really, that’s really fascinating. Let’s jump to our favorite questions. Starting with, you mentioned some of the podcasts you’re listening to. What, what else are you streaming? What’s keeping you entertained these days? So,

01:02:52 [Speaker Changed] Streaming. I’m, I’m, I’m, I’m in a little bit of a rut in streaming right now. Oh, really? Yeah. I’m having tr everybody, you know, like everybody’s got their favorite, you know, streaming show that they like. And if you ask anybody, people come up with like four of them, oh, you gotta watch this, you gotta watch this. And all of a sudden it’s like, it all blends together and you can’t keep it together. So I, I’m a touch lost right now in, in terms of streaming, I won’t say, give me suggestions because I won’t remember it as soon as I leave here.

01:03:19 [Speaker Changed] I’m just gonna give you one. Okay. ’cause it’s quirky and interesting. Okay. It’s called Department Q.

01:03:24 [Speaker Changed] Department

01:03:25 [Speaker Changed] Q. Right. So this is a limited nine episode series on Netflix. Detective is shot, his partner is injured, the third person is killed at, at the site, and he basically is appointed head of the cold case division. Interesting. Which they’re just standing up. That’s

01:03:53 [Speaker Changed] The kind of stuff

01:03:53 [Speaker Changed] I love. I love that stuff. And it’s in Scottish, and I normally don’t love police procedurals. Yeah,

01:03:58 [Speaker Changed] Yeah, yeah.

01:03:58 [Speaker Changed] This is kind of fascinating. It’s department

01:04:00 [Speaker Changed] Q

01:04:01 [Speaker Changed] It’s, it’s, it sort of builds slowly over time. Like I could give you a hundred others that you, you wouldn’t care about, but I kind of know the sort of of stuff.

01:04:12 [Speaker Changed] Good.

01:04:12 [Speaker Changed] That’s a good one you like, but it’s quirky and weird, but really interesting. Good. If there, if you’re gonna have any complaint over it, and I don’t think this is a complaint, but the complaints I can imagine are, well, this builds slowly. I’m like, yeah. It’s not just, just That’s okay. You know, if you wanna open with a chasing Yeah. Yeah. James Bond and Mission Impossible. There you go. You know where to go find this is a little, a little more cool. Okay. So we’ll, well, I’m curious to see how you Department Q, department q such a, such an odd, let’s talk about mentors. You referenced one of them. Who were the folks who helped shape your career?

01:04:46 [Speaker Changed] So I would say there were, there were several. One that had an immense impact on me was the person who hired me at Merrill, Chuck Klau. Chuck Klau at the time was Merrill’s chief strategist. He’s,

01:04:57 [Speaker Changed] He’s, I know that name from way back when. Yeah,

01:05:00 [Speaker Changed] Yeah, yeah. He was the chief strategist at, at Merrill from 87 to 2000, something like that. Wow. And Chuck gave me two pieces of advice, which, which he, he claims he doesn’t remember that he gave me, but I’m sure he does. The first was my first day when I walked in at Merrill and I kind of said like, what do you think I should be focusing on? And he said to me, I don’t really care. Just don’t make a fool of yourself,

01:05:27 [Speaker Changed] By the way. That’s good advice for anybody, anywhere, anytime

01:05:30 [Speaker Changed] It was. And I, at first I was very put off like, this guy doesn’t care about me. Like, what is this all about? You know? But what he was saying was, you’re a grownup. Right.

01:05:38 [Speaker Changed] Right. Act like it don’t,

01:05:39 [Speaker Changed] You don’t, yeah, exactly. You don’t need me to tell you what you should do, but be aware, don’t make a fool of yourself. Right. Don’t, don’t do stupid things. Second thing he told me, which I live by to this day, and I tell this to people all the time, he said, make sure you’re a star and not a Roman candle. Huh. Which I thought, I still think to this day is fantastic advice.

01:06:01 [Speaker Changed] So persistency not, don’t just flame out.

01:06:04 [Speaker Changed] Don’t flame out. Don’t be the 10 minute, you know, thing. Be be the star that, to be a star is harder than you think. And, but be a star. Don’t be a Roman candle that I still to my day live my professional career that way.

01:06:18 [Speaker Changed] I, I I think, I think that’s great. You said you don’t read a lot, but you’ve written several books. I know there are books that have influenced you. What are some of your favorites? Do you read anything on vacation?

01:06:30 [Speaker Changed] So I do what I tend to read. I, I don’t have any one book that I would give you, but I, I will tell you, I tend to read a lot of espionage, spy and espionage type stuff. Okay. And the reason why is that as these things progress and as the stories progress, not, not like, as you said, not like James Bond type stuff. Right. But, but it’s, it, it’s almost like solving a puzzle or, or completing, you know, completing a puzzle in, in some way. And, and I find that fascinating. I find, you know, I was always in high school, my favorite math was, was geometry because everything was a puzzle to me. There was like, we had different tools. How do you solve the problem? And that’s kinda the way I, I view spies and espionage is that there’s different tools, but how do you solve the problem and how do you get where you want to go?

01:07:19 [Speaker Changed] Be in the spot. I got, I have another recommendation for you.

01:07:23 [Speaker Changed] This is why it came today. It

01:07:24 [Speaker Changed] Was a charming, it was one of these films that like, oh, this looks interesting. Netflix recommended, let’s try this black bag Black also set in the uk, MI six, husband and wife Yeah. Worked together. And there’s a mole somewhere in MI six and people, somehow each of them are led, I wanna say it’s, is it Kate Wins led, it’s one of the Kates. Hmm. And I forget who’s the lead husband, lead the man, the husband. But each of them begin to suspect the other. Oh,

01:08:00 [Speaker Changed] Interesting. And

01:08:02 [Speaker Changed] Shockingly interesting. Like, normally you go into a movie you have no idea about and let’s see how this is. And we both were like, wow, this was surprisingly good. So again, I know your wheelhouse. Yeah. Black Bag, black Bag and Department Q. You have now a film, a series, and a book. I’ve taken care of your, your summers there, entertainment. And so anything else you’re, you wanna mention that you’re reading?

01:08:30 [Speaker Changed] No, there’s not. You know, I, no, I haven’t, I haven’t been reading a lot recently For fun, I have to admit. But what I do read, you know, pretty religiously is, is getting back to the whole issue of, of being dispassionate. I I do read The Financial Times, I do read The Economist. To me that’s, that’s a must read for people in

01:08:48 [Speaker Changed] Industry. I have found the British papers. Yeah. Generally, like what we think of as left of center is sort of dead middle Yeah. To them. Yeah. And they look their right is kind of our middle. Like, it’s not like our spectrum feels wider. Our our political range. I think that’s right. And they, everybody seems to be clustered somewhere around, it’s either center right or center left, not extreme Right. Or extreme left.

01:09:15 [Speaker Changed] Exactly. And I actually don’t, I, I don’t care whether people are right or left, as long as I can figure that out. What I care for is factual content. Right, right. I fact, fact checking has to be, has to be good these days.

01:09:29 [Speaker Changed] So our final two questions. What sort of advice would you give to a recent college grad interested in a career in either investing or asset management or, or quantitative strategy?

01:09:39 [Speaker Changed] Yeah, so I, I mentioned this briefly before I, the advice I do give recent college ga graduates or, or seniors or or whatever, is not to pigeonhole yourself early in your career. Don’t, don’t say, this is what I have to do and this is what I’m going to do. You know, if you’re a doctor, if you wanna be a doctor, if you wanna be a lawyer, you have that. Some of that you have to do. I get that right. But if you want to go into the financial services industry in any format, you have to be, you have to enter that with an immense amount of flexibility. Our industry changes so dramatically and so quickly that what seems super interesting to you is a college graduate could be obsolete in two or three years. Right? Right. And you don’t wanna paint yourself into a corner where that’s all you know, and that’s all you’re willing to do and you’re unwilling to do other things or unwilling to learn other things. I think if you’re coming into financial services, you should, you should be one who likes to learn and likes to morph through time. Hmm.

01:10:41 [Speaker Changed] Really, really interesting. And our final question, what do you know about the world of investing today that might have been helpful to know 40 years or so ago? Oh, when you were getting started.

01:10:51 [Speaker Changed] Oh man. I mean, I will tell you, I have gone back and read reports that I wrote 20 years ago or 25 years ago. And I read them today and I say like, what a moron. I mean, I’m amazed at my own stupidity. And, and so

01:11:08 [Speaker Changed] Let me, I’m gonna interrupt you right here to say, so Professor David Dunning of University of Michigan. Yeah. He of the famous Dunning Kruger Effect said, if you look at work that’s five years old and you don’t think it’s awful, you’re not progressing or growing.

01:11:23 [Speaker Changed] Is that right? Oh,

01:11:23 [Speaker Changed] Is that right? Swear ab I said on it. Right, right. Sitting where you were sitting

01:11:26 [Speaker Changed] That,

01:11:27 [Speaker Changed] That’s, it’s fascinating. And said, if’s fascinating. If you’re not, if you don’t hate what you did 10 years ago, you haven’t grown at all

01:11:33 [Speaker Changed] Professionally. I, I, I

01:11:34 [Speaker Changed] Cringe. How fantastic is

01:11:35 [Speaker Changed] That? I cringe. I mean, some of the, some of the ideas I wrote about we still use and they’re, they’re still the crux of what I, but I’m just saying, I look at my writing, I look at how I expressed myself, I looked at how I thought something was so important, that type of thing. And I cringe today, I absolutely cringe. And the moral of the story there is I’ve come to grips with the fact that no matter how smart I think I am, I’m really not very smart. And there’s a lot more to learn. And so I think as I’ve gotten older, I’ve wanted to learn more through time, I kind of immersed myself. And it’s, it’s funny because my friends react to me down there. They’re like, how did you know that? And it’s only because I’m reading all kinds of different things and doing all kinds of different things and paying attention to different things because I kind of think of myself as a perpetual moron. I, I don’t, I don’t know how else to describe it, but that’s really how I view myself.

01:12:23 [Speaker Changed] All I know is that I know nothing. I, yeah. Go back to Phil philosophy. What is that? Aristotle? So, yeah. So we, we will, we will end where we began. Rich, thank you for being so generous with your time. We have been speaking with Rich Bernstein, founder, chief investment officer of Rich Bernstein Associates. If you enjoy this conversation, well be sure and check out any of the 550 we’ve done over the past 11 years. You can find those at Bloomberg, iTunes, Spotify, YouTube, wherever you feed your podcast fix. Be sure and check out my new book, how Not to Invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them. How not to invest wherever you find your favorite books. I would be remiss if I did not thank our crack team that helps put these conversations together each week. Anna Luke is my producer. Sage Bauman is the head of podcasts at Bloomberg. Sean Russo is my researcher. Peter Olino is my engineer. I’m Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.

~~~

 

 

 

 

The post Transcript: Richard Bernstein, CEO / CIO of RBA appeared first on The Big Picture.

BLS: CPI Increased 0.3% in June; Core CPI increased 0.2%

Calculated Risk -

From the BLS:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in June, after rising 0.1 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.

The index for shelter rose 0.2 percent in June and was the primary factor in the all items monthly increase. The energy index rose 0.9 percent in June as the gasoline index increased 1.0 percent over the month. The index for food increased 0.3 percent as the index for food at home rose 0.3 percent and the index for food away from home rose 0.4 percent in June.

The index for all items less food and energy rose 0.2 percent in June, following a 0.1-percent increase in May. Indexes that increased over the month include household furnishings and operations, medical care, recreation, apparel, and personal care. The indexes for used cars and trucks, new vehicles, and airline fares were among the major indexes that decreased in June.

The all items index rose 2.7 percent for the 12 months ending June, after rising 2.4 percent over the 12 months ending May. The all items less food and energy index rose 2.9 percent over the last 12 months. The energy index decreased 0.8 percent for the 12 months ending June. The food index increased 3.0 percent over the last year.
emphasis added
The change in CPI was close to expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

How The Epstein Debacle Has Overshadowed Historic Success At The DOJ

Zero Hedge -

How The Epstein Debacle Has Overshadowed Historic Success At The DOJ

Authored by Julie Kelly via 'Declassified',

As I reported on X on Sunday, it appears Attorney General Pamela Bondi and FBI Deputy Director Dan Bongino have agreed to a truce. Bongino was prepared to imminently resign over Bondi’s botched handling of the Jeffrey Epstein matter; President Trump told reporters on Sunday he had spoken with Bongino and indicated his longtime friend was “in good shape” without any plans to depart soon.

If true, the development represents good news since the clash of wills pitted the White House against some of the president’s most loyal influencers, prompting one of the biggest political crises in the administration to date. Trump appears to have successfully calmed the waters both behind the scenes and online.

Unfortunately, not only did the Epstein matter create deep division in MAGAland, fixation on the topic sucked the oxygen out of the media sphere related to significant achievements within the Department of Justice. Bondi and her team continue to clean house at the systemically corrupt department as longtime employees are either fired or leave voluntarily amid “differences” with the president’s policies. The most recent purge includes members of Special Counsel Jack Smith’s team, J6 prosecutors, and the spokeswoman at the most powerful U.S. Attorney’s office in the country.

But rather than take their well-deserved firings on the chin like grown ups, self-proclaimed “victims” of the personnel wrecking ball emote on social media or to slavish reporters proving that DOJ employees are a partisan, sanctimonious, and downright annoying bunch of humans.

Poor Poor Pitiful Me, Part 1,306

For example, Bondi last week fired Joseph Tirrell, head of the DOJ’s ethics office. (LOL).

Tirrell, according to Bloomberg News, is “a career attorney who’d spent nearly 20 years at the department,” meaning Bondi was stuck with him until the DOJ could find a reason to terminate. No details are available as to why Tirrell finally got the boot but he reportedly did, among other things, oversee Special Counsel Jack Smith’s operation.

Last February, Tirrell reviewed Smith’s last disclosure report, which revealed the special counsel had received $140,000 in pro bono legal advice after the 2024 election. (The president promised to investigate Smith, who handed down two criminal federal indictments against Trump in 2023.)

It’s unclear whether Tirrell approved that free legal work, flagged any excessive expenditures—the special counsel’s office spent roughly $50 million in a little over a year—or identified any conflict of interests within the office. But instead of simply updating his resume, Tirrell followed in the light-in-the-loafers footsteps of his former colleagues by penning a tale of woe on social media.

Patricia Hartman, the longtime spokeswoman at the D.C. U.S. Attorney’s office, went straight to CBS News last week to bitch about her invitation to the unemployment line.

Hartman, no doubt at the direction of Biden appointee Matthew Graves, spent four years churning out daily press releases to boast about the Biden DOJ’s success in the politically-motivated January 6 investigation. Hartman even issued press releases on the misdemeanor cases against Trump confidants Steve Bannon and Peter Navarro; U.S attorney’s offices rarely pursue federal misdemeanors and certainly never brag about it in press releases if they do.

Nonetheless, Hartman portrayed herself as the victim of a political operation rather than the devoted mouthpiece of one:

Hartman is the only J6 propagandist to hit the streets. Following an immediate expulsion of J6 and Jack Smith prosecutors back in late January, the DOJ is back to the chopping block in both matters. Bondi just fired at least 20 lawyers and staffers assigned to Smith’s team bringing the total number of scalps to 37. (Smith resigned on January 10.) At least three prosecutors who handled high-profile J6 cases also got the ax this month with more to come, according to my own sources.

Voluntary Self Deportation

Many DOJ employees are leaving voluntarily rather than anxiously refresh their email inbox for a message with the subject line, “Notice of Removal From Federal Service.” Dozens of employees working at the DOJ unit responsible for defending the administration against a nonstop deluge of lawsuits have resigned, according to a Reuters analysis this month. Prosecutors complained of a heavy workload--boo hoo!--and ideological differences with the new boss.

"Many of these people came to work at Federal Programs to defend aspects of our constitutional system. How could they participate in the project of tearing it down?” one lawyer who recently quit told Reuters.

A similar exodus is underway at the DOJ’s civil rights division where nearly 70 percent of the division’s attorneys have headed for the exits rather than work for Harmeet Dhillon, the president’s pick to run the office. Apparently the totally nonpolitical lawyers object to doing things like keeping boys out of girls’ sports, protecting children from surgical mutilation, and combating religious bias—just a few of Dhillon’s stated objectives.

All of this comes on top of months of success in identifying and firing known partisans at both the DOJ and FBI, an historic purge with no signs of stopping. The moves are “creating rampant speculation and fear within the workforce over who might be terminated next,” former staffers told the Washington Post.

Which should be sweet music to the collective ears of Trump supporters. Unfortunately, this good news is being silenced by a cacophony of discord and demands in the Epstein case—something the enemies of MAGA are enjoying all too much.

Tyler Durden Mon, 07/14/2025 - 23:25

Orange Juice Futures Squeeze On Trump's Brazil Tariff Threat 

Zero Hedge -

Orange Juice Futures Squeeze On Trump's Brazil Tariff Threat 

President Trump fired off a flurry of trade warning letters last week to countries including South Korea, Brazil, Europe, Mexico, and Canada. In one letter to Brazilian President Luiz Inácio “Lula” da Silva, Trump announced the potential for a new 50% tariff on imports from Brazil. The move has since sparked fears of supply disruptions and sent orange juice futures in New York soaring to a four-month high. 

The most active contract jumped 8.655% to $3.1385 a pound on Monday, the highest since early March. Orange juice futures have been rallying since Trump’s trade warning letter to the South American country last week, stoking fears of renewed supply disruptions. Prices previously surged as high as $5 a pound in late 2024, as U.S. orange juice production fell to decade lows. Prices then crashed earlier this year.

OJ is on track for the largest monthly gain since January 1981. 

The threat of disrupted OJ supplies comes as the U.S. has ramped up imports from Brazil in recent years, with Florida production in disarray due to greening disease and hurricanes that have devastated large swaths of groves, according to Craig Elliott, a market analyst at Expana, as cited by Bloomberg. He noted that while the full impact of the proposed tariff remains uncertain, the volume of trade at risk is substantial and could further undermine Brazil’s competitiveness.

Tariffs risk upending Brazil–U.S. ag trade across a wide range of goods (much more than just OJ) — from coffee and red meat to poultry, pork, and more. 

Tyler Durden Mon, 07/14/2025 - 23:00

"The Numbers Don't Lie": Most California Voters Say Special Interests Have Too Much Influence On Policy: Poll

Zero Hedge -

"The Numbers Don't Lie": Most California Voters Say Special Interests Have Too Much Influence On Policy: Poll

Authored by Kimberly Hayek via The Epoch Times (emphasis ours),

A poll by the Berkeley Institute of Governmental Studies published on July 10 found that a majority of Californians believe special interest groups wield too much influence over policymaking in Sacramento.

A voter drops off a ballot at an official ballot drop box on the final day of early voting ahead of Election Day at City Hall in San Francisco on Nov. 4, 2024. Loren Elliott/Getty Images

More than 6,000 respondents were asked whether or not “special interest money has too much influence in Sacramento politics and decisionmaking.”

Fifty-five percent of respondents strongly agreed, and 20 percent somewhat agreed. Only 2 percent disagreed.

Republicans and Democrats were largely united on the issue.

The poll found that 73 percent of Democrats and 81 percent of Republicans agreed with the statement. Among those with no party preference, 75 percent agreed.

The sentiment was shared across regional, gender, age, education, income, and racial groups, with at least 59 percent of respondents in each group agreeing with the statement. The poll also found that 87 percent of regular voters strongly or somewhat agreed with the statement.

“The numbers don’t lie. Californians overwhelmingly recognize that big money wields far too much power over our elected officials,” said Russia Chavis Cardenas, deputy director of nonprofit organization California Common Cause.

“People from every political party, every race, and every walk of life are united behind one urgent demand. They want Sacramento to break the grip of big money on our democracy.”

When asked whether they trust various representatives to “act in the best interests of the California public,” 14 percent of voters said they have “a lot” of trust in Gov. Gavin Newsom. Another 28 percent said they trust him “somewhat.”

Voters trust the state Legislature about as much: 11 percent said they trust it a lot, and 33 percent said they trust it somewhat.

California Gov. Gavin Newsom speaks in Los Angeles on Sept. 25, 2024. John Fredricks/The Epoch Times

Voters have even less trust in “tech companies and their leaders,” with just 4 percent saying they have a lot of trust that those leaders will act in the best interests of California residents. The poll found 58 percent have no trust “at all” in tech leaders. Trust in business leaders in general was only slightly higher: 4 percent said they trust them, while 46 percent said they do not trust them “at all.”

It’s no surprise that Californians have little trust in tech companies and their leadership,” said Leora Gershenzon, policy director of the California Initiative for Technology and Democracy.

“All too often, they have made decisions that further screentime addiction, mental health challenges in children and teens, and political deepfakes that undermine elections, all to maximize profit.”

Voters trust labor unions more, with 19 percent saying they trust them a lot and 32 percent saying they trust them somewhat.

Community-based nonprofit organizations score higher: 27 percent trust them a lot, and another 35 percent trust them somewhat.

“With so much special interest money in California elections, everyday Californians question the motives of our elected leaders. But they know community-based organizations will always have their back,” said Camila Chavez, executive director of nonprofit organization Dolores Huerta Foundation.

Regarding the justice system, 20 percent of California voters said they have a lot of trust in the courts, and 37 percent said they trust them somewhat.

Eleven percent of voters said they trust public officials a lot, and 39 percent said they trust them somewhat.

‘Democracy Under Attack’

A majority of Californians, 64 percent, across gender, age, education, regional, income, and racial groups, view American democracy as “under attack.”

Fewer than 15 percent of respondents from each group said American democracy is in “no danger.”

Seventy percent of respondents aged 65 and older believe American democracy is under attack, along with 69 percent of white people, and 74 percent of black respondents. Only 1 percent of black respondents view American democracy as being in no danger.

Democrats and Republicans are split on the issue, with 81 percent of Democrats seeing American democracy as under attack, while only 38 percent of Republicans agree. A total of 39 percent of Republicans view American democracy as being tested, and 24 percent of Republicans view American democracy as in no danger.

Sixty-one percent of those with “No Party Preference” believe that American democracy is under attack. An estimated 32 percent view it as being tested. Just 8 percent of those with no party preference, and 3 percent of Democrats, see American democracy as being in no danger.

“It is hard to imagine that a majority of voters would have seen U.S. democracy as under severe threat,” said Eric Schickler, co-director of the Institute of Governmental Studies. “It is now something of a new ‘normal,’ itself a worrisome sign about how things have shifted.”

Tyler Durden Mon, 07/14/2025 - 22:35

Trump Wants Gaza Deal 'Straightened Out' Within The Next Week

Zero Hedge -

Trump Wants Gaza Deal 'Straightened Out' Within The Next Week

President Trump on Sunday said he hopes a ceasefire deal in Gaza can be finalized within this week, in comments made to reporters before boarding a flight to attend yesterday's FIFA Club World Cup Final.

When asked about the ongoing crisis in Gaza, he responded, "We’re talking, and hopefully we’ll get that straightened out over the next week. Let’s see what happens."

While there had been anticipation in Israel for a deal announcement during Prime Minister Benjamin Netanyahu’s recent visit to Washington DC last week, recent days have seen the typical non-committal, ambiguous statements out of both Washington and Tel Aviv. The war looks to have no solutions, given the stated goals of Israel and the United States.

Middle East envoy Steve Witkoff expressed optimism Sunday, saying he was "hopeful" an agreement could be reached. 

But as it stands the Netanyahu government is still insisting on the full disarming of Hamas, while Hamas for its part wants full withdrawal of the Israeli military.

Neither is expected to happen, and at this point it looks to be a fight to the death - with Israeli hostages still in limbo (and many feared dead) - and thousands of Palestinian civilians getting slaughtered each week.

Currently, a plan floated by some Israeli officials for a designated 'humanitarian city' inside a sector of Gaza has continued to be met with immense pushback. Critics call it in effect a "concentration camp" - while many within Israel say it is logistically impossible.

The plan was announced by Israel’s Defense Minister Israel Katz last week:

Israeli affairs analyst, Dan Perry, says the plan to build a “humanitarian city” would involve “by all indications a very long process” to build and maintain, while the country does not have the “funds or the energy or the desire” to do so.

“I think this has to be viewed in the context of the current negotiations where the very reporting of such a plan might be an effort to put pressure on Hamas to show more flexibility,” Perry told Al Jazeera.

“I agree with [opposition leader Yair] Lapid that it is a security, political and logistical nightmare. I would add that it’s ethically inadmissible,” he added.

And so it is unlikely to get off the ground. In the meantime aid delivery continues to also be mired in controversy and scandal, as American military contractors have reportedly fired on hungry Palestinians.

Reports say the IDF troops have shot dead scores of Palestinians seeking the aid, and UN and international rights groups have slammed the unsafe aid station set-ups.

Al Jazeera provides some Monday updates on the situation as follows:

  • At least 47 people killed across Gaza today, including Palestinians gathered near aid centre.
  • Israeli forces continue bombarding Gaza a day after killing 95 Palestinians across the Strip.
  • Criticisms of Israel’s plan to set up an internment camp in Gaza are growing, with Israeli opposition leader Yair Lapid saying it would amount to a “concentration camp” if Palestinians there are not allowed to leave.
  • Israel’s war on Gaza has killed at least 58,026 people and wounded 138,520, according to Gaza’s Health Ministry. An estimated 1,139 people were killed in Israel during the October 7, 2023, attacks, and more than 200 were taken captive.

And below are more regional and global headlines via Newsquawk.

* * *

Geopolitics: Middle East

  • Iran Foreign Ministry spokesperson says Tehran will respond to the return of UN sanctions after snapback mechanism. No date or location for US/Iran nuclear talks. Will not restart US talks unless we are certain they will work.
  • Israeli official said talks in Doha are ongoing with Hamas for a ceasefire and hostage deal but noted Hamas is sticking to positions that do not allow mediators to advance an agreement.
  • US envoy to the Middle East Witkoff said he is hopeful on Gaza ceasefire negotiations and was said to meet senior Qataris in New Jersey on Sunday.
  • Iranian Foreign Minister Araghchi said they are carefully assessing options for talks with the US.

Ukraine

  • US President Trump is considering greenlighting new funding for Ukraine to send a message to Russia, according to CBS. It was separately reported that President Trump is to announce an "aggressive" Ukraine weapons plan on Monday to arm Ukraine which is expected to include offensive weapons, according to Axios.
  • EU envoys are nearing an agreement on lower Russian oil price cap, according to Reuters.
  • Ukraine’s SBU intelligence agency accused Russia’s FSB of being behind the murder of an SBU Colonel in Kyiv last week and said agents responsible for the murder were killed during an operation to apprehend them.
  • IAEA team at Ukraine’s Zaporizhzhia nuclear plant reported hearing hundreds of rounds of small arms fire on Saturday night.
  • Russia’s Defence Ministry said Russian forces took control of Myrne and Mykolaivka in eastern Ukraine.
  • North Korean leader Kim reaffirmed unconditional support for Moscow’s actions in the Ukraine war during a meeting with Russian Foreign Minister Lavrov, while North Korea and Russia pledged cooperation to safeguard each other’s territorial integrity. Furthermore, Russia expressed firm opposition to any attempt to undermine North Korea’s national security and sovereignty, while it was also stated that Moscow wants to further strengthen the strategic partnership.
  • Ukrainian President Zelensky's Chief of staff says US Special Envoy Kellogg has arrived in Kyiv to discuss security and sanctions against Russia.
  • Russian President Putin's envoy Dmitriyev says Russia-US dialogue will continue.
  • Russia's Kremlin says it is obvious Ukraine is not in a hurry on peace negotiations, "we await timing of third round of talks".

Other

  • North Korea warned it stands ready to take military action against threats from the US, Japan and South Korea following recent joint air drills involving a strategic US bomber, according to KCNA.
Tyler Durden Mon, 07/14/2025 - 22:10

ICE Detains 361 Illegal Immigrants, Finds 14 Minors In Operation At California Marijuana Farms

Zero Hedge -

ICE Detains 361 Illegal Immigrants, Finds 14 Minors In Operation At California Marijuana Farms

Authored by Jacob Burg via The Epoch Times (emphasis ours),

Administration officials on July 13 defended President Donald Trump’s immigration enforcement operations, including one on a California marijuana farm last week that a worker advocacy group alleges led to a man’s death.

California National Guard troops face off with protesters during a federal immigration operation at Glass House Farms in Camarillo, Calif., on July 10, 2025. Blake Fagan/AFP

Department of Homeland Security (DHS) Secretary Kristi Noem told NBC News’s “Meet the Press” on July 13 that Immigration and Customs Enforcement (ICE) agents detained 361 illegal immigrants and encountered 14 unaccompanied minors during a July 10 operation on two marijuana farms in Southern California.

“At the California marijuana facilities, ICE and CBP law enforcement rescued at least 14 migrant children from what looks like exploitation, forced child labor, and potentially human trafficking or smuggling while facing assault and even gunfire,” DHS Assistant Secretary for Public Affairs Tricia McLaughlin said in a statement.

Among those arrested were “criminals with convictions for rape, serial burglary, hit and run and DUIs,” she added.

Both marijuana sites are operated by and licensed to Glass House Farms, which confirmed the operation and said it was fully complying with the search warrants.

United Farm Workers, a worker advocacy group, alleges that several workers were injured during the operation and reported prematurely Friday that one man died a day after he fell off a 30-foot building that he climbed. The family of Jaime Alanis, 57, later confirmed that he died Saturday.

The worker’s family created a GoFundMe page to raise funds for his family and a burial in Mexico, identifying him as Jaime Alanís.

Elizabeth Strater, national vice president of the United Farm Workers, claimed that there were U.S. citizens arrested during the operations. DHS said Monday that four U.S. citizens “are being criminally processed for assaulting or resisting officers.”

The Department of Homeland Security said its agents weren’t responsible for Alanís’s death. “Although he was not being pursued by law enforcement, this individual climbed up to the roof of a green house and fell 30 feet,” the agency stated.

Agents immediately ordered a medical evacuation, according to the department.

When asked about the death during an interview with CNN’s “State of the Union” on July 13, border czar Tom Homan said: “It’s sad. It’s unfortunate.

“He wasn’t in ICE custody, and ICE did not have hands on this person.

“But it’s always unfortunate when there’s deaths. No one wants to see people die.”

Homan said the agents were doing their job serving criminal search warrants.

“I see the media saying it was an ICE raid,” he said. “No, they were serving criminal search warrants as part of a criminal investigation involved with child trafficking, child labor. I think it was a total of 11 children that were found on that farm, and now they’re being interviewed.”

Response to Judge Ruling

On July 11, a federal judge temporarily blocked the Trump administration from carrying out immigration enforcement operations and arrests in the Central District of California without probable cause.

The judge ordered the Department of Homeland Security to stop detaining people based on their race, spoken language or accent, occupation, or presence in specific locations such as bus stops.

Noem told NBC Sunday that the administration would “absolutely” comply with the court order, but denied that the Trump administration is using racial profiling when carrying out immigration enforcement search warrants.

“What we have always done is built a case and done investigative work, and who we go after and who we target. And so this judge is ridiculous in the fact that he put forward a decision like this,” Noem said.

She said the administration will appeal the ruling and that “we will win it.”

“Because over and over again, when our ICE officers are out there getting the worst of the worst off of our streets, they’re using the investigative backgrounds and information that they have from either criminal records or what they have for charges or individuals who are breaking our federal laws that need to be brought to justice,” Noem said.

On July 13, Homan told CNN that physical characteristics are one of many factors that agents could use to establish reasonable suspicion that a potential target lacks legal immigration status, and thus give probable cause to stop and detain them.

He emphasized that it can’t be the sole reason, and suggested that features such as having a visible MS-13 tattoo would be one example.

“I want to be clear about that again, because my words are taken out of context. Physical description cannot be the sole reason to detain and question somebody. That can’t be the sole reason to raise reasonable suspicion,” Homan said.

“It’s a myriad of factors, and I could stay here for the next half hour and give you all the factors.”

Aldgra Fredly, T.J. Muscaro, and Reuters contributed to this report.

Tyler Durden Mon, 07/14/2025 - 21:45

Zuckerberg "Focused" On Building Mega Gigawatt-Size Data Centers

Zero Hedge -

Zuckerberg "Focused" On Building Mega Gigawatt-Size Data Centers

Meta shares rose during the U.S. morning cash session after CEO Mark Zuckerberg announced on Threads that the company is building several massive data centers to support its superintelligence ambitions. 

"For our superintelligence effort, I'm focused on building the most elite and talent-dense team in the industry. We're also going to invest hundreds of billions of dollars into compute to build superintelligence. We have the capital from our business to do this," Zuckerberg wrote in a post.

He continued, "We're actually building several multi-GW clusters. We're calling the first one Prometheus and it's coming online in '26. We're also building Hyperion, which will be able to scale up to 5GW over several years. We're building multiple more titan clusters as well. Just one of these covers a significant part of the footprint of Manhattan." 

Zuckerberg cited a recent report from tech blog SemiAnalysis that noted Meta was aggressively advancing toward superintelligence amid a series of setbacks in model performance, such as losing its lead in open-weight models to competitors like China's DeepSeek.

Here's more from SemiAnalysis...

Meta's shocking purchase of 49% of Scale AI at a ~$30B valuation shows that money is of no concern for the $100B annual cashflow ad machine. Despite seemingly unlimited resources, Meta has been falling behind foundation labs in model performance.

The real wake-up call came when Meta lost its lead in open-weight models to DeepSeek. That stirred the sleeping giant. Now in full Founder Mode, Mark Zuckerberg is personally leading Meta's charge, identifying Meta's two core shortcomings: Talent and Compute. As one of the last founders still running a tech behemoth, Mark doesn't need SemiAnalysis to tell him to slow down stock buybacks to fund the future!

Meta's race for compute:

  • Prometheus cluster in Ohio: Features an "all-of-the-above" approach (self-build and leasing) with on-site natural gas plants (e.g., 200MW units from Solar Turbines, Siemens Energy, and CAT).

  • Hyperion cluster in Louisiana: Planned as the world's largest campus by 2027, with over 1.5GW of IT power in phase 1.

And the race for talent and strategy 

  • Recruiting Executives: Meta has aggressively onboarded leaders such as Nat Friedman (ex‑GitHub), Alexandr Wang (Scale AI CEO), and Daniel Gross. The pitch: unmatched compute budgets, open-source impact, and access to >2 billion users. Comp packages can reach $200–300 million for four years.

  • Scale AI Tie‑in: Meta's $15–30 billion investment in—and 49% stake acquired from—Scale AI brings in essential data-labeling and evaluation expertise (SEAL lab) to strengthen LLM data pipelines

  • M&A Activities: While Meta reportedly approached startups like Thinking Machines and SSI, only Scale AI joined the fold—focused on closing data quality gaps exposed by Llama 4's struggles

In markets, Meta's shares rose just over $1 to $725.50 on the news. The stock is up 24% year-to-date, trading in record-high territory amid the broader trend of the race for AI compute and talent.

All of this capital expenditure (capex) by Big Tech firms...

...has many on Wall Street increasingly asking whether this unprecedented AI spending surge will translate into sustainable new revenue streams. 

Tyler Durden Mon, 07/14/2025 - 20:55

Supreme Court Allows Trump To Fire Education Department Employees

Zero Hedge -

Supreme Court Allows Trump To Fire Education Department Employees

Authored by Matthew Vadum via The Epoch Times,

The Supreme Court on July 14 allowed President Donald Trump to move forward with dismantling the Department of Education by firing almost 1,400 employees.

 In a brief unsigned ruling, the justices blocked the order issued in May by U.S. District Judge Myong Joun, who had concluded that the Trump administration’s “true intention is to effectively dismantle the Department” even though in his view it lacked the power to do so.

The court did not explain its decision.

Three justices - Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson - dissented from the ruling.

Justice Sonia Sotomayor dissented, in a 19-page opinion that was joined by Justices Elena Kagan and Ketanji Brown Jackson.

Sotomayor called the court’s decision “indefensible,” writing that it “hands the Executive the power to repeal statutes by firing all those necessary to carry them out."

"The majority,” she said, “is either willfully blind to the implications of its ruling or naïve, but either way the threat to our Constitution’s separation of powers is grave.”

In her dissent, Sotomayor emphasized that, until this year, “Presidents have recognized they lack the unilateral authority to eradicate a Department that Congress has tasked with fulfilling statutory duties.”

But President Donald Trump, she said, “has made clear that he intends to close the Department without Congress’s involvement.”

In its briefs at the Supreme Court, Sotomayor continued, “the Government does not defend the lawfulness of its actions” but instead “presents a grab bag of jurisdictional and remedial arguments to support its bid for emergency relief” – none of which, she said, “justifies this Court’s intervention.”

A federal district court had issued an injunction blocking the process, directing the government to rehire some of the departmental employees who had been laid off.

Trump campaigned on shuttering the department.

On March 20, he signed Executive Order 14242, pledging to close the agency, which he said “has entrenched the education bureaucracy and sought to convince America that Federal control over education is beneficial.”

The department “does not educate anyone” and “maintains a public relations office that includes over 80 staffers at a cost of more than $10 million per year,” the executive order states.

Tyler Durden Mon, 07/14/2025 - 20:05

Tuesday: CPI, NY Fed Mfg

Calculated Risk -

Mortgage Rates From Matthew Graham at Mortgage News Daily: Mortgage Rates Just a Hair Higher Ahead of Important Inflation Report
Today's movement in mortgage rates, in and of itself, is barely worth mentioning. The average lender remains close enough to Friday's levels but is technically just a hair higher. That fact is offset by the counterpoint that most of the past two months saw higher rates.

The future is far more interesting than the present--specifically, the immediate future. Tomorrow morning brings the release of the Consumer Price Index (CPI). This is one of the most important economic reports as far as interest rates are concerned and tomorrow's example is especially notable.

This CPI marks the first major opportunity for the official data to show (or not show) a meaningful impact on inflation from tariffs.[30 year fixed 6.83%]
emphasis added
Tuesday:
• At 8:30 AM ET, The Consumer Price Index for June from the BLS. The consensus is for a 0.3% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 2.6% year-over-year and core CPI to be up 2.9% YoY.

• Also at 8:30 AM, The New York Fed Empire State manufacturing survey for July. The consensus is for a reading of -10.1, up from -16.0.

White House Unveils Sweeping MAHA Changes In Nation's Food Supply Chain 

Zero Hedge -

White House Unveils Sweeping MAHA Changes In Nation's Food Supply Chain 

Months after President Trump released a report titled "The MAHA Report: Make Our Children Healthy Again," outlining America's childhood chronic disease crisis and its potential contributing causes, the White House has now released a detailed list of changes within the processed food industrial complex — just ahead of a promised September revelation by Health Secretary Robert F. Kennedy Jr. has pledged to identify the root cause of the autism epidemic.

"President Donald J. Trump took office promising to confront the chronic health crisis plaguing Americans — and six months later, he is delivering on that promise by removing harmful chemicals from our food supply," the White House wrote in a statement.

The White House noted that "dozens of ice cream companies — representing more than 90% of the ice cream volume sold in the U.S. — have pledged to eliminate the use of certified artificial colors in their ice cream and frozen dairy products." 

What's becoming undeniable is that this nation's food supply was hijacked by globalist mega-corporations pumping it full of toxic ingredients. If that wasn't the case, why are they now scrambling to remove synthetic dyes and other harmful chemicals?

Here's the growing list of companies that have taken steps to improve their food supply chain:

  • Steak & Shake moved to 100% all-natural beef tallow and replaced its "buttery blend," which contained seed oils, with 100% Grade A Wisconsin butter.

  • McCormick announced it will drop certain food dyes from its products.

  • PepsiCo announced it will remove artificial ingredients from popular food items — including Lay's and Tostitos chips — by the end of the year.

  • In-N-Out announced it will remove synthetic food dyes and artificial flavors from its menu items, and also transitioned to 100% beef tallow.

  • Tyson Foods eliminated synthetic dyes in its food products.

  • Mars removed titanium dioxide from its Skittles product.

  • Sam's Club committed to removing 40 harmful ingredients — including artificial colors, additives, dyes, and high-fructose corn syrup — from its private-label products.

  • Kraft-Heinz announced it will remove artificial dyes from its U.S. products.

  • General Mills announced it will remove artificial dyes from its U.S. cereals and all foods served in K-12 schools.

  • Nestlé announced it will remove all petroleum-based food dyes from its food and beverage products.

  • Conagra Foods announced it will remove certain color additives from its frozen products, no longer offer products with artificial dyes in K-12 schools, and stop using artificial dyes in the manufacturing of its products.

  • JM Smucker announced it will remove synthetic colors from its consumer food products.

  • Hershey announced it will remove synthetic dyes from its snacks.

  • Consumer Brands announced it will urge its members to remove artificial colors in food and beverage products served in schools.

Americans must demand more from these mega food companies — say no to seed oils and other toxic chemicals in the food supply chain. The best way to break free from the industrial food complex is to go local: find a farmer or rancher, plant a garden, raise chickens. Yes, it takes work — but it not only secures your own food supply, it also helps you understand exactly where your food comes from.

Tyler Durden Mon, 07/14/2025 - 19:40

Cuomo "In It To Win It", Staying In NYC Mayoral Race As Independent

Zero Hedge -

Cuomo "In It To Win It", Staying In NYC Mayoral Race As Independent

Authored by Chase Smith via The Epoch Times,

Former Democratic New York Gov. Andrew Cuomo announced on July 14 that he will remain in the New York City mayor’s race, weeks after losing the Democratic primary.

“To the 440,000 New Yorkers who voted for me, a sincere thank you,” Cuomo said in a video statement posted on social media platform X.

“Thank you for believing in me and my agenda and in my experience. And I am truly sorry that I let you down.”

Cuomo lost the Democratic nomination last month to Zohran Mamdani, a state assemblyman. Mamdani officially became the Democratic nominee on July 1, winning 56 percent of the vote after three rounds of ranked-choice tabulation, according to certified results published by the city’s Board of Elections. Cuomo received 44 percent.

The former governor had conceded on election night, but not until the video announcement did he confirm that he would remain in the race.

“The fight to save our city isn’t over,” Cuomo added. “Only 13 percent of New Yorkers voted in the June primary. The general election is in November, and I am in it to win it.”

In the video, Cuomo presented his campaign as a contrast to Mamdani, accusing him of offering “slick slogans, but no real solutions.” Cuomo promised to campaign in person across the five boroughs. “For the next few months it’s my responsibility to earn your vote,” he told New Yorkers.

“Every day, I’m gonna be hitting the streets, meeting you where you are—to hear the good and the bad, problems and solutions,” he said.

Cuomo will face both Mamdani and incumbent Mayor Eric Adams in the general election. Adams, who won the 2021 race as the Democratic nominee, opted to skip the primary and is running for reelection as an independent.

Cuomo’s decision sets up a rare three-way contest and highlights a broader split within the Democratic Party between more moderate Democrats and the left wing of the party. Mamdani’s surprise win tested calls for moderation from national Democratic leaders following former Vice President Kamala Harris’s 2024 loss to Donald Trump.

Cuomo, who resigned from the governorship in 2021 amid sexual harassment allegations, entered the mayoral race with support from prominent Democratic figures including former President Bill Clinton, former New York mayor Michael Bloomberg, and Rep. James Clyburn (D-S.C.).

Mamdani, a self-described democratic socialist, ran on a platform focused on cost-of-living issues, including rent freezes and fare-free public transit.

Mamdani’s campaign did not respond to a request for comment. Shortly after Cuomo’s video was posted, Mamdani replied to the post on X with a link to donate to his own campaign.

Also running as an independent is Jim Walden, a lawyer and first-time political candidate.

Curtis Sliwa, the Republican nominee for mayor who lost to Adams in 2021, has called Mamdani “too extreme for a city already on edge” in a post on X. Sliwa has an uphill battle fighting for votes in the heavily Democratic leaning city, where he received 302,680 votes to Adams’s 753,801 in the last election.

The general election will be held on Nov. 4.

Tyler Durden Mon, 07/14/2025 - 19:15

Leaked Messages Reveal Andreessen's Fury: 'Universities Declared War On 70% Of The Country'

Zero Hedge -

Leaked Messages Reveal Andreessen's Fury: 'Universities Declared War On 70% Of The Country'

Venture capitalist Marc Andreessen warned that universities engaging in discriminatory practices against students and faculty will face significant consequences, according to leaked screenshots obtained by the Washington Post.

In the private group chat with AI scientists and Trump administration officials, Andreessen stated that universities “declared war on 70% of the country and now they’re going to pay the price.” He criticized DEI and immigration policies, describing them as “two forms of discrimination” that are “politically lethal.”

(Washington Post illustration; Obtained by The Post)

Andreessen further claimed that Stanford University and MIT are operating as “mainly political lobbying operations fighting American innovation.”

The billionaire tech investor also addressed Stanford’s decision to remove his wife, Laura Arrillaga-Andreessen, as chair of its Center on Philanthropy and Civil Society, noting it was done “without a second thought, a decision that will cost them something like $5 billion in future donations.”

This isn’t the first time Andreessen has called out what he perceives as a broken university system.

In a recent interview with billionaire venture capitalist and Palantir co-founder Joe Lonsdale, Andreessen raised concerns about access to elite education.

“If you’re the parents of a smart kid where I grew up [rural Wisconsin] and you think you’re going to get them into a top university in this country, you’re fooling yourself,” Andreessen said. “What level of untapped talent exists in this country that a combination of DEI and immigration have basically cut out of the loop for the last 50 years?”

Andreessen argued that the intersection of DEI policies and high-skilled immigration has “warped” perceptions of who gets access to elite education. “Nobody wants to talk about, but I’ve started to talk about the intersection of DEI and immigration that has really warped our perceptions on high-skilled immigration over the last 50 years,” he said.

Andreessen also pointed to the sharp rise in foreign enrollment at top universities, noting, “You look at the foreign enrollment rates at the top universities, which went from 2 or 3 or 4 percent 50 years ago or whatever to 27% or 30% or 50%.”

"There’s been this massive transformation of who gets admitted through affirmative action, as we now know it, DEI,” the tech billionaire continued. “This goes straight to the political divide in the country. If you’re parents of a kid where I grew up [rural Wisconsin] and you’ve got a smart kid and you think you’re going to get them into, you know, a top university in this country, like you’re fooling yourself.”

Andreessen drove the point home, adding, “There is this really fundamental question which is, what level of untapped talent exists in this country that a combination of DEI and immigration have basically cut out of the loop for the last 50 years? And how long can we have this story to everybody in the Midwest and in the South that says, sorry, because of historical oppression, your kids are shit out of luck.”

Andreessen made headlines last year when he and his business partner, Ben Horowitz, endorsed President Donald Trump’s third campaign for the White House.

Tyler Durden Mon, 07/14/2025 - 18:50

China-Linked Tech Tycoon Neville Roy Singham's Niece Backs NYC's Next Marxist Mayor

Zero Hedge -

China-Linked Tech Tycoon Neville Roy Singham's Niece Backs NYC's Next Marxist Mayor

Submitted by Jason Curtis Anderson of One City Rising

There's a new political trend sweeping New York City, and it's as cynical as it is surreal. For over a decade, we've seen a parade of political campaigns proudly brandishing their tokenized Jewish support: "Jews for Jamaal," "Jews for Rashida," "Jews for Shahana."

Now, we're treated to the latest iteration: "Jews for Zohran."

The irony? None of these candidates are Jewish. All of them, however, are staunchly anti-Israel. And the newest addition to this cast of characters has a direct tie to one of the world's most prolific spreaders of Chinese Communist Party (CCP) propaganda.

A New York Post investigation revealed this week that the "Jews for Zohran" campaign is spearheaded by Alicia Singham Goodwin, a prominent Democratic Socialists of America (DSA) organizer and, notably, the niece of Neville Roy Singham. Yes, that Neville Roy Singham—the shadowy billionaire with deep ties to the CCP who has spent hundreds of millions bankrolling anti-American, anti-Israel, and pro-CCP activism across the globe.

 Alicia Singham Goodwin- CURBED

For those who need a refresher: 2017 was a pivotal year for Neville Roy Singham. First, the U.S.-born tech mogul sold his company ThoughtWorks to Apax Partners, a sovereign wealth fund entangled with nearly $1 billion in Chinese government money via the China Investment Corporation. Next, he married CODEPINK co-founder Jodie Evans, cementing a personal and political alliance that would bankroll global leftist activism. Finally, Singham relocated to Shanghai, where he began operating hand-in-glove with CCP's propaganda apparatus.

The New York Times profiled Singham in August 2023, exposing how his vast web of nonprofits and media outlets has since been weaponized to funnel CCP talking points into American political discourse. From their Shanghai base, Singham and Evans became the Bonnie and Clyde of the progressive activist world—directing over $160 million into Evans' "People's Support Foundation" and another $98.8 million into a constellation of anti-Israel, anti-ICE, and anti-American protest groups. 

They are the same groups that led Florida Rep. Anna Paulina Luna and the House Oversight Committee into launching an investigation into Singham after learning that his organizations played a leading role in anti-ICE riots across California—riots that left over $20 million in damages, torched police vehicles, and racked up more than 650 arrests.

Singham, unsurprisingly, has not responded.

In India, his media arm Newsclick was raided by authorities after investigations revealed a coordinated effort to destabilize Prime Minister Modi's government. The Indian government accused Newsclick of terror financing, election interference, and money launderingall bankrolled by Singham. Internal emails unearthed during legal discovery detailed plans to emulate Hezbollah and the Muslim Brotherhood by establishing "partisan popular media centres" and offering community services to radicalize Indian Muslims.

Witnesses testified that Newsclick staff were ordered to incite violence during protests against the Citizenship Amendment Act (CAA), distribute Chinese-funded cash to demonstrators, and even supply weapons for riots and arson. The result? The 2020 Delhi riots, which left 53 dead, over 200 injured, and entire neighborhoods reduced to ash.

Singham also never responded to India's legal summons. 

Now, Singham's niece is helping to run Zohran Mamdani's mayoral campaign.

Singham's network operates like a political virus, infecting vulnerable democracies, seeding chaos, and eroding support for America and its allies from within. It has successfully embedded itself in grassroots movements, NGOs, and now electoral campaigns.

The nexus of Neville Roy Singham's global operation and New York's Democratic machine is no laughing matter. The same tactics that fueled violence in Delhi and sowed unrest in California are now knocking on Gracie Mansion's door.

Tyler Durden Mon, 07/14/2025 - 18:25

Adobe Digital Price Index Torpedoes Democrats' Inflationary Tariff Storm Propaganda 

Zero Hedge -

Adobe Digital Price Index Torpedoes Democrats' Inflationary Tariff Storm Propaganda 

Ahead of Tuesday's Consumer Price Index (CPI) print—which could determine whether rate traders price in a September cut—new data from one of the most comprehensive gauges of digital inflation shows deflation in June, with no indication that tariffs are filtering through just yet. That's a far cry from the inflation apocalypse narrative pushed by leftist corporate media and Michigan sentiment surveys

The Adobe Digital Price Index—an Adobe Analytics–powered inflation gauge that tracks online prices, similar to the CPI but focused on digital commerce—printed at -2.09% year-over-year in June. Categories such as apparel (-7.68%), electronics (-2.66% YoY), and groceries (-2.04% YoY) all experienced deflation.

Looking at subcategories within electronics, computer prices fell 10.73% YoY in June. Given that much of the global computer supply chain is based in China, one might have expected prices to surge amid the ongoing U.S.-China trade war—but that hasn't materialized (yet). 

Meanwhile, the UMich survey of deranged Democrats... 

Looking ahead, Goldman analyst Giulio Esposito expects tomorrow's CPI print around .23% month-over-month increase in June core CPI, vs consensus at +.3%, corresponding to a YoY rate of 2.93% (vs 3.% cons).

"Going forward, the team does expect tariffs to provide a somewhat larger boost to monthly inflation, expecting monthly core CPI between 0.3% and 0.4% over the next few months," Esposito noted. 

Back to the Adobe data—either demand for electronics is sliding, or vendors are cutting their margins to absorb tariffs. Remember what we said earlier this month about Toyotas and Nissans (read here)... 

Tyler Durden Mon, 07/14/2025 - 18:00

Puerto Rico Faces Blackout Threat After New Fortress Halts LNG Shipment

Zero Hedge -

Puerto Rico Faces Blackout Threat After New Fortress Halts LNG Shipment

Weeks after New Fortress Energy rallied on news of a temporary contract extension for LNG supply to Puerto Rico, Bloomberg now reports the island has idled temporary power plants after the company abruptly halted a critical gas shipment, raising the risk of power outages at the peak of summer demand.

Puerto Rico Energy Chief Josue Colon slammed the LNG shipment cancellation as "unjustified," disputing New Fortress's claims of being owed millions of dollars since 2020. With 10 out of 14 temporary generators offline and the rest running on expensive, dirty diesel, Colon warned the island now faces an elevated risk of blackouts. 

He said LNG tankers were supposed to dock in San Juan in recent days, but failed to come to port, adding that weather on Saturday would have allowed them to dock, "but suddenly, and without any valid reason, contractually, the ship was diverted." 

Colon described existing power generation on the island as sufficient but with little margin for error. He warned that power outages "are a possibility ... and every megawatt that's available is necessary." 

New Fortress's LNG supply contract with Puerto Rico was set to expire in June but has been temporarily extended. However, plans to award the U.S. gas producer a 15-year deal worth an estimated $20 billion were put on hold last week after a federal watchdog warned it could create a near-monopoly over the island's gas supply. 

"That exclusivity was created under a contract that the oversight board approved in 2018 when it gave New Fortress exclusivity over the only port in the northern area where natural gas can be brought in," Colon told reporters late last week. "Those preexisting conditions are not this administration's responsibility."

The cancellation is the latest setback for the U.S. gas producer, which is grappling with mounting debt and shares trading at record lows, down roughly 73% since its 2019 IPO.

According to the latest Bloomberg data, the stock is heavily shorted, with about 58 million shares sold short, representing about 32.5% of the float.

New Fortress has a $270 million payment due in September under a revolving credit facility, with the remainder maturing over the next two years, according to a Fitch Ratings report. An additional $510 million note is set to come due next year. 

Tyler Durden Mon, 07/14/2025 - 17:20

The Systematic Unraveling Of The Administrative State

Zero Hedge -

The Systematic Unraveling Of The Administrative State

Authored by Jeffrey Tucker via The Brownstone Institute,

In 1883, when the Pendleton Act was passed, creating the US civil service, it must have seemed like no big deal. The forgotten Chester A. Arthur was the president. The fear of being assassinated like his predecessor James Garfield convinced him to back the legislation. The case for passage: government needs professionals with institutional knowledge. Technicians were changing the world, so why not government too?

Science and engineering were the rage – electricity, steel bridges, telegraphic communications, internal combustion, photography  – so surely public affairs needed the same level of expertise. Who could deny that civil service could do a better job than the cousins and business partners of professional politicians?

That’s how it started. What was once called government of, by, and for the people was derided as the hopelessly corrupt “spoils system,” a phrase that reflected genius marketing. So it was overthrown in favor of “merit-based” hiring in the executive, a staff not yet permanent or huge, but the proverbial camel now had its nose under the tent. 

Through two world wars and the Great Depression, and then the Cold War, what landed on the other side was something the Constitution’s Framers never imagined. We had huge governing systems in giant bureaucracies staffed by employees who could not be fired. It was left to them to implement, but really create the operational framework for the whole of civil society. 

It was a state within a state, one with many layers, including that which was and is classified. 

Industry and media long ago caught on that the civil service was a more reliable source of information and institutional continuity than the elected or appointed branches of government. Serving in government became a mark of credibility in industry, and so the revolving door was in constant operation. Media and the deep state, including its military and intelligence sectors, developed a mutually beneficial relationship that allowed for the manipulation of the public mind. 

The best thing about the new system was that hardly anyone in public life really understood it. The schoolkids were still taught that there are three branches of government with checks and balances between them. Public life has been long dominated by elections with fierce ideological battles that eventually became more like window dressing, the results of which did not matter much for the practical affairs of state. It was the illusion of democracy. 

Once the machinery was revealed, and some critical attention was applied to its legitimacy, the unraveling was inevitable. The reason is rather obvious. The entire thing is inconsistent with the idea of a people’s government. The Founders fought a war to overthrow bureaucracy, not establish one.

The Declaration of Independence plainly said: it is the right of a people to overthrow any government and establish a new one. 

That idea is the most embedded postulate in the whole of American civic life. It has far more legitimacy in the public mind than the claims of the civil service or the demands that its plots and machinations must remain secret from the people. 

Strangely, throughout the whole period of administrative state gains, the Supreme Court was never called upon to render a clear judgment on its legitimacy. There were small decisions along the way that shored up its functioning, but nothing that plainly said: this is or is not consistent with the law governing a free people. 

This year, and mostly because the Trump administration decided to challenge the entire model, the machinery has begun to malfunction and melt away. There is a very long way to go, but we finally have the answer to the question of this fourth branch’s legitimacy. Plainly, it is not legitimate. It never has been. 

The opening salvo was arguably Phillip Hamburger’s Is the Administrative State Unlawful? (2014), which gradually set off a huge literary debate for and against, plus a growing army of podcasters who figured it out in the course of the events that followed. It was a classic case of raised consciousness: once you see it, you cannot unsee it. 

The active confrontation began in Trump’s first term. He arrived in Washington, D.C., expecting to be the boss of the executive branch, probably because that’s what the Constitution says in Article 2, Section 1. He quickly found out otherwise. Everything he wanted to change was declared to be off-limits. So far as he could tell, the whole of the city agreed that the job was entirely ceremonial. 

That did not sit well with him. The tradition in the deep state of ignoring the president unless he annoyed them rubbed him wrong. He finally got fed up with the plots, schemes, and attempts to undermine presidential authority – which he saw as like unto a CEO, but no one else agreed – that he decided to run a test. He fired James Comey as head of the FBI. Washington freaked out. 

The man to whom the job of firing fell was Justice Department attorney Rod Rosenstein, whose sister worked at the CDC. She was Nancy Messionier, who called the first press conference on the matter of a new virus from China that she said would necessitate dramatic changes in American life. Her role was first revealed by the New York Times reporter, who later said he was tricked. 

No one at the CDC bothered to check with Trump. By the time he was asked to sign off on lockdowns, a month following the initial CDC announcement, the deed was pretty well done. He chose to get out ahead of the issue rather than be eaten alive by a media prepared to blame him for every death. He spent the next eight months issuing edicts via social media – initially bad but increasingly better – but he was almost entirely ignored by the administrative state he had unleashed. 

Just before leaving office in 2020, Trump issued an executive order that would have reclassified a portion of the civil service as holding jobs subject to termination. Every venue that covered federal affairs had a meltdown of panic about what this would mean for the future of the 100-year racket they had been running.

The order was quickly repealed by the new president upon taking the oath of office – an action that set up the great battle of the future: permanent Washington vs. the public. 

After four years in exile, Trump and his team plotted their revenge. It was clear to everyone that this issue was fundamental. He would have to risk it all by putting the question to the Supreme Court. He did this by issuing a record number of executive orders that pertained to the executive branch, all of which would presume that he could act like a president. 

Trump’s team had predicted a flurry of lawsuits followed by injunctions, very much like what had happened in 2019-2020. This time, however, they would lawyer up and drive the question to the top. It was a huge gamble but it has turned out well. They knew that the structure of the status quo was completely indefensible from a Constitutional point of view. 

The most recent blow to the administrative state gets to the heart of the issue.

In Trump v. American Federation of Government Employees (July 8, 2025), the Supreme Court backed the right of the president to engage in mass firings of federal employees.

There was only one dissenting vote from Justice Ketanji Brown Jackson, the judge who had reversed other Trump orders when she was a DC district judge. 

Jackson’s dissent tries to make sense of the 4th branch of government.

“Under our Constitution, Congress has the power to establish administrative agencies and detail their functions,” she wrote. “Thus, over the past century, Presidents who have attempted to reorganize the Federal Government have first obtained authorization from Congress to do so.”

Lacking such authorization, she says, the Court should embrace the “harm-reducing preservation of the status quo.”

After all, she warns, “This executive action promises mass employee terminations, widespread cancellation of federal programs and services, and the dismantling of much of the Federal Government as Congress has created it.” “What one person (or President) might call bureaucratic bloat is a farmer’s prospect for a healthy crop, a coal miner’s chance to breathe free from black lung, or a preschooler’s opportunity to learn in a safe environment.”

There we go: the very core of the central-planning beast is at risk. At least she does understand the stakes. 

This latest ruling – with many more likely to follow – comes on the heels of a flurry of similar decisions including: Loper Bright Enterprises v. Raimondo (June 28, 2024), which overturned Chevron deference (1986), reducing agency interpretive authority, shifting power from agencies to other branches (judiciary and executive, respectively); SEC v. Jarkesy (June 27, 2024), which limited agencies’ use of in-house adjudication, enhancing judicial oversight; Corner Post, Inc. v. Federal Reserve (July 1, 2024), which expanded opportunities to challenge old regulations; Ohio v. EPA (June 27, 2024), which enforced strict APA compliance, curbing regulatory overreach; Garland v. Cargill (June 14, 2024), involving restricted agency statutory interpretations; Trump v. CASA (June 27, 2025), which curbed nationwide injunctions, strengthening executive action; and City and County of San Francisco v. EPA (March 4, 2025), which narrowed the EPA’s regulatory scope.

This has all happened with remarkable speed – in the course of one year. The regime of one hundred years has suddenly fundamentally changed to fit more precisely with what the Framers designed. It amounts to a counter-coup against the tyranny of experts and the convoluted systems of compulsion and control they had carefully constructed. Even if we do not yet feel the effects, the ground has shifted beneath our feet. 

It’s a myth that courts are merely looking at the law and ruling cases on their merits. They are subject to the pressures of public opinion and have proven deferential to the ethos of the times. That ethos has changed, suddenly and dramatically, and why? 

From 2020 to 2023, with continued fallout today, the administrative state that had long ruled out of the public eye reached deep into the private affairs of every American. It closed the schools, churches, and businesses. It issued stay-at-home orders. It kidnapped family members into medical institutions, allowing no contact with family. It then mandated the injection of multitudes with an experimental shot that achieved nothing but left many harmed and others dead. 

It is a measure of the arrogance and perceived hegemony of this machine – which extends from agencies to corporations to academia and the nonprofit sector – that so many within its ranks believe they could get away with all these outrages without consequence. Public rage followed, expressing itself in every possible way and demanding change. That change has begun. The conditions are in place for a much more dramatic change, which could happen later or possibly sooner. 

The intricate networks of influence, graft, and quid pro quo, and surreptitious pillaging of the people’s resources and power, believed itself to be invulnerable, somewhat like the rulers of the old Soviet empire in the months before it fell apart. Every old regime has believed itself to be secure up to the moments when its leaders seek sanctuary and its minions flee to the hills. 

With the Covid response, the administrative state got over its skis, bit off more than it could chew, jumped the shark, pulled out the wrong Jenga block, or whatever other cliche you want to choose. It is the precipitating event, the event that exposed the whole. One is reminded of Mikhail Gorbachev’s war on vodka, which did more than Glasnost or Perestroika to end the regime and undermine the last shred of credibility of the party’s rule. 

We’ve wondered for many years what the revolution would look like when it came home. We got a glimpse of this last week, when iPhone cameras recorded thousands of State Department employees carrying their belongings out in bankers’ boxes out the front doors of the palace that had long been their home. Live by administrative edicts; die by them. 

Tyler Durden Mon, 07/14/2025 - 17:00

Summer Storms

Zero Hedge -

Summer Storms

Authored by James Howard Kunstler,

“It’s dark on the Left now. They’ve reached that predictable moment where inflicting pain is all they have left.“

- Sasha Stone

Theories on the Epstein mess fly around like a murmuration of starlings wheeling across an angry summer sky. The birds are just birds. They are not the storm clouds in the background. Mark the difference.

You can rightly say that Mr. Trump has handled this Epstein business rather awkwardly - especially last Wednesday’s little show of vexation in the cabinet meeting, barking, nothing to see. . . just move along. What?

You’ve been watching the Epstein psychodrama unspool for nearly twenty years, so how can it possibly come to this?

Looks like Pam Bondi fumbled badly in those early days on the job, promising things she was less than fully informed about. The public was already convinced that the entire power structure of the nation — of all Western Civ, actually — was a convocation of perverts, and that a vast trove of evidence was sitting there waiting to be laid on them. And then Mr. Trump slammed the door shut. Mssers. Patel and Bongino at the FBI got caught flat-footed, and “Danny Boombatz” especially freaked, seeing his reputation as a truth-teller likely to shred all over cable TV. Most unfortunate, the whole appalling episode.

But then, Sunday, the president suggested on his social media that the Epstein business had become a Democratic Party op. He did not elaborate. And maybe it sounds suspiciously spurious. But, is it not worth considering? Consider also: In all of Epstein’s dark activities there was surely a there there. He did run a concerted blackmail enterprise for some combo of Israel’s Mossad, the CIA, and the UK’s MI6 intel outfit. And, since blackmail requires documentation, there was a ton of it, eventually scooped out of his various domiciles by the FBI.

The key is: had become a Democratic Party op. Didn’t start out that way, but might have turned into one. Consider: The Democratic Party was up to its eyeballs in ops against Mr. Trump since he rode down that fabled escalator in 2015. The “intel community” was the chief player in these operations. The intel community ran rings around Mr. Trump with all manner of fabricated nonsense during the election campaign of 2016 and throughout his first term. You could say — and I believe the DOJ under Ms. Bondi will say in cases waiting to be brought — that these many operations amounted to one continuous seditious conspiracy to overthrow a president. It ran from the Steele dossier, through the Mueller Investigation, through the Norm Eisen / Adam Schiff engineered impeachment No 1, through the gamed election of 2020, through the J-6 committee, and through all the nefarious lawfare gambits against Mr. Trump during the “Joe Biden” fake presidency.

Why wouldn’t the Epstein files now turn out to be an extension of these same operations? The DOJ first moved against Epstein in 2005. The case culminated in 2008 with a plea deal on some Mickey Mouse state prostitution charges and a non-prosecution agreement with the feds under US Attorney for the Southern District of Florida, Alex Acosta — who was reported later saying that Epstein “belonged to intelligence,” and that the case was therefore “beyond my pay-grade” to prosecute.

Between 2008 and 2019, Epstein returned to his international swashbuckling ways.

Strangely, he was finally busted on June 6, 2019, by then-AG William Barr, whose father, Donald Barr, had been headmaster of New York City’s Dalton prep school, where Jeffrey Epstein, age twenty-one, was hired to teach math and physics in 1974, though he lacked a college degree.

All that may just be coincidental, of course.

A little more than a month after his arrest on sex trafficking charges in the summer of 2019, Epstein died in the Manhattan federal lockup under mysterious circumstances.

The outstanding question even afterward was: trafficking with-and-to whom?

And the general assumption among the public was: trafficking teenage girls to a long list of public officials, movie stars, financial bigshots, and miscellaneous celebs such as Prince Andrew of the British royal family.

Astoundingly little was learned from the prosecution of Ghislaine Maxwell in 2021-22, which was led by Maurene Comey, daughter of former FBI Director James Comey (fired in 2017). Small world. The case only covered Ms. Maxwell’s activities between 1994 and 2004. Why only that period? Never explained. Rumors of a “client list” being among the evidence have never been substantiated, and were repudiated last week by AG Pam Bondi and President Trump.

Okay, all very well, such as it is. But consider: all the evidence, in all the cases against Jeffrey Epstein and his associate Ghislaine Maxwell, has been in the possession of the FBI and the DOJ since at least the first Epstein case in 2005-08.

If there was any evidence of Donald Trump caught in some indecent act, why did it not get leaked during the campaign of 2016, or any time since then? His political adversaries tried virtually everything else to knock him out of the arena, up to even assassination — but not that?

The DOJ and FBI were arguably in their most roguish phase as weaponized agencies during the “Joe Biden” years. All the Epstein evidence resided in the New York City field office of the FBI. These were also the years when the apparatus of the Democratic Party — and its rank-and-file — fell into a fugue of vicious, psychotic animus against Mr. Trump and the populist movement he led, not just in the USA, but spreading throughout Western Civ.

Do you suppose that the FBI might have worked some hoodoo with those Epstein evidence files, especially to set the table for the 2026 mid-term elections, when knocking a few Republicans out of office might flip the House and Senate back to the Democratic Party? I would suppose it’s not just a thing; I think it’s the thing.

I would imagine that this is exactly what Mr. Trump was hinting at the other day when he referred to this business as yet another Democratic Party op.

He knows the mainstream media will never investigate it or report it.

And the alt-media is too momentarily disconcerted to entertain the idea.

So, he just slammed the door shut.

Nobody likes it, but it may be necessary. Other storms are brewing: financial gales, geopolitical thunderheads, and apparently — we are officially informed — the coming cases against John Brennan, James Comey, and other figures who initiated the coup, which is a much bigger deal than who might have been having sex with whom sixteen years ago.

Tyler Durden Mon, 07/14/2025 - 16:20

Why AI's Siren Song Is So Hard To Resist

Zero Hedge -

Why AI's Siren Song Is So Hard To Resist

Authored by J.Peder Zane via AmericanGreatness.com,

Should we say please and thank you to Siri and Alexa?

Sure, it sounds a little nutty to extend courtesy to machines.

We don’t say job well done to our dishwashers, robot vacuums, sprinklers, and all the other gadgets that make our lives easier.

But Siri, Alexa, and all the other interactive devices we are steadily attaching ourselves to are radically different – they perform their labors with a smile. They captivate and engage us.

This augurs a profound change in human history. For millennia, technology bolstered and freed the human body. Wheels allowed us to move faster; arrows helped us vanquish mighty beasts. More recently, railroads, cars, planes, telephones, and computers have enabled us to overcome almost all our physical limitations, while household appliances have largely released us from menial labor. Set it and forget it.

As Duke Professor Adrian Bejan has observed, these revolutionary breakthroughs have already transformed us into something altogether new and different: a “human/machine species.” It is now almost impossible for people in the developed world to imagine who we are apart from the devices that are not just tools, like our ancestors’ sharpened stones, but appendages. Look at your hand and you’re likely to see a phone.

Alexa and other new technologies transcend the body. They don’t just offer physical service but an emotional connection. As artificial intelligence becomes better able to mimic human thought, human feeling, our attachment to and reliance upon these machines will deepen.

A recent article in Wired magazine states that this development is already quite advanced. Headlined, “My Couples Retreat With 3 AI Chatbots and the Humans Who Love Them,” the piece profiles three Americans who say they are “in a serious relationship with an AI partner.”

It is tempting to dismiss these people as sad and somewhat kooky souls, but they are not outliers. “A recent survey by researchers at Brigham Young University,” Wired reports, “found that nearly one in five US adults has chatted with an AI system that simulates romantic partners. Unsurprisingly, Facebook and Instagram have been flooded with ads for the apps.”

This trend seems especially concerning during a period when both marriage and birth rates have been declining. Surveys suggest Americans are less sexually active and are spending more time alone. Too many of us seem to be giving up on each other. As we have seen with the rise of the smartphone—which has only been around since 2007!—there will be no dearth of scholars and commentators to warn us about the heavy price we will pay for detaching from one another.

While it is easy – and necessary – to critique the loneliness crisis and condemn the emerging appeal of AI partners, the better question is, why do all these experts seem destined to become modern-day Cassandras, issuing grave yet unheeded warnings? Why are human beings embracing a future that seems so inhumane?

Common answers draw on a range of economic, political, and cultural forces.

Most are on point, but they don’t unlock the key riddle: Why do these technologies seem irresistible?

Bejan – a celebrated mechanical engineer with whom I wrote a book, “Design in Nature” (Doubleday, 2012) – provides powerful insight into this question by identifying forces that transcend humanity’s wondrous inventions and most sublime thoughts. He focuses our gaze, instead, on the eternal laws of nature which define reality and insistently shape our behavior.

In a series of books and hundreds of peer-reviewed papers, Bejan has detailed a principle of physics he calls the Constructal Law, which observes the tendency of natural systems that move and flow to self-organize into evolving designs that allow them to flow more easily. Over millions of years, for example, raindrops have coalesced to produce the tree-shaped river basins that cover the globe because they help them move more mass (the water) with less energy. We see this same phenomenon in a flash when lightning bolts create tree-shaped designs in the sky to move their current from the clouds.

Because human beings are part of nature, we are governed by this same urge. We devote much of our mental energy to figuring out how to do more with less. In many ways, the history of human civilization is the story of raindrops and river basins. Our civilizations have created innumerable evolving designs – including trade routes, cities, legal systems, and information networks – to move more stuff, more easily. This includes ourselves, which is why we have become a human/machine species.

At least since the Enlightenment, philosophers have warned about how modern culture strips life of meaning and connection. In recent years, the price we pay for being glued to our phones and now newfangled AI devices seems clear. But, Bejan shows, technology marches on because these “dehumanizing” advances align with our natural urge. This is, at bottom, the most human of instincts.

As machines become better able to mimic human thought and feeling, their appeal is likely to grow because they reduce the friction and resistance of relationships. Human beings are complicated. We make demands, reduce one another’s autonomy. Many people are turning their backs on parenthood, not just because children are expensive, but they can also be a hassle that limits our freedom.

We can argue until we’re blue in the face that those hassles are a profound blessing, that the friction of human relations enhances life. But, especially in an era marked by growing solipsism and narcissism, it is not hard to see why some people might choose to interact with partners who are designed to satisfy only their needs, like washing machines and microwave ovens, with whom they can share fearlessly share intimacies in a world where love means never having to say please or thank you.

This may be dehumanizing, but it is also natural.

Tyler Durden Mon, 07/14/2025 - 15:45

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