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Do Doctors Make Money Off Vaccines? A Look At Incentives And Bonus Structures

Do Doctors Make Money Off Vaccines? A Look At Incentives And Bonus Structures

Authored by Zachary Stieber via The Epoch Times,

“Doctors are being paid to vaccinate, not to evaluate,” Health Secretary Robert F. Kennedy Jr. said in a recent video.

“They’re pressured to follow the money, not the science.”

Doctors administer dozens of vaccines to many children in the United States. Adults are also advised to receive multiple shots.

Here’s what to know about vaccines and payments.

What Does the Literature Say?

A review of studies confirms that some doctors profit from vaccinating.

In a 2020 paper, researchers found when analyzing three years’ worth of vaccination claims for five Colorado clinics that reimbursements averaged 125 percent of costs, making administering vaccines “financially favorable across the practices.”

Another study found that various providers in North Carolina, when receiving the maximum payment for reimbursement from insurers or the government, profited from vaccinating patients. Even if they received the minimum payment, pediatric and family medicine practices still reported positive income, according to the 2019 study.

On the other hand, other doctors say the costs of administering certain vaccines to certain people exceed the vaccine payments.

In a survey of 34 pediatricians, for instance, more than half said they do not profit from vaccinating, according to a 2009 paper.

A number of practitioners have also said they face escalating costs associated with vaccination, such as staffing, leading them to stop or consider stopping providing vaccines to patients with private insurance.

Reimbursement for vaccinating patients varies depending on whether patients have private or public insurance. Under a program called Vaccines for Children, the government also provides vaccines to doctors for free. It does not pay for related costs, but doctors can charge an administration fee that the Centers for Disease Control and Prevention says “helps providers offset their costs of doing business,” with the maximum varying by state.

A nurse prepares to give a COVID-19 vaccine to a boy as his mother comforts him in Denver on Nov. 3, 2021. Michael Ciaglo/Getty Images

What About Those Bonuses?

Doctors can make extra money for vaccinating under incentive programs from insurers, as highlighted by Brian Hooker, a senior scientist with Children’s Health Defense—a group Kennedy chaired through 2023—and other witnesses during a hearing in July on vaccines held by Sen. Ron Johnson (R-Wis.).

“Some pediatricians can make upwards to a million or more a year just in those incentives,” Hooker said.

Asked for citations, Hooker pointed The Epoch Times to documents he collected from insurance companies that list available bonuses.

Links to those and other documents that outline incentives and are available online are provided below:

  • Blue Cross Blue Shield Blue Care Network of Michigan: $400 per child who receives a set of 24 or 25 vaccine doses on or before their second birthday.

  • Aetna Better Health of Louisiana: $10–$25 per member, depending on level of COVID-19 vaccination coverage practice-wide.

  • Molina Healthcare of Ohio: $100 incentive for COVID-19 vaccination.

  • Anthem Blue Cross and Blue Shield Medicaid: $50 per individual aged 6 months and older who received a COVID-19 vaccine by Dec. 31, 2022.

  • United Healthcare Community Plan of Michigan: Incentives for patients who receive the meningococcal, Tdap (tetanus, diphtheria, and pertussis), and HPV vaccines by their 13th birthday.

  • Meridian: Up to $120 per child who receives the 24 or 25 doses by their second birthday, or adolescents who received three certain doses by their 13th birthday, capped at $9,600 for each category.

  • BlueCross BlueShield of Illinois: $149 for each child, if 63 percent or more meet criteria, who received the 24 or 25 vaccine doses by the time they turn 2.

  • Central California Alliance for Health: Bonuses for children who receive at least 24 doses by the time they turn 2 and the three certain doses before they turn 13.

The sets of vaccines for which providers receive bonuses are recommended by the Centers for Disease Control and Prevention.

Dr. Paul Thomas, who ran a pediatric practice in Oregon, estimated in a 2021 study that he was losing more than $1 million a year by offering parents what he called informed consent, or detailed discussions about the benefits and risks of the recommended vaccines.

Thomas—who surrendered his license in 2022 after the Oregon Medical Board determined that his alternative vaccination schedule posed a danger to the public—told The Epoch Times in an email that he was forced to work harder, freeze salaries, and impose an administration fee on every patient to cover income he did not receive due to administering fewer vaccines than many practices. Thomas has said he was unfairly targeted, in litigation denied by courts that found the board is protected by “absolute immunity.”

People attend an American Academy of Pediatrics (AAP) conference in Anaheim, Calif., on Oct. 8, 2022. AAP, as well as some other groups and doctors, have said physicians are not motivated by money when vaccinating patients. John Fredricks/The Epoch Times

“It would be near impossible for current pediatric practices to survive if not clearly impossible if they were to suddenly lose half or all their vaccine income, not to mention the catastrophic nature of loss of ‘quality’ bonuses,” Thomas said.

Dr. Renata Moon, who sits on the board of directors for the American College of Pediatricians, said that her former employer in 2020 started tracking the vaccination rate for patients. She was unable to determine why and said she would not be surprised if they were receiving compensation.

“It is unethical for physicians to receive bonuses or monetary compensation for pushing the products of pharmaceutical companies. It’s a massive conflict of interest!” Moon told The Epoch Times via email. “Do they have the patient’s best interest at heart or are they focused on their bank accounts?”

What Do Other Doctors Say?

The American Academy of Pediatrics (AAP), as well as some other groups and doctors, have said physicians are not motivated by money when vaccinating patients.

“Pediatricians do not profit off vaccines,” the AAP said in a July 16 post on X.

The organization declined to make one of its experts available for an interview on the topic. When a spokeswoman was sent studies, including multiple published by the AAP’s journal Pediatrics, that show some pediatricians have made money from vaccinating, she pointed to an AAP webpage that states “pediatricians recommend childhood vaccines because they are one of our most effective tools to help keep children healthy and prevent diseases from spreading in communities.”

It also states, “pediatricians often take on significant costs to provide the vaccinations their patients need, and the minimal payments they receive do not always cover these costs.”

Among the costs, the group said: purchasing vaccines and storing them.

Dr. Todd Porter, a pediatrician employed in Illinois for a multi-specialty physician-led organization, said that he has not paid attention to whether he makes money from vaccinating children.

Doses of H1N1 influenza vaccine sit in a basket at Rush University Medical Center in Chicago on Oct. 6, 2009. Scott Olson/Getty Images

“I have to surprisingly side with the AAP on this one even though I no longer support the AAP on just about everything else,” Porter told The Epoch Times in an email. “As a pediatrician, my recommendation of routine childhood vaccines has nothing to do any reimbursement my office may receive and again I can honestly say I have no working knowledge of what that reimbursement would be.”

Porter says he has been motivated for the more than 20 years he has worked as a doctor to provide vaccines to minimize vaccine-preventable disease. He has never recommended the COVID-19 vaccines and believes the CDC and AAP did not provide adequate details around the risks and benefits of the shots.

“I have become a bit uncertain about the risk/benefit of each of the vaccines. I still would recommend these historical routine childhood vaccines, but with the growing vaccine hesitancy amongst parents I do not push them,” he wrote. “I also have stopped generally recommending the influenza vaccine until I see more rigorous data to show that it really works.”

Vaccination rates among kindergartners have declined in recent years, and a third of parents in a recent survey said they would be refusing some or all vaccines for their children.

Kennedy’s Statements

Kennedy has spoken several times recently about the payments for vaccinations. During an interview released in June with political commentator Tucker Carlson, he mentioned an article stating half of the revenue for most pediatricians comes from vaccines.

The Department of Health and Human Services did not respond to a request for that alleged article.

“And then there’s a whole structure where Blue Cross and the other insurance companies pay bonuses to the pediatrician ... and that’s why your pediatrician, if you say, ‘I want to go slow on the vaccines,’ or, ‘I want to have a little different schedule,’ your pediatrician will throw you out of his practice because you’re now jeopardizing that bonus structure,” Kennedy said. “And these are all perverse incentives that stop doctors from actually practicing medicine and caring for the client because they’re looking at the bottom line.”

Twenty-one percent of pediatricians told surveyors that they dismissed families who declined one or more vaccines, Dr. Sean O'Leary, the current chair of the AAP Committee on Infectious Diseases, reported in a 2015 study. A 2020 review co-authored by O'Leary found evidence that dismissing families “appears to be increasing as a strategy for dealing with vaccine refusal.”

A form dismissal letter offered to doctors by the AAP states, “It has become clear that our philosophies regarding medical care differ greatly.” The letter directs parents to arrange for medical care for their children elsewhere.

Health Secretary Robert F. Kennedy Jr. testifies on Capitol Hill in Washington on June 24, 2025. Madalina Kilroy/The Epoch Times

O'Leary and other AAP officials said in a 2024 report that there are ethical issues about dismissing families, including whether doctors have a responsibility to care for all patients who come to them, Dismissal, they wrote, “can be an acceptable option ... after repeated attempts to help understand and address parental values and vaccine concerns, engender trust, and strengthen the therapeutic alliance.”

Kennedy added in the X video on Aug. 8 that “we’re scanning every corner of the health care system for hidden incentives that corrupt medical judgment” and that officials had found “doctors are being paid to vaccinate, not to evaluate.”

He said that officials discovered that more than 36,000 doctors had reimbursements from Medicare altered based on the vaccination rates of children in their practices.

The video was released as Kennedy announced officials were repealing a previous policy that favored hospitals that reported the vaccination rates of staff members.

“Doctors should be guided by medical judgment and their Hippocratic Oath, not by financial incentives or government mandates,” Kennedy said. “That’s what this policy change is about, and it’s just the beginning.”

Tyler Durden Fri, 09/05/2025 - 17:40

California To Spend $239 Million Turning San Quentin Into "Scandinavian-Style Rehab Center"

California To Spend $239 Million Turning San Quentin Into "Scandinavian-Style Rehab Center"

California is spending $239 million to transform San Quentin State Prison into what Gov. Gavin Newsom’s office once called the state’s “most notorious prison” into a Scandinavian-style rehabilitation center. Construction is set to finish in January 2026, with the first incarcerated people moving in soon after, according to the San Francisco Chronicle.

The Chronicle writes that the plan dates back to Newsom’s 2018 election, when he halted executions, began dismantling Death Row, and ordered transfers of San Quentin inmates. In 2023, he unveiled a full-scale conversion into a Nordic-inspired campus aimed at preparing prisoners for life outside.

Modeled after systems in Norway, Denmark, and other Nordic countries, the project emphasizes rehabilitation through work, education, and “normalizing spaces” such as a self-service grocery store, café, farmers market, and podcast studio. Prisoners will have single rooms, reducing San Quentin’s population from 3,400 to about 2,400.

“The holistic initiative leverages international, data-backed best practices to improve the well-being of those who live and work at state prisons,” said Todd Javernick, a spokesperson for the Department of Corrections and Rehabilitation. He added the goal is “creating safer communities and a better life for all Californians, by breaking cycles of crime for the incarcerated population, while improving workplace conditions for institution staff.”

The state hired Danish architecture firm Schmidt Hammer Lassen and convened an advisory council of reform advocates, which recommended measures like making “good nutrition foundational to the San Quentin experience.”

Supporters hope the California Model will serve as a national blueprint, but critics argue the money should instead go to crime victims. Families of incarcerated people also worry transfers will send loved ones far from spouses and children.

San Quentin has already shifted from maximum to medium security, allowing in prisoners deemed lower-risk. Officials also note that closing Death Row reduces costs, as housing death-sentenced inmates can be twice as expensive.

The redesign includes three new buildings for media production, coding classrooms, a large multipurpose hall, café, and store.

Tyler Durden Fri, 09/05/2025 - 17:20

Quinn: WW3 Is Inevitable, Compromise Isn't An Option During 'The Fourth Turning'

Quinn: WW3 Is Inevitable, Compromise Isn't An Option During 'The Fourth Turning'

Authored by Jim Quinn via The Burning Platform blog,

Fourth Turnings never fizzle out.

They build to a crescendo of death and destruction.

Is there any indications whatsoever that we are not on a course towards all-out war?

How it started...

"We gave categorical assurances to Gorbachev that if a United Germany could remain in NATO, NATO would not be moved Eastward" Jack Matlock, US Ambassador to the Soviets 1987-1991 speaking 30 years ago.

NATO did, however, move Eastwards towards Russia, and the rest is history

How's it going?

Professor Jeffrey Sachs explains:

Now, we have the return of the most primitive kind of Russophobia imaginable.

So Europe meets, as, as you note, every two or three days in terror of Russia with these fools around the table, without talking to the Russians at all.

If you just watch these people, they don't know anything, and they don't want to learn anything, and they don't want to hear anything.

And especially, in Europe, the most desperate thing is, for God's sake, don't talk to the other side. It may be a little annoying.

And so we actually have a spectacle of grown people like Starmer, Merz, Macron, grown people that won't even have ... a discussion with President Putin.

And what happens next?

Dmitry Medvedev:

"The United Kingdom has sent Ukraine $1.3 billion obtained as profit from the use of frozen Russian assets.

This was said by the English idiot Lammy.

Well, this means one thing: British thieves have handed over Russian money to the neo-Nazis.

The consequences?

Britain has committed an offense, and Russia has, as lawyers say, a claim against it and the current Banderite Ukraine.

But considering that these funds cannot be recovered through legal proceedings for obvious reasons, our country has only one way to reclaim the assets.

To return what was seized in kind. That is, with "Ukrainian land" and other real estate and movable property located on it.

(I am obviously not talking about the lands of the new Russian regions, they are already ours.)

So any illegal seizure of arrested Russian funds or income from them must be converted into additional territories and other property of country 404. Or by confiscating the valuables of the British Crown.

There are still enough of them in various places, including those located in Russia."

The path has been set on the Fourth Turning - it's now when not if.

Tyler Durden Fri, 09/05/2025 - 17:00

The Power-Bill Crisis Keeps Energy Secretary Wright Up At Night

The Power-Bill Crisis Keeps Energy Secretary Wright Up At Night

Weeks after Energy Secretary Chris Wright told Glenn Beck that the power-bill crisis would last for "a few years," America's top energy official told Fox Business on Tuesday that rising electricity costs remain his top concern.

"It's what I worry about most seven days a week," Wright told Fox Business' Maria Bartiromo. "We want to stop the rise in electricity for Americans and reshore jobs and opportunity there."

The Trump administration is racing to restore and expand stable fossil-fuel power generation (see the EO), after parts of the nation's grid were left in a fragile state by the Biden-Harris regime's unreliable green-energy policies, amid surging power demand from data center buildouts - all in an effort to compete with China. 

In mid-August, Goldman analysts led by Hongcen Wei told clients, "We find that 9 out of 13 US regional power markets have already reached critical tightness this summer, while expecting all but one to reach critical tightness by 2030." 

Wei warned: "Critical tightness could lead to power price spikes and blackouts with significant social and economic losses."

By the end of the summer, nine of the 13 U.S. regional power grids have already reached dangerously low spare capacity levels, which are at or below the critical reliability threshold. This raises blackout threats and results in power price spikes during high-demand usage hours. 

This tightening is most evident in the Mid-Atlantic region...

The epicenter of the power crisis is in Maryland. 

Bloomberg suggested earlier that the power bill crisis could become a political liability for Republicans ahead of the midterms. However, the real-world example playing out in Maryland shows it's hurting Democrats bigly.

Maryland Democrats are pointing fingers at the regional grid operator. Still, it was their own party that spent years championing unreliable solar and wind while retiring coal plants, leaving the grid in a state of chaos - on the brink of collapse last month (read here). 

Now comes the informational war used by both parties that will blame each other for the power bill mess.

Wright told Congress earlier this year that solar and wind subsidies have been disastrous for the grid.

Recently, Wright told Fox Business about Trump's plan to add "more energy to the grid."  

. . . 

Tyler Durden Fri, 09/05/2025 - 16:40

The Grifters' Lament

The Grifters' Lament

Authored by James Howard Kunstler,

"We are the sickest country in the world. That's why we have to fire people at the CDC ... They did not do their job! This was their job to keep us healthy!"

- Robert F. Kennedy, Jr.

What a gruesome spectacle it was to see HHS Secretary Robert F. Kennedy, Jr. take on a conclave of vicious grifters on the Senate Finance Committee straining to warp reality in defense of their mighty patron, the nation-wrecking pharmaceutical companies.

Do you understand how deep, convoluted, and grave the political sickness is?

Over the years, the public health agencies and “big pharma” had evolved into a symbiotic vector driving the nation into chronic illness. They allowed the population to poison themselves on a diet of corn syrup, engineered snack foods, and chemical additives. Result: epidemic obesity, diabetes, and many other illnesses. To counter that, they dosed everybody to-the-max with sketchily-tested pharma products while the agency employees raked in royalties and pharma got a get-outa-jail-free card in the 1986 National Childhood Vaccine Injury Act (NCVIA) — legal liability cancelled.

Then, they all badly mis-stepped, conniving in the Covid-19 operation, a still poorly-comprehended scheme to punk the American people and enable mail-in ballot fraud to steal the 2020 election. First, there was Dr. Fauci’s years’ long effort to hatch a novel corona virus, Covid-19, in labs here and overseas. Then, there was the opportune release of the virus in 2019. Then, the pharma response to the virus: a “miracle” mRNA vaccine that was likely already developed in secret, even before Operation Warp Speed was acted-out to pretend that pharma just came up with it. And, of course, there was President Trump 1.0 getting hosed by his Covid Response Team (Fauci, Birx, et al.) on all this.

Thus, you have that battery of US Senators all paid handsomely by Pharma to defend the industry with hysterical obfuscation against the lone figure, Mr. Kennedy, striving to correct all that fantastic corruption. He retorted to their malign nonsense honorably, revealing their conflicts of interest, their cupidity, the bales of dollars paid by pharma to the likes of Elizabeth Warren, Bernie Sanders, and the rest over the years, and their longstanding silence on the afore-mentioned poisoning and drugging of America.

Incidentally, to understand how this grift got so exorbitant, look to the unfortunate 2010 Supreme Court decision Citizens United v. Federal Election Commission (558 U.S. 310). In a 5-4 ruling (by majority conservative justices, then including Alito, Thomas, and Scalia), SCOTUS decided that previous prohibitions on corporate money in election campaigns were unconstitutional because corporations enjoy legal status as persons, that is, as citizens, and giving money to election campaigns is a form of free speech under the first Amendment, which can’t be abridged by any law.

And so, the spigot opened on vast fortunes laid on politicians by corporations seeking to protect their interests. If anything went to warp speed, it was the Beltway lobbying industry. The Citizens United decision was a singular tragedy for our country. The legal reasoning behind it was specious because corporations, unlike real human citizens, do not have duties, obligations, and responsibilities to the nation, entailed in their citizenship. Rather, corporations have duties, obligations, and responsibilities solely (and explicitly in law) to their shareholders, whose interests are not necessarily consistent with the public interest. Why has no one noticed this?

Well, they haven’t and that is exactly where American politics went badly off-the-rails. The resulting accelerated corruption in the public health agencies of our government has been a disgusting side effect of all that, which RFK, Jr., has been called to clean up, a Herculean task. The most visible manifestation of that corruption is the chronic illness of the people — 76.4 percent of all of us, he told the committee, with eight out of ten young men physically unfit for military service. We’re the sickest nation in the world.

When the senators confabulate over “the science,” what they really mean is the armature of medical authority that has enabled the money-flow to their campaign committees (and eventually to their own bank accounts.) It’s that very scaffold of authority that has collapsed. Why? Because the medical authorities lied over and over about the Covid-19 episode, and especially about the vaccines, which were never properly tested, and were neither safe nor effective.

Your own doctors got paid extravagantly to push the vaccine. The so-called Pfizer Papers, collected, collated, and analyzed by Naomi Wolf’s organization (because nobody else would do it) showed the sloppiness of the whole process behind the vaccines’ development and release, and the pharma companies’ evasion of responsibility for the damage done. The medical journals lied about everything from the origin of the virus to the efficacy of the vaccine. The CDC campaigned against viable, inexpensive treatments for the virus. The CDC pushed the worthless, gamed PCR tests to jack up the case numbers. The CDC pushed the idiotic mask rules, school closings, business closures, and the vaccine mandates. The hospitals killed people with remdesivir and respirators, and got paid for it! The authority of all these parties is blown, especially the CDC’s — and these perfidious senators have the gall to hide behind this “science”?

What Mr. Kennedy is challenged with is sorting through all the official lies told by these agencies — the so-called “data” — to arrive at a comprehensible picture of what really happened. And then to inquire beyond Covid into many other pharma products that might be making Americans sick. Neither the politicians nor the people employed by the agencies when Covid went down want that to happen.

Tyler Durden Fri, 09/05/2025 - 16:20

Tether, El Salvador Deepening Ties To Gold, The 'Natural Bitcoin'

Tether, El Salvador Deepening Ties To Gold, The 'Natural Bitcoin'

Authored by Vince Dioquino via Decrypt.co,

  • Stablecoin issuer Tether has held talks on investing in gold miners and royalty firms, after already acquiring $8.7 billion worth of bullion.

  • Meanwhile, El Salvador bought nearly 14,000 ounces of gold for $50 million, its first central bank purchase since 1990.

  • Tether CEO Paolo Ardoino has previously described gold as “natural Bitcoin,” and suggested in a separate interview that if a global “reset” were to occur, it would “happen in gold.”

Tether, the world’s largest stablecoin issuer, has reportedly been in discussions with mining and investment groups to deploy billions into the gold industry, according to a Financial Times report late Thursday.

The talks reportedly span mining, refining, trading, and royalty companies, following chief executive Paolo Ardoino’s view of gold as “the natural Bitcoin.”

“I prefer to think in Bitcoin terms, and I think gold is kind of a resource of nature and is almost like the natural Bitcoin,” Ardoino said onstage at the Bitcoin 2025 conference back in May.

Tether is also moving to deepen its role in the sector, planning to spend about $100 million more to increase its previous 37.8% stake in Toronto-listed Elemental Altus Royalties, a Canadian firm that buys future revenue streams from gold mines, according to a report from Bloomberg early Friday.

"Access to capital is one of the key constraints in the royalty and streaming business; Tether’s support is fully aligned with our growth strategy," David Baker, CFO at Elemental Altus Royalties, said in a statement shared with Decrypt.

He added that, "Since their first investment in June, Tether has been very supportive of the company and management," noting that prior to the merger announcement the firm had announced almost $70 million of gold royalty acquisitions in Australia and Liberia.

Tether is already among the world’s biggest private holders of the metal.

The company disclosed $8.7 billion in gold bars held in a Zurich vault in its Q2 2025 attestation report, collateralizing part of its operations.

In 2020, the firm launched Tether Gold, a gold-backed stablecoin backed by more than 7.7 tons of the precious metal, according to an April 2025 attestation report by accounting firm BDO Italia.

Tether did not immediately return Decrypt's request for comment.

El Salvador’s first gold buy in 35 years

Tether’s gold push comes as Banco Central de Reserva, El Salvador's central bank, announced its first bullion purchase in 35 years, buying 13,999 troy ounces for $50 million, raising the country’s holdings to 58,105 ounces, worth an estimated $207 million.

The central bank characterized the purchase as a diversification play for its $4.7 billion in foreign reserves, according to a syndicated report from Agencia EFE.

El Salvador has already accumulated more than 6,200 bitcoin, now valued at over $706 million based on current prices, according to data from Bitcoin Treasuries. Earlier this week, the country’s Bitcoin Office confirmed that it has moved its crypto holdings to new addresses, following security concerns.

These moves suggest that large sovereign Bitcoin holders, such as El Salvador, and major crypto industry names, including Tether, are beginning to frame gold as a complementary hedge, treating it less as a rival asset and more as a partner in diversification strategies.

A source working on Tether's regional expansion efforts declined to comment, citing internal policies, and instead directed Decrypt to Ardoino’s interview with Anthony Pompliano in August, where he argued that gold could be viewed as a counterweight to fiat, not a rival to Bitcoin.

In the interview, Ardoino suggested traders might choose to rotate into bullion at cycle peaks, given its 6,000-year history and scale as a reserve asset.

“There is time for everything, and I think that when [...] if the world will go to hell in the next 5 years, there’s good chances that part of the reset will happen in gold,” Ardoino said.

Tyler Durden Fri, 09/05/2025 - 15:45

Akin To Damaging 'Brand USA': Bessent Exposes Cracks In Fed's So-Called 'Independence'

Akin To Damaging 'Brand USA': Bessent Exposes Cracks In Fed's So-Called 'Independence'

Amid all the hair-pulling and teeth-gnashing over President Trump's 'firing' of Fed Governor Lisa Cook (for alleged mortgage fraud), the market seems increasingly complacent that The Fed's holier-than-thou independence is under threat.

For its part, the market shows no fear whatsoever about USA sovereign risk...

Perhaps the market doesn't believe the hype that Fed 'independence' is actually under threat by the president's actions... or perhaps, the market knows full well that The Fed has never been truly independent, and the temper tantrums being thrown by establishment types is merely the vinegar strokes ending the delusion that maintains The Fed's unquestionable omniscience?

First things first though, we need to know what's at stake and no one has described the shifts in perceptions of Fed independence better recently than Citadel Securities' Nohshad Shah:

RESERVE CURRENCY STATUS, GLOBAL LEADERSHIP IN TECH INNOVATION, THE WORLD’S BEST ACADEMIC INSTITUTIONS, BEING A MAGNET FOR GLOBAL TALENT…AND CRUCIALLY, THE RULE OF LAW WITH INDEPENDENT INSTITUTIONS…HAVE COMBINED TO ENSURE THAT THE US HAS BEEN THE MOST COMPETITIVE PLACE ON EARTH TO DO BUSINESS AND GROWTH HAS EXCEEDED MOST OF THE DEVELOPED WORLD BY A WIDE MARGIN…OTHERWISE KNOWN AS “US EXCEPTIONALISM”.

A core part of this construct is the independence of the Federal Reserve, and this remains sacrosanct in the minds of global investors. There is concern amongst market participants that President Trump’s recent move to fire Fed Governor Lisa Cook could be an attempt to garner greater influence over central bank policy. Whilst the merits of the case will surely be analysed thoroughly by the courts, markets are uneasy about the broader emphasis of this Administration on Unitary Executive Theory…the constitutional doctrine that the US President holds sole absolute authority over the entire executive branch including all federal agencies, departments, and officers…and the power to remove any executive branch official at will.

Proponents of this doctrine argue it is vested in the President from Article II of the Constitution and that other branches of government (including Congress and Courts) should not limit or interfere with Presidential Authority, thereby ensuring maximum accountability…ultimately to voters. Of course, as with much of US public discourse, this is a contentious issue with critics warning that it concentrates too much power in one seat undermining checks and balances, risking authoritarianism. In the near-term, should the President succeed in removing Cook, he would be appointing two new governors (including Miran), which when you include Governors Waller and Bowman, takes him to a majority of four out of seven on the Board aligned with his views. 

Not only does this have an impact on upcoming FOMC decisions, but it allows Trump to re-shape the entire FOMC given the Board must reappoint all regional Fed presidents in February next year. However, there are several obstacles. First, it is unclear if Cook’s firing will stand – the President can fire a Fed member for “cause”, but there remains uncertainty around whether the mortgage fraud allegations made against Cook meet this definition: negligence of duty, inefficiency, or malfeasance. Friday’s initial hearing of the case ended without a ruling – we will learn more in coming days. There is also a broader executive authority consideration for the Supreme Court, which in May allowed the President to fire two members of the NLRB, asserting that agencies exercising “considerable executive power” fall closer to Article II authority in a boon to unitary executive theory…

BUT…earmarking the Federal Reserve as a “uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States” suggesting a carve out of sorts for the Fed due to it being a constitutionally exceptional institution with roots in the country’s earliest banking history. Interestingly, Justice Kavanaugh has written approvingly of the Fed’s independence in the past (h/t Brooke Cucinella): 

“To be sure, in some situations it may be worthwhile to insulate particular agencies from direct presidential oversight or control—the Federal Reserve Board may be one example, due to its power to directly affect the short-term functioning of the U.S. economy by setting interest rates and adjusting the money supply.” (Brett M. Kavanaugh, Separation of Powers During the Forty-Fourth Presidency and Beyond, 93 Minn. L. Rev. 1454, 1474 (2009)). 

So even with SCOTUS’ broader embrace of unitary executive doctrine, we remain in murky waters as to where this issue lands. Second, whilst Governors Waller and Bowman are currently firmly in the dovish camp, this was certainly not always the case…indeed when inflation surged in 2021, Waller was an early proponent for tightening monetary policy pushing for both tapering asset purchases and aggressive rate hikes in 2022. Similarly, Bowman’s stance until late 2023 was hawkish. 

The point here is that whilst there might be short-term incentives to be dovish given the backdrop of Chair selection, both are seasoned professionals with a track-record of public service…so if the economic growth and inflation picture shifts (as I expect), so should their monetary policy views. And finally, regarding the election of regional fed bank presidents…the Board of governors does indeed have an effective veto on appointments, but it will not be trivial to exert influence upon each of the 12 regional bank boards of directors, with a total of 6 per board (72 directors in total, most of them public representatives) required to affect the selection process. 

In sum, I expect this to be an ongoing saga to be played out in the courts in coming months whilst remaining a source of uncertainty and volatility for asset prices.

ANY EROSION OF FED INDEPENDENCE WILL HAVE UNTOLD IMPLICATIONS FOR THE US AND GLOBAL ECONOMIES…

...and this is starting to play out in market pricing…1y1y USD forward swaps are 3.02%, priced for a return of policy rates back to what most consider neutral…something I would consider to be a dovish outcome, given the current backdrop for the US economy (unless the labour market collapses in coming months)…and yet 10y10y forward swaps have risen to 4.66%, the highest in over a decade (chart below). 

This likely reflects a level of concern from bond markets around deficits (which continue to rise)….inflation (above target and at-risk of rising w/tariff effects)…and risk premium for Fed independence. It also serves as a reminder for policymakers that the economy is most impacted by the long-end rate not the short-end (10x multiplier for FCI). Whilst these levels are still within acceptable ranges, one need only look over the pond at the UK to see what happens when investors are perennially concerned about governments’ ability to manage the fiscal outlook…30y Gilt yields (5.60%) have been rising consistently for four years now and have risen over 100bps since July 2024 when the BOE started cutting policy rates from 5.25% to 4.00%!

Perhaps the biggest sign for US policymakers should be the ~13% depreciation of the US dollar against EUR this year, far outpacing what interest rate differentials would suggest.

All told, the risks of damaging Fed independence are akin to damaging Brand USA and the medium-term implications are likely to be wide-ranging and uncertain…not to mention the consequences of allowing inflation to spiral out of control. Inflation credibility has been hard won by central banks across the developed world, most notably in the 1970s. In their most recent fight, the majority have been unable to bring inflation back to target reflecting wide ranging changes in the global economy…most importantly the introduction of pro-cyclical fiscal policy (despite large deficits) and a partial unwind of globalisation.

This does not seem like an opportune time to lose control of this mandate.

But, what if The Fed is already un-independent?

No lesser authority than Treasury Secretary Scott Bessent has just this day unleashed his sword pen in a Wall Street Journal Op-Ed, "The Fed’s ‘Gain of Function’ Monetary Policy", pointing out that the central bank put its own independence at risk by straying from its narrow statutory mandate.

In the lengthy op-ed, Bessent critiques the Fed’s post-2008 monetary policies, comparing them to a risky "gain-of-function" experiment with unpredictable outcomes.

He argues that The Fed’s over-use of complex, nonstandard tools, mission creep, and regulatory overreach have undermined its independence, credibility, and effectiveness.

The most notable aspects of The Fed's failures include:

  • Failed Forecasts: The Fed’s over-reliance on flawed models led to significant errors, like overestimating GDP growth post-2008, missing the impact of supply-side policies, and fostering inequality through a wealth effect that favored asset owners.

  • Economic Inequality: Policies like quantitative easing disproportionately benefited large firms and homeowners, widening class and generational gaps, as noted in Karen Petrou’s book: "Engine of Inequality".

  • Eroded Independence: The Fed’s expanded role in fiscal-like interventions, Treasury debt management, and bank regulation (e.g., post-Dodd-Frank) has blurred lines between monetary and fiscal policy, creating conflicts of interest and enabling fiscal irresponsibility.

  • Regulatory Failures: The 2023 Silicon Valley Bank collapse highlights the risks of combining monetary policy with bank supervision, which should be delegated to agencies like the FDIC.

Bessent concludes by stating that The Fed’s overreach has caused economic distortions, inequality, and a loss of credibility, threatening its independence.

It must scale back and recommit to its core mandate to ensure economic stability and public confidence.

Bessent's suggestion is that The Fed should simplify its toolkit, use unconventional policies only in emergencies, and undergo an independent review to refocus on its mandate of maximum employment, stable prices, and moderate interest rates. This is critical to restore public trust and safeguard its independence.

Tyler Durden Fri, 09/05/2025 - 15:25

New York AG Asks Appeals Court To Reinstate Trump's $500 Million Civil Fraud Penalty

New York AG Asks Appeals Court To Reinstate Trump's $500 Million Civil Fraud Penalty

Authored by Matthew Vadum and Sam Dorman via The Epoch Times,

New York Attorney General Letitia James filed an appeal on Sept. 4 of a court ruling that threw out an estimated $500 million penalty in President Donald Trump’s business fraud case.

James’s office filed a notice of appeal with the New York Supreme Court in Manhattan, indicating an appeal was being launched with the state’s highest court, the Court of Appeals of the State of New York, on behalf of the state. The brief notice does not spell out arguments from James as to why the appeal should be allowed.

The filing came after a ruling on Aug. 21 by the New York Appellate Division’s First Judicial Department, a branch of the New York Supreme Court, tossed the penalty in a fractured ruling but left the civil judgment against Trump undisturbed. The case concerned allegations that the Trump Organization was involved in financial fraud by misrepresenting property values.

The trial judge, New York Supreme Court Justice Arthur Engoron, ruled against Trump in February 2024, issuing a judgment of more than $460 million, with interest accruing. Trump posted a bond of $175 million, and the appeals process moved forward in the New York Appellate Division’s First Judicial Department.

The Appellate Division affirmed the judgment issued by Engoron, but the panel of five judges was divided, filing three separate opinions, including partial dissents.

Two of the jurists—Justices Peter Moulton and Dianne Renwick—said they thought James “acted well within her lawful power in bringing this action, and that she vindicated a public interest in doing so.” However, both disagreed with the high-dollar penalty.

Moulton said in a concurring opinion that the lower court’s penalty order “is an excessive fine that violates the Eighth Amendment of the United States Constitution.”

Justices John Higgitt and Llinet Rosado joined an opinion saying Engoron’s judgment should be vacated and a new trial ordered.

Justice David Friedman criticized James, saying she was focused on “political hygiene, ending with the derailment of President Trump’s political career and the destruction of his real estate business.”

He said that the court’s ruling “unanimously derails the effort to destroy his business.”

Trump hailed the Appellate Division ruling in an Aug. 21 post on Truth Social, saying he achieved “total victory” and that he was “so honored by Justice David Friedman’s great words of wisdom.”

James lauded the Appellate Division ruling when it came out.

“The First Department today affirmed the well-supported finding of the trial court: Donald Trump, his company, and two of his children are liable for fraud,” she said on X.

“The court upheld the injunctive relief we won, limiting Donald Trump and The Trump Organization officers’ ability to do business in New York.”

It is unclear when the Court of Appeals of the State of New York will act on the appeal.

Tyler Durden Fri, 09/05/2025 - 15:05

Trump Deploys F-35s To Puerto Rico Airfield After Pair Of Venezuelan Jets Buzz US Warship

Trump Deploys F-35s To Puerto Rico Airfield After Pair Of Venezuelan Jets Buzz US Warship

The Pentagon has warned Venezuela after two of its miliary aircraft buzzed a United States Navy ship in international waters, as an apparent show of force after a US naval build-up in the region.

The pair of warplanes, identified in various media as F-16 jets, flew over over the guided-missile destroyer Jason Dunham in the southern Caribbean Sea on Thursday, and while the US ship did not engage the aircraft, a subsequent Department of Defense statement called it "highly provocative" and "an attempt to interfere with our counter-narco-terror operations."

US Navy file image

"Today, two Maduro regime military aircraft flew near a US Navy vessel in international waters," the Pentagon said in a post on X. "The cartel running Venezuela is strongly advised not to pursue any further effort to obstruct, deter or interfere with counter-narcotics and counter-terror operations carried out by the US military," the Pentagon said.

This was clearly President Maduro's response to Tuesday's US strike on an alleged drug trafficking speedboat in the same waters and general posture of saber-rattling. President Trump says the blown-up boat belonged to a criminal organization tied to Maduro, and the rare military action resulted in the deaths of eleven people.

However, some international monitors have noted that if those slain were civilians, this amounts to an extra-judicial killing, also given there was no apparent attempt to intercept the vessel or arrest those aboard. This is likely what's behind the sudden frequent use of the term 'narco-terrorists' by the US administration.

The sudden terror pretext and label makes it easier to justify direct military action in front of the American people, who have become generally wary of the potential for new, unnecessary wars and foreign adventurism abroad - even if in Latin America.

Maduro has ordered a heightened defense posture due to the US sending some eight naval ships, with Venezuela’s Noticias Venevision news outlet quoting him as saying it is the "first time in history that the communal units of the militia will be activated, spanning the national map from north to south, from east to west, down to the last community."

But the White House is answering further by deploying even more assets near Venezuela in the dangerous environment of rising tit-for-tat tensions. 

President Trump has newly ordered ten F-35 fighter jets to be deployed to Puerto Rico, the American territory and Caribbean archipelago, in what's becoming (or rather, being sold to the public) an all-out Pentagon war on drug cartels. Reports say the advanced aircraft will be in position by week's end. They will join the at least eight warships and one nuclear-powered fast attack submarine to the eastern Caribbean, which are also there.

Just ahead of this new jet deployment, Trump warned after hitting the drug boat, "Please let this serve as notice to anybody even thinking about bringing drugs into the United States of America." 

What's really going on here? One trend being reflected, as we've long previewed, is that President Trump's worldview is for greater coordination of national and hemispheric defense across the Americas, hence the push for stronger economic integration between the United States and Canada, coupled with a hardened defense perimeter stretching from the Arctic to the Panama Canal. Monroe Doctrine on steroids?

But this surge in major defense assets off Venezuela's coast could also more likely be about renewing regime change efforts targeting Caracas, after some apparent failed externally-backed coup efforts which happened during Trump's first term. After all, the 'war on drugs' is a losing proposition in the historic US policy playbook (and ironically the CIA was a hidden hand which helped fuel drugs on American streets), given it had been on for past many decades, and deploying warships and stealth jets is hardly the right tool set for something the DEA and Coast Guard have conventionally done.

There's also the question of to what degree one takes seriously the US administration's claims concerning Maduro and his socialist country's role in shipping dangerous substances into the United States. Why not a force concentration against the Mexican drug cartels instead - or at least in parallel? Of course, Mexico is not home to the world's largest known reserves of oil, as Venezuela is, and consideration of what's really going on can't happen without that key fact front and center.

Tyler Durden Fri, 09/05/2025 - 14:45

Justin Sun Urges Trump-Linked WLFI To Unlock 'Unreasonably' Frozen Tokens

Justin Sun Urges Trump-Linked WLFI To Unlock 'Unreasonably' Frozen Tokens

Authored by Zoltan Vardai via CoinTelegraph.com,

Tron founder Justin Sun is urging World Liberty Financial (WLFI), a crypto project linked to the Trump family, to unfreeze his token allocation. His wallets were blacklisted after suspicious transactions flagged by blockchain trackers sparked accusations of selling.

Sun’s World Liberty Financial (WLFI) token address was blacklisted on Thursday, after blockchain data from Nansen and Arkham flagged the address for a $9 million transfer, Cointelegraph reported.

In a Friday response to the blacklisting, Sun said his pre-sale tokens were “unreasonably frozen,” urging the team behind World Liberty Financial to unlock his investment, in respect to the principles of decentralized blockchain technology. 

World Liberty’s decision to block his tokens is a violation of investor rights and risks “damaging broader confidence in World Liberty Financial,” wrote Sun in a X post, adding:

“I call on the team to respect these principles, unlock my tokens, and let’s move forward together toward the success of World Liberty Financials.”

“Tokens are sacred and inviolable—this should be the most basic value of any blockchain. It’s also what makes us stronger and more fair than traditional finance,” added Sun.

Source: Justin Sun

Sun was among the first investors to join the Trump family-linked WLFI pre-sale, and said that he was looking to hold the tokens long-term.

Sun “stated he will not be selling soon (his words) and is creating yield on HTX for WLFI deposits — plus minting $200M USD1 on Tron to power the ecosystem,” wrote the WLFI platform in a Tuesday X post, referencing Sun’s earlier statement.

Source: WLFI

“Justin and the WLFI team are in active communication about this matter,” a spokesperson for Justin Sun previously told Cointelegraph.

Justin Sun moved $9 million of WLFI to HTX: Bubblemaps

The blacklisting occurred shortly after Sun had started moving WLFI tokens to the HTX cryptocurrency exchange.

“Justin Sun moved $9M of his still-unlocked $WLFI to HTX. In total, he sent $10M to CEXs over the past 3 days,” wrote Bubblemaps in a Friday X post.

Source: Bubblemaps

Other crypto analysts have also suggested that Sun was selling his allocation, despite earlier promises.

“If Justin Sun really lured in WLFI tokens from HTX users with a 20% APY to lock them, and then sell them to get out of ‘his’ own position while they’re still unvested, then he deserves to get his account frozen,” wrote Quinten François, cryptocurrency analyst and the co-founder of social decentralized application weRate, in a Friday X post.

Others, including Nansen crypto intelligence platform founder Alex Svanevik, contend that Sun has not been selling his allocation.

Source: Alex Svanevik

“At first, it (an AI agent) thought @justinsuntron caused the dump. Then I asked it to scrutinize the timestamps. Conclusion seems to be: he did not,” wrote Svanevik in a Friday X post, referencing his conversation with the Nansen AI agent.

Still other industry analysts allege that Sun circumvented HTX to end up selling via the Binance exchange instead.

“A Binance deposit wallet connected to Justin Sun received over 60 million WLFI tokens worth $12M yesterday from HTX,” according to Conor Grogan, head of product at Coinbase exchange.

“The 60M WLFI deposit represents about 52.6% of HTX’s total WLFI holdings at present from what I can find onchain based on HTX’s public wallets,” Grogan said in a Thursday X post.

Tyler Durden Fri, 09/05/2025 - 14:25

Kenvue Craters On Report RFK Jr To Link Autism To Tylenol Use In Pregnancy

Kenvue Craters On Report RFK Jr To Link Autism To Tylenol Use In Pregnancy

The stock of Tylenol maker Kenvue is crashing after a WSJ report according to which Robert F. Kennedy Jr. plans to announce that pregnant women’s use of an over-the-counter pain medication is potentially linked to autism in a report that will also suggest a medicine derived from folate can be used to treat symptoms of the developmental disorder in some people.

The report, sourced to "people familiar" and expected this month from the Department of Health and Human Services, is likely to highlight low levels of folate, an important vitamin, and Tylenol - which has been mass produced since 1955 - taken during pregnancy as well as other potential causes of autism.

Kennedy’s department also plans to pinpoint a form of folate known as folinic acid, or leucovorin, the people said, as a way to decrease the symptoms of autism, which affected roughly one in 31 eight-year-olds in the U.S. in 2022.

Tylenol, whose active ingredient is acetaminophen, and has been used for decades, is a widely used pain reliever, including by pregnant women. While a handful of previous studies indicated risks to fetal development, others have found no association. The American College of Obstetricians and Gynecologists says it is safe to use in pregnancy, though it recommends pregnant women consult with their doctors before using it, as with all medicines.

Tylenol is made by McNeil Consumer Healthcare, a division of Kenvue, and other companies make similar acetaminophen-based products. 

“Nothing is more important to us than the health and safety of the people who use our products,” a Kenvue spokeswoman told the WSJ. “We have continuously evaluated the science and continue to believe there is no causal link between acetaminophen use during pregnancy and autism.”

Of course in a market where nobody is surprised when crazy things come out of left field late on Friday, the stock of KVUE plunged, losing 12% of its value because RFK Jr., long leeches, short tylenol pair trade was taking on water in recent decades.

Tyler Durden Fri, 09/05/2025 - 14:15

One Of Russia's Largest Oil Refineries Once Again On Fire After Ukraine Drone Strike

One Of Russia's Largest Oil Refineries Once Again On Fire After Ukraine Drone Strike

Ukrainian drones have yet again targeted one of Russia’s largest oil refineries overnight - this time a Rosneft facility in the Ryazan region, which lies southeast of Moscow.

Ryazan Governor Pavel Malkov in confirming the strike on what he called an "industrial enterprise" described that eight drones were shot down in the area, but which resulted in no injuries or damage to residential buildings.

The attack unleashed two active fires at the Ryazan refinery, with witnesses hearing explosions around 2 am local time, after which large flames and thick smoke were spotted above the southern outskirts of the city.

Over 90 drones in total were launched across various parts of Russia overnight. Cross-border drone attacks have been a regular feature of the war, coming nightly, and Russia has just as frequently responded with its own major missile and UAV attacks.

One Ukrainian military blogger has claimed that due to Ukraine's sustained attacks on Russia's energy infrastructure, "Gasoline (in Russia) is becoming scarce, while gas and oil are quickly running out."

Strikes from this summer have reportedly disrupted some 20% of Russia’s refining capacity, or roughly 1.1 million barrels per day.

Ukraine's military and media have classified Russia's refineries as essentially military targets, given they prop up funding of the armed forces as they execute Putin's 'special military operation' in Ukraine:

According to Ukraine's General Staff, the ELOU-AVT-6 primary oil processing unit, with an estimated annual capacity of 6 million tons, was hit.

The plant, which has a capacity of 13.8 million tons per year, was previously struck by Ukrainian drones on Aug. 2, forcing two of its three main refining units to halt operations.

Ukraine's military said the facility plays a role in supporting Russia's armed forces.

Just the past month has seen at least a dozen similar attacks on Russian crude refineries and distribution sites - revealing a concerted effort to permanently damage the Kremlin's ability to fund the war.

Newsmax writes that "The impact has been felt nationwide. Motorists face fuel shortages, long lines, and record prices." The report adds, "Wholesale gasoline prices have jumped 54% since January, prompting authorities to suspend exports and impose rationing in some regions."

Tyler Durden Fri, 09/05/2025 - 14:05

Is Lisa Cooked?

Is Lisa Cooked?

By Molly Schwartz, cross-asset macro strategist at Rabobank

Yesterday, the Department of Justice opened an investigation into Fed Governor Lisa Cook, probing allegations of mortgage fraud. This comes after a series of tweets from Bill Pulte, Director of the Federal Housing Finance Agency, with supposed evidence supporting claims that she was not living at her home in Ann Arbor, MI. Questions, however, still remain as to if she is even guilty, given that she has not yet been convicted (though the DOJ probe might change that) and whether this is even fair grounds to fire her from her position on the Board of Governors in the first place.

Cook’s legal team maintains that she “never committed mortgage fraud,” asserting that discrepancies in her mortgage paperwork were already flagged and addressed during her 2022 confirmation process. Indeed, her legal team has filed a lawsuit against Trump over his attempts to remove her. The rest of the Governing Board, including Chair Powell, were also named in the suit, though they are “being sued only to the extent that they are able to effectuate President Trump’s purported termination of Governor Cook.”

Whether Cook is guilty or not, there are clear political incentives for Trump to fire her. As it stands, Trump has two Governors, Waller and Bowman, ready and willing to vouch for cuts if it means it will get them on the short list for Fed Chair. Meanwhile, Stephen Miran is on deck to replace Kugler, who stepped down shortly after the July FOMC decision. With Cook still employed, Trump sympathizers are capped at a 3-4 minority. If Trump can stack the Fed with another pick of his own to replace Cook and pull in a sympathetic outsider to act as Fed Chair when Powell steps down, Trump would achieve a 5-2 majority on the Board in 2026.

But before Miran can step into Kugler’s shoes, he must be confirmed by the Senate. Yesterday, Miran testified before the Senate Banking Committee, making his case for confirmation. According to Senator Moreno, Miran is already ahead, having confirmed that Miran has “never lied on a mortgage application.” Miran made sure to emphasize his commitment to Fed independence in his prepared statement. However, Senator Warren challenged this, asking Miran several pointed questions, including whether Trump lost the 2020 election. Miran avoided a direct answer, stating only that Congress confirmed Biden’s victory. Other questions included if he believed the Bureau of Labor Statistics falsified data ahead of the 2024 election (in an attempt to sway public sentiment in favor of Harris) and if he thought tariffs had caused tangible price increases. Warren criticized Miran’s responses, saying he had “blown it” and made his loyalty to Trump clear.

Another point of contention among Democratic senators was Miran’s dual role as Chairman of the Council of Economic Advisers (CEA) and his nomination to the Fed. Miran stated he would take an unpaid leave of absence for the remainder of Kugler’s term – about four and a half months – as advised by counsel, but that he would resign from the CEA if granted a longer term. Still, senators expressed concern that even on leave, Miran remains functionally employed by the Trump Administration and therefore may be influenced to make decisions that serve political interests rather than economic ones.

Another major proponent of “imposing bans on the revolving door between the executive branch and the Fed” is none other than Stephen Miran himself, as explained in a co-authored paper published in March of 2024. In the article, Miran (and Katz) take aim at Chicago Fed President Austan Goolsbee, indirectly referring to him as a “Biden campaign surrogate.” While complimenting Goolsbee’s talents as an economist, Miran and Katz went so far as to argue that “to pretend that one can easily shift between highly political and allegedly nonpolitical roles without letting political biases inform policy is, at best, naïve – and, at worst, sinister.”

While perhaps a tad melodramatic, it’s an unfortunate position for Miran to be in the hot seat and have his own words spun back at him by Elizabeth Warren. But question remains if Miran is the exception to his own rule.

Across the Atlantic, European leaders gathered at the Coalition of the Willing Summit – seated on bouclé chairs – to discuss the future of Ukrainian security. According to Macron, 26 countries agreed to support Ukraine, including sending troops if necessary. Zelenskiy tweeted after the event, speaking of a “long and detailed conversation” with Trump and thanked him for his support, though he did not elaborate on what exactly that support entailed and what commitments the US would make towards Ukrainian security going forward. He did, however, hint at the continued use of US sanctions and tariffs, citing “strong economic measures to force an end to the war.” Zelenskiy also praised the NATO’s Prioritized Ukraine Requirements List (PURL) initiative, agreed upon in July of this year, which helps to supply Ukraine with American weapons.

In an absence of data yesterday on the Eastern Hemisphere, we once again turn our focus back to the United States. Yesterday morning, ADP employment data registered only 54k payrolls added to the economy, down from 104k the month prior, for the fifth sub-100k print year-to-date. This was followed by similarly weak data in ISM services employment at 46.5, fueling the ever-increasing likelihood of a Fed cut at the September meeting. Surprisingly enough, despite slipping yields, USD was still the strongest performing G10 currency. We also saw economic activity data from south of the U.S. border, suggesting continued economic lethargy in Mexico as gross fixed investment contracted at a rate of 6.4% year-over-year and 1.4% month-over-month in June. Meanwhile, the Canadian trade balance, which registered its deepest deficit in April, has shown some improvement in July, with the deficit creeping back up to “only” -$C 4.94 billion, which is at least better than the April 2020 deficit.

Tyler Durden Fri, 09/05/2025 - 13:45

Six Flags Faces Bankruptcy Fears After $500M Debt And Park Closures

Six Flags Faces Bankruptcy Fears After $500M Debt And Park Closures

We're not sure what more of a comment about discretionary spending one would need...

Six Flags, less than a year removed from its merger with Cedar Fair, is drowning in debt, closing parks, and facing warnings of bankruptcy, according to The Sun.

The company has racked up $500 million in debt, seen revenue fall by $100 million in Q2, attendance drop 9%, and season pass sales decline 8%. Two parks have already been shut down, with California’s Great America set to close in 2027.

“The whole company needs to be reimagined,” said Dennis Speigel of International Theme Park Services, who warned “bankruptcy is not out of the question.”

Citi analyst James Hardiman agreed, saying “everything should be on the table as we think about asset sales,” though flagship parks like Cedar Point are expected to survive.

The July 2024 merger was billed as a growth engine, with executives projecting 6% attendance gains in 2025. Instead, attendance fell 9%. “It’s about the biggest miss I’ve ever seen in the theme park industry versus expectations,” Hardiman said.

The Sun writes that leadership turmoil has added to the crisis. CEO Richard Zimmerman announced he will step down at year’s end, a move Hardiman called “odd,” especially mid-season. Chairman Selim Bassoul remains in charge.

Six Flags blames poor weather for disrupting nearly 50 operating days, but critics say demand for multi-park passes was overstated. Controversial new fees for haunted houses at Halloween events have further angered passholders.

Stock prices have plunged to $23.84, less than half their pre-merger value. Two law firms are already exploring potential securities-fraud lawsuits.

“If I were running the company, there are 10 to 12 parks I would keep, pay off debt and start over,” said Speigel. “I wouldn’t be surprised if you see the company on the precipice of bankruptcy to get that debt off the books.”

Tyler Durden Fri, 09/05/2025 - 13:25

Why Keynes' Economic Theories Failed In Reality

Why Keynes' Economic Theories Failed In Reality

Authored by Lance Roberts via RealInvestmentAdvice.com,

A recent post from Daniel Lacalle, “How Keynesians Got The US Economy Wrong Again,” exposed the widening gap between John Maynard Keynes’ economic theory and reality. Despite the confident forecasts of leading Keynesian economists, the U.S. economy in 2025 continues to defy expectations. The Federal Reserve’s tightening cycle failed to trigger the widely predicted “hard landing,” and growth has proven more resilient. Simultaneously, inflation remains somewhat sticky, but still declining, and the economy refuses to follow the neat, linear pathways that textbook models suggest.

This latest embarrassment for Keynes’ orthodoxy is part of a much larger story. The failures aren’t isolated miscalculations but the predictable result of a flawed framework that policymakers have clung to for decades. Keynesian economics didn’t just “get it wrong” in 2025, but has repeatedly failed to deliver on its promises for over forty years. And the consequences are becoming impossible to ignore.

At its core, Keynesian economics is deceptively simple. When demand for the private sector falls, the government should borrow and spend to fill the gap. The idea is that temporary fiscal stimulus injections will smooth business cycles, reduce unemployment, and quickly return the economy to full capacity.

But the key word here is temporary. John Maynard Keynes was clear: governments should run deficits during downturns and surpluses during expansions. The debt incurred to rescue the economy should be repaid once conditions normalize.

However, in practice, this discipline never materialized. Politicians discovered that voters liked stimulus but hated austerity. Since the 1970s, deficits have become a permanent feature of U.S. fiscal policy, regardless of the business cycle. The results are sobering: the U.S. national debt now exceeds 120% of GDP, entitlement programs are structurally underfunded, and each crisis requires larger interventions with diminishing economic benefits.

The COVID-19 pandemic was the ultimate Keynes experiment. Between 2020 and 2022, the federal government injected over $5 trillion in fiscal stimulus into the economy, complemented by the Federal Reserve slashing interest rates to zero and expanding its balance sheet by $120 billion each month. According to the Keynesian model, this unprecedented monetary and fiscal stimulus should have ushered in a durable economic boom.

The Failure of Artificial Growth

However, as we noted in “MMT Was Tried And Failed,” the massive flood of stimulus temporarily boosted economic growth by “pulling forward” future demand, but it also created several problems.

“The most obvious problem was the impact of dramatically increasing demand on a supply-stricken economy. With the economy “shut down” due to Government-mandated restrictions, the flood of stimulus payments led to a demand boost. Given the basic economics of supply versus demand, prices rose. As expected would be the case, the implementation led to a massive surge in inflation. (Given most Americans’ have fixed healthcare and housing payments for a contractual period, the third measure shows what cost-of-living is for most every month.)”

Crucially, inflation, excluding housing and healthcare, surged to nearly 12% during the pandemic-stimulus-infused spending spree. However, today, as the economy slows and the stimulus fades from the system, that inflation rate has declined to just 1.61%.

Secondly, the “economic boom” created by the demand-pull stimulus continues to disappear as the economy normalizes slowly back to roughly $3.50 in debt to make $1 of economic activity. Following the pandemic shutdown, the economy surged to unprecedented levels, nearing 17.5% nominal growth. On a shuttered economy, the byproduct of all that demand was an inflation surge to 40-year highs, peaking above 9% in 2022. Five years later, inflation continues to decline towards the Fed’s 2% target, but remains sticky as remnants of monetary and fiscal stimulus continue to flow through the system.

The Broken Transmission of Monetary Policy

A further failure of modern Keynesian policy is its overreliance on central banks. Through rate cuts and quantitative easing (QE), monetary stimulus has become the go-to solution for any economic slowdown. Yet the transmission mechanism between monetary policy and real economic activity has fundamentally broken. Artificial interventions and “MMT” failed to work in reality because the underlying transmission system failed.

“The promise of something for nothing will never lose its luster. So MMT should be viewed as a form of political propaganda rather than any real economic or public policy. And like all propaganda, we must fight it with appeals to reality. MMT, where deficits don’t matter, is an unreal place.”

Meanwhile, the velocity of money, the rate at which money changes hands in the economy, while recovering somewhat from the economic shutdown, continues to trend lower. In other words, the Fed can inject liquidity but fails to circulate productively. The velocity trend does not provide an encouraging outlook for GDP growth.

Given the weakening economic growth rates and subsequently declining inflation, a direct reflection of weakening consumer demand, banks have little incentive to expand lending at current rates, especially in an environment of tighter regulations and poor credit quality.

One key problem is that Keynesian models assume a linear cause-and-effect relationship between government spending and economic output. They focus almost entirely on aggregate demand, neglecting critical dynamics like debt saturation, supply chain fragilities, and the feedback loops of global capital markets.

In today’s highly financialized economy, government spending does not circulate efficiently. As noted, much of it gets trapped in financial markets, inflating asset prices rather than stimulating productive investment. Ultra-low interest rates, another hallmark of Keynesian policy, discourage savings and encourage debt-fueled speculation. This distorts capital allocation, causing malinvestment in unproductive assets like meme stocks, speculative real estate, and unprofitable tech ventures. Most benefits remain trapped in the top 10% of the economy, which owns roughly 88% of the inflation-adjusted financial assets.

In other words, the wealthy retain the monetary injections while inflation taxes them away from the poor.

Mr. Lacallie highlighted this mismatch between Keynes’ theories and economic realities. As he noted, many mainstream economists repeatedly forecasted a 2023-2024 recession that never arrived, underestimated inflation persistence, and misread the impact of fiscal tightening. These forecasting errors expose deeper flaws in how Keynesians model the modern economy.

Hayek’s Warnings Prove Prophetic

The Austrian school of economics, particularly Friedrich Hayek’s views, starkly contrasts with Keynesian thinking. Austrian economists believe that a sustained period of low interest rates and excessive credit creation creates a dangerous imbalance between saving and investment. In other words, low interest rates tend to stimulate borrowing from the banking system, which leads, as one would expect, to the expansion of credit. This expansion of credit, then, in turn, increases the supply of money.

Therefore, as one would ultimately expect, the credit-sourced boom becomes unsustainable as artificially stimulated borrowing seeks out diminishing investment opportunities. Finally, the credit-sourced boom results in widespread malinvestments. When the exponential credit creation is no longer be sustainable, a “credit contraction” occurs, ultimately shrinking the money supply. The markets eventually “clear,” which causes resources to be reallocated towards more efficient uses.

Modern policymakers refuse to allow this natural process. Each downturn results in more aggressive stimulus, which only delays the necessary corrections. The result has been a relentless build-up of economic imbalances. Inefficient businesses survive on cheap debt, zombie firms proliferate, and innovation suffers. Each economic expansion is weaker than the last, and each recovery depends on larger interventions to stay afloat.

Perhaps the greatest misconception perpetuated by Keynesian economists is that debt-financed stimulus is a free lunch. In reality, servicing the debt and rising debt service costs become a significant economic headwind. The Congressional Budget Office projects that U.S. interest payments will exceed national defense spending in the coming years and approach $1.5 trillion annually by 2030. Of course, that is assuming that rates stay where they are currently. The next crisis, which has become more common since the turn of the century, will significantly lower rates. As shown, a reduction in rates by 1% would dramatically impact future liabilities.

This is not just a fiscal issue—it’s a macroeconomic drag. Spending dollars on interest payments diverts them from infrastructure, education, or productive investment. Worse, rising debt levels crowd out private investment, distort capital markets, and reduce the flexibility to respond to future crises.

Conclusion: Keynes’ Economic Theory Has Failed

For the last 40 years, each Administration and the Federal Reserve have continued to operate under Keynes’s monetary and fiscal policies, believing the model worked. The reality, however, is that most of the economy’s aggregate growth is financed by deficit spending, credit expansion, and a reduction in savings. 

This reduced productive investment and slowed the economy’s output. As the economy slowed and wages fell, the consumer took on more leverage, decreasing savings. The result of the increased leverage required more income to service the debt, rather than fuel increased consumption.

Secondly, most government spending programs redistribute income from workers to the unemployed. Keynes’ economists argue that this increases the welfare of many hurt by the recession. What their models ignore, however, is the reduced productivity that follows a shift of resources toward redistribution and away from productive investment.

All of these issues have weighed on the overall prosperity of the economy. What is most telling is the inability of current economists, who maintain our monetary and fiscal policies, to realize the problem of trying to “cure a debt problem with more debt.”

This is why Keynes’ economic policies have failed, from “cash for clunkers” to “Quantitative easing.” Each intervention either dragged future consumption forward or stimulated asset markets. Pulling future consumption forward leaves a “void” in the future that must be continually filled. However, creating an artificial wealth effect decreases savings, which could be used for productive investment.

It’s time we wake up and realize we are on the same path.

Tyler Durden Fri, 09/05/2025 - 13:05

EU Slaps Google With Massive €2.95 Billion Antitrust Fine 

EU Slaps Google With Massive €2.95 Billion Antitrust Fine 

The European Commission has slapped Google with a €2.95 billion fine for abusing its dominance in the search advertising market through "self-preferencing" practices, according to a new Financial Times report. The EU ordered Google to end these behaviors within two months or risk a potential breakup. This marks one of the largest EU fines against a company, following the €4.12 billion Android fine in 2018.

EU competition chief Teresa Ribera warned Google to draw up a "serious remedy to address its conflicts of interest, and if it fails to do so, we will not hesitate to impose strong remedies." 

Lee-Anne Mulholland, Google's global head of regulatory affairs, called the fine "unjustified" and said "it requires changes that will hurt thousands of European businesses by making it harder for them to make money." 

The commission's investigation began around 2021, with formal charges issued in 2023. Brussels warned back then that the only solution for Google might be breaking up its ad-tech business. 

Not since US v Microsoft, filed in 1998, has Silicon Valley been so threatened.  

Meanwhile, in the US, Google earlier this week avoided a breakup order after a judge ruled against forcing divestitures of Chrome or Android. Instead, Google must share more data and stop exclusive distribution deals. 

Even as Brussels and Washington ramp up antitrust actions against the tech giant, its New York-listed shares have gone parabolic this year.

. . . 

Tyler Durden Fri, 09/05/2025 - 12:45

Biden-Appointed Judge Blocks Trump's Transgender Passport Order

Biden-Appointed Judge Blocks Trump's Transgender Passport Order

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

A federal appeals court on Sept. 4 upheld a lower court ruling that blocked enforcement of President Donald Trump’s executive order banning the use of gender-neutral markers on passports.

U.S. passports are arranged for a photograph in Tigard, Ore., on Dec. 11, 2021. Jenny Kane/AP Photo

U.S. District Judge Julia Kobick issued an injunction in April blocking the Department of State from enforcing the passport policy against six plaintiffs who filed the case, later expanding it in June to grant class certification, covering other Americans identifying as nonbinary or transgender.

In the Sept. 4 ruling, the court’s three-panel judge stated that the government failed to meaningfully address the district court’s finding that the changes to passport policy were rooted in “unconstitutional animus toward transgender Americans.”

The judges noted that the federal government did not meet its burden to secure a stay, despite its argument that blocking the policy could harm “certain long-term institutional interests of the executive branch.”

“In contrast, based on the named plaintiffs’ affidavits and the expert declarations submitted by the plaintiffs, the district court made factual findings that the plaintiffs will suffer a variety of immediate and irreparable harms from the present enforcement of the challenged policy, including ‘a greater risk of experiencing harassment and violence’ while traveling abroad,” the judges stated.

The American Civil Liberties Union (ACLU) of Massachusetts, which represented the plaintiffs, said the ruling ensures that “transgender, non-binary, and intersex people will continue to be able to obtain accurate passports.”

The White House did not respond to a request for comment by publication time.

The United States had permitted individuals who identify as transgender and intersex to choose a different sex for their passport than their birth sex since 1992, pending submission of medical documentation, until the rules were changed in 2021 under President Joe Biden.

The Biden administration allowed people to self-select their passport sex marker based on gender identity. Individuals who identified as non-binary or intersex were allowed to select an “X” marker rather than “M” or “F.”

After taking office on Jan. 20, Trump signed an executive order titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” mandating that government-issued identification documents, including passports, use sex rather than gender identity.

“It is the policy of the United States to recognize two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality,” the order stated.

ACLU filed the lawsuit in February on behalf of the plaintiffs challenging Trump’s order. Kobick ruled in their favor in April, noting that the administration failed to demonstrate substantial government interests in changing the passport policy.

Joseph Lord contributed to this report.

Tyler Durden Fri, 09/05/2025 - 12:20

Lululemon Plunges On Weak Guidance As Sexy Leggings Demand Slumps

Lululemon Plunges On Weak Guidance As Sexy Leggings Demand Slumps

Lululemon shares in New York crashed on Friday after the upscale athletic apparel retailer slashed its full-year earnings guidance, citing the Trump administration's move to end the de minimis exemption loophole.

"This is a disappointing update from LULU, and we expect shares to underperform peers tomorrow as a result," Goldman analyst Brooke Roach wrote in a first take note to clients after the earnings release on Thursday. 

Across the board, Lululemon cut its FY25 outlook, lowering revenue expectations in the US, Canada, and China as demand for its overpriced sports bras, workout tops, and leggings weakens.

Roach provided more color on the outlook downgrade: 

The company lowered its FY25 outlook across all key line items. For FY25, LULU's lowered its revenue growth expectations for the US, Canada and China as consumer demand for the brand continues to soften, and margin pressures have increased as a result of (1) Incremental tariff rate increases (~50bps net headwind vs. 40bps prior); (2) Changes in the de minimis exemption (~170bps net headwind); (3) Elevated promotionality (~50bps headwind vs. 10-20bps prior); and (4) Incremental SG&A deleverage due to FX and ongoing investments in Power of 3x2 initiatives (~80-90bps deleverage vs. ~50bps prior). Management noted they expect a ~$320mn EBIT headwind from tariffs (incl. de minimis pressures) as they look out to FY26.

As a result, Lululemon shares plunged in New York, down about 16% by 10:00 a.m. EST. Year-to-date, the stock is off 55%, hitting lows not seen since early 2020.

Roach is "Neutral" on the stock. He explained (Pro Subs read here) that he lowered his 12-month price target to $200 from the previously stated $232.

Other Wall Street analysts noted weakness in its US business. Stifel downgraded the stock to "Hold" from "Buy." 

According to Bloomberg data, 28.9% of Wall Street analysts rate the stock a "Buy," 57.9% a "Hold," and 13.2% a "Sell."

More commentary (courtesy of Bloomberg):

Stifel's Peter McGoldrick (cut to hold from buy, PT to $205 from $324)

  • The meaning FY25 guidance cut was due to challenges from domestic market pressures and removal of the de minimis exemption

  • While the acknowledgment of underperformance within the casual side of the business is a starting point, "reigniting brand momentum in the US is likely to take longer than we had previously anticipated"

Bloomberg Intelligence's Poonam Goyal

  • "Lululemon is facing increased pain from tariffs and slowing sales, notably in the Americas"

  • Along with guidance for a $240 million annual hit to gross profit from tariffs and the removal of the de minimis exemption, the company cut its earnings guide

JPMorgan's Matthew Boss (neutral, PT to $191 from $224)

  • The company's 2Q same-store-sales was weighed down by weak Americas comps, "which sequentially worsened over the course of the quarter despite taking higher than planned markdowns"

  • "Merchandise mix reset required into spring 2026"

Jefferies' Randal Konik (underperform; PT $150)

  • Says the US business is declining, adding that the third- quarter earnings appear to be a "little better," but the topline miss is the major issue due to competition and will continue to worsen given the below Street outlook

  • "We believe guidance cuts continue and will become more severe through the end of the fiscal year"

EMARKETER's Suzy Davidkhanian

  • Lululemon's second-quarter results were mixed as revenue grew 7% to $2.5 billion, but missed guidance, while adjusted EPS beat expectations

  • "Once the trailblazer in athleisure, Lululemon has lost its innovation edge, now squeezed by luxury newcomers like Alo Yoga and private-label dupes with comparable fabric tech at lower prices" 

  • "Looking ahead, holiday gifting may provide a short-term lift, but sustainable growth hinges on whether Lululemon can move credibly into new sport verticals and find the right formula for its footwear"

Queue the Sweeney ad...

. . .

Tyler Durden Fri, 09/05/2025 - 11:20

California Passes Bill To Require Schools To Notify Parents Of ICE Operations

California Passes Bill To Require Schools To Notify Parents Of ICE Operations

Authored by Jill McLaughlin via The Epoch Times (emphasis ours),

An emergency bill to require California schools to notify parents and school staff when federal immigration officers are operating in the area passed the state Legislature on Sept. 2.

A Homeland Security officer speaks to classmates and relatives gathered outside immigration court in Chelmsford, Mass., on June 5, 2025. Brian Snyder/Reuters

Senate Bill 98—dubbed the Sending Alerts to Families in Education, or SAFE Act—is now waiting to be signed by Gov. Gavin Newsom.

“With students returning to school, this legislation is more important than ever,” the bill’s author, state Sen. Sasha Renée Pérez, a Democrat from Pasadena, said in a statement. “The SAFE Act will inform and protect immigrant students and their families on school campuses.”

If signed into law, the measure will require all elementary, secondary, charter schools, and college campuses to make the notifications. The schools would need to update their safety plans to include procedures for the notifications and provide additional resources for families about their educational rights, state privacy laws, and counseling or support services.

The notification would also be required to include the date, time, and location of the immigration enforcement.

The legislation includes an urgency clause, which means it would take effect immediately after Newsom signs it, instead of the typical date of Jan. 1, 2026.

California schools serve an estimated 133,000 children ages 3 to 17 who are illegal immigrants, according to the Migration Policy Institute, a Washington, D.C.-based global immigration policies think tank.

More than 2.7 million people in California are illegal immigrants, and over 400,000 have moved to the state within the last five years, the institute reported.

President Donald Trump declared a national emergency at the southern border on his first day in office Jan. 20, making immigration enforcement a top priority. Since then, federal Immigration and Customs Enforcement (ICE) operations have included checking the welfare of immigrant children who crossed the border illegally and without a parent in the past four years.

In April, two elementary schools in Los Angeles denied entry to Department of Homeland Security investigators checking on the health and safety of such children.

“DHS is leading efforts to conduct welfare checks on these children to ensure that they are safe and not being exploited, abused, and sex trafficked,” a department spokesperson told The Epoch Times in an email at the time.

In the face of ongoing federal immigration operations, Pérez said the SAFE Act can help “inform and empower school communities to make the best decisions about their safety and their family’s safety.”

“I urge [Newsom] to sign the SAFE Act,” Pérez continued. “Students and their families have been living in fear. California must ensure our schools and colleges remain places where students can learn, teachers can teach, and classrooms can be safe places for young Californians.”

Flanked by images of a person arrested for violence during the ICE protests in Los Angeles, White House press secretary Karoline Leavitt speaks about President Donald Trump's response to the protests at the White House on June 11, 2025. Bryan Dozier/Middle East Images via AFP via Getty Images

The legislation was a priority of the California Latino Legislative Caucus and was sponsored by the state’s Superintendent of Public Instruction Tony Thurmond, the University of California Student Association, California State Student Association, Student Senate for California Community Colleges, California Faculty Association, and others.

“Our immigrant families are living in fear and our time to act is limited,” Thurmond said in a statement. “The school year has begun, and now is the time to make decisive efforts to protect our communities and maintain school as a safe place for learning.”

Aaron Villarreal, chair of the Cal State Student Association, said he has witnessed classmates and colleagues struggle with fear of immigration enforcement.

“This anxiety is not unique to Sacramento State but is shared across all 22 campuses,” Villarreal said.

Tyler Durden Fri, 09/05/2025 - 11:00

UK Deputy PM Resigns After Home Purchase Tax 'Error'

UK Deputy PM Resigns After Home Purchase Tax 'Error'

While Fed Governor Lisa Cook attempts to litigate her way out of an alleged mortgage fraud (for which the Trump administration has delivered the receipts), The U.K.’s deputy prime minister, Angela Rayner, resigned this morning following an 'ethical' error on her home purchase tax payments.

Rayner, who admitted on Wednesday that she did not pay enough tax on her purchase of an apartment in Hove, on England’s south coast, earlier this summer, said the report found that she acted in good faith, but that, crucially, she should have sought more specific tax advice.

“I take full responsibility for this error," she said in her resignation letter to Prime Minister Keir Starmer.

Of course, this is very different from Lisa Cook's playing of the race-card, not addressing the actual crime she is accused of, and distracting from her actual fraud by claiming it's a witch hunt.

As AP reports, in the U.K., levies are charged on property purchases, with higher charges due on more expensive homes and secondary residences.

Reports have suggested that Rayner saved 40,000 pounds by not paying the appropriate levy, known as a stamp duty, on her 800,000-pound ($1 million) purchase.

Rayner, 45, had sought to explain that her “complex living arrangements” related to her divorce in 2023 and the fact that her son has “lifelong disabilities” underlay her failure to pay the appropriate tax.

In response, Starmer voiced his sadness but said Rayner had made the right decision.

“I have nothing but admiration for you and huge respect for your achievements in politics,” Starmer wrote.

The handwritten letter signed off “with very best wishes and with real sadness.”

But, as Stephen Bush writes at The Financial Times, Angela Rayner’s resignation leaves Sir Keir Starmer’s government weaker and his own position more uncertain, even as the full extent of the damage is still unclear.

Those around Starmer knew full well that if they could keep Rayner, they were better off doing so, because of the chaos and uncertainty that a fresh election for deputy leader creates within the Labour party.

This is why the loudest defenders of the now ex-deputy prime minister were not her core allies but those of Starmer — Rachel Reeves, the chancellor, whose political career lives or dies with his, and Peter Kyle, the ultraloyal secretary of state for science and technology.

As far as the government as a whole is concerned, today’s events force Starmer’s hand in conducting a ministerial reshuffle, at a time when he did not want one.

Given that Downing Street’s own weakness makes a wider reshuffle too risky, he may be saddled with a less far-reaching set of changes than he might have been able to make in the new year.

...

Everything from the government’s position on the UK’s relationship with the EU to wealth taxes to trans rights to its handling of Donald Trump could now come under fire from rival deputy leadership candidates.

For Rayner, her housing arrangements have already extracted their price. The costs to Starmer are only just beginning.

Rayner's previous comments had opened her up to charges of hypocrisy, particularly from current Conservative leader Kemi Badenoch, who said Rayner's position had been “untenable for days.”

“The truth is simple, she dodged tax," she said in a video posted on social media. “She lied about it.”

Tyler Durden Fri, 09/05/2025 - 10:40

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