Earlier today Tesla CEO Elon Musk tweeted, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”  He also said, “still committed to acquisition.”

While tech stocks have been collapsing over the past 15 days, from a big picture perspective this approach by Musk looks like a potential negotiation strategy to lower the offer.  The actual number of spam/bot accounts on the platform is unknown.

CNBC – […] Twitter shares fell more than 8% Friday and are down about 23% from Musk’s agreed-upon purchase price of $54.20 per share. Part of the dip is related to an overall slump in technology stocks this month. The Nasdaq has fallen another 11% since the market close on April 25, the day Twitter accepted Musk’s offer.

“This is probably a negotiation tactic on behalf of Elon,” Toni Sacconaghi, Bernstein senior research analyst, said on CNBC’s “Squawk Box.” “The market has come down a lot. He’s probably using the guise of true active users as a negotiation ploy.”

Musk may feel some pressure or obligation to other potential investors in Twitter to lower the price, even if the world’s wealthiest man is more price agnostic.

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Perhaps you’ve noticed. For the past two nights Fox News and a host of corporate allies have been doing a full-frontal attack against Pennsylvania Senate Candidate Kathy Barnette.

The club reaction appears to have been triggered by a GOP Trafalgar poll showing Kathy Barnette in a close second place (23.2%), surging ahead of David McCormick (21.6%) and right on the heels of Mehmet Oz (24.5%).  [Bartos 7.2%, Sands 6.5%]

In this outline I will explain the easily visible GOPe club moves without trying to support any particular candidate, that’s for Pennsylvania voters to decide.  However, once you understand the background play, it might help clarify what the Keystone state voters are witnessing.

BACKGROUND.  President Trump has endorsed Mehmet Oz.  However, many people in the MAGA base are stuggling with that endorsement because they just don’t like the guy and question the bonafides of his sudden, seemingly convenient, MAGA-mindedness.

Meanwhile, David McCormick is the GOPe candidate from the mold of the typically Wall Street Mitch McConnell tribe.

McCormick is the quintessential corporate republican, or what might be described as the ‘establishment’ party choice.  I would call McCormick the club candidate.

Kathy Barnette is the alternative favorite in the race for the MAGA base who just cannot bring themselves to support Oz.  Barnette is the outsider and carries a fierce independent streak that appeals to frustrated voters who have had enough of the nonsense.

As a result, the top three in the race break down into McCormick as the Club candidate, while Barnette and Oz are splitting the MAGA vote.  By my estimation the MAGA support looks like 60%(ish) Barnette and 40%(ish) Oz.  What is happening now in this race is very Karl Rove-ian.

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Earlier today ultra-MAGA representative Marjorie Taylor Greene delivered remarks about the failures of the Biden administration as they are reflected in the continual food security and pricing crisis.   I strongly recommend watching these brief remarks, very impressive.

MTG accurately identifies the origin of the current baby formula crisis, as an outcome of stress within the supply chain caused by government intervention into the overall system.  MTG then notes that FDA rules and regulations make supply interruptions worse.

Additionally, in the background of the federal DHS and HHS contracts for food products, including baby food/formula, most of those federal contracts contain a ‘first right‘ or ‘prioritized continuity‘ provision, creating a distribution outcome (via contractual mandate) where illegal aliens end up with preferential allocation.  WATCH (2:55 mins):

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The entire premise of the J6 committee is a farce.  The overwhelming majority of Americans fully understand it is a political exercise between Democrats in congress and their hired Lawfare allies.  The goal is to label their political opposition as extremists, block and/or tarnish President Trump and manufacture a false premise to advance the Democrat 2022 election goals.

Despite this reality the effort continues in order to fuel their far-left base and media allies.

Today, the House committee triggered subpoenas against House republican members.  The subpoenas were sent to House Minority Leader Kevin McCarthy (U-DC), Rep. Jim Jordan (R-Ohio), Rep. Scott Perry (R-Pa.), Rep Andy Biggs (R-Ariz.) and Mo Brooks (R-Ala.). All five of the house members had previously rejected investigators’ requests for voluntarily testimony.

The subpoena authority is likely, hopefully, to be challenged in court.  The premise of a House committee issuing subpoena’s to the political opposition of the same House membership appears to violate the function of government on many levels.

WASHINGTON DC – […] The Republican leader indicated he might not comply with the subpoena.

“My view on the committee has not changed,” said McCarthy, who added he had not yet seen the subpoena. “They’re not conducting a legitimate investigation. It seems as though they just want to go after their political opponents.”

The select committee demanded testimony from the five lawmakers in the final week of May.

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Senator Rand Paul has blocked a fast-track senate vote on the additional $40 billion funding package created by Joe Biden and House Democrats.  Both Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell approved a fast-track vote; however, senator Rand Paul (KY) stood defiant against their effort.

Despite the high-profile pressure from the two Senate leaders, Rand Paul refused to move and that means the Senate will have to take procedural steps to overcome his objection, which could take several days. “My oath of office is the US constitution not to any foreign nation and no matter how sympathetic the cause, my oath of office is to the national security of the United States of America,” Paul said in his remarks before objecting to moving to swift passage of the bill. “We cannot save Ukraine by dooming the US economy.” WATCH:

The $40 billion supplemental spending bill for Ukraine is more than the total military budget of Russia.  The combined Ukraine aid packages now exceed $60 billion, more than the entire budget for the U.S. Dept of Homeland Security including border protection.

Rand Paul is on the right side of history with his position, and the overwhelming majority of Americans agree with him.   However, the opinion of the people is irrelevant to the Senate.   Even democrat Senator Chuck Schumer seemed to admit this point when he said Rand Paul’s position “was not the opinion of the overwhelming majority here,” meaning in the senate.  Schumer would have used other terms if he thought the American people agreed with him.  They don’t, and he knows it.

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The “Producer Price Index” (PPI) is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale). Today, the Bureau of Labor and Statistics (BLS) released April price data [Available Here] showing another 11.0% increase year-over-year in Final Demand products at the wholesale level.

Last month when looking at internal economic activity that showed a contraction in consumer purchases of goods, we said pay attention to the service side of the ledger now.  Knowing people have stopped buying ‘stuff’, if people are starting to run out of money, they will cut back in the service sector (dining out, etc).

While the PPI focuses on prices, the PPI data for April shows exactly that service side contraction now taking place.  Wholesale inflation in goods is determined heavily by higher costs for raw materials and processing.  However, the rate of inflation within the service sector is more connected to what consumers can afford.   Modified Table-A, look at the April difference between goods (1.3%) and services (0.0%):

[Ex. The lawn company might pay 50% more for oil and gasoline (goods side), but they may not be able to increase the rate they charge you by 50% to mow the grass (service side).]

The major current production inflation in both goods and services is directly connected to the cost of energy.  Energy prices are embedded in every sector of the economy.  For “goods” higher electricity, heating/cooling and petroleum costs (packaging, materials, transportation, etc) are unavoidable and passed on to consumers. For “services,” individuals and companies raise their prices to compensate for increases in their own costs.  It is a cumulative inflation snowball.

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It has often been said that if you chase the global climate change ideology to its natural conclusion, we end up in communal groups sitting around a tepid campfire eating some form of sustainable algae cakes and picking parasites off each other…  Prior to Joe Biden that prediction might have seemed like hyperbole. Now, not so much.

Indeed, the Green New Deal energy policy of Joe Biden creates massive downstream consequences.  Unfortunately, the White House doesn’t seem to care. The high prices and scarcity of critical goods are a feature, not a flaw, as they chase their climate friendly Build Back Better agenda.

Following the continuum of intended consequence, now we have diesel fuel shortages beginning to hit the U.S. economy; and with scarcity comes higher prices of an almost astronomical scale. “The national average price of diesel is now $5.54 per gallon, which is an increase of 22 cents from last week, which was when the most recent record was set. Data shows there’s no state that’s currently seeing diesel prices below $5.12 per gallon.” (LINK)

Making matters even worse is a drop in available inventory of diesel fuel which is about to become a crisis for the east coast of the U.S.  Some Truck Stop operators like Love’s and Pilot are already warning their big rig customers they may not have fuel for truckers.

[…] “Love’s is monitoring the fluid situation on the East Coast, we have experienced minimal outages during low traffic hours,” Oklahoma-based Love’s Travel Stops said in an emailed statement. “The company has no plans to restrict purchases of diesel.”

[…] Earlier on Wednesday, the U.S. government’s Energy Information Administration said total inventories of distillates, which is mainly diesel fuel but also heating oil, fell last week to a 17-year low of 104 million barrels, which is 23% below normal.

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When the satire hits the central nerve of accuracy….

(READ HERE)

Joe Biden was in Chicago today attending the International Brotherhood of Electrical Workers conference.   As he delivered his remarks about the U.S. economy, the installed occupant of the White House started yelling about food boxes and desperate hungry Americans.  WATCH (40 secs):

Perhaps someone should tell Joe Biden that he’s in charge of the economy he is complaining about.  The failures he speaks of are happening under his stewardship.

I know it seems odd, but Joe Biden did this yesterday when he promised in his inflation speech that if people supported Joe Biden as president, Joe Biden would fix the inflation problems Joe Biden created last year.  It all seems rather odd.  And now he’s just yelling about it.

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I’ve been pondering this disconnect for several weeks as the messaging from inside the beltway, including their expressed priorities, seem even more disconnected than before.  The DC bubble has always been present; however, lately the disconnect is even more profound.

Perhaps the increased distance in priorities can be explained by federal politicians cancelling townhall meetings and constituent engagement due to the pandemic. Perhaps politicians are holding party positions disconnected from the population they are supposed to represent because they have spent two years physically distancing from the voters.  Whatever the cause, the disconnect is now more severe.

The contrast is even more significant when it comes to the far-left politicians, because they travel amid a very closed communal tribe where outside opinions are considered toxic to their sense of identity.  The term “safe spaces” was literally coined because leftists cannot handle differences of opinion.

The professional leftist arguments are generally flawed, illogical, antithetical to common values and historically weak.  As an outcome their advocate policy positions are weak and easy to deconstruct when challenged.  To avoid being challenged they rarely hold open discussions with constituents in their districts without extreme vetting measures to avoid confrontation.

Regardless of root cause, most Democrats are severely disconnected from the economic reality of their district citizens.  This is evidenced in a Politico report today discussing the example of Democrat House member Katie Porter of California.

As the article notes, Ms. Porter told the House Democrat Caucus of her experience in the ‘real world’ with people who are grocery shopping.  The perplexed Democrats sat quietly listening to the stories of how price increases for food and gasoline are seriously hurting something called ‘working-class‘ people.

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