Daily SA: Greer: “The Great Rotation” is Coming Back (Thu, 27 July 23) – Forward Observer

Daily SA: Greer: “The Great Rotation” is Coming Back (Thu, 27 July 23)

Good morning. Here’s your Daily Situational Awareness for Thursday, 27 July 2023.


  • READ TIME: 5 Minutes, 44 Seconds
  • Inside the Beltway
    • (1) Hunter Plea Deal Implodes as McCarthy Walks Impeachment Line
    • (2) Judge Strikes Down Biden Admin Post-Title 42 Asylum Rule
    • (3) Raimondo Warns of Chinese Chip Glut, Pentagon Looking for Minerals
  • Domestic INTSUM
    • (4) Money Supply Shows Banks are Making More Loans
    • (5) Greer: “The Great Rotation” is Coming Back
    • (6) BlackRock: U.S. Economy Headed for a Full Employment Recession
    • (7) Trucking Giant Yellow to File Bankruptcy
  • Russia-NATO SITREP
    • (8) Ukraine Counteroffensive Moving Again
  • China & Indo-Pacific SITREP
    • (9) China’s Foreign Minister Says It’s Time to Move on Security Challenges


  • (1) HUNTER PLEA DEAL IMPLODES AS MCCARTHY WALKS IMPEACHMENT LINE: The proposed plea deal between Hunter Biden and the Department of Justice (DOJ) on alleged tax crimes fell apart in court yesterday after prosecutors told the judge the plea bargain would not immunize Hunter from future prosecution of the Foreign Agents Registration Act.
    • Hunter’s legal team was accused of deceiving the court to suppress a filing from House Ways and Means Republicans urging the judge to consider IRS whistleblower testimony.
    • According to House Republicans, during a closed-door meeting yesterday, House Speaker Kevin McCarthy (R-CA) cautioned GOP lawmakers on launching a formal impeachment inquiry against President Biden without sufficient evidence.
    • Why It Matters: McCarthy is trying to balance pressure from his right flank from Freedom Caucus members and Republicans who are up for reelection in swing districts. Some of his detractors in the House are satisfied with his approach and say the evidence is mounting against President Biden. Meanwhile, Biden’s son Hunter appears to no longer be under the protection of the Justice Department; the move to leave him open to future prosecution may be a response to public criticism over the “sweetheart” plea deal and whistleblower testimony that DOJ officials stepped in to hinder the investigation. – R.C.
  • (2) JUDGE STRIKES DOWN BIDEN ADMIN POST-TITLE 42 ASYLUM RULE: U.S. District Court for the District of Northern California Judge Jon Tigar said new Biden administration rules under Title 8, which assumed migrants who crossed the border illegally were ineligible for asylum, violated U.S. laws protecting asylum access.
    • White House Press Secretary Karine Jean-Pierre said the Justice Department will appeal the decision and request an extension of the 14-day stay on the judge’s order. 
    • Why It Matters: Biden’s post-Title 42 immigration policy came under immediate attack from both directions, and the likelihood that pro-immigration activists could find a federal judge to side with them was always high. If the Biden administration loses on appeal, there could be an immigration surge between ports of entry as it loses the “stick” in its “carrot-and-stick” immigration policy. – R.C.
  • (3) RAIMONDO WARNS OF CHINESE CHIP GLUT, PENTAGON LOOKING FOR MINERALS: Commerce Secretary Gina Raimondo said the U.S. needs a combination of export controls and domestic incentives to fight a coming glut of semiconductors that will come from China’s aggressive industry subsidies.
    • The Pentagon will issue a first-of-its-kind contract for U.S. or Canadian companies to recover gallium from waste streams of other products by the end of the year.
    • Why It Matters: China could “weaponize” the market to suppress U.S. domestic chip production by flooding the market with cheaper alternatives. In a similar move, OPEC kept oil prices low in the 2000s to keep U.S. shale oil production unprofitable while controlling key mineral inputs. – R.C.


  • (4) MONEY SUPPLY SHOWS BANKS ARE MAKING MORE LOANS: Starting in May, the money supply has increased after the spring banking crisis.
    • 13-week (quarterly) annualized, non-seasonally adjusted M2 money supply growth went from -7.4% in early June to -5.8% in early July.
    • Although improving, money supply growth is at the lowest in decades and still at Great Depression levels.
    • Why It Matters: When money supply growth falls below 0%, a stock market crash, financial crisis, or recession follows. This year was no different – money supply growth fell to -2% right before Silicon Valley Bank collapsed in March. Looking ahead, money supply growth typically peaks in January and bottoms out in late summer. – H.B.
  • (5) GREER: “THE GREAT ROTATION” IS COMING BACK: In early 2022, former Wall Street commodities trader Tony Greer correctly called a move from big tech to commodities, and now he’s forecasting another tech to energy shift.
    • Oil volatility increased this year due to OPEC+ export cuts on one hand, and President Biden’s Strategic Petroleum Reserve (SPR) releases on the other, leaving oil speculators on both sides unsure of what to do next.
    • West Texas Intermediate (WTI) oil just broke above its 200-day moving average – a sign that oil prices could run higher.
    • Why It Matters: Fears of a 2023 recession are fading, so oil demand will likely remain strong. As we’ve consistently noted, a lower oil supply should keep oil prices elevated this summer and fall. – H.B.
  • (6) BLACKROCK: U.S. ECONOMY HEADED FOR A FULL EMPLOYMENT RECESSION: In a research note this week, BlackRock strategists said that consumers are spending more on services, which is dropping the price of goods, but the labor market is tight, which is driving wage inflation.
    • The shrinking supply of workers is due to aging and a low unemployment rate, and that’s giving employees leverage on wages.
    • Even if companies’ sales decline, they’ll need to pay higher wages – or risk losing employees to competitors.  
    • Why It Matters: BlackRock is right: It’s time to think differently. Reliable economic relationships may no longer work in this economy. Governments’ reactions to COVID altered labor markets and supply chains, and we’ll feel these impacts for years to come. – H.B.
  • (7) TRUCKING GIANT YELLOW TO FILE BANKRUPTCY: According to Yellow employees, senior executives in the company told their staff early yesterday that the less-than-truckload giant would file for bankruptcy by Monday before backtracking and telling employees to inform customers that they were not filing for bankruptcy.
    • Yellow has $1.3 billion in loans coming due next year, including $700 million from a U.S. government loan that kept the company from going under during COVID.
    • Why It Matters: The Teamster strike of Yellow employees was averted Monday, but the damage from the threat of the strike was done before the weekend was over. Yellow has been losing customers who were concerned a strike or bankruptcy could strand their cargo in transit. The backtracking from senior executives is likely intended to prevent further customer loss, but it is probably too little too late to avert bankruptcy, which will cut 10% of LTL trucking from the market and increase prices. – R.C.



  • (8) UKRAINE COUNTEROFFENSIVE MOVING AGAIN: Despite an apparent stalemate along Russian lines, Pentagon officials are now saying the Ukrainian counteroffensive is moving forward.
    • Unconfirmed reporting from multiple international news sources says Ukraine has committed its reserve forces to an attack south of Orikhiv, in Zaporizhzhia Oblast, in an effort to drive a wedge between Russian lines.
    • Early reporting from Russian sources says a Ukrainian armored brigade of Western-trained forces had launched a massive assault on Russian positions.
    • Why It Matters: If reports are true, and there is no confirmation that they are at this point, this will likely be Ukraine’s all-in push to split Russian defensive lines in a thrust to the Sea of Azov. Ukraine may be attempting to cut a significant swath of Russian forces off from their supply lines in Crimea and force a withdrawal to pre-invasion lines. Russian reporting from the Orikhiv region claims that Russian forces repelled mass wave attacks on their defensive lines; however, those reports also have not been confirmed. – M.M.

China & Indo-Pacific SITREP

  • (9) CHINA’S FOREIGN MINISTER SAYS IT’S TIME TO MOVE ON SECURITY CHALLENGES: Wang Yi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and the newly returned Foreign Minister, called for joint efforts to address global security challenges.
    • Wang made the remarks at the BRICS meeting of National Security Advisers and High Representatives on National Security in Johannesburg, South Africa.
    • Wang was recently re-appointed as Foreign Minister after Qin Gang was detained and removed from the position. 
    • Why It Matters: Wang Yi’s comments at the BRICS meeting were anything but conciliatory towards the West. Wang is carrying out Chinese President Xi Jinping’s orders to push forward an alternative to the so-called “international rules-based order.” Expect China to continue undermining U.S. hegemony geopolitically and financially to include de-dollarization and retaliatory actions against further U.S.-led export controls on semiconductor and AI technology. – M.M.

Low Intensity Conflict SITREP (Next 48 hours)

  • Greenwich Village, NY – Far-left activists are planning a memorial rally at Stonewall and demand protestors prepare to “make some noise.” The rally is planned for Thursday, 27 July, at 1900 EDT. The location of the rally is Stonewall Inn, Greenwich Village, NY.


M.S. indicates analyst commentary from Mike Shelby

M.M. indicates analyst commentary from Max Morton

J.V.  indicates analyst commentary from Jared Vaughn

R.C. indicates analyst commentary from Robert Cook

H.B. indicates analyst commentary from Harrison Burge

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