Zerohedge

Authored by Bill Pan via The Epoch Times,

A federal judge has temporarily barred Elon Musk’s government efficiency team from accessing federal student loan and financial aid information stored at the U.S. Department of Education.

In an order issued Tuesday evening, Judge Randolph Moss of the U.S. District Court for the District of Columbia barred any members or associates of Musk’s Department of Government Efficiency (DOGE) from seeing or using information from more than a dozen internal databases related to student finance until next Monday.

Both sides of the lawsuit—a group of students at the University of California (UC) and the Education Department—have agreed to the halt as they prepare arguments.

UC students a week ago accused the Education Department of violating the Privacy Act of 1974, a federal law that restricts federal agencies from sharing personally identifiable information with third parties unless specific legal exceptions apply.

For example, the FUTURE Act of 2019 authorizes the Education Department to import tax return information from the IRS to streamline the financial aid application process.

In their complaint filed at the D.C. federal court, the students allege that the Education Department has been providing DOGE with “continuous and ongoing access” to sensitive information “for an unspecified period of time” without clear oversight or legal authorization.

“Because [the Department’s] actions and decisions are shrouded in secrecy, individuals do not have even basic information about what personal or financial information Defendants are sharing with outside parties or how their information is being used,” the complaint reads.

The lawsuit comes amid growing uncertainty over the future of the Education Department, which operates on a multi-hundred-billion-dollar budget and oversees $1.5 trillion in federal student loans owed by more than 42 million Americans.

President Donald Trump has expressed strong interest in dismantling the department, a position long held by some conservative and libertarian-minded Republican lawmakers but rarely taken seriously in mainstream political discussions—until now.

Speaking about his nominee for secretary of education, Linda McMahon, Trump said he hoped she would eliminate her own position and return control of education to individual states.

“We spend more per pupil than any other country in the world, and we’re ranked near the bottom, we rank very badly,” Trump told reporters on Feb. 4 in the White House. 

“What I want to do is let the states run schools—I believe strongly in school choice—but in addition to that, I want the states to run schools.

“I told Linda, ‘Linda, I hope you do a great job and put yourself out of a job.’ I want her to make the Education Department unnecessary.”

McMahon’s Senate confirmation hearing is scheduled for Thursday.

First the good news: Elon Musk’s DOGE is going through government spending with a fine-toothed comb, slashing a million here, a billion there.

The bad news: at the rate it is going, DOGE will need a few hundred years to make a tangible impact, because as the Treasury reported earlier today, in January the US government spent a near-record $642 billion, a 29% increase from the $500 billion in January…

… while it collected just $513.3 billion in tax revenues, a far more modest 7.5% increase YoY…

… which resulted in a $129 billion budget deficit for the month…

… the second highest January deficit on record (only the post-covid shock of 2021 was great)…

… and $840 billion so far in fiscal 2025.

This is a problem because as shown in the next chart, the cumulative budget deficit for the first 4 months of fiscal 2025 is the highest on record, surpassing even the fiscal shock from the depths of the post-covid response.

And the punchline is that no matter what Musk does, the USS Titanic is now more or less on autopilot because while a few billions in discretionary spending can be cut, interest on the debt can not be – without a default (it can however be inflated away… and it will be) – and in January, gross interest on the Federal debt hit a record $1.167 trillion in the past twelve months thanks to another $83.6 billion in interest spending.

Another way of looking at it: in the first four months of the fiscal year, the US has spent $392 billion on interest alone, the highest 4 month total ever.

What else to say? Well, we could lie to you and tell you that there is some hope and that DOGE will be able to fix this, but as much as we’d like that to be the case, we are now well beyond the Minsky Moment and for all the kicking and screaming, there is only one way all of this ends.

 

Via American Greatness,

The federal judge who ordered the Trump administration to unfreeze all funding pauses while federal spending is being assessed, has a history of anti-Trump and woke activism.

Chief Judge John McConnell Jr. of the U.S. District Court in Rhode Island can be seen in video footage from 2021 accusing Trump of being “a dictator” and claiming that “racism is a white people problem” and that “we all have racism inside of us.”

Judge John McConnell Jr. says as a “middle class, white male privileged person” he needs to “understand” criminals who are “women, black, or transgender” and that the “law applies to them where they are.” pic.twitter.com/ZT9LTI7l5y

— Natalie Winters (@nataliegwinters) February 12, 2025

Judge McConnell equates President Trump’s first four years to the damage inflicted by the Civil War and Jim Crow laws.

He also compares President Trump a “tyrant.” pic.twitter.com/I0REreofkR

— Natalie Winters (@nataliegwinters) February 12, 2025

McConnell, who was appointed by president Obama, has ordered Trump to resume all paused funding and to restore any funds that have been withheld or potentially face criminal contempt charges.

The judge also mandated that if Trump wishes to delay any payment, he will need to first need to seek McConnell’s permission and justify the request to the judge’s satisfaction.

Commentator Scott Jennings, in a discussion on CNN earlier this week, posed the question to fellow panelists as to whether an unelected judge can cover up fraud but the sitting president is powerless to stop it.

CNN meltdown after Scott Jennings asks: A judge can cover up fraud, but the President of the United States can’t stop it? 🤔🔥

The panic is real! Jennings hit a nerve, and now CNN is spiraling. Apparently, an unelected judge can sweep fraud under the rug, but if a sitting… pic.twitter.com/5zsa75bNIT

— TheWakeninq2 (@wakeninq2) February 11, 2025

Fellow commentator and former New Hampshire Governor Chris Sununu raised the possibility that McConnell’s actions, in conjunction with 23 state Attorneys General, were the product of “judge shopping” and that “judges don’t just randomly get these cases.”

Sununu told the CNN panel that “there’s a reason that these cases are filed in Boston and Rhode Island.”

Scott Jennings ends the careers of every Democrat on the CNN panel, by nailing the issue about activist judges illegally interfering with the Trump presidency.

He starts with Gretchen Carlson who clearly wants “individual judges who hate Donald Trump to tie him up for four… pic.twitter.com/dePI0Gd3IG

— Paul A. Szypula 🇺🇸 (@Bubblebathgirl) February 11, 2025

The question of whether the president is subordinate to 300 district court judges will likely find its way to the U.S. Supreme Court for further clarification.

In the meantime, Judge McConnell’s anti-Trump statements and history of activism casts serious doubt on his ability to maintain impartiality.

Via Greg Hunter’s USAWatchdog.com,

Renowned Attorney Larry Klayman, founder of Judicial Watch and later Freedom Watch USA, predicted that the crap would hit the fan after Donald Trump was sworn into office.  

He was correct. 

Now, Klayman says, “Just in the last few days, we have had Chuck Schumer, Maxine Waters and Hakeem Jefferies, the Minority Leader in the House, threating to go into the streets for violence. ..”

“We can expect violence, but right now, what they are testing are these federal judges…

The Democrats have gone forum shopping in leftist states, I don’t even call them liberal anymore… and they are enjoining every one of President Trump’s major executive orders.  

It’s an outrage.  

It’s illegal, and I don’t think President Trump should obey those orders.  

I think they are illegal. Trump says he’s going to obey the orders, and I don’t think he should...

Trump should not obey the orders.  That is the fastest way to get it to the Supreme Court, and that is not to obey the orders.  

They will be at the Supreme Court lickety-split.”

Klayman says, “The President has the right to intervene to see how that money is being spent.”

“If he finds fraud, waste and corruption, it should be turned over to (AG) Pam Bondi to prosecute.  

What they found so far is $50 million worth of condoms for Hamas, all kinds of money going to terrorist organizations and you name it.  It’s beyond the theater of the absurd.  It’s criminal.  

Trump pointed out at his press conference today that there are likely kickbacks… There are trillions and trillions of dollars, and that is just what has been wasted in the past.”

Klayman also says the pardons from President Biden for his son and family are illegal.  Klayman contends, “These so-called pardons are null and void…”

“The pardons were illegal for two reasons:  He (Biden) did not have the mental capacity to grant them, and they were not specific.  They did not say what people were being pardoned for.  I just pardon you for any crime.  You can’t do that.”

Klayman thinks the fight with the Left is a lot worse than most people think.  

Klayman explains, “We are going to be in a violent revolution potentially in short order…”

“The Left is pushing too hard right now, and they are going to start the violence like they did with Antifa and Black Lives Matter.  

Look what happened in Philadelphia when the Eagles won the Super Bowl.  

Lawless, leftist thugs burned down Broad Street. . . . This is a situation that can only spin more wildly out of control the more Trump pushes. . . .

It’s getting to a very dangerous phase… 

The Left wants us dead – they really do.  They want to have complete control.  

Now that control has been taken away from them in an election, they are not going to go quietly.  If they don’t get what they want in court, and they probably won’t, they are going to be violent, and this could ratchet up more and more.”

There is more in the 58-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with renowned lawyer and government corruption fighter, Larry Klayman, founder of FreedomWatchUSA.org as he updates us on what he sees coming as Team Trump uncovers massive fraud with government books.

FreedomWatchUSA.org desperately needs your financial support.  To donate, click here.

To donate to FreedomWatchUSA.org so Larry Klayman can hire more attorneys to fight for the rights of all Americans being attacked by tyrannical dark forces on the Left, click here.

On Tuesday this week, AP spent its time writing about how the White House barred one of its press reporters from an Oval Office event on Tuesday after the news agency refused to adopt President Donald Trump’s directive to rename the Gulf of Mexico as the “Gulf of America.”

A second AP reporter was later blocked from a separate event in the White House Diplomatic Room, the news agency reported.

The AP did not identify the reporter involved. The ban, which officials had threatened earlier that day, raises potential free speech concerns.

Julie Pace, AP’s senior vice president and executive editor, condemned the action, calling it “unacceptable.”

She commented: “It is alarming that the Trump administration would punish AP for its independent journalism. Limiting our access to the Oval Office based on the content of AP’s speech not only severely impedes the public’s access to independent news, it plainly violates the First Amendment.”

Oh, so all of a sudden everyone is all worked up about the first amendment? Where were these ‘honest’ reporters the last 4 years?

AP says that no other journalists were affected, though the administration also recently evicted several news outlets from Pentagon office spaces.

The White House Correspondents Association condemned the move, stating: “The White House cannot dictate how news organizations report the news, nor should it penalize working journalists because it is unhappy with their editors’ decision.”

Meanwhile, Google Maps quickly adopted “Gulf of America,” with Apple Maps partially following suit. The Gulf, bordering both the U.S. and Mexico, has carried its original name for over 400 years.

Trump also ordered Alaska’s Denali reverted to “Mount McKinley,” reversing President Obama’s 2015 decision. The AP agreed to use “Mount McKinley” since it falls under U.S. jurisdiction, unlike the Gulf’s internationally recognized name.

Meanwhile, of course…

The Associated Press has taken over $52 Million of government money pic.twitter.com/2RY4Q1Fb4l

— Chadwick Moore (@Chadwick_Moore) February 12, 2025

 

After yesterday’s stellar 3Y auction, many were expecting today’s sale of benchmark 10Y paper to also be very solid too, especially after the massive post-CPI concession which sent the 10Y surging by over 10bps. It did not quite work out that way, and when the Treasury sold $39BN in 10Y paper at 1:00pm ET, the auction tailed by 0.9bps, the biggest tail since August, in a sale that left a lot to be desired.

The bid to cover dropped to 2.48 from 2.53, this was the lowest bid to cover since August.

The internals were better with Indirects rising tom 71.6% from 61.4%, the highest since October 24. And with Directs awarded 14.8%, Dealers were left holding just 13.6%, the lowest since last October.

Overall, this was a disappointing, if hardly terrible auction, and considering the massive surge in yields, it probably should have had better participation, although the market was hit by way too many other news to care about this particular sale and predictably, the 10Y barely moved in the secondary market after the news of the auction broke.

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Might Nvidia and Tesla, with price-to-earnings ratios (P/E) nearly double and quadruple that of the S&P 500, respectively, be value stocks? Conversely, is it possible that Ford is not a value stock despite a P/E of 10, a price-to-sales ratio (P/S) of .20, and a 7.5% dividend yield? Based solely on that information, answering the question is impossible. Regardless, we bet most investors classify Nvidia and Tesla as growth stocks and Ford as a value stock.

This article introduces GARP- Growth at a Reasonable Price. As we will detail, by introducing earnings growth expectations into traditional valuation equations, some value stocks may not be quite the gems investors think. Likewise, some growth stocks may be value stocks.  

Defining Value And Growth

Investopedia defines a value stock as follows:

A value stock refers to shares of a company that appears to trade at a lower price relative to its fundamentals, such as dividends, earnings, or sales.

By and large, most investors would agree with their definition. Investors often use the word “cheap” when describing value stocks.

Investopedia defines a growth stock as follows:

A growth stock is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market.

Here, too, most investors would approve of Investopedia’s definition. Some may add that growth stocks often boast high valuations.  

Value and growth are frequently used terms by investors. Rarely, however, do we hear investors use both descriptors on the same stock. Instead, most investors segregate stocks into one classification or the other. Doing so may cloud their analysis, thus limiting the potential stocks that can meet their objectives and others that may fall short of their expectations.

The PEG Ratio

Listed below are some popular equity valuation metrics:

• Price to Earnings (P/E)

• Price to Forward Earnings (P/FE)

• Price to Sales (P/S)

• Price to Book Value (P/BV)

• Price to Free Cash Flow (P/FCF)

The listed per-share ratios are great tools to calibrate how much of a particular fundamental, like earnings or sales, an investor can buy given the share price. While they are essential valuation measures, they lack one of the most critical indicators of future stock performance. They are all based on historical financial data. The one exception is price-to-forward earnings (P/FE). While P/FE is forward-looking, most investors only use one-year earnings growth forecasts to calculate the ratio.

A company’s track record is critical information, but investors should buy or sell stocks based on their future. Thus, expected growth, not just historical growth, should be at the top of investors’ minds.

To assist in stock valuation with expected growth in mind, ratios like the PEG (price/earnings to growth) ratio are beneficial. The PEG ratio divides the standard P/E ratio by the expected growth rate.

Most often, three to five-year expected growth rates are used in the PEG ratio. However, investors can reformulate forward-looking valuations based on any years of growth estimates they choose.

Decomposing PEG

We created the scatter plot below to better understand the PEG ratio. It plots 458 of the S&P 500 stocks. We excluded those with negative or absurdly high forward P/E ratios. The data, courtesy of Zacks, uses its proprietary 3–—to 5-year annualized earnings growth estimates.

Each blue dot represents the intersection of a stock’s one-year forward P/E and its expected annual earnings growth. The black dotted line represents fair value relative to the S&P 500 index. The current forward P/E for the S&P 500 is 24.26, and its expected earnings growth is 15.55%. Thus, its PEG ratio is 1.56 (24.26/15.55). The black dotted line connects all points with an identical PEG ratio. The green line connects all PEG ratios that are equal to 1.0. Traditionally, anything below 1.0 is considered value. 

Currently, 29.5% of stocks are cheaper than the S&P 500, i.e., below the black dotted line. Only 12.25% have PEG ratios below 1 (beneath the green line).

Value And Growth May Not Be What We Think

To draw more insights from the graph, we highlight six stocks. They show how the PEG ratio can complement other valuation methods.

AIG (red triangle) has a forward P/E 11, which is well below the S&P 500 and is what many investors would classify as value. However, its expected earnings growth rate is a mere 2%. Thus, its PEG ratio of 5.50 makes it very expensive.

TSLA (red circle) has a forward P/E of 142, representing the highest valuation of those stocks plotted. Despite such a high valuation, its expected growth rate is only 21%, not much more than the index’s 15.5%. Either investors think that earnings growth will be over four times Zack’s expectations, or Tesla is grossly overvalued. Suppose Tesla matches Elon Musk’s prediction that it will have a market cap greater than the five current largest companies combined. In that case, its annual growth rate may ultimately be multiples of Zack’s forecast; thus, currently, it may be a value stock.

AMZN (green triangle) has a higher-than-market forward P/E of 28. However, its growth expectations of 35% are almost double the expected growth rate of the S&P 500 (18%). Therefore, AMZN is a value stock despite its higher-than-market valuation and its exceptional expected growth rate.

FSLR (green circle) has a very low forward P/E of 9 and an expected annualized growth rate of 43%. Based on this data, FSLR is a deep-value growth stock. Also, note that its PEG of .20 is well below the traditional 1% value indicator.

EG (orange triangle) has a low forward P/E of 5. Such is likely due to its low expected growth rate of 2%. Despite its low valuation and growth rate, EG is fair value to the S&P 500 index with a PEG of 1.56. Based solely on this data, an investor should be indifferent to owning EG and the S&P 500.

LYV (orange circle) has a high forward P/E of 54 and a high expected growth rate. Like EG, it has a PEG in line with the market of 1.56.

Summary

The first paragraph asked whether TSLA, NVDA, and F were value stocks.  

We have already shared our analysis of TSLA.

Interestingly, based solely on this data, NVDA is a value stock with a PEG ratio below the S&P 500 and 1.0.

Despite its very low valuations and high dividend yield, Ford has a PEG ratio of 1.86, moderately above the S&P 500 and well above 1.0. Based solely on this analysis, Ford is not a value stock.

Value is in the eye of the beholder and may not be apparent as some may think!

The data we use in this analysis is courtesy of Zack’s. Ideally, using an average of multiple earnings growth projections and your projections provides the most thorough analysis.

Breakfast in America has never been more expensive…

Worse still, to cap off Bidenomic’s spectacular failure, we just witnessed the largest monthly jump in the price of Breakfast in America… ever…

h/t @M_McDonough

In fact, during President Joe Biden’s reign, the cost of a decent meal to start the day (eggs, bacon, cheese, bread, coffee) rose over 50%.

The cost of eggs! 

We told readers last week… 

Time To Build Backyard Chicken Coop As Wholesale Egg Prices Hit New Record Highs https://t.co/nJiB1tYvNO

— zerohedge (@zerohedge) February 4, 2025

Finally, did Joe spend his last few months in office listening to Supertramp?

“I’m a loser, what a joker 

I’m playing my jokes upon you

While there’s nothing better to do, hey”

Makes you wonder…

US President Trump and Russian President Putin held a nearly hour-and-a-half call this morning which the US president described as “lengthy and highly productive.”

Trump said on Truth Social that both leaders had extended invitations of “visiting each other’s nations,” while, the US leader said he would be calling Ukrainian President Volodymyr Zelensky “right now” to inform him about the call.

President Trump took to his Truth Social account to explain what was discussed (emphasis ours):

I just had a lengthy and highly productive phone call with President Vladimir Putin of Russia. 

We discussed Ukraine, the Middle East, Energy, Artificial Intelligence, the power of the Dollar, and various other subjects. We both reflected on the Great History of our Nations, and the fact that we fought so successfully together in World War II, remembering, that Russia lost tens of millions of people, and we, likewise, lost so many!

We each talked about the strengths of our respective Nations, and the great benefit that we will someday have in working together. 

But first, as we both agreed, we want to stop the millions of deaths taking place in the War with Russia/Ukraine. 

President Putin even used my very strong Campaign motto of, “COMMON SENSE.” 

We both believe very strongly in it. We agreed to work together, very closely, including visiting each other’s Nations. We have also agreed to have our respective teams start negotiations immediately, and we will begin by calling President Zelenskyy, of Ukraine, to inform him of the conversation, something which I will be doing right now. 

I have asked Secretary of State Marco Rubio, Director of the CIA John Ratcliffe, National Security Advisor Michael Waltz, and Ambassador and Special Envoy Steve Witkoff, to lead the negotiations which, I feel strongly, will be successful. 

Millions of people have died in a War that would not have happened if I were President, but it did happen, so it must end. 

No more lives should be lost! 

I want to thank President Putin for his time and effort with respect to this call, and for the release, yesterday, of Marc Fogel, a wonderful man that I personally greeted last night at the White House.

I believe this effort will lead to a successful conclusion, hopefully soon!

Developing…

Authored by Jacob Burg via The Epoch Times,

At least 70,000 federal workers have opted into the Trump administration’s buyout offer as of Feb. 11, a White House official told The Epoch Times.

The number of workers accepting the offer had reached 65,000 on Feb. 7, after a total of 20,000 had opted in three days prior.

Among his many efforts to downsize the federal government, President Donald Trump released his “Fork in the Road” plan that would give federal workers deferred resignation with eight months of full pay and benefits if they are willing to leave their jobs.

The offer was made after Trump in January ordered all federal workers back to in-office work and directed officials to enforce stricter performance standards.

U.S. District Judge George O’Toole Jr. initially delayed the offer’s original Feb. 6 deadline for four days before issuing an indefinite pause on Feb. 10.

“The court orders that the current stay of the Feb. 6, 2025, deadline … remain in effect until further order of the court,” a note on the docket stated.

Several unions had sued to block the offer, alleging that the Office of Personnel Management had violated the Administrative Procedure Act and Anti-Deficiency Act.

In a court filing, Elena Goldstein, an attorney with Democracy Forward, the group leading the lawsuit, asked the court to have the Trump administration notify federal employees that the buyout’s deadline was paused.

“Otherwise, some members of the federal workforce might not receive notice of the extended stay of the deadline,” she wrote in the filing.

Goldstein has argued that the buyout plan is too broad and does not consider which worker positions were still needed in the federal government.

She also alleged it was unlawful because it commits to spending funds not yet appropriated by Congress.

The last point has been a source of scrutiny for the plan, as Congress’s current funding appropriations expire in March.

The offer promises to give participating employees full pay and benefits through the end of September.

Critics have said there is no guarantee participating employees will receive the full eight months of pay and benefits.

In response, DOJ attorney Eric Hamilton defended the buyout.

He said it gave any federal workers who structured their lives around remote work an alternative, as Trump had ordered all agency heads to “take all necessary steps to terminate remote work arrangements.”

The Trump administration has said that those who do not accept the buyout could still lose their jobs.

Additionally, Trump signed an executive order on Jan. 20 seeking to reclassify up to 50,000 federal jobs, making those employees easier to fire.

Trump’s order exempts those “of a confidential, policy-determining, policy-making, or policy-advocating character” from civil servant protections.

In a lawsuit filed in federal court, the American Federation of Government Employees argued that the president lacks the authority to strip federal workers of protections against being fired at will.

The Trump administration argued in a court filing before a Feb. 7 hearing that an extension to the deadline for federal employees to opt into the “deferred resignation” program was unnecessary.

“Extending the deadline for the acceptance of deferred resignation on its very last day will markedly disrupt the expectations of the federal workforce, inject tremendous uncertainty into a program that scores of federal employees have already availed themselves of, and hinder the administration’s efforts to reform the federal workforce,” the filing states.