A Dysfunctional Internal Revenue Service (IRS) Poses a Threat to American Citizens; BLS: 29,000 Jobs in September Sends Stock Futures Soaring

Absolutely wonderful news:

"The IRS no longer has the resources to pursue all delinquent filers."

-- Treasury Inspector General for Tax Administration (TIGTA)

What may be even better, after Money Daily tried to find out just who this Inspector General is, is that the position is currently vacant, though, since January, 2024, Heather M. Hill is TIGTA's Principal Deputy Inspector General, performing the duties of the Inspector General, following the death of J. Russell George.

According to Jeremy Portnoy, of RealClearInvestigations, Americans underpaid taxes by by an estimated $696 billion in 2022, which is kind of funny and kind of sad, since those taxes were filed in the early months of 2023, which is now more than three years ago. Even the investigation of unpaid taxes by wily American citizens is past due.

Here is the actual report filed by TIGTA [PDF] just in case anyone wants to pore over completely useless numbers and findings.

The trouble with the IRS is that it's hardly functional in its current form. The system is still running on COBOL, a computer language created in 1959. If it wasn't for automatic payroll deductions, the IRS would hardly collect anything at all. Corporate taxes, which account for less than nine percent of all taxes, are wildly reduced by accounting practices devised by the IRS in its voluminous, 75,000 pages of rules, regulations, guidance, and court interpretations.

Perhaps the worst part of the entire IRS structure is that it is supposedly "voluntary", which, in the strict interpretation of the word means individuals don't actually have to submit tax forms or pay income taxes. Good luck trying that approach. Despite there being no actual laws that require American citizens to file tax returns and pay taxes on their income, the Supreme Court has repeatedly supported the agency's spurious position.

About $14 billion is annually spent by the IRS, a huge number, yet they still have trouble processing returns in a timely, efficient manner. Since they are doing such a poor job collecting taxes, maybe President Trump's concept to abolish the agency in favor of tariffs and other taxes isn't so far-fetched. Of course, when Elon Musk and his DOGE team went snooping around the agency, the blowback from Capitol Hill was swift and thunderous. Senators and Reps in the House don't want their golden calf reduced or even restructured. Thus, the government's chief collection agency remains dysfunctional.

While that's good news, it also implies that the federal government, $40 trillion in debt and generally bankrupt, is unable to collect taxes from its sovereign people. That's really not good news. It means chaos, if not already present in the government architecture, is well on its way and that, if it's even possible, the government will become more broke, faster, unable to pay it's debts with money it can't collect.

If IRS agents and upgraded systems with AI are released upon the general population, the effects could be devastating. The agency is known for its heavy-handed tactics and extreme penalties and interest charges. They have the power to seize assets, close businesses, and generally wreak havoc upon their intended victims.

Knowing all of this, Americans better just keep their heads down, do as they're told, file their returns on time and pay the piper. Of course, there are more than 14 million individuals who don't follow that advice. The number is growing, and, surprisingly, some of these non-filers work for the IRS.

Geez, Louise...

As far as that September Non-farm Payroll report from the BLS was concnerned, bummer!

The labor market gained only 29,000 jobs in September.

According to the BLS (excerpts):

Both nonfarm payroll employment (+29,000) and the unemployment rate (4.2 percent) changed little in September, the U.S. Bureau of Labor Statistics reported today. Employment in all major industries changed little over the month.

Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1 million, changed little in September. The unemployment rate has remained in a narrow range of 4.1 percent to 4.3 percent since March.

Total nonfarm payroll employment changed little in September (+29,000), following an average monthly gain of 45,000 over the prior 12 months. Employment in all major industries changed little over the month.

While the BLS itself might desire to pooh-pooh what is a disappointing number, the reality of the situation - a weakening labor market - is a forerunner of a weak economy. As usual, prior months were revised lower.

The change in total nonfarm payroll employment for July was revised down by 31,000, from +21,000 to -10,000, and the change for August was revised down by 29,000, from +162,000 to +133,000. With these revisions, employment in July and August combined is 60,000 lower than previously reported.

Wall Street popped champagne bottles and stock futures spiked on the news. The immediate reaction is that a number this weak will put the FOMC on hold at their October 27-28 meeting, keeping the federal funds target rate at 3.75-4.00%, and, with that, everybody should be piling further into overpriced stocks.

Yippie!

At the Close, Thursday, October 1, 2026: Dow: 50,926.56, +20.51 (+0.04%) NASDAQ: 26,871.60, +10.53 (+0.04%) S&P 500: 7,666.45, +14.91 (+0.19%) NYSE Composite: 23,526.84, +36.05 (+0.15%)

Markets Continue to Play Patty-Cake with Rising Interest Rates; Inflation, Gas Prices, Iran Will Remain Unresolved Until Midterms

Wednesday didn't prove to be much better for those holding equity positions than the previous two days. Initially, the S&P and NASDAQ posted gains, but, as the day wore on, there was no further upside. At the very end of the session, in literally the last ten minutes, the S&P slipped into the red and the NASDAQ lost the vast majority of the day’s gains. The Dow spent almost the entire session in the red.

The market tried desperately to avoid the elephant in the room: the rapidly-rising interest rate yields on longer-dated treasury securities. By the end of the session, the reality of a 10-year note yield approaching 5.30% and the 30-year already having eclipsed 5.65% could hardly go unnoticed. The dumping of stocks at the close was one of the more unusual events in some time, especially considering that it was the end of the month and te quarter.

As Thursday rolls in, futures are, as usual, trending higher on virtually no news. This particular playbook - goosing futures into the open - seems to have a short shelf life. After a while, everybody begins to see right through it, set down their Zero-Day-to-Expiry options for the day and wait for the selling to begin. Friday might offer some insight with September Non-farm Payrolls announced prior to the open, but probably not.

Stocks continue to be wildly overvalued and the market a carnival led by barkers on TV and in government. All-time highs are close by, but the Dow is actually down 6.34% from its August 5 high. And, it's October.

The main issues for the U.S. and its economy haven't gone away. They're just being maintained as best as possible until the midterms. The fighting and bombings in Ukraine and Russia continue. The Middle East remains a powder keg. Inflation is still at unacceptable levels, housing continues to be completely unaffordable for any reasonable middle class family, and gas and diesel prices are through the roof.

It's a happy day in hell when all that matters is the election of some people whose main purpose in life is to get elected and re-elected and everything else is put on hold.

As the eminent Dr. Chris Martenson has opined at least a hundred times: "It doesn't have to be this way."

At the Close, Wednesday, September 30, 2026:
Dow: 50,906.05, -443.87 (-0.86%)
NASDAQ: 26,861.06, +63.52 (+0.24%)
S&P 500: 7,651.54, -19.30 (-0.25%)
NYSE Composite: 23,490.80, -218.80 (-0.92%)

ADP Reports 90,000 Jobs Added in September; PCE Below Expectations; GDP Grew at 2.2% in Q2 According to BEA's Third Estimate

Stocks spent another session leaning to the downside Tuesday, awaiting something, anything that might light a fire in the belly of the investment community.

They'd have to wait.

The only impactful economic release was the monthly JOLTS report that demonstrated, for the third straight month, that there were fewer job openings than people unemployed.

A slightly brighter picture emerged Wednesday morning when ADP released its National Employment Report for September, showing private employers adding 90,000 jobs during the month.

Hiring accelerated for the first time since May, led by education and health care and leisure and hospitality. Financial activities and professional and business services showed weakness.

Shortly thereafter, the BEA announced its third estimate of GDP for the second quarter.

Real gross domestic product (GDP) increased at an annual rate of 2.2 percent in the second quarter of 2026 (April, May, and June), according to the third estimate released today by the U.S. Bureau of Economic Analysis (BEA). In the first quarter, real GDP increased 2.5 percent (revised). The contributors to the increase in real GDP in the second quarter were consumer spending, investment, and exports. Imports, which are a subtraction in the calculation of GDP, increased.

The BEA also threw some shade on the otherwise upbeat data, announcing that personal consumption expenditures (PCE) increased $190.8 billion (0.9 percent).

Real PCE increased $92.8 billion (0.6 percent at a monthly rate) in August. From the preceding month, the PCE price index for August increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

From the same month one year ago, the PCE price index for August increased 3.4 percent. Excluding food and energy, the PCE price index increased 3.0 percent from one year ago.

Though these readings were flat, they were not increasing, and were below Wall Street estimates, offering some hope that the FOMC might keep the federal funds target rate at the current 3.75-4.00% at the October meeting. Futures markets were relieved on the news, with all three major indices spiking higher as the opening bell approached.

There's nothing like goosing inflation expectations to a level that ensures the actual data will come in below them to pump up markets. Wall Street and the trained seals in the corporate media are notorious for raising or lowering expectations in order to keep the narrative on a positive thrust. This morning's example is another of that kind.

"Be careful what you wish for" is applicable to the current conditions.

At the Close, Tuesday, September 29, 2026:
Dow: 51,349.92, -131.59 (-0.26%)
NASDAQ: 26,797.54, -22.84 (-0.09%)
S&P 500: 7,670.84, -12.85 (-0.17%)
NYSE Composite: 23,709.60, -47.71 (-0.20%)

Stocks Slump to Open Week; Boomers Increasingly Favoring Fixed-Income Over Equities Becomes a Long-Term Concern

Stocks stumbled out of the gate Monday and remained in negative territory for the entire session as tensions in the Middle East and persistent inflation continued to worry investors. At the same time, higher yields in long-dated treasuries pulled skeptics out of dividend-paying stocks to the perceived safety of fixed income.

The logic is simple. Why hold stocks with three or four percent returns when two-year notes are throwing off a similar amount, risk-free. Stocks can rise or fall in price, which erodes gains, while bonds deliver monthly or quarterly returns without the worry.

Retirees, and the fund managers who handle their money, are moving to the safety of corporate and treasury paper, avoiding the drama. Baby Boomers, who represent the largest pools of investment funds, are sailing away toward Easy Street, now that the regime of low rates is finally dead and buried.

The only problem with this generational shift is that inflation continues to noisily erode purchasing power, though that is not a concern for the elderly armed with significant assets. They have enough continuing income from pensions, Social Security and long-held investments that make rising prices an annoyance rather than a base case concern.

The dynamics of geo-politics, midterms, and data center power grabs don't bother people in their 60s, 70s and 80s as much as it does working-class middle-aged individuals, who are still building retirement nest-eggs and looking for opportunities n stocks. Simplified, it may be assumed that Millennials are driving the speculative side of the market while Boomers are beginning to wind down equity holdings in favor of more and more treasury issuance, a relief to the government, which has been running low on buyers at a time when issuance is high and growing.

If the federal government insists on overspending and running larger and larger deficits, elderly Americans are increasingly more than happy to fund them at higher and higher rates. After all, holdings in treasury notes and bonds are funding some 20-30% of government expenditures, so anybody on Social Security might be said to be self-funding, getting a monthly stipend from the money they've lent to the government, plus a generous return. It's really a win-win for them.

There are a number of caveats to which the government should be paying attention. While there are roughly 10,000 Boomers retiring every day, 14,000 to 15,000 are dying at the same time. That means the government will be paying out less in benefits over time, net of annual COLAs, though, on the other hand side of the coin, their pool of potential investors will be shrinking. The government will also be spending more of the budget on interest on the debt, which, if rates continue to rise, means that spending amount will accelerate.

At some point there's a collision of interests. Maybe, when interest on the debt exceeds Social Security spend, Boomers, who are declining in number anyway, might not see investing with the government as a solid prospect. At that point, the government may run out of willing investors, though Millennials may pick up some of the slack. It's a problem without a solution at this point, but it's still a condition that may not become realized for another five years, when the last of the Baby Boomers (those born in 1964) reach full retirement age, making 2030-2031 appear as a possible inflection point.

In the meantime, stocks will continue their antics, but it is the funding mechanism - treasuries and other fixed income investments - that is calling the shots and sending the real signal. It's something to bear in mind when considering investment horizons.

As the open approaches on Tuesday, stock futures are higher, but only moderately. There are still too many issues in the finance and investment world under consideration to formulate a positive picture.

At the Close, Monday, September 28, 2026:
Dow: 51,481.51, -347.11 (-0.67%)
NASDAQ: 26,820.38, -248.34 (-0.92%)
S&P 500: 7,683.69, -59.72 (-0.77%)
NYSE Composite: 23,757.31, -155.28 (-0.65%)

WEEKEND WRAP: NASDAQ at Record Levels; Oil, Gas Remain Pricey; Interest Rates Spike; Gold, Silver Futures in Backwardation

In case any more proof was needed that equity markets remain grossly overvalued, this week's action on the NASDAQ sent home the message, clearly and loudly, closing at new all-time highs on Monday (27,122.09) and Tuesday (27,244.28) before giving a little back as the week progressed.

The Shiller PE ended the week at 41.48, a bit lower that recent highs, but still the second highest ever, behind the measure of 44.19 recorded at the height of the dotcom bubble (December 1999). It bears noting the Shiller Mean: 17.42, and the Median: 16.13, observing that stocks are generally 3X overpriced on a measuring tool that dates back to 1871. Perhaps, as some suggest, the world, and, especially the United States, entered a new epoch at the turn of the century. If true, then stocks are supposed to carry extreme valuations. If not, reversion to the mean might be a painful experience.

It also bears noting that the purchasing power of the dollar has undergone severe decline in the current century, so much that a stock that may have been worth $30 per share in 1990 is now worth $100 in devalued dollars. That would explain much of the upside tendencies to which the markets have grown accustomed. It does not explain, however, why gold has been revalued, in U.S. dollars, from less than $300 in the late 1990s to the current valuation of roughly $4400, a nearly 15-fold increase. That said, buying and holding gold would be the more fruitful investment. In 1996, the S&P 500 was roughly 1000. Today's price above $7,700 is not quite an 8-fold gain.

A NASDAQ price of 2,000 in 1998 returned closer to gold's mark, a roughly 14-fold increase. We should all be rich.

How markets will continue to play out through the midterms and beyond represents only a small snapshot of the longer term. It is likely time to stay the course, no matter one's investment preferences. With dollar depreciation accelerating, holding anything other than cash will probably be tradable for food or energy at some future point.

This comes as a reminder that the best investors are those who choose carefully and do not deter from their chosen paths.

Stocks

As noted, it was a darn good week for the NASDAQ, particularly in Mag7 and semi-related stocks. The AI push continues to fire up markets. Whether AI is eventually a boon or a bane, the money being thrown into it is serious, despite some setbacks, such as Oracle's troubles at a New Mexico build.

While the rise on the NASDAQ appears relentless, the Dow has struggled to keep pace. Year-to-date, the Naz is ahead by 16.46%, with the Dow lagging, up only 7.83%, less than half the gain. Though the NASDAQ rip may be a bit noisy, Dow stocks have suffered because of the rise in long-term interest rates, which are competing with dividend-bearing stocks, typical of the Dow 30 blue chips.

It's a case-in-point of speculation running hotter than investing and it will continue... until something breaks, if allowed to.

Heading into the midterms, the usual games are expected to continue, with back-and-forth with Iran and Ukraine leading the headlines. The Republican party's leader, President Trump, is likely to pull a rabbit out of somewhere for an October surprise that will leave Democrats crying in their non-alcohol beers. The stock market will love it. The press will loathe it. Most people will barely notice, and those that do will understand it for what it is, a cheap trick to garner support.

Thus, at least until November 3rd, expect stocks to continue ramping higher. That's not a prediction. It's simply a judgement call based on current non-realities.

The week ahead, which splits the end of the fiscal year and the 3rd and 4th quarters on Wednesday and Thursday, offers a few tasty tidbits of economic data.

Possibly the most impactful won't appear until Friday, when the BLS releases Non-farm payrolls for September. Prior to that, Tuesday offers the monthly JOLTS data. On Wednesday ADP releases its monthly employment report. The PCE price index and the third estimate of second quarter GDP are also out on Wednesday. S&P Global Manufacturing PMI and weekly unemployment claims are out on Thursday.

Relevant data releases can be found at Trading View.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
08/21/2026	3.80	3.77	3.80	3.88	3.90	3.95	4.03
08/28/2026	3.84	3.83	3.86	3.90	3.94	4.02	4.15
09/04/2026	3.79	3.83	3.90	3.91	4.00	3.98	4.13
09/11/2026	3.93	3.99	4.05	4.07	4.15	4.12	4.35
09/18/2026	3.97	3.98	4.10	4.14	4.24	4.24	4.44
09/25/2026	4.04	4.14	4.20	4.24	4.32	4.33	4.50

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
08/21/2026	4.24	4.31	4.43	4.57	4.74	5.25	5.27
08/28/2026	4.34	4.41	4.48	4.59	4.73	5.21	5.22
09/04/2026	4.37	4.45	4.54	4.65	4.78	5.25	5.24
09/11/2026	4.63	4.69	4.78	4.87	4.96	5.38	5.35
09/18/2026	4.76	4.83	4.86	4.93	5.01	5.38	5.34
09/25/2026	4.81	4.94	4.98	5.06	5.17	5.54	5.49

Treasuries had one of the most volatile weeks in years this past week, especially the 10-year note and 30-year bond, with yields rising to multi-year highs, though that did not seem to be particularly worrisome to equity investors.

2s-10s expanded to +36, 11 basis points higher than last week's tighter +25. Full spectrum continues at the high end of the range, up to +145. A steepening curve often reflects markets' belief in stronger growth, higher inflation, or greater government borrowing needs. The evident danger appears to be at the long end, which doesn't seem to want to stop pricing in high inflation and persistent government spending.

The economy continues to be galloping right along. Warsh and the Fed made the first move to get that horse back in the bridle, but the bond vigilantes are doing what they do, bidding prices lower and yields higher.

Spreads:

2s-10s
2026
1/2: +72
1/9: +64
1/16: +65
1/23: +64
1/30: +74
2/6: +72
2/13: +64
2/20: +60
2/27: +59
3/6: +59
3/13: +55
3/20: +51
3/27: +56
4/3: +51
4/10: +50
4/17: +55
4/24: +53
5/1: +51
5/8: +48
5/15: +50
5/22: +43
5/29: +47
6/5: +38
6/12: +37
6/18: +27
6/26: +31
7/2: +35
7/10: +35
7/17: +37
7/24: +36
7/31: +47
8/7: +46
8/14: +51
8/21: +50
8/28: +39
9/4: +41
9/11: +33
9/18: +25
9/25: +36

Full Spectrum (30-days - 30-years)
2026
1/2: +114
1/9: +112
1/16: +108
1/23: +104
1/30: +115
2/6: +113
2/13: +97
2/20: +100
2/27: +90
3/6: +102
3/13: +115
3/20: +123
3/27: +124
4/3: +120
4/10: +124
4/17: +119
4/24: +122
5/1: +126
5/8: +124
5/15: +141
5/22: +135
5/29: +127
6/5: +130
6/12: +128
6/18: +121
6/26: +117
7/2: +128
7/10: +135
7/17: +133
7/24: +136
7/31: +149
8/7: +140
8/14: +146
8/21: +147
8/28: +138
9/4: +145
9/11: +142
9/18: +137
9/25: +145

Oil/Gas

Conditions in the Middle East continue to erode, with Iran targeting more vessels and the U.S. maintaining its blockade. Some reports are suggesting that more oil is flowing out of the gulf region, with Saudi Arabia picking up most of te slack. The veracity of these reports is questionable, but the price of crude has fallen, which, in the larger scheme of things, doesn't really matter much.

Average price for a gallon of unleaded regular gasoline in the U.S. was $4.46 last week and $4.45 this week, remaining near the highest Sunday price in over four months. Peace prospects in the Middle East are off the table, oil flows remain disrupted, and the president is getting serious heat from party members concerning the upcoming midterms, which Republicans are now hoping that gas and diesel prices moderate over the next five weeks.

Gas prices in key states:

California (leader): $6.35 (+0.20)
Washington: $5.52 (-0.03)
Indiana: $3.89 (lowest) (-0.14)
Oklahoma: $4.07 (+0.05)
Louisiana: $4.00 (+0.01)
Mississippi: $3.97 (+0.01)
Florida: $4.40 (+0.12)
Illinois: $4.77 (-0.14)
Pennsylvania: $4.53 (-0.04)
New York: $4.45 (-0.01)
Maryland: $4.35 (+0.14)
Michigan: $4.67 (-0.25)
Texas: $3.89 (lowest) (-0.05)
Georgia: $4.17 (+0.11)

On Sunday, September 27, there are forty-seven (47) states with average prices at or above $4.00, with only three (3) below the $4 threshold (Texas, Louisiana, Mississippi), not including Hawaii ($5.56) and Alaska ($5.05), with four above $5 (California, Nevada, Oregon, and Washington) and one, California, above $6.00. The Southeast has maintained as the lowest region overall over the past 14 weeks, but now, a gallon of unleaded regular is averaging above $4.00 ($3.89-4.17) in places like Tennessee, Alabama, Arkansas, Georgia, Texas, and Mississippi, with the Midwest region second, prices ranging higher, from $4.12 to $4.33. Exceptions include Florida in the Southeast and Michigan and Illinois in the Midwest.

All Northeast states, from Delaware and Maryland all the way to Maine, continue to average well above $4.00.

Bitcoin

This week: $84,540.25
Last week: $80,888.60
2 weeks ago: $77,245.85
6 months ago: $66,214.66
One year ago: $109,587.90
Five years ago: $47,675.17

Crypto had a solid week to the upside, especially bitcoin, which ramped to its highest level in nine months.

Precious Metals

Gold:Silver Ratio: 66.64; last week: 66.09

Futures, per COMEX continuous contracts:

Gold price 8/28: $4,504.10
Gold price 9/4: $4,477.20
Gold price 9/11: $4,390.00
Gold price 9/18: $4,415.90
Gold price 9/25: $4,320.50

Silver price 8/28: $67.09
Silver price 9/4: $66.82
Silver price 9/11: $65.02
Silver price 9/18: $66.79
Silver price 9/25: $64.71

SPOT: (stockcharts.com)
Gold 8/28: $4,454.08
Gold 9/4: $4,429.45
Gold 9/11: $4,348.10
Gold 9/18: $4,377.63
Gold 9/25: $4,283.78

Silver 8/28: $66.34
Silver 9/4: $66.20
Silver 9/11: $64.48
Silver 9/18: $66.24
Silver 9/25: $64.28

Gold and silver continued to be under pressure, though both may be setting up bases that would suggest higher prices in the medium term. Conditions continue to suggest allocation of cash toward PMs. Futures prices being higher than spot, suggests that the purposeful suppression of prices in precious metals has exceeded the patience of buyers.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (free shipping included, numismatics excluded):

Item/Price	Low	High	Average	Median
1 oz silver coin:	68.95	92.50	74.88	72.00
1 oz silver bar:	69.95	81.00	75.54	75.91
1 oz gold coin:	4420.71	4663.96	4507.24	4479.42
1 oz gold bar:	4445.71	4597.12	4504.90	4489.73

The Single Ounce Silver Market Price Benchmark (SOSMPB) lost ground during the week, ending at $74.58, a decline of $1.43 per troy ounce from the September 20 price of $76.01.

WEEKEND WRAP

At the Close, Friday, September 25, 2026:
Dow: 51,828.62, +478.64 (+0.93%)
NASDAQ: 27,068.72, +129.34 (+0.48%)
S&P 500: 7,743.41, +39.28 (+0.51%)
NYSE Composite: 23,912.59, +96.09 (+0.40%)

For the Week:
Dow: +145.98 (+0.28%)
NASDAQ: +546.17 (+2.06%)
S&P 500: +92.91 (+1.21%)
NYSE Composite: -86.17 (-0.36%)
Dow Transports: -506.88 (-2.52%)

Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2026, Downtown Magazine Inc., all rights reserved.