Pages

Saturday, March 22, 2025

2025-03-23

 ***** denotes well-worth reading in full at source (even if excerpted extensively here)


Economic and Market Fare:


The Outlook projects global growth slowing to 3.1% in 2025 and 3.0% in 2026, with important differences across countries and regions.

GDP growth in the United States is projected at 2.2% in 2025 before slowing to 1.6% in 2026. In the euro area, growth is projected to be 1.0% in 2025 and 1.2% in 2026. China’s growth is projected to slow from 4.8% this year to 4.4% in 2026.

Inflation is projected to be higher than previously expected, although still moderating as economic growth softens. Services price inflation is still elevated amidst tight labour markets, and goods price inflation has begun picking up in some countries, although from low levels. .........

The Outlook highlights a range of risks, starting with the concern that further trade fragmentation could harm global growth prospects. ..............




Earlier this month, Federal Reserve chair Jerome Powell made a sneakily profound comment, important for understanding how the central bank will approach policy in its meeting this week and beyond.

The big picture: "However fat you think the tails are, they're fatter than you think," Powell said, referring to the outer edges of a probability distribution.

Translation: The odds of some seemingly unlikely, extreme scenario occurring are higher than most people comprehend.

Powell made the comment in discussing the pandemic-era economy, but it could apply just as well in thinking about the Trump 2.0 economy, where an onslaught of policy change is creating a wider range of possibilities than usual for how the economy will evolve. ..............

The bottom line: The tails are fat, with possibilities for extreme results on either growth or inflation. But they're fat on both sides of the Fed's mandate, which will make the case for caution.


A trade war could push up inflation when both the UK and US economies really need cheaper borrowing. So what’s a central bank to do?


Something much bigger is going on than simply correcting prices.

...
...



............... Most corrections do not turn into bear markets. 14 of the 44 post-WWII corrections morphed into bear markets, while over the past three decades that ratio dropped to 4 out of 16.

More importantly, much of a market recovery happens quickly. For instance, the S&P 500 returns an average of 8.1% in the month following a non-bear market correction low, which equates to a roughly 50% retracement of the average correction loss (down 13-14%).


The US president wants both to protect domestic manufacturing and hold the dollar as the reserve currency

......... If one is to understand this more sophisticated approach, one should read Miran’s “A User’s Guide to Restructuring the Global Trading System”, published in November 2024. The author states that “this essay is not policy advocacy”. But if it quacks like a duck, it is a duck. From a man in his current position, this must now be read as advocacy. ..............







In 2023, the US had the lowest tariff levels in the world, lower than the European Union, Canada, Mexico, and China, see the first two charts below.

The US also has fewer non-tariff barriers than China, Mexico, Canada, and many European countries, see the third chart below.

When some countries have lower barriers to trade, the gains from trade are not distributed evenly, and the US is currently investigating tariffs and non-tariff barriers with individual countries. 

The bottom line is that the purpose of the trade war is to create a more level playing field so that the benefits from trade are more evenly distributed, including to the US manufacturing sector.

 







What characterizes a wait-and-see economy is that consumers and firms are more cautious about spending decisions. Consumers are more reluctant to plan vacations, to buy cars, and to buy new washers and dryers. Similarly, firms are more reluctant to hire and more reluctant to do capex.

The wait-and-see economy is no longer just for companies directly involved in trade with Canada and Mexico. Uncertainty for small businesses is near all-time high levels. This is a problem because small businesses are the foundation of the economy, accounting for more than 80% of total US employment, see the first chart below.

Markets are not yet pricing in the coming slowdown in the hard data. The spread between CCC and single-B has only widened modestly and is still significantly tighter than where it was during the summer of 2022—when the economy was doing just fine—see the second chart. In a slowdown scenario, investors would start to migrate to higher-quality names.

The bottom line is that a wait-and-see economy eventually leads to a slowdown in the hard data. And markets should prepare for that scenario.


Donald Trump’s one-month concession does not apply to large swaths of goods exported north

............. Businesses are being forced to make these existential decisions with no certainty about which of the boomeranging policies Trump has proposed will stick.

That uncertainty is its own burden, said Díaz Bedolla.

“Everything comes to a halt, no one takes decisions,” he added. “If you’re going to impose tariffs, just do it already.”





Quotes & Tweets of the Week:

MS: Coming to grips with the idea that President Trump is keeping promises made to reform US trading relationships, investor and consumer confidence cracked. If economic data slow, ratifying investor concerns, CEO confidence may crack next. As April 2 approaches, investor nerves may fray further. ..........

Growth Concerns and Volatility Are Likely to Persist...Policy uncertainty has only ramped up further recently, which means growth risks are likely to persist over the coming months. Perhaps even more importantly, this administration doesn't appear to be preoccupied with stock prices. In other words, we don't think investors should view a relief rally from oversold levels as a sign that volatility is subsiding in a durable manner. Not only is policy being sequenced in a more growth-negative way to start the year (in line with our views from last November), the speed and uncertainty around new policy introduction is denting investor, consumer and corporate confidence


MS, again: Many investment professionals spent most of their career dealing with a bull market in US Treasuries. The pandemic-related inflationary episode caused bond bulls to second guess themselves. The time has come for investors to reacquaint with their inner bond bull. Stay positioned for lower yields.


Bessent: "Corrections are healthy. They're normal. What's not healthy is straight up, that you get these euphoric markets. That's how you get a financial crisis. It would have been much healthier if someone had put the brakes on in ‘06, ‘07. We wouldn't have had the problems in ‘08. So, I'm not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great."

cont'd: "The American dream is not “let them eat flat screens.” That if American families aren't able to afford a home, don't believe that their children will do better than they are, the American dream is not contingent on cheap baubles from China, that it is more than that. And we are focused on affordability, but it's mortgages, it's cars, it's real wage gains."






Charts:
1: 
2: 
3: 
4: 
5: 
6: 


...


(not just) for the ESG crowd:

Signs of human-induced climate change reached ‘new heights’ last year, say UN scientists


It’s hard to see right now, and impossible for most people to mentally accept.

How many millions of years has it been since CO2 levels were this high? .................

Look at the first graph, see the surge in CO2 levels about 16mya to around 480ppm(CO2). That period is known as the Miocene Climatic Optimum (18-16mya) ..............

........................ That's what a CO2 level in the 480ppm to 550ppm range looks like in the geologic record. It was about +6°C to +8°C over our 1850 baseline temperature when CO2 levels were at 280ppm. ..................

Does it seem like 2025 is going to be “better” than 2024?

OR

Does it seem likely that we have crossed another tipping point?

We have increased the Global Mean Surface Temperature (GMST) enough, the changes to the Climate System have degraded the biosphere to the point that it is loosing its ability to absorb and sequester CO2.

If the +3ppm yearly increase in the atmospheric CO2 level continues the consequences are very clear. .......................


Analysis: How Soon Will Large Scale Collapse Happen

..................... Albedo loss advances insurance industry collapse by 10–15 years, with regional uninsurability beginning in the 2030s and systemic failures by the 2040s. The industry’s core business model—spreading risk across time and geography—fails in a world of concurrent, accelerating disasters. While wealthier economies may temporarily subsidize coverage, the global insurance system will fragment by mid-century, shifting climate costs directly to households and governments. Without radical emissions cuts and financial reforms, climate-driven economic collapse becomes unavoidable by 2060.


There is nothing RFK Jr. can do at the Department of Health to make up for what's happening at the EPA.

......... I’m going to say this with the most grace and sympathy toward my Robert F. Kennedy Jr.-admiring readers as I possibly can: There is nothing Kennedy can do at the Department of Health that will make up for what Donald Trump is doing at the Environmental Protection Agency. Nothing.





Vid Fare:




U.S. B.S.:

Two months into his second term, Trump is making mere plutocracy seem quaint.

.............. In the process, the president is offering a lesson in how to turn a plutocracy into a full-blown oligarchy.

The US has arguably been a plutocracy—a system of government run by the wealthy—for some time now. .................


Paul Dans, the ousted director of Project 2025, says he’s delighted that Trump is implementing his agenda after all.

............. “It’s actually way beyond my wildest dreams,” Dans said. “It’s not going to be the easiest road to hoe going forward. The deep state is going to get its breath back. But the way that they’ve been able to move and upset the orthodoxy, and at the same time really capture the imagination of the people, I think portends a great four years.” ...................


You can’t make America great again by wrecking the government.

........ Leaving aside the buckets called “culture wars” and “foreign policy,” we may distinguish eight distinct forces at work in Trump’s economics. They are (a) the targeted destruction of specific regulatory agencies, (b) random disruptions of the federal civil service, (c) old-fashioned Reaganism, (d) tariffs, (e) migration, (f) energy, (g) the military, and (h) the general effect of rash and unpredictable policymaking—otherwise called uncertainty and chaos. ...................................

............................. Over the longer term, it is hard for an old progressive, who fought against the forces of deindustrialization and financialization when they took control under Reagan in the early 1980s, not to sympathize with the stated vision of the old man now in charge. But it is one thing to yearn for a vanished past of superior American engineering, industrial strength and technological prowess—and quite another to create the conditions for revival. Handing the economy over to libertarians, monopolists, speculators, and rich reactionaries with big egos will not make America great again.


A Deep Dive into the End of Post-WWII Moral Internationalism and a Revival of the 2,500-Year-Old Melian Dialogue

There are some timeless truths that never change no matter how hard we try to bury them. They may be forgotten or ignored — for a while — but it is only ever a matter of time until events bring them back into focus, much to the surprise of everyone who thought that the current political, economic, or social order had somehow managed to tame the self-serving brutality of history.

In the 19th century, Germans coined a term for politics based purely on pragmatic calculations rather than on moral or ideological considerations — realpolitik. Perhaps the most famous example of realpolitik in action comes from Chancellor Otto von Bismark’s ruthless 19th-century campaign of using “blood and iron” (military force) and economic pressure (customs unions) to unite all German-speaking lands under Prussian leadership — by any means necessary — in order to achieve his goal of establishing the German Empire.

At the core of realpolitik is the timeless rule that a nation's strength and its ability to impose its will are the ultimate determinants of legitimacy in international affairs (a.k.a. “might makes right”). Since the dawn of time, national interests have always trumped all other considerations. To quote ancient Greek historian Thucydides, writing in the 5th century BC in the context of the infamous war between Athens and Sparta, “The question of justice arises only between parties equal in strength. Outside of that, the strong do what they can and the weak suffer what they must.”

The post-WWII era emerged as a giant experiment to try to replace realpolitik with a kinder, fairer, more moral world order — it was an effort to impose classical liberal moral principles onto the interactions between nations by entangling Western Civilization in a maze of treaties, alliances, and international institutions designed to restrain the endless wars, exploitation, plunder, and bullying that stronger nations have always imposed on the weak.

But despite the lofty rhetoric and high-minded moral intentions, this new coalition of liberal-minded nations failed to bring about an end to history.

It was always a pipe dream to think that national interests could be subordinated to post-WWII morality — predictably, that era is now unravelling as all those post-WWII institutions, treaties, and alliances crumble beneath mountains of corruption and (above all) because in reality every member-state, big and small alike, never stopped working to selfishly manipulate and exploit all those institutions, treaties, and alliances for their own national interests. Beneath the lipstick, a pig is still a pig. ........................................



Geopolitical Fare:

During Trump's first term in office, Gabbard was a leading critic of Trump's backing of the Saudi war in Yemen, which she called genocidal



Something similar could be said about almost all Western policies except those which make the rich richer. “Is the policy working? No. Are we going to continue? Yes.”

Here’s the thing, AnsarAllah is the only nation in the world taking military action to try and stop the Israeli genocide of Palestinians. ...............

It is tiresome to keep saying this, but Israel, with the full support of many countries, including Britain, Germany and most importantly America (and my own nation, Canada, not that our help amounts to anything) is committing red letter genocide. There is no question about this, it is not “complicated” and there is no possibility of being a moral person, or even not a complete fucking waste of human skin, if you support genocide.

As for Yemen and AnsarAllah, they appear to be the only nation in the world which is fully moral in this respect, and the only nation in the world fully living up to the requirement for nations to actively try and stop genocide.  .......................


How the USA is leaving behind not only devastation but hardened enemies, too.

With Israel and the West committing genocide against the Palestinians to ethnically cleanse Gaza, the only outside (de facto) government that has lived up to the elementary demands of the most basic ethics – as well as the UN 1948 UN Genocide Convention and the 1998 Rome Statute – by taking direct military action to confront the perpetrators is that of Yemen. Otherwise, the heroic Palestinian Resistance defenders of Gaza stand alone.

(In Lebanon, Hezbollah has also interfered with Israel, but while powerful, it is not a government, de facto or internationally recognized, and it has been careful to limit its response, so as not to expose its country to mass murderous retaliation, as threatened by Israel and thus, in effect, by the West.)

That is the dystopian hell world we really live in: Its strongest (for now) states commit and support a genocide and ethnic cleansing war of extermination, proudly announced by the Israeli perpetrators and broadcast in detail for the whole world to watch in real time. Rich-world war tourists, meanwhile, get on planes to get their slice of the mass murder action and post about it on X.

It is left to Yemen, a poor and small country, itself recently ravaged by a brutal war of bombing and starvation, conducted under the leadership of Saudi Arabia and, of course, backed by the West, to do what all of us should be doing: help Palestine and fight Israel  ..........



This is Trump’s genocide. Trump is just as culpable for what happens in Gaza as Netanyahu. Just as guilty as Biden was during the last administration.

Trump signed off on the reignition of the Gaza holocaust. He spent weeks sabotaging the ceasefire and then gave the thumbs up to the resumption of the genocide. He did this while bombing Yemen and threatening war with Iran for Israel. ...........


America's "anti-war" candidate is bombing innocent civilians in Yemen to eradicate the last flicker of moral courage on this planet.





Sci Fare:

gotta link to any article that starts off talking about one of my favourite books, Sawyer's book Calculating God:
In “Calculating God,” Robert J. Sawyer’s first-contact novel, the aliens who arrive on Earth believe in the existence of God – without being particularly religious. Why?

There are certain physical forces, they explain, that make life in our universe possible only if they are tuned to very specific values. Which they are. We are here, after all. But there’s no physical reason that the values need to be set the way they are. The aliens have concluded that someone, or something, set the values of these parameters at the beginning of the universe to insure that life would come into existence. That something they call God. .................

........................ 
Swenson helpfully put the argument like this. There are four possibilities: (i) There is a God and a multiverse, (ii) There is a God and only one universe, (iii) There is no God and there is a multiverse, and (iv) There is no God and only one universe.

If (iv) there is no God and only one universe, then it’s surprising that this one universe is somehow fine-tuned. If (i) there is a God and a multiverse, and we assume that God doesn’t fine-tune every universe, it’s surprising that this one is tuned. If (iii) there is no God and there is a multiverse, it’s (again) surprising that this universe is one of the fine-tuned ones. Finally, only (ii) is it not surprising. That there is a God and only one universe, in other words, is more likely than the alternatives.







Other Fare:

The central banker airdropped in as Canada’s new prime minister is adopting the language of ethnic pride, and maybe that should worry us.

............. After almost a decade of tyranny, mismanagement, corruption, demographic vandalism, forced medical experimentation, hoaxed blood libels, Academy Award-winning performances, and cringe-inducing dress-up, Justin Trudeau, the second-worst1 Prime Minister in Canada’s history, is finally, at long and long-awaited last, gone.

You’d think I’d be ecstatic, yet I find myself greeting his departure with a shrug.

It’s possible we’ll look back on Justin’s circus act as the good old days.

......................... Despite Carney’s lack of political experience, he’s arguably one of the more charismatic politicians Canada has seen on the federal stage in some time. He projects a calm aura of reassuring technocratic competence, which appeals at a visceral level to the Canadian electorate, preferring as it always has the firm hand of authoritarian paternalism.

.................. This may be one of the most embarrassing electoral reversals of Canadian history. Poilievre was being handed the Prime Minister’s Office on a silver platter, but has already blown a massive lead out of sheer milquetoast cowardice, and so is on track to hand that silver platter back to the Liberals.

............... It’s all very savvy political manoeuvring, and of course Canada’s puckstick patriots are eating it up, yet I cannot help but worry that there is something much darker at play.

Canadian politics does not take place in a vacuum. Canada is a vassal state of its southern neighbour, effectively a resource colony which is permitted as a polite fiction to maintain its pretensions to sovereignty. .....................................

.................................... Meanwhile Ukraine’s real estate and natural resources have been appropriated by its foreign creditors as payment for assistance in the war. The globalists poured 100-proof ethnonationalism straight into the hindbrain of Ukrainian society, sent them into an unwinnable war, encouraged them to fight Russia to the last flower of Ukrainian youth, and will repay the Ukrainian people by stealing everything they own and giving their depopulated land to foreign peoples far more alien than the Russians.

Neat trick. With allies like these, etc.

So, Canada. ............................

Across Canadian history, one of the only consistent threads in Canada’s national identity has been that Canadians are Not-Americans: we might not quite know what we are, but we aren’t (ugh) that. This frequently manifests as a sort of brittle insecurity, an ostentatious inferiority-superiority complex: unlike those stupid Americans, Canadians are smart, we are law-abiding, we are polite, we are sensible, we are European, we are educated, we aren’t racists, we have free health care. Much of this is overcompensatory cope – Canadians, by and large, are every bit as ignorant and provincial as Americans – but this really is how Canadians feel. ............

If the plan really is to Ukrainify Canada, then reasoning by analogy with what happened in the Ukraine, there are some things we can expect to see in the coming months and – God forbid – years of Carney’s administration. .................

That’s a dark scenario, and perhaps my imagination is getting away from me, afflicting me with a fever dream, and if so, hey, one of my functions here is to say the crazy stuff out loud. Maybe Carney’s rhetorical pivot is just a cynical campaign strategy. Maybe it’s more than that, but there’s no intention of using Canada to do anything other than sabotage America’s natural resource pipeline.

But then I see Chrystia Freeland making deranged statements about deploying British nuclear deterrents on Canadian soil.



Canada’s Liberal Party selected central banker Mark Carney to lead the country as prime minister.  

He only recently became a politician, but already he’s sitting at the head of the class!  No worries, though.  He has the kind of résumé all globalists in good standing with Klaus Schwab’s World Economic Forum would envy.  He ran not only the Bank of Canada, but also the Bank of England.  He’s a central banker extraordinaire!  He loves printing funny money and manipulating markets.  Artificially created inflation is his jam, man!

Carney is the most recent iteration of the World Economic Forum’s standard operating procedure for captured governments (and Canada is most definitely WEF-captured): Whenever possible, put bankers in charge of those pesky territorial designations nostalgically known as nation-states.  France’s petit fromage, Emmanuel Macron, was a Rothschild & Co. investment banker.  Former U.K. prime minister Rishi Sunak was a Goldman Sachs and hedge fund guy.  Don’t be surprised when more transnational bankers seemingly come out of nowhere and immediately dominate the politics of other pseudo-sovereign countries.  Investment banking — and more specifically, central banking — is the lifeblood of globalism.  Why?  Because once a bank is big enough, it gambles with the futures of entire nations (and the millions of individual lives therein) as if they were mere poker chips.

So the globalist cabal claims another section of the world map!  Or retains its claim over Canada, I should say. ..................

How jolting it must be for the uninitiated to discover that Volodymyr Zelensky’s fiefdom is not renowned for its “democratic” norms, but is instead considered one of the most irredeemably corrupt crime dens in all of Europe.  If you’ve ever found yourself near any of Europe’s other troubled conflict zones, you know that a reputation for being the continent’s premier destination for depravity is not an easy distinction to claim.  Ukraine had to work hard for its deserved notoriety. 

No matter.  Klaus Schwab’s globalists are good at rebranding.  

When money-printing central bankers fund USAID, and USAID pays Western journalists to run stories about the glorious nobility of Ukraine’s system of government, then the less informed among us eventually start spouting the same thing: Ukraine good.  Russia bad.  We make nuclear war now?  It’s not our fault that we humans can be programmed so easily.  We are biologically wired to trust people in positions of authority. .............



................. You all realize how insane this is, right? From 1975 to 2024 you’re looking at a 2.7 degree Celsius rise. So 2.7 degree in half a century. So 5.4 degree Celsius per century in Germany right now is what we’re getting. ..................


Pics of the Week:






Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)