“Miss” vs expectations:
Ultra-Low Interest Rates Are Here to Stay: 2021 Central Bank Guide
Covid pandemic could bring ‘a lost decade’ of economic growth, World Bank says
Subdued Global Economic Recovery
Although global economic output is recovering from the collapse triggered by COVID-19, it will remain below pre-pandemic trends for a prolonged period. The pandemic has exacerbated the risks associated with a decade-long wave of global debt accumulation. It is also likely to steepen the long-expected slowdown in potential growth over the next decade.
"Risk-On" Or "Risk-Off" - In 2020, It Didn't Matter!?
The Risk Of The Bullish View
As we noted last week:
“Currently, every single analyst has the same story going into 2021.· Prepare for an economic boom.· Interest rates will rise.· Inflation is coming back.· The stock market is going to 4100-4500· Small-caps are the new ‘new trade.'”
You get the idea. Everyone is incredibly “bullish” about the coming year with hopes of more stimulus, infrastructure spending, and a vaccine.
Somehow, despite millions of people still unemployed, the economy has just shifted into a “Golden Age” not seen since the 1950s.
However, therein lies the problem.
There have been two previous periods in history that have had the necessary ingredients to support a rising trend of interest rates, inflation, and economic growth over an extended period.
The first was during the previous century’s turn as the country became more accessible via railroads and automobiles. Production ramped up for World War I, and America began shifting from an agricultural to an industrial economy.
The second period was post-World War II. The war left America the “last man standing” after France, England, Russia, Germany, Poland, Japan, and others were devastated. It was here that America found its most substantial run of economic growth in its history as the “boys of war” returned home to start rebuilding the countries that they had just destroyed.
The U.S. is no longer the manufacturing powerhouse it once was, and globalization has sent jobs to the cheapest labor sources. Technological advances continue to reduce the need for human labor and suppress wages as productivity increases. Today, the number of workers between the ages of 16 and 54 participating in the labor force is near the lowest level relative to that age group since the late 70s.
There is also a structural and demographic problem that continues to drag on economic growth as nearly 1/4th of the American population is now dependent on some form of governmental assistance. These issues are only going to worsen due to long-term demographic trends, not only domestically but globally.
In other words, the ingredients required for sustained levels of more robust economic growth and prosperity are not available.
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The surge in deficit spending, combined with the pick up in short-term demand for construction and manufacturing processes, will give the appearance of economic growth. Such will likely get both the Federal Reserve and the “bond bears” on the wrong side of the trade.
The impacts of these “one-off” inputs into the economy will fade rather quickly after implementation as organic productivity fails to increase. While many always hope these programs will lead to an ongoing economic expansion, a look at the last 40 years of fiscal and monetary policy suggests it won’t.
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While more stimulus and infrastructure spending may spur the economy and markets initially, the payback tends to be severe. Such is why we keep ending up at this point, demanding more spending to fix the last drawdown.
Wash. Rinse. Repeat.
Bubble Fare:
S&P 500 – Trading At Historical Extremes
What Could Cause A Correction In 2021?
Lots of things. The market is currently priced for perfection betting on explosive economic growth, a falling dollar, interest rates remaining low, consumer spending surging sharply, and inflation remaining muted. The reality is that none of those things will likely turn out to be the case. The one thing that always trips of the market is the one thing that no one is paying attention to. For me, that risk lies with the US Dollar.
...
if I am right, the preservation of capital during an ensuing market decline will provide a permanent portfolio advantage in the future. The real power of compounding is not in “the winning” but in the “not losing.”
As the latest Citi Panic/Euphoria model shows, this week’s Panic/Euphoria jumped to a record 1.83 versus an upwardly revised 1.69 in the prior week.
‘What Were You Thinking?’ Part Tres
Jeremy Grantham: Waiting for the Last Dance: The Hazards of Asset Allocation in a Late-stage Major Bubble
Executive Summary
The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.
These great bubbles are where fortunes are made and lost – and where investors truly prove their mettle. For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in.
But this bubble will burst in due time, no matter how hard the Fed tries to support it, with consequent damaging effects on the economy and on portfolios. Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.
BofA: Bitcoin Is Now "The Mother Of All Bubbles"... This Is How It Could Burst
Ban Bitcoin
Bitcoin produces 36.5 megatonnes of CO2 per year, it's time for the climate-change movement to pile on.
Bitcoin Mining and Its Environmental Effects
(not just) for the ESG crowd:
Challenging the Pro-Growth Market: Mark Carney’s Reith Lectures and the Need for a Radical Approach
“Society won’t settle for worthy statements followed by futile gestures. It won’t settle for countries announcing plans in Paris five years ago for 2.8 degrees warming, far too high, that they don’t even meet. Society won’t settle for companies that preach green but don’t manage their carbon footprints, or financial institutions who can’t tell us whether our money is on the right or wrong side of climate history.”
Reith Lectures 2020 – How We Get What We Value
Mark Carney’s Reith Lectures will chart how we have come to esteem financial value over human value and how we have gone from market economies to market societies. He argues that this has contributed to a trio of crises: of credit, Covid and climate. And the former Bank of England governor will outline how we can turn this around.
COVID-19 notes:
There are so many Covid patients, younger this time. But my hospital is full
There can be no debate: this is now much, much worse than the first wave, says this NHS consultant
Over Half of COVID Transmission May Occur via Asymptomatic People
‘Close To A Worst-Case Scenario’—Former CDC Director Issues ‘Horrifying’ Outlook For New Covid Strain
It’s Time to Use Eminent Domain on the Coronavirus Vaccines
Respecting drug companies’ intellectual property rights during a pandemic doesn’t make medical, or economic, sense.
Rabobank: Here's How We Could Be Stuck With COVID Forever:
Other Fare:
Peter Turchin: The Storming of the U.S. Capitol
On one level, that of macrosocial dynamics, what happened yesterday, January 6, 2021, is not surprising. After all, my own model indicates that structural pressures for instability in the United States continue to build up. On a more immediate micro-level, watching hundreds of demonstrators break into the Capitol building and rampage through its hallowed halls was shocking. ..
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What’s next? The dynamics of political violence at the micro-level and in the short run are difficult to predict. More important is what will happen at the level of deep, structural-demographic trends. Popular immiseration has been increasing for decades. I have written before how shocking it was for me to see such Malthusian indicators of stress as declining life expectancy, which turned down before Covid-19. The epidemic has now delivered a body blow to the well-being of the great majority of the Americans, with life expectancy, employment and incomes, as well as subjective measures of well-being all trending down. …
Fun Fare:
Our Galaxy Has a Shocking Array of Really Weird Stars. Here's Your Ultimate Guide
Pics of the Week:
Rare Sighting of a White Moose in the Swedish Woods
Sudden stratospheric warming could mean wild winter storms ahead
EXTRA [controversial or non-market-related] FARE:
must watch video on COVID:
[More] COVID Fare:
Nearly Half of U.S. Voters Believe Health Officials have been Misleading with COVID Data
Political Fare:
This is an obvious double standard
…Regardless of how you feel about Wednesday’s events – whether you’re horrified or happy - a rational person should at least be able to acknowledge the massive double standard.
For example, the media wasted no time in calling the events “treason”.
This is bizarre, because the Article III of the Constitution clearly defines treason. And the Supreme Court has clarified it in numerous cases, like Cramer v. United States in 1945, in which the Justices stated:
“the crime of treason consists of two elements. . . breaking allegiance. . . and rendering [the enemy] aid and comfort. . . if there is no intent to betray [the country], there is no treason.
What did we see Wednesday? Thousands of people waving American flags on the balcony of the US Capitol chanting “U-S-A! U-S-A!”.
CNN seriously thinks that such actions constitute an intent to betray the country.
Yet BLM activists wanting to murder police, burn down the White House, and “go get that motherfucker” is totally fine. During the BLM riots, the ‘news’ site Vox ran articles praising the riots, saying they are “destructive, dangerous, and scary– but can lead to serious social reforms.”
But Wednesday’s Vox insisted that every Capitol protester “should be arrested”.
The double standard is extraordinary. And it’s obvious.
The protesters from yesterday, along with millions of other people, are angry.
They feel that they have legitimate grievances. They feel they’ve been lied to. They feel betrayed.
But the media and political establishment has been dismissive at every opportunity. They pretend to want unity and reconciliation. But there is no respect. No empathy. No understanding. No one is listening. No one cares. And the blatant double standard only makes it worse.
The Lafayette Park Protests And The Revision Of History
One of the most unsettling aspects of the last four years is the intentional effort to rewrite history in the media to fit a narrative either by denying facts or echoing clearly false statements. The recent stories on the riot in Congress is a good example.
Enough With the Outrage.
Like pretty much all conservatives, I have consistently criticized riots and other forms of political violence for many years. That includes yesterday’s Washington, D.C. riot.
You can’t say the same about liberals, however. Until yesterday, one might have thought that liberals consider rioting and other forms of political violence to be as American as apple pie.
You could write a book in support of that proposition, but for now let’s cite just a few examples.
Do you remember when President Trump was inaugurated on January 20, 2017? Leftist Democrats rioted in Washington that day. That riot was arguably worse, more violent and more destructive, than what happened in D.C. yesterday. The liberal rioters destroyed stores, set vehicles on fire and battled with the police. Six police officers were wounded. Here is a video reminder:
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Over the ensuing four years, Antifa and Black Lives Matter rioted countless times, bringing devastation to cities like Portland, Seattle, Kenosha and Minneapolis. Did any Democrats denounce these riots? Not that I remember. Many Democrats endorsed them, or seemed to do so. Kamala Harris, for example,…
The Capitol Riot Wasn’t a Coup. It Wasn't Even Close.
Fog and Noise
Let’s also just step back for a moment and ask: why did so many flag-waving MAGAs turn out Wednesday on the Mall in Washington DC? Answer: because they have been served one shit sandwich after another for four years by the Democratic Party and their captive news media, and the latest one featured vote tabulations getting erased in real time at ten-plus thousand vote increments right before their eyes on the flatscreen in the wee hours of November 4. And after that, and other balloting monkeyshines, the response from their government was a mere yawn. Total institutional failure. The ballot fraud that so many witnessed was never aired or adjudicated in a proper legal forum, and they were good and goddam pissed about it.
Only In Your Imagination Was That An Attempted “Coup”
Is it unusual for a mob to breach the Capitol Building — ransacking offices, taking goofy selfies, and disrupting the proceedings of Congress for a few hours? Yes, that’s unusual. But the idea that this was a real attempt at a “coup” — meaning an attempt to seize by force the reins of the most powerful state in world history — is so preposterous that you really have to be a special kind of deluded in order to believe it. Or if not deluded, you have to believe that using such terminology serves some other political purpose. Such as, perhaps, imposing even more stringent censorship on social media, where the “coup” is reported to have been organized.
…
there are many people who in positions of power who would like you to believe that a real-life “insurrection” is genuinely underway, and to develop a kind of exaggerated mythical understanding of what occurred at the Capitol. Because it will enable them to seize additional powers — not through a “coup,” but through the vast inflation of an alleged threat, which is always how they do it.
“The Storming of the Capitol”: America’s Reichstag Fire?
The four big lies underpinning this story show it was likely a staged event.
The media are already spinning a narrative around the events in Washington DC. One that bears no resemblance to reality, does not hold up to any kind of scrutiny and will have massive, far-reaching consequences for all of us.
While Railing Against Trump Coup, Biden Appoints Chief Ukraine Coup-Plotter Victoria Nuland
Biden Is Not Yet Inaugurated and the Establishment Is Already Fomenting Civil War
Trump was demonized before he was inaugurated. He was demonized because he was correctly perceived by the Establishment as a threat to the Establishment. Trump’s election surprised the Establishment. The Establishment thought that Establishment control over the media guaranteed their power and was astonished to realize that enough American voters saw through their lies and propaganda to elect a non-establishment figure.
The world does not understand that the American Establishment has a propaganda organization that shames the one assembled by Joseph Goebbels. The American media, never very independent, lost all semblance to independence during the Clinton regime when 90% of the US media was concentrated into six hands and converted into a completely obedient tool of the Establishment. Anyone who doubts this should explain why on every issue the presstitutes speak with one voice, which is never the voice of the people.
…
The Establishment has now put out calls for retribution against US Senators and Representatives who supported Trump’s attempt to have the evidence of electoral fraud examined. I have watched presentations of the evidence by nonpartisan professionals, and the evidence of electoral fraud is overwhelming. Yet it has been deep-sixed without ever being examined. In place of examination, from day one the presstitutes, none of whom looked at the evidence, repeated endlessly that there was no evidence. Trump, and not the stolen election, was blamed for discrediting American democracy.
The Swamp Swallowed Trump
…Then again, it all plays out well for anyone but Trump. And perhaps a few GOP’ers who stood by him. You could say, Trump entered the swamp and drowned in it, it swallowed him whole. Which is not to say that he’s such a perfect character, hell no, but he was the one and only chance to get rid of the power cabal that is DC. Which is a much bigger danger than he could ever be.
Where career politicians like Pelosi, Schumer, McConnell and Joe Biden can reside for decades, and be handed ever more handsome amounts of money by the lobbyists who write their laws, which benefit the corporations they work for. Trump was the chance to do at least something about this. They ate him alive.
Now the story is that Trump is/was the main danger, and that he was attempting a coup against his own government. To finish off the job, after being hunted down by the MSM for 4+ years, social media, for whom unceremoniously dumping Trump, after he was their main attraction for years -at least for clickbait-, was just a business decision dressed in some vague set of moral principles, are now simply deleting him.
And people cheer that. They don’t understand that from now on, as US president you serve at the behest, grace and kindness of the CIA, New York Times and WaPo, but even more that of @jack and Zuckerberg, and not that of the American people. As the noise about an attempted coup allows Team Biden to slip in Sally Yates, Susan Rice and Victoria Nuland and their whole gang of neocon warmongers. The entire media focus on Trump served to hide what those people were doing behind the scenes all along.
Democrats Use Capitol Incident To Suppress Political Dissent
… Make no mistake. Both actions that follow from the ludicrous Capitol 'sacking', Biden's 'domestic terrorism' act and the systematic eradication of communication channels for people with certain opinions, will primarily be used against the left.
When President Biden starts his first war all significant protest against it will be declared to be 'domestic terrorism'. All communication against it will be 'inciting' and therefore banned. We know this because it has always been like this.
Ed Curtin: Raskolnikov’s Dream Come True
It’s all a movie now with the latest theatrical performance having been the January 6, 2021 stage show filmed at the U.S. Capital. A performance so obvious that it isn’t obvious for those hypnotized by propaganda, even when the movie clearly shows that the producers arranged for the “domestic terrorists” to be ushered into the Capital.
...
As with the events of September 11, 2001 and the subsequent anthrax attacks, the recently staged show at the Capital that the mainstream media laughingly call an attempted coup d’état will result in a new “Patriot Act” aimed at the new terrorists – domestic ones – i.e. anyone who dissents from the authoritarian crackdown long planned and underway; anyone who questions the vast new censorship and the assault on the First Amendment; anyone who questions the official narrative of Covid-19 and the lockdowns; anyone who suggests that there are linkages between these events, etc.
Who, after all, introduced the Omnibus Counterterrorism Act in 1995 that became the template for the Patriot Act in 2001 that was passed into law after September 11, 2001? None other than former Senator Joseph Biden. Remember Joe? He has a new plan.
...
Media & Democrats are launching second 'war on terror' – against Americans – Glenn Greenwald warns
Some of the very same people behind the original ‘War on Terror’ are now helping start a new one against Americans, journalist Glenn Greenwald warned amid a rising crackdown on free speech following the chaos at the US Capitol.
Greenwald is a lawyer who turned to journalism in 2005 to protest the suppression of Americans’ civil liberties under the Bush-Cheney ‘war on terror’. He ended up playing a key role in publishing NSA whistleblower Edward Snowden’s revelations about the illegal mass spying on Americans. On Friday, however, he sounded alarm over what he saw as history repeating.
“There's absolutely a new War on Terror being initiated,” he tweeted. “This new one is aimed inward, domestically.”
The Boot Is Coming Down Hard And Fast
Biden has announced plans to roll out new domestic terrorism laws in the wake of the Capitol Hill riot.
… Did you know that Biden has often boasted about being the original author of the US Patriot Act?
The first draft of the civil rights-eroding USA PATRIOT Act was magically introduced one week after the 9/11 attacks.
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The correct response to a huge section of the citizenry doubting an electoral system we’ve known for years is garbage would have been more transparency, not shoving the process through and silencing people who voice doubts and making that entire faction more paranoid and crazy.
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Supporting the censorship of online speech is to support the authority of monopolistic tech oligarchs to exert more and more global control over human communication. Regardless of your attitude toward whoever happens to be getting deplatformed today, supporting this is suicidal.
America and USG
America is a country. USG is the sovereign corporation, or regime, that owns the country. More people need to learn to see this distinction clearly and frankly. I love the country although frankly I think it needs a lot of work. But it’s a classic property. It’s the ‘68 Mustang of countries. Most people can’t even begin to imagine the things you could do with the place. A Mustang chassis with a Tesla powertrain…
I think the regime needs to go wherever Sun Microsystems went—or maybe Czechoslovakia. Or the Protectorate of England. Or even Theranos. I’m done with it and I don’t see how anyone else could be otherwise.
LRB collection: See you in hell, punk
Writing about how (not) to stage a coup by Hilary Mantel, Thomas Jones, Perry Anderson, Patricia Beer, Christopher Hitchens, Ella George, Bruce Ackerman, Alexandra Reza, James Meek and John Perry.
Quotes of the Week:
Mark Jeftovic: “Think it through people. Do you want to live in a society where Facebook and Twitter decide not what is permissible to say but even which narratives can be explored and which ones can’t?”
From: The Cultural Purge is Now in Overdrive
Emily Ratajkowski: Anyone else feel like proper amount of capital police being absent/letting Trump people in/providing insane visuals of MAGA dudes on the floor of the house was wildly convenient to justifying big tech’s rollout of censorship?
James Carden: [Victoria Nuland’s] arrival among Biden’s national security people is the worst news we have had so far as to the likely policies the new administration will develop and execute.
[Somewhat] Satirical Fare:
Oh, yes, you really did it this time! You stormed the goddamned US Capitol. You and your racist, Russia-backed army of bison-hat wearing half-naked actors have meddled with the primal forces of GloboCap, and now, by God, you will atone! No, do not try to minimize your crimes. You entered a building without permission! The building where America simulates democracy! You walked around in there waving silly flags! You went into the Chamber, into people’s offices! One of you actually put his filthy populist feet up on Pelosi’s desk … ON HER DESK! This aggression will not stand!
Why did the coup in DC fail? Because the is no American Embassy in DC to provide logistical support.
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Why was there a coup in America this year? Because travel restrictions meant they couldn’t do one overseas!
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