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Tuesday, February 20, 2024

2024-02-20

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


Economic and Market Fare:


The Conference Board's Leading Economic Indicators (LEI) continued its decline in January, dropping 0.4% MoM (notably worse than the -0.1% MoM expectations), and December's 0.1% declin e was revised down to a 0.2% decline.
  • The biggest positive contributor to the leading index was stock prices (again) at +0.10
  • The biggest negative contributor was average workweek at -0.18
This is the 22nd straight MoM decline in the LEI (and 23rd month of 25) -  equaling the longest streak of declines since 'Lehman' (22 straight months of declines from June 2007 to April 2008) .......


but:

........... The largest positive contributor to the turn from a recession forecast came from the recent surge in stock prices to record highs. The benchmark S&P 500 index (.SPX), opens new tab has risen by more than 20% since late October after signals from the Federal Reserve that its aggressive interest rate cycle aimed at containing inflation is over and that rate cuts are expected this year.

Persistently low numbers of new filings for unemployment benefits and measures of future credit availability, home building permits and new orders of manufactured goods also contributed to the change in the outlook. ...






Loan loss provisions have thinned even as regulators highlight risks in commercial real estate market

Bad commercial real estate loans have overtaken loss reserves at the biggest US banks after a sharp increase in late payments linked to offices, shopping centres and other properties.

The average reserves at JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley have fallen from $1.60 to 90 cents for every dollar of commercial real estate debt on which a borrower is at least 30 days late, according to filings to the Federal Deposit Insurance Corporation.

The sharp deterioration took place in the last year after delinquent commercial property debt for the six big banks nearly tripled to $9.3bn. ......

Across the wider US banking sector the value of delinquent loans tied to offices, malls, apartments and other commercial properties more than doubled last year to $24.3bn, up from $11.2bn the year before.

US banks now hold $1.40 in reserves for every dollar of delinquent commercial real estate loans, down from $2.20 a year ago, according to the FDIC data, and the lowest cover banks have had to absorb potential commercial real estate loan losses in more than seven years.



China Fare:

China’s impressive topline growth figures mask underlying disparities and societal unease.



Vid of the Week:




Quotes of the Week:
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Charts:
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(not just) for the ESG crowd:

Alexander Muller, former FAO assistant director-general talks about how the impacts and cost of natural capital as well as social affairs have been ignored till now



Geopolitical Fare:

You Only Need To Cage A Bird If It Knows That It Can Fly

One point I keep trying to drive home here in as many ways as I can is that this is the dystopia we were warned about. The main difference between this mind-controlled dystopia and the fictional dystopias in novels like 1984 is that in 1984 people knew they weren’t living in a free society, whereas in this dystopia the people believe they are free.

In Orwell’s dystopia people knew they weren’t free and had to use doublethink to stay out of trouble with their rulers. In this dystopia people have no idea how pervasively they’re being dominated by their rulers; they think they came up with their ideas, worldview and political positions on their own, when in reality those belief systems were constructed inside their skulls by a profoundly sophisticated propaganda machine without their even knowing it.

All mainstream and semi-mainstream political factions are owned and operated by the powerful, and propaganda is used to get the public subscribing to them to advance the interests of the powerful. Because the overwhelming majority of us have been manipulated into espousing one of these power-serving belief systems (they give you multiple choices depending on your ideological disposition), the more overtly totalitarian measures described by dystopian novelists are unnecessary. You only need to cage a bird if it knows that it can fly. .....



There is propaganda by commission and propaganda by omission, the former often serve to conceal the latter. Timing is crucial.

That the U.S. President Joseph Biden, his British, NATO, Israeli allies, and their corporate media mouthpieces are in need of a major propaganda victory is obvious. They are losing the war in Ukraine, have been condemned throughout the world for the genocide in Gaza, and are ruling over a disintegrating empire. Biden and Netanyahu’s political lives are at serious risk. And so they have just rolled out a full-court propaganda press effort aimed at covering their losses. It should be crystal clear to anyone who can use logic to see the timing involved.

The great French scholar of propaganda and technology, Jacques Ellul, wrote years ago that propaganda “is not the touch of a magic wand. It is based on slow constant impregnation. It creates convictions and compliance through imperceptible influences that are effective only by continuous repetition.”

However, once this groundwork has been laid over time – as it has been with the continuous anti-Russia Putin hysteria and support for Israel’s Zionist policies – it can be intensely ratcheted up in exigent circumstances when the long-serving narrative is in jeopardy, such as it is now. ..........

But we are in a propaganda war for the minds of the Western public.  Much of the rest of the world has seen through the risible MSM headlines used to delude the public that Russia is the great threat to world peace and stability. Like the previous Russia-gate lies, this ongoing one, coinciding with Navalny’s death, is timed to divert the public’s attention from key ongoing matters.

Tomorrow and Wednesday, Julian Assange will have his final appeal in a British court to prevent his extradition to the United States. Biden wants this journalist prosecuted for doing the job that the MSM have failed to do: Exposing the facts about the ruthless U.S. killing machine. ..........



.......... Since a pack of lies about Alexei Navalny won last year’s Oscar for the best documentary film of the year when he was alive,   there’s no doubt he can win another Oscar when he’s dead.  But alive or dead, the prize-winning propaganda of Navalny’s story bears no resemblance to the truth. This is what happens in wartime, especially when the side which is losing the war on the battlefield – that’s the US, NATO and the Ukraine – claims to be winning the war of words against Russia. ........






[not sure whether to place this in Economy or Geopolitics or ESG, so:] 
Other Fare:

Doomberg: Atlas Won’t Shrug
The human endeavor demands ever more energy. So it shall be.

............ What nearly all market observers get wrong is the nature of the relationship between energy and the economy. Most view energy as an input into economic activity, as though its contribution to gross domestic product (GDP) is no different than the other measurable goods and services that go into that important calculation. This is how otherwise intelligent people observe Russia’s comparatively modest GDP and conclude that it is nothing more than “a gas station masquerading as a country.” Such arrogance is the root cause of the West’s catastrophically flawed sanctions policy against the country, and such ignorance explains the dangerously naïve calls to “end fossil fuels,” the equivalent of demanding suicide on a billion-person scale.

This is a concept so vital that it is worth writing with bolded emphasis:

Energy is not an input into the economy, IT IS THE ECONOMY. Humanity organizes its economic activities to ensure a steady growth in the extraction and exploitation of primary energy because energy is life, standards of living are defined by how much energy is available to be exploited, and all humans everywhere are perpetually seeking a higher standard of living.

As far as foundational axioms go, that’s a pretty good one. ........



Pics of the Week:




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