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Sunday, March 3, 2024

2024-03-04

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


Economic and Market Fare:


…What Does Any of This Even Mean?
Perhaps the single clearest message from looking at the breakdown is that any attempt to measure overall inflation within the economy is going to be fraught with difficulty, and rest on disputable assumptions. That is good to know because both society and the markets are riven by disputes over inflation technicalities. Plenty of people believe the figures are manipulated or even falsified, while the overall numbers can seem to ignore realities for particular individuals on the ground. No two humans will buy the same basket of things each month, so they’ll tend to have slightly different rates of inflation in their living costs…

… And the Markets?
This data release was pre-hyped as a big event. The surprisingly strong CPI earlier in the month raised the stakes. That number, in combination with predictions (which turned out to be correct) that monthly PCE inflation would rise a little, helped ensure an unduly aggressive buildup. The eventual numbers, bad but no worse than feared, therefore prompted a sharp fall in yields. By the end of the day, that too had been reversed. The market thinks it’s now got it right that the Fed probably won’t cut more than three times this year, which happens to be exactly what the Fed is saying.



The market went into 2024 expecting six Fed cuts.

The reality is that the US economy is simply not slowing down, and the Fed pivot has provided a strong tailwind to growth since December.

As a result, the Fed will not cut rates this year, and rates are going to stay higher for longer.

How do we come to this conclusion?

1) The economy is not slowing down, it is reaccelerating. .......



Bubble Fare:


............ I define a bubble market as one that has a combination of the following in high degrees:
  1. High prices relative to traditional measures of value (e.g., by taking the present value of their cash flows for the duration of the asset and comparing it with their interest rates).
  2. Unsustainable conditions (e.g., extrapolating past revenue and earnings growth rates late in the cycle when capacity limits mean that that growth can’t be sustained).
  3. Many new and naïve buyers who were attracted in because the market has gone up a lot, so it’s perceived as a hot market.
  4. Broad bullish sentiment.
  5. A high percentage of purchases being financed by debt.
  6. A lot of forward and speculative purchases made to bet on price gains (e.g., inventories that are more than needed, contracted forward purchases, etc.).
I apply these criteria to all markets to see if they’re in bubbles. When I look at the US stock market using these criteria (see the chart below), it—and even some of the parts that have rallied the most and gotten media attention—doesn’t look very bubbly. .......

In the remainder of this post, I’ll walk through each of the pieces of the bubble gauge for the US stock market as a whole and show you how recent conditions compare to historical bubbles. While I won’t show you exactly how this indicator is constructed, because that is proprietary, I will show you some of the sub-aggregate readings and some indicators. ............



Investment Wisdom QOTW:

Howard Marks: "Psychology swings much more than fundamentals, and usually in the wrong direction or at the wrong time.  Understand the importance of resisting those swings—profit if you can by being counter-cyclical and contrarian."



Tweet Threads of the Week:

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Vid of the Week:



Charts:
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(not just) for the ESG crowd:




.... "Far from falling rapidly - as is required to meet the global climate goals set out in the Paris Agreement - CO2 emissions reached a new record high," the IEA said in a report.




The fossil fuel industry has known for decades that recycling alone won't solve the plastic crisis. But it's spending millions to convince the public otherwise.



Populism To Counter De-Nationalized Elites?

.................. Throughout the West, citizens are becoming increasingly suspicious of liberal democracy because they realize that no matter who they vote for, they always end up getting the same policies to them (yes, this is a gross generalization..please forgive me). It’s not just that people feel that their interests are not being represented by their elected representatives, but that their ruling elites are becoming increasingly distanced from the people that they purport to represent. The sentiment is growing that we are ruled by managers, and that we, the people, really do not have a say in anything.

For those of us who grew up in the West, democracy is part of our DNA. We live and work under the assumption that government rules on behalf of us, the people, and not lord over us, the peons. All of us now realize that the latter is much more true than the former, which is why you choose to read people like me .......... 

................ It also allows these same elites to have a monopoly on what is considered to be “democracy” today. They are its shepherds, and they get to define it (and constantly re-define it) as they see fit. 

............... Everything outside of the narrow bounds of this hour’s definition of liberal democracy is grouped together as “populism”, and populism=fascism. .........



There’s an infuriatingly common type of liberal who purports to oppose Israel’s actions in Gaza while also saying they support “Israel’s right to exist”, as though Israel’s existence is somehow separable from its genocidal murderousness. This is a state that literally cannot exist without nonstop violence and tyranny, as demonstrated by its entire unbroken history since its inception. It was set up as a settler-colonialist outpost for western imperialism from the very beginning, and that’s exactly what it’s been ever since.

History has conclusively established that it is not possible to drop an artificial ethnostate on top of an already-existing population in which the pre-existing population is legally subordinate to the new one without tremendous amounts of warfare, police violence, mass displacement, apartheid, disenfranchisement and oppression. This is not actually debatable. It is a settled matter (no pun intended).

Is it possible to have a nation in which Jews are welcomed and kept safe? Of course. Many such nations exist outside of Israel, and the majority of the world’s Jews live in them. What isn’t possible is a Jewish ethnostate in historic Palestine in which the pre-existing population is treated as less than the Jewish population that does not necessarily entail nonstop violence, tyranny and abuse. This is self-evidently a direct contradiction in goals, but it’s what the liberals we’re discussing here pretend to believe is a reasonable possibility. .............

...  Liberals subscribe to these fantasies as a kind of cognitive pacifier, which allows them to relax and feel okay with themselves despite the fact that they’re not actually endorsing any viable path toward justice.

And to be clear this isn’t just what liberals do with regard to Israel-Palestine; it’s their whole entire position on everything. On every issue their position is little more than “Maintain the status quo, but make it pretty and psychologically comfortable for me.” .........



In fact, no evidence of even a single rape.

I noted, repeatedly, that I doubted these rape claims and was correct, as usual.

Now if you believed them you need to think very carefully about why. Every war always includes reports of fake atrocities and this is especially true at the start of the war, in order to gin up support. My “favorite” is that when Iraq invaded Kuwait, we were told that Iraqi soldiers were bayoneting babies in incubators.

Never happened.

Note that the primary purveyor of the mass rape claims was the New York Times, who also were the primary purveyors of fake nuclear weapon scares in the lead-up to the Iraq War.

The New York times is Hasbara from the top, intensely dedicated to Israel and the Zionist project of ethnic cleansing and genocide. I cannot recall any war it didn’t support. It also has a record of intensely political editorial decisions: for example in the 2004 election it decided not to publish revelations of mass spying on American citizens, against the law, because it would effect the election (hurt Bush, help the Democratic candidate.)

If you believe the New York Times without running what they claim thru a common sense filter (do they have reason to lie about this or to twist it?) you’re a fool. This applies to the media in general. .........

If you trust the media, you are a fool. That’s understandable. You were brought up to think that authority figures were trustworthy (even though they’re the ones who do almost all the harm in the world). But at some point you have to grow up and notice that the much of the media is your enemy, just like most corporations, rich people and governments. ...




Nearly 1,000 Palestinians were killed and wounded after Israeli forces opened fire on people surrounding an aid convoy


Palestinian voices have never been more urgent.

.......... As this catastrophe worsens, at this point surpassing al–Nakba in brutality, it is ever more urgent that Palestinian voices are heard. Especially in the United States, which continues to provide billions of dollars in weapons for Israel’s genocide. ......................





‘For Many Ukrainians, It’s Been a 10-Year War, Not a 2-Year One’ headline, The New York Times.

While the Washington Post has long been considered the mouthpiece of the CIA, the New York Times has been more effective at carrying water for it in recent years. The recent longish Times article entitled The Spy War: How the C.I.A. Secretly Helps Ukraine Fight Putin contains  recitation of CIA-friendly talking points that portrays it as indispensable to ‘our’ ability to commit pointless, petty atrocities against Russia as the US  sacrifices more Ukrainians in its misguided war. Missing from the piece is any conceivable reason for the US to continue the war. .................

........... Biden was a known quantity when he was appointed by Barack Obama to be President in 2020. The CIA, acting in league with the FBI, had spent prior years softening up the American public with lies about US foreign policy, lies about American history, lies about Donald Trump and his supporters, lies about their own roles in rigging American elections, lies about the American-led coup in Ukraine, lies about Russian military ambitions, and lies about US plans for the destruction of Ukraine. To be clear, these American agencies weren’t lying to the Russians. They were / are lying to the only people who believe their bullshit--- Americans. ..............

However, this is at best a partial explanation. What is surprising about US foreign policy is how ignorant of world history, US history, basic diplomacy, military tactics, economic relations, and basic human decency the American political leadership is. It’s almost as if the answer to every foreign policy conundrum of the last century has been to bomb civilian populations, kill a whole lot of people, and then pretend it never happened. Vietnam? Check. Nicaragua? Check. Syria? Check. Iraq? Check. Ukraine? How can the body counts be hidden from beleaguered, clueless, citizens so effectively? ...........

The question of why Barack Obama and the CIA appointed Biden to be President in 2020, given his tenuous relationship with ‘our’ shared reality, his long history of not just supporting every bad idea that is run through Washington, but his proposing most of them (see here, here, here), and his apparent ignorance of world history, American history, basic diplomacy, healthcare economics (ACA), industrial policy, and basic canine etiquette, would be a mystery if it were one. Those angry about the US genocide in Gaza need to understand that his willingness to slaughter millions of innocents in US wars is why he was appointed to be President. ..........

As horrific as the US / Israeli genocide in Gaza and war in Ukraine are, anyone paying attention to US foreign policy since WWII would know that this is what America does. ..........

The youth who are in the streets protesting the US / Israeli genocide in Gaza are on the right side of history. But where have they been for the last two years with respect to the US war against Russia in Ukraine? .........

Looking forward, Americans face a tricky proposition with any establishment politician. The questions are: who are they lying for, and who are they lying to? .........



....................... And Russia is still faced with the question of how to secure the neutrality of a rump Ukraine, as in the parts of Ukraine that Russia does not occupy and eventually succeed in having join the Russia Federation. Recall that the process used with the Crimea and the four newly adopted oblasts was a referendum. Having gone that route twice, any other way would look illegitimate. Putin also said at the very start of the SMO that Russia did not want to go where it was not welcome. He and likely the rest of the Russian leadership does not intend to garrison hostile territory; it’s costly and corrupting. ........


***** Malinen: The Endgame, Part I
The Russo-Ukrainian War And Geopolitics Of Europe

In early February, I posted a poll on X asking whether I should write a geopolitical piece on the Russo-Ukrainian war, adding to my series mapping a worst-case scenario for the war. While the vote count for this particular poll was not very high, an overwhelming majority supported this notion.

Before conducting the poll, developments in Ukraine in December and January had led me to ponder the outcome, or endgame, of the war. In September 2022, I had established an alternative to the western narrative of the war, spewed relentlessly by our media. In it, I argued that
  • Ukrainian losses are massive, passing Russian losses possibly 5-10 times.
  • The Russian army has not collapsed, but it may have become the strongest it has been since WWII.
  • The West (NATO) is fighting a proxy-war in Ukraine with the possible aim of regime change in Russia.
  • Russia is about to create a war-machine not seen in Europe for a very long time, which it could use to unleash a devastating attack against Ukrainian (NATO) forces during the winter.
In late-October 2022, I also noted that:
The massive force Russia is amassing and the all-but-halted progress of Ukrainian forces, tells me that we are most likely approaching a turning point in the war. In the worst case, this implies that Ukraine has already lost. Even in the best case (excluding peace) this means that the war will drag on and become a resource race between NATO and Russia.
Now, essentially all of this, except the Russian winter-offensive (2022/23) have been proven true. Ukraine has effectively lost the war, or a least she cannot win it in any plausible scenario. Just a few days ago, French President Emmanuel Macron attempted a game-changer, by “not ruling out” NATO boots in Ukraine. This, unsurprisingly, led to a strong backlash both from European allies and the Kremlin, but the idea of direct NATO involvement in Ukraine had been floated. Yet, we already know that western soldiers have been in Ukraine for some time and now we also know that NATO has been providing both operational and intelligence support for Ukraine for some time.

Anyone who understands anything about the ‘power politics’ in Europe knows that radical new developments will be first proposed by some party/parties only to be shot down by other political leaders. However, after this initiation, the proposal keeps appearing in newspaper articles and comments by political leaders, which slowly turn from condemnation to neutrality and further to (reluctant) acceptance. This is why all of us concerned about pan-European security should be extremely vigilant concerning the plans of European political leaders and the elite. The analysis presented in this piece further amplify these concerns by showing that the motives of NATO in the Ukrainian conflict are unlikely to be benevolent for the European populace. ............

Yet, the decisions and actions, or “errors”, NATO has made in the Russia-Ukraine war, can only be plausibly explained with two scenarios. The first one is that NATO leadership is highly erratic, while the other is that NATO is not an “defense alliance”, but an aggressor. Both of these have dire implications for the security structure of Europe. ............

The wars fought by Russia and the U.S. over the centuries, shows their power politics rather clearly. The difference between the two is that, while Russia has mostly fought wars close to its borders, the U.S. has waged wars, practically, across the globe. ...........

Purely from economic premises, the idea of Russia engaging in a war of invasion in Europe is preposterous!  ..........

Alas, it appears that NATO operates with two faces. Publicly it's a defense alliance, responding to the threat of Russia. Yet in the background, it is sowing the seeds of conflict, and flaming them by deliberately over-stepping the red lines of its main rival, Moscow. This leads us to the first scenario, i.e. to erratic NATO. ..............

 If we observe all the “erratic” decisions and actions by NATO for the past 30 years, it’s hard to conclude anything else than that the Deep State seeks a direct confrontation with Russia. What could be the catalyst for this?

Russia holds vast mineral resources, estimated to total between $75 to $90 trillion. .........



............... Moreau perfectly understands how Ukraine, nearly 10 years after Maidan, is not a nation; “and has never been less than a nation”. It’s a territory where populations that everything separates are jumbled up. Moreover, it has been a – “grotesque” – failed state ever since its independence. Moreau spends several highly entertaining pages going through the corruption grotesquerie in Ukraine, under a regime that “gets its ideological references simultaneously via admirers of Stepan Bandera and Lady Gaga.” None of the above, of course, is reported by oligarch-controlled European mainstream media. ...........



....................... Just like other powers, as a rule Russia does not reveal its intelligence capabilities. The release of the transcripts was extraordinary.  For that reason, it is safe to say that President Putin in his speech was sending a clear message to Washington, Berlin and Brussels that there can no longer be hiding behind the skirt of proxy war and legalisms, that they will pay the price for any attack on Russia which nominally is made by Ukraine using Western long-range weapons


We must take a stand or let our children fall, it's that simple.

.......................... What G. W. Bush had revealed to Beck and what Liz Truss discovered when she got to the top of the tree, has been the defining feature behind our “democracies” for a very long time. Former British Prime Minister Benjamin Disraeli said in 1844 that, “The world is governed by very different personages from what is imagined by those who are not behind the scenes.” Sir William Pitt, Prime Minister in 1770 said that, “There is something behind the throne greater than the King himself.”

........................ In his 1965 book "Tragedy and Hope," Carroll Quigley warned us that, “The powers of financial capitalism had [a] far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. … The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and direct injury of all other economic groups.” That world system of financial control is what's today being promoted as the "rules based global order." 

In particular, the banking interests appear to be the key movers behind the perpetual warfare we are witnessing today. The better we understand the way the systems work, the more the saying, "all wars are bankers' wars" rings true. .....................

The vast majority of Ukrainian people were in favor of peace and normalization of relations with Russia. Yet the powers behind the throne determined otherwise and were able to sacrifice half a million young Ukrainian men and destroy the lives of millions. ......

Unless we accept that in the near future our children also be sacrificed for bankers’ pursuit of Russian collateral, we need to shine the spotlight at those behind the throne who are pulling the levers and pushing us into war. It is our duty today to push against them with all our might, creativity and determination. Anything short of that risks turning more European nations into what Ukraine is today. And no, it has never been about democracy nor about freedom. It is strictly about banking and about the collateral. ...........


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Other Fare:

What does it mean that a half-hour spot on your calendar a few weeks away is such a rare and valuable commodity?

.......... in the past few weeks I’ve had a couple things that temporarily exploded my calendar. (My dad died in hospice, which was and is inevitable and horrible and full of grief. Of course everything on my calendar evaporated into inconsequential for some period of time. Which also if you’re wondering why this newsletter has been quiet, now you know why.) I should point out that absolutely everybody in all of my realms have been supportive and understanding. Also, even though I cancelled some important professional travel, some other highly necessary travel popped up. Now that I’ve recently returned to work, I realize that for several months my calendar will be experiencing adverse repercussions of this unscheduled bereavement leave. I think it says… something… that being unexpectedly pulled away from work for a week and a half can cause so much long-term tumult. ............

......... It’s not just that universities are expecting so much of us. We are expecting so much of ourselves. How often do I interact with trainees who want to do all the things that their mentors are doing, and even more on top of that. How did this come to be?

Here is one hypothesis: Some folks are very high achievers, and generation after generation of high achievers has resulted in an extremely elevated bar. ...........



Pics of the Week:




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