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Sunday, March 17, 2024

2024-03-17

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

Economic and Market Fare:

Nearly everyone has given up on their recession call, and that makes the outlook 'dangerously reminiscent' of 2007, SocGen says

....... Edwards, who has warned previously that the US faces a decent risk of a recession, pointed to several indicators of a coming downturn that are flashing in the economy.

While GDP and jobs growth look resilient on the surface, the Chicago Fed's National Activity Index, a broad gauge of economic activity, actually shows that economic growth has been below 1% for at least the last six months, he noted.

Meanwhile, employees, especially high earners, are feeling less confident that they'll be able to get a new job ........

The labor market has also been signaling flat growth for nearly a year now, Edwards said, citing household employment surveys from the National Federation of Independent Business. That's a strong sign there "may be trouble ahead," and views of a strong US economy could be at risk of "collapse," he warned.

Those signs appear lost on many other market commentators, who have dialed back their recession views in the last few months. ......


Hope springs again that the Bank of Japan will raise policy rates and finally end the deflationary era.
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.......... In the theory of efficient markets, where economic actors are presumed to be rational beings (measured objectively), this discrepancy shouldn't occur. If markets indeed possess perfect information, as most economic theories propose, then worsening fundamentals should translate into falling asset prices, and improving fundamentals should lead to rising prices.

However, this overlooks that human actions are not solely dictated by objective rationality; emotions play a significant role. Furthermore, it's unsurprising that asset prices, including those in financial markets, are influenced by narratives.

Narratives significantly influence price discovery and shape market participants' expectations. Compelling narratives, a phenomenon well-known in the entertainment industry, heavily sway people ...........

....................................... The sharp decline in small businesses' hiring plans historically indicates potential labor market weakening ahead. Presently, initial jobless claims do not indicate any signs of mounting stress. However, the discrepancy between initial claims and small businesses' hiring plans warrants close observation in the coming weeks.


The labor shortage experienced in 2023 prompted businesses to invest in labor-saving technology, yet capital spending remains subdued. Overall, investment activity is contracting, with businesses scaling back their plans for further capital outlays. The report underscores that long-term investment spending will remain tepid as long as business sentiment remains subdued.

Moreover, more businesses reported lower nominal sales, with a net negative of 13%, while a net negative of 10% anticipates reduced sales in the future, reflecting prevailing pessimism. Additionally, the report indicates a rise in excess inventory. Plans to increase compensation hit their lowest level since March 2021, and businesses cite persistently challenging borrowing conditions due to elevated interest rates, with the average short-term rate at 8.7%.

Regarding inflation, fewer owners intend to raise selling prices ........

At this juncture, one could analyze various sub-indices of the CPI to argue either that the Fed is on the brink of a significant error or that inflation is already yesterday's news. However, in my opinion, both perspectives can overlook the broader context. While it's true that the "super core" services CPI reflects an uncomfortable increase for the Fed, it's also true that the shelter component within the index lags behind market prices and is expected to decline in the months ahead.

Nonetheless, as I've emphasized in previous discussions, sustainable changes in the general price level are better assessed by examining past shifts in money supply and money demand. Both factors do not indicate a re-acceleration of inflation, as money supply growth has slowed and even turned negative, while money demand appears relatively stable. .............

I sense that the prevailing narrative of a "soft landing," or even a "no-landing," reinforces this scenario. The question arises: what transpires when the economy shows signs of weakening, considering that strength appears already priced in? In such a scenario, we might witness a shift from stocks to bonds and a significant short squeeze in the bond market, accompanied by a change in the narrative and possibly a new round of central bank easing akin to previous crises.

While one should never say never, a sustainable uptick in inflation and interest rates seems improbable here. The same holds for sustained economic strength, particularly one fueled by traditional Keynesian deficit spending. Should the prevailing market narratives shift, they could be impacted profoundly, akin to a hurricane.


Nobel Laureate economist Angus Deaton has delivered a ferocious rebuke to his own profession, saying economists have failed to understand that capitalism is about power.

Angus Deaton is the economic doyen from central casting. The bow-tie-wearing econometrician was born in Scotland, did a PhD at Cambridge and has been at Princeton for the last 40 years. He’s currently the Eisenhower Professor of Economics and International Affairs Emeritus. He won the Nobel Prize for Economics in 2015. And he’s just dropped an almighty bucket of shit on his entire profession.

Where Deaton published it is almost as interesting as the contents: at the International Monetary Fund, that institution once seen as the standard-bearer of neoliberal orthodoxy, but which has in recent years developed a curiosity about the real-world impacts of the hardline policies it once imposed upon or prescribed to countries.

Deaton lobs a series of truth bombs at his own profession, the result, he says, of “changing my mind, a discomfiting process for someone who has been a practising economist for more than half a century”. These include:
  • “We have largely stopped thinking about ethics and about what constitutes human well-being”.
  • If “economists should focus on efficiency and leave equity to others, to politicians or administrators… the others regularly fail to materialise, so that when efficiency comes with upward redistribution — frequently though not inevitably — our recommendations become little more than a license for plunder”. 
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Quotes of the Week:

Howard Marks: "There's no asset so good that it can't be overpriced and become a bad investment, and very few assets are so bad they can't be underpriced and be a good investment."


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(not just) for the ESG crowd:

As airborne methane surveys of oil and gas systems continue to discover large emissions that are missing from official estimates1,2,3,4, the true scope of methane emissions from energy production has yet to be quantified. .....


Study highlights effect of aerosols over Asia on Atlantic Meridional Overturning Circulation




Geopolitical Fare:

The State of the Union address exemplifies everything that is wrong with this country. Trivialities are spun as being important, the most serious issues are glossed over, and lies are said to be true. The state of the union is one of failure.


In her powerful speech at ‘Still We Rise’, Naomi Klein argues that global political classes are united behind a shared supremacist vision in their defence of Israel’s crimes

............... In your country as well as mine, there is no moral leadership except the leadership rising up from the grassroots. All we have is one another.

We should pause over this, because it is part of the horror and vertigo of our historical moment. Israel’s annihilatory campaign in Gaza is not the first genocide in modern history. Not the first time openly fascist forces have fused a violent, supremacist ideology with a seemingly limitless commitment to wipe out a people they consider a demographic threat.

The distinctive unity of the global political elites

What is unique, at least since the era of open colonialism and its genocides, is the unity this carnage has inspired among political elites in the Global North, and to some extent beyond it. After all, when fascism rose in Europe the 1930s, it had powerful supporters in our political classes, but it also had powerful opponents.

That is far less true today. All across what passes for a political spectrum, from the rabid far right to the mealy-mouthed centre left, we have witnessed powerful actors putting their partisan differences aside to come together in active support of these crimes against humanity .......................

................ This belief system, more than anything else, helps explain why the governments of the wealthy world have joined Israel’s revenge frenzy with such unshakable enthusiasm, and why so many have refused, months into this slaughter, to even call for the barest of minimums: a permanent ceasefire. .........

‘What we see in Palestine will also be the suffering in the world of all the peoples of the south [as] the West defends its excessive consumption and its standard of living based on destroying the atmosphere and climate… knowing that it will cause the exodus from the south to the north’.

This system, Petro reminds us, ‘is ready to respond with death’ to ‘defend the consumption bubble of the rich on the planet and not save humanity, whose majority is disposable, like the children of Gaza’. ........



A bill stating that TikTok must divest or sell TikTok or stop operating in the US has passed.

Commenter KT Chong pointed out the stakes for China and the US
This ban is NOT just about protecting America from China. TikTok has global reach OUTSIDE the US. TikTok is a most popular app in over a hundred countries in the world — including in the Global South where China’s influences are steadily rising while US is facing increasing hostility due to the US complicity in Israel’s genocide of Palestinians in Gaza and ethnic cleansing in West Bank. Once the US gets its hands on TikTok, the US government will definitely use it to spread anti-China and pro-US propaganda. That is the true purpose of forcing Chinese to sell TikTok to the US, so that that US can seize/steal a most popular media tool and then use its global influences against China. I would rather TikTok just gives up its US market (i.e., banned in the US) than to hand over its global influence to the US government.
.... I will point out that TikTok has been notorious or famous, depending on your view, for contradicting US propaganda on many issues, most recently on Palestine. The videos are often savage, and make politicians look like fools in a way that is much easier to do in video than with writing or audio only, and they are seen by millions. ....



........ Saying TikTok must be suppressing pro-Israel content because pro-Palestine content is more popular is like saying they’re suppressing flat earth content because round earth content is more popular. Pro-Israel content is just less popular in general, which is why the gap is the same on Facebook and Instagram.

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The US government is like “No no it’s not censorship, we’re just using state power to ensure that popular speech platforms are only allowed to exist if they can be controlled by US government agencies.”

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Israel has done so much fucked up shit in the last few days we’ve already forgotten the news that they literally tortured UN staff to extract false statements about UNRWA having Hamas connections.

They. Tortured. UN. Staff. If we had anything remotely like objective news reporting in the western press, this would have been the top story everywhere for days.


The Gouzenko Affair was always a lie... and here's why

Today, a vast array of citizens living in the Trans Atlantic community are being led to believe that the enemy of the free world who lurks behind every conspiracy to overthrow western governments and undermine “liberal values” is…China.

While the left has been fed with four years of propaganda designed to convince them that the enemy of the west has taken the form of the Kremlin, the conservative consumers of media have been fed with the narrative that the enemy is China.

The reality is that both Russia and China together have a bond of principled survival upon which the entire multipolar order is based. It is this alliance which the actual controllers of today’s empire wish to both destroy and ensure no western nation joins… especially not the USA. .........



The decision to induct Finland and Sweden into NATO’s collective suicide pact shouldn’t come as a huge surprise to anyone who has been paying attention to the growth of Nazism over the past 78 years.

Not only is this growth taking the form of a renewal of swastika-tattooed, black sun of the occult loving, wolfsangel-wearing Azov, C14, Svoboda and Aidar neo-Nazis in Ukraine today, but a whole re-writing of WWII history which has taken an accelerated dive into unreality during the 30 years since the Soviet Union collapsed.

Across the spectrum of post Warsaw Pact members absorbed into NATO such as Lithuania, Estonia, Albania, Slovakia, and Latvia, Nazi collaborators of WWII have been glorified with statues, public plaques, monuments, and even schools, parks and streets named after Nazis. Celebrating Nazi collaborators while tearing down pro-Soviet monuments has nearly become a pre-condition for any nation wishing to join NATO .......



...................... We live in a very sick and crazy society, and if you’re not conscious and selective about how you interact with every facet of it you’ll inevitably get swept up in the sickness and craziness yourself. Health and wellbeing are still possible within the framework of our present dystopia, but you need to hold every part of it at arm’s length and examine it with a critical eye before taking it in.

This civilization is not your friend. Hopefully someday we’ll live in a civilization whose component parts we can trust, but this civilization is rife with poison for our bodies, our minds, and our hearts. And we need to conduct ourselves in accordance with this reality if we want to be healthy.



Sci Fare:

Depending on where we look, the universe is expanding at different rates. Now, scientists using the James Webb and Hubble space telescopes have confirmed that the observation is not down to a measurement error.


Why We Search for Silver Linings
A tendency to reframe negative events may be embedded in our neurobiology.



Other Fare:


............. Needless to say, that translates into a dim view of government and the mainstream media.

Nowhere does the article mention climate change as a cause for dejection among the young, including the better off. I know people a generation behind me who struggled over the decision to have kids: “Do I want to bring them into a world that could be coming apart societally? Do I want to contribute to more consumption by having offspring?” I’d imagine that that concern is even more prevalent among young adults.

We’ll highlight some of the critical finds in the article, such as the confirmation that TikTok is very important to the young. The proposed ban is providing them with yet more confirmation that the government does not care about their needs. The story dances around the idea that the bill to ban or force the sale of TikTok might be significantly about censorship, to curb their ability to confirm with each other how bad things are, as in how authority has failed them. Of course, since we live in the best of all possible worlds, any such thinking must be the result of Chinese trouble-making, as opposed to their experience. ...............


On the evolving landscape of psychedelic drugs in medical applications.


  • Unregulated advisers employ ecstasy, ketamine despite pitfalls
  • ‘Psilocybin helps me be a better leader,’ one consultant says



Pics of the Week:

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