***** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
The price action in equities and Treasuries over the last 24 hours shows a strong shift towards a recession regime, which is when volatility expands and both equities and yields go down. My bullish call on equities and crypto on Monday was poorly timed. I was right for about a day - risk appetite improved following Powell’s FOMC statement and confirmation that rate cuts are coming. However, the following day saw two worrying data points - jobless claims came in at a high in the economic cycle of 249k, well above the 236k expected, and the ISM manufacturing employment index came in at 43.4, well below expectations and at levels consistent with inflation. The S&P 500 proceeded to fall sharply afterwards and Treasuries rallied violently, led by the front end of the curve.
We have been getting weak prints like this throughout the last three months and they haven’t resulted in such a strong market reaction. My theory about why the market reacted like this is that larger institutions that trade on a medium to long term time from (think pension funds and sovereign wealth funds) have been patiently waiting for the Fed’s easing cycle to begin. Most have been sitting in Tbills and holding out on moving out into the maturity curve. We are likely seeing a tipping point where larger institutions are collectively positioning for an economic recession and a deep Fed cutting cycle. How deep? Every previous recession has required real interest rates to go negative in some part of the curve (usually the front end at the very least) to ease financial conditions enough to recover. With CPI at 3.0% and core PCE at 2.6%, this means a Fed funds rate or terminal rate at 2-2.5%. If the US economy is indeed tipping into recession, the Fed would need to act swiftly and deliver these cuts within the next 2-4 quarters. This means a terminal rate of 2-2.5% by the middle of next year .....
***** The Sahm Rule, Employment, And Recession Indicators
................ So far, the economy has defied recessionary expectations. That was due to the flood of monetary stimulus from the Inflation Reduction Act and the CHIPS Act and a surge in deficit spending, which supported economic growth. However, that expenditure surge has now peaked and turned lower, dragging on economic growth in the future. ...........
While there may not be any indication of a recession in the next 12 months, according to mainstream economists, it is likely worth paying attention to what is happening in employment since nearly 70% of economic growth is derived from consumption. The “Sahm Rule” is another essential indicator suggesting that underlying economic weakness is more significant than the headlines suggest.
Sure, this “time could be different.” The problem is that, historically, such has not been the case. Therefore, while we must weigh the possibility that analysts are correct in their more optimistic predictions of a “soft landing,” the probabilities still lie with the indicators.
While the LEI and inverted yield curves suggest that the “conditions” for a recession are present, the “Sahm Rule” and measure of full-time employment tend to be the “evidence” of one.
Of course, this is probably why the Federal Reserve is pushing to cut rates even though inflation remains well above its target.
Charts:
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Our Coincident Employment Index contracted after the July NFP report.
— Eric Basmajian (@EPBResearch) August 4, 2024
The EPB Coincident Employment Index is a basket of 5 critical labor variables.
-0.1% is far from definitive, but we've never seen a sustained negative growth rate outside of a recession. pic.twitter.com/II5F6PR5uy
(not just) for the ESG crowd:
It wasn't just scientists who were worried, but Congress, the White House, and even Sports Illustrated.
The Sustainable Development Wish List Amid Global Challenges
A shared hallucination or a perfect global dream. Writing about SDGs feels a bit like that. A global vision without execution in a fractured world that is becoming more militant and violent every day. A magnificent idea supported by, at least on paper, governments and corporations around the world. We need to be realistic about the world’s global challenges and bold enough not to use them as an excuse for cynicism. The SDGs are a bit of a global wish list. Adopted in 2015, these goals, the SDGs, were meant to plot a course to curing 17 of the most fundamental ills afflicting human society and the planet. ............
A shared hallucination or a perfect global dream. Writing about SDGs feels a bit like that. A global vision without execution in a fractured world that is becoming more militant and violent every day. A magnificent idea supported by, at least on paper, governments and corporations around the world. We need to be realistic about the world’s global challenges and bold enough not to use them as an excuse for cynicism. The SDGs are a bit of a global wish list. Adopted in 2015, these goals, the SDGs, were meant to plot a course to curing 17 of the most fundamental ills afflicting human society and the planet. ............
Geopolitical Fare:
In the last few days Israel has assassinated leaders in multiple neighboring nations, assassinated multiple journalists, deliberately destroyed a water facility in Gaza during a polio outbreak, and had riots defending the right of IDF soldiers to rape Palestinian prisoners. Clearly the sort of country we should all want to send our sons and daughters to go fight and die for.
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Western officials are always babbling about Israel’s “right to defend itself”, which sparks all kinds of debates about whether an occupying force does in fact have a right to defend itself under international law. What these debates overlook is the fact that Israel ISN’T “defending itself”. It’s pure offense. Pure attack. Israel is always the aggressor.
Israel is never “defending itself”, and the US is never “defending Israel”. Both of these nations exist in a constant state of attack and aggression, which is then framed as “defending” by propaganda spin.
The US sows violence and division in the middle east as a matter of policy. Israel’s very creation was an act of aggression upon the people this apartheid ethnostate was dropped on top of, and it has been the aggressor ever since. Other nations and groups in the middle east have been defending themselves against those aggressions. They are the only parties in all this who can claim to be “defending” anything.
Even measures which appear inherently defensive in nature like the “Iron Dome” and the missile and drone interceptions we saw this past April during Iran’s retaliatory strikes are not defensive the way Israel and the US use them, because they are used to protect Israel from the defensive measures of the people Israel is attacking. A Kevlar vest ceases to be a defensive measure when you use it to keep from being stopped by police while conducting a mass shooting. A shield stops being a tool of defense when you’re using it to make sure you can stab someone with your sword. They’re just measures taken to facilitate more Israeli aggression by removing the deterrence and defense capabilities of the people it’s attacking. ........
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There’s a song “Expert In A Dying Field” by a band out of Aukland called The Beths, and every time I hear it I find myself thinking “God I hope that’s me someday.” I hope someday to live in a world where all this information and insight I’ve gathered about imperialism, tyranny and abuse is obsolete.
I long to be an expert in a dying field. Where nobody needs to know what lies are being marketed in Washington or who’s killing who in the middle east, because none of that’s happening anymore and everyone’s just getting along and being happy. Where the finer points of imperial propaganda manipulation are no longer relevant to the world we live in, because there is no imperial propaganda machine, and there is no empire. Where any information about what wars we’ve been deceived into is rapidly becoming as trivial as information about wars fought by long-dead empires in ancient history. Where there’s no longer an urgent need to awaken from our propaganda-induced coma and overthrow the power structures which are killing our biosphere and threatening all terrestrial life with nuclear brinkmanship, because the great uprising has already occurred. .........
People often object to criticisms of Israel’s ongoing mass atrocity in Gaza by saying, “Well what SHOULD Israel have done in response to October 7 then?” They say it like the question should confound you, as though it’s some kind of thought-terminating unanswerable Zen koan or something.
But it isn’t. The question is very answerable, and the most correct answer is that Israel should have done what it always should have done: right the wrongs of the past and make peace.
October 7 was entirely a response to generations of abuse against the Palestinian people by the state of Israel, so the correct response to it would have been to heal those abuses in a way that is agreeable to the Palestinians. ............
As Ukrainian Defenses Collapse, What Can US Patriots Learn From The Conflict?
Sci Fare:
A year ago mainstream analysts said Ukrainians troops (with NATO’s help) would soon destroy the Russian military and party on the beaches of Crimea. Today, the establishment admits manpower shortages are a reality and they admit Russia is overrunning Ukraine’s defensive positions all over the front. Soon, Russia will control the entirety of the Donbas region and beyond using attrition warfare.
The “experts” have no idea what they’re talking about, or, they’re lying to the public on purpose. Either way their opinions are not to be trusted. ............
.......... The “other”, the immigrant, is always an easy target. The actual villains are the UK’s ruling class and if violence is the method then the correct response would be to Bastille them, but people are rarely capable of understanding that their most profound enemies are those who rule them. Putin is not a significant danger to Americans or Brits: their own politicians and corporate leaders are responsible for their poverty, increasing death rates, sickness and homelessness.
If you want a good country again, figure out a way to replace your leadership class wholesale.
Sardonicky: Follies of the Oligarchs
.......... To hear the mainstream edia tell it, millions of disaffected and younger voters will pivot to the Democrats, all because Walz has so folksily described the Republicans as "weirdos." How cool is that? It's so much more down-to-earth than the party's failed message of calling Trump an existential threat to "democracy."
It is designed to make the electorate forget all about such existential threats as both political parties being in full support of World War III, most notably of Israel's continued genocide of Palestinians and its provocations of Iran and Lebanon. So if the Democratic side of the duopoly can only put a folksier face on murder and misery, they will manufacture the consent of US citizens. ................
It's time to cure ourselves of the notion that any politician will ever save us. It's time to stop identifying ourselves as mere consumers and spectators rather of as active citizens and iindependent thinkers.
Sci Fare:
........... It doesn’t really take a genius, to understand what went wrong. You gave everyone a vaccine, that already began to fail in the summer of 2021.
That’s when you should have figured out something went wrong. You shouldn’t be looking at this three years down the road, scratching your head, puzzled by what went wrong.
It was obvious you made a mistake, back in 2021. That mistake is still with us today.
This vaccine triggered an abnormal adaptive immune response, that is very vulnerable to the effects of genetic mutations to the virus. The virus struggles to overcome natural immunity through mutation, whereas the adaptive immune response induced through vaccination with inactivated (non-live) vaccines is relatively simple to overcome. ...........
............... We screwed this up of course. We caused most of the human race, to deploy the wrong antibodies against this virus: IgG2 and IgG4 antibodies, that have a very short bridge, of just 12 amino acids. When their bridge is so short, the antibodies can not tie different proteins together to pull the whole virus particle out of its proper shape and destroy it.
The unvaccinated still appear to have the IgG3 antibodies that the body naturally deploys against the Spike protein of this virus, the only antibody that offers strong neutralization of a viral particle. ..............
Unfortunately, as long as everyone keeps getting reinfected, because people don’t have a proper immune response that is variant-independent, the virus just keeps evolving to get better at avoiding people’s antibodies. ............
It’s a very logical consequence, of a failed vaccination campaign.
Three years after the failure of their vaccination campaign, the virologists are now starting to realize something is going wrong and publicly admit it.
But as long as no attempt is made to repair people’s immune response, we’re stuck with a very awful situation.
It’s not just the vaccinated, who are constantly getting re-infected by this virus. It’s also a problem for the unvaccinated, who are constantly being exposed to it.
You don’t need to be a genius, or have a crystal ball, to figure this out. You just need to be able to tie the different lines of evidence together.
All I’m asking for, is that they just admit that they screwed it up and killed a bunch of people by screwing it up. Then the world can start working on a solution.
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