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Sunday, September 15, 2024

2024-09-15

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


Economic and Market Fare:


This August, Federal Reserve Chairman Jerome Powell delivered his annual address to top central bankers and economists, sparking what Bloomberg described as an ‘all-conquering Wall Street rally’. The reaction was in stark contrast to that which met his last two speeches at Jackson Hole. In 2022, a contrite Powell accepted he had been wrong about the recent bout of inflation being ‘transitory’ and committed to continued interest rate rises; in 2023, having raised rates to almost 5.5%, he announced they would have to stay ‘higher for longer’. On both occasions, markets plummeted.

This year’s rally appeared to rest on three claims: first, that inflation was ‘on a sustainable path back to 2%’, which meant it was ‘time for policy to adjust’; second, that while the labour market had ‘cooled considerably’, this was not because of ‘elevated layoffs’, as in a downturn, but rather ‘a substantial increase in the supply of workers and a slowdown from the previously frantic pace of hiring’. The Federal Reserve’s ‘dual mandate’ to keep inflation low and employment high therefore required it consider lowering rates in order to maintain a strong labour market. Of course, Powell cautioned that ‘the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks’, but the overtones of his speech were clear: that he had won the fight against the inflation and effected a near impossible ‘soft landing’, stopping the economy from overheating without causing a downturn. Should we believe him? ..................

........... What of his claim to have achieved a ‘soft landing’? There is equal reason to be sceptical. On the one hand, adverse jobs data suggest that a recession could still be looming. On the other, if interest rate cuts manage to prevent a recession, this leaves the door open to continuing inflation and ‘no landing’ at all. Raising the curtain on neoliberalism in 1979 with historically unprecedented rate hikes, the Federal Reserve has since, by nursing successive asset bubbles, deprived itself of the ability to use the only anti-inflationary weapon in its arsenal. Having arrogated to itself responsibility for managing the economy, it has now proven unable to do so.


The goal should be getting to "neutral" as quickly as possible. Since no one knows where that is, optimal policy should consist of moving down quickly while preserving the option to correct later.

Federal Reserve officials believe that it is time to start lowering short-term interest rates. But they are unsure of how rapidly to do so, even though they told us in June that they broadly agree that short rates should drop by about 1.25 percentage points by the end of 2025 and by more than 2 percentage points by the end of 2026.

My suggestion: they should lower rates to their best estimate of “neutral” immediately, while remaining willing to raise rates rapidly again if that estimate turns out to be too low. This approach may lead to substantial interest rate volatility, but it also reduces the risk of meaningful policy errors. By contrast, the “gradualist” approach that seems to be most officials’ current preference is much more likely to lead to a mistake—in either direction. ..............

Moreover, the risks are asymmetric. If rates go “too low”, they can always be raised again. But if rates are too high for too long, the resulting damage could be difficult to repair even if the Fed eventually responds as the textbooks recommend. The great reopening from the pandemic was the only time that the U.S. job market snapped back quickly from a drawdown. Normally, it takes many years for employment rates to fully recover even from “mild recessions”. ........


Plotting the change in Federal Reserve interest rate policy before and after a trigger of the Sahm Rule.

.......... The Sahm rule was triggered in the July Employment Situation Report. Historically, the Sahm rule has been a slightly lagging indicator, meaning the trigger dates occur after a recession has already started.

In this post, we won’t address whether a recession has started or not but rather look at historical changes in the Federal Reserve's interest rate policy around historical Sahm rule trigger dates. ..........

If we follow the more modern, non-inflationary historical path, which I think is appropriate, we can see on the left chart that the Fed is behind the curve.

The right-hand chart shows the path of inflationary recessions.

If we take the average of 2008, 2001, 1990, and 1960, the Fed Funds rate is down about 200bps when the Sahm rule is triggered.

This implies the Fed should have the policy rate at 3.5% today. 







China Fare:






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(not just) for the ESG crowd:

A flawed energy strategy means our country now has to import electricity

In its monthly update on energy trends, Statistics Canada reported this week that this year, for the first time ever, Canada has become a net importer of electricity. The switchover in our electricity trade balance reveals the shortcomings of an energy strategy that now emphasizes decarbonization over energy security, leaving customers vulnerable to supply shortfalls and higher prices.

Traditionally, Canada has generated surplus electricity that it has exported to the U.S. But in April total electricity generation was down 6.9 per cent from a year ago, continuing a trend that began earlier this year. The decline is the result of droughts across much of the country that have curtailed hydroelectric generation as well as planned maintenance at nuclear stations.

Hydro and nuclear account for just over two-thirds of all electricity generation in Canada. Hydro contributed 26.0 million megawatt-hours (MWh) and nuclear 5.2 MWh of the total electrical production of 45.7 MWh in April. With hydro and nuclear power generation falling at home, we had to import 2.6 million MWh from the United States in April, while our exports plunged a whopping 64.4 per cent to 1.7 million MWh. .........

.... As former Ontario cabinet minister Dwight Duncan observed at a recent conference on energy policy, Ontario and Quebec have the highest energy demand in the world because of peak demand in both winter and summer. But there is a disconnect between Canada’s ambition to electrify our power grid and our reluctance to expand electricity capacity. Electrifying our homes and vehicles while using energy-hungry technology implies a massive increase in our electricity consumption. 

Only recently have governments begun to realize projected electricity demands far exceed supplies. That is why Ontario and Quebec recently announced ambitious and expensive plans to boost generation. Ontario is expanding and refurbishing its extensive network of nuclear plants. .........



Yves here. I imagine readers will take issue with this post, analytically and practically. Let’s start out with the lack of authority economists have to discuss climate change analyses, given their acceptance of the destructive work of William Nordhaus, appallingly legitimated by giving him a Nobel Prize. The authors are on extremely thin ice in criticizing the caliber of degrowth studies in light of how they’ve celebrated appalling poor studies that fit their preferences. Steve Keen is good one-stop shopping for an evisceration of his claims.

This article pointedly ignores the lack of any solutions to our accelerating climate change crisis that are remotely adequate to the scale of the problem. It also takes the position that the needs of the economy take precedence over the future of the biosphere and the intermediate -term survival of something dimly representing modern civilization (we are likely past that being an achievable outcome, but it should at least be acknowledged as an aim). And it also implicitly ignores that absence of evidence is not evidence of absence. .............




Now that the election is closer and the Democrats have switched out Biden for Harris, I feel like I should reiterate my position that you’re not actually punishing the Democrats if you refuse to vote for them in November. I often see people talking about making the Democratic Party pay a price for Gaza and for ignoring calls from progressives to end the genocide, but it doesn’t actually work that way. They don’t care.

They don’t care if you don’t vote for them. They don’t care if they lose. Their political careers will be fine either way.

It’s entirely okay and legitimate to not vote for Democrats, but don’t let that act dupe you into thinking your vote matters. It doesn’t matter how you vote, and it doesn’t matter how you don’t vote. The US power structure is set up to be completely unaffected by voters. Acting like you could teach the Democrats a lesson by refusing to vote for them only feeds into the illusion that voting matters inside a power structure that has been deemed too important to be left to the hands of the voters.

There’s a viral tweet from Glenn Greenwald going around that says “The US has no functional president and has not had one for months, and it’s barely noticeable and barely matters because there’s a permanent unelected machine that runs the government.” ..........



It was Kamala Harris For the Oligarch People all the way on Tuesday night.  With taunt after taunt, platitude after platitude, she utterly destroyed Donald Trump's portrait of her as a Marxist Commie radical. Beyond any reasonable doubt, she established her right-wing cred as both a neoliberal and a neoconservative.

It has taken gallons of the recombinant political DNA of Dick Cheney, Barack Obama and both Clintons to create the ultra-processed finished product known as Kamala Harris.



The presidential debate sucked and they were both horrible, but Harris clearly came out looking more coherent and in control. In other words, Harris did what anyone debating Trump should have been able to do on day one. The fact that it’s taken three whole election cycles to see a candidate dominate Trump in a basic presidential debate shows what braindead morons the Democrats have been serving up all these years. 

As a debater, she did her job. As a presidential candidate, she showed why so many warmongering Republicans have been so eager to support her. She showed that she’s a Republican with pronouns in her bio, talking about how tough she’s going to be on China and how much she loves fracking and oil and Israel and how many Republicans have endorsed her and her policies. 

This is what the “left wing” looks like in the world’s most powerful government. US politics is so intensely stupid. ...............

❖

“If you’re anti-war than why don’t you support Trump?”

Because I fucking paid attention when he was president.

I watched the warmongering and militarism rolled out by his administration instead of mindlessly ingesting right wing media like a drooling idiot.

I watched the evil things he did in nations like Yemen, Venezuela, Iran and Syria.

I watched him ramp up cold war aggressions against Russia and pave the way to the war in Ukraine.

I watched him assassinate Soleimani and shred the Iran deal.

I watched him lock up Assange.

I watched him veto attempts to save Yemen.

I listened to him say he’s keeping troops in Syria “to keep the oil”.

I watched him starve Venezuelans to death while staging the most transparent foreign coup attempt in history.

I watched him appoint bloodthirsty PNAC neocons like Elliott Abrams and John motherfucking Bolton to high positions within the US murder machine.

I listened to Mike Pompeo say they’re squeezing Iranian civilians with starvation sanctions in the hope that it will spark a civil war.

I listened to Rex Tillerson brag about boats full of dead North Koreans washing up on Japan’s shores because US sanctions had successfully starved them to death.

I watched him shamelessly facilitate agendas that had long been promoted by the worst neocons and war whores in Washington while you dopes who are now asking me “why don’t you support Trump?” were letting Alex Jones and Tucker Carlson tell you how to think.

I don’t support Trump because I spent four years of my life staring right at the administration he was running and writing about what I saw unfiltered by the lens of party politics instead of letting a bunch of asshole pundits confirm my biases for me like you did. That’s the one and only reason we see him differently.

❖

Democrats said if Trump was re-elected in 2020 he’d unleash hell on earth, then Biden was elected and he unleashed hell on earth. Democrats will blame everyone but themselves if they lose in November, but it will be nobody’s fault but their own.






Geopolitical Fare:


.............. And it’s so obnoxious. It’s like yes, you win elections under the current system by being a warmongering corporate whore. That’s the problem the real left is trying to address. Duh.

Yes, those who align themselves with the Democratic Party win elections. But then what do they do with that win once they’ve won? They commit fucking genocide. They start wars. They kill the ecosystem. They repay favors to the donor class at the expense of everyone else. Republicans also win elections, and then do these same things.

If the current system means you will lose elections unless you are loyal to a murderous, ecocidal, exploitative and tyrannical power structure, then is the problem really losing elections, or is the problem the current system? ........

Some of the worst people in the world have won elections. It’s not enough to win, you’ve got to do good things with your win. Democrats do not do good things when they win, they do profoundly, shockingly evil things when they win. This is a problem, and the real adults in the room are trying to fix it by changing the system which is responsible for it. ....



........................ There’s so much going on in the world right now, and the US-centralized empire is doing so many terrible things, but every once in a while I think it’s important to highlight the fact that all these individually awful things are just the mundane daily manifestations of a power structure that has us on a trajectory toward a final global confrontation that would make them all look like a picnic in the park. 

Status quo politics are quite literally driving us to armageddon. Freeing ourselves from these murderous tyrants is swiftly moving beyond the morally correct thing to do for the sake of the empire’s victims around the world, to an existentially urgent action we must take for our own self-preservation.



I shouldn’t be able to do this for a living. Criticizing the warmongering of a single power structure shouldn’t be anyone’s full-time job. No government should be murdering people so consistently and reliably that people can plan their whole lives around it.

Yet here we are. Not only are people like me able to focus on commentary about the mass military violence of the US and its satellite states as a full-time gig, but we usually find there’s too much to talk about from day to day. ...........



.............. Our civilization is cruel and savage, but we compartmentalize away from its cruelty and savagery and laugh at our sitcoms and vapid comedians and make believe the worst things happening politically in our society are the mainstream culture war wedge issues that pundits and politicians prefer to keep us talking about. We live out our lives sedated by entertainment and social media and food and pharmaceuticals while genocide, nuclear brinkmanship and ecocide unfold all around us, thinking ourselves good and virtuous if we are kind to our pets and hold the correct opinions about racial justice and vaccines. 

If we as a society were actually good, none of this would be happening. Moral clarity would find all this intolerable, and would reject it and eject it by any means necessary. Which is why the powerful pour so much energy into keeping us all sedated and confused. A lot of power and wealth rides on our lack of moral clarity. ...........



DURING the entire post-war period when it has been in existence in the metropolitan countries, democracy has never been in as bizarre a state as it is today. Democracy is supposed to mean the pursuit of policies that are in conformity with the wishes of the electorate. True, it is not that the governments first ascertain popular wishes, and then decide on policy; the conformity between the two is typically ensured under bourgeois rule by the government deciding on policies in accordance with ruling class interests, and then having a propaganda machinery that persuades the people about the wisdom of these policies The conformity between public opinion and what the ruling class wants is thus achieved in a complex manner whose essence lies in the manipulation of public opinion.

What is currently happening however is altogether different: public opinion, notwithstanding all the propaganda directed at it, wants policies that are altogether different from those being systematically pursued by the ruling class. The policies favoured by the ruling class in other words are being pursued despite public opinion being palpably and systematically opposed to them. This is made possible by having most political parties line up behind these policies; that is, by getting a very large spectrum of political formations or parties backing these policies against the wishes of the majority of the electorate. The current situation is thus characterised by two distinct features: first, a broad unanimity among the bulk of political formations (parties); and second, a total lack of congruence between what these parties agree on and what the people want. Such a situation is quite unprecedented in the history of bourgeois democracy.These policies moreover relate not to minor questions concerning this or that matter, but to fundamental issues of war and peace. ...........



As the Gaza war enters its 12th month with no end in sight, the ongoing horrors continue to be normalized in U.S. media and politics. The process has become so routine that we might not recognize how omission and distortion have constantly shaped views of events since the war began in October. .......


John Wight on the grim context of the latest escalatory development in the blood-soaked proxy conflict between Russia and the West.

............ This is the grim context in which must be viewed the latest escalatory development when it comes to the conflict in Ukraine between Russia and the West. Yes, you read that correctly. This is in truth a conflict between Russia and the West, not per se Russia and Ukraine.

Ukraine in this regard is merely a convenient and bloodsoaked proxy  — a cat’s paw whose manhood has and is being sacrificed on the altar of U.S.-led Western hegemony. ...........

It  bears repeating again and again that this ugly and bitter conflict was eminently avoidable. It is a conflict not of Russia’s but of the West’s choosing. .......









Sci Fare:

Scientists are worried that persisting cognitive issues may signal a coming surge of dementia and other mental conditions

Many of Covid’s earliest and most alarming effects involve the brain, including a lost sense of smell, sluggish thinking, headaches, delirium and strokes. More than four years after the pandemic began, researchers are recognizing the profound impacts Covid can have on brain health, as millions of survivors suffer from persistent issues such as brain fog, depression and cognitive slowing, all of which hinder their ability to work and otherwise function. ......



Other Fare:

Radagast: A parody of a tragedy

The world we live in is unfortunately getting dumber at a rapid pace. This is not unique to leftists or rightists, although the general pattern that leftists are a few IQ points above the right continues to hold. When I was younger I would have been interested in arguing about subjects like abortion, but I don’t think there’s really a point to it.

To be quite honest, I don’t think there’s much of a point to anything anymore. I spend my days working on my own creative little hobby projects, vaping cannabis or watching birds. I don’t really think it’s possible in our day and age to beat the stock market anymore either, not because the market is efficient, but because it’s impossible to tell when it will behave rationally again. Money is just flooding into the biggest American companies and there is no clear mechanism visible to me that would trigger a correction. I just can’t get myself to invest in bubbles. ..........
 
I would recommend to just enjoy what we have available, while you still can. If you look back at today ten years from now and all you remember is working, you’re probably going to regret how you spent your days. You have essentially all music from all around the world available to you for ten euro a month. It won’t be here forever. ..............

Again, none of this insanity is going to last forever. If you were to put a child on the world, the insanity would be over before the child becomes an adult. We’re really late into the game, we already burned down most of the world and the walls that hold the piles of ashes back are starting to collapse. 

Your first SARS2 infection reduces your IQ by 3 points on average, the second one by 2. That’s what the studies say. We’re all brain damaged from a new virus, so political debates in the world’s major superpower now revolve around whether or not Haitians are eating people’s pets. We’re sinking into a deep sleep from which we won’t recover, gently fading out of this decaying world, as everything around us grows ridiculous, a parody of a tragedy. ........



Poetic Fare:

Nature has a Plan
a bit part of it
is (Wo)Man
 
Other Species
not a few 
have a right
to be here
too
 
*
 
If that is
mostly
understood 
most everything
is
good
 
but when we
think we’re
IT
 
and Nature’s
but a
Tool

She sends us
wailing
back to School
 
to Relearn
The Goodly Rule
 
*
 
Imperil None
(wo)man nor
beast

but share
her ample
feast
 
*
 
but if we
that solemn
trust betray
 
in all due
and dire
distrait

She will
(with nary a
mournful tear)

cast our kind
away

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