***** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
.................... The 2024 economy has proved far more resilient than most expected at the beginning of the year. In fact, stock markets outran the best of them.
The point here isn’t to beat up on the Wall Street strategists.
Quite the contrary, actually.
These men and women are tasked by management and boards to put out forecasts because the bank can then sell it to their institutional clients. These folks produce evidence-based research grounded in historical data and interpreted through robust multi-factor models. Many of these people are off-the-charts intelligent. But, you share a bourbon or three with them, and they’ll share their disdain for these outlooks.
The purpose of this message is to exert caution.
The historical track record of Wall Street strategists correctly forecasting the market 12 months in advance is not great. In fact, they’re more often wrong than right. ...........
not saying I agree, but:
Mark Haefele, Chief Investment Officer at UBS GWM, says:
”The US election result remains a focal point, with the prospect of lower taxes and deregulation adding to a positive ‘Roaring 20s’ market narrative built on solid growth, and continued investment in AI. Still the problems of deglobalization, debt, and demographics—among others—mean the we have to be prepared for a wide range of outcomes in the year ahead.”
again, not what I think, but a good summary of what many think:
Credit Agricole: 2025-26 Outlook: mind consensus via TheBondBeat
…US rates:
- Despite the Fed cutting rates, the best trade in 2024 was staying in cash (or T-bills), certainly on a risk adjusted basis.
- The cyclical bull steepening we were expecting came through but a progrowth Republican policy mix points to a very shallow cutting cycle.
- A clean sweep suggests a high probability of election pledges being enacted boosting nominal growth but destabilising global trade.
- The UST curve should remain dis-inverted but very flat. With Fed policy rates likely dropping to 4% only, 10Y yields should hover around 4.5%.
- While QT should end, net UST supply of USD2.1trn should weigh on longend ASW. The debt ceiling debacle should be manageable.
- Significant, fiscal driven bear steepening is not on our radar. The Fed should remain driven by its existing remit.
- Large deficits and (financial) deregulation augers for higher growth implying the potential for higher UST real yields.
The US has never been so overhyped, relative to the rest of the world
....... The overwhelming consensus is that the gap between the US and the world is justified by the earnings power of top US companies, their global reach and their leading role in tech innovation. These strengths are all real. But one definition of a bubble is a good idea that has gone too far. Awe of “American exceptionalism” in markets has now gone too far. .........
Realtor.com Reports Active Inventory Up 26.5% YoY
............... However, inventory is still historically low. New listings remain below typical pre-pandemic levels.
............... However, inventory is still historically low. New listings remain below typical pre-pandemic levels.
Deflation fuels ‘inexorable’ slide in China’s long-term sovereign bond yields below Japan’s for the first time
The reason we’re in crisis is not because policymakers have been ignoring the advice of orthodox economists, but because they have been following it.
In 2016, Paul Romer, who was then Chief Economist at the World Bank wrote “The Trouble with Macroeconomics” in which he eviscerated the current state of macroeconomics in the U.S. and around the world, writing that orthodox macroeconomics had been in “30 years of intellectual regress,” and was so disconnected from reality that it was “post-real”. Romer wrote his paper, inspired by a similar critique of “string theory” in physics.
Lee Smolin begins The Trouble with Physics (Smolin 2007) by noting that his career spanned the only quarter-century in the history of physics when the field made no progress on its core problems. The trouble with macroeconomics is worse. I have observed more than three decades of intellectual regress.
The reason for this, Romer argues, is that orthodox economics - the formulas used by government budget offices, political parties, central banks and business, are based on a series of assumptions that are not backed up by facts.
They are, in fact, filled with assumptions that are a figment of a shared imagination .....................................
The Critics of MMT Aren’t Doing Their Homework
By contrast, proponents of Modern Monetary Theory have predicted many of the crises that neoclassical economists completely whiffed on, because they actually measure and include data in their model that orthodox economics does not.
What is even more egregious, however, are the superficial criticisms of MMT deployed to criticize it, which amount to not understanding it, because they can’t see how it fits in with their own view. That, however, is the point. It doesn’t “fit in” with their view, it replaces it with a different one. ................
One would reasonably think that if someone had been exposed in the past for pumping out a discredited academic paper after being at the forefront of the destructive austerity push during the Global Financial Crisis, then some circumspection might be in order. Apparently not. In 2010, Carmen Reinhart and Kenneth Rogoff published a paper in one of the leading mainstream academic journals – Growth in a Time of Debt – which became one of the most cited academic papers at the time. At the time, they even registered a WWW domain for themselves (now defunct) to promote the paper and tell us all how many journalists, media programs etc have been citing their work. While one can understand the self-promotion by Rogoff and Reinhart, it seems that none of these media outlets or journalists did much checking. It turned out that they had based their results on research that had grossly mishandled the data – deliberately or inadvertently – and that a correct use of the available data found that that nations who have public debt to GDP ratios that cross the alleged 90 per cent threshold experienced average real GDP growth of 2.2 per cent rather than -0.1 per cent as was published by Rogoff and Reinhart in their original paper. So all their boasting about finding robust “debt intolerance limits” arising from “sharply rising interest rates” – and then “painful fiscal adjustments” and “outright default” were not sustainable. Humility might have been the order of the day. But not for Rogoff. He regularly keeps popping up making predictions of doom based on faulty mainstream logic.
I analysed the spreadsheet scandal in detail in this blog post – Elementary misuse of spreadsheet data leaves millions unemployed (April 17, 2013).
His latest intervention (November 28, 2024) – Europe’s Economy Is Stalling Out – was published by Project Syndicate, which regularly gives space to these nonsensical mainstream articles. ........
............................................ Both situations, however allow us to conclude that from that given position, any discretionary attempt to reduce the deficit will reduce growth, incomes and employment.
I was talking to a podcast yesterday and they asked me what might happen if Elon Musk and his gang close down a lot of government departments.
While the Musk zealots might claim they are freeing the US of wasteful and unnecessary bureaucracy, the spending that runs those departments is necessary to sustain the current GDP growth and employment levels, given non-government spending choices.
So if they scrap those departments and do not increase spending elsewhere to offset the chosen spending cuts then the US will likely fall into recession. ...................
Quotes of the Week:
Donovan: US data on income and spending confirms that the US consumer has money and is prepared to spend it. There was not, perhaps, much doubt of the latter point.
Donovan: US data on income and spending confirms that the US consumer has money and is prepared to spend it. There was not, perhaps, much doubt of the latter point.
Wang: A new round of tariffs is much more likely to prompt a dovish monetary policy response on concerns of higher unemployment than a hawkish response on concerns of inflation. Higher tariffs could raise prices, but the inflationary impact would in part be tempered by a strengthening dollar and lower business margins. Most importantly, the Fed would likely be looked through any price increases as transitory. Tariffs are more likely to slow economic growth
BSM: At risk of making a statement of the bleeding obvious, it has been an(other) extraordinary year for US equities. November closed at yet another all-time-high for the S&P500 and the fervent post-election embrace of risk left this rodent almost surprised that the monthly candle was only the 7th largest percentage advance for the ‘Spooz’ since the Covid lows. We got our Santa rally. With bells on! But is the old boy now out over his skis?
Elliott: For decades prudence was a virtue in asset management.
These days it is a liability.
Charts:
1:
(not just) for the ESG crowd:
There was a tortuous and painful end to COP29, the international climate change conference held in oil-rich Baku, Azerbaijan. The main issue was how much would the rich countries hand over to the poor countries to pay for the measures to mitigate global warming and handle the damage caused by rising ‘greenhouse gas’ emissions. The finance target set was for more than $1.3trn a year by 2035. But the final deal was based on just $300bn in actual grants and low-interest loans from the developed world. The rest would have to come from private investors and perhaps levies on fossil fuels and frequent flyers – the details of which remained vague. ..............
.............. “With each new iteration of the texts, oil and gas producers managed to dilute the urgent commitment to phase out fossil fuels,”
Analysing the way ancient plankton responded to climate change 21,000 years ago, scientists at the University of Bristol have warned that this "lifeblood of the oceans" simply cannot keep up with pace of current temperature rises.
.............. I have posted this article from Derrick Jensen many times, appealing to the reality of what hope really means rather than the general cultural meaning that so many people think it means. He explains it rather well in just three paragraphs, quote:
"Frankly, I don’t have much hope. But I think that’s a good thing. Hope is what keeps us chained to the system, the conglomerate of people and ideas and ideals that is causing the destruction of the Earth.To start, there is the false hope that suddenly somehow the system may inexplicably change. Or technology will save us. Or the Great Mother. Or beings from Alpha Centauri. Or Jesus Christ. Or Santa Claus. All of these false hopes lead to inaction, or at least to ineffectiveness. ...............
Chronicles of Collapse
Erik Loomis reviews “The Burning Earth: A History” by Sunil Amrith.
Radagast: Microplastics in your brain
So… this is not good at all. Some scientists measured microplastics concentrations in the brain and found that in 2024 the brain was 0.5% microplastics in weight, which was an increase in 50% from eight years previously. ...
This is again, a lagging problem. Plastic production around the world is skyrocketing and it generally takes many years, until those big pieces of plastic become small enough to enter the food chain.
The working thesis of this blog is in a sense the idea that something other than global warming will bring down human civilization, enabling non-human organisms to go on without us. The prime candidates to make that happen are of course H5N1, SARS-COV-2 and monkeypox.
But the microplastics thing is a bit of a wildcard. I’ve had this idea that we’ve been getting dumber for quite some time and some things suggest to me it may have started before SARS-COV-2 started in 2020. Microplastics in our brains could be part of the explanation. ............
They found an increase in microplastics in every organ they looked at over the past 8 years. How much microplastics can you put into the brain, before it starts to make us dumber? We’re at 0.5% now. To me that is a terrifying number. Autism and depression are mostly a product of brain inflammation. If the brain tries to get rid of these particles, inflammation would seem to me like its main available tool .........
In the words of the late great Lynn Margulis, a woman like no other, Gaia is a tough bitch. The speed of our release of carbon into the atmosphere is unprecedented in geological history, but we’re engaged in numerous unprecedented experiments simultaneously. ........
U.S. B.S.
It’s so fun how the Biden administration is using its lame duck months to skyrocket hostilities between nuclear superpowers and we don’t even know who’s really making these decisions because the president’s brain is cottage cheese.
Expectation of peace talks after Donald Trump's inauguration is pushing all sides of the Ukraine war to escalate, with British and American missiles adding fresh risk
In an irony so miserable it must be true, widespread belief that peace talks are coming after Donald Trump’s inauguration is pushing Russia and the U.S. into a game of nuclear chicken, leaving us with “60 days to decide on World War,” as one Russian newspaper put it this week.
While the story may not be getting Cuban Missile Crisis treatment here, Joe Biden’s decision to green-light launches of U.S.-made ATACMS missiles into Russia has that country’s media in freakout mode. ............
Trump's cabinet picks seem more neocon than isolationist
Donald Trump has received praise for being a dove when it comes to international affairs. His record and early cabinet selections tell a different story.
Part 3 of our series on how Barack Obama undermined U.S. democracy
Last week we wrote about the central role Obama played in establishing the Russiagate Hoax. This week we’re going to take a closer look at why Obama was so involved. What drove him to push a hoax that had been ostensibly put into place by the Clinton campaign?
Many are aware of Biden’s entanglements in Ukraine but most are unaware of Obama’s implicit involvement. For some time now it's been our working theory that Russiagate originated, at least in part, as the result of what Joe Biden was doing in Ukraine - and as a result of Obama’s knowledge of Biden’s actions.
Recall that Biden’s involvement in Ukraine traces back to at least early 2014 when he was pulled into the U.S. overthrow of Ukraine’s democratically-held elections by Victoria Nuland, the assistant secretary for European and Eurasian affairs in the Obama State Department. ..........
Geopolitical Fare:
...... Peace will be made under the terms Russia wants, or the war will continue. Ukraine is still fighting, but everyone with the least lick of sense knows it is going to lose. Ukraine will have to accept the terms imposed on it, because if it doesn’t Russia will just keep going. ...........
.......... As for Ukraine, the best deal they could have gotten was offered by the Russians near the start of the war, but they believed NATO and the US and Boris Johnson and thought they could win. The result is going to be a much weaker and poorer Ukraine, probably with half the pre-war population.
Meanwhile sanctions, instead of harming Russia, boomeranged and hurt Europe far more than Russia, and have contributed to Europe’s ongoing de-industrialization. .......
... If you find yourself faced with the proverbial ignorant uncle at Thanksgiving this year and want to appear fact-based rather than conspiratorial, maybe the following round up of links and sources about the beginnings of the war will help. ..............
.............. Also the story of the Ukrainian Civil War from 2014 to 2022 has been systematically mistold.
The ICG has a good corrective in their “visual explainer” of the Donbas War.
Key graphic which shows how Ukraine dramatically upped their shelling of civilians in the independent republics just prior to Russia’s invasion — forcing Putin’s hand.
Source:The Special Monitoring Mission of the Organization for Security and Co-operation in Europe (OSCE SMM)
Uncle “Ukraine Is Heroically Resisting Aggression” will also want to learn all about the horrific mass murder of anti-Maidan counter-protestors in Odessa in 2014 that is VERY well known in Russia and Ukraine and almost completely unknown in the US.
This is just scratching the surface but essentially for those who been exclusively following US & UK media, everything they know about Ukraine is wrong.
A failure of understanding in Ukraine.
I’ve written a number of times now about the unreality with which the West habitually approaches the continuing crisis in and around Ukraine, and the almost clinical dissociation from the real world that it displays in its words and its actions. Yet as the situation deteriorates and Russian forces move forward everywhere, there is no real sign that the West is becoming more reality-based in its understanding, and every probability that it will learn nothing, and continue to live in its constructed alternative reality until it is dragged out forcibly. ................
The “debate” (if you can call it that) in the West largely excludes real life factors. It takes place at a high normative level, where certain facts and truths are simply assumed. Why that is so, and what its consequences are, is the subject of first part of this essay, and then because these subjects are inherently complex, I go on to set out how to understand them as straightforwardly as possible. .................................
Lawrence: Biden’s ‘Samson Option’
.................... We know now the risks those devoted to prolonging the imperium’s final phase will take in defense of the no-longer-defensible: All risks are acceptable as they cling to power. They will risk another world war; they will risk nuclear annihilation.
They Lied About Gaza, And They're Lying About Syria
Sci Fare:
.......... It’s hard to say exactly what’s happening in the moment, but I will say it’s mighty convenient how Russia being tied up in Ukraine and Hezbollah being decapitated by Israel leaves Syria once again exposed to the longstanding regime change agendas of the same western empire who’s been backing both of those proxy conflicts.
❖
Syria is more complicated and harder to understand than Gaza, but if you look into it you’ll find mountains of evidence that for many years the US and its allies and partners have been actively fomenting violence, chaos and destruction in that nation to effect regime change. Anyone who denies this is either ignorant or dishonest, as is anyone who calls you a Russian propagandist or an Assad lover for stating this well-evidenced fact.
There are a lot of people who see through the imperial lies about Gaza but still buy into the imperial lies about Syria, largely because the lies about Gaza are so much easier to see through. Immense amounts of propaganda and information ops have gone into framing the violence we’ve been seeing in Syria since 2011 as a completely organic rebellion against a tyrannical dictator who just wants to murder civilians because he is evil. But if you bring the same sincere curiosity and rigorous investigation to this issue that you brought to the plight of the Palestinians, you will discover the same kinds of lies and distortions which you’ve seen the western political/media class promote about Gaza being spun about Syria as well — frequently by the same people.
This is how unpacking the lies of the empire tends to unfold for folks. Your eyes flicker open because of some really obvious plot hole in the official narrative like Vietnam, the Iraq invasion, or Gaza, and then once you’ve seen through those lies you start getting curious about how else you’ve been deceived. You start pulling on other threads and learning more and more, and then after a while you start seeing the big picture about the US-centralized empire inflicting horrific abuses upon humanity all around the world with the goal of dominating the planet.
If you saw through the lies about Gaza, don’t stop there. Keep going. Keep pulling on threads. Keep learning. Stay curious. They lied about Gaza, they lied about Iraq, they lied about Libya, they lied about Ukraine, and they’re lying about Syria too. Don’t listen to anyone who tries to dull your curiosity. Ignore anyone who tries to shout you down and shut you up for asking inconvenient questions. Keep waking up from the matrix of empire propaganda until your eyes are truly clear.
Only A Truth-Based Relationship With Reality Can Satisfy
................ The overwhelming majority of humanity is lost in delusion. Our minds are full of propaganda-induced hallucinations about a completely fictional world in which capitalism is working just fine and the US and its allies stand on the side of freedom and justice. Our behavior is driven by advertising and cultural indoctrination about what we should buy and how hard we should work to buy it and what kinds of goals we should be striving to achieve. Our psyches are wrapped around a believed sense of self which is completely and utterly illusory. .......................
................ The overwhelming majority of humanity is lost in delusion. Our minds are full of propaganda-induced hallucinations about a completely fictional world in which capitalism is working just fine and the US and its allies stand on the side of freedom and justice. Our behavior is driven by advertising and cultural indoctrination about what we should buy and how hard we should work to buy it and what kinds of goals we should be striving to achieve. Our psyches are wrapped around a believed sense of self which is completely and utterly illusory. .......................
It’s all lies. It cannot satisfy.
The only thing that can satisfy is a truth-based relationship with reality. One in which your worldview is in alignment with truth, and your thoughts are in alignment with your worldview, and your words are in alignment with your thoughts, and your deeds are in alignment with your words. .................
Sci Fare:
***** Radagast: Record levels of pneumonia
............................ I think Democrats in a way feel a sense of relief over having lost the election. If they had won the election, they would have to work out how to try to solve our problems. But since people voted for Trump, now they deserve what they’re going to get. The United States has settled on YOLOing the next pandemic. There is bird flu in the cows, the cats that drink their raw milk die with bleeding brains, but nobody seems to care.
The whole population is starting to show signs of immunodeficiency. ............
.................... When SARS-COV-2 first emerged, it was incapable of infecting children and it was killing people who had about eight years of life expectancy left. Now we have a virus that regularly infects children, as a result of the global gain of function experiment through mass vaccination. We also see widespread brain damage in the population now. We also see widespread damage to the immune system, mostly concentrated in the lungs, resulting in far more cases of pneumonia.
Just as there is no easy technofix for climate change, there is no easy technofix for SARS-COV-2. The Trump administration thought they could fix the SARS-COV-2 problem by rushing a vaccine, but it left everyone with a broken immune response. The same people peddling social distancing as an easy solution back then, are now peddling blocking the sky as an easy solution to global warming.
Any sort of real solution to the problems we face would just require radical lifestyle interventions. ...........
Other Fare:
How the Ancient Sumerians Created the World’s First Writing System
Overthinking what you said? It's your 'lizard brain' talking to newer, advanced parts of your brain
QOTW:
Overthinking what you said? It's your 'lizard brain' talking to newer, advanced parts of your brain
QOTW:
Sardonicky: "The myth of Thanksgiving has deservedly been collapsing in recent decades. Like US Empire itself, the story is a picked-over turkey carcass, with unsightly shreds of dried out flesh and gristle clinging to the wishbone of American exceptionalism."
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