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Saturday, January 25, 2025

2025-01-25/26

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


Economic and Market Fare:

Lacy Hunt, Hoisington: The Global Capacity Glut



...................................... Understanding that inflation is solely a function of supply and demand, reversing monetary liquidity will erode future economic activity. Notably, what caused the inflation spike post-2020 was not an increase in the debt or the Federal Reserve but rather the temporary increase in the money supply caused by sending checks to households. Therefore, unless the Government passes a new infrastructure spending bill of massive proportions or sends another round of stimulus to households, no factor is available to restart the inflation process of increased demand.

Over the coming decades, the massive surge in unproductive debt will increase deflationary pressures and slower economic growth. These issues are not new but have plagued economic growth for the last 40-years. The result is that debts and deficits will continue to detract from rather than contribute to economic growth


MS: Buy US Treasuries Before The Buyers' Strike Ends | US Rates Strategy (via TheBondBeat)

The US presidential inauguration passed without the "day one" tariff increase many investors expected. The longer the administration decides on tariffs, the more comfort investors – currently on a buyers' strike – will feel about putting money to work. Buy US Treasuries before the strike ends.

Key takeaways
  • Investors who have been on a buyers' strike should grow more comfortable putting money to work as President Trump's second term progresses.
  • The inauguration ended with growth-negative immigration orders, not inflation-inducing tariffs. The longer this policy mix continues, the lower yields will go.
  • Lower inflation than feared, less growth than expected, and a Fed that cuts rates more than priced into markets should lead to lower US Treasury yields.  
  • ........


................ Citi’s King described his journey that ultimately led him to one answer: flows. Traditional financial indicators, he said, started to breakdown in the Obama-Bernanke years.

“About 2012, all my favorite fundamental indicators — in credit, in equities, for risk assets especially — basically broke down,” King said. “Interest rates didn't seem to have the impact that they used to on either markets or, for that matter, the economy.”

After the shift, “markets seem to be driving the economy more than the conventional view of the economy driving markets.”  .................

“That influence from central bank money creation has, especially over the last year, been overshadowed by a massive rising tide of inflows to US equity funds .............



....... We refresh our previous work from Nov 2023 comparing today's economic and asset performance to historical soft landings and recessions (since 1960). Today, most US economic data is still in between soft landing and recession. Equities are trading in line with soft landings, while fixed income is performing worse than most historical scenarios.

The key takeaway remains that we would be looking to rotate some equity exposure into bonds as yields surge, while keeping focused on how the US labor market, manufacturing and housing data evolves. US labor market data is most in line with soft landings at present, while the ISM manufacturing and building permit data is still somewhat recessionary ........








QOTW:

Mosler: For the last few years, forecasters grossly undervalued the role of the real gov deficit spending supporting output/employment/etc. as well as the current policy reversals that are rapidly going the other way and can rapidly pull the rug out from aggregate demand.
 


China Fare:

EVs, batteries, lidar, drones, robotics, smartphones, AI. China's progress across a range of overlapping industries creates a mutually reinforcing feedback loop.

China has developed multiple tech-industrial ecosystems that overlap in terms of the firms and technologies involved. China doesn’t just have a smartphone industry or a battery industry or an electric vehicle industry. It has all of these industries and more. China’s strength across multiple overlapping industries creates a compounding effect for its industrial policy efforts .........



Tweet of the Week:



Charts:
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(not just) for the ESG crowd:


......... I think the simplest and most important quote is this one:
Our society and economy fundamentally depend on the Earth system which provides essentials such as food, water, energy and raw materials.
A lot of people seem to miss that the economy is a wholly owned subsidiary of the environment. Mother nature has the final say on everything.




............... Trump will go on to do many evil things as president, just as he did during his first term, but none of this will reverse the fact that Biden just spent four years advancing genocide, nuclear brinkmanship and authoritarianism. The Democratic Party plays just as crucial a role in promoting the tyranny and abuse of the US empire as the Republican Party does, and it is nonsensical to think of either of them as a lesser evil. The empire itself must end.

............. It’s possible that Trump’s term will constitute another swing from Bush-level depravity to Obama-level depravity. .................... The rest of the time, the empire likes to be a lot subtler about its abuses, like it was during the Obama administration and the first Trump administration. Starvation sanctions. Staging coups. Secretly arming proxy forces. Drone assassinations. Covert ops. It prefers these means over the Hulk Smash ground invasions like we saw during George W Bush’s first term, and the overt genocidal atrocities like we saw during Biden’s.



.................. That said, most of the many executive orders issued by President Trump are purely restorative, a reaffirmation of core constitutional structures that had been previously ignored or overthrown. Therefore, these are not acts of executive imposition so much as deployments of power in order to give power back to the people.

In other words, most of the actions are not about the “imperial presidency.” They are about returning power to where it belongs and never should have left, namely to the U.S. Constitution and to the voters in a republican system of government.

This is why all the chatter about Trump’s use of power (“He’s behaving like a dictator!”) misses the mark. Completely.

Let’s just consider one that is near and dear to my heart: “Restoring Freedom Speech and Ending Federal Censorship.” It does nothing other than restate the meaning of the very first amendment to the U.S. Constitution, which proclaimed that government cannot interfere with the freedom of speech.



.............. If you were to twist my arm and force me to say something positive about Donald Trump, this is the sort of thing I would point to. He makes the US empire much more transparent and unhidden. He removes its mask and reveals the twisted face beneath it.

The US isn’t suddenly ruled by billionaires now that Trump is president; it was already ruled by billionaires. The US isn’t suddenly an empire bent on global domination now that Trump has been sworn in; that was already the case. But you’re not supposed to just come right out and say that.

Well, Trump comes right out and says it. He says the quiet parts out loud. He’s the only president who’ll openly boast that US troops are in Syria to keep the oil or lament that they failed to take the oil from Venezuela, or just come right out and tell everyone he’s bought and owned by Zionist oligarchs. He puts much less effort into disguising the true nature of the US empire than other presidents.

That’s the only reason various factions of America’s unofficial permanent government have had objections to Trump’s presidency over the years. .............

............. The primary obstacle to revolutionary change under the western empire is the fact that its citizenry have been successfully propagandized into accepting the status quo. The more people open their eyes to the fact that we are ruled by psychopaths who are driving us to our doom on multiple fronts, the closer we get to a collective movement toward a healthy world.



...................... “I studied the Nazis at university, taught the history of Nazi Germany on two continents and wrote for major newspapers about Nazi Germany. I am internet famous for fact-checking chuds [gross people] on the history, ideology and policy of Nazi Germany. That was a Nazi salute.”

Well, that settles it.

As the outrage continued, any doubt or dissent was denounced as evidence that you are obviously a Nazi as well.

That became a bit embarrassing when the leading Jewish organization, the Anti-Defamation League, stated the obvious: This was not a Nazi salute but rather an “awkward gesture.”

The core principle of liberal mob tactics is that there can be no divergence, even by a group like the ADL. The way to deal with opposing ideas or writings is by making someone persona non grata. If you do not cancel others, you will be canceled.

So the ADL was effectively declared soft on Nazis by Rep. Alexandria Ocasio-Cortez (D-NY): “Just to be clear, you are defending a Heil Hitler salute that was performed and repeated for emphasis and clarity. People can officially stop listening to you as any sort of reputable source of information now. You work for them. Thank you for making that crystal clear to all.”

We’ve reached a level of absurdity where Jewish advocates are treated like they are virtual Nazi sympathizers. .....................

.................. Of course, labeling political opponents as diabolically evil fanatics and seeking to bar candidates from ballots sounds a lot like … well … it sounds familiar.

There is an alternative. We can put the rage rhetoric aside and have honest debates over differences on politics and laws. In other words, we can fight over policy … and leave the Nazis out of it.



Geopolitical Fare:


... He can save us from a third world war by doing the right thing — end all support to the regime in Kiev and disband NATO; put an end to U.S. militarism and imperialism, and restore the Republic. This should be his top priority. But that seems unlikely.

A republic doesn’t seek control over others. Trump’s ambitions towards Panama, Greenland, Canada and Iran indicate that it will be business as usual. Empire is Trump’s vision ...........


Trump Reveals Plan For The Ethnic Cleansing Of Gaza



Sci Fare: 


So, in case there are some of you who still have the faint hope that vaccination against SARS-COV-2 simply results in a similar immune response to natural immunity, I will have to shatter that hope. ...............

If you thought my posts about how the innate immune system normally handles the response to this virus that is now overly reliant on the adaptive immune system in most of the population were hypothetical, well, here’s the evidence you were waiting for. Most of the population is stuck with an abnormal and inappropriate adaptive immune response to this rapidly mutating and diversifying virus. ......................





Other Fare:

Sam Altman: The man who wants to end our world

................. In 2015, Sam Altman says:

“AI will probably most likely lead to the end of the world, but in the meantime, there’ll be great companies.”

He then goes on to raise money to build these AI systems that are now everywhere on the Internet.

Sam Altman is part a small group of very wealthy and powerful people, most of whom live on the west coast of the United States, who believe that you, me and free unshackled life itself are obsolete. They see this as an inevitability and so rather than trying to stop it, they try to make sure they will be among the ones holding the whips.

And of course Altman won’t say he’s trying to end the world. No, he is just trying to steer this inevitable technological development in the right direction! But why is it inevitable? Because people like him insist on making it inevitable. .................................

But most important of all perhaps, is that we have already reached the stage of dead whistleblowers. .......................





QOTW:

Sansone: “The purpose of a pardon is to correct a miscarriage of justice, not to prevent future judicial action.”



Pics of the Week:




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