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Monday, June 16, 2025

2025-06-15

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


Economic and Market Fare:


Barclays: 2025 CES benchmark revision: A requiem for the mighty tailwind (via TheBondBeat)

Preliminary QCEW estimates suggest that the CES overstated job gains by 857k from April​-​December 2024, and we expect an eventual revision of 0.8​-​1.1mn. This would trim monthly job gains by 65​-​85k​/​m over this period, reflecting the diminished tailwind on labor supply from slowed immigration.

Be prepared for a big benchmark revision to the job estimates in the upcoming employment situation report for January 2026. This could be preceded by a preliminary benchmark adjustment this August that is even larger.



Bubble Fare:


.................. The core of our discipline is to align our investment stance with prevailing, measurable, observable market conditions, and to change our investment stance as those conditions change. No forecasts are required.

As I noted in April, we can accept the prospect of a collapse to run-of-the-mill valuations just as easily as the prospect of record valuations and endless monetary interventions. History has a great deal to say about the likelihood of one versus the other, and arithmetic has a great deal to say about the very different long-term returns that investors could expect in those different situations. Still, we’ll take good care of the future by taking good care of the present moment, again, and again. That’s where we focus our attention. ................


It’s tempting to imagine that somehow valuations have become irrelevant or less useful than in the past, because average valuations have been higher in recent decades than they were historically. What this conclusion misses is that the mapping from valuations to subsequent returns remains intact. Extreme valuations have still been followed, on average by poor returns. Depressed valuations have still been followed, on average, by outstanding returns.

Notice that even in data since the 1980’s, there is a clear diagonal mapping from valuations to subsequent market returns. Presently, the S&P 500 price/forward earnings ratio is consistent with likely 10-year S&P 500 total returns of about zero, with low single digit returns being the optimistic case.
What the higher level of valuations of recent decades have actually done is to steepen the relationship between starting valuations and subsequent returns. Valuations at the end of a given investment horizon have tended to be higher, on average, so that any given starting valuation has mapped to a higher subsequent return. Yet extreme valuations have typically still been followed by reversion to less extreme valuations. .....



Charts:
1: '



(not just) for the ESG crowd:





So, there were protests in L.A. over Trump’s immigrant removal strategy, some turned violent and Trump is calling in the National Guard and talking about using the military.

It’s worth pointing out that Trump has deported less undocumented immigrants than Biden did over comparable periods. This isn’t about deportation, as such.

What it is about is Gestapo tactics: sending people to torture prisons without due process; wearing masks and refusing to show badges or warrants; giving ICE the right to create its own warrants without judicial oversight (clearly unconstitutional); seizing people who are showing up for meetings at immigration facilities or immigrant courts.

It’s not what Trump is doing, it’s how he’s doing it—in the cruelest, most lawless and unconstitutional way possible.

The message is “we can do whatever we want, and you can’t stop us.”

Thus, protests. And, thus, Trump escalating immediately to the national guard: military force (that’s what the Guard is: military.)

Protestors are caught in the paradox of protest in a fascist state: if you don’t protest the powers that be assume they’ve gotten away with it and will escalate. If you do protest, they use that as an excuse to escalate. ............

................ So, will Americans kneel, then fall to their bellies? Will the legal system and the constitution work? Or will this escalate until the US is a failed state?



Geopolitical Fare:


Well it looks like the US is on the precipice of war with Iran again.

US officials are telling the press that they anticipate a potential impending Israeli attack on Iran while the family members of US military personnel are being assisted with evacuation from bases in the region.

This comes as Tehran issues a warning that it will strike all US military bases within range of its missiles if it comes under attack. ..........





With Trump's blessing, Israel launches a devastating attack on Iran.




The crew are now hostages...

When Israel intercepted the Madleen in international waters, it had no jurisdiction to act, and aside from anything else, the crew had committed no crime. The Madleen was perfectly entitled to sail through international waters and deliver aid to Gaza. The attempt to deliver aid was not illegal, the interception was.

Israeli drones sprayed the Madleen with a white substance and an Israeli boat rammed the aid vessel before commandos boarded it, all because it contained things like baby food, medicine and prosthetics. Israel must defend itself from those things, apparently. ...............

Bizarrely, Israel's act of piracy was described by the BBC as "diverting" the Madleen. In what universe was this a diversion? When you capture people in international waters who have committed no crime, you have not diverted them, you have kidnapped them. The crew of the Madleen are hostages, and not only that, Israel is already bragging about how it plans to abuse them.

The crew of 12, who the media describe as "activists", comprise of journalists, politicians, and a doctor. They are to be taken to the port of Ashdod where they will be psychologically tortured by the IDF. .............

The real mission of the Freedom Flotilla was not to feed Gaza because those small vessels can only carry so much. The real mission was to break the starvation blockade by showing the world we are dealing with monsters who have no regard for international law. The Madleen might not have reached the shores of Palestine, but it has spectacularly achieved its mission of exposing a rogue state. Well done.


Noam Chomsky offered a rule of thumb for predicting the ‘mainstream’ response to crimes against humanity:

‘There is a way to calibrate reaction. If it’s a crime of somebody else, particularly an enemy, then we’re utterly outraged. If it’s our own crime, either comparable or worse, either it’s suppressed or denied. ...............................................................................


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Sci Fare:

An immensely readable dive into the ‘predictive processing’ hypothesis, our best guess as to how the mind really works


A fresh look at Andromeda’s motion reveals the Milky Way may escape the expected crash for at least 10 billion years







Other Fare:

Tribalism, Neo-Feudalism And The Vise Of Technology In The Age Of Hyper-Acceleration

I’ve truly underestimated the gullibility of the Canadian public – after being predictably on-track for a massive pendulum swing to a Conservative super-majority from 10 years of Liberal policies demolishing Canada, the entire dynamic reversed and was nullified within a few short weeks by the entire “Elbows Up” mind-fuck.

The irony behind all this is that the public largely switched their vote for the candidate Donald Trump wanted to win because of their own Trump Derangement Syndrome.

Watching it from the outside was demoralizing.

(Steve Bannon told me before the election that Trump’s “51st State” riffs were done on purpose to get the libs re-elected and Trump himself took a victory lap afterwards – Canadians were had. Why? Because the Americans want Alberta, and they think they’ll get it through de facto economic or political integration within a few years after #WEXIT happens).

We’ll see how long this administration lasts – nominally a minority, but functioning as a quasi-majority, and already introducing truly horrific legislation like Bill C-2, the Strong Borders Act – which is more of a mass surveillance and war on cash bill than anything else. ..........



Satire:


Due to concerns that peace talks between Iran and the US were about to succeed, Israel was left with no choice but to bomb Iran in self-defence. Iran is now expected to launch a totally unprovoked counter-attack which is definitely not what Israel wanted.

Israel's "pre-emptive" terror attack murdered civilians in apartment buildings across Iran and it might have also killed one or two scientists and military leaders. The important thing is it got its real target: the civilians.

Israel has refuted the claim that its terror attack achieved nothing other than infuriating Iran, reminding us it has dragged the US and UK into another needless war in the Middle East. Israel is good at that sort of thing.

You will be reassured to hear that the American and British militaries are preparing to defend Israeli airspace. Our leaders were unable to think of an alternative approach such as letting Israel fight its own fucking war. This is because they were worried about further Epstein leaks. Aren't we all? ...........
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