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Monday, September 1, 2025

2025-09-01

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


Economic and Market Fare:


Over the past 24 hours, an idea from Barry Ritholtz’s latest blog post has been sitting with me restlessly:

“One of the challenges that comes from analyzing markets and the economy is just how much ‘gray’ there is. Most data points exist along a noisy continuum, subject to future revisions. The meanderings above or below the trend may be just noise, or the start of something more ominous. Key reversals occur rarely and are difficult to spot in real time.”

Wow, that pretty much sums up the challenges of investing in a nutshell.


The message in the front end (first two years) of the yield curve is powerful. Take a look

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In the chart Tom is showing what happens when two ratios derived from the front end of the yield curve reach certain extremes and then turn. He has listed key dates. And, using FRED data, he has also marked recession periods.

Do we always get a recession? No. Do we get a slowdown? Nearly always yes. Is that happening now (2025)? Slowdown for sure. Recession? Maybe.

Tom's chart covers the entire period of declining interest rates (starting from1980) and continues through the COVID period to present. During the period he examined, the federal budget was in deficit at times and in surplus at other points. Over the 45 years examined, inflation was sometimes near zero and sometimes in the very high single digits.

The present yield curve is flashing a yellow light and warning us.

No indicator has a perfect record, but this one deserves a lot of respect. 


Lack of newcomers keeps unemployment low for now but will undercut long-run growth if it persists



................................................. Central bank independence mushroomed not because it was more efficient in ‘controlling’ inflation or avoiding financial collapses, but because it fitted the neoliberal theory that freedom of markets and finance from government control was best for capitalism.  CBI allows the financial sector to look after its fictitious capital (bonds and stocks) and the profits gained at the expense of wages and real value without potential interference by any democratically elected (left?) government. Bailing out the banks in the global financial crash to preserve an independent financial sector was the Fed’s policy. ............ entral bank independence means independence from the demands of the many to protect the interests of the financial sector.

..................... Of course, none of this scepticism about the merits of CBI and the consequent lack of democratic control over the banking system in the major economies means supporting Trump’s autocratic attempt to control the Fed as the ‘lender of last resort’.  Replacing undemocratic central bank independence with Trumpist autocracy will do nothing for America’s working people; their mortgages, their loans, their savings, or their cost of living.


Pettifor: Technocrats as handmaidens to authoritarianism - Pt 1
Central bank technocrats are not ‘independent’

....................... That is why central banks cannot be divided from other public institutions, no matter how powerful the ideology of ‘independence’. For while the management of monetary policy is a challenging and difficult skill, requiring specialist economic and statistical expertise, nevertheless monetary and fiscal institutions must work in tandem to support the economy as a whole. ............


Tax rises will only accelerate its decline

.................. The problem the UK has today, which it did not have in 1976, is a structurally weak economy with low productivity growth. The UK’s economic model, that of a late-capitalist rentier society, is no longer working. Yet, unlike in the Seventies, the UK lacks a political majority sufficient to arrest the toxic dynamic between rising debt and low economic growth.

.............. If things in Britain are bad, though, they’re worse in France. 



Bubble Fare:


Financial markets have transformed; today, trading and speculation have merged into performance art. The “Meme Market” culture now permeates mainstream finance. ................

............ The term, coined by Howard Lindzon, “degenerate economy,” captures this shift.
“A ‘degenerate economy,’ or ‘degen economy,’ refers to a speculative and high-risk financial environment where the lines between investing, trading, and gambling are blurred, often accelerated by mobile technology and social media.”
..................... “Meme Markets” is structured on entertainment psychology and can defy fundamentals for sustained periods. Retail-driven rallies lift meme-linked equities, and fans hold fast through volatility. The S&P 500 index, as discussed in “Buy Every Dip,” stays buoyed by passive flows that fuel the top-10 stocks in the index regardless of earnings growth.  .................



............  In this piece, I'm going to write out what conditions I believe will burst the bubble.  ............. I should also be clear, and I will get to after the premium break, that this will be a series of events rather than one big one, though there are big ones to look out for. ........................


The long shadow of crypto

...................................... There is a pervasive suspicion among A.I. skeptics (many of whom were and are also crypto skeptics) that the A.I. boom is a redux of the crypto boom--which is to say, effectively, a grift forced on consumers and abetted by unwitting journalists and other eager marks.



Charts:
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(not just) for the ESG crowd:


............... A.I. tools like ChatGPT are powered by vast data centers — warehouses filled with power-hungry computer chips — which already consume 4.5 percent of the electricity used in the United States. Over the next three or four years, that number is expected to double or even triple, to as much as 12 percent of electric demand by 2028. At present, about a quarter of data centers’ throughput is for A.I., but that could jump to more than 90% by as soon as 2030. McKinsey projects a 441% global increase in world data-center loads envisaged by 2030. The International Energy Agency projects that by that year, 4.25 years hence, A.I. will use 62% of all global electric supply. 

........................... It takes about 10 tons of refined uranium to produce one ton of nuclear fuel. As uranium mining exhausts the easy pickings, finding that 10 tons may mean removing 1000 or more tons of overburden, and that amount is steadily rising. All the low-hanging fruit has been picked. 



For more than two decades, governments, international agencies, and corporations have promoted the false hope of an “energy transition.” History shows otherwise. There are no examples of true transitions—only new energy sources added on top of old ones.

The theory was that if we replace fossil fuels with renewables, emissions will fall and the climate-change problem is solved. But the reality is that no credible outlook shows fossil fuel use falling enough to reduce emissions in a meaningful way ...................

.................. What we’re left with is more consumption, more debt, more ecological overshoot, and a political economy built on cheap energy that no longer exists. Prosperity is now out of reach for many households, businesses, and even nations. That collapse in affordability is the real fuel behind today’s populist revolt against the old order and its elites.

The energy transition bet everything on renewables replacing fossil fuels and on the promise that growth could continue without much disruption to ordinary life. If ever there were a too-good-to-be-true story, that was it. We should have seen the fallacy long ago—but we didn’t want to.




The Government of Norway made a tourism ad, and it’s surprisingly honest and informative!



U.S. B.S.:




............. the DNC’s leadership is determined to derail a resolution calling for “an arms embargo and suspension of military aid to Israel.”

Maneuvering to sidetrack that resolution, DNC Chair Ken Martin and all five vice chairs are sponsoring a counter-resolution that does little more than repeat the kind of hollow rhetoric that President Biden and Vice President Harris offered about Israel and Gaza last year. 

............................................. Those numbers show that, on the subject of Israel and Gaza, the DNC’s officers are guilty of political malpractice – and actively complicit with what most Democrats in the nation see as genocide. .................

Meanwhile, Israel continues with mass killing and genocide made possible by the U.S. government.





Geopolitical Fare:




After twenty-two months of unprecedented carnage, three things are clear: (1) the Israeli regime will not end the genocide in Palestine of its own will,  (2) the U.S. government, Israel’s principal collaborator, as well as the majority of Israelis, and the regime’s proxies and lobbies in the West, are fully committed to this genocide, and to the destruction and erasure of every remnant of Palestine from the river to the sea, and (3) other Western governments like the UK and Germany as well as far too many complicit Arab states in the region are fully dedicated to the cause of Israeli impunity.

That means that genocide (and apartheid) will only end through resistance against the Israeli regime, the steadfastness of the Palestinian people, the solidarity of the rest of the world, and the isolation, weakening, defeat, and dismantling of the Israeli regime. 

As was the case in apartheid South Africa, this is a long-term struggle. But even in the face of Western government obstruction, there are things that can be done right now. Things like boycott, divestment, sanctions, demonstrations, disruption, civil disobedience, education, prosecutions under universal jurisdiction, and civil cases against Israeli perpetrators and complicit actors in our own societies. And yes, we can also demand intervention and protection for the Palestinian people.

Established by a Cold War-era resolution adopted in 1950, the Uniting for Peace mechanism authorizes the UN General Assembly (UNGA) to act when the Security Council is blocked by the veto of one of its permanent members. Under this mechanism, the UNGA could mandate a UN protection force to deploy to Palestine, protect civilians, ensure humanitarian aid, preserve evidence of Israeli crimes, and assist in recovery and reconstruction.  ............


The Trump administration and international partners are discussing proposals to build a “Riviera of the Middle East” on the rubble of Gaza. One would establish U.S. control and pay Palestinians to leave.



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Western leaders who say they’ll recognize a Palestinian state while feebly calling on Both Sides to reach a ceasefire deal are just cuter, more photogenic versions of Netanyahu. They’re making empty noises to appear as though they’re doing something while refusing to actually lift a finger to stop the genocide.

They know Israel’s not going to make a permanent ceasefire deal because Netanyahu has explicitly stated that the slaughter won’t end until the ethnic cleansing of Gaza is complete. That’s why Tel Aviv is just ignoring the fact that Hamas agreed to a ceasefire a week and a half ago; there is absolutely nothing Hamas could agree to which would stop Israel from doing everything it needs to do to steal a Palestinian territory from the Palestinians who live there. The assault on Gaza has never been about removing Hamas; it has always been about removing the Palestinians.

Western leaders are pretending not to know this and promoting the false notion that Israel is basically acting in good faith in these negotiations, and that the only obstacle is Israel and Hamas being unable to successfully agree to terms. Participating in this mass deception while refusing to take any concrete actions to end the genocide is participating in the genocide. They’re not dropping the bombs or firing the bullets, but they’re helping to make sure they keep raining death and destruction on Palestinians.

They are Netanyahu with a nice guy smile. They are good cop Netanyahu.


Swedish activist on board largest Gaza-bound flotilla yet



For those who may have forgotten, it was earlier this year that Donald Trump sent around a video of economist Jeffrey Sachs at Cambridge Union giving a lengthy and cogent explanation of how the American war against Russia in Ukraine began, when it began, and why it is unjust, without legitimate purpose, destructive to US interests, and gratuitously murderous and destructive. The point: Donald Trump has had the information that he needs to end the American war in Ukraine. He is now playing the ugly American with people’s lives by pretending otherwise.

The received wisdom amongst military analysts this week is that the US ‘plan’ for Ukraine is to hand the conflict off to the least capable people on the planet--- the European political leadership, handpicked by the CIA for their prostrate demeanor and ability to not see what is in front of their eyes. With Germany’s Merz proclaiming cuts to the social safety net in Germany in order to pay government salaries and pensions in Ukraine (as the US has been doing), it seems that we in the West are all Americans now. And just added, France is doing the same.

The alleged next step in Donald Trump’s ‘peace’ (piece) plan is to have Russian President Vladimir Putin meet with Ukrainian citizen Volodymyr Zelensky, presumably to maintain the State Department – CIA fiction that Ukraine has anything to do with the US war against Russia in Ukraine--- other than providing the 1.7 million Ukrainian youth to do the dying. While 100% of the CIA-linked sources on the internet claim that the number (1.7 million) is ‘Russian disinformation,’ over the last 75 years, the CIA’s record of truthful emanations is vanishingly small.

For those who missed it, the only official role that Volodymyr Zelensky has in Ukraine is as the West’s ‘boy in Ukraine.’ Reports have it that he is still alive due to the permanent presence of MI6 guards around him. He hasn’t held elected office for over a year, and therefore is incapable of legally negotiating on behalf of Ukraine. But again, the American purpose in maintaining the fiction that Zelensky does have an official role in Ukraine is to maintain the fiction that Ukraine--- other than supplying the war dead, is an actual participant in the conflict.

If Donald Trump weren’t so relishing his role as Master of Plantation Earth, the West’s utter contempt for the people of Ukraine would be widely understood. A large majority in Ukraine want the war ended. ..................

...................... While Donald Trump appears to his supporters to be something different, his actual policies are the same old same old, but packaged differently. As noxious and toxic as Joe Biden was to the Russians, the sad bet here is that, should we survive the next three years, the Russian assessment of Trump will be about the same as that of Biden. The purpose in making this point is to save on future heartache and possible nuclear annihilation. ..................

................................................... This bullshit has got to end before it ends us.



................. Jones could have stopped at “communist” and “oil reserves”. Venezuela has the largest proven oil reserves of any country on the planet, and is not aligned with the capitalist western empire that is loosely centralized around Washington DC. Any reasons given for US regime change intervention beyond this should be read as excuses.

Whenever the US war machine moves its crosshairs to a different target I always get people telling me “No no Caitlin, THIS time the Evil Bad Guy really DOES need to be regime changed! THIS time our government and media are telling us the TRUTH!”

And it’s always so stupid, because it’s just the same rehashed lies over and over again. The empire takes whatever actions will help it to dominate our planet and its resources to a greater extent than it already does, and then it makes up justifications for those actions. ...............


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Book Fare:

In a his new book Breakneck, Dan Wang argues that if the US really wants to compete with China, it needs to focus more on engineering and less on litigating.


From megastructures in the Arabian Desert to urban decay close to home, we are pulled between utopian and dystopian visions of the modern city. Sci-fi novelist William Gibson offers a more likely scenario.

.......................... Widely acknowledged as the originator of the cyberpunk subgenre of science fiction and inventor of the term “cyberspace,” the novelist William Gibson writes of future cities as working out the consequences of this paradox. Many of Gibson’s science fiction novels start with serious destruction through war, natural disasters, climate change, or global ecological collapse. And his cities of the future are the stage where he plays out stories about virtual realities, brain–machine interfaces, artificial intelligence, genetic engineering, and nanotechnology — the very constellation of technologies that some anticipate will allow, and in Gibson’s work have allowed, humans to interact in all kinds of new, non-physical ways that will both obviate the need for physical cities and create posthuman forms of intelligence far exceeding our own, calling into question the primacy of our creative efforts.

What makes Gibson’s portrait of great cities thought-provoking is that, despite all this change, he imagines them persisting at all, in some ways operating no worse than the worst that can be found today. This situation becomes all the more thought-provoking when we see how he links the fate of his cities to the fate of the modern project itself, whose deep impact on making cities what they are today will persist into the future.

The modern project — meaning here not just scientific and technological progress, but also liberal democratic politics, free market economics, and social egalitarianism — promised to alleviate many of the historical givens of the human condition, like material scarcity, rampant disease, inequality, and social and political oppression. And it absolutely has expanded the possibilities of human life for vast numbers of people over the course of time. Yet for Gibson, the modern project is also in some ways responsible for, or at least unable to prevent, the civilizational crashes his stories anticipate. Modernity does not survive unaltered in his stories. The technological center no longer holds, and we see increased social stratification and the rise of oligarchic political and economic arrangements of a sort that some will say are quite familiar today. .....................................



................................ Whenever you’re looking into fixing or changing a society you’ve got a problem at three levels. Individual, group, society. No solution will work at the society level if it isn’t supported by how things are done at the group or individual level. Our society, for example, is organized around corporations whose primary motive is greed. People are rewarded for making more money, with very few limits on how much they are allowed to hurt other people along the way.

Capitalism  is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all .....................



................ Finally, Rowling struck at the broader political consequences of these ideas, asserting that “said ideology, and the privileged, blinkered fools pushing it because they suffer zero consequences themselves, have done more damage to the political left’s credibility than Trump and Farage could have achieved in a century.” 

She’s right. Chris Columbus and the parade of Hollywood elites rushing to condemn Rowling reveal less about her supposedly “controversial views” and more about their own cowardice. They aren’t guided by principle—they’re driven by fear: fear of social media mobs, fear of losing roles, fear of being canceled. Columbus, Radcliffe, Watson, and the rest have chosen the path of convenience over courage, prioritizing their reputations over common sense, fairness, and even basic reality. 

Rowling’s positions—protecting women’s spaces, defending free speech, supporting vulnerable minors, and calling out ideological exploitation—are neither radical nor hateful. Yet, in an era where ideological conformity is more important than truth, she is vilified simply for speaking the truth. The real scandal isn’t Rowling’s beliefs; it’s the craven complicity of those too timid to defend reason, morality, and decency.

The fake outrage over J.K. Rowling exposes the media’s true agenda: silencing dissent and forcing ideological conformity.



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