Listen to this article 6 minutes 00:00 / 06:06 1x Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. U.S. 10-year Treasury yield Source: Tullett Prebon As of March 24 % Pre-pandemic peak of S&P 500 2020 '21 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 S&P 500 forward price/earnings ratio Source: Refinitiv Note: Weekly data S&P 500 peak 2020 '21 12 14 16 18 20 22 24 The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is the The parallel in the stock market is the hunt for the greater fool . Sure, GameStop < shares bear no relation to the reality < of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they "like the stock." Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks drove up the price of many tiny stocks, penny shares and those popular on Reddit discussion boards. Speculative bets such as the solar and ARK ETFs rallied up until mid-February, long after growth stocks peaked in August Price performance Source: FactSet *Russell 1000 indexes As of March 25, 7:02 p.m. ET % Invesco Solar Value* ARK Innovation Growth* Sept. 2020 '21 -25 0 25 50 75 100 125 The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. me title= A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. NEWSLETTER SIGN-UP ( Mar 26, 2021 , www.wsj.com )
M Michael OFarrell SUBSCRIBER 3 hours ago Biden, or whoever is actually in charge, is
giving this country away. It will the younger generation that will pay the price. Like
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flag
M Mark A. Rosasco SUBSCRIBER 3 hours ago "A whole generation with a new explanation" ,
history definitely rhymes.
According to John Kenneth Galbraith, financial memory is usually about 20 years, then
lessons need to be re-leaned the hard way, either with financial euphoria or I would say with
tax polices that promote economic growth.
J John Augsbury SUBSCRIBER 4 hours ago It is regrettable that Biden has done less than
nothing to bring the country together. Biden has allowed Nancy Pelosi and Chuck Schumer to set
their own agendas and leadership seems to come from back rooms. Main Stream Media provide
nothing but a cheer leading section or cover for the illegal immigration crisis. Like
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S Sharif Ahmed SUBSCRIBER 4 hours ago "he doesn't have a mandate .... no, he doesn't have a
mandate... no mandate....no..," the conservative muttered as he stared blankly at the asylum
walls.
Another 'no mandate' article from the people who continue to disregard a 7 million vote
thrashing. We'll be forced to read these for years to come I guess.
Like thumb_up 3 Reply reply Share link Report
flag Andrew Colin SUBSCRIBER 4 hours ago When they decided to count those *7
million at 4am is when things get sticky Sharif.
Sadly these fringe ideas this joke of a president is pushing will never be mainstream, no
matter how many times the media tells us that they are.
D Daniel Altorfer SUBSCRIBER 3 hours ago Biden has been a life long salaried public tax
absorber for 50 years with nothing to show for it. Maybe your vote is the real comedy here.
Like thumb_up 12 Reply reply Share link Report
flag John Briscoe SUBSCRIBER 4 hours ago This whole piece is an admission
that Republicans have lost any credibility with US Citizens aged less than 60 years. Like
thumb_up 7 Reply reply Share link Report
flag
D Daniel Whitworth SUBSCRIBER 4 hours ago I am under 60 years old and am now a Republican;
formerly a Democrat. I challenge your assessment.
Like thumb_up 19 Reply reply Share link Report
flag Andrew Colin SUBSCRIBER 4 hours ago Former Dem, under 40, now a Repub,
will never vote Dem again after the handling of COVID-19 and the woke mob.
In fairness I don't typically side with Facebook and corporate America on fringe ideas, but
rather actual progressive ideas.
You couldnt be more wrong in your assessment. The Dem party is a collection of underemployed
social media addicts that are typically obese and unhappy... if we want to be accurate. Like
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C C F ETTER SUBSCRIBER 4 hours ago
The Bolsheviks, a tiny but ferociously focused minority, proceeded in this way in 1917.
Those who don't know their history are doomed to repeat it. Like thumb_up
14 Reply reply Share link Report flag
J JOHN OWEN SUBSCRIBER 4 hours ago The Bolsheviks led to the rise of Stalin. Like
thumb_up 13 Reply reply Share link Report
flag
M Mary Rhee SUBSCRIBER 5 hours ago I just finished reading "I chose Freedom," by Victor
Kravchenko, published in 1946. He writes about his eventual repudiation of the Communist system
and his escape to the west. Like so many young idealists, he was an ardent believer in the
teachings of Lenin, Marx, and Stalin--until he saw the evils of collectivization and the
subsequent starvation of the peasants, the lying of the press, and the State's justification of
brutality and often murder for "the higher good." In our country today, some of these same
tactics are being implemented. True, they are being implemented on a lesser scale than Victor
Kravchenko experienced, but the seeds of totalitarianism are being groomed, fostered, and even
praised by today's extreme Left. We need to stop this brainwashing. Granted, the extreme Right
has its flaws, too, but they don't control the press, universities, or Silicon Valley. Both
parties need to dump their extremists so that we can get our country back. Like thumb_up
3 Reply reply Share link Report flag
C C F ETTER SUBSCRIBER 4 hours ago It wasn't stolen. It was manipulated. Manipulated by the
press, by social media, the FDA, the FBI and our intelligence 'professionals' of the past and
present and Covid was the blessing bequeathed upon the Democratic Party by the Chinese
communists.
S Susan Lynch-Smith SUBSCRIBER 4 hours ago Also, news media with their selective coverings,
especially with Hunter Biden and Biden himself, of whom is an idiot. But wait, we the people
are the idiots as it is a runaway train now with you do not speak out unless it is for the
administration and the left-wing ideologies.
Over the months there have been letters to the editor regarding academia,
"Academic Freedom Long Ago Withered Away" (Letters, March 5) being a case in point. I find
it interesting that for the most part they are written by professors emeriti or retired
academics, not active ones with a job to lose. This is very telling in and of itself.
David Zeiler's
post
("How
We Know Stock Market Crash Is Coming") was one of several crash predictions in the first quarter of 2021. And yet, the first day of
the second quarter ended with the S&P 500 breaking through 4,000 to close at an all-time high of 4,019.87. Rounding up, that's four
thousand twenty reasons to ignore
permabears
.
It's one thing to hedge against downside risk - we've been big advocates of that (more on that below) - but betting on a collapse
because you're negative about politics or the government is a recipe for losing money.
There were certainly reasons to be cautious at the end of last year - there always are. But if you bet against the market and the
dollar and bet on gold then, you've taken L's on all three since.
The Markets Versus The Real World
Markets impact the real world and vice-versa. George Soros spends lots of words explaining this under his theory of "
reflexivity
",
but it's easier to explain with a couple of examples. The real world impacting the market is an easy one: Russia invaded Finland in
1939, and Finish bonds tanked. But markets impact the real world too. A recent example was the WallStreetBets crowd bidding up the
price of AMC shares. That enabled AMC to float a secondary offering, raising money to keep the theater chain in business. Thanks to
a bunch of Robinhood traders, movie theaters stayed open in the real world.
Although markets and the real world impact each other to some extent, markets are not the real world. A lot of negative things that
happen in the real world have no impact on the market, and vice-versa. For example, we've written recently about the
anarcho-tyranny
in
America's cities, and how depraved teens
murdered
an
immigrant working a sub-minimum wage in our capital. Terrible stuff, but it has no impact on the stock market, and another new high
in the S&P 500 won't impact it either.
Japan As Another Example
Japan offers another example of the distinction between markets and the real world. In February, the Nikkei 225, Japan's main stock
index, crossed above the 30,000 level for
the
first time
since 1990. For thirty years, Japanese stocks went nowhere, but that doesn't mean Japan went nowhere. They kept
improving their enviable country. Compare, for instance, their bullet train network in 1990...
To their network in 2020.
Lost in translation
10 hours ago
Stop
investing; instead, cash out, go Galt.
Stop
supporting a system that hates you and wants you dead.
Orlov
warned us ...
philipat
5 hours ago
I
really like Orlov, he makes some very smart observations. One of his most brilliant I thought was to point
out that "
A large part of the US economy depends on selling over-priced services to ourselves, which
ultimately doesn't amount to much
". How very true..
philipat
13 hours ago
2020 GAAP Earnings have a forward P/E of 40X. That's unprecedented and absurd, especially since there is no
recovery and the economy will collapse after the "stimulus" ends.
Agreed
about Silver, especially now FINALLY more people have understoof what a scam the paper PM derivatives
"markets" are and are buying physical. It's collapsing at the edges, with the Perth Mint leading the way in
exposed fraud!!
Automatic Choke
PREMIUM
8 hours ago
(Edited)
ok.
an interesting read, though, is "This Time Its Different". a very thorough evaluation of all financial
crises since the stone age. they ask the question, "is it possible to borrow your way out of a debt
crisis?" spoiler: "no".
your
argument says that the fed must keep spiking the punchbowl harder and harder to keep the party going. i
don't disagree. i only claim that there is a limit, and all of history agrees.
(edit)
by the way...how old are you? i was around when people were buying home mortgages at 18%, and it wasn't
pretty.
philipat
5 hours ago
(Edited)
I
think the Fed has nothing left. All it can do is jawbone and QE (Or QE in the slightly different form of YCC).
And it will until it collpases or there is the reset - whichever comes first. The economy started turnong
down in 4Q2018 and became noticeable in Sept 2019 with the Repo events. Well before Covid, which is just the
excuse and cover for many things. So if Covid goes away, as soon as the "stimulus" ends, the economy will
turn down again.
I'm
old enough to remember that too. But luckily never had a mortgage. Moved around the world with MNCs and had
accommodation paid for until I designed and built my own place in the tropics and by then was able
to pay cash.
Abuse of "Family office" was the only invention of Bill Hwang. and he was not the first to
exploit this loophole to accumulate unsustainable level of leverage.
One of them walks for hours through New York's Central Park listening to recordings of the
Bible and embraces a new, 21st-century vision of an age-old ideal: that of a modern Christian
capitalist, a financial speculator for Christ, who seeks to make money in God's name and then
use it to further the faith. A generous benefactor to a range of unglamorous, mostly
conservative Christian causes, this Hwang eschews the trappings of extravagant wealth, rides
the bus, flies commercial and lives in what is, by billionaire standards, humble surroundings
in suburban New Jersey.
That same Bill Hwang, it turns out, is also a backer of one of Wall Street's hottest hands
of late, Cathie Wood of Ark Investments. Like Hwang, Wood is known to hold Bible study meetings
and figures into what some refer to as the "faith in finance" movement.
And here, at last, is where the Bill Hwangs collide. The fortune he amassed under the noses
of major banks and financial regulators was far bigger and riskier than almost anyone might
have thought possible -- and these riches were pulled together with head-snapping speed. In
fact, it was perhaps one of the greatest accumulations of private wealth in the history of
modern finance.
And Hwang lost it all even faster.
... ... ...
But before the next success, Tiger Asia ran into more trouble -- this time, trouble big
enough to bring Hwang's days as a hedge fund manager to an end.
When Tiger Asia pleaded guilty to wire fraud in 2012, the SEC said the firm used inside
information to trade in shares of two Chinese banks. Hwang and his firm ended up paying $60
million to settle the criminal and civil charges. The SEC banned him from managing outside
money and Hong Kong authorities prohibited him from trading there for four years (the ban ended
in 2018).
Shut out of hedge funds, Hwang opened Archegos, a family office. The firm, which recently
employed some 50 people, initially occupied space in the Renzo Piano-designed headquarters of
the New York Times. Today it's based further uptown, by Columbus Circle, sharing its address
with the Grace & Mercy Foundation.
"My journey really began when I was having a lot of problems in our business about five or
six years ago," Hwang said in a 2017 video. "And I knew one thing, that this was a situation
where money and connections couldn't really help. But somehow I was reminded I had to go to the
words of the God."
That belief helped Hwang rebuild his financial empire at dizzying speed as banks loaned him
billions of dollars to ratchet up his bets that unraveled spectacularly as the financial firms
panicked. What ensued was one of the greatest margin calls of all time, pushing his giant
portfolio into liquidation. Some of the banks may end up with combined losses of as much as $10
billion, according to analysts at JPMorgan Chase & Co.
... ... ...
Doug Birdsall, honorary co-chairman of the Lausanne Movement, a global group that seeks to
mobilize evangelical leaders, said Hwang always likes to think big. When he met with him to
discuss a new 30-story building in New York for the American Bible Society, Hwang said, "Why
build 30 stories? Build it 66 stories high. There are 66 books in the bible."
Before so much went so wrong so fast, Archegos appeared to be ramping up. A year ago, Hwang
petitioned the SEC to let him work or run a broker-dealer; the SEC agreed.
It's impossible to say where Bill Hwang, the hard-charging financial speculator, ends, and
Bill Hwang, the Christian evangelist and philanthropist, begins. People who know him say the
one is inseparable from the other. Despite brushes with regulators, staggering trading losses
and the question swirling around his market dealings, they say Hwang often speaks of bridging
God and mammon, of bringing Christian teaching to the money-centric world of Wall Street.
By 2024 world output will still be 3% lower than was projected before the pandemic, with
countries reliant on tourism and services suffering the most, according to the IMF.
... "The Biden stimulus is a two edged sword," said former IMF chief economist Maury
Obstfeld, who is a now senior fellow at the Peterson Institute for International Economics in
Washington. Rising U.S. long-term interest rates "tighten global financial conditions.
Whether "working from home" is a temporary fad or a permanent "new normal" remains to be seen; what becomes more evident is
the mounting supply glut of corporate space in Manhattan, according to
Bloomberg
,
citing a new report from real estate firm Savills.
Savills said the amount of office space available in Manhattan is at a three-decade high. The report, released on Thursday,
said the availability rate soared to 17.2% in the first quarter. The rise in the rate was primarily due to a massive surge
in sublease space, which now stands at 22 million square feet, or 62% higher than 2019 levels.
"Abundant short- and long-term options are driving price reductions," Savills noted. "Many owners are proposing
historically aggressive rates, concessions, and flexibility to secure tenants amid so much competition."
Savills said rents fell for the fifth consecutive quarter to around $76.27 a square foot, down 9% from a year earlier.
These cheaper rents are creating a massive opportunity for companies who want to enter the city.
Desperate landlords were offering generous concessions for long-term leases at newly constructed buildings: "Average tenant
improvement allowances jumped 16% and free rent surged 17% to an average of 13.5 months. The tenant-friendly market is
expected to last for at least the next 12 to 18 months," Savills said.
The Manhattan office market continues to struggle more than one year after the pandemic hit, which has emptied Manhattan's
skyscrapers. And since most employees are still working from home, just around 24.21% of workers in the New York
metropolitan area were back at their desks as of this week.
Even with the vaccine rollout now reaching 100 million Americans, companies are still opting for "hybrid" work as remote
working
dominates
.
In a past report, Jim Wenk, a vice chairman at Savills North America, said commercial real estate in the borough will have
a "very choppy period for the foreseeable future."
A
recent
survey
from the Partnership for New York City found 66% of Manhattan's most prominent employers would allow employees
to work under hybrid work arrangements, meaning they would Manhattan's most prominent employers.
As more proof the work environment is rapidly changing, major magazine publisher Conde Nast (who owns brands such as ARS
Technica, GQ, Teen Vogue, The New Yorker, Vanity Fair, Vogue, Wired, among other popular magazines) is a major anchor
tenant in the new World Trade Center, recently
skipped
out
on rent as it asked for rent discounts and a reduction in square footage.
Last month, JP Morgan was
reportedly
looking
to sublet hundreds of thousands of square feet at 4 New York Plaza in the financial district and 5 Manhattan West in the
Hudson Yards area.
To make matters worse, Hudson Yards, a massive complex on Manhattan's Far West Side with condos, office space, and
retailers built over an enormous railroad yard had investors panic because the company
refuse
d to
open its books. The combination of work-at-home and folks moving to suburbs has left Hudson Yards and other places across
the borough a 'ghost town.'
This all suggests that the virus pandemic has brought years of technological change to the work model that has possibly
made companies more productive and cut costs as employees work from home or adopt a hybrid work model. Without office
workers returning to the borough, there can't be a robust recovery in the near term.
Consolidation continues in the Permian. Pioneer CEO Sheffield has stated repeatedly recently
that the goal is free cash flow now and not growth at all costs. As smaller producers continue
to get marginalized, rapid production increases in tight oil are likely a thing of the past.
Most likely a good thing for everyone.
A senior official from Nord Stream 2 AG, the project company leading the Nord Stream 2 Russia to Germany natural gas
pipeline project,
has
reported
an uptick in "provocative" activity from warships and planes in the
area where the pipeline is being built
.
"Higher activity of naval vessels, airplanes and helicopters and civilian vessels of foreign states is observed in the work
area after restarted construction of the offshore segment of the Nord Stream 2 gas pipeline, whose
actions
are often clearly provocative
," said Nord Stream AG official Andrei Minin,
according
to the Russian news agency TASS
.
Above: the pipe-laying vessel Fortuna, which is operated by the Russian company KVT-RUS
and recently targeted by US sanctions. Image via Reuters
Minin said a 1.5-mile safety zone is established around the construction area where vessels are not supposed to enter.
"Nevertheless, naval vessels of foreign countries are constantly registered near service ships performing work," he said.
He added that a Polish antisubmarine warfare airplane is
"regularly flying around
the work area at a small height and closely to the pipelay vessel."
Minin said in one provocation,
an unidentified submarine was above surface within
one mile of the pipeclay vessel Fortuna
, a ship that was
hit
with US sanctions on January 19th.
Minin said the activity indicates "obviously planned and prepared provocations."
Besides warships and planes, he said fishing vessels have also come dangerously close to the construction area.
The Nord Stream 2 pipeline has been in the crosshairs of the US for years, but despite sanctions and threats, Nord Stream
AG reported on Thursday
that
the project is now 95 percent complete
. Construction restarted in December 2020 after being suspended due to threats of
US sanctions.
Although it's not clear if the US is involved in these provocations, it is likely. Washington seems willing to take extreme
measures to
stop
the project and is
threatening to sanction its ally Germany
. Besides
the US, another country keen to stop the project is Ukraine,
which
stands to lose up to $3 billion
a year in gas transportation fees if the pipeline is complete.
The original Nord Stream consists of two lines that run from Vyborg, Russia, to Lubmin, Germany, near Greifswald. The new
project would add two more lines, doubling the amount of natural gas Russia could export to Germany.
play_arrow
Be of Good Cheer
1 hour ago
$3
billion loss to the Biden Crime Family. No wonder he wants to stop NS2.
NoPension
1 hour ago
^^^^^!!!
Pair Of Dimes Shift
45 minutes ago
10% to the big guy would be $300M.
Damn right the big guy's handlers are pissed.
Rid'n Dirty
1 hour ago
The
US spends over $1 trillion on "defense" with over 800 bases worldwide, yet we have no control over who
illegally takes up residence here. America has become an ugly hegemon run by Wall Street and other
corporate whores. Almost 2/3rds of the world is under some type of US sanction designed to wreck
economies and starve innocent people (Houthis, Syrians and Iranians).
Let's see if Germany can do what's best for its economy for the first time since 1945.
Based Fren
1 hour ago
It's so tiresome. We just have to stick our finger in everyone else's business.
naro
1 hour ago
Have you heard of the MILITARY INDUSTRIAL COMPLEX. Wars is their oxygen.....they are looking for
wars wherever they can find it.
ManOnFirst
59 minutes ago
a
Polish fishing vessel rammed a construction ship and blamed a faulty engine for the incident. I really
hate the Poles. They are the whiniest, most cowardly country in the world. They lament the fall of
their empire 1000 years ago and think they could still be a superpower if only the big, bad Russians
weren't so mean. Oh, and the big, bad Germans too.
SoDamnMad
27 minutes ago
I'm
surprised the Russians didn't throw a 3 liter gasoline jug with a burning rag taped to it down on that
fishing vessel. Your telling me no steerage and no engine control. Two can play this game. Poles best
not try to lay any communication cables in the next 20 years.
Games Without Frontiers
1 hour ago
(Edited)
Globalists from the US doing everything they can to prevent a more independent EU. The further away you
can get from a dying and dangerous empire the better.
2banana
1 hour ago
Established by whom?
Oh,
you just made that sh!t up in international waters in one of the most heavily used trade routes in the
world.
Minin said a 1.5-mile safety zone is established around the construction area where vessels are not
supposed to enter. "Nevertheless, naval vessels of foreign countries are constantly registered near
service ships performing work," he said.
Games Without Frontiers
1 hour ago
It's international waters but safety zones are always established on this type of industrial project,
it's hard to enforce in open waters but the West looks like a bunch of tools as usual.
not-me---it-was-the-dog
43 minutes ago
(Edited)
remove
link
....
Shipping
and shipping lanes In Danish waters, the proposed NSP2 route will run inside and along the TSS Bornholmsgat for
approximately 42 km close to the Swedish EEZ. The TSS Bornholmsgat carries most of the ship traffic to/from the
Baltic Sea and experiences over 50,000 ship passages per year. The proposed NSP2 route additionally crosses the
TSS Adlergrund in the Danish and German EEZs, which has approximately 7,000 ship movements per year. Safety
exclusion zones will be implemented around slow-moving construction vessels. Only vessels involved in the
construction of NSP2 will be allowed inside the safety zone; therefore, all other vessels not involved in
construction activities will be requested to plan their journeys around the safety zone. The shipping lanes
crossed by the proposed NSP2 route in Danish waters provide sufficient space and water depth for ships to plan
their journey and safely navigate around possible temporary obstructions. The impact on ship traffic associated
with the imposition of a safety zone is assessed to be minor and associated with local and temporary changes to
the traffic scheme. Therefore, it is assessed that there will be no significant transboundary impacts on Baltic
Sea ship traffic caused by the NSP2 project in Danish waters.
so....umm....since the work is being done in danish waters, well, gosh, i would guess the exclusion zones are set
up with......wait for it......danish authorities. and the last bits in german waters will require german
authorities to set up the exclusion zone.
Ukraine gets 3B a year in transit fees for Russian gas...
rejectnumbskull
15 minutes ago
Besides the US, another country keen to
stop
the
project is Ukraine,
which
stands to lose up to $3 billion
a year in gas transportation fees if the pipeline is complete.
Did
you not read this sentence in the article correctly?
"It is a dimension as vast as space and as timeless as infinity. It is the middle ground
between light and shadow, between science (reality) and superstition (bubbles), and it lies between the pit of man's fears
and the summit of his knowledge (fundamentals). This is the dimension of (economic) imagination. It is an area which we
call The Twilight Zone."
-
Rod Serling, introduction to the TV series, 1959 [our comments in ( )]
Our economy has entered the twilight zone. Today, economic leaders base policies on a hoped-for
utopia
with
bubbles called 'growing markets' and greed termed 'good valuations'. The
twilight zone
economy
is a place where fundamentals have disappeared. It is a utopian world of no moral hazard for business, financial
or economic mistakes. In the last year, the Federal Reserve has injected over $4.1T into the banking, hedge fund, Wall Street
complex of the financial elite. Vast injections of dollars have sent stock valuations to record highs. Yet, the
pandemic-driven economy is real for 19M Americans out of work, others who lost 540,000 loved ones, and millions carrying
housing debt due to missed rent and house payments.
Policymakers Disconnected From the Real Economy
Yet, policymakers continue to become further disconnected from the real economy where people work and spend. These leaders
imagine an economy of full employment forever, risk assets continually rising in price (not value) with virtually no market
corrections. It is an economic wonderland for corporations to use low-cost debt to finance infinite profits and stock
buybacks. Wall Street is only too pleased to hype this corporate financial engineering. Goldman Sachs forecasts a GDP surge
to 8% in the 4th quarter of this year due to the $1.9T American Rescue Bill. Bond king Bill Gross predicts interest rates
surge to 3 – 4 % by year end.
Does all this monetary and fiscal stimulus result in a
healthy solid economy or the most catastrophic inflationary bubble in modern times
? Our post identifies the dimensions of
the Twilight Zone Economy.
Astronomical Public Debt Drags Growth
The country is drowning in low-interest debt. But, this liquidity 'soma' drug is putting investors to sleep, thinking
everything will be ok. Now, public debt is at levels not seen since WWII and projected to go to 200% of GDP by 2051.
Source: CBO, The Daily Shot – 3/15/21
During WWII, debt supported production capacity for building weapons, planes, and infrastructure to support the war effort.
When the war was over, the US was the only major economy intact, leading to a high growth productive economy. The investment
in productive industries increased the standard of living for most Americans.
Sources: Blackrock, IMF, OECD, The Daily Shot – 3/15/21
Are the present monetary debt and fiscal stimulus programs of relief payments resulting in productive investment? This chart,
by Lance Roberts, shows how increasing public debt has resulted in a continuing decline in real economic growth.
Source: RIA, Lance Roberts, 3/17/21
Public debt not used for solid investments in infrastructure, basic research for innovation, or productivity has resulted in
an ever-growing debt level to achieve a continuing decline in economic growth. This cycle of low-cost ballooning debt to
finance debt service and transfer payments will likely result in economic stagnation or worse.
Negative Yielding Debt Triggers Speculation
Sovereign negative-yielding debt reached a record high of $17.8T last month. Thus, a massive level of worldwide debt is not
repaying the entire principal to debt holders. Correlated to soaring negative-yielding debt is the meteoric rise of trader
speculation in Bitcoin and other cryptocurrencies.
Sources: Daily Feather, Bloomberg – 3/22/21
Such parabolic moves in debt and speculative digital currencies like Bitcoin are candidates for a significant reversion in
value at some date in the near future.
Equity Markets Are In An Alternate Reality
Why is a firm like Tesla valued at the same level as the next six largest car companies or the oil industry's total market
capitalization? Isn't Tesla's valuation in the economic twilight zone? Analysts value Tesla at $1M per vehicle produced versus
GM at $5000 per vehicle. While VW is building six battery factories in the EU, and vows by 2025 to produce over 1.2M EVs in
2022, matching Tesla's total output. VW has now taken over the dominant market share in Europe and is opening EV plants in
Asia and North America.
There are 15 major car manufacturers, including GM, Ford, Toyota, Honda, Nissan, BMW, Mercedes, investing billions into EV
production plants and battery facilities. Tesla may have a first-mover advantage in the EV market, but it may wind up like
Yahoo, losing out to Google in the internet search sector. The following chart shows S&P valuations at Dotcom Crash levels in
2000.
The following chart shows the record valuation of stocks as a percentage of GDP back to 1952!
Sources: Charles Schwab, Bloomberg – 12/31/20
Traders are using ever-increasing levels of margin to buy stocks. Corporate executives with record levels of cash are
resuming stock buybacks as the Dow and S&P continue to set new record highs. Yet, corporate sales and economic fundamentals
don't support this extreme valuation case.
This chart from Real Investment Advisors notes the divergence of stock valuations growing to 164% versus corporate sales
growth of 42% and GDP growth at 22% since 2007.
Source: Real Investment Advisors – 3/20/21
Investors, executives, and the Federal Reserve are addicted to low-interest rates. And just like physical addiction, the time
will come when the zero-interest economic drug won't work anymore, and withdrawal sets in spiraling into a market crash.
Bubbles Bubbles Everywhere
Another sign of an alternative reality is bubbles in non-financial markets. For example, Christie's just sold a digital work
of art by an artist known as Beepie for $69.3M with a non-fungible (exchangeable) token (NFT) when the bidding started at just
$100. NFT collectible prices have sky rocked, providing the buyer with ownership rights indicating their purchase is
authentic. Beepi knows he's riding a soaring market, observing, 'Absolutely it's a bubble, to be honest."
An NFT buyer purchased 351 Top NBA Shot videos for $5,000 last January in the video clip market. Based on social media
chatter, Momentranks.com values the videos at $67,000 today. Sneaker reselling has soared as the collectible marketplace,
StockX, announced that Nike Dunks sold for $33,400 two months ago. StockX disclosed that a Tom Brady rookie trading card sold
for a record $1.3M in January. Even innocuous things like Twitter CEO Jack Dorsey's first tweet sold for $2.9M. Venture
capitalists Marc Andreessen and Ben Horowitz note what motivates mania buyers at a collectible forum:
Andreessen:
"A big part of the entire
point of life is aesthetics. The way that we live and the design of things around us and artistic creativity."
Horowitz:
"It's a feeling. You're buying
a feeling. And what's that worth?"
Writer Ben Carlson notes in his analysis of bubble markets that:
"We're
emotional. We lead with our feelings. We're superstitious."
Superstition is a characteristic of the Twilight Zone Economy.
Core City Life Is Changed Forever
Many think life will go back to the way things were in February 2020. We disagree. Life has changed forever in America. The
lack of commuters changes core city life where they are the heartbeat of neighborhoods surrounded by office towers. Millions
of small businesses and restaurants dependent on commuter patronage are scrambling to survive. When they had the opportunity,
millions of workers worked from home and found they could perform successfully remotely. Hundreds of thousands of workers
left cities to move to another less costly city or region. Some analysts think 99% of commuters will come back to city
offices.
Yet, surveys show that from 20 – 25 % of professionals in dense city centers like New York and San Francisco want to work from
home at least 3 – 4 days a week or work from home full time. Based on remote worker management experience companies are
restructuring their reporting hierarchy. Global corporations to startups are moving to a distributed worker organization,
further flattening the reporting structure for improved performance and business agility.
The lack of office workers leaves 20% of offices in core cities vacant, putting banks and commercial office space landlords at
risk for billions of dollars in lease income. Plus, small businesses in these core cities have lost 50- 60% of their sales.
Business owners hold billions of dollars in lease debt which must be paid off even after 80% of commuters return. Innovative
new small businesses and restaurants will emerge to support these commuters. Plus, new attractions and business models will
bring back visitors crucial for the leisure and hospitality sectors.
Millions of Workers Are Long Term Unemployed
About 19M workers collect continuing unemployment, of which 39.5% have been unemployed over 27 weeks. These permanently
unemployed workers will have a difficult time finding their next job. While Indeed reports that job openings are up 3.7 %
from January 2020, millions of workers are still unemployed. Many of these workers do not have the job skills to be hired for
many new manufacturing and services jobs. Bank of America completed an analysis of unemployment pre – COVID to the trajectory
of employment post COVID showing a lingering decline in the labor force.
Sources: Bank of America, CBO, Zerohedge, Real Investment Advisors – 2/12/21
The BofA analysis shows a permanent loss of employment in labor force size in Phase 3 of the recovery. The reality of the
economy that workers and consumers will likely live in is an economy of debt dragging economic growth with poor job prospects.
Job prospects for millions of workers will be limited by their lack of marketable skills. A major workforce segment faces a
long financial recovery time from either the loss of their business or job. Lack of consumer spending by the permanently
unemployed will slow the recovery.
Corporate Executives Join In the Party
In the 1950s, CEO pay to average worker pay was 50 times. Today, CEO pay is 350 times average worker pay, with Wall Street
applauding stock buybacks totaling 1.4T in 2019. While buybacks fell to $450B in 2020, Bloomberg forecasts stock buybacks to
resume $150B per quarter in 2021. Stock buybacks create overvalued markets. Ned Davis Research estimates the SPX as overvalued
by at least 20% due to stock buybacks distorting prices in 2019. A company gooses prices by using cash to purchase shares in
the open market, thereby reducing the stock pool for public investors. If demand stays the same, prices go up.
Yet, the company has not increased in substantive value. Many executives used low-cost debt to make stock purchases that
saddle the company with major debt obligations. Executives must refinance these debt obligation or pay them off in the near
future. In January 2020, corporate debt hit a 30-year record 49% of GDP, while interest rates were low. Fitch forecasts a
jump in corporate loan defaults in 2021 to 8 – 9% from a 2020 default range of 5 – 6%.
Sources: Fitch Ratings, Vuk Vukovic – 9/22/20
A significant default storm looms in the coming years as interest rates rise.
Another cash flow squeeze is developing in profit margins. Prices paid for goods and services are increasing at a rate far
faster than corporations can raise end customer prices in the following chart.
Sources: Mizuho Securities, The Federal Reserve Bank of Philadelphia, The Daily Shot –
3/19/21
Note the gap between prices paid and prices received in 2009 just before the 2009 fall. A similar cash flow squeeze seems to
be strengthening.
Policy Makers Are Missing Solid Economic Landmarks
To pilot a ship along a coast and into a safe harbor, a captain needs recognizable landmarks and beacons.
Our
policy – captains are in a twilight zone fog.
Many key economic indicators do not actually measure what policymakers tell
us they do. Stock earnings per share reports are financially manipulated by stock buybacks misleading investors as to the
actual earnings per share compared to pre-buybacks. The Fed holds interest rates artificially low with the resulting
liquidity injections distorting debt markets. Unemployment rates are not accurate when the Bureau of Labor Statistics shows a
rate of 6.7%. But, according to state unemployment reports, 19M workers are on continuing unemployment. Thus, the unemployment
rate is more like 12.6%.
The Fed's inflation consumer price index figures exclude 'volatile energy and food prices, which are expenses consumers
experience every day. Since the federal government in 1999 changed to a 'consumer lifestyle buying pattern' approach rather
than a standard price comparison, inflation has consistently been under-reported. In 1998 the Bureau of Labor Statistics
shifted to an 'owner equivalent rental cost' for homeownership. Using the Case-Shiller Home Price Index since 2019 shows the
BLS OER-based approach understates CPI dramatically at 1.0% vs. the Case-Shiller model at 2.5%.
Industry Research On The Real Economy Is More Accurate
Chapwood Investments publishes a biannual index including 50 cities comparing consumer goods and services prices on 500
consumer items. Their analysis showed the top ten cities in the US with an average inflation rate of 10% in the second half of
2020. A marketing industry research firm compared price changes for 220 often purchased consumer products at Target and
Walmart comparing 2018 to 2019 prices on average, the increase was 5 – 6% for both stores. Corporate marketing executives
must have accurate information to make reasonable sales forecasts and plans for investment. Our policy leaders can learn from
their example.
The Way Out of the Twilight Zone
To leave the Twilight Zone grip requires policymakers to recognize financial and real
economy fundamentals. They need to drop the no economic pain utopia model.
Policymakers need to get real with their
statistics and tracking systems to base their policy initiatives on the real economy. Analysts need to use fundamentals for
stock market and financial valuations. The Fed should stop rescuing failing hedge funds, zombie companies and end the
addiction to low-cost debt. Washington can start paying for new spending programs with increased focused taxes, ending
government waste and lower spending. The focus needs to be on a monetary and fiscal set of policies sustaining
entrepreneurship, hard work, and allowing the economic consequences of business failure to run their course.
To avoid the inevitable market crash, these programs need to be phased in over several
years to allow for investors, executives, and consumers to make adjustments to their portfolios.
It
is as if economic leaders have sent investors up an infinite 'wall of price' like a free solo climber, with no safety rope
leaving them to the inevitable fate of fundamental economic gravity
.
takeaction
3 hours ago
(Edited)
I stopped right
here...
" who lost 540,000 loved ones "
People die
every day...and it is NOT from the scamdemic...
In regards to
this economy...with Biden being propped up, the printing will not stop...
So watch asset
prices continue to explode. Don't short anything right now.
There will be a
time to short...but IMO not now..you will get crushed.
mrktwtch2
PREMIUM
3 hours ago
remove
link
I live
in a small suburb north of Chicago in the county of mchery il we r 12 miles south of the Wisconsin
border..my wife paid 139k for her town home in 2002 it went down to 78k during the crash but now its worth
195..since the joggers burned the cities down everyone is trying to move out of the city..strange times
indeed
USAllDay
3 hours ago
The
stupidity is just getting started. Yield curve control, price fixing, never ending eviction and foreclosure
moratorium extensions, constant stimulus for fat alcoholic/meth addicted "single mothers". The collapse will
be beautiful. Nothing this dirty should exist.
SMC
27 minutes ago
The
thing we can do is enjoy every day to the fullest and not help them peddle their idiocy and fear.
If we
are right, they are destroying themselves.
Mathematics, Physics and Chemistry may be "*-ist" but they combined with staying in shape, focus and
dedication are key to our survival.
There's a saying that bull markets climb a wall of worry.
Investors are always looking for something to go wrong when things are going right. With
stocks at or near all-time highs, investors have begun to fret over higher interest rates and
their potentially negative impact on economic growth, coming inflation and what higher rates
portend for stock-market valuations.
Higher rates, however, probably won't kill the bull market. Corporate management teams might
do that all on their own. New stock sales by companies already flush with cash is sending a
coded message to investors that things might be as good as they get.
Interest rates are always a concern for the market and the overall economy. Higher interest
rates make everything more expensive including home mortgages and car payments. It also makes
it harder to start and grow businesses.
For the market, higher interest rates tend to depress price-to-earnings multiples. The
reason is, essentially, math. If investors can make more interest on their bonds, they demand
more return from stocks. Higher returns tomorrow means paying less for stocks today.
Here's the thing. Inflation isn't running wild. The yield on the 10-year Treasury bond is
about 1.7%, up from recent lows, but lower than where yields finished 2019. That isn't a high
enough rate to choke off economic growth. At 3% and higher, the oxygen intake could start to
get cut off.
Inflation expectations aren't out of line with history either. Inflation expectations can be
measured by the difference in traditional government bonds yields and the yield on government
inflation protected securities. Essentially, the face value of an inflation protected bond goes
up by the consumer price index. The difference in yield between the traditional bond and the
inflation protected bond is the level of inflation required to make an investor the same return
on both.
Today, the 10-year yield is at roughly 1.7%. The 10-year inflation protected yield is
negative 0.7%. So inflation has to average about 2.4% for both bond holders to get the same
return.
Investors should watch out for inflation, but they should be more concerned with recent
stock sales by companies flush with cash.
While a robust domestic recovery is great news for corporate profits, it might not be for
stock prices if bond yields keep climbing -- especially technology stocks, which have proven to
be especially sensitive to yields recently. Back in December when vaccine and stimulus plans
were known, economists thought that the 10 year note's yield would be 1.08% in June. It
jumped to 1.72% on Friday in response to the jobs report. Some forecasters see it topping
2% this year for the first time since the summer of 2019.
If we are to believe authorities the USA. added 916K jobs in March, and the official
unemployment rate is at 6% (note the word official; the current official U6 unemployment rate as
of March 2021 is 10.70%; so the real number is probably much higher than 10%)
Fudging data became as prominent as it was in the USSR. The neoliberal empire can't afford objective stats.
Notable quotes:
"... monthly data is collected over a brief timeframe - just a few days - and that the calculations are seasonally adjusted. ..."
"... Yes, at least half the sheep population think they are real. It's insane how dumb people are today. ..."
I spent the last 2 weeks digging into the numbers - especially timing of the surveys and
data collection. I get the fact that weekly claims don't reflect new hires. I also realize
that monthly data is collected over a brief timeframe - just a few days - and that the
calculations are seasonally adjusted.
But let's be reasonable - how is it possible to have 700K - 800K initial jobless claims
every week and create nearly a million new jobs? Does anyone really believe any of these numbers?
Globalistsaretrash
Yes, at least half the sheep population think they are real. It's insane how dumb people
are today.
Apparently it was "You pissed on my rug!". I guess if they update that book and article,
they'll include Trump characterizing Justin as "weak and dishonest" - which I would say,
based on his 7 years as PM, is blunt but accurate.
I think you're right that any US concessions are just a reprieve. That
non-agreement-capable thing. Freeland and Justin don't care, they're looking forward to
getting rich after leaving office, like the Clintons, Obama, etc. as a reward for their
service to plutocracy.
William Gruff @19, Hoarsewhisperer @16, agreed. That, it seems to me is the root of the
problem. Our politicians are for sale to the highest bidders. It's no longer democracy, but
full-fledged plutocracy with a veneer of "democracy" that's visibly cracked and flaking off
to anyone but the willfully blind.
solo @38, good point. Saudi Arabia also sided with China on Xinjiang:
Importantly, the Crown Prince said Saudi Arabia 'firmly supports China's legitimate
position on the issues related to Xinjiang and Hong Kong, opposes interfering in China's
internal affairs under any pretext, and rejects the attempt by certain parties to sow
dissension between China and the Islamic world.'
Plainly put, Saudi Arabia has undercut the current US campaign against China regarding
Xinjiang. It is a snub to the Biden administration.
"What Washington and its allies are doing is trampling over international law and kicking
it to the curb. Their conduct is that of rogue states who perceive themselves to be above the
law, entitled to act in whatever way they please with no accountability.
"Ironically, and sickeningly, the Americans, Europeans, Canadians, Australians and other
partners, talk loftily about respecting "values' and 'rules-based international order'. They
are the ones who are trashing any semblance of order. It is these NATO powers that have
launched numerous criminal wars of aggression without any mandate from the UN Security
Council. They have carried out covert regime-change operations which have unleashed mayhem
and terrorism. They impose unilateral sanctions on nations suffering from NATO's intrigues,
such as Syria and Venezuela. They run assassination programs and torture-renditions to black
sites around the world. Their troops kill Afghan civilians in cold blood after kicking down
their doors in the middle of the night. The United States rips up nuclear arms control
treaties with Russia, while sailing warships into Chinese territory."
So, under the tenets of International Law, both Russia and China have the right to
counter-attack and have. But the initial law breaking by the Outlaws must be stopped, and it
appears they must be forced to do so. And since two of the Outlaws sit on the UNSC, using
that organizations Article 7 powers won't do the job as the Veto will be invoked. IMO, the
only alternative is to turn to the UNGA and ask it to override the deadlocked UNSC and
warrant the arrest of the Outlaws by all UN member states wherever they may be.
I hope barflies take the time to read the editorial as it ends with an excellent news item
that's more than apt for our times.
Not only was the March payrolls report a blockbuster, golidlocks number, much higher than expected but not
too
high
to spark immediate reflation/hike fears thanks to subdued wage inflation, job growth in March was also widespread unlike
February, where 75% of all new jobs
were
waiters and bartenders
. By contrast, in March the largest gains occurring across most industries with the bulk taking
place in leisure and hospitality, public and private education, and construction.
Here is a full breakdown:
Employment in leisure and hospitality increased by 280,000 in March,
as
pandemic-related restrictions eased in many parts of the country. Nearly two-thirds of the increase was in food services
and drinking places (+176,000). Job gains also occurred in arts, entertainment, and recreation (+64,000) and in
accommodation (+40,000). Employment in leisure and hospitality is down by 3.1 million, or 18.5 percent, since February
2020.
In March, employment increased in both public and private education,
reflecting
the continued resumption of in-person learning and other school-related activities in many parts of the country. Employment
rose by 76,000 in local government education, by 50,000 in state government education, and by 64,000 in private education.
Employment is down from February 2020 in local government education (-594,000), state government education (-270,000), and
private education (-310,000).
Construction added 110,000 jobs in March,
following job losses in the
previous month (-56,000) that were likely weather-related. Employment growth in the industry was widespread in March, with
gains of 65,000 in specialty trade contractors, 27,000 in heavy and civil engineering construction, and 18,000 in
construction of buildings. Employment in construction is 182,000 below its February 2020 level.
Employment in professional and business services rose by 66,000 over the month.
In
March, employment in administrative and support services continued to trend up (+37,000), although employment in its
temporary help services component was essentially unchanged. Employment also continued on an upward trend in management and
technical consulting services (+8,000) and in computer systems design and related services (+6,000).
Manufacturing employment rose by 53,000 in March,
with job gains occurring
in both durable goods (+30,000) and nondurable goods (+23,000). Employment in manufacturing is down by 515,000 since
February 2020.
Transportation and warehousing added 48,000 jobs in March.
Employment
increased in couriers and messengers (+17,000), transit and ground passenger transportation (+13,000), support activities
for transportation (+6,000), and air transportation (+6,000). Since February 2020, employment in couriers and messengers is
up by 206,000 (or 23.3 percent), while employment is down by 112,000 (or 22.8 percent) in transit and ground passenger
transportation and by 104,000 (or 20.1 percent) in air transportation.
Employment in the other services industry increased by 42,000 over the month,
reflecting
job gains in personal and laundry services (+19,000) and in repair and maintenance (+18,000). Employment in other services
is down by 396,000 since February 2020.
Social assistance added 25,000 jobs in March,
mostly in individual and
family services (+20,000). Employment in social assistance is 306,000 lower than in February 2020.
Employment in wholesale trade increased by 24,000 in March,
with job gains
in both durable goods (+14,000) and nondurable goods (+10,000). Employment in wholesale trade is 234,000 lower than in
February 2020.
Retail trade added 23,000 jobs in March.
Job growth in clothing and
clothing accessories stores (+16,000), motor vehicle and parts dealers (+13,000), and furniture and home furnishing stores
(+6,000) was partially offset by losses in building material and garden supply stores (-9,000) and general merchandise
stores (-7,000). Employment in retail trade is 381,000 below its February 2020 level.
Employment in mining rose by 21,000 in March,
in support activities for
mining (+19,000). Mining employment is down by 130,000 since a peak in January 2019.
Financial activities added 16,000 jobs in March.
Job gains in insurance
carriers and related activities (+11,000) and real estate (+10,000) more than offset losses in credit intermediation and
related activities (-7,000). Financial activities has 87,000 fewer jobs than in February 2020.
It's hardly a surprise that with the US reopening, the one industry seeing the biggest hiring remains leisure and hospitality
where jobs rose by 280,000, as pandemic-related restrictions eased in many parts of the country, with nearly two-thirds of the
increase in "food services and drinking places", i.e., waiters and bartenders, which added +176,000 jobs in March.
And another notable change was in the total number of government workers, which surged by 136K in March, reversing the 90K
drop in February, as a result of 49.6K state education workers and 76K local government education workers added thanks to the
reopening of schools around the country.
Here is a visual breakdown of all the March job changes:
Finally,
courtesy
of Bloomberg
, below are the industries with the highest and lowest rates of employment growth for the most recent month.
7
play_arrow
Jack Offelday
1 hour ago
The "V" recovery. Where Food Service jobs are the new "Golden Age".
Creamaster
47 minutes ago
(Edited)
My wife is a nurse in an outpatient office under a large hospital umbrella here. Normally these outpatient
spots go within days to a week.
Currently they have 2 openings they have been trying to fill for a few months now. Combine that with the
fact my wife got 3 years worth of raises in a single shot, recently and out of the blue for no reason, tells
me the hospitla is really screwed trying to fill nursing spots.
After this pandemic crap, it has likely scared alot of people away from entering healthcare, and if a nurse
was on the fence about retirement , likely decided to call it quits after all this BS.
newworldorder
45 minutes ago
There are an estimated, 30 million illegals currently in the USA waiting legalization.
WHEN legalization happens, they will bring into the USA (by historical averages,) another 60 to 90 million
of their family members in 10 years.
And all of them US Minority workers, by current US Diversity Laws, - same as all Black Americans.
Nice work on pulling all the puzzle pieces together, b!
The really big problem will be weaning the Outlaw US Empire from its addiction to
Unilateralism, which is its primary mode of operation aside from a very brief interlude when
FDR was POTUS, devised the UN and its Charter, and got the Senate to ratify it so it would
become an integral part of the USA's fundamental law of the land.
All one need do to see the gravity of the bolded text is to examine the Outlaw US Empire's
behavior since FDR died--The USA immediately transformed into the Outlaw US Empire on 22
October 1945 when the UN Charter came into full force and the Empire was already in grave
violation of its fundamentals.
That those millions of violations have never seen the inside of a courtroom doesn't mean
they never occurred or aren't now happening globally.
"Nord Stream AG Says Warships, Submarines and Helicopters Tried to Disrupt Pipeline's
Construction":
"However, it seems that in March threats to the pipeline multiplied and became more
'real'.
"The construction site of Nord Stream 2 has been suffering harassment by various vessels
and aircraft in recent months, which nearly led to damage to the pipeline itself, according
to Nord Stream AG representative Andrey Minin. He stressed that the disturbances were
'clearly planned and thoroughly prepared provocations,' devised to stop the joint
Russian-European project in its tracks ." [My Emphasis]
Unilateral Act of War anyone?!! Yes, its the Poles once again.
IMO, it's sad b omitted mentioning the newly formed Friends of the UN Charter Group in his
article since it aims at drowning the "Unilateral, rules based international order" once and
for all time. My promotion of it isn't going to be enough. If all but the Neoliberal nations
become members, then they can jointly aver that there's only one system of international Law
and its based on the UN Charter and all relevant treaties thus shutting up the Outlaw US
Empire regardless its protests. Of course, a movement within the Empire that says the same as
the Friends would go a long ways to getting us where we as humans want to go to--a peaceful
planet that's concerned about the wellbeing of humans and all they need for support instead
of making the rich ever richer through the terror of unremitting Class War.
And if you don't think that War isn't based on Terror, then you haven't seen migrant
families busted up with the little kids being kidnapped and all put into concentration camps.
( China is
beginning to bark up that very inhuman tree watered so well by the Outlaw US Empire.)
"As it stands, Russia is very much focused on limitless possibilities in Southwest Asia,
as Foreign Minister Sergey Lavrov made it clear in the 10th Middle East conference at the
Valdai club [Link at Original]. The Hegemon's treats on multiple fronts – Ukraine,
Belarus, Syria, Nord Stream 2 – pale in comparison."
Awhile ago, I posted the following acutely correct adage: The USA treats business as war,
while treating war as business. I added what Coolidge was misquoted as saying in 1925--The
business of America is business (He actually said, "the chief business of the American people
is business.") So when the POTUS says its just business, you should prepare for war.
Back to the linked article. While reading it ought to be easy to see why the BRI
interconnectivity is seen as a huge threat to the two Outlaw Maritime Empires--UK/US--who
initially set forth the parameters of the Great Game. (BTW,
Lavrov's Great Game program interview English transcript is now complete.) They have no
seat at the table whatsoever. You'll also see why the Outlaw US Empire will try to remain in
Afghanistan forever as well as the reason why it can't admit the real reason for being
there--to interdict the BRI and the development boom it promises to bring to a great many
impoverished people throughout Eurasia. Talk about Human Rights!
But it looks like all the Empire's efforts will amount to little more than a mosquito
attacking an elephant for there's no way it can stop BRI or Eurasian integration; at best, it
can merely delay it and earn the enmity of the planet, including its own people. Clearly,
India will cease its role in the Quad as staying locks it out from what it needs
most--development that uplifts its impoverished tens of millions. And the loss of India means
the certain loss of the Great Game for the Outlaw Empire.
In the grand scheme of things, Ukraine is merely a tsetse fly as is NATO ultimately. The
real prize lies with the geoeconomic riches BRI and Eurasian Integration will generate and
being a partner with it, not an adversary.
"It is a dimension as vast as space and as timeless as infinity. It is the middle ground
between light and shadow, between science (reality) and superstition (bubbles), and it lies between the pit of man's fears
and the summit of his knowledge (fundamentals). This is the dimension of (economic) imagination. It is an area which we
call The Twilight Zone."
-
Rod Serling, introduction to the TV series, 1959 [our comments in ( )]
Our economy has entered the twilight zone. Today, economic leaders base policies on a hoped-for
utopia
with
bubbles called 'growing markets' and greed termed 'good valuations'. The
twilight zone
economy
is a place where fundamentals have disappeared. It is a utopian world of no moral hazard for business, financial
or economic mistakes. In the last year, the Federal Reserve has injected over $4.1T into the banking, hedge fund, Wall Street
complex of the financial elite. Vast injections of dollars have sent stock valuations to record highs. Yet, the
pandemic-driven economy is real for 19M Americans out of work, others who lost 540,000 loved ones, and millions carrying
housing debt due to missed rent and house payments.
Policymakers Disconnected From the Real Economy
Yet, policymakers continue to become further disconnected from the real economy where people work and spend. These leaders
imagine an economy of full employment forever, risk assets continually rising in price (not value) with virtually no market
corrections. It is an economic wonderland for corporations to use low-cost debt to finance infinite profits and stock
buybacks. Wall Street is only too pleased to hype this corporate financial engineering. Goldman Sachs forecasts a GDP surge
to 8% in the 4th quarter of this year due to the $1.9T American Rescue Bill. Bond king Bill Gross predicts interest rates
surge to 3 – 4 % by year end.
Does all this monetary and fiscal stimulus result in a
healthy solid economy or the most catastrophic inflationary bubble in modern times
? Our post identifies the dimensions of
the Twilight Zone Economy.
Astronomical Public Debt Drags Growth
The country is drowning in low-interest debt. But, this liquidity 'soma' drug is putting investors to sleep, thinking
everything will be ok. Now, public debt is at levels not seen since WWII and projected to go to 200% of GDP by 2051.
Source: CBO, The Daily Shot – 3/15/21
During WWII, debt supported production capacity for building weapons, planes, and infrastructure to support the war effort.
When the war was over, the US was the only major economy intact, leading to a high growth productive economy. The investment
in productive industries increased the standard of living for most Americans.
Sources: Blackrock, IMF, OECD, The Daily Shot – 3/15/21
Are the present monetary debt and fiscal stimulus programs of relief payments resulting in productive investment? This chart,
by Lance Roberts, shows how increasing public debt has resulted in a continuing decline in real economic growth.
Source: RIA, Lance Roberts, 3/17/21
Public debt not used for solid investments in infrastructure, basic research for innovation, or productivity has resulted in
an ever-growing debt level to achieve a continuing decline in economic growth. This cycle of low-cost ballooning debt to
finance debt service and transfer payments will likely result in economic stagnation or worse.
Negative Yielding Debt Triggers Speculation
Sovereign negative-yielding debt reached a record high of $17.8T last month. Thus, a massive level of worldwide debt is not
repaying the entire principal to debt holders. Correlated to soaring negative-yielding debt is the meteoric rise of trader
speculation in Bitcoin and other cryptocurrencies.
Sources: Daily Feather, Bloomberg – 3/22/21
Such parabolic moves in debt and speculative digital currencies like Bitcoin are candidates for a significant reversion in
value at some date in the near future.
Equity Markets Are In An Alternate Reality
Why is a firm like Tesla valued at the same level as the next six largest car companies or the oil industry's total market
capitalization? Isn't Tesla's valuation in the economic twilight zone? Analysts value Tesla at $1M per vehicle produced versus
GM at $5000 per vehicle. While VW is building six battery factories in the EU, and vows by 2025 to produce over 1.2M EVs in
2022, matching Tesla's total output. VW has now taken over the dominant market share in Europe and is opening EV plants in
Asia and North America.
There are 15 major car manufacturers, including GM, Ford, Toyota, Honda, Nissan, BMW, Mercedes, investing billions into EV
production plants and battery facilities. Tesla may have a first-mover advantage in the EV market, but it may wind up like
Yahoo, losing out to Google in the internet search sector. The following chart shows S&P valuations at Dotcom Crash levels in
2000.
The following chart shows the record valuation of stocks as a percentage of GDP back to 1952!
Sources: Charles Schwab, Bloomberg – 12/31/20
Traders are using ever-increasing levels of margin to buy stocks. Corporate executives with record levels of cash are
resuming stock buybacks as the Dow and S&P continue to set new record highs. Yet, corporate sales and economic fundamentals
don't support this extreme valuation case.
This chart from Real Investment Advisors notes the divergence of stock valuations growing to 164% versus corporate sales
growth of 42% and GDP growth at 22% since 2007.
Source: Real Investment Advisors – 3/20/21
Investors, executives, and the Federal Reserve are addicted to low-interest rates. And just like physical addiction, the time
will come when the zero-interest economic drug won't work anymore, and withdrawal sets in spiraling into a market crash.
Bubbles Bubbles Everywhere
Another sign of an alternative reality is bubbles in non-financial markets. For example, Christie's just sold a digital work
of art by an artist known as Beepie for $69.3M with a non-fungible (exchangeable) token (NFT) when the bidding started at just
$100. NFT collectible prices have sky rocked, providing the buyer with ownership rights indicating their purchase is
authentic. Beepi knows he's riding a soaring market, observing, 'Absolutely it's a bubble, to be honest."
An NFT buyer purchased 351 Top NBA Shot videos for $5,000 last January in the video clip market. Based on social media
chatter, Momentranks.com values the videos at $67,000 today. Sneaker reselling has soared as the collectible marketplace,
StockX, announced that Nike Dunks sold for $33,400 two months ago. StockX disclosed that a Tom Brady rookie trading card sold
for a record $1.3M in January. Even innocuous things like Twitter CEO Jack Dorsey's first tweet sold for $2.9M. Venture
capitalists Marc Andreessen and Ben Horowitz note what motivates mania buyers at a collectible forum:
Andreessen:
"A big part of the entire
point of life is aesthetics. The way that we live and the design of things around us and artistic creativity."
Horowitz:
"It's a feeling. You're buying
a feeling. And what's that worth?"
Writer Ben Carlson notes in his analysis of bubble markets that:
"We're
emotional. We lead with our feelings. We're superstitious."
Superstition is a characteristic of the Twilight Zone Economy.
Core City Life Is Changed Forever
Many think life will go back to the way things were in February 2020. We disagree. Life has changed forever in America. The
lack of commuters changes core city life where they are the heartbeat of neighborhoods surrounded by office towers. Millions
of small businesses and restaurants dependent on commuter patronage are scrambling to survive. When they had the opportunity,
millions of workers worked from home and found they could perform successfully remotely. Hundreds of thousands of workers
left cities to move to another less costly city or region. Some analysts think 99% of commuters will come back to city
offices.
Yet, surveys show that from 20 – 25 % of professionals in dense city centers like New York and San Francisco want to work from
home at least 3 – 4 days a week or work from home full time. Based on remote worker management experience companies are
restructuring their reporting hierarchy. Global corporations to startups are moving to a distributed worker organization,
further flattening the reporting structure for improved performance and business agility.
The lack of office workers leaves 20% of offices in core cities vacant, putting banks and commercial office space landlords at
risk for billions of dollars in lease income. Plus, small businesses in these core cities have lost 50- 60% of their sales.
Business owners hold billions of dollars in lease debt which must be paid off even after 80% of commuters return. Innovative
new small businesses and restaurants will emerge to support these commuters. Plus, new attractions and business models will
bring back visitors crucial for the leisure and hospitality sectors.
Millions of Workers Are Long Term Unemployed
About 19M workers collect continuing unemployment, of which 39.5% have been unemployed over 27 weeks. These permanently
unemployed workers will have a difficult time finding their next job. While Indeed reports that job openings are up 3.7 %
from January 2020, millions of workers are still unemployed. Many of these workers do not have the job skills to be hired for
many new manufacturing and services jobs. Bank of America completed an analysis of unemployment pre – COVID to the trajectory
of employment post COVID showing a lingering decline in the labor force.
Sources: Bank of America, CBO, Zerohedge, Real Investment Advisors – 2/12/21
The BofA analysis shows a permanent loss of employment in labor force size in Phase 3 of the recovery. The reality of the
economy that workers and consumers will likely live in is an economy of debt dragging economic growth with poor job prospects.
Job prospects for millions of workers will be limited by their lack of marketable skills. A major workforce segment faces a
long financial recovery time from either the loss of their business or job. Lack of consumer spending by the permanently
unemployed will slow the recovery.
Corporate Executives Join In the Party
In the 1950s, CEO pay to average worker pay was 50 times. Today, CEO pay is 350 times average worker pay, with Wall Street
applauding stock buybacks totaling 1.4T in 2019. While buybacks fell to $450B in 2020, Bloomberg forecasts stock buybacks to
resume $150B per quarter in 2021. Stock buybacks create overvalued markets. Ned Davis Research estimates the SPX as overvalued
by at least 20% due to stock buybacks distorting prices in 2019. A company gooses prices by using cash to purchase shares in
the open market, thereby reducing the stock pool for public investors. If demand stays the same, prices go up.
Yet, the company has not increased in substantive value. Many executives used low-cost debt to make stock purchases that
saddle the company with major debt obligations. Executives must refinance these debt obligation or pay them off in the near
future. In January 2020, corporate debt hit a 30-year record 49% of GDP, while interest rates were low. Fitch forecasts a
jump in corporate loan defaults in 2021 to 8 – 9% from a 2020 default range of 5 – 6%.
Sources: Fitch Ratings, Vuk Vukovic – 9/22/20
A significant default storm looms in the coming years as interest rates rise.
Another cash flow squeeze is developing in profit margins. Prices paid for goods and services are increasing at a rate far
faster than corporations can raise end customer prices in the following chart.
Sources: Mizuho Securities, The Federal Reserve Bank of Philadelphia, The Daily Shot –
3/19/21
Note the gap between prices paid and prices received in 2009 just before the 2009 fall. A similar cash flow squeeze seems to
be strengthening.
Policy Makers Are Missing Solid Economic Landmarks
To pilot a ship along a coast and into a safe harbor, a captain needs recognizable landmarks and beacons.
Our
policy – captains are in a twilight zone fog.
Many key economic indicators do not actually measure what policymakers tell
us they do. Stock earnings per share reports are financially manipulated by stock buybacks misleading investors as to the
actual earnings per share compared to pre-buybacks. The Fed holds interest rates artificially low with the resulting
liquidity injections distorting debt markets. Unemployment rates are not accurate when the Bureau of Labor Statistics shows a
rate of 6.7%. But, according to state unemployment reports, 19M workers are on continuing unemployment. Thus, the unemployment
rate is more like 12.6%.
The Fed's inflation consumer price index figures exclude 'volatile energy and food prices, which are expenses consumers
experience every day. Since the federal government in 1999 changed to a 'consumer lifestyle buying pattern' approach rather
than a standard price comparison, inflation has consistently been under-reported. In 1998 the Bureau of Labor Statistics
shifted to an 'owner equivalent rental cost' for homeownership. Using the Case-Shiller Home Price Index since 2019 shows the
BLS OER-based approach understates CPI dramatically at 1.0% vs. the Case-Shiller model at 2.5%.
Industry Research On The Real Economy Is More Accurate
Chapwood Investments publishes a biannual index including 50 cities comparing consumer goods and services prices on 500
consumer items. Their analysis showed the top ten cities in the US with an average inflation rate of 10% in the second half of
2020. A marketing industry research firm compared price changes for 220 often purchased consumer products at Target and
Walmart comparing 2018 to 2019 prices on average, the increase was 5 – 6% for both stores. Corporate marketing executives
must have accurate information to make reasonable sales forecasts and plans for investment. Our policy leaders can learn from
their example.
The Way Out of the Twilight Zone
To leave the Twilight Zone grip requires policymakers to recognize financial and real
economy fundamentals. They need to drop the no economic pain utopia model.
Policymakers need to get real with their
statistics and tracking systems to base their policy initiatives on the real economy. Analysts need to use fundamentals for
stock market and financial valuations. The Fed should stop rescuing failing hedge funds, zombie companies and end the
addiction to low-cost debt. Washington can start paying for new spending programs with increased focused taxes, ending
government waste and lower spending. The focus needs to be on a monetary and fiscal set of policies sustaining
entrepreneurship, hard work, and allowing the economic consequences of business failure to run their course.
To avoid the inevitable market crash, these programs need to be phased in over several
years to allow for investors, executives, and consumers to make adjustments to their portfolios.
It
is as if economic leaders have sent investors up an infinite 'wall of price' like a free solo climber, with no safety rope
leaving them to the inevitable fate of fundamental economic gravity
.
takeaction
3 hours ago
(Edited)
I stopped right
here...
" who lost 540,000 loved ones "
People die
every day...and it is NOT from the scamdemic...
In regards to
this economy...with Biden being propped up, the printing will not stop...
So watch asset
prices continue to explode. Don't short anything right now.
There will be a
time to short...but IMO not now..you will get crushed.
mrktwtch2
PREMIUM
3 hours ago
remove
link
I live
in a small suburb north of Chicago in the county of mchery il we r 12 miles south of the Wisconsin
border..my wife paid 139k for her town home in 2002 it went down to 78k during the crash but now its worth
195..since the joggers burned the cities down everyone is trying to move out of the city..strange times
indeed
USAllDay
3 hours ago
The
stupidity is just getting started. Yield curve control, price fixing, never ending eviction and foreclosure
moratorium extensions, constant stimulus for fat alcoholic/meth addicted "single mothers". The collapse will
be beautiful. Nothing this dirty should exist.
SMC
27 minutes ago
The
thing we can do is enjoy every day to the fullest and not help them peddle their idiocy and fear.
If we
are right, they are destroying themselves.
Mathematics, Physics and Chemistry may be "*-ist" but they combined with staying in shape, focus and
dedication are key to our survival.
Today's
Martyanov Blog is really good and incorporates some of Hudson's views, this being most
prescient:
"But behind all of that is a systemic and irresolvable crisis of financial predatory
capitalism, which goes under different monikers, but remains the same, as Michael Hudson
astutely put it--the parasite finally ate the host. In this case, the neocon insanity in the
US is merely a private symptom of a larger ailment."
The earlier longer excerpt he includes is also worth experiencing--it was from the latest
discussion with Escobar. I suggest reading it.
'The world will never be the same:' Coursera CEO on learning post pandemic
Reggie Wade
·
Writer
Fri, April 2, 2021, 12:43 PM
More content below
More content below
^IXIC
+1.76%
COUR
+1.73%
The online learning platform
Coursera
(
COUR
)
saw a big pop following its Nasdaq (
^IXIC
)
debut this week. Coursera revenue was up 60% last year, and CEO Jeff Maggioncalda predicts online learning is here to stay even
after the pandemic eventually winds down.
"The world needs more access to high-quality learning. ... There will be a new normal that emerges. We don't know what that will
look like either in terms of how we work remotely versus in an office and how we will learn online and also on campus. But it's
pretty clear that the world will never be the same again and that online learning will be a big part of it," he told Yahoo
Finance Live.
"So we really think about the long term, all the structural reasons why people will need to learn continuously through their
lives to learn new skills as the world goes more digital," he said.
Dec 27, 2019 Mountain View / CA / USA - Coursera headquarters in Silicon Valley; Coursera is an American online learning
platform that offers massive open online courses, specializations, and degrees
One area that Coursera is looking to expand is its degree and certification programs. Maggioncalda tells Yahoo Finance that the
company can use technology to shake up traditional degree offerings.
"What we've seen for centuries is that college degrees are the most meaningful, recognized learning credential that there is, and
the credential type hasn't really innovated that much over the last period of history. We think with technology, the ability to
create not only degrees but other types of credentials," he said.
"It will be a portfolio of credentials. We believe that will serve lifelong learning needs in a world where people need to keep
learning, even as they're working," he added.
Bloomberg News recently published an article,
Amazon
Fights Union Drive With Fact-Free Bombast
, discussing Amazon's alleged use of misinformation to prevent employees from
unionizing. In the same manner Kailash recused itself from having a "bull" or "bear" thesis on Bitcoin, we will recuse ourselves
from any discussion of unions. What we would like to draw our readers' attention to however is the method by which Amazon pays
many senior executives.
In the Bloomberg article it noted that the former head of Amazon's
logistics business was awarded stock compensation worth $160 million dollars.
In the wake of the scandals that occurred during the financially profligate dot.com bubble, rule FAS123 was passed requiring stock
compensation be expensed in a company's income statement. In papers written both in the professional and academic worlds, Kailash
has used Amazon as an example of how cash flow accounting contradicts the intent of FAS123. The Kailash note found
here
showed
how Amazon's well explained and GAAP compliant use of lease and stock comp accounting could potentially cause confusion among
analysts. Kailash's academic expert on stock compensation put his work,
Stock
Compensation Expense, Cash Flows and Inflated Valuations
through peer review. His work made it painfully clear that this GAAP
compliant accounting method diminished the information value of traditional calculations of free cash flows.
Authored by Vassilis Karamanis, FX and rates strategist who writes for Bloomberg
Albert Einstein is widely credited as saying that
insanity is doing the same thing over and
over again and expecting a different result.
The phrase keeps coming to my mind as I read story after story on the Archegos
Capital Management saga and look at a series of charts on the euro. At first, the two might seem unrelated, but they both hold
relevant lessons about market complacency.
The story reads as expected -- or feared: The firm, little known outside finance circles, had amassed tens of billions of dollars in
stocks bets, much of it using opaque derivatives and borrowed funds, including some giant bets on a small group of equities. And
then it all went awry.
The acronym LTCM doesn't mean much, it seems, to some market participants. Common sense either. Maybe Margin Call, J.C. Chandor's
2011 movie, should be trending in streaming services, serving as a healthy reminder.
Those of us who still remember the spectacular collapse of the U.S. hedge fund Long-Term
Capital Management in the late 1990s though are probably asking ourselves how this happened again.
Was it a regulatory issue, a market inherently at fault or just human nature? Will the story simply be forgotten again, especially
given the few signs of lasting damage on markets? Or maybe we are all grown ups now and can move on quietly and in peace instead of
obsessing over every set back. At least until the next tail risk comes knocking on our door, that is.
So what does the euro have to do with any of this?
It's not that there is a secret correlation with stocks that unveiled itself amid the Archegos turmoil. But I'd argue that there's a
link.
And it's that some investors or managers are losing sight of reality and sustainable
value-at-risk levels.
The common currency hit its lowest level in nearly five months today. Fair enough, right? The yield on 10-year U.S. notes reached
its highest level since January 2020 Tuesday, and is now just a whisker away from halving its decline since 2018, so it makes sense
for the dollar to keep applying pressure on euro bulls.
Darth Vader
5 hours ago
I think it's
unfair to mix Albert Einstein up with these grubby little thieves.
The game is
rigged and they're picking winners and losers. Best not to play their game.
Misesmissesme
5 hours ago
I
think these fit better:
Only two things are infinite,
the universe and human stupidity, and I'm not sure about the former. A Einstein
The difference between genius
and stupidity is that genius has its limits. A Einstein
OrazioGentile
5 hours ago
Still
waiting for a movie on the collapse of Bear Stearns or Lehmann- fact I'm sure will be loads more
entertaining than fiction!
Former regulators and financial-reform advocates say one rule change, in particular,
could have prevented the debacle : requiring greater disclosures of the bets that investors
such as Archegos place on companies using swaps.
Bloomberg News recently published an article,
Amazon
Fights Union Drive With Fact-Free Bombast
, discussing Amazon's alleged use of misinformation to prevent employees from
unionizing. In the same manner Kailash recused itself from having a "bull" or "bear" thesis on Bitcoin, we will recuse ourselves
from any discussion of unions. What we would like to draw our readers' attention to however is the method by which Amazon pays
many senior executives.
In the Bloomberg article it noted that the former head of Amazon's
logistics business was awarded stock compensation worth $160 million dollars.
In the wake of the scandals that occurred during the financially profligate dot.com bubble, rule FAS123 was passed requiring stock
compensation be expensed in a company's income statement. In papers written both in the professional and academic worlds, Kailash
has used Amazon as an example of how cash flow accounting contradicts the intent of FAS123. The Kailash note found
here
showed
how Amazon's well explained and GAAP compliant use of lease and stock comp accounting could potentially cause confusion among
analysts. Kailash's academic expert on stock compensation put his work,
Stock
Compensation Expense, Cash Flows and Inflated Valuations
through peer review. His work made it painfully clear that this GAAP
compliant accounting method diminished the information value of traditional calculations of free cash flows.
The rules at issue in the case, initially adopted between 1964 and 1975, had been meant "to
promote competition, localism and viewpoint diversity by ensuring that a small number of
entities do not dominate a particular media market," Justice Brett M. Kavanaugh wrote for the
court. But the rules, he added, were a relic of a different era -- "an early-cable and
pre-internet age when media sources were more limited." "By the 1990s, however, the market for
news and entertainment had changed dramatically," Justice Kavanaugh wrote. "Technological
advances led to a massive increase in alternative media options, such as cable television and
the internet. Those technological advances challenged the traditional dominance of daily print
newspapers, local radio stations and local television stations."
The case, Federal Communications Commission v. Prometheus Radio Project, No. 19-1231,
concerned three rules. One barred a single entity from owning a radio or television station and
a daily print newspaper in the same market, the second limited the number of radio and
television stations an entity can own in a single market, and the third restricted the number
of local television stations an entity could own in the same market.
In 2017, the commission concluded that the three rules no longer served their original
purposes of promoting competition and the like. The vote was 3 to 2 along party lines, with the
commission's Republican members in the majority.
They were not deciding if media consolidation was OK. They were deciding if the FCC had the
regulatory authority to make such a change. The court decided, unanimously, that they did.
If they had decided otherwise, it would open up any such regulatory changes to lawsuits
against the change. This includes further tightening media ownership rules, or changing rules
on pollution, or regulations on corporate governance.
Is they have should have gone for the throat and said FCC, SEC, FTC, FEC, etc. rule-making
is unconstitutional per se because all legislative and pseudo-legislative activity must be
enacted explicitly by only the Congress.
It would have utterly horrified and enraged progressives and big corporation-loving
republicans, but it would have been considered a judicial Gettysburg for the forces of populism
on both sides because it would have gutted the power of the administrative state to render the
people's assembly a vestigial organ.
(Reuters) – Exxon Mobil and Chevron Corp have scaled back activity dramatically in
the top U.S. shale oil field, where just a year ago the two companies were dominating in the
high-desert landscape.
The cautious approach of the two largest U.S. oil companies is a major reason domestic
oil production has been slow to rebound since prices crashed during pandemic lockdowns in 2020.
Production now is about 11 million barrels per day (bpd), down sharply from the record of
nearly 13 million bpd hit in late 2019.
The share of drilling activity by Exxon and Chevron in the Permian Basin oil field in
Texas and New Mexico dropped to less than 5% this month from 28% last spring, according to data
from Rystad Energy.
"We essentially hit a pause button," said Chevron Chief Financial Officer Pierre
Breber. "When the world was oversupplied we didn't see the virtue in putting more capital to
add barrels." (Graphic: Exxon and Chevron slash Permian drilling, here)
Neither company is likely to boost spending until next year, according to the
companies and analysts. Chevron expects to produce around 1 million barrels daily by 2025 and
Exxon 700,000 bpd by 2025, the companies said at investor days this month.
Chevron will increase Permian spending from $2 billion now to pre-Covid levels of $4
billion annually "over the course of the next several years," Breber said, but the
company will not increase drilling in the Permian this year. It is currently running about five
rigs in the Permian with two completion crews, down from just under 20 a year ago.
SNIP However, output is unlikely to increase dramatically, due to the swift decline rates for
shale wells.
"We would need three months of oil prices sustained at current levels followed by six
months of drilling activity before production begins to climb higher on a sustained basis,"
said Peter McNally at Third Bridge.
Exxon and Chevron are not the only producers keeping spending down. Many shale companies
have hedged a majority of expected 2021 oil production at an average price below $45 a barrel,
well below current market prices, Enverus' Andy McConn said. The hedges reduce exposure to the
recent increase in oil prices, discouraging near-term growth. (Graphic: Permian oil production
stalls, )
It looks like they hope to return to normal production by 2025.
Biden's plan will end tax preferences for fossil fuel companies. I am not sure if there are
more specifics than that.
However, if expensing intangible drilling costs is eliminated, the shale boom will
officially be dead.
As percentage depletion applies only to the first 1,000 BOEPD per company, elimination of
that would primarily hurt marginal wells.
Also, Biden has proposed $16 billion to plug abandoned wells and reclaim abandoned
mines.
Of course, at this point, the infrastructure bill is not entirely specific. There will be a
lot of negotiation in Congress.
To me, it would seem short to medium term positive for oil prices. Shale companies will
finally have to pay income taxes, and assuming the corporate rate goes to 28%, I don't see how
there would be another drilling boom in shale, absent a super spike in oil and/or natural gas
prices.
Further, the bill would cause a spike in US oil demand. Lots of heavy equipment and
materials that will consume petroleum, even that needed for more clean energy.
Future will be more clear once the plan is signed into law.
I would note grain spiked on the USDA estimates for corn and soybean acres. This could
affect oil prices short term.
Short interest in US stock is at all time lows. Hardly anybody is short. Means there are
hardly any shorts to squeeze out to ramp valuations higher. My guess is there will be one last
ramp higher on the release of US infrastructure bill. Which Biden will release I think it is
Wed of this coming week.
Short interest in the dollar is near all time highs. Hardly anybody is long. These shorts
will start to be squeezed out soon sending dollar much higher as shorts cover.
Oil price might get one last surge off this infrastructure bill but it will be short lived
if it comes at all.
With margin debt set to shrink starting April 1st. There won't be a continued ramp of
prices. There will be a contraction of prices. Might take a month for this contraction to start
showing itself in prices as banks tighten down on margin debt.
...history shows that one messy unwind can easily spread. The U.S. Office of Financial
Research finds that the ten largest hedge funds were leveraged
far more heavily than the next 40 largest funds, as of June. And many family offices may
not be counted in these statistics at all, which mostly rely on disclosure forms they are able
to avoid.
There are some obvious responses for regulators, such as mandating disclosure of the
total return swaps that allowed Archegos to build big positions out of the public eye. But
there are no easy answers to the wider challenge of overseeing leverage within the broadest
financial complex when debt is almost free.
The system has held up under the latest strain, but this isn't a victory. Archegos means one
who leads the way. Regulators must do what they can to ensure as few as possible follow.
Swiss rival Credit Suisse expects a hit in the billions of dollars from Archegos, people
with knowledge of the matter have said, while Nomura Holdings Inc. has signaled it may lose as
much as $2 billion. Analysts at JPMorgan Chase & Co. estimate the Archegos blowup may cause
as much as $10 billion of combined losses for banks.
David Herro, chief investment officer of Harris Associates -- one of Credit Suisse's biggest
shareholders -- said on Bloomberg Television on Wednesday that the Archegos incident was a
"wake-up call" for Credit Suisse and should lead to sweeping changes to its culture and
oversight practices.
Shares of Credit Suisse tumbled 21% this week on concern over the size of its potential
Archegos hit. Deutsche Bank is down 2.9%.
Casino capitalism is the fertile ground for the most sleazy types of speculators. The stock
market has become a giant slot machine financed by 401K lemmings. The marks here are 401K
investors.
Excessive leverage is a immanent feature of the pre-collapse stage of Minsky cycle. So those
who argue that we are close to another crash get some additional confirmation due to this event.
The Masters of the Universe rediscovered the hidden areas of huge risk, and like in 2008 are
afraid but can't and do not want to anything.
TBTF such as Goldman and Morgan aid the most sleazy types as they bring outsized profits for
them. So this a catch 22 as Goldman and other TBFT controls SEC not the other way around.
It would be prudent to view banksters as a special type of mafia and treat accordingly and
prohibit for them serving in government. But this is impossible under neoliberal as financial
oligarchy has all political power.
The question is: Is there another fund that's larger, that's more leveraged with the same
characteristics that could prove to be a more systemic event? That's the major concern right
now." Wall Street's hottest trades such as pure-tech plays and high-flying tech/media like the
ones bet on by Hwang -- could be unwound. The Hwang blowup wakes up investors to the realization
that many parts of the market are overvalued and it's time to sell -- and quickly as yields are
going up. For the the FAANGS, the Tesla's out there -- the fundamentals don't support the stock.
So it would be logical to a large correction.
Notable quotes:
"... The idea that one firm can quietly amass outsized positions through the use of derivatives could set off another wave of criticism directed against loosely regulated firms that have the power to destabilize markets. ..."
Much of the leverage used by Hwang's Archegos Capital Management was provided by banks
including Nomura Holdings Inc. and Credit Suisse Group AG through swaps and so-called
contracts-for-difference, according to people with direct knowledge of the deals. It means
Archegos may never actually have owned most of the underlying securities -- if any at all.
While investors who own a stake of more than 5% in a U.S.-listed company usually have to
disclose their holdings and subsequent transactions, that's not the case with positions built
through the type of derivatives apparently used by Archegos. The products, which are transacted
off exchanges, allow managers like Hwang to amass exposure to publicly-traded companies without
having to declare it.
The swift unwinding of Archegos has reverberated across the globe, after banks such as
Goldman Sachs Group Inc. and Morgan Stanley forced Hwang's firm to sell billions of dollars in
investments accumulated through highly leveraged bets. The selloff roiled stocks from Baidu
Inc. to ViacomCBS Inc., and prompted Nomura and Credit Suisse to disclose that they face
potentially significant losses on their exposure.
One reason for the widening fallout is the borrowed funds that investors use to magnify
their bets: a margin call occurs when the market goes against a large, leveraged position,
forcing the hedge fund to deposit more cash or securities with its broker to cover any losses.
Archegos was probably required to deposit only a small percentage of the total value of
trades.
The chain of events set off by this massive unwinding is yet another reminder of the role
that hedge funds play in the global capital markets. A hedge fund short squeeze during a
Reddit-fueled frenzy for Gamestop Corp. and other shares earlier this year spurred a $6 billion
loss for Gabe Plotkin's Melvin Capital and sparked scrutiny from U.S. regulators and
politicians.
The idea that one firm can quietly amass outsized positions through the use of
derivatives could set off another wave of criticism directed against loosely regulated firms
that have the power to destabilize markets.
Bob 2 days ago This is another major reminder that the stock market is not as rational as we
want to believe. A small group of very large, leveraged funds can have far more impact on the
market than dozens or hundreds of well thought out and researched programs. Sigh. Take your
lumps and move on. Hasso 2 days ago 2008 - Hwang's Tiger Asia suffered losses from the
Volkswagen short, 2012 - Hwang's Tiger Asia paid $44M to settle insider trading charges, banned
2014- Hong Kong fined him $5.3M & banned him for four years. 2021 - And here we are
again.
Tyrone 2 days ago Gee, Credit Suisse involved in sleezy investments. Again. I'm shocked, just
shocked!
Manohar 2 days ago Banks haven't learnt anything yet...you know why? Because its other people's
money and the no one gets prosecuted when they are caught with hand in the cookie jar.
killer klown 2 days ago it's a sign that the market and it's regulators have learned
nothing.........to even pretend that a penny difference in assumed earnings versus actual
earnings using the GAAP accounting (which itself says it's not exact but generally accepted
accounting principles)moves a stock is in itself a joke, this situation of a BIG BLACK BOX
calls for the complete dismantle of the derivatives market which was created to lay off risk.
Bill Hawng should be FLAT Broke his possesions seized, The board of Credit Suisse and Nomura et
all should be unemployed as of 8:31 this morning. But they won't and it's only going to happen
again and again.
Amvet 2 days ago Market manipulators have a free rein in the USA. Are politicians also
involved? Reply 16 3 George 2 days ago Just amazing how some of the world's most sleazy
characters have access to cosmic sums of money and remain under the radar and legal(???). Then
nothing seems to happen except that loads of other folk get burned while they move on to the
next bright idea. Reply 13 1 Rick 2 days ago So clearly limiting those who can purchase these
to exclude amateur players has not been successful. Recklessness is not limited to amateurs.
Mr. H. 2 days ago In 2008 high finance was playing very high risk games with clients money at
the undefined edge between legal and illegal. A bunch of firms went away along with many
billions of dollars because a bunch of players were playing CYA. They came up with the term
"too big to fail" when they were picking winners and losers. "too big to fail" is is fetid
bovine excrement. The SEC, that is the administrative government, was not doing its job! There
were many questions about government employee competence to do those jobs. The government
should have let the market place pick the winners and losers, then the government should have
prosecuted everyone who failed to perform their fiduciary duty and set a major precedent about
high risk play with other people's money; keep it legal or go to jail and lose your shirt. That
is what should happen this time too! Noone 2 days ago Almost like something that is so
dangerous and risky to both the market AND the "investor" that retail traders ARE BANNED from
doing it should.. idk.. BE ILLEGAL FOR EVERYONE? Useless SEC. Do your job right.
Philip 2 days ago Ironic that Hedge Funds are the most unhedged game going.... Dan 1 day ago
The managers of these HFs lack morality, they steal from other companies because they believe
in their twisted little minds if they set up a system whereby they can trade in dark pools with
illegal naked shorting, counterfeit shares and stock manipulation under the radar -- it makes
the crime okay. All of this criminality is been done with the aid of supplementary leverage
ratio (SLR) If they can manage to bankrupt the company they short with Government SLR they end
up paying no tax and pocket the money GME/AMC and more for example.. Bingo the most audacious
robbery attempt in the history of the state. Oh boys did they fail, wow what a spectacular
failure. Now they have to deleverage destabilizing the entire market. Do these HF managers rank
their values differently to the moral code we all live by? Obviously they do! There's no doubt
they'll get lots of time to think about their behaviour when they're in the slammer. Each case
will have to be evaluated on its own merit at some stage of course. On the face of it, all
indications points to a tradeoff that benefits themselves at the disadvantaging of other. Sad
for them! I rest my case!
Jodes 1 day ago The spikes in shares like ROKU, BIDU, SHOP and many more have huge parabolic
spikes at the top accounting for the disfunctional market as we were seeing it at the top. They
had huge buy orders to artificially spike the prices keep them up and then experts come in
after and raise price targets and put a BUY rating on the stock. Then get retail to buy in and
then drop them like a rock. Greedy and dispicibale. All probably done for a huge bonus. While
retail suffers for their greed.
Vince 2 days ago More than 100 Trillion (with a T) are moving around the world in Derivatives
each and every day., some say closer to 200 Trillion! You figure it our when THAT bubble
bursts! Reply 2 1 SniffMopWho 2 days ago Interesting how these guys make millions and billions,
just by pressing keys on a keyboard.
... 2 days ago More sleaze trying to bring down the market by making risky bets with swaps and
derivatives, yet the regulators are caught asleep again. Just more proof of incompetence by
Biden and his hired idiots at the SEC.
TL;DR- Citadel and friends have shorted the treasury bond market to oblivion using the
repo market. Citadel owns a company called Palafox Trading and uses them to EXCLUSIVELY short
& trade treasury securities. Palafox manages one fund for Citadel - the Citadel Global
Fixed Income Master Fund LTD. Total assets over $123 BILLION and 80% are owned by offshore
investors in the Cayman Islands. Their reverse repo agreements are ENTIRELY rehypothecated
and they CANNOT pay off their own repo agreements until someone pays them, first. The ENTIRE
global financial economy is modeled after a fractional reserve system that is beginning to
experience THE MOTHER OF ALL MARGIN CALLS.
THIS is why the DTC and FICC are requiring an increase in SLR deposits. The madness has
officially come full circle.
tnorth 4 hours ago
another month of completely rigged 'markets'
mtl4 4 hours ago remove link
Music is still playing, make sure you have a chair when it stops
this_circus_is_no_fun 1 hour ago remove link
Consider these two points:
Treasuries are claimed to be backed by the "full faith and credit of the United
States".
In Q1, Treasuries suffer their biggest loss in 40 years.
y_arrow
Kreditanstalt 1 hour ago (Edited)
I've always wondered why seemingly contradictory and uncorrelated assets and asset classes
alternately "soar" and "plunge" on different days, usually in random conjunction with
others...
It seems so counterintuitively...MECHANICAL...or theory-driven, rather than rational
"investing".
This is first of all about the corruption of SEC. all this hacking of financil system in not new. So the failure to
prevent it is the failure of regulation.
One of World's Greatest Hidden Fortunes Is Wiped Out in Days
More content below
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VIACA
+4.87%
GSX
+4.75%
Katherine Burton and Tom Maloney
Tue, March 30, 2021, 8:29 AM
More content below
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VIACA
+4.87%
GSX
+4.75%
(Bloomberg) --
From his perch high above Midtown Manhattan, just across from Carnegie Hall, Bill Hwang was quietly building
one of the world's greatest fortunes.
Even on Wall Street, few ever noticed him -- until suddenly, everyone did.
Hwang and his private investment firm, Archegos Capital Management, are now at the center of one of the
biggest margin calls of all time -- a multibillion-dollar fiasco involving secretive market bets that were
dangerously leveraged and unwound in a blink.
Hwang's most recent ascent can be pieced together from stocks dumped by banks in recent days -- ViacomCBS
Inc., Discovery Inc. GSX Techedu Inc., Baidu Inc. -- all of which had soared this year, sometimes
confounding traders who couldn't fathom why.
One part of Hwang's portfolio, which has been traded in blocks since Friday by Goldman Sachs Group Inc.,
Morgan Stanley and Wells Fargo & Co., was worth almost $40 billion last week. Bankers reckon that Archegos's
net capital -- essentially Hwang's wealth -- had reached north of $10 billion. And as disposals keep
emerging, estimates of his firm's total positions keep climbing: tens of billions, $50 billion, even more
than $100 billion.
It evaporated in mere days.
"I've never seen anything like this -- how quiet it was, how concentrated, and how fast it disappeared,"
said Mike Novogratz, a career macro investor and former partner at Goldman Sachs who's been trading since
1994. "This has to be one of the single greatest losses of personal wealth in history."
Late Monday in New York, Archegos broke days of silence on the episode.
"This is a challenging time for the family office of Archegos Capital Management, our partners and
employees," Karen Kessler, a spokesperson for the firm, said in an emailed statement. "All plans are being
discussed as Mr. Hwang and the team determine the best path forward."
The cascade of trading losses has reverberated from New York to Zurich to Tokyo and beyond, and leaves
myriad unanswered questions, including the big one: How could someone take such big risks, facilitated by so
many banks, under the noses of regulators the world over?
part of the answer is that Hwang set up as a family office with limited oversight and then employed financial derivatives to
amass big stakes in companies without ever having to disclose them. Another part is that global banks embraced him as a lucrative
customer, despite a record of insider trading and attempted market manipulation that drove him out of the hedge fund business a
decade ago.
A disciple of hedge-fund legend Julian Robertson, Sung Kook "Bill" Hwang shuttered Tiger Asia Management and Tiger Asia Partners
after settling an SEC civil lawsuit in 2012 accusing them of insider trading and manipulating Chinese banks stocks. Hwang and the
firms paid $44 million, and he agreed to be barred from the investment advisory industry.
He soon opened Archegos -- Greek for "one who leads the way" -- and structured it as a family office.
Family offices that exclusively manage one fortune are generally exempt from registering as investment advisers with the U.S.
Securities and Exchange Commission. So they don't have to disclose their owners, executives or how much they manage -- rules
designed to protect outsiders who invest in a fund. That approach makes sense for small family offices, but if they swell to the
size of a hedge fund whale they can still pose risks, this time to outsiders in the broader market.
"This does raise questions about the regulation of family offices once again," said Tyler Gellasch, a former SEC aide who now
runs the Healthy Markets trade group. "The question is if it's just friends and family why do we care? The answer is that they
can have significant market impacts, and the SEC's regulatory regime even after Dodd-Frank doesn't clearly reflect that."
Valuable Customer
Archegos established trading partnerships with firms including Nomura Holdings Inc., Morgan Stanley, Deutsche Bank AG and Credit
Suisse Group AG. For a time after the SEC case, Goldman refused to do business with him on compliance grounds, but relented as
rivals profited by meeting his needs.
The full picture of his holdings is still emerging, and it's not clear what positions derailed, or what hedges he had set up.
One reason is that Hwang never filed a 13F report of his holdings, which every investment manager holding more than $100 million
in U.S. equities must fill out at the end of each quarter. That's because he appears to have structured his trades using total
return swaps, essentially putting the positions on the banks' balance sheets. Swaps also enable investors to add a lot of
leverage to a portfolio.
Morgan Stanley and Goldman Sachs, for instance, are listed as the largest holders of GSX Techedu, a Chinese online tutoring
company that's been repeatedly targeted by short sellers. Banks may own shares for a variety of reasons that include hedging swap
exposures from trades with their customers.
'Unhappy Investors'
Goldman increased its position 54% in January, according to regulatory filings. Overall, banks reported holding at least 68% of
GSX's outstanding shares, according to a Bloomberg analysis of filings. Banks held at least 40% of IQIYI Inc, a Chinese video
entertainment company, and 29% of ViacomCBS -- all of which Archegos had bet on big.
"I'm sure there are a number of really unhappy investors who have bought those names over the last couple of weeks," and now
regret it, Doug Cifu, chief executive officer of electronic-trading firm Virtu Financial Inc., said Monday in an interview on
Bloomberg TV.
He predicted regulators will examine whether "there should be more transparency and disclosure by a family
office."
Without the need to market his fund to external investors, Hwang's strategies and performance remained secret from the outside
world. Even as his fortune swelled, the 50-something kept a low profile. Despite once working for Robertson's Tiger Management,
he wasn't well-known on Wall Street or in New York social circles.
Hwang is a trustee of the Fuller Theology Seminary, and co-founder of the Grace and Mercy Foundation, whose mission is to serve
the poor and oppressed. The foundation had assets approaching $500 million at the end of 2018, according to its latest filing.
"It's not all about the money, you know," he said in a rare interview with a Fuller Institute executive in 2018, in which he
spoke about his calling as an investor and his Christian faith. "It's about the long term, and God certainly has a long-term
view."
... ... ...
"You have to wonder who else is out there with one of these invisible fortunes," said Novogratz. "The psychology of all that
leverage with no risk management, it's almost nihilism."
Unlike the devastating London Whale debacle in 2012, which was
all
JPMorgan
eventually drawn and quartered quite theatrically before Congress (and was a clear explanation of how banks used Fed reserves
to manipulate markets, something most market participants had no idea was possible), this time JPMorgan was nowhere to be
found in the aftermath of the historic margin call that destroyed hedge fund Archegos. Which is may explain why JPMorgan bank
analyst Kian Abouhossein admits he is quite "
puzzled"
by
the recent fallout from the Archegos implosion (or maybe JPM simply was not a Prime Broker of the notorious Tiger cub), which
however does not prevent him from trying to calculate the capital at risk from the Archegos collapse.
In a note published this morning, Kian writes after Nomura yesterday confirmed (at least) a $2Nn potential claim and fellow
Japanese bank Mitsubishi UFJ Securities Holdings announcing today of another potential $300MM loss - which as the JPM
strategist admits "
for a likely non-material PB player is surprising to us"
–
JPMorgan now
expects losses well beyond normal
unwinding scenario for the industry
: and explains that it now sees "the losses as very material in relation to
lending exposure for a business that is mark-to-market and holds liquid collateral" and makes Nomura's indication of
potentially losing $2bn and press speculation of CSG $3-4bn losses "as not an unlikely outcome" according to the JPM
strategist.
So why is JPM surprised?
Because as Abouhossein writes,
"
in normal
circumstances... we would have suspected industry losses of $2.5-5bn. We now suspect losses in the range of $5-10bn
."
In
other words,
JPM has doubled its max loss estimate to as much as $10BN, a number which
could yet rise.
To get there, JPM estimates that
Archegos was highly leveraged at 5-8x (i.e. $50-80bn
of exposure for $10bn of equity
) - using Total Return Swaps and
Certificates
for Difference
to lever up so massively as we discussed yesterday - and it was this use of equity-swaps tha "tincreased
the inability of PBs to see the concentration risk in holdings within the hedge fund in question."
Even so, Kian admits that he remains "
puzzled why Credit Suisse (CSG) and Nomura have
been unable to unwind all their positions at this point – as we would expect to get an announcement as soon as this is the
case, on the scale of potential losses (especially in the case of CSG which hasn't provided numerical impact)"
although
we have gotten some headlines suggesting the total loss could be as big as $7 billion.
That said the JPM analyst expects full disclosure by the end of the week at the latest from CSG and would keep an eye on
credit agencies statements as well. And in the harshest slam of JPM's competitors, Kian says he suspects
"potentially
poor risk mgmt being an issue here considering i) late unwinding, and ii) possibly significant more leverage than for GS/MS
similar exposures."
Alternatively, one could argue that it was Goldman and Morgan Stanley who rushed to break ranks with the syndicate of Prime
Brokers and started dumping blocks of Archegos shares for one reason or another on Friday morning as we detailed yesterday,
which meant that while they suffered the least losses, those banks - like CS, Nomura and Wells - which were slow to start
selling, would end up with the largest losses (for more see "
How
Goldman And Morgan Stanley Broke Ranks And Triggered The Biggest Margin Call Since Lehman
").
In terms of actual loss estimates with an empahsis on Credit Suisse which so far appears to
be the hardest hit, here is a breakdown from JPMorgan of what is known:
In terms of capital at risk, based on press articles,
Credit Suisse seems to have
bigger issues than Nomura assuming press speculation of $3-4bn are correct and Grensill could potentially lead to additional
litigation cost of $1-3bn.
In the case of Nomura, JPM has reduced the share buyback for FY2020 from ¥75 billion to
¥10 billion; if the press speculation losses are correct,
it would expect CS at a
minimum will have to cancel its share buyback for 2021, preserving the dividend and we assume no buyback for the next 2 years
assuming Basel 4 implementation as of Jan 2023.
Assuming no RWA growth vs. YE2020 levels, JPM calculates that
CS
can absorb a max. one-time pre-tax hit of c$4.5b
n
(CHF 4.2bn) for Archegos which post-tax is 116bps of CET1
capital offset by 32bps of Retained earnings (1Q Net Income less 1Q dividend accrual of CHF 0.2bn and share buyback of CHF
0.3bn completed YTD) and still reach 12% by end of 1Q 21 which is seen as an acceptable level for S/Hs under Basel 3 – with
further hits to come (see below). The minimum CET1 requirement is 10% and every additional $1bn pre-tax hit is 26bps of CET1
capital based on YE2020 RWAs and
hence "any hits beyond $5bn pre-tax from Archegos will
call into question the capital position in our view", JPM warns.
Separately, Bloomberg adds that March's blowups may - in addition to wiping out more than a year of profits for the bank and
threaten its stock buyback plans - also add add to the reputational hit from the other missteps by bank CEO Thomas Gottstein.
With the shares posting the only decline among Europe's major banks in 2021 and a new chairman starting next month, Chief
Executive Officer Thomas Gottstein is facing questions over whether he and risk chief Lara Warner have a handle on the bank's
exposures.
"Risk control at every level in this bank must be examined and changes made where there are deficiencies," David Herro, chief
investment officer at Harris Associates, one of the biggest investors in the bank, said in an email. "But I state the
obvious?"
As Bloomberg further notes, the hits from Archegos and Greensill have spoiled a plan by Gottstein to start the year with a
clean slate.
The CEO late last year wrote down the value of the bank's stake in hedge fund York Capital and took a hit related to a
long-standing legal case into residential mortgage-backed securities, dealing the bank its first quarterly loss in three
years. The crises have more than overshadowed its best start to the year in a decade.
"While all four events appear idiosyncratic in nature, it inevitably has led investors to
question the strategic decision making at CS and the risk culture of the firm,"
Andrew Coombs, a Citi bank analyst wrote
Tuesday.
While Credit Suisse has not quantified the full damage yet, and has merely said that it faces "highly significant" losses tied
to Archegos, Berenberg analysts pegged the hit at 3 billion Swiss francs, on top of 500 million francs from the Greensill
issues.
* * *
Finally, JPM tries to answer a key question for many investors,
namely what has
happened with holdings (as speculated in the press ) of Archegos Capital?
As Kian writes, the share price of Arhcegos Capital linked stocks fell by -39% on avg. since the beginning of last week.
According to press reports (Bloomberg), Archegos Capital was forced to sell large shareholdings in eight online and
entertainment companies (
GSX Techedu, ViacomCBS, Discovery, iQIYI, Tencent Music,
Vipshop, Baidu, Farfetch)
to cover potential losses after some positions moved against the fund. Once Archegos
Captial failed to meet its margin commitments, the sell-off intensified further as banks started offloading via sizeable block
trades the holdings posted by the fund as collateral, prompting more declines.
Based on the latest publicly available disclosure the banks with the largest exposure to the mentioned companies were Morgan
Stanley, Credit Suisse, Goldman Sachs, Nomura and to a lesser extent UBS and DB (more details below). On Friday alone, both
ViacomCBS and Discovery saw their largest ever daily decline, with each falling by more than -27%. Traded volumes for the
eight companies peaked on Friday with daily volumes being on avg. more than 13x the 90 days moving average. The sell-off
continued on Monday 29th with the aforementioned stocks falling further -6% on average.
Based on latest available public filings, JPM calculates that the banks which had the largest holdings in the eight Archegos
Capital-linked stocks mentioned by the press were
Morgan Stanley, Credit Suisse,
Goldman Sachs and Nomura.
Morgan Stanley exposure was relatively broad based with 5%+ holdings in all but one
companies and with 10%+ stake in both GSX Techedu and iQIYI. Credit Suisse exposure was also broad based with holdings in all
but one companies and with the largest exposure being its 9% stake in Discovery. Goldman Sachs exposure was mainly
concentrated in GSX Techedu (22% stake), while Nomura had exposure in all but one companies and a relatively large holding of
7% in GSX Techedu. Other banks such as Bank of America, Citi, UBS, Deutsche and Barclays also had holdings above 2% in some
the mentioned companies (mainly GSX Techedu and Discovery).
Finally, courtesy of JPM, here is a summary of all the latest publicly available information disclosing what exposure each
bank may have had - and still has - to Archegos:
play_arrow
Calculus99
4 hours ago
(Edited)
If you
listen to the corporate ******** from ALL of these firms, they'll all say the same crap -
"We employ the some of the smartest guys in finance
as well as run cutting edge risk management systems so as to protect our shareholders and (cliche) stake
holders."
Then
something like this happens, ie you let a degen gambler margin up xfold in a highly charged and volatile
market betting on some of the riskiest go-go stocks.
Any
old non-smartest guy with a $10 Casio calculator could have predicted the massive risks they were taking and
the probable fallout.
Smartest guys?
Cutting edge risk management?
Their
words aren't even worth a penny...
bonsai_king
3 hours ago
Thats
just what they post online.
In the
real world, its all backroom deals, tit for tat, exchange of favors kind of BS.
Do you
actually think anyone involved lost their personal fortunes?
101 years and counting
3 hours ago
if
you're running JPM or GS, etc....why wouldnt you leverage everything to the top? if you go boom, Jerome
will save you. afterall, if you dont save us, the "World will end".
john milton
3 hours ago
This
is it in banking, sometimes you win big time and got your big bonuses, sometimes you lose big time and
taxpayers pay your bonuses.
ssgredux
4 hours ago
Wait
till JPM hears about JPM's exposure to derivatives...
I love
the OCC Quarterly. You have to go all the way to the back, to see the good stuff. GS is leveraged, waaay
beyond everybody else!
Kefeer
3 hours ago
remove
link
Banking crisis, artificial chip
shortages, artificial price manipulation of oil
, artificial wuhan-flu war, with artificial experimental
injections, artificial everything - even the clouds above.
What is the plan with all these
working together and add the artificial dementia installed President and you have the recipe for something
huge???
....
So
glad these casinos have Gubmnt subsidized, FDIC insurance.
Great Iota
59 minutes ago
(Edited)
Save
this post ...
The
"Damage" from the Archegos collapse will be a nano piss drop in a rain compared to the damage from the
upcoming cryptocurrency collapse.
Bitcoin alone could cause quadrillion USD damage when you count the worthless underlining asset plus the
100X derivatives. I'm surprised that governments and its citizens have embraced this worthless asset. 1000
Years from know we will be teaching about the "Bitcoin Blowup".
What
can cause Bitcoin to go worthless? Lots!
1 - No
real need (only purpose is its a Ponzi Scheme designed to increase in value).
2 - Unrecoverable (lost your account, password, or remote drive? your SOL)
3 - Uninsurable (no one can return your Bitcoin to you)
4 - Open to program hacks
5 - Not backed by anything
6 - Needs electricity and internet.
7 - Can never be a useful currency
You
people have all gone mad!
stop_the_fraud
43 minutes ago
Saved
and archived.
Great Iota
30 minutes ago
I'm
hoping that the only reason the global leaders are allowing Bitcoin is so it can mop up the trillions of
paper being added to the system to save the system without creating inflation. At the end of the day, it
gives avenue for abusive money printing without inflating a real asset that people need.
Can
you imagine if all the money flowing into crypto was going into housing or food? Look at the stock market
bubble caused by all the low interest money flowing into it.
This madness will end when the fed tightens or the global economy collapse (one will happen for sure).
Cheap Chinese Crap
5 minutes ago
remove
link
You're
crazy. There's nothing wrong with treating an IOU from some anonymous guy on the Internet as a cash
substitute.
Lef-ty
PREMIUM
2 hours ago
Just
another reason to make the banks smaller. How about no derivatives trading other than a hedge book.
Synthetic positions should be part of 5% disclosure rule. The fact that no one knew what was happening is
just another warning signal.
lay_arrow
highwaytoserfdom
3 hours ago
(Edited)
Bring in Kenny Griffin and Bernake from Citadel to front run the whole market...
ROFLMAO While at it bring in Peter Griffin, and Lois; Meg, Chris, and
Stewie and Brian. heck bring in all Quahog, Rhode Island.. Wait a second
Gina M. Raimondo Secretary of Commerce jeez did not think it could get much
worse that Wilber but one of the granny culling governors (oh yea those machines
flipped votes) ..medical murder scam plan demonic reset....
LMAO--------> Look MAO CIA globalony..
Bill of Rights
3 hours ago
The same JPM thats dumping Commercial and Residential Real Estate at a massive clip,
that JPM?
Ozarkian
3 hours ago
10x Leverage caused the 1929 crash. History repeats.
RevIdahoSpud3
1 hour ago
I have just lived through the 2nd Major Coup in my lifetime as a U S Born citizezn.
The first for me was JFK's assassination by government insiders. The Second was the
2020 election with the lunatic Biden
installed
(not
elected) as president of the U S Corporation. Before that may have been the
establishing of the Fed Reserve in 1913 but I wasn't alive yet. Others may have been
WWI, WWII, Viet Nam...and how many others such as 911 and the Patriot Act.
I mention because we are supposed to read news of the banking industry, trade
agreements, border breaches and hundreds of other topics that are supposed to be
events of the day? Spontaneous and not preplanned as if these events have any
relevance to a freeman's life.
Since the Trump coup, there is nothing really noteworthy that the deep state cycles
as news. It's all smoke and mirrors. Perhaps it is to the 'players', the top 1% who
battle each other for world domain in a global chess game who actually care as they
seem to be the ones with something at stake. Their vast fortunes and their need for
more.
At the bottom of the totem it's all irrelevant. This level is just survival of the
fittest. News, fake news, and irrelevant news has no impact on reality.
And yet, how many people dwell/devote their lives and time to being abreast of
Meghan and Harry, Congress, Goldman Sachs, Tesla, Climate cooling/heating, racism,
discrimination, womyns rights... . Such as waste!
denker
2 hours ago
RWA growth ► Risk Weighted Average Growth
CET1 ► Common Equity Tier 1
CSG ► Credit Suisse Group
$300MM ► $300 million
$2Nn ► fark knows?
PB player ► Primary Broker player?
GS/MS
► Goldman
Sachs and Morgan Stanley
S/Hs under Basel 3 ► Share Holders under Basel 3
Cheap Chinese Crap
4 minutes ago
That's 2 nanu-nanus. Mork's account got hacked.
ponchoramic
2 hours ago
Daily Reminder; The financialization of everything sucked the life out of real
capitalism and everything you see right now is a product of that life sucking
parisitical scheme.
King of Ruperts Land
2 hours ago
(Edited)
Don't worry, be happy.
Secret Weapon
3 hours ago
Greedy parasites getting their balls kicked in. Very fun to watch.
scoop2020
3 hours ago
I would imagine all the big losers are putting their numbers out there so they can
take them to the bankruptcy courts and claim GS and MS had privilege(by selling
before the news came out) and try and claw back there benefits. Never brag about
dodging a bullet. It only pisses off the people who didn't dodge the bullet.
NuYawkFrankie
4 hours ago
(Edited)
It's this kind of reckless gambling suggests that we leaned nothing from the
Long Term Capital
Management fiasco
zob2020
4 hours ago
Time to ban asset management and speculation for the same company?
archipusz
4 hours ago
The gov't will take care of it.
They wouldn't take care of robinhood's traders buying gme, but they'll take care of
this to make sure hedge funds can keep trading. Y'see, hedge funds are important.
ted41776
4 hours ago
once they were deemed institutions too big to fail and too big to jail they
became the government
there is nothing they won't get away with now
naro
1 hour ago
There has never been so much margin debt in the history of America, because interest
rates are so low that it seems like almost free money, and that is exactly what led
to the Market collapse on 1929
Nuxx
PREMIUM
3 hours ago
If this had everything to make a LTCM or Lehmann 2.0, how convenient that a ship got
stuck in the mud last week and had everybody and their mother looking towards Egypt
whilst Goldman Sachs and Morgan Stanley unloaded their cargo in the meantime.
tunetopper
3 hours ago
What is the limitation of Friends and Family on Family Offices?
Why did Soros, Cohen, Tudor Jones, Druckenmuller, and Hwang all get an exemption out
of Dodd-frank in 2019.
Omphalos of Delphi
3 hours ago
Don't worry. The Federal Reserve is bailing out the pedophiles while you schmucks
get stuck with the bag-o-crap. Here are some stocks rallying hard on the face of
700.000 a week unemployment claims
Olaf Myfrenzargay
4 hours ago
Total return swaps should be banned outright.
jack-of-all-trades
29 minutes ago
remove
link
Just to add to JPM analyst's comments. It's all pure speculation but...
Other Archegos' equity swaps were most likely linked to the Viacom swaps via
standard legal arrangements (cross default-like). E.g. if Archegos' were to fail on
its obligations to the counterparty on one swap, the counterparty gets the right to
terminate other outstanding swaps with Archegos and sell its underlying hedges in
the open market. This is done firstly to eliminate/reduce counterparty's risk
exposure to Archegos and, secondly, offset any losses the counterparty would
incur on Viacom with [hopefully] gains on other swaps outstanding or, if no gains,
reduce its hedge unwind losses.
Any PB service provider to Archegos knew with 100% certainty early last week that
Archegos would not have a penny left to settle any arising swap liquidation
losses/claims to it the moment Archegos failed to meet its ViacomCBS margin call(s).
MS and GS PB desks knew that, as the US houses, their ECM desks were best positioned
to find buyers for ViacomCBS compared to CS/UBS, not to mention DB and Japanese
houses that have no real ability in most of those names. Coincidentally, it's wrong
to refer to the group of these banks as a "syndicate".
It's likely that many of these PB desks knew other and coordinated things on regular
basis but there certainly wasn't any legal arrangement/obligation among these banks
to coordinate liquidation of any of their Archegos swap hedges. Their
decision-making was straight-forward -- GS/MS, with the best chance to get out
unscathed (lower Archegos exposure, better ECM teams) -- didn't dither and headed
for the exit ASAP. For CS (and perhaps UBS/DB), it was more complicated -- not as
well-placed to find buyers for ViacomCBS stock yet with [much] larger exposures,
they probably tried to coordinate the fire sale but quickly realised that they would
not be the first out the door and ultimately got stuck in the doorframe. For the
Japanese houses, the situation was worse -- without their own ECM teams, they
depended on other banks to place large CBSViacom blocks -- a mission impossible
under the circumstances.
With regards to the huge size of these losses... everyone must be stunned:
The market has been
bullish up until now, despite the recent rollover of top speculative names like
TSLA and other techs and yield rises in longer dated Treasuries -- the mood is
nothing like 2007-08;
Granted, the stock
trading volumes since the GFC time in 2008 have been massively diluted with the
high-speed/algorithmic trading, short-gamma [index] ETFs hedging, etc, etc --
these trading flows are not "real", so to speak. But everyone's market risk
people must have known (or reasonably guessed) how to tweak their risk models for
the above.... Guess they were wrong!!!
It's safe to assume that the terms of every single one of the PB (and not PB) equity
swaps/CFDs/"whatevers" out there will be scrutinised, re-assessed, and renegotiated
when and if possible.
The silver lining to this cloud is that it happened while the sun is still shining,
relatively speaking.
More content below More content below More content below More content below More content below
More content below More content below More content below
BERLIN, Sept 21 (Reuters) - Gas contributes only a fraction of Germany's energy consumption,
and Russian gas only a fraction of that, so it is wrong to say that the Nord Stream 2 pipeline
will make Germany dependent on Russian energy, Finance Minister Olaf Scholz said.
Asked about the flagship Kremlin project, which has been heavily criticised by the United
States and some European countries, Scholz on Monday restated the German government's position
that the pipeline was a private investment and should not be the target of U.S. sanctions.
The poisoning of Kremlin critic Alexei Navalny, blamed by most Western governments on
Russian state actors, has led to renewed calls for the nearly complete pipeline, built by
state-owned Gazprom, to be cancelled.
Critics of the pipeline say it increases Germany's reliance on Russian energy and deprives
transit countries Poland and Ukraine of crucial leverage over the giant country to their east.
(Reporting by Thomas Escritt; Editing by Maria Sheahan)
...
Elevated valuations is probably the biggest source of consternation for investors.
... Barclays sees limited upside in the near term. The firm has a 4,000 year-end target for
the S&P, which suggests less than a 1% gain from Friday's close.
A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.
Shares in Credit Suisse (
CSGN.SW
)
and Nomura (
8604.T
)
sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.
Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a handful
of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving banks with huge
losses.
Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up the
cash they hold and increase their positions -- potentially earning far greater returns if their bets come good. However, it also
means hedge funds can theoretically lose more money than they hold in client funds.
If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This
process is known as a margin call.
Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off
stocks held on the hedge fund's behalf -- a fire sale known in the City as liquidating positions. The business press reported on
Friday that Goldman Sachs (
GS
)
and Morgan Stanley (
MS
)
were selling huge chunks of shares in businesses including ViacomCBS (
VIAC
),
Discovery (
DISCA
)
and Chinese stocks Baidu (
BIDU
)
and Tencent Music (
TME
).
The block sales are estimated to be worth around $20bn (£14.5bn),
according
to the Financial Times
.
Shares in Credit Suisse sunk after it warned of 'significant losses' linked to the blow up at Archegos Capital. Photo:
Fabrice Coffrini/AFP via Getty Images
A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.
Shares in Credit Suisse (
CSGN.SW
)
and Nomura (
8604.T
)
sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.
Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a
handful of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving
banks with huge losses.
Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up
the cash they hold and increase their positions -- potentially earning far greater returns if their bets come good. However, it
also means hedge funds can theoretically lose more money than they hold in client funds.
If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This
process is known as a margin call.
Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off
stocks held on the hedge fund's behalf -- a fire sale known in the City as liquidating positions. The business press reported
on Friday that Goldman Sachs (
GS
)
and Morgan Stanley (
MS
)
were selling huge chunks of shares in businesses including ViacomCBS (
VIAC
),
Discovery (
DISCA
)
and Chinese stocks Baidu (
BIDU
)
and Tencent Music (
TME
).
The block sales are estimated to be worth around $20bn (£14.5bn),
according
to the Financial Times
.
"Things started going wrong for Archegos when shares of companies such as Viacom started to slide mid-last week," said Michael
Brown, a senior market analyst at Caxton Business. "It was at that point that margins were called, and couldn't be provided,
hence the block sales seen Friday."
A fire sale can have a negative impact on stock prices and shares in both ViacomCBS and Discovery sunk 27% on Friday. Banks
therefore risked making less back from the sales than they lent to clients to fund the investments.
Credit Suisse on Monday warned it was facing "highly significant" losses linked to Archegos that could be "material to our
first quarter results".
The Swiss lender didn't name Archegos but said: "A significant US-based hedge fund defaulted on margin calls made last week by
Credit Suisse and certain other banks."
Credit Suisse said it was "in the process" of selling shares held by Archegos. The bank said it was "premature" to estimate
how much it would likely lose from the crisis.
"We intend to provide an update on this matter in due course," Credit Suisse said.
Shares sunk 13.4% in Zurich.
"One would assume that, judging by the size of positions sold, the 'game is up' for Archegos," Brown said.
He said it was "unlikely" that Archegos would pose a systemic risk to the financial system. Neil Wilson, chief market analyst at
Markets.com, said the hedge fund "appears to have been too concentrated in a number of risky stocks."
A hedge fund blow up is relatively unusual and Archegos' undoing has raised concerns that other funds could find themselves in
similar positions.
"Block equity-trades stemming from margin-calls on Archegos will have sent the market's spidey senses a tingle," said Bill Blain,
a senior strategist at Shard Capital. "Who is next?"
Alex Harvey, a portfolio manager at Momentum, said: "We tend to find out after the event that other funds get caught up as
sometimes hedge funds may be crowded into similar trades."
"When we look at this and think about the GameStop saga and the decline in Tesla as two examples -- what we're seeing are more and
more pockets of very unusual trading activity in some stocks," he said. "You worry that this sort of frothy trading activity in
turn creates pockets of distress among investors and banks that leads to larger unwinds and losses for financials."
What are the facts that indicate that "China wants to dominate the entire world"? There is
little or no evidence of that. Just repeating this pabulum on and on doesn't make it true. It
just makes hoi polloi think it is true.
There is no specific speech or document that clearly states that China wants to dominate
the entire world. It is an inference from many things pieced together, some of which are:
1. China's behavior after it was admitted to WTO. When it happened in 1999, the
expectation was that they would open up their market to global firms. Instead, what happened
was rampant technology theft and currency manipulation. They manipulated their industrial
policy to deny foreign firms a level playing field that Chinese companies were given in other
countries.
2. The Belt and Road projects. These are basically debt traps for poorer countries in
Asia, Africa and Europe in the name of infrastructure development. They give soft loans to
these countries for economically unviable infra projects, and when they fail, the Chinese
take ownership. Kinda like loan sharks loaning money to gamblers.
3. They have started grabbing territory from all neighbours using salami tactics, showing
some old "maps" that was never agreed and claiming they own the area. (Google "Nine-dash
line").
Add to this the planting of spies using Confucius institutes, secretly paying many
academic researchers to steal technology (Example: Charles Lieber from Harvard), paying
newspapers to carry China Daily propaganda supplements (WaPo, NYT, LA Ttimes, The Boston
Globe, WSJ just for starters), the Houston embassy spying, They have done this stuff not just
to USA but most major countries in the world.
Now of course we can ask, "But where did they say they want to rule the world?". Well,
Hitler didn't either. In 1938, he solemnly swore to Neville Chamberlain, the British PM that
he had no intention of conquering another country. We all know what happened after that.
Naivete is dangerous in these situations. If a country acquires enough power, it will start
having imperial ambitions. It's human nature. Germany under Bismarck in 1880s tried to stay
away from conquering other countries as long as possible, but they couldn't resist the
temptation. Now none of this means China will try to dominate the world at any cost. If
others resist strongly enough, they will back off. But that's something we have to do, and
get others to do.
1. So China copied the way in which the US industrialized in the eighteenth and nineteenth
century. Following the Washington Consensus script has a history of leading to dependency
– Ha-Joon Chang has written some very good papers and books on the basic hypocrisy of
the West in this area. In the eighteenth century Britain protected its infant textile
industry against the Indian one with very high tariffs. They also stole woollen technology
from the Dutch.
2. This is Western propaganda, perhaps reflecting the IMF/World Bank efforts of yore upon
China. The "debt trap" BRI myth has been pretty much debunked among academic researchers, but
that doesn't fit the Western anti-China discourse.
3. Grabbing territory from all their neighbours? What territory? Compare the nine-dash line
mirrors to the declared hegemony of the US over the Caribbean and Central American nations
– backed up by repeated invasions and destabilizations (Haiti, Panama, Nicaragua,
Guatemala, Cuba etc.). Take a look at the US history of grabbing lands (the Philippines,
Puerto Rico, half of Mexico, Hawaii), China is exceedingly tame compared to US history, as
well as the US recent aggressions such as the illegal invasion of Iraq and destabilization of
Syria.
The MSM that you quote are the purveyors of fake news with no actual backing apart from
intelligence community briefings, the "stenographers of the intelligence community" as one
commentator put it. This is the classic propaganda designed to rile up the population to
support action against a new "enemy", very 1984.
1. Oh I know they are China is copying USA's policy in 18th and 19th century. That is what
is concerning. That is a successful playbook to gain a lot of economic power very quickly. Of
course the USA pointing fingers is hypocrisy. But that does not make this any less of a
threat.
2. Debunked by "academic researchers"? Care to share some sources? Multiple countries like
Malaysia, Kenya, Myanmar, Sierra Leone and Bangladesh have either cancelled projects or
trying to renegotiate them. The reason is because the projects are nothing but jobs and
demand creation programs for Chinese workers and companies. Contracts are awarded at inflated
rates to Chinese contractors without competitive bidding. Then they bring in workers and
equipment wholesale from mainland china. Some projects are economically viable, others are
just white elephants, like the highway in montenegro or a port/airport in Sri Lanka in the
middle of the jungle.
3. I am not denying what USA has done to other countries. China is just starting, so what
they do looks tame. Give them a little time.
I fully agree that the MSM are purveyors of fake news. I was referring to how they all
have taken Chinese money to print stuff favourable to them, and even articles entirely
written by Chinese foreign ministry. Now of course, they might change tack and start beating
the war drums if TPTB wants them to. That confirms my opinion that most MSM are just
mouthpieces for hire with no moral principles.
https://www.theguardian.com/news/2018/dec/07/china-plan-for-global-media-dominance-propaganda-xi-jinping
Please note, I am not defending all the terrible things America has done. Pointing out
that China is a threat need not come attached with any moral judgement on America.
Also, the proper response to China IMO should be more in economic policy than military
saber-rattling. Tariffs are just a start. Why are we not building more manufacturing in USA?
Sure, wages are high and prices will shoot up. But do we really need to import 15bn worth of
sneakers (that's about 200 mn pairs a year)? Let us make shoes in America that may cost twice
as mush, but three times more durable. Same with cellphones. Decrapifying products will go a
long way in making american manufacturing viable. But that requires great sacrifice by the
consumers. Shopping or goodies has been turned into a dopamine-drip. Investing class and
business are just as addicted to high profit margins & ROIs. Cut the dependence on China,
and watch them scramble to fix their internal issues like falling wages and unemployment. The
pity is we have lost the will as a nation to make such sacrifices.
I am not sure the will does not exist. I think the will might be suppressed and
thwarted.
We would need a Protectionist Party to explain everything you have touched on and run
candidates on that basis and on that program to see whether the diffuse and muffled will
might be uncovered and re-aggregated and recovered and weaponised for domestic political
re-conquest of government and hence of political economic policy.
I envision a delicious scenario-vision in which the Protectionist Party finally wins all
three branches and the Protectionist Party President makes a speech and at the end of that
speech, AND IN MANDARIN to to make sure the prime perpetrator of export aggression hears the
message and gets the point, the following phrase . . . . in MANDARIN, remember . . .
Hmmnm "If a country acquires enough power it will start having imperial ambitions?" I
agree completely with your statement. The rest seem pretty much what I have been reading in
the Washington Post and New York Times lately. I am not sure about their objectivity. One
thing is certain and that is that war talk very easily can slip into war. Having served in
the military for over 30 years and deployed many times the best advice I ever got was from
that political analyst Mike Tyson, "Everybody has a plan until they get punched in the face."
War talk with China and Russia and Iran and trying to cripple economies with sanctions never
has and never will work but we can always try to educate a new young generation of
politicians like Joe.
Nah. But I know we need a military to defend ourselves, especially if something that
happens on the other end of the world would make the supermarket shelves go empty in a jiffy.
I think we need to reduce external economic dependence and then cut the military to a
fraction of it's current size, just enough to patrol the borders and coasts.
The bulk of the "rampant technology theft" was their insistence on building the
requirement for specified technology transfers into the agreements that let companies set up
shop there. They had watched neocolonialist behavior long enough not to want to be locked
permanently into a subservient position. This part was of course not theft at all. For the
rest of it, yeah, industrial espionage is a thing. But one notes that the firms generally
stayed there.
Currency manipulation is only bad when the other guys do it. We have periodically
deliberately weakened the dollar to try to address balance of trade issues, and in the
aftermath of the '08 recession everybody was doing competitive devaluation, trying to
accomplish by that means what they would have tried tariffs for in an earlier era.
I haven't seen a decent scholarly piece that concurs with the propaganda about belt and
road loans as sinister debt traps.
Territorial disputes aside, most of those neighbors have China as a major trading partner,
and none of the disputes have gone hot. The neighbors are also not entirely lacking in power.
Russia and India are nuclear powers, and if Japan chose to field a more formidable military
it could easily do so.
One of the hardest and most disturbing lessons we've learned from the Nixon China gambit
was that capitalism doesn't necessarily lead to democracy. Nor is a democratic society a
prerequisite for capitalism to flourish.
That came much after the Nixon thaw with China, after the fall of Soviet Union. Francis
Fukuyama solemnly proclaiming "End of History" and all that. The turning point was China
being let into WTO in 1999. Clinton, Bush II and Obama swallowed that "capitalism leads to
democracy" idea hook, line and sinker.
Technology theft, spun any way, is still technology theft. Sure, Industrial espionage is
"a thing" that everyone does. So is currency manipulation. Since we feel guilty that USA
gained global power by doing all these, we should let others do it too, just to even the
scales? Foreign policy mixed with moral feelings is a recipe for disaster.
Medicaid
expansion enrollment grew nearly 30% year-over-year in 19-state sample, Andrew Sprung,
XPOSTFACTOID, March 17, 2021
An update on Medicaid expansion enrollment growth since the pandemic struck. Below is a
sampling of 19 expansion states through January of this year, and 14 states through
February.
Maintaining the assumption, explained here ,
"relatively slow growth in California would push the national total down by about 2.5
percentage points." These tallies still point to year-over-year enrollment growth of
approximately 30% from February 2020 to February 2021.
If that's right, then Medicaid enrollment among those rendered eligible by ACA expansion
criteria (adults with income up to 138% FPL) may exceed 19 million nationally and may be
pushing 20 million. Assuming the sampling of a bit more than a third of total expansion
enrollment represents all expansion states more or less and again accounting for slower growth
in California.
"... Last week was the 53rd straight week total initial claims were greater than the second-worst week of the Great Recession. (If that comparison is restricted to regular state claims -- because we didn't have PUA in the Great Recession -- initial claims are still greater than the 14th worst week of the Great Recession.) ..."
One year ago this week, when the first sky-high unemployment insurance (UI) claims data of the pandemic were released, I said
"
I
have been a labor economist for a very long time and have never seen anything like this
." But in the weeks that followed,
things got worse before they got better -- and we are not out of the woods yet.
Last
week -- the week ending March 20, 2021 -- another 926,000 people applied for UI. This included 684,000 people who applied for
regular state UI and 242,000 who applied for Pandemic Unemployment Assistance (PUA), the federal program for workers who are
not eligible for regular unemployment insurance, like gig workers.
Last week was the 53rd straight week total initial claims were greater than the second-worst week of the Great Recession. (If
that comparison is restricted to regular state claims -- because we didn't have PUA in the Great Recession -- initial
claims are still greater than the 14th worst week of the Great Recession.)
Figure A
shows continuing claims in all programs over time (the latest data for this are for March 6). Continuing claims
are currently nearly 17 million above where they were a year ago, just before the virus hit.
FIGURE A
Continuing unemployment claims in all programs, March 23, 2019–March 6, 2021
*Use
caution interpreting trends over time because of reporting issues (see below)*
Date
Regular state UI
PEUC
PUA
Other programs (mostly EB and STC)
2019-03-23
1,905,627
31,510
2019-03-30
1,858,954
31,446
2019-04-06
1,727,261
30,454
2019-04-13
1,700,689
30,404
2019-04-20
1,645,387
28,281
2019-04-27
1,630,382
29,795
2019-05-04
1,536,652
27,937
2019-05-11
1,540,486
28,727
2019-05-18
1,506,501
27,949
2019-05-25
1,519,345
26,263
2019-06-01
1,535,572
26,905
2019-06-08
1,520,520
25,694
2019-06-15
1,556,252
26,057
2019-06-22
1,586,714
25,409
2019-06-29
1,608,769
23,926
2019-07-06
1,700,329
25,630
2019-07-13
1,694,876
27,169
2019-07-20
1,676,883
30,390
2019-07-27
1,662,427
28,319
2019-08-03
1,676,979
27,403
2019-08-10
1,616,985
27,330
2019-08-17
1,613,394
26,234
2019-08-24
1,564,203
27,253
2019-08-31
1,473,997
25,003
2019-09-07
1,462,776
25,909
2019-09-14
1,397,267
26,699
2019-09-21
1,380,668
26,641
2019-09-28
1,390,061
25,460
2019-10-05
1,366,978
26,977
2019-10-12
1,384,208
27,501
2019-10-19
1,416,816
28,088
2019-10-26
1,420,918
28,576
2019-11-02
1,447,411
29,080
2019-11-09
1,457,789
30,024
2019-11-16
1,541,860
31,593
2019-11-23
1,505,742
29,499
2019-11-30
1,752,141
30,315
2019-12-07
1,725,237
32,895
2019-12-14
1,796,247
31,893
2019-12-21
1,773,949
29,888
2019-12-28
2,143,802
32,517
2020-01-04
2,245,684
32,520
2020-01-11
2,137,910
33,882
2020-01-18
2,075,857
32,625
2020-01-25
2,148,764
35,828
2020-02-01
2,084,204
33,884
2020-02-08
2,095,001
35,605
2020-02-15
2,057,774
34,683
2020-02-22
2,101,301
35,440
2020-02-29
2,054,129
33,053
2020-03-07
1,973,560
32,803
2020-03-14
2,071,070
34,149
2020-03-21
3,410,969
36,758
2020-03-28
8,158,043
0
52,494
48,963
2020-04-04
12,444,309
3,802
69,537
64,201
2020-04-11
16,249,334
31,426
216,481
89,915
2020-04-18
17,756,054
63,720
1,172,238
116,162
2020-04-25
21,723,230
91,724
3,629,986
158,031
2020-05-02
20,823,294
173,760
6,361,532
175,289
2020-05-09
22,725,217
252,257
8,120,137
216,576
2020-05-16
18,791,926
252,952
11,281,930
226,164
2020-05-23
19,022,578
546,065
10,010,509
247,595
2020-05-30
18,548,442
1,121,306
9,597,884
259,499
2020-06-06
18,330,293
885,802
11,359,389
325,282
2020-06-13
17,552,371
783,999
13,093,382
336,537
2020-06-20
17,316,689
867,675
14,203,555
392,042
2020-06-27
16,410,059
956,849
12,308,450
373,841
2020-07-04
17,188,908
964,744
13,549,797
495,296
2020-07-11
16,221,070
1,016,882
13,326,206
513,141
2020-07-18
16,691,210
1,122,677
13,259,954
518,584
2020-07-25
15,700,971
1,193,198
10,984,864
609,328
2020-08-01
15,112,240
1,262,021
11,504,089
433,416
2020-08-08
14,098,536
1,376,738
11,221,790
549,603
2020-08-15
13,792,016
1,381,317
13,841,939
469,028
2020-08-22
13,067,660
1,434,638
15,164,498
523,430
2020-08-29
13,283,721
1,547,611
14,786,785
490,514
2020-09-05
12,373,201
1,630,711
11,808,368
529,220
2020-09-12
12,363,489
1,832,754
12,153,925
510,610
2020-09-19
11,561,158
1,989,499
10,686,922
589,652
2020-09-26
10,172,332
2,824,685
10,978,217
579,582
2020-10-03
8,952,580
3,334,878
10,450,384
668,691
2020-10-10
8,038,175
3,711,089
10,622,725
615,066
2020-10-17
7,436,321
3,983,613
9,332,610
778,746
2020-10-24
6,837,941
4,143,389
9,433,127
746,403
2020-10-31
6,452,002
4,376,847
8,681,647
806,430
2020-11-07
6,037,690
4,509,284
9,147,753
757,496
2020-11-14
5,890,220
4,569,016
8,869,502
834,740
2020-11-21
5,213,781
4,532,876
8,555,763
741,078
2020-11-28
5,766,130
4,801,408
9,244,556
834,685
2020-12-05
5,457,941
4,793,230
9,271,112
841,463
2020-12-12
5,393,839
4,810,334
8,453,940
937,972
2020-12-19
5,205,841
4,491,413
8,383,387
1,070,810
2020-12-26
5,347,440
4,166,261
7,442,888
1,450,438
2021-01-02
5,727,359
3,026,952
5,707,397
1,526,887
2021-01-09
5,446,993
3,863,008
7,334,682
1,638,247
2021-01-16
5,188,211
3,604,894
7,218,801
1,826,573
2021-01-23
5,156,985
4,779,341
7,943,448
1,785,954
2021-01-30
5,003,178
4,062,189
7,685,857
1,590,360
2021-02-06
4,934,269
5,067,523
7,520,114
1,523,394
2021-02-13
4,794,195
4,468,389
7,329,172
1,437,170
2021-02-20
4,808,623
5,456,080
8,387,696
1,465,769
2021-02-27
4,457,888
4,816,523
7,616,593
1,237,929
2021-03-06
4,458,888
5,551,215
7,735,491
1,207,201
Other programs (mostly EB and STC)
PUA
PEUC
Regular
state UI
Jul
2019
Jan
2020
Jul
2020
Jan
2021
0
10,000,000
20,000,000
30,000,000
40,000,000
Chart
Data
Caution:
Trends over time in PUA claims may be distorted because when an individual is owed retroactive
payments, some states report all retroactive PUA claims during the week the individual received their
payment.
The good news in all of this
is
Congress's passage of the sweeping $1.9 trillion relief and recovery package. It is both providing crucial support to millions
of working families and setting the stage for a robust recovery. One big concern, however, is that the bill's
UI
provisions
are
set to expire the first week in September, when, even in the best–case scenario, they will still be needed. By then, Congress
needs to have put in place long-run UI reforms that include automatic triggers based on economic conditions.
The 12 nation group might not see annual C plus C output increases of 1400 kbo/d in the
future, but it will take time for the rate of increase to fall to 455 kbo/d (where a
plateau in World output would occur) especially if oil prices rise to $80/bo or more.
No, it will not take time. Why would you think production would graduallly fall off?
Yes, decline slops are usually gradual as well as increasing slopes. But the change from
increase to plateau or increase to decline is seldom, if ever gradual. USA+Saudi+Russia has
already plateaued. Their decline is very likely to be sudden, well, it has actually already
happened.
However, in the two charts below, I have used your method of stopping the chart just before
the Covid induced decline. The charts speak for themselves.
I think it instructive to recall oil and gas investment history. Unregulated oil and gas
markets have always yielded boom bust cycles. There was a bust cycle from 1986 to 2000. A boom
cycle started in 2001 with investment in oil and gas rising on average 11% per year to $780
billion in 2014 (this was from a Kopits talk in 2014, but the link I have no longer works).
There is a lag between increased or decreased investment and the response in extraction
rates. The lag is longer offshore than onshore. For example, in spite of the investment boom
from 2001 to 2014, extraction rates were stagnant between 2005 and 2010.
A bust began in 2015 with investment dropping 25% in 2015 and a further 20% in 2016. The
drop was more pronounced offshore than onshore. Investment stayed essentially flat through
2019. Extraction rates continued to climb through 2018 but were flat in 2019.
The IEA began warning in 2016 that investment was not sufficient to meet demand in the early
2020s. In their 2019 WEO they stated that $650 to $750 billion was needed annually to attain
106 mb/d in 2030. I am assuming this sum referred to oil AND gas investment. In 2019 oil and
gas investment was $483 billion. In 2020 it was $313 billion (close to 2009 levels).
As Dennis noted in response to my comment above, the relationship between a drop in
investment and the corresponding drop in supply is not linear. But unless investment increases,
I don't expect extraction rates to achieve 2018 levels soon.
REPLYSHALLOW SAND IGNORED
03/28/2021 at 6:08 am
Ovi. I appreciate your posts. Thanks.
Schinzy. Look at what the integrated oil companies are forecasting. BP, RDS and TOT are
shrinking production. CVX and XOM are greatly reducing CAPEX. So is COP, the largest
independent. So is PXD, one of the largest shale players. Of course, these companies can change
strategy quickly, likely next year if any do.
For the first time I can recall, the government of the United States is not supportive of it
increasing production. Contrary to popular belief, this matters.
To keep a lid on oil prices, on the supply side, either the USA needs to keep adding barrels
or some other country that does not benefit as a whole from high oil prices will need to step
up. The CAPEX currently isn't budgeted to do that.
Of course, decreased demand due to the continued spikes in COVID cases will continue to put
a lid on demand. Hopefully by fall this won't be much of an issue, not for oils sake, but for
public health sake.
The other demand side lids I see could be Western EV adoption offsetting developing world
oil demand growth. Worried here about both the needed upgrades to the grids, plus the lack of
rare earth metals. The other could be another big economic issue. Don't want that, but seems
economy issues are also going to be with us given the high debt levels. The stimulus in
response to COVID isn't cheap.
REPLYSCHINZY
IGNORED
03/28/2021 at 7:41 am
All very true Shallow. I suspect these companies are reducing CAPEX because of increasing
debt. The more conservative CAPEX spending seems to be helping their share prices. SHALLOW
SAND IGNORED
03/28/2021 at 7:55 am
Schinzy.
IHS Markit doesn't see US CAPEX spending at the 2018-19 levels returning until 2024-25.
Probably too far out in the future to be accurate. However, it's 2021 forecast is for lower
CAPEX in all years since 2010 except for 2020.
I will add another big player to my list above, EOG also lowered CAPEX guidance for 2021
from where it had been pre-pandemic. Will seek to hold production flat in 2021.
Here is the C Plus C chart to to December 2022. In the original chart in the post above, I
only took it out to March 2021.
The March STEO report along with the International Energy Statistics are used to make the
projection. It projects that world crude production December 2022 will be 81,759 kb/d, 2,735
kb/d lower than November 2018
Ovi, thanks for a great chart. And even this, 2,735 kb/d below the previous peak, I think is
overly optimistic.
I think, at least two of the world's three greatest oil producers have peaked, (The USA,
Saudi Arabia, and Russia), have peaked, and the rest of the world has clearly peaked, there is
no way we can possibly surpass that 2018 peak. Actually, I think all three have peaked. I was
just being conservative.
World less USA, Saudi Arabia, and Russia peaked in 2017. All three peaked, yearly average,
in 2019. Of course you can argue that this is just the peak "so far". But I do not believe any
of the three will ever surpass their 2019 yearly average peak.
Dennis, you wrote: Below I use the trend in the ratio of World C plus C to World
petroleum liquids from Jan 2017 to Dec 2019 to estimate World C+C from Jan 2021 to Dec
2022.
Okay, you use past trend lines to estimate future production. Well, I guess there is
also how the EIA does it and the IEA does it. I just don't have confidence in that type of
analysis.
Above I have charted past World oil production less the USA, Russia, and Saudi Arabia. There
is clearly a trend there. Do you think this trend will continue?
World C+C production in 2018 averaged 82,897,000 barrels per day. In 2019 that average was
82,306,000 barrels per day. I have little doubt that future world oil production can come close
to those averages. But I would bet my SS check that the 2018 peak will never be surpassed. (I
like annual averages but if you like centered 12-month averages, then go with that.)
At any rate here are four possible sources for a surge in World oil production:
1. THE USA
2. Russia
3. Saudi Arabia
4. The World less USA, Russia, and Saudi Arabia
If World oil production is yet to peak, which one, or ones, of these four sources, will it
come from? RON PATTERSON IGNORED
03/26/2021 at 12:00 pm
I believe I have seen reports that suggest a plateau near the recent 12 month peak output
can be maintained for 5 to 10 years.
No Dennis, you have not seen that. I posted that myself some time ago. Russia stated that
they hoped to hold production at about 11.2 million barrels per day for the next four years,
2021 through 2024. I have since lost the link but it was posted right here on this list.
However, I think that was wishful thinking on Russia's part. I don't think they will hold that
level, ever again.
The drop in World minus KSA, US, and Russia C plus C output since 2018 has mostly been
due to a combination of lower oil prices and OPEC reducing output to try to bring oil prices
back up,
I am not talking about the drop since 2018, I am talking about the peak and decline
before 2018. The peak month in my chart above was November of 2016 at 52,206,000. The
peak 12-month average was September of 2017 at 51,161,000 barrels per day. At that point, in
September of 2017, the World less USA, Russia, and Saudi produced 63% of all World production.
63% of World oil production peaked in September of 2017.
While World oil production was peaking in 2018, due to increased production by the USA,
Saudi, and Russia, the World less these big three was declining to 50,737,000 barrels per day,
the average for 2018. A decline of almost half a million barrels per day.
Dennis, regardless of what happens in Canada, Brazil, and Norway over the next 5 to 10
years, the World less the big three peaked in 2016 monthly and 2017 annually. Any increase in
World production must come from one or more of the big three. HOLE IN HEAD IGNORED
03/26/2021 at 1:22 pm
Dennis , your post on the last thread .
"I stand by my estimate, in 2020 World C plus C output dropped by 5.5 Mbo/d due to a lack of
oil demand and the resulting drop in oil prices from the 2019 annual average, so a 10 Mbo/d
increase from the 2020 level (annual average) of C plus C output requires a return to the 2019
average level (roughly 82.3 Mb/d) requiring a 5.6 Mbo/d increase and then a further 4.4 Mbo/d
increase in output to reach 87 Mbo/d.
If World demand for C plus C warrants such an increase by 2028, I believe it can be
produced, and yes the model accounts for depletion, which has been ongoing since the first
barrel of oil was produced. The basis for the estimate is likely World resources of 3400 Gb of
C plus C (this includes the 1428 Gb of crude plus condensate that was produced from 1860 to
2020), remaining resources (this includes conventional and unconventional C plus C) are about
1972 Gb (this includes future discoveries and reserve growth).
It is possible less will be produced due to lack of demand, if a rapid transition to
non-fossil fuel energy sources occurs, I hope that is the case, but I am skeptical"
Well, 2020 production came in at an average of 75.93 mbpd . Decline rate was 7.5% compared to
2019. How will you achieve additional 10 mbpd by 2028 ? Ron is correct . Igor Sechin boss at
Rosneft confirms what Ron has stated , shale party is over , KSA is going to cut domestic
consumption by 1mbpd so that it can export that oil . Sorry, Brazil , Norway ,Tom Dick and
Harry are in no position to cover this lag in production .In the future decline rates will
increase as horizontal wells reach their limits of extraction . You must rethink your models
with the new facts . Your statement "If World demand for C plus C warrants such an increase by
2028, I believe it can be produced " does not hold water . Your belief or mine is irrelevant .
Geology prevails . RON PATTERSON
IGNORED
03/27/2021 at 8:55 am
OPEC has been holding back production since 2017 in order to get oil prices up, how much
different nations produce depends on their cost of production relative to price,
I don't see any evidence to support that statement. Average OPEC production in 2018 was only
170,000 barrels per day below the average for 2017. If they were holding back, they weren't
doing a very good job of it. I think they were producing flat out all three years, 2016 through
2018.
I remembered incorrectly, OPEC likely started cutting back on output in the middle of
2016 to get oil prices higher,
You remember very incorrectly. OPEC, in the last months of 2016 was emptying their storage
tanks in order to produce as much oil as they could. They would set their quotas on the amount
produced in November and December of 2016, so they were making heroic attempts to produce every
barrel possible in order to get a higher quota. (November 2016 was the OPEC all-time peak. And
in my opinion, will remain so forever.)
They started cutting in January of 2017. But by June everyone was cheating and they were
all, by July 2017, producing flat out.
Why does OPEC exist?
OPEC was formally constituted in January 1961 by five countries: Saudi Arabia, Iran, Iraq,
Kuwait, and Venezuela. They existed then for the sole reason of trying to drive oil prices
higher. They would like to do that today but squabbling among members has made them somewhat of
a joke. They are a disorganized bunch of buffoons. Yes, they have dramatically cut production
during the pandemic. But so has everyone else in the world. The bottom dropped out of
demand so everyone cut production trying to save money.
A decline in output for the World has occurred since 2018 because oil prices dropped due
to oversupply of oil relative to demand.
Okay, but what about 2017 and 2018? OPEC could not keep their members in line and by June of
2017 everyone was again producing flat out, causing that oversupply. And their cut was a
pittance anyway, not enough to make much difference. For most of 2017 and all of 2018, every
OPEC member was producing every barrel they could. (With the exception of Iran and Venezuela of
course, but that is another story for another thread.)
Just look at the chart Dennis, that is just so damn obvious it cannot be denied.
For OPEC minus Iran, Libya, and Venezuela the centered 12 month average peak was 26759
kbo/d in January 2019.
Okay, you need to update your nations here. Libya is already back, producing at maximum
possible capacity for the last 4 months. Venezuela will never be back, not in the next decade
anyway, long after peak oil is history. That leaves only Iran. Iran, if sanctions were lifted
today, could possibly increase production by approximately 1.6 million barrels per day in the
next six months or so. That would not be nearly enough to make up for the natural decline in
OPEC, especially Saudi Arabia, since the peak in 2016.
Iran is the only nation on earth that can possibly increase production in any significant
amount. So you should only deal with Iran when talking about possible OPEC production
increases.
Dennis, OPEC has done nothing but basically tread water since 2005. Why do you think they
will now save the world?
(In the chart below 2021 is only two months, January and February.
OPEC does not produce at maximum output, except when fighting for quotas.
Dennis, OPEC is not an oil company, they are a cartel. The only ones that increased when
battling for quota were Saudi, the UAE, and Kuwait. The rest just produced flat out all the
time. Check the charts.
Yes, they were all producing flat out most of the time. Only in a few instances did they
actually cut production. Of course, the pandemic hit everyone. But as you can see by the yearly
chart I posted their total share of the market has shrunk dramatically since 2005.
Dennis, OPEC peaked in 2016. Saudi Arabia is in decline. End of story. ALIMBIQUATED
IGNORED
03/27/2021 at 7:47 am
Ron,
Good point about past trends lines being a dubious predictor of future trends. This is testable
too. In this case three years of past data was used to predict the future.
If there is 40 years of data, you could run the algorithm on 35 three-year data sets and
check the accuracy of the prediction. That would give you some idea of how likely the latest
prediction is to be accurate.
My guess is that the accuracy is fairly low, but checking would reveal the truth. POLLUX
IGNORED
03/26/2021 at 3:30 am
In November, Saudi Arabia's domestic crude stockpiles fell to 17-year low: "Saudi Arabia's domestic crude stockpiles fell by 1.2 million barrels in November to 143.43
million barrels, the lowest since November 2003." (
source )
This trend continues and in January, stockpiles fell to 137.207 million barrels: "The country's domestic refinery crude throughput rose to 2.343 million bpd while crude
stocks fell to 137.207 million barrels in January." (
source ) HOLE IN HEAD IGNORED
03/26/2021 at 11:19 am
In an article Steven Kopits wrote "In its February Short Term Energy Outlook (STEO), the EIA
forecasts this month's world oil consumption at 96.7 million barrels per day (mbpd). The oil
supply, however, is much lower, only 93.6 mbpd, with the difference of 3.1 mbpd of necessity
being drawn from crude oil and refined product inventories. This is a shortfall of 3.5% "
Is he correct ? if yes ,then are we in trouble ?
Unfortunately the paper market (or electronic market) is what most US producers are paid
on.
As I have posted before, we are paid on a monthly average of the daily settles of WTI, less
a discount which primarily is due to transportation expenses. Saturday and Sunday are the same
price as Friday's close, so we watch the Friday close a little more closely.
After a very difficult 2020, 2021 has been mostly good oil price wise. I thought prices
might run a little higher, but COVID just has not subsided worldwide like I had hoped it would
by now. Maybe this summer?
REPLYOVI IGNORED
03/24/2021 at 9:40 pm
Shallow Sand
Thanks for the info. I hope that WTI stays up for you.
I used to follow a Cdn oil company that sold some of their oil on a daily basis and some a
month or two forward, based on the settled price of WTI. I later found out that the CEO was a
believer in peak oil and did well with oil on the rise to $147. The company doesn't exist
today. POLLUX IGNORED
03/25/2021 at 9:52 am
Four scenarios going forward:
1) Higher output and higher prices
Dennis?
2) Higher output and lower prices
"Brent crude oil prices will average $64 per barrel (b) in the second quarter of 2021 and then
fall to less than $60/b through the end of 2022" ( source )
– EIA
3) Lower output and higher prices
Many "Peak Oil:ers"
4) Lower output and lower prices
"Within a few months to a year, the worldwide debt bubble will start to collapse, bringing oil
prices down by more than 50%." ( source )
– Gail Tverberg
They have US C+C production falling 58,000 barrels per day in December, 108,000 bpd in
January, and 591,000 bpd in February to 10,364,000 barrels per day. The huge February drop was
due, mostly, to bad weather. SCHINZY IGNORED
03/26/2021 at 3:09 am
The one good thing about bringing back neoclassical economics.
We know what led to Wall Street Crash in 1929. The same mistakes have been repeated
globally.
At 25.30 mins you can see the super imposed private debt-to-GDP ratios.
The financial crisis appears to come out of a clear blue sky when you use an economics
that doesn't consider debt, like neoclassical economics, as it did in 1929.
1929 – US
1991 – Japan
2008 – US, UK and Euro-zone
The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart
above. The Chinese were lucky; it was very late in the day. Everyone has made the same
mistake; only the Chinese worked out what the problem was.
The Chinese don't seem too worried about the competition.
Putin and Xi are jealous of Wall Street.
No matter how hard they try, they have never been able to inflict the same level of damage to
the West, Wall Street managed in 2008.
The Chinese know what to look out for to spot a financial crisis coming. They look for the
problems brewing in private debt and inflated asset prices.
This nice Chinese chap tried to warn the Americans the US stock markets was at 1929 levels at
Davos 2018. https://www.youtube.com/watch?v=1WOs6S0VrlA
We know what a correction from 1929 levels looks like.
We have seen it before.
"They've done it again, I can't believe my luck. US stock markets are at 1929 levels,
this isn't going to end well" president Xi
Xi has probably rung Putin up to tell him the good news.
I bet they had a right old laugh.
Luckily for the Chinese, the Americans have no idea what they are doing.
The Chinese have been making all the classic mistakes of neoclassical economics, but have
been learning from them to ensure they don't make the same mistakes again.
We haven't been doing this in the West.
At the end of the 1920s, the US was a ponzi scheme of inflated asset prices.
The use of neoclassical economics, and the belief in free markets, made them think that
inflated asset prices represented real wealth.
1929 – Wakey, wakey time
The use of neoclassical economics, and the belief in free markets, made them think that
inflated asset prices represented real wealth, but it didn't.
It didn't then, and it doesn't now.
What was the ponzi scheme of inflated asset prices that collapsed in 2008? "It's nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of
$1.4 trillion of US sub-prime loans, and dispersed throughout the world" All the
Presidents Bankers, Nomi Prins.
It wasn't real wealth, just a ponzi scheme of inflated asset prices.
Real estate – the wealth is there and then it's gone.
1990s – UK, US (S&L), Canada (Toronto), Scandinavia, Japan, Philippines,
Thailand
2000s – Iceland, Dubai, US (2008), Vietnam
2010s – Ireland, Spain, Greece, India
It wasn't real wealth, just a ponzi scheme of inflated asset prices.
It's been the same since Tulip Mania.
You can inflate asset prices, keeping them inflated is the hard bit.
Oh yeah, we had a system like that where all the wealth stayed at the top. We called it
Feudalism. The Americans are progressing in the reverse direction.
Perhaps certain counter-Feudalist towns, cities, communities, etc. should study up on how
certain Free Towns and Free Republics survived in Europe during the Feudalist Period. And try
to set themselves up as the Free Towns, Free Cities, Free Republics in the midst of a future
Feudalist America.
Thank you, RMO, you summarized US-Russian relations from 1991 to the start of the Putin
era much better than me. We really missed an opportunity to integrate the Russians into the
US-EU alliance (such as it was), especially with regard to NATO.
Bush Jr. compounded this failure by mistaking Putin for an ally in the war against terror,
thinking that our concerns in the middle east paralleled Putin's affairs in Chechen. They
could have, but didn't. Putin was a more strategic thinker.
My sense is that Putin played a waiting game for much of the first two decades of this
century...
"... How convinced should anyone be when dismissing the message of metrics like these? To be sure, both the market and economy are in uncharted waters. It's possible -- perhaps likely -- that old standards don't apply when something as random as a virus is behind the stress. At the same time, many a portfolio has been squandered through complacency. Market veterans always warn of fortunes lost by investors who became seduced by talk of new rules and paradigms. ..."
"... At 35, the CAPE is at its highest since the early 2000s. ..."
"... Another indicator raising eyebrows is called Tobin's Q. The ratio -- which was developed in 1969 by Nobel Prize-winning economist James Tobin -- compares market value to the adjusted net worth of companies. It's showing a reading just shy of a peak reached in 2000. T ..."
"... the signal sent by the "Buffett Indicator," a ratio of the total market capitalization of U.S. stocks divided by gross domestic product. ..."
"... Still, it's hard to ignore the risks to underlying assumptions. While rock-bottom rates underpin many of the arguments, this year has shown that the Fed still is willing to let longer-term interest rates run higher. And betting on huge upside earnings surprises is risky too -- it's rare to see a 16% beat historically. Before last year, earnings had exceeded estimates by an average 3% a quarter since 2015. ..."
"... "This happens in every bubble," said Bill Callahan, an investment strategist at Schroders. "It's: 'Don't think about the traditional value metrics, we have a new one.' It's: 'Imagine if everyone did XYZ, how big this company could be.'" ..."
"... To Scott Knapp, chief market strategist of CUNA Mutual Group, abandoning standard valuation measures because the environment has changed places investors in "pretty sketchy territory." Talk of watershed moments rendering traditional metric irrelevant as a signal, he says. "That's usually an indication we're trying to justify something," he said. ..."
Shiller P/E. Tobin's Q. Buffett Indicator. Ignore them all?
It's 'usually an indication we're trying to justify something'
Everywhere you look, there's a valuation lens that makes stocks look frothy. Also everywhere you look is someone
saying don't worry about it.
The so-called
Buffett
Indicator
. Tobin's Q. The S&P 500's forward P/E. These and others show the market at stretched levels, sometimes
extremely so. Yet many market-watchers argue they can be ignored, because this time really is different. The
rationale? Everything from Federal Reserve largesse to vaccines promising a quick recovery.
How convinced should anyone be when dismissing the message of metrics like these? To be sure, both the market and
economy are in uncharted waters. It's possible -- perhaps likely -- that old standards don't apply when something as
random as a virus is behind the stress. At the same time, many a portfolio has been squandered through complacency.
Market veterans always warn of fortunes lost by investors who became seduced by talk of new rules and paradigms.
"Every time markets hit new highs, every time markets get frothy, there are always some talking heads that argue:
'It's different,'" said Don Calcagni, chief investment officer of Mercer
Advisors
.
"We just know from centuries of market history that that can't happen in perpetuity. It's just the delusion of
crowds, people get excited. We want to believe."
Source: Robert Shiller's website
Robert Shiller is no apologist. The Yale University professor is famous in investing circles for unpopular valuation
warnings that came true during the dot-com and housing bubbles. One tool on which he based the calls is his
cyclically adjusted price-earnings ratio that includes the last 10 years of earnings.
While it's flashing warnings again, not even Shiller is sure he buys it. At 35, the CAPE is at its highest since the
early 2000s. If that period of exuberance is excluded, it clocks in at its highest-ever reading. Yet in a recent
post
,
Shiller wrote that "with interest rates low and likely to stay there, equities will continue to look attractive,
particularly when compared to bonds."
Another indicator raising eyebrows is called Tobin's Q. The ratio -- which was
developed
in
1969 by Nobel Prize-winning economist James Tobin -- compares market value to the adjusted net worth of companies.
It's showing a reading just shy of a peak reached in 2000. To Ned Davis, it's a valuation chart worth being wary
about. Still, while the indicator is roughly 40% above its long-term trend, "there may be an upward bias on the ratio
from technological change in the economy," wrote the Wall Street veteran who founded his namesake firm.
Persuasive arguments also exist for discounting the signal sent by the "Buffett Indicator," a ratio of the total
market capitalization of U.S. stocks divided by gross domestic product. While it recently reached its highest-ever
reading above its long-term trend, the methodology fails to take into consideration that companies are more
profitable than they've ever been, according to Jeff Schulze, investment strategist at ClearBridge Investments.
"It's looked extended really for the past decade, yet you've had one of the best bull markets in U.S. history," he
said. "That's going to continue to be a metric that does not adequately capture the market's potential."
At Goldman Sachs Group Inc., strategists argue that however high P/Es are, the absence of significant leverage
outside the private sector or a late-cycle economic boom points to low risk of an imminent bubble burst. While people
are shoveling money into stocks at rates that have signaled exuberance in the past, risk appetite is rebounding after
a prolonged period of aversion, according to the strategists, who also cite low interest rates.
"Today is a very different situation -- I don't think we've got a broad bubble," Peter Oppenheimer, chief global
equity strategist at the firm, said in a recent interview on Bloomberg Television. "Given the level of real rates,
where they are, it's still likely to be broadly supportive for equities versus bonds."
Another rationale employed to dismiss certain valuation metrics is the earnings cycle. Corporate America is just
emerging from a recession, with profits forecast to stage a strong comeback. The strong outlook for profits is why
many investors are giving similarly stretched valuations the benefit of the doubt. Trading at 32 times reported
earnings, the S&P 500 looks quite expensive, but with income forecast to jump 24% to $173 a share this year, the
multiple drops to about 23.
The valuation case becomes more favorable should business leaders continue to blow past expectations. For instance,
if this year's earnings come in at 16% above analyst estimates, as they did for the previous quarter, that'd imply a
price-earnings ratio of less than 20. While that exceeds the five-year average of 18, Ed Yardeni is not troubled by
what he calls "the New Abnormal."
"Valuation multiples are likely to remain elevated around current elevated levels because fiscal and monetary
policies continue to flood the financial markets with so much free money," said the founder of Yardeni Research Inc.
He predicts the S&P 500 will finish the year at 4,300, about an 8% gain from current levels.
Still, it's hard to ignore the risks to underlying assumptions. While rock-bottom rates underpin many of the arguments, this year
has shown that the Fed still is willing to let longer-term interest rates run higher. And betting on huge upside earnings
surprises is risky too -- it's rare to see a 16% beat historically. Before last year, earnings had exceeded estimates by an
average 3% a quarter since 2015.
"This happens in every bubble," said Bill Callahan, an investment strategist at Schroders. "It's: 'Don't think about the
traditional value metrics, we have a new one.' It's: 'Imagine if everyone did XYZ, how big this company could be.'"
Returns of 2%
Valuations are never useful market-timing tools because expensive stocks can get more expensive, as was the case during the
Internet bubble. Yet viewed through a long-term lens, valuations do matter. That is, the more over-valued the market is, the
lower the future returns. According to a study by Bank of America strategists led by Savita Subramanian, things like
price-earnings ratios could explain 80% of the S&P 500's returns during the subsequent 10 years. The current valuation framework
implies an increase of just 2% a year over the next decade, their model shows.
To Scott Knapp, chief market strategist of CUNA Mutual Group, abandoning standard valuation measures because the environment has
changed places investors in "pretty sketchy territory." Talk of watershed moments rendering traditional metric irrelevant as a
signal, he says.
"That's usually an indication we're trying to justify something," he said.
"In a community where the primary concern is making money, one of the necessary rules is to
live and let live. To speak out against madness may be to ruin those who have succumbed to it.
So the wise in Wall Street are nearly always silent. The foolish thus have the field to
themselves."
John Kenneth Galbraith, The Great Crash of 1929
"Foolishness is a more dangerous enemy of the good than malice. One may protest against
evil; it can be exposed and, if need be, prevented by use of force. Evil always carries within
itself the germ of its own subversion in that it leaves behind in human beings at least a sense
of unease.
In conversation with them, one virtually feels that one is dealing not at all with a person,
but with slogans, catchwords and the like that have taken possession of them. They are under a
spell, blinded, misused, and abused in their very being."
Dietrich Bonhoeffer, Prisoner for God: Letters and Papers from Prison
"The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated
communist, but people for whom the distinction between fact and fiction, true and false, no
longer exists."
Hannah Arendt, The Origins of Totalitarianism
"When we trade the effort of doubt and debate for the ease of blind faith, we become
gullible and exposed, passive and irresponsible observers of our own lives. Worse still, we
leave ourselves wide open to those who profit by influencing our behavior, our thinking, and
our choices. At that moment, our agency in our own lives is in jeopardy."
Margaret Heffernan
Today was a general wash and rinse in the markets.
Wax on, wax off.
If you look at the charts you will see the deep plunges in the early trading hours in stocks
and the metals, especially silver.
Simply put, it is called running the stops.
This is not 'the government' doing this.
These are the monstrous financial entities that we have allowed lax regulation and years of
propagandizing to create, in the biggest Banks and hedge funds.
Most will run back to the familiar sources of their ideological addiction, the so-called
'news sites' that thrive on the internet and alternative radio funded by the oligarchs.
If you are one of those who cannot wait to run back to your familiar ideological watering
hole to relieve the tension of thought, you might just be one of the willfully blind and
lost.
Truth is more palatable to the sick at heart when it has been twisted out of shape.
The good news perhaps is that a cleaning out like this often proceeds a resumption of a move
higher.
First they kick off the riff raff. Oh, certainly that does not include you, but those
others, right?
Or not. It is not easy to think like a criminal when you are not privy to the same jealously
guarded information and perverse perspective on life.
On the lighter side I have experienced no side effects from the first dose of the
Coronavirus vaccine which I had the other day.
Let's see if the second shot has the same results.
The whole experience reminded me of 'Sabin Oral Sunday' back in 1960. I don't recall any
anti-vaxxer or ideologically driven whack-a-doodlism back then, but I was too young to
care. And polio shots were no fun. But it beat doing time in an iron lung.
How many people are really out of work? The answer is surprisingly difficult to ascertain.
For reasons that are likely ideological at least in part, official unemployment figures greatly
under-report the true number of people lacking necessary full-time work.
That the "reserve army of labor" is quite large goes a long way toward explaining the
persistence of stagnant wages in an era of increasing productivity.
How large? Across North America, Europe and Australia, the real unemployment rate is
approximately double the "official" unemployment rate.
The "official" unemployment rate in the United States, for example, was 5.5 percent for
February 2015. That is the figure that is widely reported. But the U.S. Bureau of Labor
Statistics keeps track of various other unemployment rates, the most pertinent being its "U-6"
figure. The U-6 unemployment rate includes all who are counted as unemployed in the "official"
rate, plus discouraged workers, the total of those employed part time but not able to secure
full-time work and all persons marginally attached to the labor force (those who wish to work
but have given up). The actual U.S. unemployment rate for February 2015, therefore, is 11 percent .
Canada makes it much more difficult to know its
real unemployment rate. The official Canadian
unemployment rate for February was 6.8 percent, a slight increase from January that
Statistics Canada attributes to "more people search[ing] for work." The official measurement in
Canada, as in the U.S., European Union and Australia, mirrors the official standard for
measuring employment defined by the International Labour Organization -- those not working at
all and who are "actively looking for work." (The ILO is an agency of the United Nations.)
Statistics Canada's closest measure toward counting full unemployment is its R8 statistic,
but the R8 counts people in part-time work, including those wanting full-time work, as
"full-time equivalents," thus underestimating the number of under-employed by hundreds of
thousands,
according to an analysis by The Globe and Mail . There are further hundreds of
thousands not counted because they do not meet the criteria for "looking for work." Thus
The Globe and Mail analysis estimates Canada's real unemployment rate for 2012 was
14.2 percent rather than the official 7.2 percent. Thus Canada's true current unemployment rate
today is likely about 14 percent.
Everywhere you look, more are out of work
The gap is nearly as large in Europe as in North America. The official European Union
unemployment rate was 9.8
percent in January 2015 . The European Union's Eurostat service requires some digging to
find out the actual unemployment rate, requiring adding up different parameters. Under-employed
workers and discouraged workers comprise four percent of the E.U. workforce each, and if we add
the one percent of those seeking work but not immediately available, that pushes the
actual unemployment rate to about 19 percent.
The same pattern holds for Australia. The Australia Bureau of Statistics revealed that its
measure of "extended labour force under-utilisation" -- this includes "discouraged" jobseekers,
the "underemployed" and those who want to start work within a month, but cannot begin
immediately -- was
13.1 percent in August 2012 (the latest for which I can find), in contrast to the
"official," and far more widely reported, unemployment rate of five percent at the time.
Concomitant with these sobering statistics is the length of time people are out of work. In
the European Union, for example, the long-term unemployment rate -- defined as the number of
people out of work for at least 12 months --
doubled from 2008 to 2013 . The number of U.S. workers unemployed for six months or longer
more than tripled from
2007 to 2013.
Thanks to the specter of chronic high unemployment, and capitalists' ability to transfer
jobs overseas as "free trade" rules become more draconian, it comes as little surprise that the
share of gross domestic income going to wages has declined steadily. In the U.S., the share has
declined from 51.5 percent in 1970 to about 42 percent. But even that decline likely
understates the amount of compensation going to working people because almost all gains in
recent decades has gone to the top one percent.
The increased ability of capital to move at will around the world has done much to
exacerbate these trends. The desire of capitalists to depress wages to buoy profitability is a
driving force behind their push for governments to adopt "free trade" deals that accelerate the
movement of production to low-wage, regulation-free countries. On a global basis, those with
steady employment are actually a minority of the world's workers.
Using International Labour Organization figures as a starting point, professors John Bellamy
Foster and Robert McChesney calculate that the "global reserve army of labor" -- workers who
are underemployed, unemployed or "vulnerably employed" (including informal workers) -- totals
2.4 billion. In contrast, the world's wage workers total 1.4 billion -- far less! Writing in
their book The Endless
Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to
China , they write:
"It is the existence of a reserve army that in its maximum extent is more than 70 percent
larger than the active labor army that serves to restrain wages globally, and particularly in
poorer countries. Indeed, most of this reserve army is located in the underdeveloped
countries of the world, though its growth can be seen today in the rich countries as well."
[page 145]
The earliest countries that adopted capitalism could "export" their "excess" population
though mass emigration. From 1820 to 1915, Professors Foster and McChesney write, more than 50
million people left Europe for the "new world." But there are no longer such places for
developing countries to send the people for whom capitalism at home can not supply employment.
Not even a seven percent growth rate for 50 years across the entire global South could absorb
more than a third of the peasantry leaving the countryside for cities, they write. Such a
sustained growth rate is extremely unlikely.
As with the growing environmental crisis, these mounting economic problems are functions of
the need for ceaseless growth. Once again, infinite growth is not possible on a finite planet,
especially one that is approaching its limits. Worse, to keep the system functioning at all,
the planned
obsolescence of consumer products necessary to continually stimulate household spending
accelerates the exploitation of natural resources at unsustainable rates and all this
unnecessary consumption produces pollution increasingly stressing the environment.
Humanity is currently consuming the equivalent of one and a
half earths , according to the non-profit group Global Footprint Network. A separate report
by WWF–World Wide Fund For Nature in collaboration with the Zoological Society of London
and Global Footprint Network, calculates that the Middle East/Central Asia, Asia-Pacific, North
America and European Union regions are each consuming about double their
regional biocapacity.
We have only one Earth. And that one Earth is in the grips of a system that takes at a pace
that, unless reversed, will leave it a wrecked hulk while throwing ever more people into
poverty and immiseration. That this can go on indefinitely is the biggest fantasy.
"Underfunded" is a euphemism for "have students with low test scores." E.g., "Washington
D.C.'s underfunded schools."
D.C. spent around $30,115 per pupil in 2016-17, while in 2017-18, nearby Arlington County
was expected to spend $19,340, the City of Falls Church to spend $18,219; the City of
Alexandria, $17,099; Montgomery County, $16,030; Fairfax County, $14,767; Prince George's
County, $13,816; Loudoun County, $13,688; City of Manassas, $12,846; City of Manassas Park,
$11,242; and Prince William County, $11,222.
In 2015, you wrote extensively about your concerns over neoliberalism in academia, calling
it the worst threat to education. You wrote: "In order to offset the lack of public funding,
administrators have raised tuition with students becoming the primary consumers and
debt-holders. Institutions have entered into research partnerships with industry shifting the
pursuit of truth to the pursuit of profits." To accelerate this "molting," they have "
hired a larger and larger number of short-term, part-time adjuncts ."
This has created large armies of transient and disposable workers who "are in no position to
challenge the university's practices or agitate for "democratic rather than monetary
goals."
Yes, neoliberalism is hegemonic. It affects all minority communities...
"Underfunded" is a euphemism for "have students with low test scores." E.g., "Washington
D.C.'s underfunded schools." Presumably, it means "underfunded relative to some theoretical
amount of money, such as a gajillion dollars, that would be sufficient to raise these
students' test scores to average."
My dad was a school administrator in one of the top county public school systems in the
country. A politically deep-blue part of the country. He retired in the early '80's. I
remember him telling me once after he retired that his school(s) would get constant demands
from the school board to raise black (not many Hispanics then) test scores. He said the
school(s) focused all kinds of resources on black students which yielded no appreciable
results. He then said, "You know how we raised black test scores to the level demanded? We
fudged the numbers."
"... freedom is material: a human being must be free from material privation, here and now, in life (and not in the mythical afterlife of reincarnation) in order to be really free. In other words, freedom from need is true freedom. ..."
Marx's concept of freedom is completely different from the liberal or pre-liberal concepts
of freedom. For Marx, freedom is material: a human being must be free from material
privation, here and now, in life (and not in the mythical afterlife of reincarnation) in
order to be really free. In other words, freedom from need is true freedom.
Human beings can only be materially free. Don't fall for the moral victories of
liberalism, the snake oil salesmen's promise of a spot in Paradise from the Abrahamics or the
nihilist bullshittery from the Buddhists et al.
Excellent point by vk here. Despite sometimes pretending to myself that I am a Buddhist (I
am really good at meditating!), real freedom is being free from need. Abstract and
metaphysical "freedoms" are luxuries of the wealthy that few under the thumb of the
empire can afford.
I have been surprised by the explosion in the numbers of people locally living in cars and
vans lately. I guess from my Buddhist perspective they have been freed from the attachment to
a residence. Who could have guessed that capitalism would be such a good teacher of the path
to enlightenment?
It's freedom from Want. The Four Freedoms as articulated by FDR in 1941 were:
1.Freedom of speech
2.Freedom of worship
3.Freedom from want
4.Freedom from fear
Earlier this year on the 80th anniversary of FDR's speech, I wrote a series of comments on
the topic. They remain the four main tasks needing to be accomplished for the Common Man to
be genuinely free. At the time, they were to be the main goals of WW2; goals that were
further articulated by Henry Wallace in 1942 & '43 in his speeches and writings.
Currently, several nations have accomplished those four goals; none of them is a
NATO/Neoliberal nation however.
Retirees who have the most money pay the most in taxes, according to a
recent
working paper
, but they're not necessarily rich.
"Most of the tax burden is carried by the top quintile of households,"
Anqi
Chen
, co-author and assistant director of savings research at the Center for Retirement Research at Boston College, told
Yahoo Money. But "it's important to keep in mind that when we think about the top quintile of households -- the top 20% -- they're
not the super wealthy."
Those in the highest quintile are mostly married couples with average combined Social Security benefits of $50,900, 401(k)/IRA
balances of $325,400, and financial wealth of $441,400. When annuitized, those assets and retirement accounts earn account
holders roughly $3,000 per month -- or $36,000 per year -- ostensibly making them middle-income earners, Chen said.
"That's some money but not a ton of money," Chen said, "and these households will have to pay about 11% [in taxes]."
(Photo: Getty)
The highest quintile pays 11.3% on their retirement income, while the top 5% is taxed at 16.4%, and the top 1% is taxed at 22.7%,
according to the analysis. Overall, retired households pay 6% in federal and state taxes on their income.
Researchers used income data from 3,419 individuals and 1,907 households included in the Health and Retirement Study, a
nationally representative longitudinal survey of older Americans. The analysis assumes the retirees follow the required minimum
distributions for their retirement accounts and consume only interest and dividends from their assets.
The heavy tax burden carried by well-off retirees demonstrates that even those who enter their golden years with the most money
are still short on savings, an ongoing problem for many Americans. Roughly 40% of the top quintile of savers are at risk of
maintaining their standard of living, meaning "taxes will make the goal even more difficult to attain," the study said.
For the majority of retired households, "taxes are negligible," Chen said, paying 0% to 1.9%. But they are far from lucky.
Those in the "bottom two-thirds of the income distribution don't have a lot in financial assets" that yield material income in
retirement, she added.
Yahoo Money sister site Cashay has a weekly newsletter.
Stephanie is a reporter for Yahoo Money and
Cashay
,
a new personal finance website. Follow her on Twitter
@SJAsymkos
.
Justin Anderson
Sat, March 27, 2021, 8:15 AM
Study: The typical investment adviser can't beat the S&P 500
If you work with an investment adviser, you've probably had a moment or two when you've lamented how much you're paying in
fees.
And it's normal and healthy to regularly ask yourself -- and your adviser -- what you're supposed to be getting in return for
those fees.
If your adviser answers that they're paid to "beat the market," it may be time to seriously re-evaluate the relationship.
Because you might do better just using
one
of today's popular investing apps
and putting your money into an S&P 500 index fund.
The fact is, most people who are paid to deliver higher returns than the stock market as a whole can't do it. Data from the
S&P Dow Jones Indices shows 60% of large-cap equity fund managers underperformed the S&P 500 in 2020.
It was the 11th straight year the majority of fund managers lost to the market.
There are plenty of good reasons to pay an adviser or certified financial planner to
help
handle your investments
, but beating the S&P 500 isn't one of them. The data says it probably won't happen.
What financial pros are up against
Andrey_Popov / Shutterstock
The S&P 500 has delivered inflation-adjusted returns of about 7% per year, on average, for the past 40 years.
So to beat the market, a financial adviser would need to design a portfolio that gets better returns than that.
Is it possible in a given year? Sure it is -- plenty of investors and mutual fund managers do it.
But is it possible to predict who will do it? And does the possibility justify the fees charged by the most prestigious fund
managers, many of which operate on a "two and 20" model (2% of the portfolio's value plus 20% of profits)?
Buffett's famous bet
Laurent Gillieron/EPA/Shutterstock
Warren Buffett, who's justifiably famous for his
sage
money advice
, has frequently argued that, for most people, a simple market-pegged portfolio is a smarter investment
strategy than trying to pick winning stocks.
In January 2008, Buffett put this belief to the test: He bet a prominent hedge fund manager a million dollars that an S&P
index fund would deliver better returns over 10 years than a fancy and expensive hedge fund portfolio consisting of actively
selected stocks.
Buffett made this bet
before
the stock market collapsed during the financial crisis of that same year. But it didn't
matter -- by 2015, the hedge fund manager had waved the white flag and admitted he'd lost.
Buffett's index fund had made 7.1% per year; the hedge fund had made 2.2%. It wasn't even close.
"... "Neither the Securities and Exchange Commission [SEC] nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense " (emphasis mine); and ..."
"... "The trust is not an investment company registered under the Investment Company Act of 1940. The trust is not a commodity pool for purposes of the Commodity Exchange Act, and its sponsor is not subject to regulation by the Commodity Futures Trading Commission as a commodity pool operator, or a commodity trading advisor. ..."
Is it also not a conflict of interest that HSBC bank, a bank that allegedly holds some of
the largest short positions against gold on the COMEX, is the custodian for the SPDR Gold
Trust? If these banks profit when gold and silver drop, and they manage the largest ETFs in the
US regarding these respective metals, is it unreasonable to state that these two banks should
be barred from acting as custodians of the GLD and SLV?
In fact, how is this situation any different than Goldman Sachs's actions in the past when
they originated CDOs and then made a fortune by shorting them, actions that back then, were
apparently unknown even to the firm's own traders? On the surface, it certainly appears to be
another classic case of the fox guarding the hen house.
... ... ...
Some may say that the word delusional is a harsh term, but a mere glance at the GLD and SLV
prospectuses explains my use of this term. Both the GLD and the SLV prospectus contain the
following two statements:
"Neither the Securities and Exchange Commission [SEC] nor any state securities commission
has approved or disapproved of the securities offered in this prospectus, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a criminal
offense " (emphasis mine); and
"The trust is not an investment company registered under the Investment Company Act of 1940.
The trust is not a commodity pool for purposes of the Commodity Exchange Act, and its sponsor
is not subject to regulation by the Commodity Futures Trading Commission as a commodity pool
operator, or a commodity trading advisor.
Furthermore, the SLV prospectus additionally states, "As an owner of iShares, you will
not have the protections normally associated with ownership of shares in an investment
company (emphasis mine) registered under the Investment Company Act of 1940, or the
protections afforded by the Commodity Exchange Act of 1936."
Does anyone else besides me not find it ludicrous that both the SEC and the CFTC have not
examined either the GLD or SLV prospectus to determine if it is truthful or complete, and that
in fact, any claims that the prospectus is truthful and complete is a "criminal offense"? So
with nothing in the marketing materials of how these trusts operate or what exactly they buy on
behalf of shareholders vetted by an independent third party, how is it that both of these
respective trusts are still allowed to cumulatively sell tens of billions of dollars worth of
shares to shareholders based upon a prospectus that could possibly be a complete
fabrication?
Germany is showing signs of an independent Russia policy. The main issue between the United
States, Europe, and Russia now is the Nord Stream 2 pipeline, which would carry gas from Russia
to Germany. The Biden Administration may impose
sanctions on companies that help build it, which
risks a blowup with Berlin .
Most Republicans want
even sterner measures . Senator Ted Cruz is
delaying confirmation of some of President Biden's officials unless he takes action.
Hostility towards Russia is one of the few issues that unite Republicans and Democrats
– along with support for
citizenship for illegal immigrants ,
interference in Syria, keeping
troops in Afghanistan , and thwarting
China . We can't count on Republicans or Democrats to stand up for Americans, but we can
count on support for invading the world and inviting the world. This combination of an
aggressive foreign policy and indifference towards citizens is why some call the current regime
the
Globalist American Empire (GAE). It may be based in Washington DC, but it has nothing to do
with the historic American nation or its interests.
However, what I call the " American Paradox "
may doom this "empire." It is run by people who seem to care nothing for the country; the
empire is built on sand.
And media stocks were monkeyhammered (this was the biggest weekly drop in media stocks since
March 2020) ...
This all had the smell of a major media/tech fund liquidation. ViacomCBS was a total
shitshow...
Momentum stocks melted down...
Source: Bloomberg
SPACs dumped...
Source: Bloomberg
On the week, Staples outperformed as Discretionary dumped and Energy stocks changed their
mind faster than Fauci...
Treasury yields were lower across the curve this week led by the long-end... Is the pullback
in Small Caps relative to Big-Tech implying that rates have peaked for now? 1.60% remains a key
level for 10Y yields...
NightWriter 5 hours ago
We're starting to see bad news causing price drops as opposed to 2020 where the worst
thing imaginable caused more bull runs. If there's some really bad news this weekend, the
market could open up to a new low.
Peak Finance 4 hours ago (Edited)
I expect a flip back to bad news = good market news
word is they going to rig the UE this coming month to some crazy + millions of jobs to
make biden look good just like they did for O, same tricks messing with the "no logner in
workforce" numbers to up the employment rate
which is NOT going to have the effect on the market they think it will
SuperareDolo 2 hours ago
I concluded after Bernanke's printing that the market is able to see alpha (which security
is more valuable than another), but blind to beta (the valuation of the whole market). It can
judge one against another, but is incapable of reacting to overall valuations. Those are a
factor only of how much money is in the financial system. And there's too much.
Iskiab 1 hour ago (Edited)
Well bad news is good news sorta isn't it. Bad economic news means more QE in a situation
where it won't help that much keeping the gravy train going.
I would be careful around momentum stocks. Any deviation from the trendline will be a big
buy signal for algos, they're trained to look for opportunities and ride upward momentum,
then get out faster if things go bad. If it diverges much from the old trend line they might
buy en mass and see if it can create any momentum.
CheapBastard 5 hours ago (Edited) remove link
Dow soars 450 points!
Greatest recover eva!
ok, now get back in the food line for your bowl of soup.
Keltner Channel Surf 4 hours ago remove link
More than half a dozen indices/sectors I follow had very odd charts for the bulk of the
day, VERY tightly wound with suppressed vertical action well into the post-lunch period. If
you think of a tug-of-war game at company picnics that sits at a stalemate until one side
gains the edge, it always snaps hard in one direction.
The amplitude of most Daily candles wasn't terribly out of line with stronger days the
past few weeks -- but the irregular concentration of orders in time certainly was.
If I had to guess, the news of large liquidations may have torqued the spring to a near
black hole density, as machines were spooked (or, more likely, thwarted) by unusual order
patterns, then when the liquidations ended with prices well below VWAP, we break with speed
as most machines end Friday's flat, and the bias starting yesterday afternoon was a weekly
reversion back up.
As I've said before, when less active larger players suddenly become active, more active
daily algos, which control things 80% of the time, see their impact muted or overrun. But
these little devils don't EVER stop so, like a Roomba robot vacuum that hits an obstacle,
once the path is clear, it mindlessly goes where it planned. Again, this is your market on
drugs (or computers).
Absurd NFT PRices Expose a Global Financial House of Cards
BY SKWEALTHACADEMY
FRIDAY, MAR 26, 2021 - 5:59
The
insanity of absurd NFT prices reveals the fraud of the global currency system. The pricing for assets worldwide has gone
insane at a time when the vast majority of the world's population became poorer, not wealthier, over the past 12 months due
to the global economic lockdowns. As an example, there was an article in the Philadelphia Inquirer the other day of
a
cassette tape of hip hop icon Nas's Illmatic album selling for $13,999
. Not a CD, but a cassette tape. A rectangular
piece of cardboard, known as an NBA trading card, for star
Luka
Doncic's rookie trading card, recently auctioned for $4.6M.
Luka Doncic is not a star that played in 1925, and for this
reason, his rookie card is worth so much. Luka Doncic entered the NBA in the 2018-19 season, less than three years ago.
Nostalgic or collector items are simply selling for insane price because, in my opinion, wealthy people have captured so
much of the world's wealth through a global currency system designed and engineered to produce this end result, that they
have no better use for their money than to pay $14,000 for a music item that the vast majority of people do not even have
the necessary hardware to actually play and to pay more than $4.5M for a piece of cardboard. Anyone that truly understands
the difference between a sound and an unsound monetary system realizes that the likelihood, under a sound monetary system,
of people paying exorbitant prices for the types of assets and NFTs described above would be a fraction of the probability
at which they are occurring today.
Banksy, a
UK-based street artist infamous for mocking the very wealthy people that pay millions for his artwork, even titling a piece
"Morons" which depicted an art auction with a framed picture of the words "I can't believe you morons actually buy this
shit". Instead of being offended by the artist's mockery, someone paid nearly 44,000 pounds for it and it recently sold
for nearly 10 times the original purchase price when the piece was destroyed and the act of destruction was turned into an
NFT. By the way Banksy also sold a very simple drawing of a girl with a red balloon that was mounted inside a frame in
which he had hidden a shredder. After it sold for $1.4M, Banksy remotely activated the hidden shredder and shredded his
artwork into thin strips as perhaps "revenge" against the idiocy of narcissistic, wealthy art collectors that can't find
any better use of their money than purchasing stencil created art for which no rational person would ever pay $1.4M. To
demonstrate the idiocy of the art world, Sotheby's immediately coined the shredding of the art piece as "the first work in
history ever created during a live auction", which art collectors worldwide seemed to accept, and thereby increased the
value of the destroyed piece of art to perhaps as high as double the original auction price at the current time and
avoiding a more rational valuation for the art piece to near zero.
I once read
a book called the $12M Stuffed Shark, in which the author revealed that US hedge fund manager Steve Cohen paid $12M to an
artist to kill a shark and put it in a vat of plexiglass sealed formaldehyde that he could display in the foyer of his
house and basically concluded, after a careful introspection into the art world, that pieces of art like pyramids built
from tiny Godiva chocolates and stainless-steel colored balloon animals
($58M
or more)
would be priced at whatever price dealers could convince the dumbest rich person it was worth. Certainly this
conclusion seemed to be supported when someone purchased an
"art
installation" of a banana taped to the wall with duct tape at a Miami Beach art gallery for $120,000 at the end of 2019
.
When people conclude that the best use for $5M or $58M is to buy a piece of cardboard or a steel balloon animal during a
period in which Rome is burning (i.e. exploding homelessness numbers in Los Angeles nearing 70,000 as evidenced
here
and
here
),
either this is a sign of the fraud of the monetary system, the decline of civilization, or both. If you have ever lived in
Los Angeles, as I have, and watch the video referenced in the second link, you will find it astonishing that massive
homeless encampments have sprung up throughout Los Angeles in areas that prior to recent years, had no homelessness.
(depending on the social media platform you may be watching this on, the soaring prices for which art that I consider to be
the lowest form of art that many do not even consider as art is selling for such absurd prices, including NFTs that I will
soon discuss, is certainly reflective of the rapid decline of civilization.
This rapid
decline of civilization is also reflected in the fact that giant titans of the tech world and social media platforms
continue to promote and push the most morally reprehensible content to the top positions of success on their platforms.
When popular YouTube Logan Paul visited the "suicide forest" in Japan and found a dead body hanging from the tree, he
filmed it and mocked the dead person and YouTube quickly promoted his video as one of their top trending videos on their
entire platform for 24 hours, until Logan Paul, not YouTube executives, deleted the video due to the outrage it provoked.
Another popular YouTuber, David Dobrik, has had many of his reprehensible videos monetize bullying and belittling of
others, often promoted on YouTube among the top trending videos. Recently Dobrik came under fire for allegedly monetizing a
video of an actual rape on his channel, and he was roundly mocked when his initial apology consisted of trying to blame the
rape victim, who was allegedly underage and too drunk to consent to sex. In his "apology", Dobrik stated he always gains
consent for his videos, but sometimes people he victimizes consent at first but then change their minds later, and that is
why it appears in many of his videos that he is monetizing morally reprehensible behavior. In any event, YouTube executives
allegedly allowed such morally and cowardly behavior to be monetized to massive sums of income for such YouTubers and seem
to be more focused on demonetizing anyone that challenges a narrative, true or false, forwarded by the oligarchs.
And as
ludicrous as are the prices paid for some of the assets I've mentioned above, the level of insanity paid for NFTs, in my
opinion, are at an even exponentially higher level. For those of you that may not know what are NFTs, Non-Fungible Tokens
are unique blockchain-based digital assets that represent an increasing number of commodities, from art and real estate to
collectibles like sports trading cards. One platform, Original Protocol, recently auctioned off the world's first NFT music
album by American DJ 3LAU. Collectively, the artist's fanbase
paid
out more than $11 million
for 33 NFTs contained on 3LAU's album Ultraviolet. In this case, since musicians are
routinely ripped off by giant record labels and often have such suffocating, unfair contracts that make it near impossible
to earn any significant income from album releases, the digitization of music in the form of NFTs that allow musicians to
control their income is a wonderful aspect of the new digital economy of NFTs.
The
Non-Fungibility of NFTs and Most Cryptocurrencies Disqualify Them for Use in Financial Derivative Currency Swaps
NFTs sell
digital representations of items, including some that used to be represented in the physical world, like trading cards and
pieces of art. As is the case in the fine art world, an NFT's price is the highest price you can convince someone to pay
for it, a pool of clients that often overlaps with the over indulgent, narcissistic people that comprise the bidders for
modern art pieces that sell for millions of dollars. Perhaps the most amazing quality of NFTs is that they actually have a
more meaningful value than any cryptocurrency not backed by any type of hard asset. For example, bitcoin is a digital
asset, but one would be hard pressed to describe its intrinsic value. One cannot say its fungibility is its price because
its price is denominated in fiat currencies with intrinsic values of near zero. Furthermore, for those that constantly and
very wrongly argue that non hard-asset backed cryptocurrencies are sound money, if bankers truly believed that bitcoin even
remotely qualified as sound money, they would have zero problem offering currency swap derivative contracts between any
fiat currency and bitcoin.
Yet, there
is not a single corporation in the entire world that has a currency swap that hedges their corporate cash treasury holdings
with bitcoin. You can never have any type of financial contract without unlimited risk if it is denominated in bitcoin in
which both parties realistically have no idea of the price range of that currency for the maturity of that contract. No
rational party will lock themselves into a contract in which a currency presents unlimited risk to them. The simple
understanding of why there are no derivative currency swaps or hedging contracts denominated in bitcoin should easily
explain to any rational person the very reason why BTC is not considered as sound money by a single banker in the entire
world. On the contrary, even as volatile in price as gold and silver may be, gold and silver mining companies routinely
hedge their inventory risk and their revenue risk of yet-to-be-mined gold and silver ounces by establishing open positions
of gold and silver futures contracts years into the future.
You can't
argue that BTC's intrinsic value is the block of the blockchain that records the transaction, because whether that block is
used to record an NFT, BTC, or ownership of real estate, a photo or song, the price represented by that block could
possibly vary from just a few dollars to several million dollars. So the blockchain has no intrinsic value either. However,
with NFTs, its value, is more uniquely determinable than the block upon which a bitcoin transaction is stored that records
the price of bitcoin, because that value is simply the highest price willing to be paid by all available bidders at any
given time. If there are no available bidders willing to bid on a particular NFT for weeks or perhaps months on end, then
one can assume the price of that NFT, even if the last paid price was $100,000, is likely zero. But even if there is one
available bidder for that NFT at a price of $1,000,000 then the market price of that NFT is $1M. Though one may state that
the bidding mechanism is much more controlled in BTC markets and that BTC could never be priced at zero or $1M per BTC in
such a cavalier manner that mimics the pricing of NFTs, the similarities between the pricing mechanisms based upon lack of
fungibility should not be ignored when considering the inherent risk imbedded in the price of BTC in its near $60,000 per
coin current price. You will either understand this risk and behave accordingly, or ignore this risk and likely expose
yourself to strong downside risk in the future at some point that should be expected but will remain unexpected to those
that cannot, or will not, accept this existing risk.
The five
biggest whales that own BTC in order from top to bottom,
are
believed to be as follows:
(1) The collective of institutions/people called Satoshi Nakamoto; (2) The FBI; (3) The
Winklevoss Twins; (4) Micree Zhan; and (5) Jihan Wu. Other notable owners among the top 10 BTC whales are Huobi, Tim Draper
and the North Korean State. In 2017, Bloomberg reported that only 1,000 people owned 40% of all BTC in the entire world.
Given that in the past two years, it has been reported that the top whales had been cornering the BTC market and increasing
their market share, it would not be surprising if they had increased their market share to 50% or perhaps even higher by
2021. In any event, this translates into 0.00012658% of the world's population likely controlling majority ownership of
BTC. I don't know of any world in which such a statistic does not translate into enormous risk.
Unanswered
Questions
But
fungibility is what reveals why cryptocurrencies like BTC and NFTs cannot ever qualify as sound money. For those that don't
understand why sound money needs to be a fungible asset, take gold for example. Fungibility essentially means that money
should never vary in its qualitative properties but only its quantitative properties. All gold has electroconductivity
properties no matter its form. Electroconductivity is an intrinsic quality of gold. Because all purified four nine gold has
the same density, the same volume will always be measured by the exact same weight in grams, again another fungible quality
of gold. However, depending on how paper gold futures markets are being manipulated and the date, that same gram of gold
will vary wildly in fiat currency price. Fiat currency price, thus can never be the quantitative property used to value
gold. Weight is the constant that should be used for gold's value when it is to be used as sound money, because this
quantitative property is always unwavering, always constant no matter if one is using gold as money in Moscow, Capetown,
Montevideo, Santiago, Montreal, Phoenix, Miami, Mogadishu, Kiev, Paris, Heidelberg, Reykjavik, Chiangmai, or Seoul.
What
quantitative property of bitcoin that is consistent and always the same across all uses? This is a question without an
answer. For this same reason, NFTs could never serve as sound money either. No matter the latest fiat currency price paid
for a Banksy "Morons" drawing set on fire, how can one determine the exchange rate for this NFT and an NFT representing a
Mark Cuban tweet. Should the Banksy NFT be priced 10 million times higher than a Mark Cuban tweet NFT? Is an NBA TopShot
NFT worth 1/1000 the price of a Banksy burning piece of art NFT? And even though NFTs have more uniqueness than say, a
satoshi of BTC, because price assigned to that uniqueness is entirely subjective, the uniqueness leaves it no more fit to
use as sound money than a cryptocurrency that has no backing of a hard asset. Miami-based art collector Pablo Rodriguez-Fraile
proved the absurd pricing mechanism for NFT when he recently sold an NFT that he acquired for $66,666 in October,
a
10-second computer-generated video clip of a slogan-covered giant Donald Trump created by digital artist Beeple
, for
mor than 100 times his original cost at $6.6M.
The last
point of irony in the BTC is the solution to the unsound global fiat currency system narrative is that many HODLers of BTC
are well aware of the oligarch's use of their power consolidation strategy of (1) Create a crisis; (2) Present the solution
to the artificially created crisis; and (3) Implement the solution to consolidate power, yet will never give any type of
consideration to the possibility of how perfectly the creation of BTC, in response to the 2008 global financial crisis,
fits this exact historical narrative that oligarchs have repeatedly implemented, instead choosing to believe that BTC is
the special unique exception to this oft-deployed strategy.
This
despite, three US employees of the Central Bank, Galina Hale, Marianna Kudlyak, and Patrick Shultz, and one US university
professor, Arvind Krishnamurthy, admitting that the premise I presented to my social media followers in December of 2017,
when BTC hit $20,000, that the introduction of the US bitcoin futures market was going to be used to slash the BTC price
drastically, essentially writing the premise for the referenced US Central Banker paper five months before it was written.
In that paper, titled "How Futures Changed Bitcoin Prices", the four authors basically echoed my premise, and stated,
"We suggest
that the rapid rise of the price of bitcoin and its decline following issuance of futures on the CME is consistent with
pricing dynamics suggested elsewhere in financial theory and with previously observed trading behavior. Namely, optimists
bid up the price before financial instruments are available to short the market (Fostel and Geanakoplos 2012). Once
derivatives markets become sufficiently deep, short-selling pressure from pessimists leads to a sharp decline in value.
While we understand some of the factors that play a role in determining the long-run price of bitcoin, our understanding of
the transactional benefits of bitcoin is too imprecise to quantify this long-run price. But as speculative dynamics
disappear from the bitcoin market, the transactional benefits are likely to be the factor that will drive valuation."
While they
did not name the players in the BTC futures markets that drove BTC prices downward from $20,000 to $3,000 in 2018, the
implication is that Central Bankers were involved in this downward spiral. And if Central Bankers were involved in this
downward spiral, the downward price spiral would of course, been far easier to execute, if Central Bankers were also among
the members of the collective that constitutes the largest BTC whale, Satoshi Nakamoto. Even though these dots, though
purely speculative, are clearly possible, most every BTC HODLer that is confident in the achievement of end-year $300,000
BTC prices or higher, will never consider this possibility, even for a nanosecond, despite heavy suggestions of three US
Central Bank employees that Central Bankers were involved in the 2018 BTC price crash. But if one did, as is the rational
and logical thing to do, then one would have far greater difficulties distinguishing the mechanisms that set the price for
NFTs and BTC. And as the introduction of the first BTC ETFs seem to be on the near horizon now, one would be smart to heed
the lessons learned after trading of BTC futures was introduced at the end of 2017. Subscribe to my
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Listen to this article 6 minutes 00:00 / 06:06 1x Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. Earnings, valuation and rampant speculation have all played a role in the extraordinary bull market that began a year ago this week. The latest combination of the three has a troubling reliance on the speculative element. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. A broad framework for thinking about stocks can be derived from the late economist Hyman Minsky's three stages of debt. In the first stage, borrowers take on only what they can afford to repay in full from their earnings by the time the debt matures; a standard mortgage works like this. U.S. 10-year Treasury yield Source: Tullett Prebon As of March 24 % Pre-pandemic peak of S&P 500 2020 '21 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 S&P 500 forward price/earnings ratio Source: Refinitiv Note: Weekly data S&P 500 peak 2020 '21 12 14 16 18 20 22 24 The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is stocks going up when earnings -- or rather the expectation of earnings, since the market looks ahead -- go up. There is a risk of course, just as there is with debt: The earnings might not appear, and the stock goes back down. But earnings offer the least risky form of gains, and one that we should welcome as obviously justified. From the low in the summer, 2020 earnings forecasts jumped more than 10%, and expectations for this year rose more than 8%. Stocks responded. In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's second stage, borrowers plan only to repay the interest, and refinance when the main debt is due to be repaid; much company debt works like this. It is taken out with a plan to roll it over indefinitely. Interest rates matter a lot: If they go down when the company needs to refinance, it will pay less. The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The equity parallel is to gains in valuation due to lower long-term rates. As with corporate debt, this is entirely justified and sustainable so long as rates stay low, because future earnings are now more appealing. The danger is that rates rise, in which case the stock might be hit no matter how earnings pan out. A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the A big chunk of the gains in stocks in the past year came from the sharply lower rates in the first response to the pandemic when the Federal Reserve flooded the system with money. Price-to-forward-earnings multiples soared. From the S&P 500's low on March 23 to the end of June, the market went from 14 to more than 21 times estimated earnings 12 months ahead, even as those estimated earnings fell amid lockdown gloom. The yield on the 10-year Treasury, already down sharply from mid-February's high, fell further as stocks rebounded. In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the In Minsky's third phase, borrowers take loans where they can't afford to pay either the interest or principal from income, in the hope of capital gains big enough to make up the gap. Land speculators are a prime example. The parallel in the stock market is the The parallel in the stock market is the The parallel in the stock market is the hunt for the greater fool . Sure, GameStop < shares bear no relation to the reality < of the company, but I can make money from buying an overpriced stock if I can find someone willing to pay even more because they "like the stock." Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks Wild bets became obvious this year, as newcomers armed with stimulus, or "stimmy," checks drove up the price of many tiny stocks, penny shares and those popular on Reddit discussion boards. Speculative bets such as the solar and ARK ETFs rallied up until mid-February, long after growth stocks peaked in August Price performance Source: FactSet *Russell 1000 indexes As of March 25, 7:02 p.m. ET % Invesco Solar Value* ARK Innovation Growth* Sept. 2020 '21 -25 0 25 50 75 100 125 The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. The concern for investors: How much of the market's gain is thanks to this pure speculation, and how much to the justifiable gains of the improving economy and low rates? If too much comes from speculation, the danger is that we run out of greater fools and prices quickly drop back. me title= A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. A look at how stocks moved through the pandemic suggests earnings and bond yields are still much more important than the gambling element for the market as a whole, but is still troubling. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. From the S&P peak in mid-February to the end of June, the story was of cratering earnings partly offset by higher valuations. The S&P was down 8%. Earnings forecasts for 12 months ahead fell 20%, while with 10-year yields down almost a full percentage point, valuations were up from a precrisis high of 19 times forecast earnings (itself the highest since the aftermath of the dot-com bubble) to 21 times. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. Growth stocks -- based on the Russell 1000 index of larger companies -- were slightly up, because they benefit most from falling bond yields, having more of their earnings far in the future. Cheap value stocks, which benefit less, were down 18%. NEWSLETTER SIGN-UP
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Since June the story has reversed. Earnings forecasts have soared, and this year's earnings predictions are now
back up to match where 2020 earnings were expected to be before the recession. The bond yield has leapt almost
a full percentage point, and is higher than it was last February.
Yet, since June, the market's overall valuation is slightly up, and growth stocks are up 23%. Sure, cheap value
stocks responded as expected, rising almost a third and beating growth stocks. But if a lower bond yield
justified the rise in valuations, a higher bond yield ought to mean lower valuations, and probably outright
lower prices for growth stocks.
This is concerning but, directionally at least, is explained by the oddity of August, when bond yields rose
alongside valuation multiples and
the
biggest technology stocks leapt in price
. Measure it from the end of August, instead of the end of June,
and valuations have dropped a bit as bond yields have risen.
But the fall isn't enough to provide much comfort, and worse is that the highly speculative stocks popular with
many individual traders bucked the trend. Notable themes including electric cars, hydrogen, SPACs and wind and
solar power went into ludicrous mode until the middle of February this year, when the rise in bond yields
accelerated and the speculative stocks fell back some.
Share prices propelled more by earnings expectations than bond yields is healthy, while speculation is -- by its
nature -- fickle, and so a poor basis for holding on to a stock for long. My hope is that the contribution of pure
gambling to the overall level of the market is relatively small. But it is hard to explain why stocks should be
so much higher than before the pandemic panic when the earnings outlook is worse and bond yields are back to
where they were.
The Federal Reserve's $3.4 trillion in asset purchases and the roughly $4.5 trillion in Covid
recovery funds Congress approved in 2020 largely succeeded in [reventing the 2020 recession
hitting the stock market. Unemployment increased to the recession level and will stay at this
level.
S&P 500 Thrived During Federal Reserve's Low-Rate Regime. This regime by-and-large
ended.
Almost everyone expects a notable pickup in inflation this year -- including the Fed.
Monetary policymakers expect the personal consumption expenditures (PCE) price index to rise 2.4%
this year. That's vs. 1.5% in the 12 months through January. The 10-year yield is up 66 basis
points since Jan. 5.
Now, as President Joe Biden gets ready to tee up another massive spending package focused on
infrastructure, Wall Street is weighing what unleashed fiscal policy might mean for interest
rates, tax rates and stock prices.
The implications are magnified by the
Federal Reserve's recent about-face on inflation , from standing on guard against it to
trying to stoke it. The combination of easy fiscal and monetary policy may lift the Dow Jones
and S&P 500 in the near term. Yet some on Wall Street think it could mean lower returns in
the future.
The seismic shifts in fiscal and monetary policy are drawing comparisons to another
old-economy moment: the latter half of the 1960s. That era was marked by strong economic
growth. But it also brought rising inflation -- and a long-term stock market top.
S&P
500 Hits Highs While Techs Slip
The Dow Jones and S&P 500 index rallied to new highs this month, though they have pulled
back modestly in recent days. The Nasdaq remains 9% off its Feb. 16 peak, selling off this week
What ails big techs that dominate the Nasdaq, like Apple stock, Amazon.com ( AMZN ) and highly valued
growth names such as Tesla ( TSLA )?
Tech giants are no longer are the only game in town given the bullish outlook for cyclical
and value stocks. Meanwhile, the surge in Treasury yields has led stock market strategists to
rethink growth stock valuations -- and much more.
...If not for Jan. 5, the latest round of fiscal stimulus might have been $1.25 trillion
smaller -- like the $600 billion package pitched by moderate GOP senators.
The Democrats' bill went well beyond $1,400 stimulus checks, emergency jobless aid and funds
for Covid vaccines and testing. Washington also will send $580 billion to state and local
governments. That "is significantly higher than the estimated $85 billion net budget shortfall
facing state and local governments," wrote Moody's Analytics economist Bernard Yaros.
...
Biden also promised "historic investments in infrastructure, manufacturing, innovation,
research and development, and clean energy." These more tangible investments, however, would
involve a one-time appropriation that could be financed with deficits.
The Biden campaign's plan to spend $2 trillion on green-tinted infrastructure over four
years will likely serve as a starting point. The whole package could add up to $4 trillion,
Goldman Sachs estimates.
Money started flowing out of technology stocks that led the market higher for much of the
last year. The sharp increase in bond yields in recent weeks has taken the steam out of
technology stocks
Despite FED cheerleading of stock market money managers are betting that inflation will climb
sharply, and could spur the central bank to raise interest rates or pare back bond
purchases.
This rotation has benefitted the value and cyclical sectors, like industrials ( XLI ), energy ( XLE ) and financial ( XLF ) stocks -- which have all outperformed this year.
Meanwhile, defensive sectors, like consumer staples ( XLP ), health care ( XLV ) and utilities ( XLU ) have been the worst performers.
Tech ( XLK ) is the fourth
biggest sector laggard this year, as attention (and money) has shifted from the high-growth
names like Peloton ( PTON )
and Zoom ( ZM ) to the less
sexy names that are more likely to benefit from a recovery, like Caterpillar ( CAT ), American Airlines ( AAL ) and Goldman Sachs ( GS ).
A record 52% of those surveyed by BofA now think we'll see more of the same over the next
year -- that value will outperform growth.
...if bond yields simply climb higher, problems emerge for the entire market when the moves
in the bonds are too rapid or disorderly. The pace of the rise or fall in yields
matters.
P Paul Avila SUBSCRIBER 8 hours ago U.S. stocks edged higher Wednesday as investors
awaited more testimony from Federal Reserve Chairman Jerome Powell.
Good grief. Is there any way his subordinates could prevent that? Perhaps lock him in a
supply closet until the market closes? Every time he opens his pie hole, I lose money.
W Will Bee SUBSCRIBER 8 hours ago Actually I suspect we are waiting for all the FED and
Treasury "people" to stop jawboning us so Markets can assimilate their irrelevance
Both OPEC Russia and here in North America, have done a good job of curtailing their output.
So with regard to supply, the market is more in balance. Yes, we are in the midst of a strong
rally today. But that all comes on the heels of a massive sell-off, a $4 barrel sell-off
yesterday.
So the market's in the process of balancing itself out. Keep in mind that we've rallied from
about $30 a barrel before the winter to upwards of-- we knocked on the doorstep a couple of
weeks ago-- $70 a barrel. So we've had a terrific run over this one season. We're now at a
level, 57, 58, the high 50s, low 60s, which, more or less, where the market was trading in
2019, i.e. the year when the economy was strong, no one heard of COVID.
... what the really positive to come out of COVID is the consistently strong demand for
diesel fuel. Now diesel fuel is your primary industrial fuel, and that never really took a
significant hit. It obviously took a hit at this time last year when everything took a hit, but
it was the first in energy market to rebound, and it stayed strong. And we're at very high
levels.
... if we are correct, we don't go into another set of COVID lockdowns like last year, that
demand certainly should be enough to propel us back above that 70 even with Brent in that,
towards that $80 range.
Sellers got more than they listed for in 36% of deals in February, according to
Redfin
... the median home price of U.S. residences rose 14.4% last month, to $336,200, compared to
the same time the previous year, the data showed. That marks the biggest jump since July
2013.
Mar.24 -- Senator Elizabeth Warren (D-MA) asks Treasury Secretary Janet Yellen if she would
direct the Financial Stability Oversight Council (FSOC) to consider designating BlackRock as a
firm whose failure could threaten the financial system.
(Reuters) - Treasury Secretary Janet Yellen said on Wednesday it is important to "look
carefully" at systemic risks posed by asset managers, including BlackRock Inc, but said
designating them as systematically important financial institutions may not be the right
approach.
Yellen's remarks came in response to questions from Senator Elizabeth Warren, a longtime
Wall Street critic, who demanded to know why BlackRock and other large asset managers had not
been added to the list of designated institutions.
"I believe it is important to look very carefully at the risks posed by the asset management
industry, including BlackRock and other firms," Yellen, who as Treasury secretary, chairs the
Financial Stability Oversight Council (FSOC), which is charged with making such
designations.
"FSOC began to do that, I believe, in 2016 and 2017, but the risks it focused on were ones
having to do with open-end mutual funds that can experience massive withdrawals and be forced
to sell off assets that could create fire sales. That is actually a risk we saw materialize
last spring in March," she said.
In 2014, BlackRock and other asset managers won a battle in their fight against tighter
regulation when a panel of top financial regulators agreed to revamp their review of
asset-management firms to focus on potentially risky products and activities rather than
individual firms.
"I think that with respect to asset management, rather than focus on designation of
companies, I think it is important to focus on an activity like that and consider what the
appropriate restrictions are," Yellen said.
"The past two administrations in the US, and numerous global regulators, have studied our
industry for a decade and concluded that asset managers should be regulated differently from
banks, with the primary focus being on the industry's products and services," BlackRock said in
a statement.
The collapse of Greensill involved a predicable cast of unwise enablers, but it should
serve as a warning to the growing number of Alternative Asset buyers on the dangers of complex deals which promise much but
deliver less. Due diligence is critical in the highly illiquid alternatives sector.
You really can't make it up when it comes to the collapse of supply chain charlatan Greensill. I suspect it will make a great
film It should also send a judder down our spines, reminding us things are seldom what they seem in complex structured finance:
I'm wondering how many fund managers are quietly nervous about what's really in their alternative asset/direct lending
investment buckets this morning?
If I was a holder of complex European securitisation/receivables deals that promise much, but actually provide very little
information on the performance of underlying assets, then I might suddenly find an anxious desire to check just how they are
REALLY doing.
At least former UK premier David Cameron will be happy. A majority comprising Tory MPs on the UK's Treasury Select Committee
blocked
an inquiry
into Greensill yesterday on the basis it may be politically influenced. The fact
Call-Me-Dave
was
texting chancellor Rishi Sunak pleading for GFC to be a special case for Covid Bailout loans says it all about the dangers of
lobbying. The SNP will be equally delighted at the lack of scrutiny of dodgy dealings up in the Highlands.
The Greensill collapse is unlikely to be the last time financial chicanery is exposed as
sham. And that is why holders of European Alternatives and Asset backed transactions should be nervous. The lessons of the
Greensill deals are multiple:
Don't assume the deals you are sold are what you are told they are,
There is no substitute for deep due diligence.
Companies that look impossible to finance do not suddenly become AAA credits after a sprinkling of magic secured funding dust.
Anything promising of low-risk/high-returns from complex structuring and technical innovation is suspect.
Let's review the unfolding Greensill mess:
There over 1000 holders of the $10 bln plus of defaulted Greensill investment structures packaged and issued by Credit Suisse –
which marketed them as ultra-safe secured investments. Under the law, what the holders recover on these deals will rather depend
on how much the administrator and the courts can jemmy out of Sanjay Gupta's
dead-firm walking
;
steel and commodities business GFC Alliance. (I have no hesitation in saying GFC will go to the wall – there can't be a single
sane financial firm on the planet willing to finance them as the story of its' Greensill relationship emerges and its connected
in-house banking arrangements become clearer – although, apparently, a state rescue is under consideration to save jobs.)
Investors will be lucky to see much more than the 30% recovery already in the pot from non-Gupta related investments in the
Greensill funds – but Credit Suisse may decide to make its investors good. The reputational damage of seeing their private and
investment banking clients clobbered for their stupidity, which would negate their private banking brand, may mean it's worth
taking the hit. No wonder CS staff are very grumpy about their bonuses.
Successful financial scams require willing participants. All the usual fools are there in
the mix.
Yet again the German regulator missed what was going on in Greensill's German bank and its exposures to Gupta. The team at Credit
Suisse who agreed to warehouse Greensill originated "future receivables" and sell them as pristine secured assets have a limited
shelf life. The insurance broker who managed to convince an insurance fund the underlyings were AAA quality looks vulnerable. Or
what about the sales teams in Morgan Stanley who actually marketed the deals. Yet again Softbank is in the frame after it
invested in excess of $1.5 bln at a $4-7 bln valuation, hailing Greensill as a leading Finech, when the actual truth is that its
high-tech driven lending algos were nothing more than basic Excel spread sheets.
Greensill's financial magic was little more than sheer chutzpah – being able to persuade investors that the dull old low margin
conservative business of factoring – short-term secured lending against invoices and accounts receivable, was something
incredibly clever, undervalued and able to generate huge returns based on unique proprietary tech.
Greensill deals went further. Rather than just factoring Gupta's bills to suppliers and its invoices, the firm conjured up
"future receivables" – pledging the company's expected future earnings for lending now. That's not necessarily a bad thing – its
basic credit – but it only works if these earnings were completely predictable like obligated mortgage payments. What Greensill
was doing was lending on future earnings on very volatile commodities. Remember – oil prices went negative in 2020.
In return for funding challenging names we know Greensill took divots out these clients. It made over £36 mm financing Gupta's
deals in Scotland, and an amazing $108mm in fees from the $850mm Bluestone coal deals in the US – for which it is now being taken
to court. All these fees gave Lex Greensill the wherewithal for his private Air Greensill fleet – but didn't make the financings
any safer.
Any smart investors would probably have asked questions – but what's not to like about a deal that's secured on receivables,
offers a high coupon, is wrapped with an insurance package from reputable insurer and involves major investment firms like Credit
Suisse banking them, and Morgan Stanley marketing them?
One question is how did Greensill get away with it so long?
It was clear as early as 2017 there were major issues with some of the supply chain financing deals Greensill was putting
together. The following year a major Swiss investment group, GAM, blew up when deals a leading fund manager had bet the shop on
were questioned internally. A review by external investigators discovered a lack of information and documentation on a whole
series of Greensill deals. They questioned how due diligence was done on the deals. The fund manager was suspended and later
dismissed – triggering a redemption run on the fund. The whistle-blower was also shown the door on the back of massive client
exits.
GAM invested in the funds because it's very hard to turn down the promise of a low risk / high return deal that promised so much
more than the tiny yields available in conventional credit markets.
Despite the events at GAM, Credit Suisse went on to package $10 bln plus of Greensill deals. It was all done with an insurance
wrap from a single name put them in its safe bucket. I know other insurance firms refused the deals. The trigger for the collapse
of the Greensill scam was the withdrawl of that critical insurance – causing Credit Suisse to stop. Greensill has known for a
year Tokyo Marine (which sacked the underwriter involved) would not renew and had been unable to find alternative cover.
Perhaps Credit Suisse bought the story and Softbank link that Greensill was a remarkable new Fintech with the Midas touch of
changing dull, conservative factoring into a money machine? All that glitters is not gold.
One of the major developing themes in markets has been a shift from financial assets – which are seriously mispriced due to
monetary distortion and financial asset inflation – into real assets, the so-called alternatives market. Alternative because they
are not stocks or bonds, but cash flows and real assets. The collapse of Greensill will heighten awareness of due diligence risks
in these non-standard, off-market, asset backed alternatives. Alternative asset holders will be looking at holdings for what else
might be wobbly.
For instance, I might urge them not to be hypnotised by the assumptions underlying a well-known fund investing in music
royalties, the basis of which is also being questioned by analysts. (I certainly won't mention the fund by name as the manager is
a well-known litigant.) I have no reason to believe or disbelieve what analysts, the FT and a US investment bank have said about
it overpaying for assets or questioning the valuation hikes it puts on future revenues when it acquires catalogues. Personally I
like music assets, know their value, and, given certain circumstances the fund in question might come good. Equally.. it might
not.
To understand how these deals works its critical to understand exactly what's occurring within the structures – how real are the
assets, how the cash flows, how its accounted, and where it goes. That's why having top notch accountants and lawyers is such an
important requirement for any deal. However, if they are working in the interests of the issuers and bankers – then investors are
the likely patsies. There is a real difference between the way US and European Asset Backed deals are structured – basically US
deals are transparent. European deals tend to be opaque.
Alternative deals based on real assets and tangible cash flows are often, but not always, decorrelated from distorted financial
assets, allowing low risk deals to yield better long- term returns. They tick can the box in terms of risk vs return and provide
significant diversification away from conventional markets. The major negative is there is little pretence they will be liquid
assets. If you want to sell – even in good markets it will not be easy.
The only way you should participate in Alternative type deals is by knowing exactly what's going on. And – yes, my day job is
Head of Alternative Assets. Happy to discuss in depth any time.
Most tax havens are either American possessions or British possessions. Then there are the
tax havens that are firmly under American geopolitical control (Switzerland, Monaco,
Luxembourg, Ireland). Then there is the State of Delaware (of which the present POTUS is from).
There are no tax havens under the control of an enemy of the West.
The USA should stop with that charade. If it wanted to curb on tax evasion, it would've
already done so decades ago.
Capitalism is value that self-valorises. The rich must get richer and the poor must get
poorer over the long term. That's how a healthy capitalist system operates. To try to claim USD
1.4 trillion from their bourgeoisie is not how the American Empire should work. This is a
desperate attempt of the American Federal State to survive.
The sub-headline is true, but the headline not necessarily. The USA still is the financial
superpower, therefore its fiat currency is the universal fiat currency (Dollar Standard).
Stagflation will only happen if the Dollar Standard is to be severely weakened in a very short
period of time; otherwise, what will happen is some form of partial reverse-stagflation: low
unemployment (officially), low inflation (even to the point of zero inflation or even
deflation) and low economic growth.
This situation will go on until the Dollar Standard disappears. After that, the American
Empire will quickly and inexorably collapse through a spiral of hyperinflation and economic
recession. At this phase, it will probably go all-in with WWIII, with military invasions of
Latin American, the Middle East and China, while preparing for a delusional strike-first
nuclear attack on Russia. By this time, the American people will be completely hallucinated and
fuming with anger in a fascist frenesi against the rest of the world (China in particular), so
popular support for a global invasion would not be a problem.
In the Spectator article linked -- thank you b and all -- Kimball quotes a canny friend
who said "I'd rather be ruled by the Chinese than the Yale faculty". Yes, I thought, that is
how the west is now.
I am a teacher in Australia's oldest university whose new vice-chancellor (CEO) is a pure
technocrat without academic background or a PhD.
This is the strange norm now: grey neoliberal managers are rushed into areas that require
specialists in order to 'streamline' or 'set up structures of accountability' or simply
hollow out the joint. This guy sees 'tech' as the answer, so will accelerate the pedagogical
catastrophe taking place across the world (Zoom-'teaching') whose implications are dystopian,
psychologically alienating and frankly depressing.
He is the Yale faculty at the local level; Blinken is the Yale faculty on the diplomatic
stage: a recognisable and familiar type of manager from no particular background whose career
is made leap-frogging from bureaucratisation process to bureaucratisation process.
He berates the Chinese thinking that they are the old faculty resisting the newspeak of
neoliberal managerialism, an empty meaningless feedback loop of tickboxing. The 'rules-based
order' is some imaginary thing produced in the mind of grey men to obscure their
self-aggrandisement in a vacuum; zero time has been invested in any thought about it. The
'Biden-Doctrine' is a vacuum of intellectual reflection. In short, Blinken simply doesn't
care about his job, he just cares about ticking a box on his CV as he sets himself up for the
promotion/next job. Where once we had career specialists dedicated to the actual job (like
Chas Freeman) now the whole world is run by these empty people. The consequences are very
depressing.
University administrators need not have doctoral or other academic achievements. What is
needed, in any enterprise, is the commitment to the health and to prosperity of that
enterprise.
In America, they promoted men who promised lower taxes and easier money. Men with dubious
loyalty to the long term health and well being of that country or her population. The results
is there for the world to see. Same in Italy; Mr. Berlusconi would promise to cut taxes, and
would omit to also mention that he would also cut state services. And foolish plebians would
vote for him.
When the late Mr. Khomeini came to power in Iran, one of his observations was that he
could not find enough men with integrity to put them in executive positions.
I would like to respectfully suggest to try to preserve what you can but do not try to be
a lean department or program. Maintain the "fat" so that you van save as much of the
scholarly muscle as you can when the cutting times come.
Also, reach out to the public and the alumni and ask for whatever help you can obtain. Use
Kung-Fu approaches, never attack directly. Keep trying to find alternative careers for your
older or newer faculties. Take any and all positive action and try to preserve Learning and
Scholarship for the future generations.
The late Joseph Stalin observed: "Cadres decide everything."
May be you cannot stop this, but you can delay and dlelay and derail, thus buying time for
people to adjust to their new circumstances.
That would be Mark Scott as Vice Chancellor of the University of Sydney? What a decline
from when Enoch Powell was Professor of Greek at Sydney. I greatly admire Powell's scholarly
work on Herodotus and his edition of Thucydides (one of my set texts when I was at Oxford).
How much of that work did he do at Sydney?
"....Yang responded sharply to the US officials and criticized Washington for both
domestic and foreign policy issues. "The United States uses its military force and financial
hegemony to carry out long arm jurisdiction and suppress other countries," he said. "It
abuses so-called notions of national security to obstruct normal trade exchanges, and incite
some countries to attack China."
"....The US took several steps ahead of the talks that made it clear the meeting would be
contentious. Blinken visited Japan and South Korea with Secretary of Defense Lloyd Austin
earlier this week. While meeting with his Japanese and Korean counterparts, Blinken slammed
Beijing, accusing China of using "coercion and aggression" in the region. On Wednesday, the
US slapped sanctions on 24 Chinese and Hong Kong officials...."
using coercion and aggression - two very definitive qualities of American Imperialism post
WWII
Now they are pushing the "China genociding Uyghurs" lies to frame the minds of Americans
and people in the West and around the global to prepare a hot war against China.
Now they are pushing the "China genociding Uyghurs" lies to frame the minds of Americans
and people in the West and around the global to prepare a hot war against China.
There is no "Hot War" in preparation against China, this is simply procedural posturing in
the absence of any other means of relating to the Chinese civilisation.
The Zio-American empire is well aware this would mean a nuclear annihilation or at the
least a re-shuffling of the global order against their interests.
The US has developed no means of relating to civilizational challenges other than
violence, so it is merely cycling through the motions it knows of but with an understanding
that it cannot take them to their logical conclusion.
Thanks for your perspective, xot! Interesting insights.
trump changed that, suddenly the ugly side of the empire became visible
I've heard this about Trump a lot, but I've always wondered why Trump was the ultimate
catalyst for this epiphany. You would think that the Iraq War should have been that watershed
moment, or even Libya (and perhaps they were for many, like me). I suppose from the
perspective of inter-imperialist relations in the first world, a lack of decorum of the level
of Trump's is more anomalous and egregious than the imposition of death and destruction of
people in the global south.
I think that the presidency of Mr. Trump revealed the ugly side of the United States;
suddenly the gilded papier marche of America, carefully created by the best propaganda
techniques over 70 years, was shredded and USA was revealed to be a country just like so many
others.
It is up to American people, Judeo-Christians as well as others, to address the deep deep
social problems of the United States.
Despite a roomful of hot air amerikans will always be considered War Criminals by the
rest of us
I have to admit having become totally bored with the words which any gang of elites from
any nation whose population is far too large to have the types at the top comprehend much
less represent citizens' points of view, spout.
I get that there are fans of particular nations here, who believe some of these nation
states have more humane policies than other nation states, but all of them however humane are
essentially spouting toop down driven attitudes.
We know that amerika with its narrow & prescriptive "you can vote for anyone as long as
it is someone from one of these two virtually identical political organisations" system pays
little attention to their citizens' views. Unfortunately humans being humans, once a person
gains a little power their priorities focus on retaining & increasing power, so that
after time, no matter how egalitarian things may have been at the start, a shift to imbalance
between the governors and the governed is inevitable.
It is impossible to imagine that President Xi Jinping would do as Mao Zedong did and hand
power to the people, especially the nation's young people to trigger the 1966 Cultural
Revolution.
One thing is for sure though, that is however many may have died during the cultural
revolution, the casualties were confined to China's citizens and the casualties &
atrocities were infinitesimal compared to the murders, rapes and savagery committed by
amerika's war upon the people of Indochina.
IOW 50+ years ago China moved to resolve generational differences with an internal, domestic
debate, whilst amerika tried to resolve that issue by indoctrinating its young people into a
thoroughly racist anti-asian POV, then sent their youth to "kick out the jams" on the heads
of the people of Vietnam, Laos & Cambodia.
The results were horrific and since courtesy of TV, they were far better documented than the
horror inflicted upon the citizens of Korea less than a decade before have stuck in all
non-amerikans minds ever since.
I have sounded off here at MoA quite a few times that most amerikans view the Indochina
conflict negatively because it was such a waste of 'young amerikan' lives, rather than the
way the rest of us see it, that amerika butchered and raped their way through Indochina
without the slightest remorse.
Last week I stumbled across an old documentary released back in 1972 "Winter Soldier". The
film documents the
1971 Winter Soldier hearing held by Vietnam Vets Against War.
VVAW had tried to stop the Indochina slaughter by the standard means - protests, marches,
contacting politicians, all to no avail. So then they came up with the 'Winter Soldier'
hearing which had veterans of the war against the people of Indochina, telling their stories
of the atrocities they had committed.
The witnesses came from across the range of amerika's military; from grunts - surprisingly
most were volunteers rather than draftees, to a Marine captain who served as a helicopter
pilot.
These guys who returned to amerika lauded as heroes while deep down feeling nothing but
Guilt & shame,
make it clear that My Lai was no outlier, it was SOP.
It is also clear from what they tell us of their boot camp experience that racist
anti-asian indoctrination featured big time in their training which led them to regard all
Vietnamese as the enemy.
The behaviour got worse and worse, particularly rapes and the mutilation of children, once
the troops realised no one was would restrict their cruel antics against those they all
considered to be less than human. Senior officers either joined in or 'looked the other
way'.
Most of this documentary is in the form of testimony as cameras were generally kept away from
the 'fun' but even so I found just hearing the stories too much to bear.
Anyway although copies of 'Winter Soldier' do become available on You Tube from time to
time, they can be hard to find and are frequently taken down, so if anyone does want to know
what is commonplace for the brave amerikan military, they can download a copy of Winter
Soldier from here .
The hearings likely did the job eventually, in that the thugs in control of amerika got
the message that if the war continued, more and more truth about the scale & horror of
awful amerikan atrocities would become public and that would be counter to satiating these
elite thugs' greed inside and outside amerika. A peace agreement was signed and VVAW went
back to emphasising the damage done to amerikan soldiers rather than the horrors inflicted
upon a much, much larger Indochinese civilian population.
This is why BidenCorp are confidently denying their crimes while asserting all these other
nations are killers, simply because amerikans have never been required to comprehend the true
scale of the crimes amerika has committed upon their (mostly unjustly selected, amerikan
created) enemies.
All the words spouted by elites only ever reinforce prevailing attitudes. Change in the
way amerika views itself will only be effected when amerikans are forced to honestly consider
all the crimes which have been committed in their name.
I'm not holding my breath, neither do I see much point in any analysis of who said what to
whom as words are worthless in the face of fell deeds.
...., the US neurotic dynamic is to escalate blindly until it achieves control. This is
the dynamic that must be defeated.
Yes that's problem all right, but can you ever defeat that dynamic given that the gorilla
owns 10,000 nukes and has no moral qualms whatsoever of using them? Until a near perfect
anti-nuke defense system is developed I surmise the world would just have to live with, and
get used to, the juvenile antics of King Kong because it has stated time and again it would
escalate all the way up to using its nukes, because that's what they are for according
to a former Sec. of State.
I'm a pessimist on this issue. I'm afraid we'll just have to endure and live with a wild
beast for a while to come.
i've been a reader of moa for quite a few years now, but never contributed to the forum.
mostly because after a while i found what i wanted to say anyway, and why pile on?
I really enjoy the civility of the forum, and it's internationality. And of course b's
insights. as a German myself I share many points of view with him in matters i have knowledge
in, or think that i do.
For example i think that trump sure might be seen as a disaster by many, but it was a gift
to Europe, and Germany in particular, because he opened the eyes of many, many people here
who for decades thought murrica is our friend, our big brother, who will always protect us
from the evil of the world - namely communism, Russia and lately china. a majority of the
people here, as well as in the rest of the so called "western world" have been brainwashed
for about 7 decades to think that way, even when America committed the most obvious, heinous,
horrible crimes against humanity and our civilization as a whole.
there was always a spin, "human rights", "democracy", "free trade" and so on, values that
had to be "defended" - when in reality it was always an offensive aggression or even a
"pre-emptive strike". people just swallowed what the media fed them and went on with their
daily chores.
Trump changed that, suddenly the ugly side of the empire became visible, and i will always
be grateful for that. because now it cannot be hidden anymore. it wasn't just the unruly
behaviour of a "new rich" and uneducated bully who accidentally became president.
politically, the general attitude was always the same, trump only worded it much more
obvious, making it harder for politicians and media to spin. that's why our politicians and
media (for the most part fed by trans-atlantic "think tanks") hated him almost more than
Americans themselves - he made their lies obvious and transparent. if it wasn't so sad, it
sometimes was almost funny to see them squirm, having to explain why our friend and protector
suddenly became so selfish and hostile.
All of them welcomed of course the new Harris administration, being so progressive, just
and friendly again - only to witness a change of paradigm they probably didn't even think
trump was capable of, or willing to: i think in later years, this week will mark the
"official" beginning of the new cold war era. this behaviour against Russia and china was not
a slap, but a punch in the face and will NEVER be forgiven nor forgotten. the only question
for europe is: does it finally have the balls to emancipate and stand up against the bully?
or will it submit and become a collateral damage of it's downfall? in form of a nuclear
wasteland maybe?
I think that Nord stream II is a turning point. If Germany caves in here, there's little
hope to get rid of the leash for it and the whole of Europe.
If it stands tall, europe might become a buffer instead of a frontline. knowing and seeing
our politicians, i'd say it doesn't look good.
I don't understand why so many otherwise intelligent people are seemingly unable to bring
themselves to question the fundamental 'model' that supposedly describes what is going on in
the 'West'. If political 'models' were subjected to the same sort of analysis that scientific
ones were, then the model used by b and most of the people who comment here would undoubtedly
be rejected. There are simply too many elephants in the room.
Why are European countries going along with all the stupidity? Such as America's rampage
through the middle east, originating and perpetuated with proven lies, flooding Europe with
migrants as a result.
Why are European countries apparently happy to go along with the Russophobia and the
Sinophobia. Are their leaders really so lame-brained that they took the ludicrous Skripal
poisoning story and the even more ridiculous Navalny yarn at face value?
Why are European countries going along with the stupid and unfair sanctions? sanctions
that cost Europe far more than they do America.
Why is Europe going along with the increased militarisation of the of the border with the
Russian federation and the open war-mongering? Surely European leaders realise that they are
wantonly courting WW3 and risking a nuclear conflagration? Could they really be so stupid as
to imagine that lining the border they share with the Russians with ABM's was actually
'defensive' in nature?
Last but certainly not least, why is Israel so important? How come a tiny country in the
middle east gets to thumb its nose at international law on a daily basis? Why is it OK for
them to have nukes? Why is it OK when they shoot literally thousands of unarmed protesters?
killing hundreds. How come they can build walls and that is OK, How come they can run an
openly apartheid state but somehow be immune to criticism?
The answer to all these questions is actually quite simple, the US and Europe are pretty
much controlled by the same set of oligarchs and the most powerful of the oligarchs are the
bankers. Once you realise that it is the bankers driving most of this garbage all of the
elephants are explained.
MarkU @ 39 -- HossKara struck gold with his suggestion @34, to which I responded @35.
It's all about the Benjamins, particularly the Petrodollar controlled by what
Psychohistorian euphemistically calls "Private Finance" and is the world's reserve currency.
Any attempt to circumvent the Petrodollar in trade, especially energy resources, brings
violent aggression to punish the wayward country and its leaders.
"Private Finance" in this context really means the thug standing behind you with a
baseball bat. "You don't know who you're dealing with, punk." Iran trades with other
countries in other currencies, so does Venezuela, so does China, so does Russia. Get the
picture?
Saddam Hussein announced that he was going to accept other currencies than the dollar for
Iraq's oil -- look what happened to him. Same with Gaddafi. They and their countries were
made examples of what happens when you deny Uncle Ratschild his pound of flesh.
One more observation from my seat in the gallery: FOSSIL ENERGY is the basis of industrial
civilization, and our complete dependence on it portends our extinction as a species. We
might as well accept the fact that we are done.
"... Nord Stream 2 is of vital importance to Germany's energy security. The German public was rather hostile to President Trump and Biden's victory was seen with relief. But when it sees how Biden pursues the same policies, and with a similar tone, it will turn on him ..."
"... Since Washington is now in conflict with a goodly part of the public it sees that creating foreign policy crises and enemies as an excellent course of action to shore up support. Americans are always ready to react against enemies no matter how slender the proof of the wrongdoing ascribed to the enemy. There is never a penalty to pay for lying in the US if you are in the mainstream media or in the political arena. Since the CIA controls much of the European media and their ruling class it would take quite a lot for Europeans to drop their status as vassal states. ..."
Nord Stream 2 is of vital importance to Germany's energy security. The German public
was rather hostile to President Trump and Biden's victory was seen with relief. But when it
sees how Biden pursues the same policies, and with a similar tone, it will turn on him .
<-- b
However "hostile", Germany contributed to uni-lateral Trumpian sanctions, and so far,
North Stream 2 is the only beacon of independence. Take Ukraine: Germany and France form half
of Normandy Four, and provided name for Steinmeier formula. Ukraine resolutely resists
proceeding with any obligations under that formula. Germany is silent on that and support
annual extensions of sanctions, not to mention sanctions on Syria, Venezuela and whatever EU
sanctions.
Syria is an interesting example. It could be actually popular among German voters to
facilitate reconstruction in that country and return of the refugees to their homeland. Iran
and Russia are potentially good customers for German industry. Independence of German banks
and other companies from whimsical sanctions from USA would help too.
Seemingly, ingrained masochism is hard to overcome.
Thanks for posting Pepe's comments, some of which are in his current article I linked to
on the open thread. In my comment related to Pepe's article I noted his excerpt of Chinese
academic Jisi and this specific part:
"the Americans are eager to deal with problems before they are ready to improve the
relationship."
That observation is consistent with that of an entity that only wants its orders obeyed
and seeks no relationship or friendship with any other entity since it sees itself as Top
Dog, and #1 in every way. As with the Nord Stream project, we see the Gangster mentality--Do
as I say or else!
Not only does the Emperor have no clothes or much of a working memory, he's got erectile
disfunction too that's well beyond the ability of Viagra to fix.
So here we have Blinken, Winken and Nod providing direction for failing empire
Blinken is obvious
Winken is that behind the scenes, wink, wink, nod, nod (there ain't no class structure here)
type VP and
Nod is the new normal as US President.
I am sure they will try to take America to new places, yet to be dreamt of....will the
brainwashed of the West follow?
About Germany and Nord Stream II.....To a degree that I am not sure of, Germany is like
Japan, a fully owned colony of empire....this may be the time that the Germany nut gets
cracked wide open....interesting times indeed.
Where are the details of Blinken telling China how to behave? I can hardly wait for the
next act of Blinken, Winken and Nod
"Why, after so many bad words towards it, would China help the U.S. with solving the North
Korea problem? It has zero incentive to do so."
This (as well as the Germany/NS2 thing) sounds like a rather naive view. Western headlines
are for western internal consumption. And what's happening behind the scene, what incentives
are offered and what threats are made in exchange for what specific actions, we simply don't
know.
I notice a lot of accusations that Washington is "stupid" but that's not true. You have to
understand how Washington works before you make such statements. The Deep State knows that it
can control the minds of most Americans by inventing "truths" without any need to prove
anything.
Since Washington is now in conflict with a goodly part of the public it sees that
creating foreign policy crises and enemies as an excellent course of action to shore up
support. Americans are always ready to react against enemies no matter how slender the proof
of the wrongdoing ascribed to the enemy. There is never a penalty to pay for lying in the US
if you are in the mainstream media or in the political arena. Since the CIA controls much of
the European media and their ruling class it would take quite a lot for Europeans to drop
their status as vassal states.
Remember, Washington can throw endless amounts of money around and fund everything from
terrorism, crime waves, sexual indiscretions a la Epstein (the CIA had it's own whorehouse
which my father pointed out to me decades ago--it was in Roslyn Virginia and it used underage
girls and boys to improve its soft-power).
So far, no one has paid a penalty for lying or corrupt practices in Washington if they
were "made" men or women (Trump never got that far).
As long as Europe, Japan and some other countries continue to be vassal states the US can
and will get away with anything. Nordstream 2 is the issue that may change all that. Once
Germany rebels the rest may follow.
germany breaking rank will be first big turn in nato. nordstream is a non negotiable issue
for germany. meanwhile the US is not agreement capable. on anything and the vaccine hoarding
is a big F U in EU to so called allies. all the pieces are set. just need time to let it all
play out. the global south woke to it before the slower europeans can see the world anew.
as for the US china alaska meeting, it does seem to me that the US administration and deep
state or whatever you want to call it are not coordinated or fully aligned with each other.
the timing of the US sanctions on hk officials seem designed to thwart any possible dialogue.
as if some elements are working to ensure the meeting resolves nothing.
the china global times calls this move the US stick that comes down before any negotiation
and says it's a continuation of trump era tactics. maybe. I see it more as designed to make
the meeting fail instead of designed to achieve anything such as extracting concessions from
china. not being agreement capable because it is sabotaged from within.
but at this pt in the crumbling empire it is perhaps foolish to analyze its tactics in
terms of means and ends. its only 'rationale' at this pt is to just keep doing what it's
doing. sanctions wars threats coercion and moral grandstanding. it only knows it is right and
there is nothing else besides.
About Vlora to be an Alternative to NS2. Just a Fake from Radio France International, paid
for by french gov. France is now full play in US hand. Macron want NS2 [and soon NS1..] to be
shut down.
Nord Stream 1 is 55 Md.M3/y
Nord Stream 2 too.
110Md.m3/year
The biggest ship to deliver US GNL in Europe is 260.000 m3. 1m3 GNL is 600m3 natural
gaz.
It's me or my computer? 3 ship per day? How many ship necessary? 60? 80?
Not an economy, a nightmare.
American capitalism was plunder and is now parasitism.
In order to get energy, Germany need Russia. Nord Stream is a direct tie in order to avoid
"reliable" intermediate like Ukraine or Poland.
In order to get everything under control US need [reliable intermediate] to cut the tie
between [oil/gas fields] from Middleeast or Russia and Germany, the sole country in Europe
with Great industrial/technical capacity.
Your editorial "The
Semiconductor Shortage" (March 13) is right that government action is not needed to correct
the short-term supply-demand imbalance causing the global chip shortage, but wrong that the
U.S. can "prod" its way to stronger domestic semiconductor production and more secure chip
supply chains in the long term. Global competitors haven't passed the U.S. as a location for
chip manufacturing by prodding. They've done it by funding ambitious government incentives to
lure semiconductor production to their shores.
As a result, only 12% of global manufacturing is now done in the U.S., down from 37% in
1990.
The IRS uses the information it has on hand to determine your eligibility for a stimulus. If
your income in 2020 was higher than in 2019, you might want to wait to file if the two numbers
straddle the cutoffs for stimulus eligibility, which
are $75,000 for single people and $150,000 for married couples .
The value of a 30-year Treasury fell 15.6% in just three months. That is the equivalent of
almost a decade of the income it offered three months ago, and it is the flip side of the
sudden rise in yields. Shorter-maturity Treasurys have fallen less, but even for the 10-year
note it will take six years of income to recover the loss of the past three months.
...But the probability of inflation averaging over 3% for the next five years has reached
30%, the highest since the taper tantrum, showing the rising uncertainty about the impact of
stimulus combined with easy money.
Morgan Stanely's chief US equity strategist Mike Wilson told investors Monday in a new
podcast titled "A Tougher Road Ahead for
Small Caps?" that "extraordinary outperformance" of cyclicals and small caps is coming to
an end . He downgraded small caps on Monday to reduce risk.
"From our perspective, the equity market is doing exactly what it should be at this stage
of the recovery. The recent non-linear move in long-term interest rates means equity
investors can no longer ignore this risk. The rates market is mispriced , and now that the
seal has been broken, there's good chance equity markets start to price in the next 50bps
move, even if it's months away. What this really means is that equity valuations are likely
to fall this yea r - a key part of our call for 2021 ," Wilson said.
The downgrade comes as Wilson told investors last week
three reasons why the "stock correction has further to go before it's over." His latest
podcast indicated the "extraordinary outperformance and earnings revisions and valuation
expansion" of small caps is likely "coming to an end."
Wilson warned:
"Falling equity valuations is what always happens at this stage of the recovery , and we
see little reason to think it will be different this time. Having said that, the recent
fiscal stimulus may provide one last final push higher as this money leaks into the market.
We would use that strength to reduce positions in the more expensive parts of the
market."
He said his team upgraded small caps near the pandemic low last April as his core "thesis
was that we would experience a V-shape recovery in the economy, and the government subsidy of
the unemployment cycle would accrue to the bottom line of corporations, especially small caps."
Since then, Russell 2000 has outperformed S&P 500 and Nasdaq 100 by 50% and 40%,
respectively.
With the Russell 2000 down more than 1% and the Nasdaq 100 up more than 1% on Tuesday
morning, one of the most significant shifts from value to growth is underway since late
October.
Lt. Frank Drebin 4 hours ago
Does today appear more and more like the beginnings of the Dot Com bust?
Not that I don't like charts or comparisons (good job Tyler's), but the dot com bust didnt
have trillions of dollars pumped into it to keep it propped up. Little apples to oranges if
you ask me.
yerfej 4 hours ago
There might be some new highs in the next week or two as the cash flows into the market
but it pretty much over. Get out now as the implosion is going to be fast and furious.
You_Cant_Quit_Me 3 hours ago
You have to be crazy to open a small business when the federal or local govt can shut you
down based on no scientific data. Similar story for being a landlord when the govt can ban
evictions for nonpayment of rent. Why risk your capital when those with no skin in the game
can indirectly destroy your life savings.
Mrgior31513 1 hour ago
Because not doing so is leaving money on the table. People open small businesses because
being an employee is not generally the most lucrative option, and higher paying jobs are not
always available. Opening a small business is always extremely risky, now we just have more
added risks to the mix. Federal, state and local governments could always shut you down based
on no scientific data and ridiculous regulations, this is nothing new ~simply wider spread
than it normally is.
radical-extremist 3 hours ago
This analyst has yet to realize we're no longer living in 2005. We're living in world with
previously unfathomable liquidity brought about through Central Banks and perpetually low
interest rates. And our government has just pumped another $1.9 Trillion into everything. You
can't look at one segment and predict it should go lower, without considering the volatility
of the Whole Enchilada.
This is about neoliberlization of education. Early over-specialization essentially is
detrimental to professional development. this is clearlly a neoliberal approach -- to get ready
cogs into the machinery that does not reuare any additional trianing to be productive and save on
training.
Like Knuth said on a different potic "Premature optimization is the root of al evil"
Why has it taken so long for professional-services firms in the U.S. to adopt a bespoke
graduate-degree approach (
"Employers Customize Business Degrees," Business News, March 5)?
The former president of the University of Limerick, Edward Walsh, was way ahead of the game
in this regard. Dr. Walsh arguably created a new norm in Irish third-level education back in
the early 1970s, from the university's modest beginnings in the "White House" as the building
was and is still known, to a now very impressive campus with a proud record of innovation in
education and excellence in research and scholarship. Dr. Walsh customized our degrees to match
the requirements of Irish companies and industry.
My bespoke electronics-production degree was customized because the electronics industry in
Ireland at the time found that many electronic-engineering grads applying for
production-oriented positions weren't suitably qualified. As a graduate in engineering, I
believe it made my finding a job much easier than some of my counterparts in other
universities, both in Ireland and abroad. Our degrees opened many doors for my class in a lot
of different industries, and I believe they still hold us in good stead today when changing our
careers or setting up indigenous businesses.
Since inception in 2011, the Commercial Banking Program in the Mays Business School of Texas
A&M University has joined with the banking industry in implementing and teaching a required
commercial-banking curriculum that is designed to position our graduates for successful careers
in commercial banking. The banking industry provides us with valuable input on essential
training and skills they require of our students to be considered for employment. In addition,
selected parts of the program curriculum are taught by senior banking executives from our
advisory board of directors. Students receive current, relevant banking-industry training
taught by banking executives positioning them for successful careers in commercial banking.
Banks find our graduates are trained according to industry requirements and are productive
sooner than their peers, and the Commercial Banking Program is helping alleviate the shortage
of trained talent within the banking industry.
Recent research using functional magnetic resonance imaging (fMRI) techniques is allowing us to peer into the connections, yet
shrouded in mystery, between local brain activity, cognitive processes, and partisan attachment. This developing body of
knowledge has revealed the profound importance of evolution in shaping the ways in which our brains process all kinds of
information, in particular political information. At the center of this evolutionary journey is the importance of groups -- of being
initiated and accepted into them, of aligning ourselves with them, of being loyal to them regardless of philosophical
considerations.
The social dynamics of group membership and participation are programmed
more deeply into our brains than is abstract philosophizing.
"In other words, people will go along with the group, even
if the ideas oppose their own ideologies --
belonging
may have more value than facts.
" Because we once moved from place to place as nomads, such groups are our homes even more
than any physical locations are.
We now have decades of research suggesting -- if not proving -- "
the
ubiquity of emotion‐biased motivated reasoning
," reasoning that is qualitatively different from the kind operating when
subjects are engaged in "cold reasoning," where the subjects lack a "strong emotional stake" in the subjects at issue. Coupled
with a growing literature on the startling character and extent of
political
ignorance
, the current state has dire implications for human freedom. The stakes are high: in
their
2018 study
of why and how partisanship impairs the brain's ability to process information objectively, NYU researchers Jay J.
Van Bavel and Andrea Pereira note that
"partisanship can alter memory, implicit
evaluation, and even perceptual judgments."
One recent study, published last fall by a team from Berkeley, Stanford, and Johns Hopkins, set out to better understand how
partisan biases develop in the brain. The researchers had subjects watch a series of videos, using fMRI to explore the "neural
mechanisms that underlie the biased processing of real‐world political content." The results showed that partisan team members
process identical information in highly biased and motivated ways. The
researchers
locate this neural polarization
in the part of the brain known as the dorsomedial prefrontal cortex, a region associated with
understanding and formulating narratives. The study also found, perhaps unsurprisingly, that to the extent a given participant's
brain activity during the videos
aligned with that of the "average liberal" or "average
conservative," the participant was more likely to take up that group's position
.
The study accords with years of
previous
research
showing that partisans' opinions on important social, political, and economic issues are
affected
by subconscious brain processes -- processes of which they're neither aware nor in control
. This ought to be deeply
concerning to everyone who belongs to a political team: processes are taking place in your brain, underneath or beyond the level
of direct awareness, that are informing your conclusions about important social and political issues. To reflect on this for even
a moment should fill anyone who aspires to critical thinking or rationality with a kind of dread, for
loyalty
to the team seems to be overriding the higher faculties of the mind
.
But, the authors are careful to note, it's important not to interpret these results as pointing to some kind of determinism,
whereby we can't choose how to think or what we believe. As one of of the
study's
authors,
Stanford psychologist Jamil Zaki, says, "Critically, these differences do not imply that people are hardwired to disagree."
Rather,
these neural pathways seem to be carved largely by the kinds and sources of the
media we consume
. From the data yielded by such research, among many other similar studies,
a picture
begins to emerge of partisanship as a kind of mind poisoning
, an infection that leads to serious and, importantly,
measurable
cognitive impairment
. Evidence suggests that, under the influence of
partisanship, we can't even understand our own thoughts and opinions.
In another important, recent experiment, researchers wanted to understand the relative accuracy of participants' introspective
constructs. The researchers set out to gauge people's ability to understand their own choices, to see clearly "the elements of
internal argumentation that lead to [their] choices." In particular, the researchers wanted to know how subjects would deal with
choices that had been manipulated -- that is, whether subjects would "notice mismatches between their intended choice and the
outcome they are presented with." Would subjects recognize that something was off? If they failed to notice the manipulation,
would they offer justifications for choices they had not even made? The assumption is that subjects who fail to notice the
mismatches must not really understand the reasons for their choices or "the internal processes leading to a moral or political
judgment."
The results revealed
a conspicuous "introspective blindness to the internal processes
leading to a moral or political judgment."
People didn't seem to understand why they had made the decisions they'd made
(or had not made), though some exhibited what the researchers call "
unconscious
detection of self‐deception
" -- these subjects were unable to detect the manipulations of their answers, but they did register
lower confidence in the manipulated choices, which the authors suggest points to "the existence of a neural mechanism
unconsciously monitoring our own thoughts."
Once one has chosen and joined a team, she has very little control over her own thoughts. When they are introduced, new data are
distorted, misinterpreted, or discarded based on their consistency with what we may describe as a program running in the
background:
partisanship leads the team member into a cognitive position of unconscious
self‐deception
. Few of us, if fully understanding this phenomenon, would choose it for themselves -- at least that's the
hope of many who study this area. As the authors observe,
"reflecting on our beliefs may
help to develop free societies."
They suggest that if citizens better understood the brain mechanics of the cognitive
impairment and self‐deception brought on by partisanship, they'd be positioned to make better decisions. Research has shown that
"
reflecting
on how we make decisions leads to better decisions
."
Similar research on self‐deception
in politics has also confirmed the presence of the
Dunning‐Kruger
effect
(to summarize, people think they know a lot more than they actually do). Further, the effect is exaggerated within the
context of politics, with
low‐knowledge participants describing themselves as
even
more
knowledgeable than usual once partisanship is made a conspicuous factor
.
Vitor
Geraldi Haase and Isabella Starling‐Alves posit
that the kind of self‐deception that is such "a major characteristic of
political partisanship probably evolved as an evolutionary adaptive strategy to deal with the intragroup‐extragroup dynamics of
human evolution." Objective truth, meaning roughly an accurate model of reality, is not important, at least not anywhere near as
important, as conformity and indeed submission, which we may associate with
social
reality
.
Whatever its flaws
, evolutionary psychology offers us several promising leads on the question of just why the brain isn't
able to perform on partisanship. This notion of social reality is an important clue. At this juncture, it is important to
underline the fact that when we speak of partisanship, we are not speaking of ideology; the relationship between partisan
identification and political ideology is complicated, the connection between the two not particularly strong. Ideologues tend to
think systematically, and the philosophical
contents
of their beliefs are deeply
important to them. What is important to the partisan is not
what
she believes, but that
she aligns her beliefs with those of her team or in-group -- or else, as may be the case, that she is loyal to and supportive of the
party group despite any real or perceived ideological nonconcurrences.
Americans tend to vastly
overestimate
the differences
in political ideology and policy preferences between Democrats and Republicans. In fact,
most
Americans are not at all ideological
, can't describe ideologies accurately (
as
their proponents would describe them
), and have almost no information on either the history of ideas or the empirical
evidence that bears on particular political or policy questions. Interestingly, partisanship doesn't necessarily seem to be about
politics in the normative or philosophical sense, as "people place party loyalty
over
policy, and even over truth
." There are actually
relatively
weak correlations
between partisan identity and concrete policy preferences. "[P]artisan affect is inconsistently (and
perhaps artifactually) founded in policy attitudes."
Indeed, strong partisanship is necessarily an impediment to ideological thinking insofar as ideology is predicated on an
integrated and consistent approach to policy questions, as against the blind, team‐rooting approach associated in the literature
with partisanship.
Ideological people, whatever their flaws, hold political actors and
government bodies to account.
Partisans change positions readily and shamelessly, depending on anything from who is
living in the White House, to the vagaries of party leaders, to what is perceived as popular at the moment. Further, individual
Americans' political opinions are remarkably unstable over time, vacillating between glaring contradictions, relying on
a confused amalgam of elite opinions. Partisanship as we know it rather seems to be
a holdover
from humankind's history of tribal loyalty
, with "
selective
pressures hav[ing] sculpted human minds to be tribal
." That is, evolution selected for just the kinds of cognitive biases we
find in partisans on both sides today (importantly, neither "team" is immune).
Partisanship quite literally makes one dumb -- or is it that dumb people are just more likely
to be committed partisans?
Zmigrod is careful to point out that the study can't give us the answer to that question,
that we would need longitudinal studies in order to better understand the causal direction and causal phenomena at play. As soon
as partisanship is introduced, as soon as a question mentions a politician or political party,
subjects
are unable to accurately assess basic facts
. Indeed, remarkably, tinging a question with a political shade renders many
subjects
unable to answer a simple question
even when they are given the answer
. Relatedly,
studies have shown that one's political affiliations
even
affect her ability to perform basic math
: given an operation that yields a statistic contradicting a subject's partisan view,
the subject will tend to question the result rather than updating based on the evidence or attempting to reconcile the new
information with her politics.
In a groundbreaking
study
published last summer
, a team of researchers led by the University of Exeter's Darren Schreiber attempted to address the lack
of brain imaging research specifically aimed at better understanding
nonpartisans
,
a group that has been neglected as almost all such research has focused on the differences between the brains of partisans of the
left and right. The study found that nonpartisans' brains are different from those of their brainwashed brethren, particularly in
"
regions
that are typically involved in social cognition.
"
It may be that the next stage in human evolution will involve rewiring our brains to accept the fact that current groups are
artificially and arbitrarily defined -- that all human beings are one people. For just as there is harmful, toxic tribalism, there
is also socially beneficial, cooperative, cosmopolitanism. As social policy expert
Elizabeth
A. Segal writes
, "Ultimately our goal should be to build the tribe we all belong to: that of humanity." Libertarians take
this lesson quite seriously, for we tend to see ourselves as part of a common global community of connected individuals who are
perfectly capable of dealing with one another through peaceful and mutually‐beneficial interactions. We celebrate social,
cultural, religious, and linguistic differences as the spice of life rather than see them as dividing lines or impediments to
willing collaboration. If we can understand and think clearly through partisanship, we can begin to build a freer world based not
on arbitrary divisions and compromised reasoning, but on mutual respect and renewed emphasis on rigorous critical thinking.
Well, technically, Goldman clients are asking if they should be buying anything at all,
period, in a time of resurgent volatility driven by rising rates and bond market vol, which
sparked a high beta/growth panic in equities two weeks ago but have since seen the influence
fade.
Yet anyone hoping for a quick and painless reprieve from surging rates will be disappointed.
In his latest Weekly Kickstart, Goldman's David Kostin writes that the bank's economists expect
that rates will continue to rise in coming months and forecast 11% real US GDP growth in 2Q
with core PCE inflation rising to 2.3% "suggesting that investors will have to continually
grapple with the anxiety about economic overheating and Fed tightening that has gripped markets
in recent weeks." Goldman also expects the 10-year yield will rise to 1.8% by mid-year and 1.9%
by year-end. At the rate it is going, it may get there next week.
This is a big problem for Goldman because while we already know that equities are extremely
overpriced according to most valuation metrics, with the S&P 500 trading above the 90th
percentile in absolute valuation...
... ... ...
So what else do Goldman's clients think? Well, based on Kostin's client conversations, most
investors share the bank's view that interest rates will continue rise, but many believe that
the equity market rotations that have recently accompanied rising rates have gone too far.
Translation: Goldman clients are desperately trying to convince nobody but themselves that the
turmoil is over (spoiler alert: it is only just starting).
... ... ...
But what may be even more challenging is that value no longer is cheap as it was just a few
weeks ago. Specifically, Kostin notes that this week Goldman's equity analysts' proprietary
Reopening Scale climbed to a 5 on a scale of 1 to 10...... even as the bank's Reopening basket
has already recovered 75% of its decline, suggesting markets have vastly outrun the recovery.
Consider that Goldman's Cyclicals vs. Defensives basket pair has climbed to its highest level
since the post-tax reform surge of early 2018... ... and the relative P/E valuation of the
baskets stands at its highest historical level outside of the post-GFC recovery.
So with many cyclicals and "reopening" stocks no longer trading at depressed levels, and
with growth stocks susceptible to further market turmoil on the back of rising rates, Goldman's
clients ask: " Where is there still value in the US stock market ?"
Well, since Goldman makes its money by making markets, and has a sworn duty to encourage
clients to buy cheap stocks even when there aren't, Kostin answers with a decisive yes .
... In fact, the Goldman strategist admits that valuations today are even more elevated than
they were in 2000. 20 years ago, the aggregate S&P 500 P/E was a similar 24x, but the
median stock traded at 14x. Today, the median firm trades at 21x .
...
Energy - which we have been pounding the table on since last summer (see the Exxon posts) -
has returned 40% YTD and continues to trade with a very close relationship to long-term oil
prices. Goldman's commodity strategists expect Brent crude will rise 8% to $75/bbl next year.
Energy is also the only S&P 500 sector with short interest above its historical average.
This will be key once Quants (which recently covered their energy shorts) go massively long the
energy sector as
we previewed on Friday . Similarly, Financials, the second best sector YTD (16%), trades
closely with Treasury yields. Although it has recently rallied more than its typical
relationship with rates would have implied, relative valuations remain low compared to history
and Goldman expects value to keep outperforming if the economy continues to accelerate and
rates continue to rise. play_arrow
The Count 3 minutes ago (Edited) remove link
Listen to a guy who experienced all crashed since 1987. Whenever you have housewives trade
stocks, futures or real estate over the kitchen table the end is very near. Whenever pundits
say the market cant go down the end is very very near. Whenever people want to buy whatever
hasn't gone up yet the end is just around the corner.
Disposable people are indispensable. Who else would fight the wars? Who would preach? Who
would short derivatives? Who would go to court and argue both sides? Who would legislate? Who
would sell red hots at the old ball game?
For too long disposable people have been misrepresented as destitute, homeless, unemployed,
or at best precariously employed. True, the destitute, the homeless, the unemployed and the
precarious are indeed treated as disposable but most disposable people pursue respectable
professions, wear fashionable clothes, reside in nice houses, and keep up with the Jones.
Disposable people are defined by what they do not produce. They do not grow food. They do
not build shelters. They do not make clothes. They also do not make the tractors used to grow
food, the tools to build shelters or the equipment to make clothes.
Although disposable people do not produce necessities what they do is not unnecessary. It is
simply that the services they provide are not spontaneously demanded as soon as one acquires a
bit of additional income. One is unlikely, however, to engage the services or purchase the
goods produced by disposable people unless one is in possession of disposable income.
Disposable income is the basis of disposable people. Conversely, disposable people are the
foundation of disposable income.
For decades, governments and central banks have always identified the problems of the
economy as demand problems, even if it was not the case . If there was a crisis or a recession,
governments immediately believed that it must be due to lack of demand, and subsequently decide
that the private sector is not willing or able to fulfill the real demand needs of the economy,
even if there was no real evidence that companies or citizens were investing or consuming less
than what they needed. T he entire premise was that companies were not investing "enough".
Compared to what and decide by whom? Obviously by central planners who benefit from bubbles and
overcapacity but never suffer the consequences.
Governments and central banks never perceive risks of excess supply and even less predict a
bubble. Why? Because most central planners see debt, oversupply, and bubbles as small
collateral damages of a greater good: recover growth at any cost.
Behind the mistake in diagnosis is the obsession to maintain or grow Gross Domestic Product
(GDP) at any cost regardless of the quality of its components. GDP is relatively easy to
inflate. I always explain to my students that GDP is the only economic calculation in which you
add what you spend with what you earn. GDP can be inflated through government spending and with
higher debt-fueled expenditures. Debt is not a problem when it serves its purpose, which is to
finance productive investment and allow the economy to grow, while efficiency, innovation, and
technology allow us to be more productive and receive more and better goods and services at
cheaper prices. It is a virtuous cycle.
The virtuous cycle of credit turns into a vicious cycle of unproductive debt when we
incentivize malinvestment and prevent technology substitution by implementing massive
government stimuli and liquidity injections.
Why is it so expensive to get anything done in the US?
Neoclassical economics and the missing equation.
Disposable income = wages – (taxes + the cost of living)
The US's high cost of living pushes up wages making it expensive to get anything done in
the US.
See where neoclassical economists go wrong?
Employees get their money from wages, and the employers pay the cost of living through wages,
reducing profit.
It is the US's employers who pay the high cost of living, via wages, reducing profit.
Do you really want to pay the US's high cost of living in wages?
No way.
You will have to off-shore to maximise profit.
The early neoclassical economists hid the problems of rentier activity in the economy by
removing the difference between "earned" and "unearned" income and they conflated "land" with
"capital".
They took the focus off the cost of living that had been so important to the Classical
Economists as this is where rentier activity in the economy shows up.
It's so well hidden no one even knows it's there.
The neoliberals picked up this pseudo economics and thought it was the real deal.
Things were never going to go well.
Imagine the Chamber of Commerce actively lobbying for state-supported child care, massive
increases in funding for public transportation, public education, public health, and
housing.
Perhaps we should take a look at China to learn how we too can become better capitalists,
and so help USA businesses focus on the business of business.
Western companies couldn't wait to off-shore to low cost China, where they could make
higher profits.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
What was Keynes really doing?
Creating a low cost, internationally competitive economy.
Keynes's ideas were a solution to the problems of the Great Depression, but we forgot why
he did, what he did.
They tried running an economy on debt in the 1920s.
The 1920s roared with debt based consumption and speculation until it all tipped over into
the debt deflation of the Great Depression. No one realised the problems that were building
up in the economy as they used an economics that doesn't look at private debt, neoclassical
economics.
Keynes looked at the problems of the debt based economy and came up with redistribution
through taxation to keep the system running in a sustainable way and he dealt with the
inherent inequality capitalism produced.
The cost of living = housing costs + healthcare costs + student loan costs + food + other
costs of living
Disposable income = wages – (taxes + the cost of living)
Strong progressive taxation funded a low cost economy with subsidised housing, healthcare,
education and other services to give more disposable income on lower wages.
Employers and employees both win with a low cost of living.
Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of
neoclassical economics that he originally solved.
"Keynesian ideas went wrong in the 1970s" and from the 80s on because the (primarily)
Republicans had forgotten that Keynes originally stipulated that the government debt incurred
during "bad times" be liquidated during "good times". Since Reagan, Republicans have
increased debt to stimulate the economy, but failed to pay it down once that part of Keynes's
took effect. Republicans are the biggest half-Keynesians of all time.
Behind all this is the neo-liberal renunciation of any 'national' policies. Define a
'nation' as you will, it still is a valid category. It has definite 'needs' and requirements
to function well and continue as a viable entity. The 'national' government has functioned in
the past as the representative and facilitator for the 'nation.' "Drown that in a bathtub"
and you eventually eliminate the 'nation's' ability to function. The end stage of that
process is the collapse and extinction of the 'nation.'
The above process should be familiar to anyone who has studied the past few decades of
American history. What the proponents of the neo-liberal dispensation have not advertised, if
indeed they even know, is what replaces the 'nation?' An International Syndicate of
Oligarchs? If so, such an endeavour is doomed to failure. History has shown, time and again,
that the concept and practice of commercial business is not an adequate organizing principle
for large scale human society. It simply does not make allowances for human variability.
The best example of the point above that I can think of is the present dominance of short
term thinking and planning in the business sphere. Restricting the inputs of the decision
making process to short term issues, such as quarterly earnings and stock prices in the
bourse, leads to the dysfunctions bemoaned in the piece above. Offshoring a factory makes
sense from a short term business point of view, but ignores the long term 'national'
implications. Here is a direct conflict between the two methods of social organization. At
present the short term methodology is ascendant. Alas, it looks as if America is going to
have to learn this lesson of setting proper 'national' priorities the hard way; such as by
losing a war decisively.
I look on the bright side here. A small thermonuclear exchange between America and some
peer adversary will not only 'thin out' the population, but also bring on a nuclear winter
and retard the progression of global warming for a while. It might be the breathing space the
Terran human race needs to survive beyond the upcoming evolutionary bottleneck.
Value stocks are beating growth stocks by the widest margin in two decades, the latest sign
that investors expect the next year to bring a powerful economic rebound.
As
the rollout of Covid-19 vaccines quickens and the economy bounces back from last year's
shutdowns, portfolio managers are snapping up cyclical stocks -- banks, energy companies and
others whose fortunes are closely linked to economic growth. Those shares often fit the
description of value stocks, which trade at low multiples of their book value, or net
worth.
The shift in bets marks a reversal of a trend that has held essentially since the financial
crisis, in which growth stocks outpaced value stocks. That reflected in part the rise of big
tech companies such as Apple Inc. and Amazon.com Inc. AMZN -0.77% and in part the
softness of the U.S. economy. This year, the Russell 1000 Value Index is up 11% and the Russell
1000 Growth Index has edged up 0.2%.
Tech Wrecks As Yields Breakout
BY TYLER DURDEN
FRIDAY, MAR 12, 2021 - 11:05
10Y Yields topped the March 5th highs...
And 30Y has broken out...
And that triggered selling long-duration growth-tastic stocks, sending Nasdaq notably lower...
And more rotation into value as the Dow and Small Caps jump...
And the
correlation
between bonds and stocks remains extremely high and
extremely unusual...
That won't help the asset-allocators?
OldNewB
39 minutes ago
It
will all reverse as soon as Europe closes.
bonsai_king
17 minutes ago
remove
link
Already reversing heavily.
Tech not routed is what this article should read.
A
1% dip in MSFT, QCOM, NVDA, APPL is not exactly a rout....
OldNewB
15 minutes ago
Yep. PPT is real.
zeroshrubbery
35 minutes ago
(Edited)
remove
link
The
senate blew their load by using their budget reconcilliation for the year to pass stimulus, so nothing
else will pass this year. Biden pretty much said point blank there will be no more stimulus period. So
right now we're in a buy the rumor, sell the news dip. The 100 billion or so flowing into the market
should create one final massive blow off top before everyone and their brother's snake's feed mouse
starts taking profits.
I'm
tracking the trading shows some completely dense permabulls, who think they are god's gift to humanity
sharing expert trading advise with their portfolio of HODLing meme stocks. I can't wait to bathe in the
schadenfreude as the losses start hitting 40-50%, they probably will mark their channels private at 80%
losses so I'm not expecting it to last long but one can only hope.
OldNewB
28 minutes ago
Don't be so sure. If the Fed doesn't buy absolutely everything (just like BOJ), the final crash
happens and America goes under. They're not going to let it happen. Inflation and hyperinflation is
the plan, even though they will continue to lie about it being low. Liars and thieves all.
The jobs picture overall has been improving with
379,000 workers added in February , although the U.S. economy still has almost 10 million
fewer jobs than it did before the coronavirus pandemic took hold. Economists have been revising
their employment and GDP forecasts are higher.
Goldman Sachs Chief Economist Jan Hatzius, for example, wrote in a report this week that
the jobless
rate would fall to 4.1% by the end of 2021, from 6.2% last month.
Hyams has been seeing similar encouraging signs on Indeed, with postings on the site already
lapping where they were pre-pandemic. "On Indeed, when we look at new job postings and our
benchmark pre-pandemic of February 1, 2020, at the end of this February we were up 5%
year-over-year. That's still with entire sectors completely shut down," he said.
As for where the hottest demand lies for new jobs, Hyams pointed to e-commerce-related
occupations including logistics, warehousing and delivery, as well as jobs in health care and
pharmacy.
While some of those openings may require showing up regularly in-person, many will not,
which again feeds into Hyams' thesis that interviews will remain virtual.
"If you're going to be a remote worker, interviewing over video actually makes a whole lot
more sense. It's more convenient. It will cut down on travel," he said.
That means many interviewees can continue to pull their blazers and ties out of the closet
-- along with their sweatpants.
Remember job interviews pre-pandemic? The jitters, the choosing of just the right suit, the
race to get there early, maybe even the drive across town or flight across the country for a
shot at a new opportunity?
Like most everything else, the pandemic changed that dynamic. The jitters may remain, but
in-person meetings are largely off the table, interviews among them. The CEO of one of the
most-trafficked jobs websites says it's likely to stay that way even after people get back to
the office.
"People being able to conduct an interview from the safety and convenience of their own
home is going to change hiring forever," said Chris Hyams, Indeed CEO, in an interview with
Yahoo Finance Live. "We believe this is the beginning of a massive secular shift."
"In April, we saw the number of requests for interviews to happen over video shoot up by
1,000%. Even as things have started to stabilize and the economy has opened up over the last 11
months, we've seen that continue to grow," Hyams said.
The jobs picture overall has been improving with
379,000 workers added in February , although the U.S. economy still has almost 10 million
fewer jobs than it did before the coronavirus pandemic took hold. Economists have been
revising their employment and GDP forecasts are higher. Goldman Sachs Chief Economist Jan
Hatzius, for example, wrote in a report this week that the
jobless rate would fall to 4.1% by the end of 2021, from 6.2% last month.
Hyams has been seeing similar encouraging signs on Indeed, with postings on the site
already lapping where they were pre-pandemic. "On Indeed, when we look at new job postings
and our benchmark pre-pandemic of February 1, 2020, at the end of this February we were up 5%
year-over-year. That's still with entire sectors completely shut down," he said.
As for where the hottest demand lies for new jobs, Hyams pointed to e-commerce-related
occupations including logistics, warehousing and delivery, as well as jobs in health care and
pharmacy.
While some of those openings may require showing up regularly in-person, many will not,
which again feeds into Hyams' thesis that interviews will remain virtual.
"If you're going to be a remote worker, interviewing over video actually makes a whole lot
more sense. It's more convenient. It will cut down on travel," he said.
That means many interviewees can continue to pull their blazers and ties out of the closet
-- along with their sweatpants.
On the technical side, drillers have vastly lengthened the horizontal leg of the typical
shale well, from slightly over a mile in
2014 to an average of 8,500 feet in early 2019. The ability to do this has come in part
from improvements in drilling fluids design to permit entry into longer sections, and better
rotary steerable MWD/LWD assemblies that enable more reliable real time drilling data from the
bit to ensure they are staying in the sweet spot of the reservoir. Improvements in perforating,
frac stage design with 4-D fracking that takes into account the frac's progress over time have
also contributed to this increase in productivity.
The amount of sand or proppant pumped per foot of interval has also increased hugely from
around a
1,000 pounds per foot-PPF, to between 2,000 and 2,500 PPF. Increasing the amount of
proppant ads to the well's cost, but it also hugely increases the permeability of the
completion. Permeability is a measure of the flow capacity of the rock. More permeability
results in more production for longer periods of time.
High grading of drilling opportunities has been a prime contributor to being able to
maintain a lower decline rate that originally supposed in my calculations. What this means is
that operators have been focusing on their Tier I acreage and bypassing lower tier
opportunities.
When you take this performance and multiply it across the top twenty or so drillers, you can
begin to see how shale production manages to hover around the 7.5 mm BOEPD level.
... ... ...
One of the questions that often comes up is what will happen when Tier I acreage is
drilled up. Some estimates have been put forward that this might occur within the next
decade.
Rystad has challenged those estimates showing an estimate of the longevity of Tier I shale
in years at present rates of drilling.
It comes as no surprise the Delaware sub-basin of the larger Permian basin is the king of
shale, and operators there will retain a low cost drilling advantage for a number years beyond
other plays.
Most analysts believe that most public companies will stick to discipline. OPEC+ also seems
to have gambled on expectations that U.S. shale will look at higher profits instead of
production this time - unlike in any of the previous oil price spikes in recent years - when it
decided not to raise production from April, except for small increases for Russia and
Kazakhstan.
In view of the recent high prices, JP Morgan now expects U.S. oil production to average
11.36 million bpd in 2021, slightly up from 11.32 million bpd last year.
The EIA sees demand continuing to recover at a good pace to mid-year, with July world oil
consumption forecast at 98.2 mbpd (but still about 4 mbpd below 'normal'). This incremental
demand is being materially supplied by two sources, Brazil and OPEC. We might accept Brazil's
crude oil production growth as given, allowing that the timing might be off by a month or two.
The pivotal question is instead OPEC's intentions.
The EIA uses a volume (or demand) driven model, implying that OPEC will passively increase
production to meet demand, and thereby keep oil prices low. But why would OPEC do this? If OPEC
simply maintained current production levels, the world would be 3.5 mbpd short of supply by
mid-year. A shortfall of 3.5 mbpd -- 3.6% of global consumption -- is a lot. It would rapidly
drain remaining excess inventories, leaving only oil prices to mediate between supply and
demand just as the world economy is showing both strength and momentum as the pandemic ends. In
other words, in the coming months consumers will be prepared to compete for the available
barrels of oil, and that should push oil prices up sharply.
... ... ...
... now is OPEC's best opportunity to make real money in the short to medium term. They
would be fools to let the opportunity slip by.
By Steven Kopits of Princeton Energy Advisors via Zerohedge.com
the majority of stocks are weakening and not making new highs, it's not a good sign
when only 30 stocks are leading the way.
Institutional investors pile into stocks
We have different (hopefully better) ways of measuring divergence these days --
specifically, cumulative breadth indicators, new highs vs. new lows, etc., so we don't
have to "stretch" to draw a conclusion about the Dow today.
The Nasdaq Composite has fallen 7.25% from its Feb. 12 record high through Tuesday as a
sharp rise in the 10-year year yield caused investors to flee stocks in the growth-heavy index.
At the same time, the Dow Jones Industrial Average has held within 0.4% of its record peak.
"The lesson here is that near or at market peaks, it is common for the Nasdaq to first
succumb to the overhyped inflation fears and the rise in bond yields, and after the mega caps
slip, the Dow follows with a lag," Rosenberg said. "And the blue-chips decline, albeit at a
slower rate."
The 10-year Treasury yield has climbed 64 basis points this year to 1.56%, a 13-month high,
amid concerns the unprecedented amount of fiscal and monetary stimulus used to combat the
economic slowdown caused by COVID-19 will bring back inflation that has been lacking since the
2008 financial crisis.
... ... ...
The last two major bond-market selloffs, in 2016 and 2012, resulted in the 10-year yield
rising by 132 basis points and 162 bps, respectively. Measuring from the August 2020 low of
0.515% suggests the top in yield could occur in the 1.82% to 2.13% area and begin forming in
May, according to Bank of America's analysis. In both examples, the top took about three months
to form.
Over the past five years the Nasdaq Composite has increased in value by 127%. Which is less
then the 456% growth in the Nasdaq during the heyday of the dot-com era but still significant.
With the recent listing of Snowflake ($SNOW) in what was the largest software IPO ever, some have
argued that this is reminiscent of the dot-com bubble where the share price for technology
companies routinely doubled or more on their first day of trading. Snowflake's astronomical
valuation aside, the frenetic market behavior surrounding this summer's IPO craze is a cause for
concern. Also look at the hype around Nikola project. The current P/E ratio od S&P500 of 28.8
is below the high of 44 in December 1999 but still very high.
Arguably the single greatest concern for the stock market is valuation, which is something
I've
been harping on for months .
As of Feb. 22, the Shiller S&P 500 price-to-earnings
(P/E) ratio -- a P/E ratio based on average inflation-adjusted earnings from the previous 10
years -- stood at 35.30. That's more than double its average reading of 16.78 over the past 150
years, and it's the highest the Shiller P/E ratio has been for the S&P 500 since the
dot-com crash two decades ago.
There have only been five instances in the 150-year history of the Shiller S&P 500 P/E
ratio where a bull market rally has sustainably taken it above 30: The Great Depression, the
dot-com bubble, Q4 2018, the COVID-19 crash of Q1 2020, and currently. In each of the previous
four instances, the S&P 500 lost between 20% and 89% of its value. Admittedly, the Great
Depression was a unique scenario that would be unlikely to play out today. Nevertheless,
bad
things have historically been in the cards for the S&P 500 when the Shiller P/E ratio
gets north of 30.
Rising Treasury yields portend trouble for spoiled homeowners and
prospective buyers
A third market crash-causing concern is that the multiyear housing boom could dry up at the
drop of a pin.
Without getting too far into the weeds, current homeowners and prospective buyers have been
driven by historically low lending rates. Though the Fed doesn't directly control mortgage
rates, there's been a fairly tight correlation between mortgage rates and 10-year Treasury
yields for a long time. Last year, 10-year Treasury yields hit roughly 0.5%, paving the way for
historically low mortgage and refinance rates, as well as tempting homeowners to take equity
out of their homes.
Buffett's disciples are looking at their idol's indicator, which seems to suggest the stock
market is significantly overvalued. The Berkshire Hathaway chief said in 2001, "The ratio
(stock market capitalization to annual GDP) has certain limitations in telling you what you
need to know. Still, it is probably the best single measure of where valuations stand at any
given moment."
While the Federal Reserve continues to pump liquidity and fuel new record highs, the
COVID-19 pandemic depresses economic output. The Buffett indicator stands at 194%, which is
well above the 159.2% just before the dot.com bubble. Hence, the Oracle of Omaha sees a very
strong warning signal.
Is the stock market heading for a crash in 2021? Pundits seem sure
a severe correction is coming because of the irrational exuberance that's happening at
present. Some analysts liken it to the events in the late 1990s when the dot.com bubble burst. We
witnessed the longest bull market
While the narrative of the Dot Com crash is commonly understood as a market-wide crash, the
chart above shows that over the five years after the peak of the bubble, the S&P 500 Equal
Weight Index generated a positive 36% return while the Nasdaq declined by 58%. If you look at
the white line representing the S&P 500 Equal Weight Index, you'll see that by the end of
2001, when the NASDAQ had fallen by almost 60%, the average stock was actually up about 9%
despite the Dot Com crash and the horrific events of 9/11.
With IT being one of few sectors that have continued to deliver stable results amid the
Covid-19 recession, analysts and investment advisors alike have urged for caution as some have
feared a repeat of the 1995-2000 tech bubble that ultimately burst in 2002 when 80% was wiped
off the stock market. However, as some more level-minded commentators have pointed out, the
differences between 2002 and today outnumber the similarities as private and institutional
investors alike have a better understanding of how digital services work now than 18 years ago
– and P/E ratios have been more reasonable lately than they were during the dot-com
bubble.
As difficult as it is to imagine a world without the internet, the medium as we know it
today only took off in earnest with the event of Windows 95 and the Netscape browser. The tech
bubble began with Netscape, the company behind the browser, which was loss-making at the time
of its IPO but still saw its share price increase from $28 to $75 within the first few hours of
trading. Netscape would be joined by other tech and software companies which had underlying
structural problems but still saw their share prices skyrocket – investors jumped at the
opportunity to buy stocks in any company with the prefix "e-" or suffix "-com". The tech
companies spent millions on advertising campaigns but failed to make a profit and in 2000,
valuations began to fall. Between 2000 and 2002 Nasdaq fell by 80% – and the dot-com
bubble burst.
In its infancy, the internet seemed to offer unlimited possibilities and so it us
understandable that investors felt optimistic. Cut-throat competition and limitations in what
consumers and corporate users were actually willing and able to do with the new medium limited
the potential of many tech companies, and start-ups with poor finances were generally not in a
position to compete with giants such as Microsoft, IBM and Apple who already had been
established for decades.
The proliferation of smartphones and 3G as well as fast broadband around 2010 enabled a new
wave of innovation and saw a rise in social media users and online streaming services. Some
pre-existing firms, such as Facebook and Netflix have been able to tap into this new market
while newcomers such as Uber and Lyft offer services that would have been unviable without
smartphones. While tech start-ups have proliferated in recent years, many stay away from the
stock market precisely because they are not yet profitable – food delivery service
Deliveroo being one example. Cab-hailing app Uber's IPO and subsequent plummeting stock price
served as a lesson to many others.
While it could be argued that the fall in value of stocks from Uber, FitBit and other tech
start-ups is tech bubble 2.0 starting to burst, a broader view calls for another assessment. As
noted, start-ups have not seen their stock prices surge when going public, but rather plummet
immediately. Unlike in 2000, investors are more aware of the differences between tech firms and
the services they offer – simply having an "e-" or "-com" in the company name does not
make investors queue up to buy stock – and investors also know that corporate IT is a
larger market than products directed as consumers. As an illustration, Amazon earns two-thirds
of its revenue from its cloud computing platform and not from physical sales or video
streaming.
Among the IT stocks on the S&P500 index that have seen the highest increase in the last
decade, we find Apple, Alphabet (the owner of Google), Amazon, Facebook, Mastercard, Microsoft
and Visa. These continue to deliver robust returns.
Taken together, the buzz word "the winner takes it all" seems to ring true as tech giants,
with their relatively high P/E multiples are in a position to dominate the market and acquire
promising start-ups. How their domination will impact the stock exchanges remains to be seen,
but for the time being it seems unlikely that their stocks would collapse.
10-year treasury rates average at around 5% during this entire growth period. This is a stark
contrast to the 1.5% we are seeing now (which already seem to rattle markets).
The Cyclically Adjusted Price Earnings Ratio, or CAPE, a measure developed by Robert
Schiller, is also flashing red with the second highest reading in history going back to the
late 1900s (see exhibit 4).
Price to sales ratios also hit a record high (see Exhibit 5).
There are other indicators that suggest that equity prices have detached from underlying
fundamentals. The put / call ratio on the CBOE has now reached the levels of the dot.com bubble
(see Exhibit 6).
Bill Gates is now the largest owner of
farmland in the U.S. having made substantial investments in at least 19 states throughout the
country. He has apparently followed the advice of another wealthy investor, Warren Buffett, who
in a February 24, 2014 letter to investors described farmland as an investment that has "no
downside and potentially substantial upside."
The World Wide Web, which is what people really tend to mean when they say 'the Internet,'
was officially invented by Tim Berners-Lee in 1989. When people interact with the Internet
today, they are using the World Wide Web, which is technically not the same as the 'Internet.'
However, the Web did not become fully commercialized right away.
When the Mosaic Web browser was released in 1993, the commercial growth of the Internet
started to become much more prominent. Really, the commercialization of the Internet and the
dawn of mass Internet commerce began around this point. However, the Dot Com Boom itself did
not really get into full force until 1997. The Dot Com Bubble was characterized by the
unprecedented growth of companies that came to be known as Dot-com companies.
There are still a companies today that are referred to as 'dot-com companies.' However, in
many cases, the people who say that are going to date themselves. The dot-com companies of the
late 1990's were more or less formed in order to take advantage of the remaining venture
capital in the markets that they entered. They often had little more than a great domain name
and a basic idea. They hoped people would invest in what they had in order for them to rise
through the ranks, but many of them would have no real idea of how to produce anything even if
their companies could have had any substance.
"... The psychologies of speculation and gambling are almost indistinguishable: both are dangerously gambler places a bet on a horse he is creating a risk, while the speculator who buys a share is simply involved in the transfer of an existing risk. ..."
"... To repeat Keynes's warning from the 1930s: "when the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done." Momentum trading, trend-following currency speculators, overleveraged hedge funds, and corporate managements obsessed with daily fluctuations in share quotations are unlikely to produce the optimal distribution of scarce resources in the global economy. We have reached Keynes's "third degree." ..."
"... ...options, developed by Scholes and Merton, which lies at the heart of the modem derivatives world, is dependent on the similar assump- tion diat past volatility is a reliable guide to future volatility. This assumption may be likened to driving a motorcar by looking in the rearview mirror -- line as long as the road continues straight but disastrous when you reach the first comer. ..."
For Smith, the speculator is defined by his readiness to pursue short-term opportunities for profit: his investments are fluid whereas those
of the conventional businessman are more or less fixed. This distinction was retained by John Maynard Keynes, who described "enter-
prise" as "the activity of forecasting the prospective yield of assets
over their whole life,1' in contrast to speculation, which he called "die
activity of forecasting the psychology of the market.'1
Specidation is conventionally defined as an attempt to profit from
changes in market price. Thus, forgoing current income for a
prospective capital gain is deemed speculative. Speculation is active
while investment is generally passive. According to the Austrian
economist J. A. Schumpeter, "the difference between a speculator
and an investor can be defined by the presence or absence of the
intention to 'trade,1 i.e. realize profits from fluctuations in security
prices.112 The line separating speculation from investment is so thin
that it has been said both that speculation is the name given to a
failed investment and that investment is the name given to a suc-
cessful speculation. Fred Schwed. a Wall Street wit, declared that
clarifying the difference between investment and speculation was
"like explaining to the troubled adolescent that Love and Passion
are two different things. He perceives that they are different, but
they don't seem quite different enough to clear up his problem."
Schwed concluded the two could be separated on the grounds that
the first aim of investment was the preservation of capital while the
primary aim of speculation was the enhancement of fortune.
As he put it: "Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money becoming a little."'
Similar problems of definition are encountered in distinguishing
speculation from gambling. While a bad investment may be a spec-
ulation, a poorly executed speculation is often described as a gamble. The American financier Bernard Baruch was once dismissed
from the presence of Pierpont Morgan for uttering the word "gamble" in relation to a business proposition.4 Later, Baruch recalled
that "there is no investment which doesn't involve some risk and
is not something of a gamble."
The psychologies of speculation and gambling are almost indistinguishable: both are dangerously gambler places a bet on a
horse he is creating a risk, while the speculator who buys a share is simply involved in the transfer of an
existing risk.
Speculation is generally considered riskier them
investment. The securities analyst Benjamin Graham declared that
investment requires a "margin of safety" so that the value of the
principal is maintained even in unforeseen adverse conditions.
An
uninformed or spontaneous investment is more speculative than
one in which the investor has taken the time to investigate and
assess its potential returns. Graham added that buying shares with
borrowed money was always speculative. The capitalist is confronted with a broad spectrum of risk with prudent investment at
one end and reckless gambling at the other. Speculation lies somewhere between the two.
... ... ...
It is often said that speculation never changes because human
nature remains the same. "Avarice, or desire of gain, is a universal
passion which operates at all times, in all places, and upon all per-
sons," wrote David Hume in the eighteenth century. To this we
might add that the fear of loss, emulation of one's neighbour, the
credulity of the crowd, and the psychology of gambling are equally
universal. The early stock markets were moved by hopes and fears
as much as their later counterparts. These emotions are unleashed
during moments of speculative euphoria. They follow die path of
least resistance, moulding each mania, regardless of its historical
context, into a common form. This explains why all great specula-
tive events seem to repeat themselves and why the experience of the
1690s seems so familiar.
The theory of the "rational bubble" appears to be nothing more
than an elaborate restatement of the "greater fool" investment
strategy, whereby the speculator knowingly buys shares above their
intrinsic value hoping that a "greater fool" will pay more for them
later. The exponents of the "rational bubble" appear to overlook
the fact that the success of this strategy is dependent on liquidity
(i.e., the constant presence of both buyers and sellers in the mar-
ket) and that in a panic buyers vanish at the very moment when
"rational bubble" speculators are seeking to unload their shares.
The "greater fool" method of investment has enjoyed great popu-
larity' in the 1990s American bull market where it has been
renamed "momentum investing." Speculators look to buy shares
that are rising faster than the market and sell quickly when the rise
begins to peter out.* The fate of the London banker John Martin in
1720 illustrates the dangers of this frivolous approach to invest-
ment. Early in the summer, he had gleefully argued that "when the
rest of the world is mad, we must imitate them in some measure,"
but he failed to sell out before the crash, lost a fortune, and ended
up complaining pathetically of being "blinded by other people's
advice."19
... ... ...
During the upturn of the cycle, Bagehot argued, people become
convinced the prosperity will last forever and mercantile houses
engage in excessive speculations. At the same time, an increasing
number of frauds are perpetrated on investors, which only come to
light after a crisis: "All people are most credulous when they are
most happy."
... ... ...
...According to John Stuart Mill, the seeds of each boom
are sown during the preceding crisis, when the liquidation of credit
causes asset prices to decline so severely that they become genuine
bargains. Their subsequent sharp rise from a low level leads to a
revival of speculation.55 After each crisis, the financial markets
invariably shrug off past follies and losses to confront the future
with bright optimism and fresh credulity. Capital becomes "blind,"
to use Bagehots term. Unable to remember the past, investors are
condemned to repeat it.
... ... ...
The most striking similarity between the 1920s and 1990s bull
markets is the notion that traditional measures of stock valuation
had become obsolete. Once again it was argued that an investment
in the stock market helped retain purchasing power during infla-
tionary periods and that management wras becoming more respon-
sive to shareholders' interests. Abby Joseph Cohen of Coldman
Sachs claimed that a longer business cycle and lower inflation justi-
fied an upward valuation in stock prices. In their Securities Analy-
sis, Benjamin Craham and David Dodds wrote that "instead of
judging the market price by established standards of value, the new'
era [of the 1920s] based its standards of value upon the market
price." In similar fashion, consultants in the 1990s invented a con-
cept named "market value added," which simply measured the difference between the market value of the firm and the amount of
capital tied up in it. The higher the "market value added," the
greater the firm is deemed to be worth.
The net asset value of a company -- the value of its factories,
machinery, and suchlike -- became the most despised of traditional
valuation tools. Dividend yields, which slipped to a historic low of
less than 1 Vi percent, were also dismissed as irrelevant. At times
even the price-eamings ratio, a measure favourable to speculative
values, has looked too conservative. Discounting future cash flow's
was used to justify any price for fast-growing technology companies. In late October 1996, a headline in the Investors Business
Daily, a stock market daily which published relative strength fig-
ures, asked and answered a question that vexed many minds:
"Overvalued? Not If the Stock Keeps on Rising."90
The new paradigm, or new' economics, of the 1990s provided the
intellectual underpinning for the greatest bull market in American
history. When stock prices fell sharply in October 1997, Abby
Joseph Cohen of Goldman Sachs saved the day by advising her
clients to increase their holding of shares. James Grant has sug-
gested that the reappearance of the new era ideology was a sign
that "markets make opinions not the other way round."
... ... ...
Keynes defined speculation as the attempt to forecast changes in
the psychology of the market. He compared it to various parlour
games -- snap, old maid, and musical chairs. Switching his
metaphor, Keynes likened speculation to a newspaper competition
in which the competitors have to pick out the six prettiest faces
from hundreds of photographs,
so that each competitor has to pick, not those faces which he
Itimself finds prettiest, but those which he thinks likeliest to
catch the fancy of the other competitors, all of whom are looking
at the problem from the same point of view ... We have reached
the third degree w here we devote our intelligences to anticipating what average opinion expects the average opinion to be.'8
Speculation which is a beneficial, indeed vital, component of the
capitalist process has come to dominate the system to an unhealthy
degree.
To repeat Keynes's warning from the 1930s: "when the
capital development of a country becomes a by-product of the
activities of a casino, the job is likely to be ill-done." Momentum
trading, trend-following currency speculators, overleveraged hedge
funds, and corporate managements obsessed with daily fluctuations in share quotations are unlikely to produce the optimal distribution of scarce resources in the global economy. We have reached
Keynes's "third degree."
... ... ...
...options, developed by Scholes and Merton, which lies at the heart of
the modem derivatives world, is dependent on the similar assump-
tion diat past volatility is a reliable guide to future volatility. This
assumption may be likened to driving a motorcar by looking in the
rearview mirror -- line as long as the road continues straight but
disastrous when you reach the first comer.
In common with all the
practical ideas generated by the Efficient Market Hypothesis, it is
based on the belief that when financial theories are turned into practice there is no change to the underlying reality. This was the error of
portfolio insurance in the 1980s and remained die error of the
derivatives markets a decade later. If markets are not efficient but
are subject to chaotic feedback loops, then the entire financial
superstructure created around derivatives in the 1990s, with its $50
trillion worth of exposure, is based on shaky premises.
Even outside the field of options pricing, the teaching of the Efficient Market Hypothesis has insinuated itself into the practices of
modem finance: the fads for "shareholder value" and corporate
stock-option schemes, the Capital Asset Pricing Model (which "scientifically" calculates companies' cost of capital), and popular
investment in stock index funds are all predicated, to a greater or
lesser extent, on the assumption that shares are efficiently priced by
the market. But if the hypothesis is false -- e.g., because speculative...
>
5.0 out of 5 stars
The
No. 1 history of financial speculation
Reviewed in the United States on July 3, 2018
Verified Purchase
Absolutely the single best history of financial speculation. Chancellor seems to
have assimilated just about everything one could on all the major speculative episodes, from ancient origins through the
1990s.
There's not much else to say. If you're an investor, this is a must-read history of how things can go horribly wrong in
financial markets.
In fact, with U.S. equities bumping against all-time high valuations (in mid-2018), this is the perfect moment to take
your time and read through this book. It'll show you all the ways you might be getting swept up in speculative excess,
of which you might not be aware, even if you're invested in the greatest businesses that have ever existed.
>
Shashank V. Nerurkar
4.0 out of 5 stars
Historical
Perspective of Financial Speculation
Reviewed in India on September 9, 2019
Verified Purchase
Devil Take The Hindmost is very informative book which covers the history of
financial speculation from the third century. The author has narrated relevant details from various sources which
reflects the scholarly research undertaken by him. The major speculative bubbles such as tulip mania, south sea bubble,
railway network in Britain and US, automobile revolution in US, the crash of 1929, junk bonds mania, the Japanese bubble
of 1980 and havoc created by derivatives and hedge funds after 1990 are covered in great details. One realizes that not
much has changed as far as factors that lead to financial speculation over the history. The reader will be better
equipped to compare the conditions in financial markets with historical perspective. The author could have avoided bias
against the Republicans in US and Conservatives in Britain as their opposition has not done any better in managing the
financial speculation. The book is a bit dated and as such do not cover the dot-com bubble and 2008 financial crisis.
The book is great read for all participants in financial markets.
An award-winning journalist investigates Amazon's impact on the wealth and poverty of
towns and cities across the United States.
In 1937, the famed writer and activist Upton Sinclair published a novel bearing the subtitle
A Story of Ford-America . He blasted the callousness of a company worth "a billion
dollars" that underpaid its workers while forcing them to engage in repetitive and sometimes
dangerous assembly line labor. Eighty-three years later, the market capitalization of
Amazon.com has exceeded one trillion dollars, while the value of the Ford Motor Company
hovers around thirty billion. We have, it seems, entered the age of one-click America―and
as the coronavirus makes Americans more dependent on online shopping, its sway will only
intensify.
Alec MacGillis's Fulfillment is not another inside account or exposé of our
most conspicuously dominant company. Rather, it is a literary investigation of the America that
falls within that company's growing shadow. As MacGillis shows, Amazon's sprawling network of
delivery hubs, data centers, and corporate campuses epitomizes a land where winner and loser
cities and regions are drifting steadily apart, the civic fabric is unraveling, and work has
become increasingly rudimentary and isolated.
Ranging across the country, MacGillis tells the stories of those who've thrived and
struggled to thrive in this rapidly changing environment. In Seattle, high-paid workers in new
office towers displace a historic black neighborhood. In suburban Virginia, homeowners try to
protect their neighborhood from the environmental impact of a new data center. Meanwhile, in El
Paso, small office supply firms seek to weather Amazon's takeover of government procurement,
and in Baltimore a warehouse supplants a fabled steel plant. Fulfillment also shows how
Amazon has become a force in Washington, D.C., ushering readers through a revolving door for
lobbyists and government contractors and into CEO Jeff Bezos's lavish Kalorama mansion.
With empathy and breadth, MacGillis demonstrates the hidden human costs of the other
inequality―not the growing gap between rich and poor, but the gap between the country's
winning and losing regions. The result is an intimate account of contemporary capitalism: its
drive to innovate, its dark, pitiless magic, its remaking of America with every click.
" Fulfillment vividly details the devastating costs of Amazon's dominance and brutal
business practices, showcasing an economy that has concentrated in private hands staggering
wealth and power while impoverishing workers, crushing independent business, and supplanting
public governance with private might. A critical read." ―Lina Khan, associate
professor at Columbia Law School and author of Amazon's Antitrust Paradox
"Anyone who orders from Amazon needs to read these moving and enraging stories of how one
person's life savings, one life's work, one multigenerational tradition, one small business,
one town after another, are demolished by one company's seemingly unstoppable machine. They are
all the more enraging because Alec MacGillis shows so clearly how things could have been
different." ―Larissa MacFarquhar, staff writer at The New Yorker and author of
Strangers Drowning: Grappling with Impossible Idealism, Drastic Choices, and the
Overpowering Urge to Help
"Alec MacGillis practices journalism with ambition, tenacity, and empathy that will command
your awe. Like one of the great nineteenth-century novels, Fulfillment studies a social
ill with compelling intimacy and panoramic thoroughness. In the process, Jeff Bezos's dominance
and its costs are made real―and it becomes impossible to one-click again the same."
―Franklin Foer, staff writer at The Atlantic and author of World Without
Mind
"For a generation, inequality has been rising relentlessly in the United States―not
just inequality of income and wealth, but also inequality of power and geography. In
Fulfillment , Alec MacGillis brings this crisis vividly alive by creating a broad
tableau of the way one giant company, Amazon, affects the lives of people and places across the
country. This book should be read as a call to action against the new economy's continuing
assault on working people, small businesses, and left-behind places." ―Nicholas
Lemann, author of Transaction Man
" Fulfillment addresses the human impact of current technologies and economic
inequality with rare power. People in tech don't often think about the ramifications of their
work; Alec MacGillis reminds us that it has consequences, and that even if there are no clear
solutions, we have a moral imperative to consider its effects." ―Craig Newmark,
founder of craigslist
Alec MacGillis is a senior reporter for ProPublica and the recipient of the
George Polk Award, the Robin Toner prize, and other honors. He worked previously at The
Washington Post , Baltimore Sun , and The New Republic , and his journalism
has appeared in The New York Times Magazine , The New Yorker , The
Atlantic , and other publications. His ProPublica reporting on Dayton, Ohio was the
basis of a PBS Frontline documentary about the city. He is the author of The Cynic , a
2014 biography of Mitch McConnell. He lives in Baltimore.
All of these "advancements" are around removing face-to-face interaction with other people.
Whether work-from-home, automated rental & purchase, retail goods delivered, etc. Curious
what long term impact this seemingly exponential shift toward human interaction as personal
irritant is doing to our social cohesion.
Is standing in a line always a burden or is it sometimes a benefit? Sure, sometimes I just
want to do my business and go but have also met fascinating people while in lines. I'm assuming
many of the people working at that ski resort are "ski bums" who used the job as a way to
fulfill their skiing lifestyle. They are a part of the skiing culture that has been removed
from the experience now. So many local jobs are being removed and replaced by tech jobs. We
barely have local community left and it's being replaced with, what? Social media? I'm a big
fan of our online communities here at NC so it's not all bad of course.
Yes, change is inevitable and much of this is convenient but just curious what it's doing to
us as a society. Maybe it's allowing us more time to focus on closer social bonds we've already
developed? Less time in lines or stores means more time with friends and family?
Our prior ways weren't exactly healthy so honestly I don't know if this will lead to better
ways or push us further apart. Any insights or ideas are appreciated. Just been pondering it
and curious what other think.
"In a system that generates masses, individualism is the only way out. But then what happens
to community -- to society?" – Jeanette Winterson
Maybe it's allowing us more time to focus on closer social bonds we've already developed?
Less time in lines or stores means more time with friends and family?
The social bond with your doctor is pretty important I would say. As it is with your local
bookseller or grocery store. They are all people too, and being face to face with them you
build more trust and compassion. This helps us both in times of hardship
I'll take the most dire view here (someone has to!):
Every step this society takes away from face-to-face interaction, and therefore community
and fellowship, is going to proportionally increase the death rate when the rolling disasters
of our era arrive properly at our shore.
I wish I could reach out and shake everyone who is like "I interact with people too much
already, this enforced isolation is GREAT!" don't they realize this philosophy might
kill them? In the upcoming chaos, if they're an unknown unknown to the people around
them, don't they realize they'll be all too easy to leave behind or even sacrifice??
This seems to be the path our society is absolutely determined to take – so be it.
Even NC is posting articles that are more or less cheering it. But as for me, I will rage, rage
against the dying of the light.
Found myself in a rather long line (no complaints) last Sat. for 2nd Covid vaccine. Realized
later that between the long line waiting and the after waiting to leave it was probably the
most people interaction I've had for over a year! We are social creatures. Our system preaches
"individualism" because that is the only way the "instant profit" system can operate. There are
other ways; our ruling classes opt out of those and the general population becomes muddled
instead.
"Modernity" and "AI" technology is great but if u have no human interaction eventually those
traits leave and you have what???? A dead society.
And with every step forward there is a step backward. Going digital across the board is not
always good as it takes away privacy and I have an example here. There is a linked article in
Links today called "Are punitive rules forcing doctors to hide their mental health problems?"
In it, a young doctor is under enormous mental stress and turns to older doctors for advice.
They 'advised her to drive out of town, pay cash and use a pseudonym if she needed to talk
to someone.' If most transaction were done digitally, how would this doctor and others like
her go for help without endangering their jobs? What options would they have?
In cases like this, the only 'options' allowed will be "official" options. As my
misguided attempt at "therapy" years ago taught me, often times, the analyst can be toxic.
Also, in a mental health setting, I encountered the "official" preference for medication
over 'therapy.' Both are situations that put the 'authority's' preferences above the
patients. One big way I eventually 'twigged' to the dystopian dynamic was in observing the
attitudes and body language of the "health care professionals" I was dealing with.
Electronica and devices have no agency, and no "body language." The entire process is
removing useful tools for the patient to navigate the shoals and reefs where the sharks
hang out in any bureaucracy.
The other, knock on effect of telemedicine we encountered was that the charges for
electronic "office visits" have not dropped. This is analogous to when a grocery store
keeps the cost of an individual item stable and reduces the package size.
Others have said it better than I, but it bears repeating; 'modern' methods are reducing
people to the status of 'things.' Just as in the process of reducing a person or group of
people to the status of "other," the next step is 'removal.'
Cash is agency. The spying may be efficient, but its main purpose is to take away
agency. Just like "software as a service" or "in the cloud", when you could just as easily
have the same functionality on your device which you own. The vendors don't want that. They
want to control you.
The only alternative is to support and keep alive businesses that accept customers with
cash and agency. And boycott the rest. Even if it is inconvenient!
Yay, less human interaction, more isolation, fewer seasonal jobs for high school or college
students. More magical technological solutions that the on-site staff has no idea how to fix
when they stop working. You're too busy and important to stand in line! That's socialism! Let's
tell everyone that they're risking imminent death by being around other people and then sell
them ways to avoid it!
The U.S. exported its production of goods and became a "service" economy or a "knowledge"
economy. Thanks to Corona much of the service employment has become virtual. Knowledge workers
can now work from home. How many knowledge workers possess knowledge unique to the U.S. and how
many could be replaced by remote workers from somewhere else?
This post describes changes, some of which may prove temporary and others may prove
permanent. I believe most of the changes and their longer term implications require time to
fully unfold. I am not fond of virtual service. I order online from the independent vendors
still around as Amazon, E-Bay, Etsy, and other platforms grind them down, but how long will
they remain independent? The U.S. Postal Service is under attack and when it falls to
privatization what kind of e-commerce will come after that? Cashless means exposed to me --
exposed to tracking and monitoring and exposed to theft from the shadows.
I don't understand the rush to eliminating cash. Cash is the last way to opt out of
commercial control. People seem to positively embrace it, and I don't get it.
(Exception: I understand why legal cash-business owners like the idea.)
I hear crime prevention and money laundering prevention as reasons. The first is code
for "control of poor people", the second is true as far as it goes, but that's not very
far. You're targeting mainly drug money while completely ignoring corporate and
high-net-worth individuals.
My question (to no one) is how was the automation financed? Did the ski company issue
new shares in equity with first refusal to the employees? Or did the company instead mosey
on down to a local branch of the government-privileged private credit cartel to have
themselves a heaping helping of the PUBLIC'S (including the employees') CREDIT but for the
company owners' PRIVATE GAIN?
As a partridge that hatches eggs which it has not laid,
So is a person who makes a fortune, but unjustly;
In the middle of his days it will abandon him,
And in the end he will be a fool. Jeremiah 17:11
The human population didn't grow to 8 billion through physical distancing, touchless
interaction, and living in isolation. ecommerce is a thing now, but it may not have a long
shelf life. There is an inherent need for human interaction if the specie is to prosper. The
pandemic is transitory and will eventually pass; human needs, wants, and desires will endure. I
look forward to the day when I can speak with a store clerk, browse shelves and racks, and pay
for things with currency. I don't believe that there is no going back. In fact, we must go
back. At least most of the way back.
"There is no one party in the electrical power generation chain on which to lay the blame,
and we should quit trying"
Power lines are shown Tuesday, Feb. 16, 2021, in Houston. More than 4 million people in
Texas still had no power a full day after historic snowfall and single-digit temperatures
created a surge of demand for electricity to warm up homes unaccustomed to such extreme lows,
buckling the state's power grid and causing widespread blackouts.
In 1882, Thomas Edison formed the Edison Electric Illuminating Co., which brought electric
light to Manhattan but most Americans still lit their homes with gas light and candles for
another 50 years. Only in 1925 did half of all homes in the U.S. have electric power. It has
been many years since the US has been fully electrified, but in 2015, 1 billion people (three
times the US population) in the world had no access to electricity. Access to electricity is a
key metric to determining a nation's affluence; as late as 2001, the entire county of
Afghanistan was virtually without electricity. Afghani GDP was $500 per person in 2019 while
the United States GDP was $65,000 per person.
We have come to expect that we should have electric power 100 percent of the time, and when
that doesn't happen, then it must be someone else's fault (Oncor, ERCOT, power generators,
retail electric providers like Griddy, employees and/or board members of any and all of the
above, etc.). There are very few who know how electric power is generated and even fewer who
understand the vast number of both mechanical and human factors that must operate seamlessly
(and do operate seamlessly 99.9 percent of the time) to provide this modern miracle. We should
really consider ourselves quite fortunate to have electricity at all, but of course we, as
Americans, are smarter, better looking and more talented than everyone else and expect to have
our every wish granted immediately; "Vanity of vanities, and all is vanity" spoke Ecclesiastes.
Not a few have observed that this event occurred at the beginning of Lent, forcing involuntary
penance on a people who refuse even the slightest voluntary inconveniences.
Within ERCOT, natural gas burned in gas turbines provides about 50 percent of the generating
capacity in Texas, with wind/solar at about 30 percent, coal about 15 percent and nuclear about
5 percent. Since natural gas provides such a large percentage of electric power, and in an
effort to find the appropriate scapegoat to Texas' woes, we first need to understand what a
typical oil and gas production facility contains. A three-phase stream (oil, salt water and
natural gas) is produced from the wellhead and flows to a separator, where the gas leaves the
top of the separator in the vapor phase and the oil-salt water mixture leaves the bottom of the
separator in the liquid phase and goes to a (gas-fired) heater-treater, which applies heat to
break the oil-water emulsion and separate the oil from the saltwater. Oil then goes to storage
tanks or pipelines, while water is either sent to a disposal well (via electric pump) or
trucked off the lease.
Let's examine what really happened during the 221 consecutive hours with temperatures below
the freezing point of water (32 degrees Fahrenheit). The natural gas in the vapor phase leaving
the separator is saturated with water vapor, and since all the functions listed above occur
above ground in steel pipes and vessels, the gas quickly drops in temperature, and the water
vapor can freeze in the pipeline creating an ice block (a hydrate). If the gas cannot leave the
lease then, unless the gas is flared, the well must be shut in. Even if the gas does not freeze
in the line, if the paved roads and dirt lease roads are too hazardous for 18-wheeled truck
transports to pick up the oil and water from the lease, then as soon as the on-lease storage is
filled, the well must be shut in. Most leases have some level of electric power for pumps,
lighting, heat tracing or similar uses, and when the electric provider ceases to provide that
power, then any efforts to restore production and unfreeze equipment are hampered. The
combination of freezing within on-lease flowlines, hazardous conditions preventing company
employees from getting to the lease, lack of crude and water truck hauling, and the loss of
electricity results in a complete wellhead shut in.
The graph below illustrates actual field production data from a Reagan County producer who
battled all the issues above:
Virtually 100 percent of the gas produced in the Permian Basin must be processed in a gas
processing plant for the removal of water, hydrogen sulfide, carbon dioxide and valuable
natural gas liquids (NGLs, which are ethane, propane, butanes and heavier), with the remaining
molecules consisting almost entirely of methane (called residue gas) delivered into
large-diameter pipelines at the plant outlet. As producers struggled to keep wells on, gas
processors also struggled as volumes to their plants steadily decreased (making it more
difficult to operate), and they faced similar issues of employee safety, in-plant freezes and
loss of electricity to key pieces of equipment like NGL pumps (if the NGLs cannot be pipelined
from the plant on a continuous basis, the plant is forced to shut down). All plants have a
minimum volume of gas required to run the plant, and many plants hit this wall; Navitas'
processing complex east of Midland dropped from 750,000 Mcf per day to zero Mcf per day) while
Cogent in Reagan County dropped from 460,000 Mcf per day to 40,000 Mcf per day.
Assuming a total loss of wind/solar and a 50 percent loss in coal, natural gas' share of the
remaining generating capacity rose to about 80 percent; when wellhead freezes dramatically
reduced gas flow to the processing plants, and when plants were having their own freeze issues,
electric providers then cut power to these plants, eliminating what little gas supply was left
available, effectively creating a "death spiral."
So, irrespective if (a) power generators were properly winterized, or (b) we had more
gas-fired powered generation, or (c) Texas was not deregulated, the fuel supply simply was not
available, "not even for ready money" (in Oscar Wilde's "The Importance of Being Earnest,"
Algernon expresses his dismay to the butler regarding why there were no cucumber sandwiches, to
which the butler replies "There were no cucumbers in the market this morning, sir, not even for
ready money"; after you read this comedy you should read his equally compelling but more somber
tale, "The Picture of Dorian Gray").
As gas supply dwindled, and power demand increased, the price of gas "for ready money"
jumped from its normal price of $3/MMBtu to $100-$200/MMBtu, and as the price of gas surged,
and the demand for power increased while its availability decreased, the price of power also
surged from $.03 per kilowatt-hour to $9 per kilowatt-hour. The typical consumer reaction was
that there was "price gouging" simply because the price increased; what we witnessed was the
classic supply-demand-price dynamic of the free market, which that same consumer enjoys on a
regular basis when shopping for virtually any product.
Griddy customers enjoyed the rewards of supply-demand-price when power was plentiful and
cheap, but they knew full well that they were susceptible to price spikes; Griddy updated
open-market prices every five minutes and sent alerts when the price was increasing or
decreasing, so those customers had the tools available on their "smart" phones and could elect
to cease or continue to use power at a known cost.
Force majeure is a French term that literally means "greater force" and is related to an act
of God, an event for which no party can be held accountable, such as a hurricane or a tornado
(or 221 consecutive hours below 32 degrees). Try as we might, there is no one party in the
electrical power generation chain on which to lay the blame, and we should quit trying. Will
all the entities in the chain expend the money to protect against an event that happens once in
a hundred years? Will you expend the money to buy and maintain a gas- or diesel-powered
generator and beef up the insulation in your house to protect against an event that happens
once in a hundred years? Do you expect the answers to both questions to be the same?
It is very unfortunate that lives were lost as an indirect consequence to the temporary loss
of electricity. In another segment of our lives where man and machine interact, let's look at
deaths on Texas roadways, which run about 3,500 per year. For the last 20 consecutive years, at
least one person has died every single day in a vehicle accident; are we filing lawsuits or
calling for the resignation of employees of TxDOT, DPS or vehicle manufacturers? If we were
serious about reducing deaths to zero (TxDOT's 2050 goal) would we drop the speed limit to 30
miles per hour on all roadways and post officers every 10 miles to issue mandatory citations?
Or would we appeal to taking personal responsibility for safe driving habits every time we
turned the key in the ignition?
Switching gears, what should oil and gas producers be prepared for in late March when they
are paid for gas delivered in February? Just because natural gas traded for $100-$200/MMBtu for
a few days does not mean you will receive that price; it depends on what your gas contract
stipulates and whether the plant to which you are connected sold any gas during that period. In
an effort to be equitable, gas processors who did sell some high-priced gas could possibly
allocate that value to only those producers who actually delivered gas to them during that
period, rather than compute an average monthly price and applying that price to all deliveries
during February. If your gas processor passes through your share of its electricity bill, you
could be in for a shock on high pass-through power costs. You may get inquiries from royalty
owners wondering why they are not seeing the effects of $100/MMBtu gas and whether you
exercised a fiduciary responsibility to obtain that price.
This is only a partial list; the storm outside is over, but the financial and legal storm
could only be beginning.
Tesla down 31%? Not a problem I will use the dividends to offset my losses. Oh wait!
BigJJ 13 minutes ago
I've never understood how Tesla could possibly make money given all the infrastructure
they had to install just to sell shoddily thrown together rusty cars that are useless when
the grid crashes.
Sound of the Suburbs 41 minutes ago (Edited)
...What was the ponzi scheme of inflated asset prices that collapsed in 2008?
El Hosel 1 hour ago (Edited)
Clearly "It's different this time", now that everybody knows "stocks only go up"...
Academic research suggests stock-market trading and more traditional gambling have quite a
bit in common. One paper published in January says there's 3.5 times more gambling in stock
markets than in more traditional venues like casinos and lotteries.
The paper -- from Alok Kumar of the University of Miami, Houng Nguyen of the University of
Danang, and Talis Putnins at the University of Technology Sydney and Stockholm School of
Economics -- says the U.S. and Hong Kong have the highest per capita levels of what they call
stock-market gambling in the world. They identify so-called lottery stocks by looking at volume
divided by market cap, and looking for unusually large ratios.
That's not to say all stock market investing is gambling. The researchers say about 15% of
stock market volume in the U.S. is associated with gambling, a percentage that runs as high as
30% in the stock markets of China and Thailand.
Sweet spots depletion might be a problem for them. U.S. shale production as a whole is
unlikely to return to the levels before the pandemic. The high decline rates of shale well are
more acure outside of sweet spot. Larger firms which still have sweet spots feel the pressure
from investors to produce level of dividends expected in the industry. That excude "all-in"
drilling as happned inthe past when Wall Stertt money were abundant and discipline was
lacking.
Currently, OPEC itself sees U.S. crude oil production for 2021 at 11.2 million bpd, slightly
down from an estimated 11.28 million bpd output for 2020. In its latest Monthly Oil Market Report
(MOMR) for February, the cartel actually revised down its 2021 forecast for U.S. oil production
by 210,000 bpd and now expects a 70,000-bpd annual decline from 2020, as continued capital
expenditure discipline is "expected to weigh on production prospects in 2021."
Larger listed U.S. producers are concerned
that some drillers would break promises of output restraint.
"There are going to be bad actors [who pursue] growth for growth's sake," Matthew Gallagher,
an executive at Pioneer Natural Resources, told the Financial Times in
January.
Pioneer Natural Resources itself will look to limit production growth to an average 5
percent over the long term, CEO Scott Sheffield
said on the Q4 earnings call last week. Moreover, Pioneer expects to return up to 75
percent of its annual free cash flow to shareholders after the base dividend is paid, Sheffield
noted. This will be returned in the form of variable dividends paid out quarterly the following
year, the executive said. Related:
Is This The World's Next Big Offshore Oil Region?
While Pioneer and other major listed shale players seem to be heeding investors' calls for
higher returns to shareholders, the smaller closely held operators are not promising anything
other than chasing higher returns on their investment, which is being generated by more oil
production.
Offshore oil has already started to show
signs of emerging from last year's crisis, as costs have been slashed since the previous
downturn of 2015-2016. Deepwater oil breakevens have dropped to below those of U.S. shale
supply, making deepwater one of the cheapest new sources of oil supply globally, Rystad Energy
said last year.
In its new report this week, the energy research firm expects 592 offshore project
commitments between 2021 and 2025, up from 355 projects in the 2016-2020 period and up from the
478 project commitments in the period 2011 to 2015.
Over the next five years, deepwater is set to show the most impressive growth in the number
of commitments, with the number of projects rising to 181 from 106 in 2016-2020 and 115 in the
five years before that, Rystad Energy has estimated.
"The search for large new fields in deep and remote waters became much more economically
viable after dayrates for drilling rigs and offshore supply vessels fell in the wake of the oil
price crash in 2014 and 2015. This offers significant support for companies interested in
deepwater," said Rajiv Chandrasekhar, energy service analyst at Rystad Energy.
Apple
( AAPL ) is
near an all-time high. So are tech giants Adobe ( ADBE ) and
PayPal ( PYPL ) .
Recent initial public offerings Zoom ( ZM ) ,
Cloudflare ( NET ) and
Peloton ( PTON ) are
at record levels as well. The Nasdaq is a hair's breadth from busting through 10,000
again . Call it irrational exuberance, Part Deux. Former Federal Reserve chairman Alan
Greenspan used that term in a speech nearly a
quarter-century ago to describe the 1996 boom in the stock market -- particularly the rise
of big tech stocks and the wave of unprofitable internet IPOs. This year's tech rally is indeed
eerily reminiscent of that late 1990s and early 2000s period, when the Nasdaq surged past the
3,000, 4,000 and 5,000 levels in a matter of months before finally peaking -- and then crashing
in April of 2000.
This week, Head of Investments Nicky Eggers talks to Will Hobbs, Chief Investment Officer,
about concerns that we are watching another technology bubble inflate. They discuss if such
dominance of a handful of companies is unusual and what is driving it. Also, does it make these
still surging stock markets more vulnerable? And what has the Black Death got to do with any of
it?
"There is a clear consensus that we are witnessing our second tech bubble in 15 years," said
Mr. Einhorn of Greenlight Capital Inc. "What is uncertain is how much further the bubble can
expand, and what might pop it."
He described the current bubble as "an echo of the previous tech bubble, but with fewer
large capitalization stocks and much less public enthusiasm."
There are three reasons he cited in an investor letter that back his thesis: the rejection
of "conventional valuation methods," short sellers being forced to cover positions and big
first-day pops for newly minted public companies that "have done little more than use the right
buzzwords and attract the right venture capital."
He didn't specify which companies he felt met that criteria.
Some of the market's biggest
momentum plays , such as biotech, Internet and social-media stocks, have been hit hard
since early March amid concerns that they have gotten too pricey. Many of those names have
recovered some of those losses over the past week and a half.
Without disclosing specific names, Mr. Einhorn said he has shorted a basket of so-called
momentum stocks. He highlighted the risk of such a move: "We have repeatedly noted that it is
dangerous to short stocks that have disconnected from traditional valuation methods," Mr.
Einhorn said. "After all, twice a silly price is not twice as silly; it's still just
silly. "
But now that there is "a clear consensus" that tech stocks are in a bubble, he said he is
more comfortable shorting a basket of these high-flying stocks.
"A basket approach makes sense because it allows each position to be very small, thereby
reducing the risk of any particular high-flier becoming too costly...When the prices reconnect
to traditional valuation methods, the de-rating can be substantial," he said. "There is a huge
gap between the bubble price and the point where disciplined growth investors (let alone value
investors) become interest buyers."
The last time the Internet bubble burst in the early 2000s, Cisco Systems dropped 89% and
Amazon.com Inc. fell 93%, he said. "While we aren't predicting a complete repeat of the
collapse, history illustrates that there is enough potential downside in these [momentum] names
to justify the risk of shorting them," Mr. Einhorn said.
Greenlight Capital lost 1.5% in the first quarter, the New York hedge fund said Tuesday. The
firm said it lost money on its bets against Keurig Green Mountain Inc. and Chipotle Mexican Grill Inc.,
among other wagers, while making money on Micron Technology Inc.
Even Société Générale – which rightfully wrote that
"markets will eventually turn but picking bottoms in this type of market is risky business"
– in a note on Friday discussed the "dead cat bounce." That's the little boost in the
market that comes when speculators cover their positions the day after big damage. The French
bank advised they should be "sold into until there are clear catalysts for a turn."
But the truth is that no one knows whether a "dead cat bounce" is a dead count bounce or
something else, even if you have all the short-covering information. Everything is temporary.
Everything is subject to change.
That makes this whole market a casino. Beating a casino requires you to get the odds in your
favor -- but you'll never get them more than just a little in your favor. In the stock market,
they are in your favor if you play it long. In the short term? No one knows.
The next 10
years
Here's Warren Buffett
recently : "I also don't think that I can make money by predicting what's gonna go on next
week or next month. I do think I can make money by predicting what's gonna happen in 10
years."
A lot of Wall Street research has internalized those principles, but the job of people
predicting the market is to predict -- and beat -- the market. Buffett would tell you that just
owning the broad market is fine. You can join it without much thought -- and for cheap --
instead of trying to beat it, which you probably can't do.
A very sensible research note from Bank of America Securities put it succinctly: "avoid
panic selling." It also offered a new perspective on what happens when you miss the 10 best
days of the stock market -- which you can't predict because they can happen when the market is
awful or when the highs are all-time.
"Since the 1930s, if an investor sat out the 10 best return days per decade, his/her returns
would be just 91% compared to 14,962% returns since then," the note said.
In other words, it is incredibly risky to try to time something that is really hard to time.
And in today's extremely volatile market, the stakes are much, much higher.
We have repeatedly noted that
it is dangerous to short stocks that have disconnected from traditional valuation methods.
After all, twice a silly price is not twice as silly; it's still just silly. This understanding
limited our enthusiasm for shorting the handful of momentum stocks that dominated the headlines
last year. Now there is a
clear consensus that we are witnessing our second tech bubble in 15 years. What is
uncertain is how much further the bubble can expand, and
what might pop it .
Given the enormous stock price volatility, we decided to short a basket of bubble stocks. A
basket approach makes sense because it allows each position to be very small, thereby reducing
the risk of any particular high-flier becoming too costly. The corollary to "twice a silly
stock price is not twice as silly" is that when the prices reconnect to traditional valuation
methods, the de-rating can be substantial. There is a huge gap between the bubble price and the
point where disciplined growth investors (let alone value investors) become interested buyers.
When the last internet bubble popped , Cisco (the best of the best bubble stocks) fell 89%,
Amazon fell 93%, and the lower quality stocks fell even more.
In the post-bubble period, people stopped talking about valuing companies based on eyeballs
(average monthly users), total addressable market (TAM), or price-to-sales.
When the re-rating occurred, the profitable former high-fliers again traded based on P/E
ratios, and the unprofitable ones traded as a multiple of cash on the balance sheet. Our
criteria for selecting stocks for the bubble basket is that we estimate there to be at least
90% downside for each stock if and when the market reapplies traditional valuation to these
stocks. While we aren't predicting a complete repeat of the collapse, history illustrates that
there is enough potential downside in these names to justify the risk of shorting them.
At this point, three stocks -- Apple, Amazon and Microsoft -- comprise about 16% of the
S&P 500 and a third of the Nasdaq 100. Their combined value of $5 trillion is bigger than
Germany's entire economy. And the last time the "Big 3" were this expensive relative to free
cash flow was during Tech Bubble Version 1.0.
There is a consensus that there is tech bubble. But it is completely unclear when it will
burst. David Einhorn made the same point in 2014: 'We Are Witnessing Our Second Tech Bubble in 15
Years' David Einhorn's make his name by shorting Lehman Brothers before it dry heaved out of
existence
Today, the S&P 500 and TSX Index are both down 4% and 10%, respectively, from their
pre-pandemic heights. Meanwhile, the tech-heavy NASDAQ Composite is at a fresh all-time high,
up a whopping 9% above those February 19 heights, as tech stocks have led the upward
charge.
Many folks have been bringing into question the divergence between the stock market and the
economy lately. But what about the divergence in performance between the tech-heavy NASDAQ and
other indices?
There's no question that the recent rally in tech stocks rhymes with the lead-up to the tech
bubble that burst in 2000, but is the tech sector really in a bubble? Or are the lofty
valuations warranted given the stock market is pointing to a nice economic recovery that could
be in the cards in 2021?
Is there a tech bubble that could burst in 2020?
Probably not.
While the recent tech-driven rally may be of concern to those who invested through the
dot-com bust, tech stock valuations, in aggregate, aren't at the absurd levels they were in
1999. So, no tech stocks aren't partying like it's 1999. At least, not yet.
However, I do see pockets of severe overvaluation within the tech sector that are quite
pronounced. For instance, the cloud stocks that have been riding high on pandemic tailwinds are
looking dangerously frothy at this juncture.
Some of the biggest tech winners over the past quarter now see themselves up well over 100%
over the last few months. Others have more than tripled. And their valuations are now above and
beyond that of their historical averages. While pandemic tailwinds are undoubtedly worth a
premium, I'm in the belief that many momentum chasers looking to the hottest tech stocks today
are in danger of paying up for many years worth of growth right off the bat.
Growth
investors: Valuation always matters
I don't care if you're looking at the best business in the world with the strongest
tailwinds at any given instance. If the price paid is too high, you could stand to lose a
considerable amount of your hard-earned investment dollars.
That's why I'd encourage investors to always consider the valuation of a stock they're
looking to purchase, rather than letting emotions like the fear of missing out force you to buy
at a stock at whatever price Mr. Market asks.
One has to draw a line somewhere, and with some of the hottest stocks out there like Shopify
(TSX:SHOP)
(NYSE:SHOP) , I think there's a chance that the line has been crossed and that investors
looking to buy after the stock's unprecedented bounce could put themselves at risk of feeling
the full force of a correction sparked by a broader correction in tech stocks.
Sure, tech-driven growth is one of the few places that have been
working amid the pandemic. And while I've been pounding the table on shares of Shopify over
the past few months, I'm growing reluctant to recommend the name at these heights.
Shopify has had its fair share of plunges en route to $1,400, not because the company
fundamentals have decayed, but because the stock needed a chance to take a breather.
The tech stocks riding high on pandemic tailwinds are overdue for a mild correction in the
event of a broader growth-to-value rotation. So, if you doubled up on shares of Shopify over
the last few months, can it hurt to take your principal off the table, as you look to play with
the house's money? I'd say it's only prudent, as tech valuations continue swelling at a quicker
rate than most other stocks.
Foolish takeaway
Don't get me wrong. Shopify is a wonderful business -- an e-commerce kingpin that's a force
to be reckoned with. The company is firing on all cylinders under its unstoppable founder
Tobias Lütke, but the valuation has become stretched.
Although I don't see a tech bubble, I do think the hottest tech flyers are at a high risk of
correcting in favour of neglected value stocks.
Fool contributor Joey Frenette has no position in
any of the stocks mentioned. Tom Gardner owns shares of
Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.
"... Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of raising capital and boosting share prices. ..."
"... However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk. ..."
"... Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake at a large profit. ..."
"... However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating, Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak. ..."
"... The story of Newton's losses in the South Sea Bubble has become one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate the motions of the heavenly bodies, but not the madness of people." ..."
"... Yes, this time is different. "Like all bubbles, it ends when the money runs out." – Andy Kessler ..."
I have previously discussed the importance of understanding how "physics" plays a crucial role in the stock market. As Sir Issac
Newton once discovered, "what goes up, must come down."
Andy Kessler, via the Wall Street
Journa l, recently discussed a similar point with respect to the momentum in stock prices. To wit:
"Does this sound familiar: Smart guy owns stock in March at $200, sells it in June at around $600, but then buys it back in
July and August for between $900 and $1,000. By September it's back at $200. Ouch. Tesla this year? Yahoo in 2000? Nope. That
was Sir Isaac Newton getting pulled into the great momentum trade of the South Sea Co., which cratered 300 years ago this month.
He lost the equivalent of more than $3 million today. Newton, whose second law of motion is about the momentum of a body equaling
the force acting on it, didn't know that works for stocks too."
To understand what happened to the South Sea Corporation, you need a bit of history.
The South Sea History
In 1720, in return for a loan of £7 million to finance the war against France, the House of Lords passed the South Sea Bill, which
allowed the South Sea Company a monopoly in trade with South America.
England was already a financial disaster and was struggling to finance its war with France. As debts mounted, England needed a
solution to stay afloat. The scheme was that in exchange for exclusive trading rights, the South Sea Company would underwrite the
English National Debt. At that time, the debt stood at £30 million and carried a 5% interest coupon from the Government. The South
Sea company converted the Government debt into its own shares.
They would collect the interest from the Government and then pass it on to their shareholders.
Interesting Absurdities
At the time, England was in the midst of rampant market speculation. As soon as the South Sea Company concluded its deal with
Parliament, the shares surged to more than 10 times their value. As South Sea Company shares bubbled up to incredible new heights,
numerous other joint-stock companies IPO'd to take advantage of the booming investor demand for speculative investments.
Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of
raising capital and boosting share prices. Here are some examples of these companies' business proposals (History House, 1997):
Supplying the town of Deal with fresh water.
Trading in hair.
Assuring of seamen's wages.
Importing pitch and tar, and other naval stores, from North Britain and America.
Insuring of horses.
Improving the art of making soap.
Improving gardens.
The insuring and increasing children's fortunes.
A wheel for perpetual motion.
Importing walnut-trees from Virginia.
The making of rape-oil.
Paying pensions to widows and others, at a small discount.
Making iron with pit coal.
Transmutation of quicksilver into a malleable fine metal.
For carrying on an undertaking of great advantage; but nobody to know what it is.
A Speculative Mania
However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was
the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk.
Though South Sea Company shares were skyrocketing, the company's profitability was mediocre at best, despite abundant promises
of future growth by company directors.
The eventual selloff in Company shares was exacerbated by a previous plan of lending investors money to buy its shares. This "margin
loan," meant that many shareholders had to sell their shares to cover the plan's first installment of payments.
As South Sea Company and other "bubble " company share prices imploded, speculators who had purchased shares on credit went bankrupt.
The popping of the South Sea Bubble then resulted in a contagion that spread across Europe.
Newton's Folly
Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of
money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake
at a large profit.
However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating,
Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak.
It is noteworthy that once Newton decided to go back into South Sea stock, he moved essentially all his financial assets into
it. In general, Newton was intimately familiar with commodities and finance. As Master of the Mint, his post required him to make
many decisions that depended on market prices and conditions. The story of Newton's losses in the South Sea Bubble has become
one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate
the motions of the heavenly bodies, but not the madness of people."
Throughout financial history, markets have evolved from one speculative "bubble," to bust, to the next with each one being believed
"it was different this time." The slides below are from a presentation I made to a large mutual fund company. What we some common
denominators between all previous bubbles and now.
The table below shows a listing of assets classes that have experienced bubbles throughout history, with the ones related to the
current environment highlighted in yellow. It is not hard to see the similarities between today and the previous market bubbles in
history. Investors are currently chasing "new technology" stocks from Zoom to Tesla, piling into speculative call options, and piling
into leverage. What could possibly go wrong?
Oh, by the way, the slides above are from a 2008 presentation just one month before the Lehman crisis. The point here is that
speculative cycles are always the same.
The Speculative Cycle
Charles Kindleberger suggested that speculative manias typically commence with a "displacement" which excites speculative interest.
The displacement may come from either an entirely new object of investment (IPO) or from increased profitability of established investments.
The speculation is then reinforced by a "positive feedback" loop from rising prices. which ultimately induces "inexperienced investors"
to enter the market. As the positive feedback loop continues, and the "euphoria" increases, retail investors then begin to "leverage"
their risk in the market as "rationality" weakens.
The full cycle is shown below.
During the course of the mania, speculation becomes more diffused and spreads to different asset classes. New companies are floated
to take advantage of the euphoria, and investors leverage their gains using derivatives, stock loans, and leveraged instruments.
As the mania leads to complacency, fraud and manipulation enter the market place. Eventually, the market crashes and speculators
are wiped out. The Government and Regulators react by passing new laws and legislations to ensure the previous events never happen
again.
The Latest Mania
Let's go back to Andy for a moment:
"When bull markets get going, investors come out of the woodwork to pile in. These momentum investors -- I call them momos
-- figure if a stock is going up, it will keep going up. But usually, there is some source of hot air inflating stocks: either
a structural anomaly that fools investors into thinking ever-rising stock prices are real or a source of capital that buys, buys,
buys -- proverbial 'dumb money.' Think of it as a giant fireplace bellows, an accordion-like contraption that pumps in fresh oxygen
to keep flames growing." – Andy Kessler
We have seen these manias repeated throughout history.
In 1929 you could buy stocks with as little as a 5% down payment
The 1960s and '70s had the Nifty Fifty bubble.
In 1987 it was a rising dollar, portfolio insurance, and major investments by the Japanese into U.S. real estate.
In 2000, it was the new paradigm of the internet and the influx of new online trading firms like E*Trade creating liquidity
issues in Nasdaq stocks. Additionally, record numbers of companies were being brought public by Wall Street to fill investor demand.
In 2008, subprime mortgages, low interest rates, and lax lending policies, combined with a litany of derivative products inflated
massive bubbles in debt instruments.
In 2020?
What about today? Look back at the chart of the South Sea Company above. Now, the one below. See any similarities. Yes, that's
Tesla. However, you can't solely blame the Federal Reserve as noted by Andy:
"Most simply blame the Federal Reserve -- especially today, with its zero-interest-rate policy -- for pumping the hot air that
gets the momos going. Fair enough, but that's only part of the story. Long market runs have always allured investors who figure
they're smart to jump in, even if it's late.
Everyone forgets the adage, 'Don't mistake brains for a bull market.'"
As stated, while no two financial manias are ever alike, the end results are always the same. Are there any similarities in today's
market? You decide.
"From SPACs, or special purpose acquisition companies, which are modern-day blind pools that often don't end well. Today's
momos also chase stock splits, which mean nothing for a company's actual value. Same for a new listing in indexes like the S&P
500. Isaac Newton could explain the math." – Andy Kessler
You get the idea. But one of the tell-tale indications is the speculative chase of "zombie" companies which are only still alive
primarily due to the Federal Reserve's interventions.
Fixing The Cause Of The Crash
Historically, all market crashes have been the result of things unrelated to valuation levels. Issues such as liquidity, government
actions, monetary policy mistakes, recessions, or inflationary spikes are the culprits that trigger the "reversion in sentiment."
Importantly, the "bubbles" and "busts" are never the same. I previously quoted Bob Bronson on this point:
"It can be most reasonably assumed that markets are efficient enough that every bubble is significantly different than the
previous one. A new bubble will always be different from the previous one(s). Such is since investors will only bid prices to
extreme overvaluation levels if they are sure it is not repeating what led to the previous bubbles. Comparing the current extreme
overvaluation to the dotcom is intellectually silly.
I would argue that when comparisons to previous bubbles become most popular, it's a reliable timing marker of the top in a
current bubble. As an analogy, no matter how thoroughly a fatal car crash is studied, there will still be other fatal car crashes.
Such is true even if we avoid all previous accident-causing mistakes."
Comparing the current market to any previous period in the market is rather pointless. The current market is not like 1995, 1999,
or 2007? Valuations, economics, drivers, etc. are all different from cycle to the next.
Most importantly, however, the financial markets always adapt to the cause of the previous "fatal crash." Unfortunately, that
adaptation won't prevent the next one.
Yes, this time is different. "Like all bubbles, it ends when the money runs out." – Andy Kessler
WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen on Friday said higher long-term
Treasury debt yields were a sign market participants were anticipating a stronger recovery, not
of increased inflation concerns.
"I don't see that the markets are expecting inflation to rise above the 2% inflation
objective that the Fed has as an average inflation rate over the longer run," Yellen said in a
PBS Newshour interview.
She added the United States needs faster job growth than seen during February, but can reach
full employment by next year with President Joe Biden's $1.9 trillion stimulus plan in
place.
Bing nips at Google's heels again. Here's why it doesn't matter.
Tim Beyers
(TMFMileHigh)
Updated: Apr 6, 2017 at 11:29AM
Published: Sep 21, 2010 at 12:00AM
Author Bio
According to the
latest data from comScore,
Google
's
(Nasdaq:
GOOG)
share of the search market fell four-tenths of a percentage point in August just as Bing partners
Microsoft
(Nasdaq:
MSFT)
and
Yahoo!
(Nasdaq:
YHOO)
gained share. Thus, the headline: Google is shrinking.
Except that it isn't
true. Let's take a closer look at Google's average search market share for the first and second quarters of 2010, and then
compare the findings with the average revenue growth of the top three search contenders:
My eyes were caught by a headline in a business paper yesterday. It said, "Steady rise in
shady deals, price rigging"...
But is greed really good?
I still remember a time in late 2008 when a lot of retail investors I met, including some from
within my family, suggested me that the stock market was a casino only reserved for the lucky
and wealthy few.
Ironically, these very people were playing this casino till a few months ago (around January
2008) when the markets were acting like a drug addict on a high.
The only different was that instead of slot machines, these people were betting on rising
stock prices.
Since the game was there to be won, or so these people thought, they played and played this
casino till the cops came, and the house came crashing down.
History is proof that such people, who play the casino called stock markets, ultimately lose
it all. Because history is also proof that in the casino business, it's the house (the casino)
that always wins and not the gamblers.
The case with gamblers is that while they win for some days, one fine day they lose it all
to the house.
This is exactly what happens to people who treat the stock market as a casino and gamble
with the mindless hope of winning it all.
Let me remind them some lessons from the history of stock markets.
Once upon a time
You see, the original design of the stock market was purely capitalist in intention.
The stock market was created to provide a means for business people – entrepreneurs,
inventors, developers – to obtain needed investment capital, to start or to expand their
businesses.
So stocks were issued, bankers and other investors bought the stock, and the businesses made
use of the invested money. But once a business started flourishing and was producing a profit,
it returned the money back to the stock holders so that it could be used by other
enterprises.
Over the years however, this last part of the process was completely forgotten.
As years passed, the brokers quickly realized that they could make lots of easy money in
trading shares back and forth. They became middlemen, in charge of the flow of capital, earning
their commission on each and every transaction.
As we see now, the game is no longer about capital and businesses, and has become one where
everything is centered on the flow of money from one investor to another, instead of one
business to another.
And in this flow, while investors get doomed time and again, brokers always make money!
This is exactly like it happens in a casino. One gambler gets rich at the expense of others,
but ultimately loses it all.
But whatever happens, the broker (the casino) always wins.
Stock market = Casino?
"So there's no difference between the stock market and casino?" you may start to wonder.
Well, not much!
One difference is that slot machines are replaced by coloured and confusing graphs, and the
loud ring of the jackpot alarm bells is replaced by scary headlines in business channels and
newspapers.
But stock brokers earn their commissions from the flow of traffic, just as in the
casinos.
Also, like in a casino, gamblers bring in lots of money and leave a portion of it behind
(most often everything they came with), thinking that they had a really good time.
So, the money goes into the stock market casino, but one question never seems to get asked
or answered: Where does all that money go?
Of course these are paper losses, but a significant part of these are real gains for the
brokers, who continue to make their bucks while everyone and his mother is selling stocks like
crazy.
Coming back to the question whether the stock market resembles a casino, I've realized over
the years that the question is deeper than it appears.
When I was asked this question a few years back, I used to reply, "No! Casinos are for
gamblers and the stock market is for investors."
However, what I've realized over these years is that there indeed are some similarities as
well as differences (as we just discussed above) between the two.
The closest similarity between the two lies in the mindset of the players/gamblers.
Gamblers go to the casino hoping for the big win. We all hear about the person who went in
poor and left the casino with millions. This seems an easy way to get rich.
What we fail to understand is the enormous odds against such a huge win. But we remain
hopeful and optimistic, and so casinos thrive.
"I would be the next millionaire!" is what all gamblers think till the time they come out of
the casino.
Unfortunately, the stock market has become like a casino for too many people, as the data
from SEBI also suggests.
"Haven't you heard about the guy who bought an unknown stock on a tip from his brother's
friend's colleague and watched it turn into the next Infosys ," asked a
friend. "I wish I was that guy!"
With such a thought, which most people in the stock market have, they buy a stock. Then they
check the ticker every 10 minutes for the next month, just like the gambler watching the wheels
turn on a slot machine, waiting for that "Yes, I'm the millionaire!" moment.
If it doesn't pay off, they speculate on another stock, just like a gambler goes to another
slot machine to try his luck.
However, the market does not operate exactly like a casino. It's the gamblers who think it
does.
In a casino, the longer you play, the more you will lose (remember, the house always
wins!).
However, in the stock market, the longer you play, the more likely you are to win.
Of course you will hear stories of people who made a quick killing in the stock market, just
as there have been people who left the casino with millions, but always remember this for a
fact – these are exceptions, not the rule.
The rule is that you can create wealth from the stock market only by buying quality
businesses and holding them over the long run.
So my answer to the question – Is stock market a casino? – isn't "No! Casinos
are for gamblers and the stock market is for investors."
The answer is – "You must know the difference and not try to treat stock market like a
casino."
If you treat the stock market like a casino, you will be a loser in the long run.
Though you might not know it from the enthusiasm of the gamblers, the current Buffett
indicator
reveals an overwhelmingly inflated stock market . Today's market cap sits at a staggering
185.4% over GDP. Even if total assets of Federal Reserve banks are included, the indicator is
still 137% over GDP. Based on these metrics, the stock market is estimated to return
-2.5% per year (on average) for the next eight years . That number doesn't even
include inflation.
Take a long, hard look at your retirement savings. Check your allocations to high-risk,
overvalued assets.
The first Fed stimulus was issued in March 2020 to prop up the economy in the midst of the pandemic. A second stimulus was issued
in January 2021.
Both seem to have set the stage to turn the markets into an overvalued "casino,"
and
here's why
What exactly did the stimulus stimulate?
The first pair of Fed "free money" stimulus packages seemed to, at least partially, do their job from a consumer standpoint.
Consumers spent money in record amounts on both
durable
and
nondurable
goods
according to official sources.
Durable goods spending spiked by about 18% to an adjusted rate of
$1.86 trillion
annually,
as you can see on the chart below:
Nondurable goods spending (things like energy and food) also increased by roughly 6% to an adjusted rate of
$3.21
trillion
annually.
So why all the concern about the high-risk market "casino" if the stimulus checks went toward buying stuff?
Strap in, because this is about to take a weird turn in the
wrong
direction
Less "pent up" consumer spending
According to
Wolf
Richter
, it seems like one reason that consumers spent like they did for the last year
is
they
deferred their mortgages:
Millions of homeowners didn't have to make their mortgage payments because they'd entered their mortgages into forbearance
programs.
But "2.6 million mortgages are still in forbearance,"
according to the
article
.
Eviction bans and student loans
automatically
going into forbearance are only
some
of
the reasons consumers went on the spending spree we saw above.
The problem is, either these mortgages, rent agreements, and loans eventually have to be repaid by the consumer, or the lenders
might have to seek other remedies.
To complicate matters even more, Wolf
thinks
any
demand for consumers to spend more could evaporate completely:
What will come when this crisis settles down, and when this free money fades, is a scenario where consumers have bought all
the goods they wanted to buy. That's the opposite of pent-up demand.
If the potential implications of this weren't bad enough, it still gets more interesting.
Even
more
stimulus?
At this moment, Congress is
thinking
about
raining even more "free cash" down on Americans.
If Wolf's prediction is right, and pent up consumer demand is gone, where will the money go?
I call it, or something like it,
the
"
boredom
markets
hypothesis
":
People got bored in their coronavirus-related lockdowns, and they couldn't bet on sports because sports were canceled, so they
turned to
betting on stocks as a form of entertainment
, not investment
or financial analysis.
The stock market is a casino that happens to still be open
.
[emphasis added]
"Robinhood's (RBNHD) trading in equities and options spiked to a level
more than double
its
previous peaks,"
thanks
to
these gamblers.
You may think calling the stock market "casino-like" is an exaggeration. Massachusetts financial regulators disagree. When they
filed a complaint against Robinhood last year, they accused the app of
encouraging
frequent trading
, rewarding users with carefree animations like confetti (whether the trade is profitable or not).
I have to say, I sometimes play computer games on my phone, and my impression is that the thing that distinguishes Robinhood
from other smartphone games is not so much the in-app animations as it is the
money
.
Like, on Robinhood, you play a game on your phone, and sometimes you win money! Other times you lose money!
Whether or not it's because of the confetti, we do know that Robinhood's $0-per-trade business model forced other brokerages
including Fidelity, E*trade, TD Ameritrade, even Charles Schwab to match their free-trading model.
This competition put even more money on the table.
Retail investors going "all in" on their casino bets?
In addition to Robinhood's spiking trade volume, "Fidelity's retail accounts totaled 26M in 2020, up 17% from a year earlier,
while daily trading volume doubled,"
according
to
an article on Seeking Alpha. "Brokerages were also bolstered as more people stayed at home due to COVID-19."
We've been wondering why currently-astronomical stock prices keep rising, inflating the
already
historic "everything bubble"
even more. It seems like the Fed isn't
just
supporting
stock prices through "quantitative easing," but
also
by handing out chips for the
world's biggest casino.
We can expect more stock market chaos. Maybe from "short squeezes" like the WallStreetBets fiasco in the last week of January. Or
we might see even sillier things like gambling on a stock because
it
has a cool name
The individual investors that powered GameStop Corp.'s meteoric rise have a new target: Rocket Cos., the parent company of
Quicken Loans. Trading of Rocket shares was halted several times this week because of its volatility. Individual investors on
WallStreetBets, the Reddit community that gave birth to GameStop's rise, have been encouraging each other to buy the stock in
recent days and sharing evidence of their own massive gains. They have relished in the company's name -- Rocket -- an apt one for
their goal of higher prices. "The $RKT is fueled and ready for liftoff," one user wrote early this week.
Matt Levine's analysis
: "An important feature of modern stock markets, unfortunately, is that companies sometimes go up not
for any fundamental reason but because their names or tickers sound like something good. It makes as much sense as everything
else, which is to say none at all."
The financially savvy know that, in the typical Vegas casino, it's a well-known fact that the odds are stacked in favor of the
house. Some say, "The house always wins."
Don't gamble your retirement savings
Though you might not know it from the enthusiasm of the gamblers, the current Buffett
indicator
reveals
an
overwhelmingly inflated stock market
. Today's market cap sits at a staggering
185.4% over GDP. Even if total assets of Federal Reserve banks are included, the indicator is
still
137%
over GDP. Based on these metrics,
the
stock market is estimated to return -2.5% per year
(on average) for the
next
eight years
. That number doesn't even include inflation.
And of course an average number like that smooths out the huge losses and the marginal wins. An average number like that is how
the house looks at their earnings at sunrise, when all the gamblers have gone back to their hotels. A lucky few walk with a
little spring in their steps, a little extra cash in their pockets. An unlucky few wait outside pawn shops on the Strip, wallets
and bank accounts empty, hoping to sell anything for a few more rolls of the dice. Everyone else, they walk away a little bit
poorer, but still hopeful. Still looking forward to tomorrow's chance at a big win
Fortunately, there are other choices available to you.
Take a long, hard look at your retirement savings. Check your allocations to high-risk, overvalued assets...
"... In the Risk Alert below, the itemization of various forms of abuses, such as the many ways private equity firms parcel out interests in the businesses they buy among various funds and insiders to their, as opposed to investors' benefit, alone should give pause. And the lengthy discussion of these conflicts does suggest the SEC has learned something over the years. Experts who dealt with the agency in its early years of examining private equity firms found the examiners allergic to considering, much the less pursuing, complex abuses. ..."
"... Undermining legislative intent of new supervisory authority the SEC never embraced its new responsibilities to ride herd on private equity and hedge funds. ..."
"... The agency is operating in such a cozy manner with private equity firms that as one investor described it: It's like FBI sitting down with the Mafia to tell them each year, "Don't cross these lines because that's what we are focusing on." ..."
"... Advisers charged private fund clients for expenses that were not permitted by the relevant fund operating agreements, such as adviser-related expenses like salaries of adviser personnel, compliance, regulatory filings, and office expenses, thereby causing investors to overpay expenses ..."
"... Current SEC chairman Jay Clayton came from Sullivan & Cromwell, bringing with him Steven Peikin as co-head of enforcement. And the Clayton SEC looks to have accomplished the impressive task of being even weaker on enforcement than Mary Jo White. ..."
"... On the same side though, fraud is a criminal offence, and it's SEC's duty to prosecute. And I believe that a lot of what PE engage in would happily fall under fraud, if SEC really wanted. ..."
"... Crimogenic: Producing or tending to produce crime or criminality. An additional factor is that, in the main, the criminals do not take their money and leave the gaming tables but pour it back in and the crime metastasizes. AKA, Kleptocracy. ..."
"... You might add that the threat of consequences for these crimes makes the criminals extremely motivated to elect officials who will not prosecute them (e.g. Obama). They're not running for office, they're avoiding incarceration. ..."
"... Andrew Levitt, for instance, complained bitterly that Joe Lieberman would regularly threaten to cut the SEC's budget for allegedly being too aggressive about enforcement. Lieberman was the Senator from Hedgistan. ..."
"... More banana republic level grift. What happens when investors figure out they can't believe anything they are told? ..."
"... Can we come up with a better descriptor for "private equity"? I suggest "billionaire looters". ..."
"... Where is the SEC when Bain Capital (Romney) wipes out Toys-R-Us and Dianne Feinstein's husband Richard Blum wipes out Payless Shoes. They gain control of the companies, pile on massive debt and take the proceeds of the loan, and they know the company cannot service the loan and a BK is around the corner. ..."
"... Thousands lose their jobs. And this is legal? And we also lost Glass-Steagal and legalized stock buy-backs. The Elite are screwing the people. It's Socialism for the Rich, the Politicians and Govt Employees and Feudalism for the rest of us. ..."
We've embedded an SEC Risk Alert on private equity abuses at the end of this post. 1 What is remarkable about this
document is that it contains a far longer and more detailed list of private abuses than the SEC flagged in its initial round of examinations
of private equity firms in 2014 and 2015. Those examinations occurred in parallel with groundbreaking exposes by Gretchen Morgenson
at the New York Times and Mark Maremont in the Wall Street Journal.
At least some of the SEC enforcement actions in that era look
to have been triggered by the press effectively getting ahead of the SEC. And the SEC even admitted the misconduct was more common
at the most prominent firms.
Yet despite front-page articles on private equity abuses, the SEC engaged in wet noodle lashings. Its pattern was to file only
one major enforcement action over a particular abuse. Even then, the SEC went to some lengths to spread the filings out among the
biggest firms. That meant it was pointedly engaging in selective enforcement, punishing only "poster child" examples and letting
other firms who'd engaged in precisely the same abuses get off scot free.
The very fact of this Risk Alert is an admission of failure by the SEC. It indicates that the misconduct it highlighted five years
ago continues and if anything is even more pervasive than in the 2014-2015 era. It also confirms that its oft-stated premise then,
that the abuses it found then had somehow been made by firms with integrity that would of course clean up their acts, and that now-better-informed
investors would also be more vigilant and would crack down on misconduct, was laughably false.
In particular, the second section of the Risk Alert, on Fees and Expenses (starting on page 4) describes how fund managers are
charging inflated or unwarranted fees and expenses. In any other line of work, this would be called theft. Yet all the SEC is willing
to do is publish a Risk Alert, rather than impose fines as well as require disgorgements?
The SEC's Abject Failure
In the Risk Alert below, the itemization of various forms of abuses, such as the many ways private equity firms parcel out interests
in the businesses they buy among various funds and insiders to their, as opposed to investors' benefit, alone should give pause.
And the lengthy discussion of these conflicts does suggest the SEC has learned something over the years. Experts who dealt with the
agency in its early years of examining private equity firms found the examiners allergic to considering, much the less pursuing,
complex abuses.
Undermining legislative intent of new supervisory authority the SEC never embraced its new responsibilities to ride herd on
private equity and hedge funds.
The SEC has long maintained a division between the retail investors and so-called "accredited investors" who by virtue of having
higher net worths and investment portfolios, are treated by the agency as able to afford to lose more money. The justification is
that richer means more sophisticated. But as anyone who is a manager for a top sports professional or entertainer, that is often
not the case. And as we've seen, that goes double for public pension funds.
Starting with the era of Clinton appointee Arthur Levitt, the agency has taken the view that it is in the business of defending
presumed-to-be-hapless retail investors and has left "accredited investor" and most of all, institutional investors, on their own.
This was a policy decision by the agency when deregulation was venerated; there was no statutory basis for this change in priorities.
Congress tasked the SEC with supervising the fund management activities of private equity funds with over $150 million in assets
under management. All of their investors are accredited investors. In other words, Congress mandated the SEC to make sure these firms
complied with relevant laws as well as making adequate disclosures of what they were going to do with the money entrusted to them.
Saying one thing in the investor contracts and doing another is a vastly worse breach than misrepresentations in marketing materials,
yet the SEC acted as if slap-on-the-wrist-level enforcement was adequate.
We made fun when thirteen prominent public pension fund trustees wrote the SEC asking for them to force greater transparency of
private equity fees and costs. The agency's position effectively was "You are grownups. No one is holding a gun to your head to make
these investments. If you don't like the terms, walk away." They might have done better if they could have positioned their demand
as consistent with the new Dodd Frank oversight requirements.
Actively covering up for bad conduct . In 2014, the SEC started working at giving malfeasance a free pass. Specifically, the SEC
told private equity firms that they could continue their abuses if they 'fessed up in their annual disclosure filings, the so-called
Form ADV. The term of art is "enhanced disclosure". Since when are contracts like confession, that if you admit to a breach, all
is forgiven? Only in the topsy-turvy world of SEC enforcement.
The agency is operating in such a cozy manner with private equity firms that as one investor described it: It's like FBI sitting down with the Mafia to tell them each year, "Don't cross these lines because that's what we are focusing
on."
Specifically, as we indicated, the SEC was giving advanced warning of the issues it would focus on in its upcoming exams, in order
to give investment managers the time to get their stories together and purge files. And rather than view its periodic exams as being
designed to make sure private equity firms comply with the law and their representations, the agency views them as "cooperative"
exercises! Misconduct is assumed to be the result of misunderstanding and error, and not design.
It's pretty hard to see conduct like this, from the SEC's Risk Alert, as being an accident:
Advisers charged private fund clients for expenses that were not permitted by the relevant fund operating agreements, such
as adviser-related expenses like salaries of adviser personnel, compliance, regulatory filings, and office expenses, thereby causing
investors to overpay expenses
The staff observed private fund advisers that did not value client assets in accordance with their valuation processes or in
accordance with disclosures to clients (such as that the assets would be valued in accordance with GAAP). In some cases, the staff
observed that this failure to value a private fund's holdings in accordance with the disclosed valuation process led to overcharging
management fees and carried interest because such fees were based on inappropriately overvalued holdings .
Advisers failed to apply or calculate management fee offsets in accordance with disclosures and therefore caused investors
to overpay management fees.
We're highlighting this skimming simply because it is easier for laypeople to understand than some of the other types of cheating
the SEC described. Even so, industry insiders and investors complained that the description of the misconduct in this Risk Alert
was too general to give them enough of a roadmap to look for it at particular funds.
Ignoring how investors continue to be fleeced . The SEC's list includes every abuse it sanctioned or mentioned in the 2014 to
2015 period, including undisclosed termination of monitoring fees, failure to disclose that investors were paying for "senior advisers/operating
partners," fraudulent charges, overcharging for services provided by affiliated companies, plus lots of types of bad-faith conduct
on fund restructurings and allocations of fees and expenses on transactions allocated across funds.
The SEC assumed institutional investors would insist on better conduct once they were informed that they'd been had. In reality,
not only did private equity investors fail to demand better, they accepted new fund agreements that described the sort of objectionable
behavior they'd been engaging in. Remember, the big requirement in SEC land is disclosure. So if a fund manager says he might do
Bad Things and then proceeds accordingly, the investor can't complain about not having been warned.
Moreover, the SEC's very long list of bad acts says the industry is continuing to misbehave even after it has defined deviancy
down via more permissive limited partnership agreements!
Why This Risk Alert Now?
Keep in mind what a Risk Alert is and isn't. The best way to conceptualize it is as a press release from the SEC's Office of Compliance
Inspections and Examinations. It does not have any legal or regulatory force. Risk Alerts are not even considered to be SEC official
views. They are strictly the product of OCIE staff.
On the first page of this Risk Alert, the OCIE blandly states that:
This Risk Alert is intended to assist private fund advisers in reviewing and enhancing their compliance programs, and also
to provide investors with information concerning private fund adviser deficiencies.
Cutely, footnotes point out that not everyone examined got a deficiency letter (!!!), that the SEC has taken enforcement actions
on "many" of the abuses described in the Risk Alert, yet "OCIE continues to observe some of these practices during examinations."
Several of our contacts who met in person with the SEC to discuss private equity grifting back in 2014-2015 pressed the agency
to issue a Risk Alert as a way of underscoring the seriousness of the issues it was unearthing. The staffers demurred then.
In fairness, the SEC may have regarded a Risk Alert as having the potential to undermine its not-completed enforcement actions.
But why not publish one afterwards, particularly since the intent then had clearly been to single out prominent examples of particular
types of misconduct, rather than tackle it systematically? 2
So why is the OCIE stepping out a bit now? The most likely reason is as an effort to compensate for the lack of enforcement actions.
Recall that all the OCIE can do is refer a case to the Enforcement Division; it's their call as to whether or not to take it up.
The SEC looks to have institutionalized the practice of borrowing lawyers from prominent firms. Mary Jo White of Debevoise brought
Andrew Ceresney with her from Debeviose to be her head of enforcement. Both returned to Debevoise.
Current SEC chairman Jay Clayton came from Sullivan & Cromwell, bringing with him Steven Peikin as co-head of enforcement. And
the Clayton SEC looks to have accomplished the impressive task of being even weaker on enforcement than Mary Jo White. Clayton made
clear his focus was on "mom and pop" investors, meaning he chose to overlook much more consequential abuses by private equity firms
and hedgies. The New York Times determined that the average amount of SEC fines against corporate perps fell markedly in 2018 compared
to the final 20 months of the Obama Administration. The SEC since then levied $1 billion fine against the Woodbridge Group of Companies
and its one-time owner for running a Ponzi scheme that fleeced over 8,400, so that would bring the average penalty up a bit. But
it still confirms that Clayton is concerned about small fry, and not deeper but just as pickable pockets.
David Sirota argues that the OCIE
was out to embarrass Clayton and sabotage what Sirota depicted as an SEC initiative to let retail investors invest in private equity.
Sirota appears to have missed that that horse has left the barn and is in the next county, and the SEC had squat to do with it.
The overwhelming majority of retail funds is not in discretionary accounts but in retirement accounts, overwhelmingly 401(k)s.
And it is the Department of Labor, which regulates ERISA plans, and not the SEC, that decides what those go and no go zones are.
The DoL has already green-lighted allowing large swathes of 401(k) funds to include private equity holdings.
From a post earlier this month :
Until now, regulations have kept private equity out of the retail market by prohibiting managers from accepting capital from
individuals who lack significant net worth.
Moreover, even though Sirota pointed out that Clayton had spoken out in favor of allowing retail investors more access to private
equity investments, the proposed regulation on the definition of accredited investors in fact not only does not lower income or net
worth requirements (save for allowing spouses to combine their holdings) it in fact solicited comments on the idea of raising the
limits.
From a K&L Gates write up :
Previously, the Concept Release requested comment on whether the SEC should revise the current individual income ($200,000)
and net worth ($1,000,000) thresholds. In the Proposing Release, the SEC further considered these thresholds, noting that the
figures have not been adjusted since 1982. The SEC concluded that it does not believe modifications to the thresholds are necessary
at this time, but it has requested comments on whether the final should instead make a one-time increase to the thresholds in
the account for inflation, or whether the final rule should reflect a figure that is indexed to inflation on a going-forward basis.
It is not clear how many people would be picked up by the proposed change, which was being fleshed out, that of letting some presumed
sophisticated but not rich individuals, like junior hedge fund professionals and holders of securities licenses, be treated as accredited
investors. In other words, despite Clayton's talk about wanting ordinary investors to have more access to private equity funds, the
agency's proposed rule change falls short of that.
Moreover, if the OCIE staff had wanted to undermine even the limited liberalization of the definition of accredited investor so
as to stymie more private equity investment, the time to do so would have been immediately before or while the comments period was
open. It ended March 16 .
So again, why now? One possibility is that the timing is purely a coincidence. For instance, the SEC staffers might have been
waiting until Covid-19 news overload died down a bit so their work might get a hearing (and Covid-19 remote work complications may
also have delayed its release).
The second possibility is that OCIE is indeed very frustrated with the enforcement chief Peikin's inaction on private equity.
The fact that Peikin's boss and protector Clayton has made himself a lame duck meant a salvo against Peikin was now a much lower
risk. If any readers have better insight into the internal workings of the SEC these days, please pipe up.
______
1 Formally, as you can see, this Risk Alert addresses both private equity and hedge fund misconduct, but on reading
the details, the citing of both types of funds reflects the degree to which hedge funds have been engaging in the buying and selling
of stakes in private companies. For instance, Chatham Asset Management, which has become notorious through its ownership of American
Media, which in turn owns the National Enquirer, calls itself a hedge fund. Moreover, when the SEC started examining both private
equity and hedge funds under new authority granted by Dodd Frank, it described the sort of misconduct described in this Risk Alert
as coming out of exams of private equity firms, and its limited round of enforcement actions then were against brand name private
equity firms like KKR, Blackstone, Apollo, and TPG. Thus for convenience as well as historical reasons, we refer only to private
equity firms as perps.
2 Media stories at the time, including some of our posts, provided substantial evidence that particular abuses, such
as undisclosed termination of monitoring fees and failure to disclose that "senior advisers" presented as general partner "team members"
were in fact consultants being separately billed to fund investments, were common practices. Yet the SEC chose to lodge only marquee
enforcement actions against one prominent firm for each abuse, as if token enforcement would serve as an adequate deterrent. The
message was the reverse, that the overwhelming majority of the abuses were able to keep their ill-gotten gains and not even face
public embarrassment.
TBH, in the view of Calpers ignoring its advisors, I do have a little understanding of the SEC's point "you're grown ups" (the
worse problem is that the advisors who leach themselves to the various accredited investors are often not worth the money.
On the same side though, fraud is a criminal offence, and it's SEC's duty to prosecute. And I believe that a lot of what PE
engage in would happily fall under fraud, if SEC really wanted.
Yes, the SEC conveniently claims a conflicted authority – 1. to regulate compliance but without an "enforcement authority",
and 2. report egregious behavior to their "enforcement authority". So the SEC is less than a permissive nanny. Sort of like "access"
to enforcement authority. Sounds like health care to me.
No, this is false. The SEC has an examination division and an enforcement division. The SEC can and does take enforcement actions
that result in fines and disgorgements, see the $1 billion fine mentioned in the post. So the exam division can recommend enforcement
to the enforcement division. That does not mean it will get done. Some enforcement actions originate from within the enforcement
division, like insider trading cases, and the SEC long has had a tendency to prioritize insider trading cases.
The SEC cannot prosecute. It has to refer cases that it thinks are criminal to the DoJ and try to get them to saddle up.
Crimogenic: Producing or tending to produce crime or criminality. An additional factor is that, in the main, the criminals
do not take their money and leave the gaming tables but pour it back in and the crime metastasizes.
AKA, Kleptocracy.
Thus in 2008 and thereafter the criminal damage required 2-3 trillion, now 7-10 trillion.
Any economic expert who does not recognize crime as the number one problem in the criminogenic US economy I disregard. Why
read all that analysis when, at the end of the run, it all just boils down to bailing out the criminals and trying to reset the
criminogenic system?
You might add that the threat of consequences for these crimes makes the criminals extremely motivated to elect officials who
will not prosecute them (e.g. Obama). They're not running for office, they're avoiding incarceration.
The SEC has been captured for years now. It was not that long ago that SEC Examination chief Andrew Bowden made a grovelling
speech to these players and even asked them to give his son a job which was so wrong-
But there is no point in reforming the SEC as it was the politicians, at the beck and call of these players, that de-fanged
the SEC – and it was a bipartisan effort! So it becomes a chicken-or-the-egg problem in the matter of reform. Who do you reform
first?
Can't leave this comment without mentioning something about a private equity company. One of the two major internal airlines
in Oz went broke due to the virus and a private equity buyer has been found to buy it. A union rep said that they will be good
for jobs and that they are a good company. Their name? Bain Capital!
We broke the story about Andrew Bowden! Give credit where credit is due!!!! Even though Taibbi points to us in his first line,
linking to Rolling Stone says to those who don't bother clicking through that it was their story.
Of course I remember that story. I was going to mention it but thought to let people see it in virtually the opening line of
that story where he gives you credit. More of a jolt of recognition seeing it rather than being told about it first.
Of the three branches of government which ones are not captured by big business? If two out of three were to captured then
does it matter what the third does?
Is the executive working for the common good or for the interests of big business?
Is the legislature working for the common good or for the interests of big business?
Is the judiciary working for the common good or for the interests of big business?
In my opinion too much power has been centralised, too much of the productivity gains of the past 40 years have been monetised
and therefore made possible to hoard and centralise. SEC should (in my opinion) try to enforce more but without more support then I do not believe (it is my opinion, nothing more
and nothing less) that they can accomplish much.
The SEC is a mysterious agency which (?) must fall under the jurisdiction of the Treasury because it is a monetary regulatory
agency in the business of regulating securities and exchanges. But it has no authority to do much of anything. The Treasury itself
falls under the executive administration but as we have recently seen, Mnuchin himself managed to get a nice skim for his banking
pals from the money Congress legislated.
That's because Congress doesn't know how to effectuate a damn thing – they legislate
stuff that morphs before our very eyes and goes to the grifters without a hitch. So why don't we demand that consumer protection
be made into hard law with no wiggle room; that since investing is complex in this world of embedded funds and glossy prospectuses,
we the consumer should not have to wade through all the nonsense to make decisions – that everything be on the table. And if PE
can't manage to do that and still steal its billions then PE should be declared to be flat-out illegal.
Please stop spreading disinformation. This is the second time on this post. The SEC has nada to do with the Treasury. It is an independent regulatory agency. It however is the only financial regulator that does not keep what it kills (its own fees and fines) but is instead subject
to Congressional appropriations.
Andrew Levitt, for instance, complained bitterly that Joe Lieberman would regularly threaten
to cut the SEC's budget for allegedly being too aggressive about enforcement. Lieberman was the Senator from Hedgistan.
It should be noted that out here in the countryside of northern Michigan that embezzlement (a winter sport here while the men
are out ice fishing), theft and fraud are still considered punishable felonies. Perhaps that is simply a quaint holdover from
a bygone time. Dudley set the tone for the C of C with his Green Book on bank deregulation. One of the subsequent heads of C of
C was reported as seeing his position as "being the spiritual resource for banks". If bank regulation is treated in a farcical
fashion why should be the SEC be any different?
I was shocked to just now learn that ERISA/the Dept of Labor is in regulatory control of allowing pension funds to buy PE fund
of funds and "balanced PE funds". What VERBIAGE. Are "PE Fund of Balanced Funds" an actual category? And what distinguishes them
from good old straightforward Index Funds? And also too – what is happening before our very glazed-over eyes is that PE is high
grading not just the stock market but the US Treasury itself. Ordinary investors should be buying US Treasuries directly and retirement
funds should too. It will be a big bite but if it knocks PE out of business it would be worth it. PE is in the business of cooking
its books, ravaging struggling corporations, and boldly privatizing the goddamned Treasury. WTF?
What about the wanton destruction of the purchased companies? If this solely about the harm done to the poor investors?
If so, that is seriously wrong.
If, you know, the neoliberal "because markets" is the ruling paradigm then of course there is no harm done. The questions then
become: is "because markets" a sensible paradigm? What is it a sensible paradigm of? Is "because markets" even sensible for the
long term?
an aside: farewell, Olympus camera. A sad day. Farewell, OM-1 and OM-2. Film photography is really not replicated by digital
photography but the larger market has gone to digital. Speed and cost vs quality. Because markets. Now the vulture swoop.
Where is the SEC when Bain Capital (Romney) wipes out Toys-R-Us and Dianne Feinstein's husband Richard Blum wipes out Payless
Shoes. They gain control of the companies, pile on massive debt and take the proceeds of the loan, and they know the company cannot
service the loan and a BK is around the corner.
Thousands lose their jobs. And this is legal? And we also lost Glass-Steagal and
legalized stock buy-backs. The Elite are screwing the people. It's Socialism for the Rich, the Politicians and Govt Employees and
Feudalism for the rest of us.
"... Kane, who coined the term "zombie bank" and who famously raised early alarms about American savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them. ..."
"... We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues, state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing the financial system. ..."
"... In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk, in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion. Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge piece of any upside if they rescue two failing institutions? ..."
Running in the background, though, was a new, darker theme: That the post-2008 reforms had gone too far in restricting policymakers'
discretion in crises. The trio most responsible for making the post-Lehman bailout revolution -- Ben Bernanke, Timothy Geithner,
and Henry Paulson --
expressed their
misgivings in a joint op-ed :
But in its post-crisis reforms, Congress also took away some of the most powerful tools used by the FDIC, the Fed and the Treasury
the FDIC can no longer issue blanket guarantees of bank debt as it did in the crisis, the Fed's emergency lending powers have
been constrained, and the Treasury would not be able to repeat its guarantee of the money market funds.
These powers were critical in stopping the 2008 panic The paradox of any financial crisis is that the policies necessary to
stop it are always politically unpopular. But if that unpopularity delays or prevents a strong response, the costs to the economy
become greater.
We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next
fire from becoming a conflagration.
Sotto voce fears of this sort go back to the earliest reform discussions. But the question surfaced dramatically in Timothy Geithner's
2016 Per Jacobsson Lecture, " Are We Safer? The Case for Strengthening
the Bagehot Arsenal ." More recently, the Group of Thirty
has advanced similar suggestions -- not too surprisingly, since Geithner was co-project manager of the report, along with Guillermo
Ortiz, the former Governor of the Mexican Central Bank, who introduced the former Treasury Secretary at the Per Jacobson lecture.
Aside from the financial collapse itself, probably nothing has so shaken public confidence in democratic institutions as the wave
of bailouts in the aftermath of the collapse. The redistribution of wealth and opportunity that the bailouts wrought surely helped
fuel the populist surges that have swept over Europe and the United States in the last decade. The spectacle of policymakers rubber
stamping literally unlimited sums for financial institutions while preaching the importance of austerity for everyone else has been
unbearable to millions of people.
Especially in money-driven political systems, affording policymakers unlimited discretion also plainly courts serious risks. Put
simply, too big to fail banks enjoy a uniquely splendid situation of "heads I win, tails you lose" when they take risks. Scholars
whose research INET has supported, notably
Edward Kane , have shown how the certainty of government bailouts advantages large financial institutions, directly affecting
prices of their bonds and stocks.
For these reasons INET convened a panel at a G20 preparatory meeting in Berlin on "
Moral Hazard Issues in Extended Financial Safety Nets ."
The Power Point presentations of the three panelists are presented in the order in which they gave them, since the latter ones sometimes
comment on Edward Kane
's analysis of the European banks. Kane, who coined the term "zombie bank" and who famously raised early alarms about American
savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them.
Peter Bofinger
, Professor of International and Monetary Economics at the University of Würzburg and an outgoing member of the German Economic Council,
followed with a discussion of how the system has changed since 2008.
Helene Schuberth
, Head of the Foreign Research Division of the Austrian National Bank, analyzed changes in the global financial governance system
since the collapse.
The panel took place as public discussion of a proposed merger between two giant German banks, the Deutsche Bank and Commerzbank,
reached fever pitch. The panelists explored issues directly relevant to such fusions, without necessarily agreeing among themselves
or with anyone at INET.
But the point Robert Johnson, INET's President, and I
made some years back , amid an earlier wave of talk about using public money to bail out European banks, remains on target:
We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues,
state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with
bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best
practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many
years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing
the financial system.
The simplest way to do that is to have the state take equity in the banks it rescues and write down the equity of bank shareholders
in proportion. This can be done in several ways -- direct equity as a condition for bailout, requiring warrants that can be exercised
later, etc. The key points are for the state to take over the banks, get the bad loans rapidly out of those and into a "bad bank,"
and hold the junk for a decent interval so the rest of the market does not crater. When the banks come back to profitability,
you can cash in the warrants and sell the stock if you don't like state ownership. That way the public gets its money back .at
times states have even made a profit.
In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk,
in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion.
Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge
piece of any upside if they rescue two failing institutions?
There needs to be an asset tax on/break up of the megas. End the hyper-agglomeration of deposits at the tail end. Not holding
my breath though. (see NY state congressional delegation)
To be generous, tax starts at $300 billion. Even then it affects only a dozen or so US banks. But would be enough to clamp
down on the hyper-scale of the largest US/world banks. The world would be better off with lot more mid-sized regional players.
Anyone who mentions Timmy Geithner without spitting did not pay attention during the Obama reign of terror. He and Obama crowed
about the Making Home Affordable Act, implying that it would save all homeowners in mortgage trouble, but conveniently neglected
to mention that less than 100 banks had signed up. The thousands of non-signatories simply continued to foreclose.
Not to mention Eric Holder's intentional non-prosecution of banksters. For these and many other reasons, especially his "Islamic
State is only the JV team" crack, Obama was one of our worst presidents.
Fergusons graph on DBK's default probabilities coincides with the ECB's ending its asset purchase programme and entering the
"reinvestment phase of the asset purchase programme". https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html
The worst of the euro zombie banks appear to be getting tense and nervous. https://www.youtube.com/watch?v=dKpzCCuHDVY
Maybe that is why Jerome Powell did his volte-face last month on gradually raising interest rates. Note that the Fed also reduced
its automatic asset roll-off. I'm curious if the other euro-zombies in the "peers" return on equity chart are are experiencing
volatility also.
Apparently the worst fate you can suffer as long as you don't go Madoff is Fuld. According to Wikipedia his company manages
a hundred million which must be humiliating. It's not as humiliating as locking the guy up in prison would be by a very long stretch.
Greenspan famously lamented that there isn't anything the regulators can really do except make empty threats. This is dishonest.
The regulations are not carved in stone like the ten commandments. In China they execute incorrigible financiers all the time.
Greenspan was never willing to counter any problem that might irritate powerful financial constituencies. For example, during
the internet stock bubble of the late 1990's, Greenspan decried the "irrational exuberance" of the stock market. The Greenspan
Fed could have raised the margin requirement for stocks to buttress this view, but did not. As I remembered reading, Greenspan
was in poor financial shape when he got his Fed job.
His subsequent performance at the Fed apparently left him a wealthy man. Real regulation by Greenspan may have adversely affected
his wealth. It may explain why Alan Greenspan would much rather let a financial bubble grow until it pops and then "fix it".
Everybody forgets (or at least does not mention) that Greenspan was a member of the Class of '43, the (mostly Canadian) earliest
members of the Objectivist Cult with guru Ayn Rand. Expecting him to act rationally is foolish. It may happen accidentally (we
do not know why he chose to let the economy expand unhindered in 1999), but you cannot count on it. In a world with information
asymmetry expecting markets to be concerned about reputation is ridiculous. To expect them to police themselves for long term
benefit is even more ridiculous.
I think Finance is currently about 13% of the S&P 500, down from the peak of about 18% or so in 2007. I think we will have
a healthy economy and improved political climate when Finance is about 8-10% of the S&P 500 which is about where I think finance
plays a healthy, but not overwhelming rentier role in the economy.
"... She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of conversations between New York Fed officials and Goldman Sachs. After being fired for refusing to soften her examination opinion on Goldman Sachs, Segarra released the tapes to ProPublica and the radio program This American Life and the story went viral from there... ..."
"... In a nutshell, the whoring works like this. There are huge financial incentives to go along, get along, and keep your mouth shut about fraud. The financial incentives encompass both the salary, pension and benefits at the New York Fed as well as the high-paying job waiting for you at a Wall Street bank or Wall Street law firm if you show you are a team player . ..."
"But the impotence one feels today -- an impotence we should never consider permanent -- does not excuse one from remaining true
to oneself, nor does it excuse capitulation to the enemy, what ever mask he may wear. Not the one facing us across the frontier or
the battle lines, which is not so much our enemy as our brothers' enemy, but the one that calls itself our protector and makes us
its slaves. The worst betrayal will always be to subordinate ourselves to this Apparatus, and to trample underfoot, in its
service, all human values in ourselves and in others."
Simone Weil
"And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the
checks and balances that are built into the system are operational, when in fact they're not. And what you're going to see and what
we are seeing is it'll be a breakdown of those governmental institutions. And you'll see governments that continue to have policies
that feed the interests of -- and I don't want to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone
else...
If TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the
same winding mountain road, but this time in a faster car... I think it's inevitable. I mean, I don't think how you can look at all
the incentives that were in place going up to 2008 and see that in many ways they've only gotten worse and come to any other conclusion."
Neil Barofsky
"Written by Carmen Segarra, the petite lawyer turned bank examiner turned whistleblower turned one-woman swat team, the 340-page
tome takes the reader along on her gut-wrenching workdays for an entire seven months inside one of the most powerful and corrupted
watchdogs of the powerful and corrupted players on Wall Street – the Federal Reserve Bank of New York.
The days were literally gut-wrenching. Segarra reports that after months of being alternately gas-lighted and bullied at
the New York Fed to whip her into the ranks of the corrupted, she had to go to a gastroenterologist and learned her stomach lining
was gone.
She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of conversations between New York Fed officials
and Goldman Sachs. After being fired for refusing to soften her examination opinion on Goldman Sachs,
Segarra released the tapes to ProPublica and
the radio program This American Life and the story went viral from there...
In a nutshell, the whoring works like this. There are huge financial incentives to go along, get along, and keep your mouth shut
about fraud. The financial incentives encompass both the salary, pension and benefits at the New York Fed as well as the high-paying
job waiting for you at a Wall Street bank or Wall Street law firm if you show you are a team player .
If the Democratic leadership of the House Financial Services Committee is smart, it will reopen the Senate's aborted inquiry into
the New York Fed's labyrinthine conflicts of interest in supervising Wall Street and make removing that supervisory role a core component
of the Democrat's 2020 platform. Senator Bernie Sanders' platform can certainly be expected to continue the accurate battle cry that
'the business model of Wall Street is fraud.'"
Both major parties work according the the scheme of a pyramidal control. To control a
company A, you need to get majority of voting shares. Which belong to company B that owns,
say, 60%. In turn, 60% or shares of B belongs to C which controls A while having 60% x 60% =
36% of capital. After adding D, E etc., you can get away with the following: you start with
actual majority of shares, and the company prospers. Time to realize gains. But that would
deprive you of control. Thus you organize company B and sell 40% of its shares. Control
preserved. Wash and repeat.
In a similar spirit, a narrow circle can control a major party. Of course, the rules are
different and more hidden. On the bottom level, the equivalent of B controlling A, it was
observed that rational arguments are boring, and the wide masses have hard time following
them and following what (itself controlled) B advocates. So you invent easy to remember
[expletive deleted] like "Obama birth's certificate", "Russian collusion" etc. An energetic
group with group solidarity needs its tribal spirit and shibboleths.
The Democratic Party civil war between the 'progressive anti-war socialist' and 'neocon
Wall Street beltway' wings. It will go on for at least two years
TBT or not TBT 1 hour ago
Oh hogwash. The minute Obama took over from Bush Cindy Sheehan and the rest disappeared
from the news. There was no real push back within the Dem electorate against the foreign wars
because they all support the Democrat War on America above all. They only pretend to give a
rip about some backward misogynist theocratic craphole people when Republicans are in
office.
King of Kalifornia 1 hour ago
It's been going on for years. The socialists keep falling for it, and the neoliberals (in
the mold of their heroes, Reagan and Thatcher) have forced their compliance.
I worry that people cannot survive this. Real, warm blooded, caring, loving people can be
broken by this. And that's what makes me angry. Because this is unnecessary. The money to
deliver a decent society exists.
All that we need to make the lives of the vast majority of people in this country is a real
understanding of economics, of money, of how it interacts with tax, and how we can use that for
the common good.
But no political party seems to get that as yet. And until they do, this unnecessary
suffering will continue. And that makes me very angry. Pointless pain is what we're enduring.
And all for the sake of accepting that money is not a constraint on our potential, and never
will be.
Let me have a go.
If prosperity and wealth can be created by printing more money, why there is still poverty
in the world?
After all, isn't every country equipped with a central bank that can print as much money as
they want?
Real wealth is not denominated in dollars, only in what those dollars can buy. Devaluing
the dollar doesn't hurt the wealthy, most of their wealth is in the form of equity and real
assets, not dollars.
The average person's wealth is measured mostly in his future labor, how much he is going to
earn. He will earn less because the Fed devalues his labor through its manipulation of the
dollar. He will see this in the rising cost of living without an increase in his pay. Sure
perhaps the value of labor will at some point catch up to the devalued dollar, but in the
interim he will earn less and will never catch up to what he would have earned otherwise.
It doesn't hurt the wealthy, it hurts the middle class, and will for years to come.
Your macroeconomic ignorance is duly noted, featuring as it does the usual "commodity
money" and mercantilist shibboleths.
MMT describes fiat monetary operations which have been in effect since the Nixon
shock and the abandonment of Bretton Woods almost 50 years ago . Do catch up.
honest question, wouldn't MMT (in a hypothetical universe run by committed MMTers) in
the UK likely will produce vastly different results than MMT in relatively autarkic
economics like the USA or Russia?
The UK relies on imports to one degree or another for virtually every physical good
necessary for a first-world living standard (food -- even basic foodstuffs like wheat,
medicine, spare parts, petrol, apparel, even steel, etc).
While the UK's economy tilts to exporting services education, finance, media,
medicinal/technological intellectual property, tourism, etc.
Would a weaker UK pound encourage more service exports? Or merely increase inflation,
particularly for the bottom 50%?
Because MMT analysts tend to be mostly US or Australian, the applicability of it to
smaller, more open economies has not, I think, had the attention thats needed (although to
be fair, Richard Murphy has done quite a lot of writing on this). While the UK is a large
economy, its also very open (although increasingly less so, thanks to Brexit). So it
clearly has much less room to manoeuvre in terms of monetary or fiscal policy than a more
autarkical nation. Its not just with MMT and inflation – things like Keynesian
multipliers tend to be lower in more open economies as the benefits of fiscal expansion get
exported out. The Labour party under Corbyn did put together some very interesting and well
thought through MMT-influenced policies, but of course that all got thrown out with
Corbyn.
As Yves has pointed out before, the UK has a particular problem in that it has little
spare physical capacity in its economy to take advantage of a weaker currency. In the past,
it has been unable to increase output when the pound has been weaker. So a weakening pound
is likely to be more inflationary than in many other economies.
I think that in a general sense, MMT makes sense in all economies in a Covid scenario of
a massive drop in output thanks to a black swan event. As Murphy points out, you just need
to shove the cash into the economy through monetary means and forget about having to repay
it. Inflation just isn't a problem in those circumstances, and it has the benefit of
maintaining productive capacity within the economy. But in more 'normal' times, MMT needs
to be applied with far more care in an economy like the UK than in a US or China or Russia
or EU.
Kind of wondering here what would happen if all the poor and unemployed/welfare
recipients and even the precarious middle class also decided to offshore their money. Why
not? Say in every country; say it became a global movement. The neoliberal nightmare should
inform us all. Just because a small country doesn't have spare capacity or idle resources
is not really a contraindication for MMT. It is more a factor of having an intrinsic
imbalance due to decades if not centuries of grift and graft by those in a position to help
themselves. And it creates confused politics. As you mentioned above – the Tories in
the UK seem to have also usurped the opposition. Well, to my thinking, that is exactly what
Trump did. And it is almost a crazy hope of "If you can't beat them, join them." And just
exactly where does that leave a functional economy? My first image is a junkyard.
First, apropos the applicability of Modern Money Theory to relatively open economies
like that of the U.K., see the discussion of the prerequisites for monetary sovereignty as
outlined by Robert Hockett and Aaron James in their 2020 book, Money for Nothing .
In addition to the well-known requirements (nation must issue its own currency; currency
not pegged to metal or any other currency; no borrowing in foreign currencies), Hockett and
James add others, including "limited trade dependence in essential goods such as food or
energy sources, in order to mitigate foreign exchange and inflation risk ." (274)
Second, apropos the applicability of MMT to smaller economies, I am pleased to note that
Fanny Pigeaud and Ndongo Samba Sylla's 2018 book, L'Arme Invisible de la
Françafrique: Une Histoire du Franc CFA , has at last been published in English
as Africa's Last Colonial Currency: The CFA Franc Story . (Your search engine will
take you either to the
publisher or to an internet behemoth where you can order it.)
Pigeaud and Sylla's book is a history and analysis of the political economy of the CFA
zone: the countries of central and west Africa which were French colonies and which
continue to use a common currency imposed on them by the French imperialists in 1945.
This book is, in my estimation, the best book we have so far in applying the insights of
Modern Money Theory to non-monetarily sovereign economies. You have to love any book that
starts out by translating Hyman Minsky's most famous aphorism into French: Tout un
chacun peut creér de la monnaie: le problème est de la faire
accepter.
"limited trade dependence in essential goods such as food or energy sources, in order
to mitigate foreign exchange and inflation risk ."
Again, we/they have choices based on resource constraints. But, as usual, they are
political. Most of these choices seem impossible now, but remember Victory Gardens ?
Alas, such things are not looked upon favourably by Big Ag and the supermarket chains, but
my depression-era grandparents grew most of their own food for their very large (by our
standards) families. Maternal side, farmers -- my mother, born 1923, said that she never
even knew there was a depression until she read about it later in high school. Grandpa paid
his property taxes by driving snowplow for the county in the winter. Father's side -- my
father, born 1922, grew up in a village (5-bedroom two story house built by his father, a
shoemaker, and friends/relatives/contractors) on a biggish, maybe 1-2 acre? lot, which was
part of a grant to the family for Civil War service. Grandma still had apple, peach, cherry
and walnut trees, raspberry and currant bushes when I knew her, and had grown beans,
tomatoes, potatoes and all that stuff before the 7 kids got married. Obviously, the kids
did a lot of the work, too. Sewing room -- made most of the clothes for family, Dad says
the kids' diapers were made of sugar sacks.
IOW, this is not rocket science. We did this sort of thing for millions of years,
omitting the last 200 or so, and can very likely do it again. People explored the whole
round world, and conquered a lot of it, without electricity or the internal combustion
engine. We're not all gonna die!
Unless we as a species continue to act on maximizing shareholder value rather than
surviving.
I think that you might be onto something here. I suspect that the lives of our
grandchildren as they grow older will resemble the lives of our grandparents from your
description. Of course that may mean a lot off decentralization from out of big cities but
it can be done – especially if there is no other choice. And it's not like in the US
that there is not the land to do this with.
It is an excellent article, with one small exception, the words, "I accept that creating
money this way is inflationary."
Contrary to popular wisdom, inflation is not caused by money creation . All
inflations are caused by shortages , most often shortages of food or energy.
That includes hyperinflations. Consider, for one, the Zimbabwe hyperinflation. The
government took farmland from farmers and gave it to non-farmers. The inevitable food
shortages caused inflation. The government's "money-printing" was merely the wrongheaded
response to the inflation, not the cause.
In fact, the hyperinflation could have been cured by more money creation, had that money
been used to cure the food shortage, by purchasing food from abroad and distributing it, or
by teaching the non-farmers how to farm.
In the past year, the U.S. has spent an astounding $4 trillion, and soon it will spend
another $2 trillion, Yet, there will be no inflation so long as there are no shortages of
food, oil, or labor.
Bottom line: Scarcity, not money creation, causes inflation.
In the US, as in the UK, planned inequality and (managed) unequal access to the benefits
of the money system are two of the most salient activities of our (US) three government
branches.
So are ye telling me the reason conservatives don't (for example) want to raise the
minimum wage is not because of some economic or monetary reason or law but instead just to
keep people in their place, i.e. preserve the status quo? Amazing! And I guess them
conservatives that "havenot" go along because of that "relative advantage" thing –
they are so fixated on keeping those below in their place that they are blind to the upside
of a more democratic and social monetary policy. Well I'll be. Now I git it!
Then the MMT School are conservatives since they'd use taxation to curb inflation (by
some undisclosed means that does not curb consumption).
But why should price inflation be a problem so long as:
1) It does not exceed income gains for ALL citizens;
2) the means that produce it do not violate equal protection under the law;
and
3) it is not extreme?
The only reason I can think of, and it's a contemptible one, is that large fiat
hoarders* would see their hoards diminish in value in real terms.
*not to disparage those saving for a home, initial capital formation, legitimate
liquidity needs, etc.
One point of inflation is to restrain creditors (rhymes with "predators").
Meanwhile, "printing" money does not initiate inflation. Most inflation–even
hyperinflation–is "cost push," i.e. related to shortages of goods. In Zimbabwe, the
Rhodesian farmers left, and the people to whom Mugabe gave their land were not as
productive. Result: a shortage of food requiring imports (balance of payments problem).
In Weimar Germany, the French army invaded the Ruhr, shutting down Germany's industrial
heartland, making a shortage of goods. They already had a balance of payments problems with
WWI reparations.
it was always thus.
the real Burkean Conservatives behind it all, who yes want to keep everyone in their
place.
as i've lamented many times, it's hard to get a read on who the real Bosses are, since they
don't go on TV and brag, generally(various rightwing billionaires in the last 15 years,
notwithstanding)
C.Wright Mills and Domhoff are the only taxonomists of that cohort that i'm aware of
Diannah Johnstone, perhaps.
Maybe Pepe Escobar when they hide the rum.
otherwise, every attempt i've seen in the last 30 years has had elements of tinfoil and
illuminatii/NWO scattered throughout.
I reckon this is by design, at some level.
whatever there exists a demographic cohort of humanity that is exceedingly wealthy, thinks
it's in charge and mostly really is and that is truly cosmopolitiain citizens of the
world.
their most defining feature is that they pretend real hard not to exist and most of us
little people give them no mind, and pretend right along.
This cohort is not monolithic, nor all powerful they each are as prone to tunnel vision and
stupidity as any of us but they have better connected steering wheels, and cleaner
windshields, and mirrors that work.
One hopes that, like in FDR Times, they will feel threatened enough by the results of their
long term policy preferences to allow a few larger crumbs to fall from the table, so as to
mollify the ravening hordes .ere those hordes notice who the real Hostis Humani Generis
are.
But it looks like they're more likely to double down on the diversionary division of the
Bewildered Herd hence, Cancel Seuss! and Sinema's little antoinette dance .and an hundred
other mostly unimportant things that happened just yesterday to keep us'n's riled up about
the wrong things.
Michael Mackenzie and James Fontanella-Khan in New York Fri, March 5, 2021, 7:00 PM
The veteran value investor John Rogers predicted the US is headed for a repeat of the
"roaring twenties" a century ago that will finally encourage investors to dump tech stocks in
favour of companies more sensitive to the economy. The founder of Ariel Investments told the
Financial Times in an interview that value investing "dinosaurs" like him stood to win as
higher economic growth and rising interest rates took the air out of some of the hottest stocks
of recent years. The US central bank is "overly optimistic that they can keep inflation under
control", he said, and higher bond market interest rates would reduce the value of future
earnings for highly popular growth stocks such as tech companies and for the kinds of
speculative companies coming to market in initial public offerings or via deals with Spacs.
Production jumped in late 2019 but has struggled to maintain a plateau since then as FPSO
start-ups have become sparser while the Campos basin decline continued apace.
Drilling rig numbers offshore increased in 2020 in support of the new FPSOs but land
drilling virtually disappeared.
Rate of decline in the Campos basin, onshore and for small offshore basins have accelerated
decline rates through 2019 and 2020, and all growth is coming from the Santos basin, which
seems to be entering middle age with a rising water cut and the first developments reaching
exhaustion.
Future Projections
Fitting a Verhulst curves to Santos basin production is virtually impossible as it is in
such an early stage of development. An attempted fit resulted in remaining reserves of 22Gb
compared to the APB figure of 11 to 12Gb. The estimate is bound to increase as a number of very
large FPSOs come on line before 2025. Therefore the projection is based on a bottom up on
recent, developing and possible projects that have started up or been announced, using any data
for throughput, reserves etc., that is available and otherwise using usual design practice
(e.g. typical field size for a given design throughput, FPSO availability, ramp-up times,
decline rates, plateau periods).
The Verhulst best fit including annual production through 2019 results in a much thinner
tail than from 2017 because recent figures have been much lower than the fit then. 2020
production was not used in the fit but the value prorated from monthly data through September
shows the declining trend is continuing. The remaining reserves calculated from the fit is only
2Gb compared to 6 to 7 Gb from APB data. Fitting the curve but constraining the reserves to
this numbe produces an unrealistically thick tail. The 2017 gave a better match but more likely
there is another round of developments due that would need a separate curve to match. The first
three of this are currently under development and their expected additional flow over the next
few years matches the prediction from Petrobras – it only shows Petrobras' share of total
equivalent production so the line shown has been prorated to total oil.
I ordered this book when Paul Craig Roberts mentioned, and quoted from it, on February 14,
2021. I especially liked PCRs quote halfway through the essay:
The United States isn't a nation any longer . It is a collection of peoples
without a country. A nation requires a unifying spirit of the people, and the United States
has no such unifying spirit. Martyanov observes that there is nothing in common between
a white WASP farm worker from Iowa, a Jewish lawyer from Manhattan, and a black rapper from
the Bronx. They view the world, America and their place in it differently, and those
visions are irreconcilable.
This has been obvious to some of us for decades. Worse yet, there is no mechanism or
movement anyone can imagine that will keep the disintegration process in check. If anything,
the elites are finding new and exciting ways to divide Americans further, and nobody is
happier about it than the social media addicts who enjoy bigger and better rotten egg memes
they can toss at the enemy de jour.
This is interesting too:
Not only is America's crisis systemic, but its elites are uncultured , badly educated
and mesmerized by decades of their own propaganda, which in the end, they accept as a
reality
I do hope the author means "uncultured" in the pejorative, insulting, Russian sense of the
word. They are the "elites" who are revolting, and they are too dumb to know they are kicking
the floorboards out from under their feet.
"People of the United States, your ruling elites are lying to you just like the chamber
orchestra on the Titanic that was playing music while the supposedly "unsinkable" Titanic
was sinking!".
The difference is, the actual American ship was just fine and hadn't hit an iceberg.
Rather, we were being deliberately sunk by a bunch of loons who were punching holes in the
hull of the ship!
But don't go thinking the whole shebang is about to go under. This has been the dream of
preppers on the right, and various anti-American groups on the other side, for generations.
The Big Collapse, in which the whole North American continent, with all its power and wealth,
just vanishes, is a pipe dream.
The most immediate causes of US collapse are, in my opinion, the rise of the predator,
parasite, class to a position of total dominance while the proles have sunk into the shite,
and the rise of China...
Commodities have seen four supercycles over the past 100 years. The last one peaked in 2008,
after 12 years of expansion.
Last month, two of the biggest banks on Wall Street - JPMorgan Chase
and
Goldman Sachs - joined others predicting a new commodities supercycle as economies reopen
and the risks of the pandemic subside.
The expectation is for a long-term boom spanning oil, metals, and agricultural material
prices. JPMorgan's head of oil and gas, Christyan Malek, recently offered one of the most
bullish forecasts for oil, suggesting international crude prices could rebound to US$100 per
barrel.
Here is a graph to look at. It depicts the share of the US national wealth owned by 0.1% of
families, that is 160 thousand families with more than $20 million per head. They had it
wonderfully good in the years leading to the Great Depression; or rather, their wonderful life
brought on the Great Depression. As their share dropped, ordinary Americans got a chance to
fulfill the American dream. Life was good for ordinary guys until the late Seventies; then
Thatcher and Reagan succeeded in turning the tide, and since then the fat cats' share has
increased and your share has dropped, until we have arrived at the present miserable state.
This graph is taken from this work by two young Berkeley
economists, Emmanuel Saez and
Gabriel Zucman , who updated it
here last year. True Left (I aspire to this lot) aren't politically correct diversity
lovers, but people who think that the wealthy should be reined in. The very rich hog resources;
they distort democracy by their lobbying and their NGOs; and now they want to save mankind,
while mankind should be saved from them. Naturally the rich guys do not relish the idea of
being taxed, let alone expropriated Lenin style; that's why they invented the faux-Left of
radical feminists and race equality activists. A good Christian would approve of bridling the
rich: it would be better for their souls. What is a man profited, if he gain the whole world,
and lose his own soul, asked Christ. But this graph proves that keeping their share down isn't
only good for their souls, but is good for our wellbeing, too. The crazy idea of trickle-down
wealth may be safely discarded as not working.
As journalist Emily Atkin explained Tuesday, the jet stream
"bringing frigid and dangerous Artic weather to millions of Americans" is, like other forms of
extreme weather, related to global warming. That's because, as Kevin Trenberth, a climate
scientist at the National Center for Atmospheric Research, told Atkin several years ago, "all
weather events are affected by climate change because the environment in which they occur is
warmer and moister than it used to be."
What's made Winter
Storm Uri especially fatal in Texas is not only the arrival of an unprecedented cold spell,
but the way the weather event is occurring in the context of preexisting social injustices like
homelessness as well as how it is interacting with the state's underdeveloped infrastructure,
inadequate planning and regulation, and lack of emergency preparedness.
Writing for Discourse Blog Tuesday, Samantha Grasso argued that
"occasionally, something will happen in Texas to remind the people who live here that we live
in a failed state."
Grasso explained how freezing temperatures cascaded into power outages causing millions to
go without heat and water in the midst of a winter storm and pandemic:
"While people began losing power Thursday, statewide outages spiked early Monday morning,
after the Electric Reliability Council of Texas (ERCOT), the entity that controls the power
grid for almost the entire state, announced a 'rolling blackout,' estimating outages around
40 minutes long in order to keep the grid from being overwhelmed. (The ERCOT, for what it's
worth, was borne out of Texas' brainless reflex to
buck federal regulation .) But by that time, it was likely too late, for a variety of
reasons . Forty minutes turned into hours, and then days, with
no real sign of when things will get better. After the power went out, so did the water,
with several cities issuing
boil water notices , or asking residents
not to drip their faucets despite their pipes freezing, or even shutting
off the water."
As Grasso noted, "It would be an understatement to say that
ERCOT was unprepared for a cold weather crisis of this scale."
The rest of the lower 48 states use two electric grids: the Eastern Interconnect and the
Western Interconnect. By contrast, in Texas, 90 percent of the state's residents rely on ERCOT.
As Kate Galbraith
reported Monday in the Texas Tribune , the Lone Star state sought independence from
the national grids to avoid federal regulations.
While Republican lawmakers and right-wing media figures have used the crisis in Texas as an
opportunity to attack renewable energy for its
alleged unreliability, The Daily Posterreported Tuesday that
ERCOT
attributed the blackouts to "a shortage of natural gas due to a drop in pressure and frozen
instruments at fossil fuel and nuclear facilities."
"The fact that Texas
deregulated its power grid in the 1990s could also be part of the problem," The Daily
Poster added. "Electricity market incentives are currently structured in such a way that
Texas' power companies receive
more money if they don't weatherize all their plants and shut down some of them during cold
weather."
Notably, the parts of Texas that are connected to the two national grids have not been
devastated by power outages. In El Paso, for instance, "about 3,000 customers had power outages
lasting five minutes or less when the winter storm moved in on Sunday," a local ABC
affiliate
reported . "As of Monday afternoon, only 12 customers were impacted."
Occurring as they did in the midst of a pandemic, the widespread power outages in Texas
threatened to squander thousands of doses of the Moderna vaccine, which must be kept between
-13°F and 5°F. As the Houston Chronicle
reported Monday night, public health officials in Harris County "hustled to distribute
thousands of doses" after the storage facility lost power and "its backup generator
failed."
NBC News
reported Tuesday that "of the 8,430 vaccines, county health officials distributed 5,410
doses to five locations, including 3,000 to the Harris County Jail, 1,000 to Houston Methodist
Hospital, 810 to Rice University, and 600 to Lyndon B. Johnson Hospital and Ben Taub
Hospital."
"The remaining doses were salvaged," the news outlet added, "after Moderna advised county
officials that the rest could be refrigerated and used for patients later that same day."
Meanwhile, mutual aid and political action groups were scrambling to provide resources and
shelter to people "who were facing below-freezing temperatures without robust city assistance,"
Grasso wrote. "Though cities opened warming centers and shelters, facilities quickly reached
capacity and weren't safe to travel to in the harsh weather conditions."
Reflecting on Covid-19, Grasso said that "Texas, just like the rest of the country, killed
so many people because our leaders thought it more important to prioritize short-term gains
than invest in people for a long-term gain."
"And through this mismanaged crisis," she added, "it will kill others, too."
By Tuesday night, at least 23 people had died nationwide, the majority in Texas, as a result
of Winter Storm Uri, according to the
The New York Times .
It is impossible to define neoliberalism purely theoretically, for several reasons. First,
methodologically, although neoliberal experiences share important commonalities (explained in
what follows), neoliberalism is not a mode of production. Consequently, these experiences do
not necessarily include a clearly defined set of invariant features, as may be expected in
studies of 'feudalism" or 'capitalism", for example. Neoliberalism straddles a wide range of
social, political and economic phenomena at different levels of complexity. Some of these are
highly abstract, for example the growing power of finance or the debasement of democracy, while
others are relatively concrete, such as privatisation or the relationship between foreign
states and local non-governmental organisations (NGOs). Nevertheless, it is not difficult to
recognise the beast when it trespasses into new territories, tramples upon the poor, undermines
rights and entitlements, and defeats resistance, through a combination of domestic political,
economic, legal, ideological and media pressures, backed up by international blackmail and
military force if necessary.
Second, as is argued in Chapters 7 and 9., neoliberalism is inseparable from imperialism and
globalisation. In the conventional (or mainstream) discourse, imperialism is either absent or,
more recently, proudly presented as the 'American Burden': to civilise the world and bring to
all the benediction of the Holy Trinity, the green-faced Lord Dollar and its deputies and
occasional rivals, Holy Euro and Saint Yen. New' converts win a refurbished international
airport, one brand-new branch of McDonald's, two luxury hotels, 3,000 NGOs and one US military
base. This offer cannot be refused - or else.- In turn, globalisation is generally presented as
an inescapable, inexorable and benevolent process leading to greater competition, welfare
improvements and the spread of democracy around the world. In reality, however, the so-called
process of globalisation - to the extent that it actually exists (see Saad-Filho 2003) - is
merely the international face of neoliberalism: a worldwide strategy of accumulation and social
discipline that doubles up as an imperialist project, spearheaded by the alliance between the
US ruling class and locally dominant capitalist coalitions. This ambitious power project
centred on neoliberalism at home and imperial globalism abroad is implemented by diverse social
and economic political alliances in each country, but the interests of local finance and the US
ruling class, itself dominated by finance, are normally hegemonic.
Third, historical analysis of neoliberalism requires a multi-level approach. The roots of
neoliberalism are long and varied, and its emergence cannot be dated precisely. As Chapters
я to 6 show, neoliberalism amalgamates insights from a range of sources, including Adam
Smith, neoclassical economics, the Austrian critique of Keynesianism and Soviet-style
socialism, monetarism and its new classical and 'supply-side' offspring. Their influence
increased by leaps and bounds with the breakdown of the postwar order: the end of the 'golden
age' of rapid worldwide growth in the late 1960s, the collapse of the Bretton Woods system in
the early 1970s, the erosion of the so-called 'Keynesian compromise' in the rich countries in
the mid 1970s, the meltdown of the Soviet bloc in the 1980s and the implosion of developmental
alternatives in the poor countries, especially after balance of payments crises in the 1980s
and 1990s. Chapters 1 and 2 show that the collapse of the alternatives provided space for the
synthesis between conservative view's and the interests of the US elite and their minions. The
cauldron was provided by the aggressive populist conservatism of Ronald Reagan and Margaret
Thatcher, and the broth was tendered by finance - that had become hegemonic worldwide after the
'coup- led by the chairman of the US Federal Reserve System, Paul Volcker, in 1979.3 By
persuasion and by force, neoliberalism spread everywhere.
It is, however, important to avoid excessively linear accounts of the rise of neoliberalism.
For example, in the United Kingdom, key elements of Thatcher's monetarist economic platform had
been imposed by the previous Labour government; she only expanded them and gave them a
compelling rationale. There was also an irresolvable tension between the puritanical claims
made by milk-snatching Thatcher, Reagan's ventriloquists, and the intellectual harlots peddling
their wares around the US Imperial Court, and the political practice of these neoliberal
administrations. For example, Reagan's 'voodoo economics' (in the words of his deputy, George
Bush pere) would have been unacceptable to the guardians of the scriptures. History shows that
it is easier to impose pristine economic and political models in the dominions, because at home
the strength of conflicting interests and the messy realities of limited power do not allow
history to start anew on demand. This is best illustrated in Chapter 14's discussion of the
asymmetric application of agrarian liberalism. It is relatively easy to parachute well-paid
advisers into distant and unimportant countries, where Lord Dollar can easily bend the natives'
will. This purifying ritual will make them almost civilised. However, should the ignorant
masses and their brutal leaders reject dollar diplomacy and be reluctant to play by the (new)
rules, weapons of mass destruction are available and they can be deployed increasingly
effectively from great distances.
Although every country is different, and historical analysis can reveal remarkably rich
details, the overall picture is clear. Tire most basic feature of neoliberalism is the
systematic use of state power to impose (financial) market imperatives, in a domestic process
that is replicated internationally by 'globalisation'. As Chapters 22. 23 and 30 argue in the
cases of the United States, the United Kingdom and east and south-east Asia respectively,
neoliberalism is a particular organisation of capitalism, which has evolved to protect
capital(ism) and to reduce the power of labour. This is achieved by means of social, economic
and political transformations imposed by internal forces as well as external pressure. The
internal forces include the coalition between financial interests, leading industrialists,
traders and exporters, media barons, big landowners, local political chieftains, the top
echelons of the civil service and the military, and their intellectual and political proxies.
These groups are closely connected with 'global' ideologies emanating from the centre, and they
tend to adapt swiftly to the demands beamed from the metropolis.
Their efforts have led to a significant worldwide shift in power relations away from the
majority. Corporate power has increased, wiiile finance has acquired unrivalled influence, and
the political spectrum has shifted towards the right. Left parties and mass organisations have
imploded, while trade unions have been muzzled or disabled by unemployment. Forms of external
pressure have included the diffusion of Western culture and ideology, foreign support for state
and civil society institutions peddling neoliberal values, the shameless use of foreign aid,
debt relief and balance of payments support to promote the neoliberal programme, and diplomatic
pressure, political unrest and military intervention when necessary. For example, Chapter 24
shows how' the ruling economic and political forces in the European Union have instrumentalised
the process of integration to ensure the hegemony of neoliberalism. This account is
complemented by Chapter 2n's analysis of the segmentation of Eastern Europe into countries that
are being drawn into a Western European-stvle neoliberalism and others that are following
Russia's business oligarchy model. In sum, neoliberalism is everywhere both the outcome and the
arena of social conflicts. It sets the political and economic agenda, limits the possible
outcomes, biases expectations, and imposes urgent tasks on those challenging its assumptions,
methods and consequences.
In the meantime, neoliberal theory has not remained static. In order to deal with the most
powerful criticisms levelled against neoliberalism, that it has increased poverty and social
dislocation around the world, neoliberal theory has attempted to present the ogre in a more
favourable light. I11 spite of the substantial resources invested in this ideologically
inspired make-over, these amendments have remained unconvincing, not least because the heart of
the neoliberal project has remained unchanged. This is discussed in Chapter 15 for poverty and
distribution, while Chapter 21 unpicks the agenda of the 'Third Way', viewed by many as
'neoliberalism with a human face'.
A MULTI-PRONGED POWER PROJECT
Neoliberalism offered a finance-friendly solution to the problems of capital accumulation at
the end of a relatively long cycle of prosperity. Chapters 1. 22 and 30 show that neoliberalism
imposed discipline upon a restless working class through contractionary fiscal and monetary
policies and wide-ranging initiatives to curtail social rights, under the guise of
anti-inflation and productivity-enhancing measures. Neoliberalism also rationalised the
transfer of state capacity to allocate resources inter-temporally (the balance between
investment and consumption) and inter-sectorally (the distribution of investment, employment
and output) towards an increasingly internationally integrated (and US-led) financial sector.
In doing so, neoliberalism facilitated a gigantic transfer of resources to the local rich and
the United States, as is shown by Chanters 11 and 15. Neoliberal globalism is not at all a
model of 'economic deregulation', and it does not promote 'private initiative' in general.
Under the ideological veil of non-intervention, neoliberalism involves extensive and invasive
interventions in every area of social life. It imposes a specific form of social and economic
regulation based on the prominence of finance, international elite integration, subordination
of the poor in every country and universal compliance with US interests. Finally, neoliberalism
does not foster rapid accumulation. Although it enhances the power and the living standards of
the global elite and its appendages, it is destructive for the vast majority. Domestically, the
expansion of 'market relations' tramples upon rights of access to food, water, education, work,
land, housing, medical care, transportation and public amenities as well as 011 gender
relations, as is shown by Chanters 16 to 18. Lawrs are changed to discipline the majority,
restrict their rights of association and make it difficult to protest against the consequences
of neoliberalism and to develop alternatives. The police, the courts and the armed forces are
available to quash protests in the 'new democracies' such as Bolivia, Ecuador, Nigeria, South
Africa, South Korea and Zambia, as well as in 'old democracies' such as France, India, Italy,
Sweden, the United Kingdom and the United States. Chanter 20 shows that democracy is everywhere
limited by the rights of global capital to seize the land and exploit its people, while Chanter
8 reviews the systematic seizure of assets which has gone hand in hand with neoliberalism in
many countries. Finally, an increasing share of global profits is being pumped into the rich
countries, especially the United States. These transfers increase the pressure 011 the
periphery, where rates of exploitation must increase sharply in order to support extraordinary
levels of elite consumption domestically as well as in the United States. In other words,
neoliberalism is a hegemonic system of enhanced exploitation of the majority. Chanter 12 shows
that the neoliberal promise of rising living standards for poor countries has not been
fulfilled, and Chanter ip, discusses the manner in which foreign aid has served this process of
exploitation. These and other chapters in this volume argue that neoliberalism prevents the
implementation of those very policies that would most likely contribute to economic growth and
poverty reduction: as Chapter 28 argues for South Asia, neoliberalism has fatally narrowed the
policy discourse. This exploitative agenda is primarily but not exclusively the outcome of a
shift in the power relations within (and between) countries. It is also the outcome of
technological changes, especially cheaper international transportation, communications and
computing power, the internet, the emergence of 'flexible' production, greater international
integration between production chains and in the financial markets, and so 011. These material
changes responded to existing social changes at least as much as they induced them.
TRANSCENDING NEOLIBERALISM
In spite of its power, the transformations that it has wrought 011 the world economy, and
the achievement of ever rising living standards for the minority, neoliberalism does not offer
an efficient platform for capital accumulation. Under neoliberalism, economic growth rates have
declined, unemployment and underemployment have become widespread, inequalities within and
between countries have become sharper, the living and working conditions of the majority have
deteriorated almost everywhere, and the periphery has suffered greatly from economic
instability. In other words, neoliberalism is a global system of minority power, plunder of
nations and despoilment of the environment. This system breeds economic, political and social
changes, creating the material basis for its own perpetuation and crushing the resistances
against its reproduction. Chanters 26 to 30 discuss the continuing crisis in Latin America,
sub- Saharan Africa, South Asia, Japan and East and South-East Asia. They argue that neoliberal
policies have enhanced instability everywhere, while Chanter 10 shows that the theoretical and
empirical evidence cannot support neoliberalism's central hypothesis that trade openness is
good for growth.
However, neoliberalism also destroys its own conditions of existence. Its persistent failure
to deliver sustained economic growth and rising living standards exhausts the tolerance of the
majority and lays bare the web of spin in which neoliberalism clouds the debate and legitimates
its destructive outcomes. Tire endless mantra of 'reforms' which systematically fail to deliver
their promised 'efficiency gains' delegitimises the neoliberal states, their discourse and
their mouthpieces. The explosion of consumer credit that has supported the improvement of
living standards in the centre, given the growing fiscal constrains upon the state, limits the
scope for interest-rate manipulation - the most important neoliberal economic policy tool. Most
importantly, popular movements have emerged and successfully challenged the neoliberal
hegemony. Whatever their limitations, as Chapter ?? argues, the recent social explosions in
Argentina, Bolivia, Ecuador, as well as more limited social movements elsewhere, show that
neoliberalism is not invulnerable. This book details and substantiates these claims, and points
toward an agenda of reflection, critique and struggle.
Canadian Cents@9 The book Capitalism on a Ventilator is a collection of essays or articles
produced by the Workers World Party, one of the Communist Parties in the US.
Amazon lists the book as currently unavailable (and asks if you want an email if it
becomes more available.)
It is indeed possible this is a surreptitious way of censoring the book, especially if the
unavailability means WWP (which operates the International Action Center) simply hasn't
complied with technical requirements imposed by Amazon.
Such as guaranteeing delivery within a limited number of days. Amazon has, apparently,
tightened up a lot to make it difficult for independents to sell on Amazon.
But it is also possible that the limited budgets and other resources led to limited
numbers of copies which are now sold out. When the new press run is complete, the book
becomes available again.
Unless you've been living under a rock for the last few weeks, you've most likely been
inundated with all kinds of new stories and finger-pointing social media diatribes about
Texas' shocking grid failure as temperatures dropped below freezing across the Lone Star
State earlier this month. And, adding insult to injury, after coping with rolling blackouts
and a plague of burst pipes during the harsh winter storm, some residents were hit with
power
bills big enough to bankrupt them--in some cases over $15,000.
As these disastrous (and in some cases
deadly ) developments unfolded, there was no shortage of accusations and blame games to
go around, with different factions (
mistakenly ) pointing to frozen wind turbines while others blamed the state's uniquely
deregulated power grid. Now, as Texas lawmakers launch an investigation into the source of
the energy system failures, state regulators have also come under fire amidst a general
atmosphere of "finger pointing and blame shifting" at the unfolding legislative
hearings .
While the outages came as a shock to Texans, as well as to the rest of the world watching
the news unfold on their various screens, the elements that came together in a perfect storm
(so to speak) to cause the systemwide failures have been in place for years, and in some
cases, decades. Texas' unique utilities market has been blazing its own trail for a long time
now, having begun its course towards energy independence in 1999, but it's only when
something goes wrong that these kinds of innovations (or "the nation's most extensive
experiment in electrical deregulation" according to the New York Times) come under
scrutiny.
Texas is in a unique position to run its own grid however it sees fit, as 90 percent of the state's energy is produced
on its very own grid. And the state has seen fit to run that grid with very, very little
regulation, "handing control of the state's entire electricity delivery system to a
market-based patchwork of private generators, transmission companies and energy retailers" as
the New York Times reported last week.
This decision was not a sinister and sneaky back-room deal; it was widely publicized and
supported in equal measure by constituents and industry leaders alike. "Competition in the
electric industry will benefit Texans by reducing monthly rates and offering consumers more
choices about the power they use," then- Texas-governor George W. Bush was quoted when he
became a signatory on the 1999 deregulation legislation.
But while Texans were promised cheap electricity in exchange for rallying around grid
deregulation, that simply never came to fruition. Since long, long before the $15,000
one-month utility bills, Texans have been paying a premium for the very same energy they were
promised to receive at a discounted rate. A deregulated power grid is particularly vulnerable
to the ebbs and flows of the market, and nearly 60% of Texans now buy their electricity from
a retail power company at a market-based rate instead of a local utility. A recent
Wall Street Journal analysis based on nationwide data from the U.S. Energy Information
Administration revealed that not only have Texans not received the lower power bills they
were expecting, on the whole they've paid more than other U.S. consumers--a lot more.
"Customers of that deregulated energy market have paid a total of $28 billon more for their
power since 2004 than they would have paid if they'd been covered by the state's traditional
utilities,"
Earther reported this week.
While the slow trickle of money of of Texans' pockets over the last 17 years is
newsworthy, considering that deregulation was sold to the public to do the exact opposite,
it's entirely likely that the system would have charged on unchanged without the massive and
scandalous grid failures cause by this months storms--although with changing weather patterns
this kind of catastrophic climate event was coming sooner or later. But in the wake of the
devastating outages, the U.S. and Texas energy industries are already changing in response as
power companies bail on deregulated
grids . "Investors prefer steady dividends from regulated utilities over erratic profits
in the freewheeling American power production industry," the Financial Times reported this
week.
While there are certainly still plenty of benefits to deregulation--incentivizing
innovation and pricing out coal plants are just two examples--this months events show that
those benefits no longer outweigh the risks for many Texan power producers and consumers.
Dennis, I must disagree with your assessment. OPEC peaked in 2016. Yes, Iran can come back
and increase production by about 1.5 million barrels per day. But that still will not make up
for the decline in the rest of OPEC. No need to mention Venezuela, they may come back around
2030 or so, long after the peak has passed.
Russia said they had peaked in early 2020. I see no reason to think they were lying.
That leaves Brazil, Norway, and Canada. They all three may increase production but nothing
spectacular. Not nearly enough to make up for the rest of the world in decline. REPLYSTEPHEN HREN IGNORED02/27/2021 at
5:58 pm
I'm inclined to agree with Ron. So much investment deferred because of 2014 and 2020 price
crashes. LTO can come back quickly if the price stays consistently high (a big if) but it
won't be enough to save the day. Investors are expecting cash from LTO these days, not
production increases. I imagine most other countries are just coasting after the turmoil of
the last year. Also still plenty of wildcards in the collapse department over the next 5-10
years: Iraq, Nigeria, Libya, etc. WATCHER IGNORED02/28/2021 at
1:12 am
Factions in the administration are on record as wanting sharply higher oil prices. Seems
difficult to see how this would get through the Senate, but it is a green priority.
RON PATTERSON IGNORED02/28/2021 at
8:48 am
Does Occidental know what they are talking about? They are saying that the investors are
just not there for a massive increase in production. And they are one of the two largest
producers in the Permian Basin.
America's oil production will never again reach the record 13 million barrels a day set
earlier this year, just before the pandemic devastated global demand, according to Occidental
Petroleum Corp.
"It's just going to be too difficult to replace the 2 million barrels a day of
production that we've lost, and then to further grow beyond that," Chief Executive Officer
Vicki Hollub said Wednesday at the Energy Intelligence Forum. "Over the next three to four
years there's going to be moderate restoration of production, but not at high
growth."
Occidental is one of the biggest producers in the U.S. shale industry, which added
wells at such a rate prior to the spread of Covid-19 that the country became the world's top
crude producer, overtaking Saudi Arabia and Russia, ushering in an era that President Donald
Trump called "American energy dominance."
U.S. oil production is stuck below it's pre-pandemic high
Shale's debt-fueled expansion came to a juddering halt due to lower gasoline demand and oil
prices, but also because of Wall Street's increasing reluctance to fund growth at any
cost. Shale operators are increasingly prioritizing cash flow and returns to investors over
production growth.
Occidental, which vies with Chevron Corp. to be the biggest producer in the Permian
Basin, has been forced to throttle back capital spending, lower growth targets and cut its
dividend in a bid to save cash during the downturn. Its finances were already severely
challenged by the debt taken on through its $37 billion purchase of rival Anadarko Petroleum
Corp. last year.
Hollub said global consumption stands at about 94 billion barrels a day, and it will
take a Covid-19 vaccine before it returns to 100 million barrels. Due to cutbacks around the
world, supply and demand for oil will likely balance again by the end of 2021, she
said.
Unlike some of her European peers, Hollub sees strong long-term demand for oil. "I
expect we'll get to peak supply before we get to peak demand," she said.HICKORY
IGNORED02/28/2021 at
11:31 am
"Unlike some of her European peers, Hollub sees strong long-term demand for oil. "I expect
we'll get to peak supply before we get to peak demand," she said."
Thanks Ron.
I wonder if she is referring to the balance in the USA, or the world.
It will be a horse-race finish for the whole decade- "and here comes Demand up the
backstretch " RON PATTERSON
IGNORED02/28/2021 at
11:26 am
Figure this one out. The EIA's AEO2021 In
the past they have always given scenarios based on "Low Price" and "High Price". But now it
is "Low Supply" and "High Supply".
They are not making a prediction, they are just saying: "Here is what low supply looks
like", and "Here is what high supply looks like". Hell, we already knew that.
Anyway, it is all about tight oil. Everything depends on tight oil. Occidental says tight
oil has peaked. But the EIA is taking no chances. They are saying in effect: "Here is what it
looks like if tight oil has peaked and here is what it looks like if it has not."
Oil prices are set to rise by the fastest rate since the 1970s over the next three years,
Bank of America said in a new report, joining the growing group of analysts forecasting a
return of oil to three-digit territory.
The average price of Brent over the next five years, however, will be between $50 and $70
per barrel, according to the bank, as
quoted by The National.
At some point changes in oil price will became qualitative and all this paper oil speculation
designed to keep them down will stop working. It might well be that the moment of declining world
production is near or already reached.
There is a finite amount of oil in the ground and with the current size of population it will
eventually be depleted. The only question is how soon.
Bloomberg, of course, repeats IEA propaganda as the USA need low oil prices to survive as
transportation of goods is mainly done by trucks and to keep it global empire from shrinking. So
take the information provided with a grain of salt.
The problem for the USA is that shale oil production (which actually mostly produce light
fractions; the fact carefully hidden in EIA statistics) is in decline and can't be revived
without huge subsidies and the write down of debt.
From trading houses in Geneva to Wall Street banks, much of the oil world agrees that global
markets could use some more barrels. The big question is whether OPEC+ will provide enough of
them.
A crude glut that piled up during the pandemic is vanishing fast. Global inventories are
plunging at the steepest rate in two decades, according to Morgan Stanley. Prices have rallied
to pre-virus levels, while U.S. production has taken a hit from freezing storms. Talk swirls of
market supercycles, and even the return of $100 oil.
With the need for more supply evident, traders expect the OPEC+ coalition, led by Saudi
Arabia and Russia, will agree to increase production when it meets on March 4, reversing some
of the output cuts made last year.
But it's unclear if the group will act vigorously enough. Wary of the virus's persisting
threat to demand, Saudi Energy Minister Prince Abdulaziz bin Salman has urged fellow producers
to remain "extremely cautious."
If the alliance agrees an output hike that falls short of requirements, however, it could
trigger a further price surge
... ... ...
Goldman Sachs Group Inc. sees Brent hitting $75 a barrel in the third quarter as a new
commodities supercycle beckons , while trading giant Trafigura Group says it's "very
bullish" on the months ahead. Socar Trading SA, a unit of Azerbaijan's state oil company,
predicts $80 could be reached this summer and triple digits within two years.
"The fear is that in 12 months there will be a shortage" even if OPEC+ revives output, said
Socar Chief Trading Officer Hayal Ahmadzada. "It will drive the price very high, very
fast."
... ... ...
Prices are still far below the levels most OPEC nations need to cover government
spending , and the International Energy Agency -- a leading forecaster -- anticipates a
market setback in the second quarter as a seasonal lull briefly causes inventories to
accumulate again.
Regarding the Renegade Inc. link @Karlof has provided and the interview with
Richard A. Werner, the research paper he talks about in the midsection can be read here:
Can banks create money out of nothing? .
Strangeley enough, it's probably the first empirical reasarch attempt on how a bank "loan" is
indicated on a bank balance sheet. He does it by taking a fictitious loan from one of these
small local community banks he talks about in the interview.
The paper is easily accessible and also contains a brief history of the perception on how
money is created and how banks operate.
And since the documentary The Spider's Web has been mentioned, there are two
complementary films to banking and finance which are worth watching: 97% Owned and Princes of Yen , the latter based on
Richard Werner's same-titled book. The book tells the story about a slow coup d'etat that
happened in Japan during the 70's and late 80's and how Japan was transformed from a
centralized command economy where credit creation was "window-dressed" by the powerful
Finance Ministry by means of an artificially created housing bubble into one that is
dominated by a neoliberalized Central Bank with all the monetary, financial and social
ramifications we can see today, not just in Japan but around the globe.
Patricia McDonald layered on sweaters, socks and mittens and huddled under blankets for 15
hours as the temperature in her Duncanville, Texas, home plunged to 42 degrees in the wake of
Winter Storm Uri.
Well after the water in her kitchen froze, McDonald decided she'd had enough and braved a
hair-raising ride over snow-covered, ice-slicked roads to get to her daughter's house several
miles away.
The Dallas County probation officer was safe and warm there. However, McDonald couldn't
establish the computer connection she needed to check in with colleagues, and she worried about
clients who had had fewer resources than she did for surviving the state's massive power
failure.
This isn't merely a Texas problem. Failing infrastructure -- from pothole-scarred roads and
run-down bridges to aging utility lines and dilapidated water systems -- poses just as big a threat to the rest
of the country.
Without a bold rebuilding campaign, Americans will continue to risk their well-being and
livelihoods as the nation collapses around them.
McDonald, financial secretary for United Steelworkers (USW) Local 9487, which represents
hundreds of city and county workers in Dallas, grew increasingly angry knowing that it took
just several inches of snow and frigid temperatures to knock out the Texas power
grid and paralyze the state.
Some Texans, confronted with days-long power outages,
slept in idling motor coaches that officials turned into makeshift warming centers or drove
around seeking hotel rooms that still had light and heat.
But even as McDonald and other Texans waited for power to be restored, police and
firefighters in Philadelphia used rafts to
rescue at least 11 people trapped by a torrent of water after a 48-inch main ruptured in
the city's Nicetown neighborhood.
America cannot move forward if it continues falling apart. That's why the USW and other
labor unions are championing a
historic infrastructure program that will modernize the country, improve the nation's
competitiveness and create millions of jobs while simultaneously enhancing public safety.
"There needs to be change," said McDonald, one of the millions affected by the blackouts
that utilities hurriedly imposed because surging demand and equipment failures put the whole
power grid "
seconds and minutes away " from a catastrophic failure that could have left the state
without electricity for months.
A major infrastructure investment, such as the one President Joe Biden envisioned in his
Build Back Better plan, will
create jobs not only for the workers who build roads and bridges but also for the Americans who
manufacture aluminum, cement, fiberglass, steel and other items essential for construction
projects.
Stronger, more resilient infrastructure will help America weather the ever
more frequent, increasingly severe storms associated with climate change. That means not
only upgrading power grids but also encasing utility poles in concrete or relocating power
lines underground. It also requires strengthening coastal barriers to guard
against the growing hurricane damage that Texas and other states face.
Expanding broadband and rebuilding schools will ensure that children across the country have
equitable access to educational opportunities. Investments in manufacturing facilities will
enable the nation to rebuild
production capacity decimated by decades of offshoring.
And an infrastructure campaign will ensure local officials have the resources they need to
manage growth, such as the
huge expansion underway at the Electric Boat submarine shipyard in Groton, Connecticut.
Kevin Ziolkovski welcomes the business that the shipyard brings to his community. But
Ziolkovski, who represents dozens of Groton Utilities workers as unit president of USW Local
9411-00, said it makes no sense for the federal government to continue awarding bigger
contracts to Electric Boat without providing sufficient funds for related infrastructure.
Ziolkovski says Groton Utilities needs $3.5 million more just to construct a new water tank
for the shipyard, one of its biggest customers. He also knows that Groton and other towns need
funds to upgrade roads, sewerage systems, public transit and recreational amenities to
accommodate the expected influx of workers and their families.
"If you want to see these multibillion-dollar nuclear submarines get built for the defense
of the entire nation, you should support everything that goes into that, too," said Ziolkovski,
who sees a national infrastructure program as one solution and developed a briefing book on
local infrastructure needs for Connecticut's congressional delegation.
McDonald, who returned to her home after three days to find the power back on but her
neighborhood under a boil-water advisory, knows that other communities will suffer unless the
nation embraces a rebuilding program.
It pains her to know that America fell into such disrepair that it cannot provide basic
services, like power and safe roads, at the very time people need them most.
We need infrastructure upgrade. How to fund? It seems a fair number of the examples here
were originally funded by local taxes. As local property taxes have been cut/ held down, the
local money to repair and maintain has disappeared. Now the same local tax cutters want
Federal money for their projects. What happened to local borrowing and funding? Is it
different from the past?
I am all for Federal funding of national projects such as roads, but local stuff might be
best funded at local level with some Federal guarantees.
all we really need is a policy to upgrade infrastructure rather than a policy of handing
money to connected insiders. Local borrowing and funding won't be a drop in the bucket and
that lack will be used to say " sorry, you can't have that! unless you guarantee profits to
the funding banksters". The system as it stands now makes this article seem fantastic, in the
disney sense
The Fed can easily fund an entire $10 trillion infrastructure package over a decade. If
not completely corrupted, this adds productive capacity at good to high rates of return
lowering total factor costs.
Also, savings could be had from the healthcare rackets that siphon off an unreal 8% to 10%
(up to $2 trillion/year) of GDP in skims. The US needs to increase investment by 5% of GDP
($1 trillion) / year to get back on track.
The funds are in "our" insanely huge "defense" budgets where because they routinely break
the 1996 law requiring an annual accounting,over $21 Trillion dollars have been unaccounted
for,n this by outside investigaters. Imagine the real amount if investigated by insiders.
When we defund the military from the size of the next 10 largest military budgets globally
down to merely the largest, we will be able to rebuild our country,pay off student debt and
pay for Medicare 4 All with change left over. This will also decrease our military's huge
pollution footprint as they are 1 of the largest sources.
The U.S. is run by predatory plutocrats. Biden and the coin-operated Congress are there
just to maintain a dignified facade on the looting operation. As long as the majority of
voters are willing to lower their standard of living in return for receiving infusions of
hatred from their favorite demagogues, the nation will continue to decline.
Even if Biden launches a large scale infrastructure and infrastructure repair program I am
not sure how much infrastructure and infrastructure repair the money would buy without major
changes in the ownership of construction Cartels and some of the ownership of existing
infrastructure -- like the Grid, Internet, and telecommunications. But look on the bright
side of life there are probably still shovel-ready projects waiting from the Obama years. I
trust that Biden has replaced the government appointees who oversaw where the CARES Act
trillions went so that we will at least have some idea where all the infrastructure and
infrastructure repair money went.
Neoliberals know next to nothing about the monetary system.
All their mistakes during globalisation have allowed heterodox economists to make enormous
progress in this area.
Even amongst the mainstream there are one or two that do have some idea.
Paul Ryan was a typically confused neoliberal and Alan Greenspan had to put him
straight.
Paul Ryan was worried about how the Government would pay for pensions.
Alan Greenspan told Paul Ryan the Government can create all the money it wants, there is no
need to save for pensions. https://www.youtube.com/watch?v=DNCZHAQnfGU
What matters is whether the goods and services are there for them to buy with that money.
That's where the real wealth in the economy lies.
Neoliberals have got very confused about where the real wealth in the economy lies and
money, which comes out of nothing.
They don't know what real wealth creation is, and think it comes from things like making
money, trade and inflating asset prices.
It's a recipe for disaster.
They always think there is no money, when money comes out of nothing and Governments can
create as much as they want.
They don't know what real wealth creation is and how to grow an economy in a sustainable
way.
They usually adopt the economic growth model of the US in the 1920s.
Bank credit is used for unproductive purposes and it is the money creation of bank credit
that drives the economy.
Debt rises faster than GDP, as you head towards a financial crisis.
No one realises the problems that are building up in the economy as they use an economics
that doesn't look at debt, neoclassical economics; apart from the Chinese.
1929 – US
1991 – Japan
2008 – US, UK and Euro-zone
The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart
above.
The Chinese were lucky; it was very late in the day.
Mankind first started to produce a surplus with early agriculture.
It wasn't long before the elites learnt how to read the skies, the sun and the stars, to
predict the coming seasons to the amazed masses and collect tribute.
They soon made the most of the opportunity and removed themselves from any hard work to
concentrate on "spiritual matters", i.e. any hocus-pocus they could come up with to elevate
them from the masses, e.g. rituals, fertility rights, offering to the gods . etc and to turn
the initially small tributes, into extracting all the surplus created by the hard work of the
rest.
The elites became the representatives of the gods and they were responsible for the bounty of
the earth and the harvests.
As long as all the surplus was handed over, all would be well.
The class structure emerges.
Upper class – Do as little as they can get away with and get most of the rewards
Middle class – Administrative/managerial class who have enough to live a comfortable
life
Working class – Do the work, and live a basic subsistence existence where they get
enough to stay alive and breed
Their techniques have got more sophisticated over time, but this is the underlying
idea.
They have achieved a total inversion, and got most of the rewards going to those that don't
really do anything.
Everything had worked well for 5,000 years as no one knew what was really going on.
The last thing they needed was "The Enlightenment" as people would work out what was really
going on.
They did work out what was going on and this had to be hidden again.
The classical economists identified the constructive "earned" income and the parasitic
"unearned" income.
Most of the people at the top lived off the parasitic "unearned" income and they now had a
big problem. (Upper class – Do as little as they can get away with and get most of the
rewards)
This problem was solved with neoclassical economics, which hides this distinction.
It's a pseudo economics that was designed to hide the way the economy actually works.
It confuses making money and creating wealth so all rich people look good.
Great minds think alike.
William White (BIS, OECD) talks about how economics really changed over one hundred years ago
as classical economics was replaced by neoclassical economics. https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s
He thinks we have been on the wrong path for one hundred years.
Small state, unregulated capitalism was where it all started and it's rather different to
today's expectations.
Engdahl takes a look at the energy crisis in Texas.
The Green Energy Fallacy
In addition US oil production, centered in Texas, has plunged by a third, and more than
20 Gulf Coast oil refineries are blocked as are grain barge shipments along the Mississippi
River. Several analysts of the deregulated Texas grid model point out that had the state
maintained a "reliable emergency backup" such as is possible with nuclear or coal power,
the blackout could have been averted. Recently Texas has forced six coal power plants to
close since 2018, owing to state rules that force power companies to take the subsidized
wind and solar power, undercutting the cost of their own coal generation. It simply forced
them to shut down functioning coal plants that generated 3.9 GW. Had those still been on
line, sources say the blackouts could easily have been averted. Unlike current wind
technology or solar, coal and nuclear plants can store up to a month or more capacity on
site for power emergencies.
While in northern states like Minnesota where severe winters are common and prepared
for, Texas has no such requirements for reserve capacity. For example, the Minnesota Public
Utilities Commission requires plants to have enough reserve capacity online to ensure the
power stays on during extreme circumstances. Instead, Texas operates an "energy-only"
market, where wholesale power prices are seen as an adequate incentive to bring more power
plants online. The aim of the energy only model was to make intermittent wind and solar
more profitable to increase their market share over conventional alternatives like coal or
nuclear.
The state grid model forced Texas coal and nuclear plants to sell electricity at a loss
on the market because they are unable to reduce their electricity output when high wind and
solar output force prices into the red. Ultimately, it forced the unnecessary closing of
the six coal plants, just what the green energy advocates wanted. The flaws in the model
are glaring, as is the growing dependence on unreliable wind and solar options to get a
dubious zero carbon footprint.
It should be obvious to all that "price signals" do not convey public interest all the
time, and definitely not in the times of crisis.
To prevent or alleviate a crisis, investments are needed that may be "wasted" or not. I
did not notice a public debate like that: "do you want to pay 1c/kWh more so the power supply
will be adequate even during to relatively short events that happen every 10 years or so?" It
is cheaper to build pipes and other equipment if they do not have to work in cold weather,
and to close usually unneeded thermal power stations rather then keeping them capable of
producing electricity during occasional weeks of peak demand.
Funnily enough, the "novel pricing mechanisms" reward the companies that did not
prevent the crisis, even few kWh's sold at a price 1000 times larger than the usual
contributes very well to the balance sheets. IMF is busy convincing borrowing countries to
engage in "reforms" of that kind (and worse, persistent jacking up of prices).
A Texas electric company has been hit with a $1 billion class action lawsuit from a woman
who claims her bill skyrocketed to more than $9,000.
Houston resident Lisa Khoury says her monthly Griddy electric bill spiked to $9,340 from
$200, and that the company pulled $1,200 from her bank account until she blocked further
payments,
according to KTRK-TV .
"It went through my mind how are we going to pay this, what are we going to do, this is
life-changing," Khoury
told KXAS-TV .
The suit accuses Griddy of price gouging and failing to protect its customers from
astronomical energy costs.
The electric company, which serves nearly 30,000 Texans, sent an email out to their
customers on Feb. 13 before the winter storm, warning them of the high costs and even
encouraged them to switch providers.
"Prices are looking to stay at record rates over the next couple of days due to the polar
vortex. Your well-being is more important than our bottom-line. Unless you are a Griddy
energy-saving expert, we recommend you immediately switch to another provider due to these
price surges," a screenshot of the email posted to Twitter reads.
A Griddy spokesman
told The Dallas Morning News that "the lawsuit is meritless and we plan to vigorously
defend it."
"Liberal" appeared in Europe in a socio-economic context in the late 1600s to describe an
system where business would be free, unhindered by royal/government control. For the most
part, to start up a business, one needed a royal license or patent. The liberals wanted
unregulated business, and their motto was "laissez faire" (let it be done/happen).
Laissez-faire capitalism is generally considered the first (entrepreneurial) phase of
capitalism, starting in the early 1700s.
Outside the English-speaking world, the word still relates to free trade and unregulated
business practices.
"Neoliberal" is more recent, coming into common usage since the arrival of the
Thatcher/Reagan regime of globalization. Neoliberals go one further than the original
liberals. While the latter just wanted governments to let businesses do their thing, the
neoliberals believe that it is government's duty to promote and support business, in other
words to play a major role in making it possible for corporations to make money. Hence,
Boeing and the other corporations and the big banks must NEVER be allowed to fail, for that
would represent a failure of government as it is understood in neoliberal ideology.
The liberalism which is referred to here is the economic liberalism which was adopted in
the United Kingdom in the 1840s after the "reform" of the Corn Laws, which permitted free
trade in grain and therefore brought down both the price of wheat and the small farming
community in the UK, as it was intended to do. Later these liberal policies (largely modelled
on the "comparative advantage" economic theory, which had already been refuted by the time it
was developed by David Ricardo) were used to justify the Irish genocide of 1847-9.
This policy was eventually abandoned later in the nineteenth century, except for places
like India, of course. It was restored in the West in the 1970s, under the name of "free
trade", and therefore is called neoliberalism, or new liberalism in the economic sense.
The term is not a compliment.
I suspect that the term "liberal-fascist" derives partly from the term Islamofascist,
meaning a Muslim who does not bow to Washington six times a day, and partly from the term
"social-fascist", a Stalinist term for a socialist who did not bow to Moscow six times a
day.
Liberalism is the ideology of capitalism. According to Losurdo, the term "liberal" (as an
adjective) is first found in 16th Century Spain, and essentially was a defense of slave labor
to serf labor.
The first theoretician of Liberalism that I can think of is John Locke. If he wasn't the
first, he certainly was the most influential, as he was the philosopher of the Founding
Fathers of the USA.
Liberalism was never an organized "school" or ideology. The term itself as we know today
(an ism) was only consolidated sometime around the French Revolution (1789), hence why many
people today (mainly Western First Worlders) still associate the term is progressivism and
even leftism. In reality, they are confounding the term with radicalism, which was the
faction of the abolitionist liberals who extrapolated liberalism to all human beings.
Neoliberalism is literally the New Liberalism. The neoliberals believe that everything
that happened between the Russian Revolution (1917) and the post-war welfare state
social-democracy was an abortion of History that should've never have happened. They then
propose the return to the classical liberal era (until 1914) with updates to the new
technological realities of their time, as if the period of 1917-1975 never existed. They then
seek to "link up" 1980-present to 1500-1914.
@vk "The neoliberals believe that everything that happened between the Russian Revolution
(1917) and the post-war welfare state social-democracy was an abortion of History that
should've never have happened."
Personally, I tend to define 'neoliberalism' as global financial capitalism. 'Global'
being the key. Something similar to what's described here: https://en.wikipedia.org/wiki/Ultra-imperialism
. Technological advances in global communications and transportation (containerization) being
its most important precursors.
But I agree that the collapse of the Soviet Union, a competing alternative model, has to
be an important component also.
@ Posted by: Mao Cheng Ji | Feb 25 2021 12:28 utc | 87
You're thinking about Monetarism - the economics school founded by Milton Friedman that
served as the economic theory of neoliberalism after the 1980s.
Neoliberalism was founded in 1947 (Mont Pelerin Society). One interesting thing about the
original neoliberals was that they didn't distinguish between European social-democracy and
communism: in their view, the welfare state was the realization of the Communist Manifesto's
program (it really does propose for what we nowadays call the welfare state in some of its
pages as some kind of transition program).
@ Posted by: Mao Cheng Ji | Feb 25 2021 12:49 utc | 89
Monetarism is the economic theory. Neoliberalism is the political-ideological doctrine.
Neoliberalism found in Monetarism the missing piece for them to govern the Western world,
sometime in the mid-1970s.
It is common for a political-ideological doctrine to absorb theories outside of its
"field" in order to strengthen itself and gain power. Change of clothes (i.e. change of the
theories it adopts) is also common.
The impression Westerners have nowadays that one political-ideological doctrine must
always have exactly one economic theory or even that they are the same thing comes from the
fact that we live in the Era of Marxism, i.e. a historical period where Marxism is dominant.
But Marxism is the exception to the rule, based on the scientific theory of the greatest
philosopher of all time.
In practice, the bourgeois ideologues will have to make do with much inferior
theoreticians (John Locke, Adam Smith, David Ricardo, Paul Samuelson, Mises, Hayek,
Böhm-Bawerk, Walras, Keynes, Friedman etc. etc. etc.) and so it is expected for them to
change their thinkers from time to time.
@vk "Neoliberalism found in Monetarism the missing piece..."
The way I see it, economics is the base. Like I said, technological advances in global
communications and transportation shifted the paradigm. What we have now is international
division of labor, controlled by west-owned global finance. Global financial capital is
rising above national boundaries; the role of national governments is to provide resources,
infrastructure, and disciplined low-cost labor, thus attracting a portion of global capital,
competing for it.
That's what I call 'neoliberalism', but I don't insist on it. What's in the name?
'Hyperimperialism', 'super-imperialism', 'inter-imperialism' or even 'state cartel' would
do.
It's just that 'neoliberalism' is a popular word these days, that seems to be used to
describe the current form of "relations of production". And why not.
Now, about ideologies. My feeling is, there are always hundreds of various ideologies
flying around. The establishment will pick a suitable one, shine it up in think-tanks, and go
with it. It'll become the dominant ideology. Until it doesn't suffice anymore, and then
they'll replace it with another. But that's all bullshit. Pwogwessivism, liberalism, social
democracy, the third way, whatever. No need to pay attention.
@ Posted by: Mao Cheng Ji | Feb 25 2021 14:18 utc | 97
Now, about ideologies. My feeling is, there are always hundreds of various ideologies
flying around. The establishment will pick a suitable one, shine it up in think-tanks, and
go with it. It'll become the dominant ideology. Until it doesn't suffice anymore, and then
they'll replace it with another. But that's all bullshit. Pwogwessivism, liberalism, social
democracy, the third way, whatever. No need to pay attention.
That's the definition of democracy in the post-war, as defined by the likes of Arthur M.
Schlesinger, Jr. and Hannah Arendt.
Schlesinger defined democracy or Western democracy as the system with a "vital center". A
vital center is a political system dominated by a political spectrum (left-right). The
ideologies within this political spectrum freely compete against each other in the public
arena for political power (getting into the White House; forming a majority within a
Parliament). Schlesinger is the father of what we nowadays call "pluralism". In opposition, a
totalitarian system is one of a single party, in which he put Nazi Germany and the USSR -
they don't have a "vital center".
Hannah Arendt defined totalitarianism as any system that vertebrates itself on one single
meta-narrative (History). She put as the totalitarian holotypes both Nazi Germany and the
USSR - the first built itself over the narrative of the master race; the second over class
struggle. By exclusion, she defines a democratic system as those without a single narrative
or any meta-narrative. By a different route, she comes to a similar endgame as Schlesinger,
with the exception that, in her model, democracies don't necessarily need to be multi-party
or even plural. You could be a single-party system and not plural - as long as the party
doesn't adopt any "meta-narrative", it suffices as free and democratic. Needless to say,
Arendt is one of the precursors to Postmodernism (absolute relativity).
That's why the West, until the present days, still consider itself as fully democratic and
China and Russia fully totalitarian: as long as the West doesn't adopt a meta-narrative and
keeps more than one party, they are democratic by post-war standards. It's not and never was
about eradicating poverty, turning the world a better place, fomenting progress for the
people etc. etc.
Lots of stabs being made at a definition for Neoliberalism. The following is from Hudson's
J is for Junk Economics , pgs 167-8:
" Neoliberalism: An ideology to absolve banks, landlords and monopolists from
accusations of predatory behavior. Just as European fascism in teh 1930s reflected the
failure of socialist parties to put forth a viable alternative, today's U.S.-centered
neoliberalism reflects the failure of industrial capitalism or socialism to free society from
rentier interests that are a legacy of feudalism.
"Turning the tables on classical political economy, rentier interests act as
plaintiffs against public regulation and taxation of their economic rents in contrast
to Adam Smith and other classical liberals, today's neoliberals want to deregulate
monopoly income and free markets for rent seeking, as well as replacing progressive income
taxation and taxes on land and banking with a value-added tax (VAT) on consumers.
"Endorsing an oligarchic role of government to protect property and financial fortunes
(see Chicago School and Moral Hazard ), neoliberalism loads the economy with an
exponential growth of debt while depicting it in a way that avoids recognizing the rising
rentier overhead (rent, interest and insurance) paid to the FIRE sector. (See Junk
Economics and Social Market .) Neoliberals want to privatize public
infrastructure. They defend this grabitization by depicting public ownership and regulation
as less efficient than congtrol by financial managers, despite their notorious short-termism.
The pretense is that private operators will provide goods and services at lower cost even
while extracting monopoly rent, building interest, dividends and high management salaries
into prices. (See Pentagon Capitalism .)"
A related definition follows:
" Neoliberal Disease: A term coined by Jan Hellevig to describe the free hand that
leaders of the demoralized post-Soviet bureaucracies gave neoliberals to redesign and
de-industrialize their economies by creating client kleptocracies . 'They freed the
markets, but only for the criminals. They totally neglected investments to modernize the
industry, and let the assets and cash streams be openly or covertly stolen by insiders and
the mob. The result was total chaos and the breakup of the Soviet Union.'" (Jon Hellevig,
"Russian Economy--The disease is not Dutch but Liberal," Awara March 2 2016, reprinted in Johnson's Russia
List , March 3, 2016, #12.)" [All Emphasis Original]
It should be noted the strategy Hellevig describes is the same as that used by those
termed "Corporate Raiders" that first prominently surfaced during Reagan/Bush and were
responsible for the so-called Savings & Loan Crisis.
If you don't have Hudson's book, I highly suggest getting it as it's filled with excellent
information and beats taking both micro- and macroeconomics. It's the companion book to
Killing the Host , which is essential for understanding Neoliberalism. The only part
of the Saga missing is a definitive history telling how the Neoliberal doctrine arose in the
UK and was exported to the USA @1880. Hudson has provided key portions but the overall story
still remains to be told.
the worst mistake jimmy carter ever made was to hire brzezinski, father of the
mujahideen and grandfather of al-qaeda. we used to brag about arming terrorists with weapons
to shoot down russian helicopters, hell they even made a "comedy" about it called charlie
wilsons war. now we accuse the russians of placing bounties on americans in afganistan and
demand more sanctions be placed on russia.
utter hypocrisy.
as for the maidan cookie monster and her neocon half wit husband, further proof of
failing upward, nothing succeeds like failure in washington. /div
Yves here. An ugly trade treaty that included corporate-profit guaranteeing "investor-state
dispute settlement" mechanisms is again getting the bad press it deserves. We mentioned the
1994 Energy Charter Treaty in our 2013-2015 opposition to the TransPacific Partnership and its
Atlantic sister, the TransAtlantic Trade and Investment Partnership because it had become
notorious in Europe for undermining clean energy initiatives.
From a November 2013 post, quoting Public Citizen :
Vattenfal, a Swedish company, is a serial trade pact litigant against Germany. In 2011,
Der Spiegel reported on how it was suing for expected €1 billion plus losses due to
Germany's program to phase out nuclear power:
According to Handelsblatt, Vattenfall has an advantage in seeking compensation because
the company has its headquarters abroad. As a Swedish company, Vattenfall can invoke
investment rules under the Energy Charter Treaty (ECT), which protect foreign investors in
signatory nations from interference in property rights. That includes, according to the
treaty's text, a "fair and equitable treatment" of investors.
The Swedish company has already filed suit once against the German government at the
ICSID. In 2009, Vattenfall sued the federal government over stricter environmental
regulations on its coal-fired power plant in Hamburg-Moorburg, seeking €1.4 billion
plus interest in damages. The parties settled out of court in August 2010.
These treaty terms are designed to erode national sovereignity and establish supra-national
mechanisms to make corporate profits senior to national laws. I'm not making that up. Again
from that 2013 post:
Word has apparently gotten out even to Congressmen who can normally be lulled to sleep
with the invocation of the magic phrase "free trade" that the pending Trans Pacific
Partnership is toxic. This proposed deal among 13 Pacific Rim countries (essentially, an
"everybody but China" pact), is only peripherally about trade, since trade is already
substantially liberalized. Its main aim is to strengthen the rights of intellectual property
holders and investors, undermining US sovereignity, allowing drug companies to raise drug
prices, interfering with basic operation of the Internet, and gutting labor, banking, and
environmental regulations.
It's not really about "trade", but a system of enforceable global governance that is not
designed for modification by those who will live the results.
The only good news about the Energy Charter Treaty, compared to its later versions of
investor-state dispute settlement provisions, is that signatories can withdraw. And that might
actually happen with the Energy Charter Treaty.
By Fabian Flues, an adviser on trade and investment policy at Berlin-based PowerShift,
Cecilia Olivet, project coordinator with the Economic Justice Programme at the Transnational
Institute, and Pia Eberhardt, a researcher and campaigner with the Brussels-based campaign
group Corporate Europe Observatory. Originally published at
openDemocracy
On 4 February the German energy giant RWE announced it was
suing the government of the Netherlands . The crime? Proposing to phase out coal from the
country's electricity mix. The company, which is Europe's biggest emitter of carbon, is
demanding €1.4bn in 'compensation' from the country for loss of potential earnings,
because the Dutch government has banned the burning
of coal for electricity from 2030.
If this sounds unreasonable, then you might be surprised to learn that this kind of legal
action is perfectly normal – and likely to become far more commonplace in the coming
years.
RWE is suing under the Energy Charter Treaty (ECT), a little-known international agreement
signed without much public debate in 1994. The treaty binds more than 50 countries, and allows
foreign investors in the energy sector to sue governments for decisions that might negatively
impact their profits – including climate policies. Governments can be forced to pay huge
sums in compensation if they lose an ECT case.
On Tuesday, Investigate Europe revealed that the EU,
the UK and Switzerland could be forced to pay more than €345bn in ECT lawsuits over
climate action in the coming years. This amount, which is more than twice the EU's annual
budget, represents the total value of the fossil fuel infrastructure that is protected by the
ECT, and was calculated using data gathered by Global Energy Monitor and Change of Oil
International.
With ECT-covered assets worth €141bn (or more than €2,000 per citizen), the UK
– which in 2019 became the first major economy to pass a net zero emissions law –
is the country most vulnerable to future claims.
In 2019 the European Commission called the ECT "outdated" and
"no longer sustainable", and more than 450 climate leaders and scientists and 300
lawmakers from across Europe have called on governments to withdraw from the treaty.
But in response, powerful interests have mobilised to not just defend the treaty, but to
expand it to new signatory states. These interests include the fossil fuels lobby keen to keep
its outsized legal
privileges ; lawyers who make millions arguing ECT cases; and the Brussels-based ECT
Secretariat, which has close ties to both industries and whose survival depends on the treaty's
continuation.
A Bodyguard for Polluters
Supporters of the ECT make a number of controversial claims to prevent countries from
leaving the treaty and persuade new countries to join. But their myths and misinformation are
easily
debunked .
For example, ECT supporters say the treaty attracts foreign investment, including into clean
energy. However, there is no clear evidence that ECT-style agreements do this: a recent
meta-analysis of 74 studies found
that investment agreements' effect on increasing foreign investment "is so small as to be
considered zero".
And while ECT supporters claim the treaty protects renewable investments, in reality it
predominantly protects and prolongs the fossil-fuel dominated status quo. In recent years only
20% of investments protected by the ECT covered clean energy, compared to 56% for coal, oil and
gas.
By protecting the status quo, the ECT acts as a
bodyguard for polluters . As the RWE example shows, when a government decides to phase out
coal or cease oil and gas operations, fossil fuel companies can demand steep compensation via
the ECT. So with no public benefits and clear risks for climate action, why are countries
hesitant to leave the treaty? Two more myths are preventing them from taking action.
Firstly, ECT proponents claim that an ongoing process to 'modernise' the treaty will fix its
flaws. But modernisation has proceeded at a snail's pace since 2017, and is unlikely to succeed
given resistance from powerful ECT members like
Japan , whose companies have used the ECT to take legal action against other governments.
Leaked
reports show that the talks are stalled due to the requirement to take decisions
unanimously.
No signatory state has proposed removing its dangerous corporate courts, which take the form
of arbitration tribunals run by three private lawyers. No state has proposed a clear exemption
for climate action. No ECT member wants to exclude protection of fossil fuels from the
modernised treaty any time soon.
In short: the negotiations around ECT 'modernisation' will not bring the treaty in line with
global climate commitments.
Secondly, ECT supporters claim that leaving the treaty offers no protection against costly
lawsuits. The ECT's sunset clause – which allows investors to sue a country for 20 years
after its withdrawal from the treaty – makes a unilateral ECT exit useless, it is
claimed.
In practice, however, withdrawing from the ECT significantly reduces countries' risk of
being sued and avoids carbon lock-in from new fossil fuel projects. The ECT's sunset clause
only applies to investments made before withdrawal, while those made after are no
longer protected.
At a time when the majority of new energy investment is still in fossil fuels, not
renewables, this is important. The sooner countries leave, the fewer new dirty investments will
fall under the ECT and be 'locked-in' by its legal status.
Italy took the necessary step of withdrawing from the ECT in 2016. Going forward, if
multiple countries decide to
withdraw together – say, the EU bloc, supported by allies such as the UK or
Switzerland – they can further weaken the sunset clause. Countries that withdraw could
adopt an agreement that excludes claims within their group, before jointly leaving the ECT at
the same time. That would make it difficult for investors from those countries to sue others
from the group.
This week a European-wide petition has been launched so that citizens can
call on their governments to end the ECT madness.
Leaving the outdated, climate-killing ECT is a no-brainer. It is not just good governance,
but the logical step for all who take global warming seriously.
Those "investor-state dispute settlement" mechanisms are nuts and I can see a rush for the
door if one or two countries pull out of the Energy Charter Treaty. There has to be a point
where they realize that the Energy Charter Treaty is not in fact a suicide pact. Good thing
that there is not an equivalent in the medical industry or else healthcare companies would be
suing nations for giving their citizens vaccines on the grounds that it is robbing those
companies of future income from treating them during the present pandemic.
"not an equivalent in the medical industry or else healthcare companies would be suing
nations for giving their citizens vaccines on the grounds that it is robbing those companies
of future income from treating them during the present pandemic"
Are you sure?
They have been given a non-liability clause for side-effects. The EU has ordered more
vaccine in spite of not knowing if the vaccines will stop the transfer of the disease. If
that doesn't sound like an equivalent, what does?
No. that's quite different. The governments under an ISDS type of regime would be required
to buy or to compensate for non-purchases.
Here, they are competing with each other to try to get supplies. The liability waivers are
in a completely different economic category and result from governments being so eager to get
the vaccines that they were released without going through the normal approval process (and
the drug companies as a result having an upper hand in bargaining).
It was the governments themselves who enjoined the pharma companies to rush vaccine
development and who then also rushed the approval process. Thus in this case (and only in
this case) I think that a waiver of liability (maybe with some residual liability for gross
negligence) is entirely appropriate.
The ECT mechanism is a reasonable response to a question: "If a company in good faith
follows a nation's laws and invests money in a long-term, legal project, who should pay for
the stranded costs if the nation decides to change the law to make the project illegal?" This
is about who should pay for stranded assets.
Legislators naturally are looking for someone else to pick up the bill and the "someone
else" is often a foreign company because domestic companies have to much political power to
be messed with and the company shareholders are often local people.
The Canadian gas pipeline to the US gulf coast is an example. More than two billion
dollars were invested, the proper permits were gotten and the pipeline was built- all except
a five mile stretch now held up in the usual creative American litigation machine. So who
should pay for the two billion invested- half of which came from the Alberta provincial
government? Alberta has already filed the arbitration claim and I support their position; if
a country encourages a legal investment and then changes the rules the country can do it- but
the country should pay for the loss.
When American assets are confiscated overseas using the same sort of creative legal
reasoning the US investors are rightly up in arms. I'm specifically not including the
all-to-common cases of fraud and political payoffs by foreign investors. In the cases Yves
cites there are no allegations that the contracts were tainted by fraud.
A well known modern historian has pointed out that if the American abolitionists wanted to
end slavery they should have campaigned to do what the British did- buy all the slaves, set
them free and compensate the owners for the "taking" of the property. In the 1830s the
British spent the money and freed the slaves. In the U.S., on the other hand we had a civil
war, more than half a million young men killed- and the cost of the war was five times what
it would have cost to purchase and free all the slaves. I use this example because there were
clearly both moral and economic issues involved in slavery, just as there are in the fight to
limit air pollution and stop climate change.
Not only is there no free lunch, but there is always a fight about who should pay for the
lunch.
This sets the stage to rethink contracts of all kinds. If the Energy Charter Treaty
(basically contracts to protect vested interests for profits and against liabilities) is
breached by a country simply leaving the organization it makes all those contracts worthless.
And it explains why the TPP and the TAP don't have a get-out clause. I think the question of
stranded assets is being mishandled too. Especially because we will need fossil fuel for many
decades to come. At this point it is a question of what do we sacrifice to protect the
atmosphere? It looks like gasoline-cars and maybe home heating fuel. But not electricity. RWE
AG is a huge generator and provider of electricity. Asia Pacific as well as the EU. So taking
Texas as a good example, what happens to RWE if they are faced with any number of problems
and need to generate electricity fast? Their best backup is oil and natural gas. And it's
gotta be a no-brainer that they are seriously involved with Nordstream-2, and something
similar in eastern Siberia (?), to supply fuel and back-up fuel for their operations. ECT is
an old agreement. TPP is a newer one. Neither one of them are looking at the downside to the
environment. So they should both be rethought and re-construed. Because, for more accurate
consideration, fossil fuels are not so much a stranded asset as an asset that must be
carefully conserved to last us through a long transition period.
Given that industries spend as much effort lobbying for the environmental disasters our
leaders (they paid to get elected) approve I don't think they deserve to earn back the
expense of their investments, let alone the theoretical profit that that stupid, immoral
investment could have generated
I think this sort of situation shows how important it is for governments to be the
investors/owners of critical infrastructure instead of capitalists (paid for by asset taxes,
transaction taxes and MMT).
At this point I can think of no wealthy person who's fortune is not built on the misery of
our grandchildren (Oh no! It's us, now, not our grandkids at the edge of the abyss) and we
need a massive asset tax on top of huge lifestyle changes. An asset free, radically different
life is coming soon for us all whether we choose it or not and putting the decision off is
only making the looming reality worse..
The tendency of liberalism to deny the consequences of society stems from its myth of the
'individual'. Liberalism imagines a world of rational subjects each making decisions in a
sovereign way (Thatcher's 'there is no such thing as society'). This allows capitalism to
erect a moral framework that represents the consequences of an economy as the consequences of
personal decisions. In this way, success (wealth) is 'reward' and failure (poverty) is
punishment. It's what Max Weber called 'secular Protestantism'. The working classes
participate in this evaluative ideology (Gramsci); it is the source of their self-loathing
and the reason they always vote against their own best interests. They all believe their lack
of means is a consequence of their lack of intelligence, work ethic, failure of
entrepreneurial spirit, etc etc. Here is Marx's own critique of the way liberalism washes its
hands of the effects of capitalism:
"The... theory... which is also expressed as a law of nature, that population grows faster
than the means of subsistence, is the more welcome to the bourgeois as it silences his
conscience, makes hard-heartedness into a moral duty and the consequences of society into
the consequences of nature, and finally gives him the opportunity to watch the destruction
of the proletariat by starvation as calmly as any other natural event without bestirring
himself, and, on the other hand, to regard the misery of the proletariat as its own fault
and to punish it. To be sure, the proletarian can restrain his natural instinct by reason,
and so, by moral supervision, halt the law of nature in its injurious course of
development." - Karl Marx, Wages, December 1847
While it may be superficially true that our poor Texan could have cunningly evaded copping
the wholesale price the fact remains that he is -- as all Texans are -- a victim of a system
structurally designed to extract exorbitant rents from his need for power. A socialist system
would not see him as a battery hen to be skimmed or as an atomized individual who should
'sink or swim' (in the words of that local mayor) but would seek to prevent power, food,
water, air, housing, education, health, etc etc from being hijacked and sequestered by vested
interests accessible only by outrageous fees. Socialism would outlaw rent-seeking, which is
the theft of meaningful life by carpetbaggers and their corrupt partners in government.
As we saw with Lavrov's latest interview, the gloves are coming off as China and Russia
escalate the diplomatic war in response to the "US-centered, racist, and mafia-styled
community" attacking them. The quote is from the Global Times Editor and deserves to be put
in full:
"Canada, the UK and Australia, three members of the Five Eyes alliance, have recently
taken action to put pressure on China. They have formed a US-centered, racist, and
mafia-styled community, willfully and arrogantly provoking China and trying to consolidate
their hegemony as all gangsters do. They are becoming a racist axis aimed at stifling the
development rights of 1.4 billion Chinese."
Despite the proven fact that there's only one race of humans--the Human Race--the 5-Eyes
nations continue to employ racism as a key tool of their so-called diplomacy. Again, the GT
Editor:
"Five Eyes alliance members are all English-speaking countries. The formation of four
states, except the UK, is the result of British colonization. Those countries share the
Anglo-Saxon civilization. The Five Eyes countries have been brought together by the US to
become the 'center of the West.' They have a strong sense of civilization superiority
. The bloc, which was initially aimed at intelligence sharing, has now become an organization
targeting China and Russia. The evil idea of racism has been fermenting consciously or
unconsciously in their clashes with the two countries."
And this "idea" is nothing new and has existed for centuries. My research led me to a 100+
year-old work, The Day of The Saxon , and to the work that suggested it, The Empire
of "The City" , both of which are freely available at The Archive. What is suggested by
them and the recent work ( Tomorrow, the World: The Birth of U.S. Global Supremacy ),
reviewed by Pepe about the planning that resulted in the post-war Outlaw US Empire is that
Empire is merely the continuance of the global Saxon Empire that still exists, and that what
we're experiencing are the ongoing "political adjustments" that confer superiority to the
Saxons since that's what they seek. In updated parlance, that would be Full Spectrum
Dominance. As we know, the Chinese have already felt Saxon love and want no more of it and
have finally made the connection between past and present. The Editor again:
"With a common language, a common historical background, and a coordinated attack target,
such an axis is destined to erode international relations and allow hooliganism to rise to
the diplomatic stage in the 21st century." [My Emphasis]
Hooliganism, an apt term given its roots in British football. Do read the entire editorial
for there is much more commendable content. Those in the EU need to understand that they're
doing the Saxon's bidding even through the UK is no longer a member as NATO still remains and
is dominated by Saxons.
"... Not only was Lloyd's still self-regulating, it was empowered to determine itself what was meant by the notion of self-regulation, unilaterally making rules governing its operations, without answering to any outside authority, even Parliament. Lloyd's secrets were still safe. ..."
I've been following Scottish independence closely now for about six months, and so have
formed a view of the protagonists. Nicola Sturgeon puts me in mind of Lady Mary Archer,
someone I knew for about four years. She is oh so sweet and polished on the outside - indeed
a High Court judge famously said of her "is she not sweet? Is she not fragrant?". But on the
inside....phew!
I believe it comes from a sense of impunity, a sense they can do anything they like,
however disgusting and depraved, and there is nobody that can touch them because they are
best female friends with Queen Elizabeth II. And the result is, well, abomination.
Let me give you some insights.
The source of wealth for Lord Archer is Lloyds of London, specifically the asbestosis
fraud. The quotes I am about to relate come from David McClintick's "The Decline and Fall of
Lloyds of London", Time Magazine Europe, February 21 2000 vol 155 no 7
Caressed by a soft breeze, Ralph Rokeby-Johnson and Roger Bradley surveyed the forbidding
fourth hole of the vintage Walton Heath golf course south of London. It was a bright
Thursday in early October, 1973. "Orator, you're not orating," Rokeby-Johnson
said. "Have I upset you?" Rokeby-Johnson had been needling the normally loquacious Bradley
for inside information since they'd teed off in the autumn golf outing of Lloyd's of
London, the world's pre-eminent insurance market. Bradley and Rokeby-Johnson were leading
executives at competing firms in the market and Lloyd's men maintained a spirited rivalry
in golf as well as business. But as they shop-talked their way along
the first three holes, "Orator" Bradley had fallen silent, because he sensed that
Rokeby-Johnson was himself harboring information that could prove explosive: the threat to
Lloyd's posed by asbestos, the ubiquitous, benign-looking insulation material that was
slowly but surely infecting workers in the asbestos industry with deadly lung
diseases--asbestosis and cancer--prompting lawsuits and insurance claims in America.
"What can you tell me?" Bradley finally asked as they idled on the fourth
tee, waiting for the players ahead to clear the green. "What I can tell you,"
Rokeby-Johnson replied in a stage whisper, "is that asbestosis is going to change the
wealth of nations. It will bankrupt Lloyd's of London and there is nothing we can do to
stop it."
It was Jefrey Archer who devised a means to turn an impending disaster into the Midas
touch.
Fast forward to February 2000. Over a quarter of a century has passed since Ralph
Rokeby-Johnson shared his apocalyptic vision with Orator Bradley. Legendary Lloyd's of
London, pioneer of the insurance industry and synonymous with it, has escaped bankruptcy.
But the organization that was once part of the very bedrock of Britannia has been
devastated by losses including massive compensation claims from American workers afflicted
by asbestosis and lung cancer. The wealth of nations may not have changed dramatically, but
Lloyd's fundamental character has changed, and thousands of Lloyd's investors--the
so-called Names who pledge all their personal wealth to underwrite insurance policies
issued by Lloyd's syndicates--have been ruined. The decline and fall of
Lloyd's, like all engrossing tragedies, has been building to a spectacular d?nouement. The
final act is now upon us and waiting in the wings are a group of Names who could yet prove
to be Lloyd's nemesis. These are the dissident investors, including members of the
so-called United Names Organization, who have refused to settle their asbestos-related
debts with Lloyd's because, they claim, they are the victims of a massive and calculated
swindle. Back in the 1980s, they argue, Lloyd's duped them into becoming Names by
fraudulently misrepresenting its profitability and concealing the ruinous asbestosis losses
that were in the pipeline. Do they have a case? The truth, they say, will
soon out. Later this month, in what could prove to be the trial of the new century, the
Lloyd's dissidents will claim in England's High Court that they have been the victims, not
just of negligent underwriting, but of one of the greatest fraudulent conspiracies of all
time. They will argue that they were recruited to Lloyd's at a time when the 300-year-old
institution knew it was facing massive asbestosis claims and needed extra capital to absorb
its forecast losses. The dissident Names will further charge that this massive fraud was
not the work of a few posh-mannered, money-grubbing Lloyd's underwriters, but was condoned
and indeed orchestrated by the Lloyd's hierarchy itself.
How much was involved?
Admonished by their partners to stop the shop-talk, Bradley and Rokeby-Johnson dropped the
subject until after the game when they settled with drinks in a corner of the tweedy bar of
the clubhouse. "Were you serious about asbestosis destroying Lloyd's?"
Bradley asked. "Of course," Rokeby-Johnson replied. On the back of his
scorecard, he then proceeded to calculate that Lloyd's could be swamped by claims far in
excess of the market's ability to pay--perhaps as much as $120 billion by the year 2000.
"Do you mean 'million' or 'billion'?" the incredulous Bradley asked.
"Billion," Rokeby-Johnson stressed. "It's the time bombs that worry me."
"What are the time bombs?" "The time bombs are the young
victims [of asbestosis] who will gradually develop lung disease. When they die, the lawyers
are going to have a field day. Pick a figure, but it won't be far off what I've told you.
See whether I am right. I shall be gone long before you."
The day after the golf match, Bradley recounted the conversation to a senior Lloyd's
colleague who warned him against repeating it to anyone else. It seemed to Bradley then
that at least a few Lloyd's insiders were aware of the looming asbestos problem even as
they recruited new Names to bolster the market's capital base. And recruit
they did. The number of names soared beyond 7,000 in the early '70s to 14,000 in 1978 and
reached over 34,000 by the late '80s. After nearly three centuries of genteel, discreet
one-by-one recruitment in Britain, Lloyd's salesmen fanned out across the world, especially
North America, touting Lloyd's as an exclusive club offering secure investments to only a
select few who qualified for membership. According to many of these new recruits, the
Lloyd's sales pitch promised not only risk-free profits, but the opportunity to join an
elite and prestigious "society" which had existed for 300 years and whose membership
included titled British aristocrats. New investors signed up in droves. As one Name
recalled later, "You don't need to drop the names of many English earls to attract a bunch
of North American dentists."
Evans says the clinching argument for joining came again from Coleridge, who boasted to
recruits that Lloyd's was backed by its own act of Parliament. "He said, 'Parliament would
never have passed the act had Lloyd's accounts and regulation not been impeccable.' I
thought to myself, if Parliament has given its seal of approval to Lloyd's, what more do I
need?"
None the wiser, Parliament on July 23, 1982, gave Lloyd's its exemption from lawsuits. It
could be held liable for damages only if a plaintiff could prove "bad faith," which is
difficult to establish under English law where the "buyer-beware" principle is more firmly
established than in the U.S. (an obstacle the Jaffray suit will have to surmount). Not
only was Lloyd's still self-regulating, it was empowered to determine itself what was meant
by the notion of self-regulation, unilaterally making rules governing its operations,
without answering to any outside authority, even Parliament. Lloyd's secrets were still
safe.
And Jeffrey Archer, what was his big idea?
In 1986, Lloyd's quietly added a clause to its contract with investors. Any legal dispute
over the investment would have to be resolved in England under English law. Investors were
not told that Parliament four years earlier had effectively inoculated Lloyd's from
lawsuits in England.....Most lawsuits by private investors against Lloyd's in the U.S. were
stymied, too. The fraud allegations for the most part never got a hearing because Lloyd's
invoked the clause it had slipped into its contracts with investors beginning in 1986
calling for any legal disputes to be litigated in England. Even though the investors
argued that they had been tricked into signing that clause --and Americans' rights
under U. S. securities laws generally cannot be waived by such contracts--U.S. appellate
courts ruled that the contracts were valid and that Names had to sue Lloyd's in England.
Archer has a plot in one of his books where a contract is central. One protagonist asks
another "Did he sign"? And the other replies "Yes, he didn't see that, nor any of the other
three clauses I had slipped in."
If you understand what happened you will understand why Lord and Lady Archer are such
favourites of the British royal family.
But my point is about Mary Archer, and the blackness within. It was not enough for this
person to reduce others to absolute penury, oh no. She had herself appointed as Chair of the
Lloyds Hardship Committee.
If you tell Lloyds you cannot pay your bill you can claim hardship. But you will have to
justify yourself before this committee. Can you imagine Mary's joy and pleasure at making
others beg for mercy? Her ecstasy as she noses through the most personal matters of other
women she has just cut down to size. She probably became quite moist at the excitement of it
all.
No, this is not my imagination. When "Lady" Archer got rid of her secretary for
"disloyalty" she didn't just fire her. She sued her, took away her house and bankrupted the
poor woman. Remember, she's best friends with the Queen.
These people are monsters. And Nicola Sturgeon is one of them.
Note to b. I do not have a link to the Time Magazine piece, but i'd be happy to post the
entire text if your readers are interested.
"Our calls for vigilance and boldness were heard in the US Congress, which pressed on
with measures designed to stop this dangerous, divisive project. We call on US
President Joe Biden to use all means at his disposal to prevent the project from
completion", the pair added.
They think they have a voice in the US Congress? Should apply for Statehood then.
The ministers suggested that if completed, the project will add to Russia's drive "to try
to convince the Ukrainian public that the West doesn't care about its own principles, and
ultimately, about the security and prosperity of Ukraine".
But wasn't the critique against socialism from the Soviet space that it was "utopian",
i.e. that it put its "principles" (ideology) before economic fundamentals?
Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project
vk @ 109. Congress of the USA to interfere with the completion of Russian-German Nord stream
II project because the LNG cartel in USA governed Texas, Lousisana , Oregon want to require
every man women and child in Europe to pay monopoly prices for LNG. As I see it failure of
Nord Stream II will be extremely dangerous to the survival of the solar and wind renewable
energy efforts; its a do it or die situation for dominate energy is the goal of the LNG
cartel...
Don't you know that whining about race, from the racist or the anti-racist side, doesn't
matter, is more important than billionaires fucking us over. It's more important than
anything. It doesn't matter if we die of freezer burn sleeping on cardboard after we've been
laid-off, evicted, and starved. It doesn't matter if we die in a nuclear war that the
billionaires started because they think it would be a good idea.
Nope. All that matters is whining about race. That's the most important thing. All else is
trivial.
Didn't American people suffer from the disease? Yes, the US government is "grotesquely
and manifestly incompetent" and they were likely to expect "a massive coronavirus outbreak
in China would never spread back to America".
The crucial factor here is that the US is not a nation per the most basic definition of
the word, "a group of people born of a common ancestry". Consequently, as illustrated by
job-killing "trade deals" and in countless other ways, there are plenty of "Americans" who
don't care a whit about the fate of Americans. That makes it entirely plausible that the Deep
State and/or one or more billionaires would release a virus in China in the full expectation
that it would hit the US and that once here it would disrupt, impoverish, and kill millions
of Americans. This was a win-win for them. The Deep State and the billionaires don't like
China, which is a non-liberal country and curtails their power by restricting the use of US
tech products. So if somehow the virus were contained in China it would be okay with them, as
it just would be a smaller win. However, what they really wanted was for the virus circle
back to the US. They knew that once here the disruption it would cause would further enrich
and empower them while giving them a pretext to dump it all on Donald Trump, whom they would
accuse of being incompetent and uncaring.
While full of good insights, the problem with this article as far as COVID is concerned is
that it misleads on the main point. COVID is not biowarfare, it is not a pandemic, it's just
the flu. The US recorded the same death rate in 2020 as in previous years and, as Dr. Colleen
Huber has documented, medical oxygen and supply sales were no different from previous
years.
All those COVID-19 deaths were simply deaths of a different name. Of course, we knew from
last March's Diamond Princess cruise–still by far the best controlled COVID
"experiment"–that the case-fatality rate of COVID-19 for the general public is in the
flu range.
But, it never was about COVID-19, which is just a glorified coronavirus of the type seen
even before the dawn of humans. Long before the virus even hit the streets, the media and
governments and medical establishments had secretly planned to to create a "panic-demic" to
scare people into a whole lot of strange and dangerous behaviors–like giving up their
liberties and economic futures. COVID-19 is just a medical nothing-burger that convinced a
lot of otherwise sane people to scare themselves into oblivion. Or did it? If the
post-election analyses are correct, Trump won in a major landslide and even those who voted
against him were already suffering from Trump derangement syndrome. So, maybe the people
weren't fooled by COVID so much as electorally raped by the vast elite cabal.
Whatever we say is a fact-based result of diligent research; whatever you say is a
conspiracy theory – both the US and China representatives subscribe to this
mantra.
Maye both Washington and Beijing are guilty -- of a perpetrating a hoax.
Putin surprised me. He flatly refused the offer of Schwab and his ilk. He condemned the
manner of recent pre-Covid growth, for all the growth went into a few deep pockets.
Moreover, he noted that digital tycoons are dangerous for the world.
The next strong man we elect must be an actual STRONG man. I salute Trump for his genius
in identifying the real majority in this country and for forcing the techno-oligarchs into
overdoing their election steal. Now we need someone who is willing to establish real
authority on behalf of the un-queer.
'Freedom' under neo-liberal capitalism is all of the negative type. You are free to be as
greedy and arrogant as you like, as rich, ie as big a thief, as you like, and as poor as you
like. You are to ignore the liberal injunction that your freedom must not interfere with that
of others, and screw as many patsies as you desire. You are 'free' to vote for two or so near
identical parties, then have no 'freedom' but that which your money buys you. 'Freedom' is
the biggest lie of all Big Lies.
Don't be spooked by those words. Do you know where the words sustainable and inclusive
come from? Tycoons didn't think them up. They're just parroting them to try and twist their
meaning. Those words are from the Addis Ababa consensus. Tycoons give lip service to those
words because if they don't, no one will give them the time of day.
AA is the consensus of the ECOSOC bloc, treaty parties of the ICESCR, 171 of them, the
overwhelming majority of the world. ECOSOC reports to the UNGA, the most participative and
least controllable UN organ. US UN delegates don't even dare mention the AA outcome –
they fixate on the Monterrey Consensus, two documents ago.
Inclusive means, don't let usurers like the IMF get you on the debt hook and immiserize
your people. Sustainable means no pillage of national wealth or resources and no imposition
of externalities (like Chevron did to Ecuador, for instance.) You will see that the outcome
document subordinates everthing the tycoons or the US want to human rights and rule of law.
Economic rights too. The outcome curbs US "Western" corporatist development by pulling WTO
and IMF under the authority of G-192 organizations like UNCTAD and ILO.
It's hard for people in US satellites to interpret this stuff because the underlying
intitiatives of the G-192 (that is, the world) are hidden from you and buried in US
propaganda. Xi is quoting his Five Principles, four of which are straight out of the UN
Charter. China has ratified the ICESCR. So China is not communist. China is not capitalist.
China is a member of the ECOSOC bloc. People in the US or its satellites have no idea what
that is, but it's vastly bigger than the Third International was. It's development based on
human rights. Tycoons and the US hate that shit but they can't stop it.
A couple of things that would go a long way to correct the goddamn stupidity running
rampant in this country are.
Correcting the following horrendous actions: The SCOTUS has passed down egregious
decisions that abridge the First Amendment and show contempt for the concept of
representative democracy. Buckley v. Valeo, 424 U.S. 1976 and exacerbated by continuing
stupid SCOTUS decisions First National Bank of Boston v. Bellotti, Citizens United v. Federal
Election Commission and McCutcheon v. Federal Election Commission.
These decisions have codified that money is free speech thereby giving entities of wealth and
power total influence in elections.
And-
Making it absolutely impossible for anyone to amass more than 100 million dollars extreme
wealth concentrates too much power.
@Chinaman me obsolescent with the disappearance of home-ec from our high schools. Economy
means to economize, to save and to make do. Credit cards in hand, suburban Americans spend
like drunken Irish sailors on shore leave.
BTW Chinaman: Those you apparently consider as deplorable, are the ones who do the actual,
real productive work. Most of the rest of employed Americans are keystrokers and
button-pushers, ordered around by governmental administrators and corporate bureaucrats.
Squatting atop the economic scrotumpole are various types of parasites, include
coupon-clipper sons of riches and those who get their ill-gotten gains from the FIRE sector:
Finance, Insurance and Real Estate speculation.
"Tim Boyd, the mayor of Colorado City, Texas, said in a post to the public that ' No
one owes you or your family anything; nor is it the local government's responsibility to
support you during trying times like this! Sink or swim it's your choice! The City and
County, along with power providers or any other service owes you nothing! '
"He also wrote that, 'Only the strong will survive and the weak will perish,' and he even
said that 'this is sadly a product of a socialist government where they feed people to
believe that the few will work and others will become dependent for handouts.' Boyd later
resigned as his remarks had provoked public anger, but it seems that he really believes in
what he posted, and so do many American politicians.
"From the perspective of an outsider, the logic of the tragedy of nearly 500,000 deaths
due to the COVID-19 epidemic in the US so far and more than 20 people being killed in the
winter storm in Texas are the same. The logic is that the attention of the capital and the
government has not been directed toward the protection of human rights . The capitalist
system in the US has derived a set of national morals that deviated from the public interest
and has gradually become flashy but useless." [My Emphasis]
I hope thomas @140 reads this. The Global Times editor's words bear repeating:
" The capitalist system in the US has derived a set of national morals that deviated
from the public interest and has gradually become flashy but useless ." [My Emphasis]
Essentially, the clock's been turned-back over 100 years as the editor notes:
"The US' concept of 'freedom' actually conceals the cold-blooded proposition of the
'freedom of being eliminated.'
The US' notion of 'democracy, human rights and freedom' is actually a combination of
'elections, political rights and social Darwinism.' As such, it comes as no surprise that
various human tragedies often occur in such a wealthy country as the US. To live in the
US, you must have the strength and capability to save yourself in the event of a disaster, or
you should be able to pay a considerable amount of money for the help you seek. Otherwise,
you deserve the miserable situation you are in, and it's more worthy for you to pin your
hopes on charitable organizations and God, instead of the government ." [My Emphasis]
That's what the state of things was prior to the Great Depression when the national
government was finally provoked into providing the most miniscule of safety nets, termed
"Automatic-Stabilizers" to satisfy the Predatory Financial Class with the promise that the
business cycles of boom and bust wouldn't be as harsh as previously. That a particular
segment of the Political Class has sought the elimination of that safety net since its
inception verifies the editor's thesis as he continues:
"Boyd portrayed the government's assisting the victims as 'sadly a product of a socialist
government.' This reflects how much he and many other American politicians like him feel
contempt for government's efforts on people's livelihood. Whether they will survive or die in
the face of natural disasters is the public's own business and it's not worthy for US
governments and officials to protect people's lives - Boyd's words are really shocking
.
"Such a US should stop preaching to China on human rights. The US and China have different
political focuses. What China seeks is the health, safety and happiness of its people
, while the US wants to see political rights orderly distributed among social elites in a
capitalist manner. The human rights outlooks held by China and the US are based on different
groups of people. Different rights are positioned in different places in the two countries.
As a result, China's human rights construction has brought tangible benefits to all
Chinese people, while the US human rights view is more suitable to be used to brag about and
as an ideological tool to launch attacks against others ." [My Emphasis]
Ex-mayor Boyd reminds me of the fictional character Frank played by Henry Fonda in Once
Upon a Time in the West , for whom any means can be used to gain the outcome. Such
characters were once very visible in movies made about the USA--the sociopathic killer always
aiming for A Fistful of A Few Dollars More where even the good guy was ugly. I couldn't agree
more with the editor's closing comment:
"Washington, please take care of your own people in the freeze and put an end to the
deaths caused by COVID-19 first thing first. We may not link these issues to human rights,
but this should be what 'America First' is all about."
The personification of Boyd passed away yesterday and is much to blame for the woefulness
of the USA's moral condition. Unfortunately, there are too many creatures like him, many of
which are in governments throughout the land.
"Why does the US use the winter storm as the excuse every time?" Shu Bin, director of the
State Grid Beijing Economics Research Institute, told the Global Times on Thursday, noting
that the power grid system is very vulnerable and requires constant maintenance and
upgrade.
A report from the US Department of Energy (DOE) in 2015 said that 70 percent of power
transformers in the country were 25 years or older, 60 percent of circuit breakers were 30
years or older, and 70 percent of transmission lines are 25 years or older. And the age of
these components "degrades their ability to withstand physical stresses and can result in
higher failure rates," the report noted.
[...]
"The US has no nationwide power grid network allocation plan like China. When it
encounters extreme weather, a state won't help another state like some Chinese provinces
and regions do with flexible allocation plans," Lin Boqiang, director of the China Center
for Energy Economics Research at Xiamen University, told the Global Times on Thursday.
[...]
"China uses 50Hz across the country, like the country has the same heartbeat," he said,
adding that China has never experienced such a scale of blackouts as the US.
[...]
China has mastered the top technologies such as "UHV transmission" and "flexible DC
transmission" and started the strategic "west-east electricity transmission" and
"north-south electricity transmission" projects, which in turn offer an opportunity for the
development of the country's western region.
One factor is a change in one of the three large producer's policies. This large producer is
also the only producer that consumes more than it produces and therefore the only one of the
three that favors lower prices. I'm referring to USA, of course.
USA shale (and to a much lesser extent GOM) growth kept a lid on prices. Where would prices
have been 2010-19 without USA adding 7 million BOPD?
USA growth doesn't appear to be headed toward adding 1 million BOPD or more per year in the
future. USA companies are all being pressured to pay dividends. To cover dividends, USA
companies need much higher prices. USA companies aren't forecasting growth like past years.
For the first time ever, the USA government is not making oil production growth, either
domestic or foreign, a priority. I am not making a "political" statement here trying to rile up
the left on the board. Just look at oil prices since the USA election on 11/3. Not a
coincidence. Not likely USA will be intervening anytime soon in the ME to protect oil supplies.
At least not in a big way.
I have no idea how high oil prices will go. I wonder what happens politically in USA with $3
gasoline? $4 ? Are high gasoline prices no longer a political liability? They weren't for Obama
in 2012. But USA was drilling like crazy in 2012. Not sure what happens this time if that
occurs, given clear desire of Biden Administration to discourage USA oil production growth.
Another factor is the Western European producers have told the market recently in a very
straightforward manner that their oil production is past peak. The CEO's of both BP and RDS
have stated this. Total is also transitioning away from oil. Equinor also, it changed its name
to remove the word oil.
Next, even though total worldwide demand will still be below a record, demand growth from
2020 to 2021 worldwide will be big, much bigger than from 2009 to 2010 after GFC. What did
prices do from the depths of GFC to 2011? Compare GFC stimulus to COVID stimulus.
Last, how many paper barrels are traded per physical barrel? With the increase in paper
barrels (I would call them more accurately day trader barrels) volatility in the oil market has
grown. The price went negative big time one day last April. It was purely a day trader
phenomenon.
Everyday you can find headlines that point to a huge transition underway in the world energy
scene.
For example today-
-Exclusive: Equinor considers more US asset sales in global strategy revamp, and
-Ford bets $29B on leading the 'electric vehicle revolution'
There is a huge scramble underway to adapt to the conditions these big companies now see
coming to be over this decade.
In the meantime, I think that oil demand growth will be very strong over the next 18-24
months.
And as the price of gas in the USA goes up in this rebound phase, the great difference in
travel cost/mile between plug-in vehicles (like a Ford mustang) and ICE vehicles will become a
widely known fact. Ford (and the other manufacturers) all know that now, even if they were slow
on the uptake.
This world is going to change rapidly this decade in so many ways. REPLYALIMBIQUATED IGNORED02/15/2021 at 11:34
am
I think a general feeling of optimism that there is light at the end of the Covid 19 tunnel
is helping as well. REPLYSURVIVALIST IGNORED02/15/2021 at 12:23
pm
" For the first time ever, the USA government is not making oil production growth, either
domestic or foreign, a priority."
Great observation. I recall when GWB2 went to KSA to 'kiss the ring' and ask for more oil
production. I wonder how it will play out next time. REPLYHICKORY IGNORED02/15/2021 at 12:33
pm
"" For the first time ever, the USA government is not making oil production growth, either
domestic or foreign, a priority."
Of much greater impact- For the first time ever, the major oil companies are not making oil
production growth, either domestic or foreign, a priority. REPLYSHALLOW SAND IGNORED02/15/2021 at 1:11
pm
The Biden administration is under pressure to see oil prices rise. The green agenda of wind,
solar and EV's is only cost competitive with fossil fuels in two ways: 1) green subsidies; or
2) higher oil prices. Until high oil prices threaten the economy, the Biden administration will
enact policies that gladly see oil prices rise. And with the oil price experience of 2009 to
2014 still relatively fresh in people's minds, the Biden administration is not afraid of $60,
$70, or even $90 oil. They are hoping for it. REPLYHICKORY IGNORED02/15/2021 at 2:13
pm
"$60, $70, or even $90 oil. They are hoping for it."
As are the people working in the oil industry. REPLYSTEPHEN HREN IGNORED02/15/2021 at 4:59
pm
As far as anyone on this board is considered, the higher the price of oil the better. Let's
phase out oil production in the US over the next three decades and keep the price high the
entire time so the producers make money and people are incentivized to switch to less polluting
EVs. It'll be like the TRC for the whole country but heading towards a bottleneck. Auction
drilling rights so only the best wells get drilled. Keep restricting drilling in a phased
manner, enact a gradually lower cap on the number of wells that can be drilled until it goes to
zero in twenty years and then maintain these stripper wells until they are empty. REPLYPAULO IGNORED02/15/2021 at 6:33
pm
Can you imagine any US party that would actually dare to promote a higher cost for gasoline?
Personally, I think there should be a big carbon tax and fuel tax surcharge imposed to fix
infrastructure, but whatever.
Confession: I am not anti oil. My son works in the Cdn industry. I just think people drive
more than they should and that energy should be priced higher. Win win. LLOYD IGNORED02/16/2021 at 3:55
pm
So $90 oil is good for:
-Saudi
-Democrats
-Shallow
-Tesla
-Renewables
PAOIL-
I disagree that high oil prices are needed to make green energy competitive, because oil is
already very expensive energy, which is why it is rarely used to generate electricity. Wind and
solar compete against coal, nuclear and gas, not oil.
Oil shines as a way to store energy in a moving vehicle and power internal combustion
engines. As such, it really competes with batteries, not with the rest of the energy market at
all. And batteries still have a tiny impact on oil markets.
So higher oil prices might be useful for the EVs, but not particularly useful for wind and
solar. But in reality, the EV market is suffering from chronic battery shortages as
manufacturers struggle to build factories fast enough to meet 20% or more annual demand growth.
The oil price really isn't an issue, and raising oil prices wouldn't help.
If Biden's goal was to make EVs more competitive, the government has an easy way to raise
oil prices, which is to raise taxes at the pump. This would be more or less neutral to the oil
price from the producer point of view. It would just encourage exports and discourage imports,
improving America's balance of payments. But it hasn't worked in Europe, where taxes are over
60% of the price at the pump. The most effective way to promote EVs is subsidizing the purchase
price of the vehicle. That has been very effective.
Hoping that the American consumer will keep oil demand up internationally no longer makes
sense, as America's relative economic importance has been falling since 1945. I'm not sure what
the previous administration was trying to accomplish by talking down the price. REPLYJEFF IGNORED02/16/2021 at 5:13
am
"But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. "
I have driven a Toyota Corolla on an 4 week US trip.
With an engine for the US market – you can't buy this modell in Europe. It was very
steady going – and thirsty. At least for european thinking, we used 7-8 litres / 100 km
by mostly driving country roads in cruise control at the given speed (didn't wanted to deal
with US police). Slow for my feeling, I'm driving faster in Germany.
And use only round about 6 litres with a car of similar size, which is a bit faster than
this Corolla – with this lazy slow driving I would use below 5 litres with my car (and
get a lot of flashing).
Jeff –
That was a little unclear on my part. I meant high gasoline prices haven't gotten people to
buy, EVs, but direct subsidies seem to work.
It's also worth mentioning that $120 oil didn't really dent consumption much, and certainly
didn't inspire many to buy EVs.
In my opinion liquid fuel is cheap. I mean I think that consumers aren't willing to make
significant changes in behavior even if prices increase significantly. S IGNORED02/17/2021 at 3:05
am
Alimbiquated, as an European in a well-to-do country, the matter of car buying is somewhat
more complicated than just gasoline price. E.g. fully electric car availibily, their price,
distances that need to be travelled (range anxiety in other words) are still important. Hybrid
cars are also rather expensive. Here it seems that these two car groups are selling better and
better, public charging points are increasing etc so we will see what happens. As I have a full
electric car I got relatively cheaply (still a bit of ouch ) I think I will not get a petroleum
or diesel car ever J HOUSMAN IGNORED02/18/2021 at 4:08
pm
"The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two
way" Three ways, actually. The third is when we finally start to realize the actual cost of
destroying the environment by burning fossil fuels REPLYMATT MUSHALIK IGNORED02/15/2021 at 10:01
pm
Global crude oil may have peaked 2018-19 before Covid
A dozen workers that are members of the Safe union are threatening to down tools at the
Mongstad terminal from midnight on Monday if talks with the industry body aimed at breaking an
impasse over a 2020 wage settlement with Equinor fail.
Other fields that could be impacted include Kvitebjorn, Visund, Byrding, Fram and
Valemon, with gas output exports from the Troll area also in danger of being hit.REPLYMATT MUSHALIK IGNORED02/15/2021 at 8:05
am
An interesting scenario showing what happens when demand outstrips supply due to lack of
investment is playing out right now in Oklahoma and Texas. There has been a lack of investment
in the region last year due to the drop in prices, and in Oklahoma, the slowing of investment
has been happening for a few years. The massive cold snap that descended on the region made
spot prices (not the futures price you can look up on Bloomberg etc) rise from $2 an MMBTU, to
$5, to $9, to $300, to $600, all in the course of a week. It is currently higher. The cold
weather has caused shut ins of wells, and processing plants. You have a situation where demand
is increasing but supply cannot keep up. I know this is a micro problem that will resolve
itself as temperatures increase, in the coming weeks, but this could be an example of what oil
prices might see in the near future. There has been a lack of investment for years in large
projects, if demand rebounds quickly as vaccine roll out continues, we will not be able to turn
back on new production fast enough to keep prices from running higher, resulting in some
temporary ridiculous price spikes. REPLYSHALLOW SAND IGNORED02/15/2021 at 10:31
am
I saw this resulted in a lot of wells that have been shut in for 5-10 years being
reactivated. REPLYGREENBUB IGNORED02/15/2021 at 8:25
pm
Shallow, are you affected by the cold snap or power outages? REPLYSHALLOW SAND IGNORED02/16/2021 at 12:41
am
Yes. We have about 10% frozen off. Our pumpers decided what to drain and shut in, and what
to keep on. They are real pros. You can't find better.
Our people are the key. We owe them bigtime. They have been out there in this stuff keeping
the rest from freezing.
We will be good soon, temps will come up.
Keep in mind, with one exception, our pumpers are 50+ years old.
Are there millennials that are going to keep the strippers going 24/7/365?
No. I work in construction biz. 90% of twenty somethings can't work five minutes without
looking at their phones. They are useless. All my buddies have the same complaint. REPLYOVI IGNORED02/15/2021 at 9:49
pm
An interesting clip from this article:
"This isn't a consensus view yet but it's quickly coming. Two heavyweights in the past week
have stepped up and called out the problem.
The first was Goldman Sach's Jeff Currie, who called the bull market in the early 2000s.
"I want to be long oil and hang on for the ride," Currie said in an interview with S&P
Global Platts on Feb. 5, warning "there is a lot of upside here."
"Is it back to $150/b? I don't know as it is a macro repricing we are talking about and
everything needs to reprice."
The other is JPMorgan and Marko Kolanovic, who said Friday that oil and commodities appear
to be entering a supercycle.
"We believe that the new commodity upswing, and in particular oil up cycle, has started,"
the JPMorgan analysts said in their note. "The tide on yields and inflation is turning."
"We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed
in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new
commodity supercycle."
Shale driller bases rig lease costs on well performance
Rigs are typically rented out at a daily rate for a period of a few months, which has meant
less money for oilfield service providers as drilling becomes quicker and more efficient. So
Helmerich & Payne Inc. is touting a new pricing model based on overall well performance,
and almost a third of its U.S. rigs are now being leased on that basis, CEO John Lindsay said
Wednesday on an earnings call.
In the Permian Basin of West Texas and New Mexico, home to the busiest shale patch in North
America, operators are now drilling the same number of wells with 180 rigs as they were with
300 rigs a year ago, according to industry data provider Lium.
Yeah okay. That's all great. But what I was looking at was oil production. It's going down,
not up. With these prices oil production should be increasing, not decling. Why is that? After
all, that's really all that matters.
One factor is a change in one of the three large producer's policies. This large producer is
also the only producer that consumes more than it produces and therefore the only one of the
three that favors lower prices. I'm referring to USA, of course.
USA shale (and to a much lesser extent GOM) growth kept a lid on prices. Where would prices
have been 2010-19 without USA adding 7 million BOPD?
USA growth doesn't appear to be headed toward adding 1 million BOPD or more per year in the
future. USA companies are all being pressured to pay dividends. To cover dividends, USA
companies need much higher prices. USA companies aren't forecasting growth like past years.
For the first time ever, the USA government is not making oil production growth, either
domestic or foreign, a priority. I am not making a "political" statement here trying to rile up
the left on the board. Just look at oil prices since the USA election on 11/3. Not a
coincidence. Not likely USA will be intervening anytime soon in the ME to protect oil supplies.
At least not in a big way.
I have no idea how high oil prices will go. I wonder what happens politically in USA with $3
gasoline? $4 ? Are high gasoline prices no longer a political liability? They weren't for Obama
in 2012. But USA was drilling like crazy in 2012. Not sure what happens this time if that
occurs, given clear desire of Biden Administration to discourage USA oil production growth.
Another factor is the Western European producers have told the market recently in a very
straightforward manner that their oil production is past peak. The CEO's of both BP and RDS
have stated this. Total is also transitioning away from oil. Equinor also, it changed its name
to remove the word oil.
Next, even though total worldwide demand will still be below a record, demand growth from
2020 to 2021 worldwide will be big, much bigger than from 2009 to 2010 after GFC. What did
prices do from the depths of GFC to 2011? Compare GFC stimulus to COVID stimulus.
Last, how many paper barrels are traded per physical barrel? With the increase in paper
barrels (I would call them more accurately day trader barrels) volatility in the oil market has
grown. The price went negative big time one day last April. It was purely a day trader
phenomenon.
Everyday you can find headlines that point to a huge transition underway in the world energy
scene.
For example today-
-Exclusive: Equinor considers more US asset sales in global strategy revamp, and
-Ford bets $29B on leading the 'electric vehicle revolution'
There is a huge scramble underway to adapt to the conditions these big companies now see
coming to be over this decade.
In the meantime, I think that oil demand growth will be very strong over the next 18-24
months.
And as the price of gas in the USA goes up in this rebound phase, the great difference in
travel cost/mile between plug-in vehicles (like a Ford mustang) and ICE vehicles will become a
widely known fact. Ford (and the other manufacturers) all know that now, even if they were slow
on the uptake.
This world is going to change rapidly this decade in so many ways. REPLYALIMBIQUATED IGNORED02/15/2021 at 11:34
am
I think a general feeling of optimism that there is light at the end of the Covid 19 tunnel
is helping as well. REPLYSURVIVALIST IGNORED02/15/2021 at 12:23
pm
" For the first time ever, the USA government is not making oil production growth, either
domestic or foreign, a priority."
Great observation. I recall when GWB2 went to KSA to 'kiss the ring' and ask for more oil
production. I wonder how it will play out next time. REPLYHICKORY IGNORED02/15/2021 at 12:33
pm
"" For the first time ever, the USA government is not making oil production growth, either
domestic or foreign, a priority."
Of much greater impact- For the first time ever, the major oil companies are not making oil
production growth, either domestic or foreign, a priority. REPLYSHALLOW SAND IGNORED02/15/2021 at 1:11
pm
The Biden administration is under pressure to see oil prices rise. The green agenda of wind,
solar and EV's is only cost competitive with fossil fuels in two ways: 1) green subsidies; or
2) higher oil prices. Until high oil prices threaten the economy, the Biden administration will
enact policies that gladly see oil prices rise. And with the oil price experience of 2009 to
2014 still relatively fresh in people's minds, the Biden administration is not afraid of $60,
$70, or even $90 oil. They are hoping for it. REPLYHICKORY IGNORED02/15/2021 at 2:13
pm
"$60, $70, or even $90 oil. They are hoping for it."
As are the people working in the oil industry. REPLYSTEPHEN HREN IGNORED02/15/2021 at 4:59
pm
As far as anyone on this board is considered, the higher the price of oil the better. Let's
phase out oil production in the US over the next three decades and keep the price high the
entire time so the producers make money and people are incentivized to switch to less polluting
EVs. It'll be like the TRC for the whole country but heading towards a bottleneck. Auction
drilling rights so only the best wells get drilled. Keep restricting drilling in a phased
manner, enact a gradually lower cap on the number of wells that can be drilled until it goes to
zero in twenty years and then maintain these stripper wells until they are empty. REPLYPAULO IGNORED02/15/2021 at 6:33
pm
Can you imagine any US party that would actually dare to promote a higher cost for gasoline?
Personally, I think there should be a big carbon tax and fuel tax surcharge imposed to fix
infrastructure, but whatever.
Confession: I am not anti oil. My son works in the Cdn industry. I just think people drive
more than they should and that energy should be priced higher. Win win. LLOYD IGNORED02/16/2021 at 3:55
pm
So $90 oil is good for:
-Saudi
-Democrats
-Shallow
-Tesla
-Renewables
PAOIL-
I disagree that high oil prices are needed to make green energy competitive, because oil is
already very expensive energy, which is why it is rarely used to generate electricity. Wind and
solar compete against coal, nuclear and gas, not oil.
Oil shines as a way to store energy in a moving vehicle and power internal combustion
engines. As such, it really competes with batteries, not with the rest of the energy market at
all. And batteries still have a tiny impact on oil markets.
So higher oil prices might be useful for the EVs, but not particularly useful for wind and
solar. But in reality, the EV market is suffering from chronic battery shortages as
manufacturers struggle to build factories fast enough to meet 20% or more annual demand growth.
The oil price really isn't an issue, and raising oil prices wouldn't help.
If Biden's goal was to make EVs more competitive, the government has an easy way to raise
oil prices, which is to raise taxes at the pump. This would be more or less neutral to the oil
price from the producer point of view. It would just encourage exports and discourage imports,
improving America's balance of payments. But it hasn't worked in Europe, where taxes are over
60% of the price at the pump. The most effective way to promote EVs is subsidizing the purchase
price of the vehicle. That has been very effective.
Hoping that the American consumer will keep oil demand up internationally no longer makes
sense, as America's relative economic importance has been falling since 1945. I'm not sure what
the previous administration was trying to accomplish by talking down the price. REPLYJEFF IGNORED02/16/2021 at 5:13
am
"But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. "
I have driven a Toyota Corolla on an 4 week US trip.
With an engine for the US market – you can't buy this modell in Europe. It was very
steady going – and thirsty. At least for european thinking, we used 7-8 litres / 100 km
by mostly driving country roads in cruise control at the given speed (didn't wanted to deal
with US police). Slow for my feeling, I'm driving faster in Germany.
And use only round about 6 litres with a car of similar size, which is a bit faster than
this Corolla – with this lazy slow driving I would use below 5 litres with my car (and
get a lot of flashing).
Jeff –
That was a little unclear on my part. I meant high gasoline prices haven't gotten people to
buy, EVs, but direct subsidies seem to work.
It's also worth mentioning that $120 oil didn't really dent consumption much, and certainly
didn't inspire many to buy EVs.
In my opinion liquid fuel is cheap. I mean I think that consumers aren't willing to make
significant changes in behavior even if prices increase significantly. S IGNORED02/17/2021 at 3:05
am
Alimbiquated, as an European in a well-to-do country, the matter of car buying is somewhat
more complicated than just gasoline price. E.g. fully electric car availibily, their price,
distances that need to be travelled (range anxiety in other words) are still important. Hybrid
cars are also rather expensive. Here it seems that these two car groups are selling better and
better, public charging points are increasing etc so we will see what happens. As I have a full
electric car I got relatively cheaply (still a bit of ouch ) I think I will not get a petroleum
or diesel car ever J HOUSMAN IGNORED02/18/2021 at 4:08
pm
"The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two
way" Three ways, actually. The third is when we finally start to realize the actual cost of
destroying the environment by burning fossil fuels REPLYMATT MUSHALIK IGNORED02/15/2021 at 10:01
pm
Global crude oil may have peaked 2018-19 before Covid
A dozen workers that are members of the Safe union are threatening to down tools at the
Mongstad terminal from midnight on Monday if talks with the industry body aimed at breaking an
impasse over a 2020 wage settlement with Equinor fail.
Other fields that could be impacted include Kvitebjorn, Visund, Byrding, Fram and
Valemon, with gas output exports from the Troll area also in danger of being hit.REPLYMATT MUSHALIK IGNORED02/15/2021 at 8:05
am
An interesting scenario showing what happens when demand outstrips supply due to lack of
investment is playing out right now in Oklahoma and Texas. There has been a lack of investment
in the region last year due to the drop in prices, and in Oklahoma, the slowing of investment
has been happening for a few years. The massive cold snap that descended on the region made
spot prices (not the futures price you can look up on Bloomberg etc) rise from $2 an MMBTU, to
$5, to $9, to $300, to $600, all in the course of a week. It is currently higher. The cold
weather has caused shut ins of wells, and processing plants. You have a situation where demand
is increasing but supply cannot keep up. I know this is a micro problem that will resolve
itself as temperatures increase, in the coming weeks, but this could be an example of what oil
prices might see in the near future. There has been a lack of investment for years in large
projects, if demand rebounds quickly as vaccine roll out continues, we will not be able to turn
back on new production fast enough to keep prices from running higher, resulting in some
temporary ridiculous price spikes. REPLYSHALLOW SAND IGNORED02/15/2021 at 10:31
am
I saw this resulted in a lot of wells that have been shut in for 5-10 years being
reactivated. REPLYGREENBUB IGNORED02/15/2021 at 8:25
pm
Shallow, are you affected by the cold snap or power outages? REPLYSHALLOW SAND IGNORED02/16/2021 at 12:41
am
Yes. We have about 10% frozen off. Our pumpers decided what to drain and shut in, and what
to keep on. They are real pros. You can't find better.
Our people are the key. We owe them bigtime. They have been out there in this stuff keeping
the rest from freezing.
We will be good soon, temps will come up.
Keep in mind, with one exception, our pumpers are 50+ years old.
Are there millennials that are going to keep the strippers going 24/7/365?
No. I work in construction biz. 90% of twenty somethings can't work five minutes without
looking at their phones. They are useless. All my buddies have the same complaint. REPLYOVI IGNORED02/15/2021 at 9:49
pm
An interesting clip from this article:
"This isn't a consensus view yet but it's quickly coming. Two heavyweights in the past week
have stepped up and called out the problem.
The first was Goldman Sach's Jeff Currie, who called the bull market in the early 2000s.
"I want to be long oil and hang on for the ride," Currie said in an interview with S&P
Global Platts on Feb. 5, warning "there is a lot of upside here."
"Is it back to $150/b? I don't know as it is a macro repricing we are talking about and
everything needs to reprice."
The other is JPMorgan and Marko Kolanovic, who said Friday that oil and commodities appear
to be entering a supercycle.
"We believe that the new commodity upswing, and in particular oil up cycle, has started,"
the JPMorgan analysts said in their note. "The tide on yields and inflation is turning."
"We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed
in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new
commodity supercycle."
Shale driller bases rig lease costs on well performance
Rigs are typically rented out at a daily rate for a period of a few months, which has meant
less money for oilfield service providers as drilling becomes quicker and more efficient. So
Helmerich & Payne Inc. is touting a new pricing model based on overall well performance,
and almost a third of its U.S. rigs are now being leased on that basis, CEO John Lindsay said
Wednesday on an earnings call.
In the Permian Basin of West Texas and New Mexico, home to the busiest shale patch in North
America, operators are now drilling the same number of wells with 180 rigs as they were with
300 rigs a year ago, according to industry data provider Lium.
Yeah okay. That's all great. But what I was looking at was oil production. It's going down,
not up. With these prices oil production should be increasing, not decling. Why is that? After
all, that's really all that matters.
In ShaleProfile published today, the Permian is showing a slight bump up in production. It
may have hit bottom. The latest STEO is showing US production dropping till June and July
before beginning to increase. Looks like many more LTO wells have to be put on line before the
decline from all of the current wells can be offset. OVI IGNORED02/16/2021 at 6:36
pm
U.S. oil output plunges as Arctic air freezes Permian shale fields
(Bloomberg) –U.S. oil production has plunged by more than 2 million barrels a day as
the coldest weather in 30 years brings havoc to key producing states that rarely have to deal
with frigid Arctic blasts.
Oil traders and company executives, who asked not to be identified, lifted their forecasts
for supply losses from an earlier estimate on Monday of 1.5 million to 1.7 million barrels.
They said the losses were particularly large in the Permian Basin, the most prolific U.S. oil
region, which straddles West Texas and southeast New Mexico. Output cuts were also significant
in the Eagle Ford, in southern Texas, and the Anadarko basin in Oklahoma.
Two million barrels would be the equivalent of about 18% of overall U.S. crude production,
based on the most recent government data.
Wonder if this drop will show up as a drop in US inventories on Feb 24. While production is
down, so is driving.
Reminder back in the day in the Bakken they had to equip their onsite huge storage of
fracking water with heaters, because NoDak is cold. One suspects the Permian is not equipped
with that and widespread frozen pipe damage can be expected. HOLE IN HEAD IGNORED02/18/2021 at 8:31
am
There is a lot of reasons to be bullish on oil at the moment. There is one problem lurking
over next 4-5 months though. Treasury will shrink the TGA by about 1 trillion USD. Most assume
this will be bullish for most things other than the dollar. But as this cash gets pushed into
the economy/markets. Banks are forced to hold more collateral, mainly T bills. Short end of
treasury yield curve is without a doubt going negative as banks have to have collateral to
except all this cash. Likely another collateral shortage in the making (repo blowup) Fed would
likely have to cut QE purchases to get yields back into positive territory. Which is no
different than hiking interest rates on an economy with a massive debt load that can't handle
higher rates.
Most of the US government debt is on short end of the curve. Therefore most of the debt will
have a negative yield. This would likely end the reflation narrative/ inflation narrative we
currently have. It's likely dollar bullish because the collateral underpinning everything just
went negative yield. And if it turns out to be highly dollar bearish. Well lookout oil prices
would be well beyond the moon.
Not as apocalyptic as it may seem. I wrote a comment on the situation in the earlier
thread
here .
Temps are starting to move up and tomorrow (Thursday) should begin the thaw. Friday is
sunny and 47 deg F for a high, then sunny weekend and following. So we're over the worst of
it. The lowest it ever got was around 0 deg F.
The infrastructure failed - the people paid to manage this failed - everybody is angry, 10
people died so far last I heard.
Rolling blackouts, some people very much suffering, townships opening warming shelters -
probably not millions of pipes bursting. Not totally iced in, just nowhere to go. People
stayed home. Businesses stayed closed. Not totally without food, people stocked up staples in
2020.
Not that dire. Absolutely fucking disgusting, and a hardship that touched everyone - some
people got really screwed and I don't know why the treatment was uneven like that - not
demographics, something with the grid. Dire, yes, and life-threatening to some or perhaps
many (numbers not clear to me yet), but not so dire as your picture suggests. Nothing like
Katrina, except the same ineptness.
But heads will roll. The governor has mandated an investigation into the regulator, ERCOT.
What follows next is of great interest. Facts will appear. I'll post anything useful.
I heard a rumor it was getting better. Could be less blackouts. Will post now in case
power goes off ;)
This Texas debacle may light a heated debate in the USA for the next weeks, for two
reasons:
1) Texas is the big alt-right/Trumpist Festung for the foreseeable future. Their
nation-building process involve catapulting Texas as the anti-California ,
the conservative version of the Shining City on the Hill, around which the USA will be
rebuilt;
2) What is happening in Texas right now goes directly to the heart of neoliberalism, which
is the political doctrine that vertebrates the alt-right. That's why conservative ideologues
such as Tucker Carlson et al are desperately scrambling on TV and social media to blame the
outage on the so-called Green New Deal.
What is happening right now in Texas, therefore, may be another episode on the battle for
the soul of the American Empire.
Chris Hedges, Just talkin' 'bout revolution [against the Borg? Chris can't quite bring
himself to name just who "they" are] on Jimmy Dore yesterday:
"These people...you know, quite literally, will kill us...not just us...I'm talking about
snuffing out the possibility of the next generation...my kids...and they have to be
stopped"
Astonishing lack of understanding of history, basic humanity and common sense.
It seems no one among the current group of "victors" has heard the phrase "win the battle but
lose the war."
With all the witch hunting and hate mongering going on, it also seems no one in authority has
heard "treat others as you would have them treat you."
Also applies to WEF Great Reset Masters of the Universe.
A huge amount of karma heading their way.
Fox News ' Tucker Carlson said on the
Thursday night episode of his program that his show has been targeted for cancellation.
Carlson said
that "in the last several weeks, and particularly in the last 24 hours, the call to take
this show off the air by groups funded -- for real -- by the Ford Foundation, or by George
Soros, by Michael Bloomberg, by Jeff Bezos, has become deafening, going after our advertisers,
going after the companies that carry our signal into your home."
What's more, he added, there has been a "cowardice and complicity" on behalf of the "entire
media class in all of this," suggesting that eventually, reporters at legacy news outlets will
be targeted as well.
Writing for Fox News' website, Carlson added that it may be part of a larger campaign to
silence Fox News and other media, noting that some legacy news outlets have dedicated resources
calling for the channel to be taken down. One columnist for The New York Times, he added, "has
written three separate columns demanding that someone yank this news channel off the air
immediately" and on Wednesday, "suggested that 'Tucker Carlson Tonight' was somehow guilty of
terrorism and violence, something that we've opposed consistently for four years."
"Fox is the last big organization in the American news media that differs in even the
smallest ways from the other big news organizations. At this point, everyone else in the media
is standing in crisp formation, in their starched matching uniforms and their little caps,
patiently awaiting orders from the billionaire class. And then there's Fox News off by itself,
occasionally saying things that are slightly different from everyone else," Carlson wrote
.
He added: "These are craven servants of the Democratic Party. They are feline, not canine.
All of their aggression is passive aggression."
Most to these so-called "jews" are NOT ACTUAL JEWS although they claim to be. Rather, they
superficially converted to Judaism about 1200 years ago, for political and financial
advantages. Think of them more like a criminal organization (Rothschild Khazarian Mafia)
which uses the terms "jew" and "anti-semitism" as Liability Shields: designed to
Deflect-Accountability and Evoke False-Trust and Sympathy with which to deceive the victims
of their Banking-Financial-$cams, War-Profiteering, Cultural-$ubversion, and other Massive
Cons.
This is why it's Important not to fall for their Primary Trap THEY RELY ON BEING
PERSECUTED so they can continue using their main go-to (anti-semitism) get out of jail free
card.
Wall Street killed the truth squad and protected the profits from job and investment
offshoring. This is what happens to elected officials when they attempt to represent the
general interest rather than the special interests that finance political campaigns. The
public interest is blocked off by a brick wall posted with a sign that says get compliant
with the Establishment or get out of politics.
As for the "direct collision course" re the EU and Russia, the collision course has been
imposed by the Master-oligarchy of U. S. on the hapless vassal EU.
Slobodan's "The Globalists" is a great look at Von Mises and Hayek peddling
NeoLiberalism to the last hereditary aristocracy standing in Europe in the interwar
years.
It's Slobodian, Quinn.
To my mind, this set up a deracinated pseudo-nazism
So you're on to something.
Hayek is the Grandfather of neoliberalism and the primary influence on Hayek's thought was
the Vienna of his youth: the go-go years after Franz Josef surrendered to the Hungarians,
created the dual monarchy, and there was the great cultural efflorescence of Vienna that
preceded the Austro-Hungarian empire's collapse.
Two ideologies emerged after WWI from Austria in reaction to the traumatic experience of
that collapse -- ideologies formulated by Austrians that then deeply damaged the rest of the
world.
Neoliberalism was one, of course. The other? Well, someone once asked Ernst Hanfstaengl
aka Putzi, Hitler's confidant, what caused Hitler's antiSemitism.
Hanfstaengl replied: 'Anyone who did not know Vienna before 1914 cannot understand.'
Hanfstaengl then explained that before WWI Vienna was full of beautiful people, the soldiers
in their uniforms, the Hapsburg Empire's citizens in their local traditional clothes etc and
'then these strange people came from the East all dressed in black and speaking a strange
kind of German'. These were the Orthodox Jews who came from Silesia, a part of the
Austro-Hungarian Empire. Kaiser Franz Josef had done much to emancipate and help the Jews, so
many crossed over to Vienna to start a new life.
Now, to further put Hitler and Nazism's policies in their historical context, it's
necessary to understand the situation in Germany prior to their appearance.
In 1871, Bismarck had nationalized healthcare, making it available to all Germans, then
provided old-age pensions as public social security. Child labor was abolished and public
schools were provided for all children. The Kaiser implemented worker protection laws in
1890. After WW I, the Social Democrats' influence had remained strong. Germany had an active
union membership. An official "Decree on Collective Agreements, Worker and Employees
Committees and the Settlement of Labor disputes" enabled collective bargaining, legal
enforcement of labor contracts as well as social security for disabled veterans, widows, and
dependents. In 1918, unemployment benefits were given to all German workers.
In the 1932 elections, the Nazi Party didn't have an outright majority. According to the
Nuremberg Trial transcripts, on January 4, 1933, German bankers and industrialists had a
secret backroom deal with then-Chancellor Von Papen to make Hitler the Chancellor of Germany
in a coalition.
"In February 1933, as Chancellor, Hitler met with the leading German industrialists at the
home of Hermann Goring. There were representatives from IG Farben, AG Siemens, BMW, coal
mining magnates, Theissen Corp, AG Krupp, and others bankers, investors, and other Germans
belonging to the top 1%. In this meeting, Hitler said, "Private enterprise cannot be
maintained in the age of democracy.'"
In 1934 the Nazis outlined their plan to revitalize the German economy with the
reprivatization of significant industries: railways, public works project, construction,
steel, and banking. Hitler guaranteed profits for the private sector; many American
industrialists and bankers flocked to Germany to invest.
The Nazis had a thorough plan for deregulation. The Nazi's chief economist stated," The
first thing German business needs is peace and quiet. It must have a feeling of absolute
legal security and must know that work and its return are guaranteed." Likewise, businesses
weren't to be hampered by too much "regulation." On May 2, 1933, Hitler sent his Brown Shirts
to all union headquarters. Union leaders were beaten, and sent to prison or concentration
camps. The Nazi party expropriated union funds -- money workers paid for union membership --
for itself.
On January 20, 1934, the Nazis passed the Law Regulating National Labor, abrogating the
power of the government to set minimum wages and working conditions. Employers lowered wages
and benefits. Workers were banned from striking or engaging in other collective bargaining
rights, and worked longer hours for lower wages. Their conditions so deteriorated that when
the head of the AFL visited Nazi Germany in 1938, he compared an average worker's life to
that of a slave. .
The Nazis also privatized medicine. One of Hitler's economists was the head of a private
insurance company. These private for-profit health insurance companies immediately started to
profit from Anti-Semitism. In 1934, they eliminated reimbursements for Jewish physicians,
which allowed them to profit further.
And so on.
Philip K. Dick once wrote a novel whose particular ontological riff was that the Roman
empire never really ended and in the 20th century people lived in an imposed illusion under
the same elite, or their heirs, that had headed the Roman empire.
That sort of science-fictional novel could be written based on our own reality, riffing on
the theme: The Nazis won.
I am curious as to why Prof. Hudson does not describe the holding of mortgages by
financial entities as de facto landlordism, even if it is decentralized and theoretically
time-limited (tho' not so with infinite re-fi and heloc).If the mortgage lenders are granted
the monopoly of literally creating a debt on a ledger, rather than it being a public utility,
and the benefits (read as: interest payments) accrue solely to those private entities, how is
that substantially different than hereditary land title and rent? I concede that at the end
of the lengthy mortgage term, the aristos cede the deed, but the parasitism is considerable,
often over the entire working life of a person or couple.
My whole point, which I hope I've stated repeatedly clearly enough, is that "Rent is for
paying interest." The financial class today has replaced the 19th-century's post-feudal
landlord class.
Loans are also taken out against financial assets such as stocks/bonds. Is that another
reason for propping up the stock market to the bizarre levels now seen?
Great stuff. While some of us are resistant to using money and debt to explain
everything , who can deny that this country has always been about money above all with
a not altogether insincere love of freedom on the side. Perhaps that latter is the source of
the "you're not the boss of me" approach to the rest of the world that Hudson talks
about.
Although I'm more text than video oriented, this time I watched the latter first instead
of reading the transcript. It was like sitting in a master class about the ongoing pernicious
influence of the American financial sector on our country's foreign policy since early in the
20th century. Even if you've already read the transcript you should watch the video as
well.
The IMF system was designed to impoverish debtors. The purpose of the IMF was to make other
countries so poor and dependent on the United States so they could never be militarily
independent. In the discussion of the British loan for instance, in the 1930s the discussion in
the London Economic Conference was, "Yes, we're bankrupting Europe, but if we give Europe
enough money to avoid austerity, they're just going to spend the money on the military." That
was said by the Americans in the State Department and the White House again and again,
especially by Raymond Moley who was basically in charge of President Roosevelt's foreign policy
towards Europe.
The question is: how do you create an international financial system designed to promote
prosperity, not austerity? The Bretton Woods is for austerity for everybody except the United
States, which will have a free ride forever. The question that I'm involved with in the work
I'm doing in China and with other countries is how to create a system based on prosperity
instead of austerity, with mutual support between creditors and debtors, without the kind of
financial antagonism that has been built in to the international financial system ever since
World War I. Financial reform involves tax reform as well: how do we end up taxing economic
rent instead of letting the rentiers take over society. That is what classical economics
is all about: how do we revive it?
Oscar Brisset
Final question: these austerity and anti-labor policies which the IMF imposes on countries
of the global South seem to be well known practices from before the IMF was created, from what
you've discussed. Did the IMF invent anything new? In addition, in the 19th century, was
predatory lending something common, or was direct invasion always the go-to method for
subjugating a territory?
Prof Hudson
The 19th century was really the golden age of industrial capitalism. Countries wanted to
invest to make a profit. They didn't want to invest in dismantling an existing industry,
because there wasn't much industry to dismantle. They wanted to make profit by creating
industry. There was a lot of investment in infrastructure, and it almost always lost money. For
instance, there was recently a criticism of China saying, "Doesn't China know that the Panama
Canal went bankrupt again and again, and that all the investments in canals and the railroads
all went broke again and again?" Of course China knows that. The idea is that you make
investment not to make a profit on basic large infrastructure. The 19th century was basically
inter-state lending, inter-governmental lending, public sector lending. That's where the money
was made. The late 20th century was one of financialization, dismantling the industry that was
already in place, not lending to create industry to make a profit. It's asset-stripping, not
profit-seeking
TORONTO (Reuters) - Hedge funds are turning bullish on oil once again, betting the pandemic
and investors' environmental focus has severely damaged companies' ability to ramp up
production.
Such limitations on supply would push prices to multi-year highs and keep them there for two
years or more, several hedge funds said.
The view is a reversal for hedge funds, which shorted the oil sector in the lead-up to
global shutdowns, landing energy focused hedge funds gains of 26.8% in 2020, according to data
from eVestment. By virtue of their fast-moving strategies, hedge funds are quick to spot new
trends.
... Tawil predicted prices of $70 to $80 a barrel for Brent by the end of 2021 and is
investing long independent oil and gas producers.
... ... ...
Global crude and condensate production was down 8% in December from February 2020, prior to
the pandemic's spread accelerating, according to Rystad Energy.
North America's output was down 9.5% and Europe's production declined just 1% over the same
time period.
U.S. sanctions against Venezuela and declining oilfields in Mexico have kept oil output from
Latin America sluggish.
Jamjen831
wrote:
peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come
with these features already baked in.
I assume some of it is just old stuff people just re-download without thinking. Android
hasn't always had a built in flashlight app (and am I crazy in that the early ones required
root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens
was a QR scanner until fairly recently.
Count me in that boat. I just checked my phone and sure enough, Barcode Scanner was there.
I'm guessing it's from 3-4 phones ago and just came along for the ride as Play autoloaded my
apps on the new phones because I haven't used it in ages and ages. daggar Ars
Tribunus Militum
REPLY FEB 8, 2021 2:57 PM
POPULAR
Jamjen831
wrote:
peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come
with these features already baked in.
I assume some of it is just old stuff people just re-download without thinking. Android
hasn't always had a built in flashlight app (and am I crazy in that the early ones required
root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens
was a QR scanner until fairly recently.
It's more likely that it's stuff that gets re-downloaded without user interaction. When you
set up a new Android, the phone will often re-download all the apps from the old phone. Unless
you're going through to curate those apps, your 2021 new phone might be getting something
that's gone through a succession of auto-downloads since the mid 2010's. everythingallatonce
Smack-Fu Master, in training
REPLY FEB 8, 2021 2:57 PM
POPULAR
peachpuff
wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these
features already baked in.
I can't really speak for the barcode scanner, but given that a lot of Android phones are
incapable of being updated there is a decent chance a lot of people with much older phones
actually have to install a flashlight app.
Google really needs to do something regarding the malware problem. I'm not going to pretend
to know the answer, but for a company that made $15.23 billion in earnings last quarter and
owns Project Zero you'd think they'd be able to protect a platform they have complete control
over. Jamjen831 Ars
Scholae Palatinae et Subscriptor REPLY FEB 8, 2021 3:02
PM
Dr.Bananas wrote:
peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come
with these features already baked in.
Not all phones. I haven't had an Android phone with a stock barcode scanner ever. Samsung
Galaxy Ace, Galaxy Nexus, Moto G, Nexus 5X, Nokia 3 and my current Sony XZ2 Compact all came
without one. It should be part of the default camera app, but sadly that's not always the
case.
As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do
those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has
pushed that. Xavin Ars
Legatus Legionis et Subscriptor REPLY FEB 8, 2021 3:03
PM
POPULAR
marsilies
wrote: So I use an app called "Barcode Scanner" that's not the malware app. However, the recent
reviews blast it for adware, which I haven't noticed. I think having the exact same name has
caused some people to post negative reviews on the wrong app: https://play.google.com/store/apps/deta
... nt.android
That's correct, it's clean, people are just confused by the same names. The one with the
malware was always a sad copy of the ZXing Team one you linked.
As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do
those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has
pushed that.
You need an internet connection for Lens to scan barcodes. Batmanuel Ars
Tribunus Militum
REPLY FEB 8, 2021 3:12 PM Ancan wrote: I've got a Galaxy S8+ and if there's a built in
barcode scanner I must admit I haven't found out in the years I've had it.
And how many users know they can use an app called "Lens" to scan barcodes?
Does Lens give you technical info about the type of a barcode (aka the Symbology)? Granted,
most people don't have a need to know or care, but I have a job doing work with retail POS
equipment, including hand and flatbed scanners. For my job, it's SUPER helpful sometimes to
have a barcode scanner app that can tell me what type of barcode is being scanned - because
sometimes scanners will scan all the barcodes, *except* this one type of barcode, and then I
gotta find out what kind of barcode it is, so that I can enable that symbology for the scanner
in question (or provide instructions to my customers on how they enable it for their POS).
Or, I can scan the barcode to get the underlying text in the barcode, to compare with our
app's logs, to make sure it's scanning correctly (e.g. not getting truncated or anything like
that).
That's why I have ZXing Team barcode scanner on my phone and recommend it to co-workers.
I assume some of it is just old stuff people just re-download without thinking. Android
hasn't always had a built in flashlight app (and am I crazy in that the early ones required
root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google
Lens was a QR scanner until fairly recently.
It isn't just old people, as you admitted yourself practically everyone doesn't
understand all the things their apps can do, especially when that changes over time. A big
part of that problem is the appalling fact that most apps, even the most widely used and
professionally developed, have basically no documentation, and no way of finding out what
their features actually are.
Developers have this fantasy in their heads that they don't document the programs
because it's really hard to keep the documentation in-sync with a changing app, but the
real reason is just a pervasive problem in development culture caused by the race to get
things onto the market, and the convenient lie that developers tell themselves that their
apps are "self documenting", as if everyone has the time or desire to play "app scientist"
and experiment with the app endlessly to find out all its hidden, unobvious features.
@dmccarty: Yeah, the "update or not" decision is tricky for apps. What I do, is turn off
update only for apps that I have no desire for updates too and which shouldn't be doing any
internet activity or only activity to a defined, trusted spot. Any other kind of app,
especially ones that might be subjected to varying network input from undefined sources,
gets updates. Up +21 ( +22 / -1 ) Down 3906 posts | registered 9/15/2009
MikeSafari
Wise, Aged Ars Veteran
REPLY FEB 8, 2021 3:17 PM peachpuff wrote: Barcode scanners and flashlight apps... who
installs these? Phones come with these features already baked in.
I unfortunately didn't have a choice. I bought a Nokia 6.1 a couple of years ago and
installed the official Google Camera app, which has a built-in barcode/QR code reader, but
when Nokia pushed the Android 10 update, it broke the camera app completely. And Nokia's
default camera app does *not* read barcodes or QR codes for some reason. So to read them, I
had to install a third-party app.
Not super thrilled anyway, but thankfully it was not this one.
As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do
those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has
pushed that.
Lens looks like it was initially exclusive to the Pixel 2, and slowly expanded until it became
its own Android app in June 2018: https://en.wikipedia.org/wiki/Google_Lens
So all the phones listed peachpuff came without it, and you'd probably have to have an
Android phone released in the last 2 1/2 years to even have it pre-installed.
Then, as others have noted, one would have to know that Lens can scan barcodes, and if you
have had Android phones for a while, the initial setup and migration may install their old
barcode scanner app anyway.
The United States of America is now a classic oligarchy. The clarity that it has brought to
our situation by recognizing this fact is its only virtue...
"Either the Constitution matters and must be followed . . . or it is simply a piece of
parchment on display at the National Archives."
- Texas v. Pennsylvania et al.
T exas v. Pennsylvania et al. did not deny setting rules for the 2020 election contrary to
the Constitution. On December 10, 2020, the Supreme Court
discounted that . By refusing to interfere as America's ruling oligarchy serves itself, the
court archived what remained of the American republic's system of equal justice. That much is
clear.
In 2021, the laws, customs, and habits of the heart that had defined the American republic
since the 18th century are things of the past. Americans' movements and interactions are under
strictures for which no one ever voted. Government disarticulated society by penalizing
ordinary social intercourse and precluding the rise of spontaneous opinion therefrom. Together
with corporate America, it smothers minds through the mass and social media with relentless,
pervasive, identical, and ever-evolving directives. In that way, these oligarchs have
proclaimed themselves the arbiters of truth, entitled and obliged to censor whoever disagrees
with them as systemically racist, adepts of conspiracy theories.
Corporations, and the government itself, require employees to attend meetings personally to
acknowledge their guilt. They solicit mutual accusations. While violent felons are released
from prison, anyone may be fired or otherwise have his life wrecked for questioning
government/corporate sentiment. Today's rulers don't try to convince. They demand obedience,
and they punish.
Russians and East Germans under Communists Leonid Brezhnev and Erich Honecker in the 1970s
lived under less ruling class pressure than do today's Americans. And their rulers were smart
enough not to insult them, their country, or their race.
In 2015, Americans could still believe they lived in a republic, in which life's rules flow
from the people through their representatives.
In 2021, a class of rulers draws their right to rule from self-declared experts' claims of
infallibility that dwarf baroque kings' pretensions. In that self-referential sense, the United
States of America is now a classic oligarchy.
The following explains how this change happened. The clarity that it has brought to our
predicament is its only virtue.
Oligarchy had long been growing within America's republican forms. The 2016 election posed
the choice of whether its rise should consolidate, or not. Consolidation was very much "in the
cards." But how that election and its aftermath led to the fast, thorough, revolution of
American life depended on how Donald Trump acted as the catalyst who clarified, energized, and
empowered our burgeoning oligarchy's peculiarities. These, along with the manner in which the
oligarchy seized power between November 2016 and November 2020, ensure that its reign will be
ruinous and likely short. The prospect that the republic's way of life may thrive among those
who wish it to depends on the manner in which they manage the civil conflict that is now
inevitable.
From Ruling Class to Oligarchy
By the 21st century's first decade, little but formality was left of the American republic.
In 1942, Joseph Schumpeter's Capitalism,
Socialism, and Democracy described the logic by which government and big business tend to
coalesce into socialism in theory, oligarchy in practice. But by then, that logic had already
imposed itself on the Western world. Italy's 1926 Law of Corporations -- fascism's charter --
inaugurated not so much the regulation of business by government as the coalescence of the
twain. Over the ensuing decade, it was more or less copied throughout the West.
In America, the 1890 Sherman Antitrust Act's authors had erected barriers against private
oligopolies and monopolies. By maintaining competition between big business, they hoped to
preserve private freedoms and limit government's role. But the Great Depression's pressures and
temptations led to the New Deal's rules that differed little from Italy's. No matter that, as
the Supreme Court pointed out in Schechter Poultry v. U.S . , public-private
amalgamation does not fit in the Constitution. It grew nevertheless alongside the notion that
good government proceeds from the experts' judgment rather than from the voters' choices. The
miracles of production that America brought forth in World War II seemed to validate the
point.
President Dwight D. Eisenhower, who had come to understand large organizations that feed on
government power and dispense vast private benefits, was not shy in warning about the danger
they pose to the republic. His warning about the " military-industrial
complex " that he knew so well is often misunderstood as a mere caution against militarism.
But Ike was making a broader point: Amalgams of public and private power tend to prioritize
their corporate interests over the country's.
That is why Eisenhower cautioned against the power of government-funded expertise. "The
prospect of domination of the nation's scholars by federal employment, project allocations, and
the power of money is ever-present and is gravely to be regarded," he said, because "public
policy could itself become the captive of a scientific-technological elite." Government money
can accredit a self-regarding elite. Because "a government contract becomes virtually a
substitute for intellectual curiosity," government experts can end up substituting their power
for truth.
The expansion of government power throughout the 1960s and '70s in pursuit of improving
education, eradicating poverty, and uplifting blacks created complexes of public-private power
throughout America that surpassed the military-industrial complex in size, and above all in
influence.
Consider education. Post-secondary education increased fourfold, from 9 percent of Americans
holding four-year degrees in 1965 to 36 percent in 2015. College towns became islands of wealth
and political power. From them came endless "studies" that purported to be arbiters of truth
and wisdom, as well as a growing class of graduates increasingly less educated but ever so much
more socio-politically uniform.
In the lower grades, per-pupil expenditure (in constant dollars) went from $3,200 in 1960 to
$13,400 in 2015. That money fueled an even more vast and powerful complex -- one that includes
book publishers, administrators, and labor unions and that has monopolized the minds of at
least two generations. As it grew, the education establishment also detached itself from the
voters' control: In the 1950s, there were some 83,000 public school districts in America. By
2015, only around 13,000 remained for a population twice as large. Today's parents have many
times less influence over their children's education than did their grandparents.
Analogous things happened in every field of life. Medicine came to be dominated by the
government's relationship with drug companies and hospital associations. When Americans went to
buy cars, or even light bulbs and shower nozzles, they found their choices limited by deals
between government, industry, and insurance companies. These entities regarded each other as
"stakeholders" in an oligarchic system. But they had ever less need to take account of mere
citizens in what was becoming a republic in name only. As the 20eth century was drawing to a
close, wherever citizens looked, they saw a government and government-empowered entities over
which they had ever less say, which ruled ever more unaccountably, and whose attitude toward
them was ever less friendly.
The formalities were the last to go. Ever since the signing of the Magna Carta in 1215 A.D.,
the rulers' dependence on popular assent to expenditures has been the essence of limited
government. Article I, section 9 of the U.S. Constitution enshrines that principle.
Congressional practice embodied it. Details of bills and expenditures were subject to public
hearings and votes in subcommittees, committees, and the floors of both Houses. But beginning
in the early 1980s and culminating in 2007, the U.S government abandoned the appropriations
process.
Until 1981, Congress had used "continuing resolutions" to continue funding government
operations unchanged until regular appropriations could be made. Thereafter, as congressional
leaders learned how easy it is to use this vehicle to avoid exposing what they are doing to
public scrutiny, they legislated and appropriated ever less in public, and increasingly put
Congress' output into continuing resolutions or omnibus bills, amounting to trillions of
dollars and thousands of pages, impossible for representatives and senators to read, and
presented to them as the only alternative to "shutting down the government." This -- now the
U.S government standard operating procedure -- enables the oligarchy's "stakeholders" to
negotiate their internal arrangements free from responsibility to citizens. It is the practical
abolition of Article I section 9 -- and of the Magna Carta itself.
In the 21st century, the American people's trust in government plummeted as they -- on the
political Left as well as on the Right -- realized that those in power care little for them. As
they watched corporate and non-profit officials trade places with public officials and
politicians while getting much richer, they felt impoverished and disempowered. Since the
ruling class embraced Republicans and Democrats, elections seemed irrelevant. The presidential
elections of 2008 and 2012 underlined that whoever won, the same people would be in charge and
that the parceling out of wealth and power among stakeholders would continue.
Americans on the Right were especially aggrieved because the oligarchy had become culturally
united in disdain for Western civilization in general and for themselves in particular. The
cultural warfare it waged on the rest of America inflamed opposition. But it also diluted its
own focus on solidifying profitable arrangements.
By 2016, America was already well into the classic cycles of revolution. The atrophy of
institutions, the waning of republican habits, and the increasing, reciprocal disrespect
between classes that have less in common culturally, dislike each other more, and embody ways
of life more different from one another, than did the 19th century's Northerners and
Southerners precluded returning to traditional republican life. The election would determine
whether the oligarchy could consolidate itself. More important, it would affect the speed by
which the revolutionary vortex would carry the country, and the amount of violence this would
involve.
The Trump Catalyst
By 2015, the right side of America's challenge to the budding oligarchy was inevitable.
Trump was not inevitable. Senator Ted Cruz (R-Texas) had begun posing a thorough challenge to
the "stakeholders" most Americans disrespected. Candidate Trump was the more gripping showman.
His popularity came from his willingness to disrespect them, loudly. Because the other 16
Republican candidates ran on different bases, none ever had a chance. Inevitably, victory in a
field so crowded depended on when which minor candidate did or did not withdraw. There never
was a head-to-head choice between Trump and Cruz.
Trump's candidacy drew the ferocious opposition it did primarily because the entire ruling
class recognized that, unlike McCain in 2008 and Romney in 2012, he really was mobilizing
millions of Americans against the arrangements by which the ruling class live, move, and have
their being. Since Cruz's candidacy represented the same threat, it almost certainly would have
drawn no less intense self-righteous anger. Nasty narratives could have been made up about him
out of whole cloth as easily as about Trump.
But Trump's actual peculiarities made it possible for the oligarchy to give the impression
that its campaign was about his person, his public flouting of conventional norms, rather than
about the preservation of their own power and wealth. The principal consequence of the ruling
class' opposition to candidate Trump was to convince itself, and then its followers, that
defeating him was so important that it legitimized, indeed dictated, setting aside all laws,
and truth itself.
Particular individuals had never been the oligarchy's worry. In 2008, as Barack Obama was
running against Hillary Clinton and John McCain -- far cries from Trump -- he pointed to those
Americans who "cling to God and guns" as the problem's root. Clinton's 2016 remark that Trump's
supporters were "a basket of deplorables," -- racists, sexists, homophobes, etc. -- merely
voiced what had long been the oligarchy's consensus judgment of most Americans. For them,
pushing these Americans as far away as possible from the levers of power, treating them as less
than citizens, had already come to define justice and right.
Donald Trump -- his bombastic, hyperbolic style, his tendency to play fast and loose with
truth, even to lie as he insulted his targets -- fit perfectly the oligarchy's image of his
supporters, and lent a color of legitimacy to the utterly illegitimate collusion between the
oligarchy's members in government and those in the Democratic Party running against Trump.
Thus did the FBI and CIA, in league with the major media and the Democratic Party, spy on
candidate Trump, concocting and spreading all manner of synthetic dirt about him. Nevertheless,
to universal surprise, he won, or rather the oligarchy lost, the 2016 election.
The oligarchy's disparate members had already set aside laws, truth, etc. in opposition to
Trump. The realization that the presidency's awesome powers now rested in his hands fostered a
full-court-press #Resistance. Trump's peculiarities helped make it far more successful than
anyone could have imagined.
"Dogs That Bark Do Not Bite"
Applying this observation to candidate Trump's hyperbole suggested that President Trump
might suffer from what Theodore Roosevelt called the most self-destructive of habits, combining
"the unbridled tongue with the unready hand." And, in fact, President Trump neither fired and
referred for prosecution James Comey or the other intelligence officials who had run the
surveillance of his campaign. He praised them, and let himself be persuaded to fire General
Michael Flynn, his national security advisor, who stood in the way of the intelligence
agencies' plans against him. Nor did he declassify and make public all the documents associated
with their illegalities.
Four years later, he left office with those documents still under seal. He criticized
officials over whom he had absolute power, notably CIA's Gina Haspel who likely committed a
crime spying on his candidacy, but left them in office. Days after his own inauguration, he
suffered the CIA's removal of clearances from one of his appointees because he was a critic of
the Agency. Any president worthy of his office would have fired the entire chain of officials
who had made that decision. Instead, he appointed to these agencies people loyal to them and
hostile to himself.
He acted similarly with other agencies. His first secretary of state, secretary of defense,
and national security advisor mocked him publicly. At their behest, in August 2017, he gave a
nationally televised speech in which he effectively thanked them for showing him that he had
been wrong in opposing ongoing war in the Middle East. He railed against Wall Street but left
untouched the tax code's "carried interest" provision that is the source of much unearned
wealth. He railed against the legal loophole that lets Google, Facebook, and Twitter censor
content without retribution, but did nothing to close it. Already by the end of January 2017,
it was clear that no one in Washington needed to fear Trump. By the time he left office,
Washington was laughing at him.
Nor did Trump protect his supporters. For example, he shared their resentment of being
ordered to attend workplace sessions about their "racism." But not until his last months in
office did he ban the practice within the federal government. Never did he ban contracts with
companies that require such sessions.
Thus, as the oligarchy set about negating the 2016 electorate's attempt to stop its
consolidation of power, Trump had assured them that they would neither be impeded as they did
so nor pay a price. Donald Trump is not responsible for the oligarchy's power. But he was
indispensable to it.
#TheResistance rallied every part of the ruling class to mutually supporting efforts.
Nothing encourages, amplifies, or seemingly justifies extreme sentiments as does being part of
a unanimous chorus, a crowd, a mob -- especially when all can be sure they are acting safely,
gratuitously. Success supercharges them. #TheResistance fostered the sense in the ruling class'
members that they are more right, more superior, and more entitled than they had ever imagined.
It made millions of people feel bigger and better about themselves than they ever
had.
Logic and Dysfunction
Disdain for the "deplorables" united and energized parts of American society that, apart
from their profitable material connections to government, have nothing in common and often have
diverging interests. That hate, that determination to feel superior to the "deplorables" by
treading upon them, is the "intersectionality," the glue that binds, say, Wall Street
coupon-clippers, folks in the media, officials of public service unions, gender studies
professors, all manner of administrators, radical feminists, race and ethnic activists, and so
on. #TheResistance grew by awakening these groups to the powers and privileges to which they
imagine their superior worth entitles them, to their hate for anyone who does not submit
preemptively.
Ruling-class judges sustained every bureaucratic act of opposition to the Trump
Administration. Thousands of identical voices in major media echoed every charge, every
insinuation, non-stop and unquestioned. #TheResistance made it ruling-class policy that Trump's
and his voters' racism and a host of other wrongdoing made them, personally, illegitimate. In
any confrontation, the ruling class deemed these presumed white supremacists in the wrong,
systemically. By 2018, the ruling class had effectively placed the "deplorables" outside the
protection of the laws. By 2020, they could be fired for a trifle, set upon in the streets,
prosecuted on suspicion of bad attitudes, and even for defending themselves.
Because each and every part of the ruling coalition's sense of what may assuage its
grievances evolves without natural limit, this logic is as insatiable as it is powerful. It is
also inherently destructive of oligarchy.
Enjoyment of power's material perquisites is classic oligarchy's defining purpose. Having
conquered power over the people, successful oligarchies foster environments in which they can
live in peace, productively. Oligarchy, like all regimes, cannot survive if it works at
cross-purposes. But the oligarchy that seized power in America between 2016 and 2020 is engaged
in a never-ending seizure of ever more power and the infliction of ever more punishment -- in a
war against the people without imaginable end. Clearly, that is contrary to what the Wall
Street magnates or the corps of bureaucrats or the university administrators or senior
professors want. But that is what the people want who wield the "intersectional" passions that
put the oligarchy in power.
As the oligarchy's every part, every organ, raged against everything Trump, it made itself
less attractive to the public even as Trump's various encouragements of economic activity were
contributing to palpable increases in prosperity.
Hence, by 2019's end, Trump was likely to win reelection. Then came COVID-19.
The
COVID Fortuna
The COVID-19 virus is no plague. Though quite contagious, its infection/fatality rate (IFR),
about 0.01 percent, is that of the average flu, and its effects are generally so mild that most
whom it infects never know it.
Like all infections, it is deadly to those weakened severely by other causes. It did not
transform American life by killing people, but by the fears about it that our oligarchy
packaged and purveyed. Fortuna , as Machiavelli reminds us, is inherently submissive to whoever
bends her to his wishes. The fears and the strictures they enabled were not about health -- if
only because those who purveyed and imposed them did not apply them to themselves. They were
about power over others.
COVID's politicization began in February 2020 with the adoption by the World Health
Organization -- which is headed by an Ethiopian bureaucrat beholden to China -- and upon
recommendation of non-scientist Bill Gates, of a non-peer-reviewed test for the infection. The
test's chief characteristic is that its rate of positives to negatives depends on the number of
cycles through which the sample is run. More cycles, more positives. Hence, every test result
is a "soft" number. Second, the WHO and associated national organizations like the U.S. Centers
for Disease Control reported COVID's spread by another "soft" number: "confirmed cases." That
is, sick persons who tested positive for the virus.
When this number is related to that of such persons who then die, the ratio -- somewhat
north of 5 percent -- suggests that COVID kills one out of 20 people it touches. But that is an
even softer number since these deaths include those who die with COVID rather than of it, as
well as those who may have had COVID. Pyramiding such soft numbers, mathematical modelers
projected millions of deaths. Scary for the unwary, but pure fantasy.
For example, the U.S. Institute for Health Metrics and Evaluation (IHME), which modeled the
authoritative predictions on which the U.S. lockdowns were based, also predicted COVID-19
deaths for Sweden, which did not lock down. On May 3, the IHME predicted that Sweden would
suffer 2,800 COVID deaths a day within the next two weeks. The actual number was 38. Reporting
on COVID has never ceased to consist of numbers as scary as they are soft.
Literate persons know that, once an infectious disease enters a population, nothing can
prevent it from infecting all of it, until a majority has developed antibodies after
contracting it -- so-called community immunity or herd immunity. But fear leads people to
empower those who promise safety, regardless of how empty the promises. The media pressed
governments to do something . The Wall Street Journal's Peggy Noonan screamed: "don't panic is
terrible advice." The pharmaceutical industry and its Wall Street backers salivated at the
prospect of billions of government money for new drugs and vaccines. Never mind the little
sense it makes for millions of people to accept a vaccine's non-trivial risk to protect against
a virus with trivial consequences for themselves. All manner of officials yearned to wield
unaccountable power.
Because the power to crush the general population's resistance to itself is the oligarchy's
single-minded focus, it was able to bend fears of COVID to that purpose. Thus, it gathered more
power with more consequences than the oligarchs could have imagined.
But only President Trump's complaisance made this possible. His message to the American
people had been not to panic, be mindful of the scientific facts -- you can't stop it, and it's
not that bad -- while mitigating its effects on vulnerable populations. But on March 15, Trump
bent, and agreed to counsel people to suspend normal life for two weeks to "slow the spread,"
so that hospitals would not be overwhelmed. Two weeks later, the New York Times crowed that
Trump, having been told "hundreds of thousands of Americans could face death if the country
reopened too soon," had been stampeded into "abandoning his goal of reopening the country by
Easter." He agreed to support the "experts'" definition of what "soon" might mean. By
accrediting the complex of government, industry, and media's good faith and expertise, Trump
validated their plans to use COVID as a vehicle for enhancing their power.
Having seized powers, the oligarchs used them as weapons to disrupt and disaggregate the
parts of American society they could not control.
The economic effects of lockdowns and social distancing caused obvious pain. Tens of
millions of small businesses were forced to close or radically to reduce activity. More than 40
million Americans filed claims for unemployment assistance. Uncountable millions of farmers and
professionals had their products and activities devalued. Millions of careers, dreams that had
been realized by lifetimes of work, were wrecked. Big business and government took over their
functions. Within nine months, COVID-19 had produced 28 new billionaires .
Surplus and scarcity of food resulted simultaneously because the lockdowns closed most
restaurants and hotels. As demand shifted in ways that made it impossible for distribution
networks and processing plants to adjust seamlessly, millions of gallons of milk were poured
down drains, millions of chickens, billions of eggs, and tens of thousands of hogs and cattle
were destroyed, acres of vegetables and tons of fruit were plowed under. Prices in the markets
rose. Persons deprived of work with less money with which to pay higher prices struggled to
feed their families. This reduced countless self-supporting citizens to supplicants. By
intentionally reducing the supply of food available to the population, the U.S. government
joined the rare ranks of such as Stalin's Soviet Union and Castro's Cuba.
But none of these had ever shut down a whole nation's entire medical care except for one
disease. Hospitals stood nearly empty, having cleared the decks for the (ignorantly) expected
COVID flood. Emergency rooms were closed to the poor people who get routine care there. Forget
about dentistry. Most Americans were left essentially without medical care for most of a year.
Human bodies' troubles not having taken a corresponding holiday, it is impossible to estimate
how much suffering and death this lack of medical care has caused and will cause yet.
The oligarchy's division of all activity into "essential" -- meaning permitted -- and
"nonessential" -- to be throttled at will -- had less obvious but more destructive effects.
Private clubs, as well as any and all gatherings of more than five or 10 people, were banned.
Churches were forbidden to have worship services or to continue social activities. The "social
distancing" and mask mandates enforced in public buildings and stores, and often on the
streets, made it well-nigh impossible for people to communicate casually. Thus, was that part
of American society that the oligarchy did not control directly disarticulated, and its members
left alone to face unaccountable powers on which they had to depend.
Meanwhile, the media became the oligarchy's public relations department. Very much including
ordinary commercial advertising, it hammered home the oligarchy's line that COVID restrictions
are good, even cool. These restrictions reduced the ideas available to the American people to
what the mass media purveyed and the social media allowed. Already by April 2020, these used
what had become near-monopoly power over interpersonal communications to censor such
communications as they disapproved. Political enforcers took it upon themselves even to cancel
statements by eminent physicians about COVID that they judged to be "misleading." Of course,
this betrayed the tech giants' initial promise of universal access. It is also
unconstitutional. (In Marsh v. Alabama , decided in 1946, the
Supreme Court barred private parties from acting as de facto governments). Since these
companies did it in unison, they also violated the 1890 Sherman Antitrust Act. But the ruling
class that had become an oligarchy applauded their disabling whatever might be conducive to
conservatives' interests and inconvenient to their own candidates.
Private entities wielding public powers in coordination with each other without having to
observe any of government's constitutional constraints is as good a definition of oligarchy as
there is. Oligarchy had increasingly taken power in the buildup to the 2020 election. In its
aftermath, it would try to suffocate America.
Sovereignty of the Vote Counters
The oligarchy's proximate objective, preventing the 2020 presidential election from
validating the previous one's results, overrode all others. The powers it had seized under
COVID's cover, added to the plethora that it had exercised since the 2016 campaign's beginning,
had surely cowered some opposition. But as November 2020 loomed, no one could be sure how much
it also had energized.
Few people were happy to be locked down. It was a safe bet that not a few were unhappy at
being called systemically racist. The oligarchy, its powers notwithstanding, could not be sure
how people would vote. That is why it acted to take the presidential election's outcome out of
the hands of those who would cast the votes and to place it as much as possible in the hands of
its members who would count the votes.
Intentionally, traditional procedures for voting leave no discretion to those who count the
votes. Individuals obtain and cast ballots into a physical or electronic box only after showing
identification that matches their registration. Ballot boxes are opened and their contents
counted by persons representing the election's opposing parties. Persons registered to vote
might qualify to vote-by-mail by requesting a ballot, the issuance and receipt of which is
checked against their registration. Their ballots are counted in the same bipartisan
manner.
The Democratic Party had long pressed to substitute universal voting by mail -- meaning that
ballots would be sent to all registered voters, in some states to anyone with a driver's
license whether they asked for them or not and regardless of whether these persons still lived
at the address on the rolls or were even alive. The ballots eventually would arrive at the
counting centers, either through the mail, from drop boxes, or through "harvesters" who would
pick them up from the voters who fill them out, and who may even help them to fill them out.
Security, if any, would consist of machine-matching signatures on the ballot and on the
envelope in which it had come. The machine's software can be dialed to greater or lesser
sensitivity.
But doing away with scrutiny of ballots counted by representatives of the election's
contenders removes the last possibility of ensuring the ballot had come from a real person
whose will it is supposed to represent. Once the link between the ballot and the qualified
person is broken, nothing prevents those in charge of the electoral process from excluding and
including masses of ballots as they choose. The counters become the arbiters.
Attorney General William Barr pointed out the obvious: Anyone, in America or abroad, can
print up any number of ballots, mark them, and deliver them for counting to whoever is willing
to accept them and run them through their machines. Since the counters usually dispose of the
envelopes in which ballots arrive -- thus obviating any possibility of tracing the ballot's
connection to a voter -- they may even dispense of the fiction that there had ever been any
signed envelopes. That is especially true of late-found ballots. Who knows where they came
from? Who cares to find out?
Only in a few one-party Democratic states was universal vote-by-mail established by law.
Elsewhere, especially in the states sure to be battlegrounds in the presidential election,
mail-in voting was introduced by various kinds of executive or judicial actions. Questions of
right and wrong aside, the Constitution's Article II section 1's words -- "Each State shall
appoint, in such Manner as the Legislature thereof may direct " -- makes such actions
unconstitutional on their face. Moreover, in these states -- Georgia, Pennsylvania, Michigan,
and Wisconsin -- the counting of votes in the most populous counties is firmly in the hands of
Democratic Party bosses with a well-documented history of fraud.
To no one's surprise, the 2020 presidential election was decided by super-majorities for the
Democratic candidate precisely from these counties in these states. Yes, Trump's percentage of
the vote fell in certain suburbs. But Trump received some 11 million more votes in 2020 than
four years earlier, and nearly doubled the share of votes he received from blacks. The
Democrats' gain of some 15 million votes came exclusively from mail-in ballots, and their
victory in the Electoral College came exclusively from the supermajorities piled up in these
corrupt counties -- the only places where Trump's share of the black vote was cut by
three-quarters. Did people there really think so differently?
This is not the place to recount the list of affidavits sworn under penalty of perjury by
persons who observed ballot stuffing, nor the statistical anomaly of successive batches of
votes that favored Biden over Trump by precisely the same amounts, of un-creased (i.e., never
mailed) ballots fed into counting machines, nor the Georgia video of suitcases of ballots being
taken from under tables and inserted into counting machines after Republican observers had been
ousted. Suffice it to note that references to these events have been scrubbed from the
Internet. It is more important to keep in mind that, in America prior to 2020, sworn affidavits
that crimes have been committed had invariably been probable cause for judicial, prosecutorial,
or legislative investigations. But for the first time in America, the ruling class dismissed
them with: "You have no proof!" A judge (the sister of Georgia's Stacey Abrams) ruled that even
when someone tells the U.S. Postal Service they have moved, their old address is still a lawful
basis for them to cast a ballot. Certainly, proof of crime is impossible with such judges and
without testimony under oath, or powers of subpoena.
Just as important, Republicans in general and the Trump White House in particular bear heavy
responsibility for failing to challenge the patent illegality of the executive actions and
consent decrees that enabled inherently insecure mail-in procedures in real-time, as they were
being perpetrated in key states. No facts were at issue. Only law. The constitutional
violations were undeniable.
Pennsylvania et. al. answered Texas's late lawsuit by arguing it demanded the invalidation
of votes that had been cast in good faith. True. But Texas argued that letting stand the
results of an election carried out contrary to the Constitution devalued the votes cast in
states such as Texas that had held the election in a constitutional manner. Also true. Without
comment, the Supreme Court chose to privilege the set of voters on the oligarchy's side over
those of their opponents. Had the lawsuit come well before the election, no such choice would
have existed. Typically, the Trump Administration substituted bluster for action.
The
Oligarchy Rides its Tigers
Winning the 2020 election had been the objective behind which the oligarchy had coalesced
during the previous five years. In 2021, waging socio-political war on the rest of America is
what the oligarchy is all about.
The logic of hate and disdain of ordinary Americans is not only what binds the oligarchy
together. It is the only substitute it has for any moral-ethical-intellectual point of
reference. Donald Trump's impotent, inglorious reaction to his defeat offered irresistible
temptations to the oligarchy's several sectors to celebrate victory by vying to hurt whoever
had supported the president. But permanent war against some 74 million fellow citizens is a
foredoomed approach to governing.
The Democratic Party had promised a return to some kind of "normalcy." Instead, its victory
enabled the oligarchy's several parts to redefine the people who do not show them due deference
as "white supremacists," "insurrectionists," and Nazis -- in short, as some kind of criminals
-- to exclude them from common platforms of communication, from the banking system, and perhaps
even from air travel; and to set law enforcement to surveil them in order to find bases for
prosecuting them. Neither Congress nor any state's legislature legislated any of this. Rather,
the several parts of America's economic, cultural, and political establishment are waging this
war, uncoordinated but well-nigh unanimously.
Perhaps most important, they do so without thought of how a war against at least some 74
million fellow citizens might end. The people in the oligarchy's corporate components seem to
want only to adorn unchallenged power with a reputation for "wokeness." For them, causing pain
to their opponents is a pleasure incidental to enjoying power's perquisites. The Biden family's
self-enrichment by renting access to influence is this oligarchy's standard.
But the people who dispense that reputation -- not just the professional revolutionaries of
Antifa and Black Lives Matter, but "mainstream" racial and gender activists and self-appointed
virtue-crats, have appetites as variable as they are insatiable. For them, rubbing conservative
America's faces in excrement is what it's all about. A Twitter video viewed by 2.6 million
people urges them to form "an army of citizen detectives" to ferret out conservatives from
among teachers, doctors, police officers, and "report them to the authorities." No doubt,
encouraged by President Biden's characterization of opponents as "domestic terrorists," any
number of "authorities" as well as private persons will find opportunities to lord it over
persons not to their taste. This guarantees endless clashes, and spiraling violence.
Joseph Biden, Kamala Harris, and the people they appoint to positions of official
responsibility are apparatchiks, habituated to currying favor and pulling rank. They have
neither the inclination nor the capacity to persuade the oligarchy's several parts to agree to
a common good or at least to a modus vivendi among themselves, never mind with conservative
America. This guarantees that they will ride tigers that they won't even try to dismount.
At this moment, the oligarchy wields an awesome complex of official and unofficial powers to
exclude whomever it chooses from society's mainstream. Necessarily, however, exclusions cut
both ways. Invariably, to banish another is to banish one's self as well. Google, Facebook, and
Twitter let it be known that they would exclude anything with which they disagree from what had
become the near-universal means of communication. They bolstered that by colluding to destroy
their competitor, Parler. Did they imagine that 74 million Americans could find no means of
communicating otherwise? Simon and Schuster canceled a book by Senator Josh Hawley (R-Mo.)
critical of communications monopolies. Did its officials imagine that they would thereby do
other than increase the book's eventual sales, and transfer some of their customers to Hawley's
new publisher ? The media effectively suppressed inconvenient news. Did they imagine that
this would prevent photos of Black Lives Matter professionals in the forefront of the January 6
assault on the U.S. Capitol from reaching the public?
In sum, intending to relegate conservative America to society's servile sidelines, the
oligarchy's members drew a clear, sharp line between themselves and that America. By telling
conservative Americans "these institutions and corporations, are ours, not yours," they freed
conservative America of moral obligations toward them and themselves. By abandoning
conservative America, they oblige conservative America to abandon them and seek its own
way.
Clarity, Leadership, and Separation
To think of conservative America's predicament as an opportunity is as hyperbolic as it was
for Machiavelli to begin the conclusion of The Prince by observing that "in order to know
Moses' virtue it was necessary that the people of Israel be slaves in Egypt, and to know the
greatness of Cyrus's spirit that the Persians be oppressed by the Medes, and to know the
excellence of Theseus, that the Athenian people be dispersed, so at the present, in order to
know the virtue of an Italian spirit it was necessary that Italy reduce herself to the
conditions in which she is at present . . ."
Machiavelli's lesson is that the clarity of situations such as he mentions, and such as is
conservative America's following the 2020 election, is itself valuable. Clarity makes illusions
of compromise untenable and points to self-reliant action as the only reasonable path. The
people might or might not be, as he wrote, "all ready and disposed to follow the flag if only
someone were to pick it up." But surely, someone picking up the flag is the only alternative to
servitude.
What, in conservative America's current predicament, might it mean to "pick up the flag?"
Electoral politics remains open to talented, courageous, ambitious leadership. In Florida and
South Dakota, Governors Ron DeSantis and Kristi Noem have used their powers to make room for
ways of life different from and more attractive than that in places wholly dominated by the
oligarchy. Texas and Idaho as well attract refugees from such as California and New York by
virtue of such differences with life there as their elected officials have been able to
maintain. Governmental and corporate pressures on such states to conform to the oligarchy's
standards, sure to increase, are opportunities for their officials to lead their people's
refusal to conform by explaining why doing this is good, and by personally standing in the way.
They may be sure that President Kamala Harris would not order federal troops to shoot at state
officials for closing abortion clinics or for excluding men from women's bathrooms.
For more than a generation, a majority of Americans have expressed growing distrust of, and
alienation from, the establishment. The establishment, not Donald Trump, made this happen. That
disparate majority, in many ways at cross purposes with itself, demands leadership. Pollster
Patrick Caddell's in-depth study of the American electorate, which he titled "We Need Smith," showed how the themes that
made it possible for the hero of the 1939 movie "Mr. Smith Goes to Washington" to prevail
against the establishment then are even more gripping now and appeal to a bigger majority.
Trump was a bad copy of Mr. Smith.
More than ever, an audience beyond the 74 million Americans who voted for Trump hungers for
leadership. The oligarchy came together by ever more vigorously denigrating and suppressing
these deplorables. Already before the 20th century's turn, the FBI and some elements in the
Army and the Justice Department had concluded that they are somehow criminal, and that
preparations should be made to treat them as such. The official position of the administration
taking power after the 2020 election is that domestic terrorism from legions of "white
supremacists" is the primary threat facing America. No wonder those so designated for outlawry
demand protection.
The path to electoral leadership is straightforward. Whoever would lead the deplorables-plus
must explain their cause to friend and foe, make it his own, and grow it by leading successful
acts of resistance.
Increasingly, conservative Americans live as if under occupation by a hostile power. Whoever
would lead them should emulate Charles de Gaulle's 1941 basic rule for la résistance :
refrain from individual or spontaneous acts or expressions that produce only martyrs. But join
with thousands in what amount to battles to defeat the enemy's initiatives, weaken his grip on
power, and prepare his defeat. Thus, an aspirant to the presidency in 2024, in the course of
debunking the narrative by which the oligarchy seized so much power over America, might lead
millions to violate restrictions placed on those who refuse to wear masks. Or, as he pursues
legislative and judicial measures to abolish the compulsory racial and gender sensitivity
training sessions to which public and private employees are subjected, he might organize
employees in a given sector unanimously to stay away from them in protest. They can't all be
fired or held back.
Such a persuasive prospective president, or president, could finish the process that,
beginning circa 2010, initiated the process of reshaping the Republican Party into something
like Caddell's Mr. Smith would have personified.
Electoral politics, however, is the easy part. Major corporations, private and semi-private
institutions such as schools, publishing houses, and media, are the oligarchy's deepest
foundations. These having become hostile, conservative Americans have no choice but to populate
their own. This is far from impossible.
Sorting ourselves out into congenial groups has been part of America's DNA since 1630, when
Roger Williams led his followers out of Massachusetts to found Providence Plantations. In the
19th century, the Mormons left unfriendly environments to establish their own settlements.
Since 1973, Americans who believe in unborn children's humanity have largely ceased to
intermarry with those who do not. Nobody decided this should happen. It is in the logic of
diverging cultures.
As American primary and secondary education's dysfunction became painfully apparent, parents
of all races have fled the public schools as fast as they could. Businesses have been fleeing
the Rust Belt for the Sun Belt for generations. When Democratic governors and mayors used COVID
to make life difficult in their jurisdictions, people moved out of them. When Twitter's
censorship of conservatives became undeniable, Parler added customers by the hundreds of
thousands each day. Facebook and Twitter's stock lost $50 billion in a week. Much more
separation follows from the American people's diverging cultures.
As conservative America sorts itself out from oligarchy's social bases, it may be able to
restore something like what had existed under the republic. Effectively, two regimes would have
to learn to coexist within our present boundaries. But that may be the best, freest,
arrangement possible now for the United States.
The thing to really wonder about is how society is changing and what that means for
financial markets. After all, it's the madness of crowds, sentiment and human behaviours that
drive market prices. Modern communications via immediate 24/7 news, social media, the ease and
gamification of trading, and the influences of inputs such as Reddit and Fake News are changing
the way markets function. It was revealing how quickly a loose internet shock-flock of aligned
retail investors swiped the market this week.
Their anger at the financial machine was palpable. They demonstrate a fundamental change at
the heart of market capitalism.
The basis of " shareholder capitalism " was best summed up by Gordon Gecko: "Greed is Good"
. It was utterly corrupting. Anything to improve returns to the owners, the shareholders, was
apparently justified. It was justified by the belief free markets would achieve an equilibrium
where shareholders would make optimal profits by providing maximum utility to their
customers.
Just like communism, it didn't quite work out the way the economists and sociologists
predicted. Everyone talks a good talk about fair shares of the cake, but try a simple
experiment and ask you kids to divide it. Everyone wants a bigger slice. (My father's solution
was simple: whoever cuts the cake chooses last.)
In reality nothing is really fair. Inequality is a driver of the human condition. Companies
cut corners to improve their share of the cake - often the management sneak in and take the
rewards, cutting out shareholders and customers. To make profits big corporates will compromise
what they can: safety, the environment, law and justice – everything from poisoning the
planet, unsafe aircraft, or bursting dams. Costs were seen as externalities addressed through
insurance, or hiring the best lawyers.
Its no wonder we now have kickback against it, and a new mantra of "stakeholder" capitalism
trying to ensure we all get that fairer slice of the pie.
Every single big investor now swears by their strict adoption of the principals and
importance of Corporate Social Responsibility (CSR), Environment, Social and Governance (ESG)
investment, and Sustainability. (I have serious concerns these valid and laudable goals have
been diminished into mere tickbox investing by corporate bureaucracy.)
Yet for all the noise and stakeholders sharing the pie, we are still seeing the steepest
ever transfer of wealth from the poor to the rich. Income inequality is rising. Across the
Occidental Western economies the poor have become desperately poor. Witness the growth in
Foodbanks in Europe and the US and the success of Marcus Rashford in addressing the appalling
reality of kids arriving in school unfed, penalising their life chances from the get-go.
And it's not just the poorest in society. The middle classes have also been hollowed out by
the difficulties of stretching static incomes to cover every rising living costs, and
TAXES.
Oh yes these two great certainties in life; death and taxes. Except . If you are rich enough
..
As we've seen the concept of Shareholder capitalism stopped delivering anything much to any
but the wealthiest. Since 2008, and particularly since the outbreak of the Covid Pandemic,
we've seen the bulk of QE money creation and government stimulus work its way into financial
assets, with the effect of driving up the price of stocks. As I wrote a few weeks ago a rough
number is that $3 trillion out of $5 trillion subsidy money in the US has gone into the pockets
of the richest in society through the inflation of their financial assets.
Try and explain how that has worked – will immediately get you branded a communist.
But it's really simple. Stocks go up because bond yields are so low – and bond yields are
so low because its policy. How to correct it?
This is why Taxes are really interesting.
If you look at the new generation of the uber-wealthy Tech barons, and the last US
President, they all share a common theme – the belief that minimising tax payments is a
signal of entrepreneurial genius. However, the reality, at the end of the day, is tax
optimisation through complex tax structures is pretty much the same as tax evasion.
Ask any right of centre American what raising taxes would do to the economy – and they
will immediately counter it's the success of tax cuts that's driven growth and markets. Tax
cuts/handouts to the rich are credited as the singular success of the last White House
administration – creating thousands of low-paid jobs across the states. If you were to
tax the rich they wouldn't invest their money in job creation, and there would be no trickle
down to the poor. Even questioning the efficacy of tax burdens on the rich could apparently
shake the edifice of US shareholder capitalism to the ground.
The thing is.. we might not actually need taxes at all. If central banks can create
limitless money with zero consequences, then why does anyone have to pay taxes? Let the rich
keep it all and we can print more money to keep the poor happy.
But Taxes have an important role in society. They are a fee members of society pay to be
part of it – you work in order to pay the taxes that allow you membership of society. The
more you pay, the greater your contribution – the more society should value you. You want
the benefits of society, then be willing to pay for it.
In an ideal world we would laud billionaires for their hard work, effort, and paying the
bulk of their earnings in taxes to raise the up rest of us. Instead, they impress their equals
by avoiding taxes, while the rest of us increasingly resent their conspicuous wealth –
earned off our backs which is very much how anyone under 30 working hard to save a deposit for
a rabbit-hutch flat they can never afford increasingly feels about the world.
We are only now beginning to questioning tax equality and tax evasion. The papers will make
some righteous noise about the dislikeable high-street retailer who has emptied the company
pension fund to finance his yachts in a tax-haven, or it might expose a singer who has not paid
a penny in tax. We almost feel sympathy for the entertainer whose stellar career ends up on the
skids because they can't meet a tax-demand.
We regard the Inland Revenue as the ultimate baddie for harassing us to pay our modest
amounts of tax – it's easy for them to go after little people. If they try to catch the
big tax-avoiders they face a battery of lawyers and accountants and deliberately complex webs
to be unravelled.
In short, the rich get away with not paying Tax while poor get harassed and get poorer.
Inequality rises.
And this where we return to Norges Bank and why their decision to act on bad tax players is
so critical.
NBIM own 1.5% of the global stock market, with stakes in over 9ooo companies. They've not
named the seven stocks they dumped – there is no blacklist, it says – but clearly
it should set every CFO thinking about their tax transparency – including paying tax
where value creation takes place. That's a clear shot across the bows for any of the big tech
firms currently selling stuff over the internet, delivering it your front door and booking all
the revenues somewhere low tax, and repatriating profits via somewhere that's agreed a
zero-taxes deal in exchange for opening a HQ office.
Some of the most valuable firms on the planet have the least transparent tax policies. Just
saying but there is a fascinating article in the Garuniad y'day: "Inside
the mind of Jeff Bezos". It reports Jeff (till recently the richest guy on the planet)
saying: " the only way I can see to deploy this much financial resource is by converting my
Amazon winnings into space travel ."
Personally, I would love to mine asteroids, but Bezos could probably ensure every child on
the planet has access to clean water, or cure cancer and have statues to himself erected across
the planet proclaiming what a wonderful philanthropic champion.
Or he and every single other billionaire could just pay taxes, thankful for the
opportunities they had to realise their dreams building their companies, while making society
better. I'm not saying take every penny – but let's be realistic who can spend a couple
of billion dollars? Even the first Mrs Blain would have struggled with that one (although I
suspect young Ms Blain could make a significant dent )
I know exactly what posts will be made on this website and Zerohedge on this article. I will
be screamed at for being a socialist. Some libertarian idiot will call himself "John Galt" and
declare a belief that helping others is weakness. Not interested. The only way we make the
world better as politicians keep reminding us – is to remember we are in this together,
on a very small planet. [ZH: 'fair and balanced' - everyone deserves to speak their mind and be
heard.]
High taxation economies – like the Scandinavians – tend to be fairly happy
places. Entrepreneurs live well and are held in high regard. Their taxes fund social provision,
health and education that are the envy of the rest of us.
In low tax countries the wealth creators live in bunker complexes protected by guards while
the masses eke out their miserable crusts .
On Thursday afternoon President Biden gave a much anticipated and wide-ranging speech laying
out his foreign policy agenda during a visit to the State Department. As expected much of it
was a repudiation of Trump's "America First" vision - though without mentioning Donald Trump by
name. His address to State Department diplomats and staff was centered around the theme of his
words: "America is back. Diplomacy is back at the center of our foreign policy."
Alarming for anyone who has called for an end to the vision which sees Washington as
essentially acting the like to 'global police force' - which unfortunately became a
(disastrous) reality starting in the Bush years and under the neocons, Biden vowed that as
commander-in-chief he would "defend democracy globally" .
He urged for the US to rebuild "the muscles of democratic alliances that have atrophied from
four years of neglect and abuse." He emphasized that "We can't do it alone."
Of course, the big question is what will that look like, with many expecting a return to the
kind of 'humanitarian interventionism' abroad and liberal internationalism that defined the
Obama years . This often took the form of covert wars (with the foremost example being Syria)
and military interventions under the guise international coalitions (such as NATO's war on
Libya) aimed at regime change.
"We must meet this new moment of accelerating global challenges – from a pandemic to
the climate crisis to nuclear proliferation – that will only be solved by nations working
together in common cause," Biden said in the afternoon address. "That must start with
diplomacy, rooted in America's most cherished democratic values: defending freedom, championing
opportunity, upholding universal rights, respecting the rule of law, treating every person with
dignity."
Here are some of the highlights and significant foreign policy changes in US posture...
Russia
Biden said that "we will not hesitate to raise the costs on Russia." At a moment Russian
opposition leaders are lobbying Washington for the targeted use of Magnitsky sanctions on
Putin's inner circle, Biden actually mentioned the imprisoned opposition activist Alexey
Navalny by name.
He called on the Kremlin to release Navalny "immediately and without condition" while
expressing that authorities had targeted him for "exposing corruption" of Putin and top Kremlin
leadership. And
further :
He said that he "made it clear to President Putin, in a manner very different from my
predecessor, that the days the United States rolling over in the face of Russia's aggressive
action" – pointing to cyber attacks from the SolarWinds breach and the poisoning of
opposition figure Alexei Navalny – "are over."
It is a general rule that corrupt economies tend to operate on faith and not on
fundamentals. And to be clear, it's not so much about naive faith that the system is stable or
functional. No, it's more about the masses having faith that the corruption and instability
will never be derailed. Most people are not as stupid as the establishment and central bankers
think they are – Almost everyone knows the system is broken, they just refuse to consider
the possibility that the fraud will be disrupted, or that it will be allowed to fail.
The old mantra "too big to fail" is a lie. NOTHING is too big to fail, and that includes the
US economy, the dollar and the elaborate Kabuki theater that keeps them both afloat. All it
takes is a single moment, an epiphany that the Ponzi scheme is unsustainable rather than
unstoppable.
I'm reminded specifically of the inflationary crisis of Argentina in 2001 – 2002.
Argentina's economy was highly dependent on foreign capital inflows, and its currency peg to
the US dollar, not to mention they were precariously reliant on support from the IMF. The IMF
openly validated the government of Argentina and their currency peg model, but foreign capital
began to decline and the peg became unsustainable. Without tangible growth in manufacturing and
a strong middle class, an economy cannot survive for long. A top down system based on illusory
"financial products" and creative accounting is doomed to crash eventually.
All it took was for the IMF to criticize the policies they initially endorsed and announced
that they were removing financial aid, and all hell broke loose in Argentina.
Almost overnight the Argentina peso plunged in value, interest rates spiked and inflation
struck hard. People poured into the streets and civil unrest erupted. The IMF would later
admit it made "errors" in its handling of the Argentina situation, but this was simply spin
control designed to protect them from further scrutiny. The IMF avoided most of the blame and
has been growing into a monstrous global centralization machine ever since.
I think we are witnessing the beginning of a similar end of mass faith in fraud in the US.
The recent Robinhood short squeeze event as well as the current decoupling of physical silver
prices from the paper ETF market have accelerated the timetable. Not surprisingly, these moves
have forced the establishment to intervene to some extent to essentially stop renegade traders
from freely investing. Accusations are flying and deplatforming has ensued. The idea that the
system is a functional fraud is gone; The world now knows it is a dysfunctional fraud, and
collapse cannot be very far behind.
Furthermore the collusion between banks, hedge funds and Big Tech is blatantly revealed.
These relationships are supposed to remain hidden in the ether. They are obvious to anyone with
any financial knowledge and sense, but they aren't supposed to be wielded in the open.
Conspirators aren't supposed to admit to the conspiracy? Right?
Some people might say the establishment has been forced to unmask by activists. Maybe. But,
as I have been warning for many years, when criminals start openly admitting to their crimes it
is probably because they think that it's too late for anyone to do anything about it.
The point is, bankers and globalists have ways of avoiding responsibility for the disasters
they engineer. When the con-game breaks, they always have patsies to take the fall.
This sets up a bizarre dynamic in which the money elites that constructed the economy like a
time-bomb are treated like victims (or heroes) and the people telling the truth about the fraud
are treated like villains and criminals. Are activist stock market traders and silver market
guerrillas to blame for any crisis that erupts in the near future? No, of course not, but they
will be blamed anyway.
That said, propaganda narratives and scapegoats may not be enough to save the bankers this
time. They will never allow a major fiscal crash to develop in a vacuum. They need more cover,
and they need to have the means to lock down the public to prevent civil unrest or rebellion
from spilling over into their backyards. I have long suspected that the covid pandemic is a
useful tool in this regard. As I noted in my article
'How Viral Pandemic Benefits The Globalist Agenda' , published in January of 2020:
" Even if a pandemic does not kill a large number of people, it still disrupts
international travel, it disrupts exports and imports, it disrupts consumer behavior and
retail sales, and it disrupts domestic trade. If it does kill a large number of people, and
if the Chinese government's response is any indication, it could result in global martial
law. With many economies including the US economy already in a precarious balancing act of
historic debt vs. crashing demand and useless central bank repo market intervention, there is
little chance that the system can withstand such a tsunami "
As we all know, medical martial law in the name of "public health" is being established in
most countries regardless of the actual death rate. The insane globalist
rantings of the World Economic Forum and Klaus Schwab have been very revealing; Schwab and
other elites have even called the pandemic a "perfect opportunity" to execute there agenda for
the "Great Reset".
However, the globalists are highly fallible, and mistakes in judgment have been made. During
the Event 201 pandemic
wargame on a coronavirus outbreak (conveniently held two months before the real thing
happened), the elites forecast at least 65 million initial deaths globally from such a virus.
We are a year into the pandemic and nowhere near that kind of death rate. In fact, the
death rate is so minuscule (0.26%) , that the public is beginning to realize the lockdown
mandates are pointless.
In the US, conservative states are moving on and keeping their economies wide open. Half the
population is refusing to take the vaccines, and many members of law enforcement are refusing
to implement lockdown policies. I don't think this is what the globalists expected at all. They
needed mass fear and they are getting mass defiance.
They're going to need a bigger threat, or a bigger virus.
This is why I have been repeatedly warning that the talk of reopenings by Biden and other
democrats is going to be very short lived. I have predicted that Biden will attempt a federal
lockdown similar to the Level 4 lockdowns used in Europe and Australia after a couple of months
of relative calm. I based this prediction on the covid "mutation" narrative being spread right
now by the mainstream media and establishment cronies like Anthony Fauci. It is not hard to see
where this is headed.
The globalists must have the "legal" option of restricting public movement as well as large
gatherings, and they must have the option of surveillance on individuals 24/7 through contact
tracing. This is the only way to prevent rebellion against the Reset and rising anger due to
economic turmoil. The veil has been lifted, the conspiracy is being widely broadcast. Martial
law alone would only inspire more dissent, medical tyranny in the name of "saving lives" is the
ONLY play the globalists have. They have to have help from a large portion of the citizenry, so
they must maintain the appearance that they are operating from the moral high ground.
The covid mutation story is clearly the next play, and Bank of America economists appear to
agree with me . They recently stated that they see little optimism in terms of a reopening
of the economy, and that hard lockdowns will return, possibly in March or April.
Another factor to consider is that the economic crash will have to reach a peak soon because
Joe Biden now resides in the White House. If the crash happens in the near term, activist
investors can be blamed, Trump can be blamed, and conservatives and liberty activists can be
blamed. If the crash happens a year or two from now, only Biden and the globalists will get the
blame.
Without lockdowns and scapegoats the scenario will end very badly for the globalists. It
might end badly for them anyway. Be ready for more chaos by Spring; I suspect the elites are
getting desperate, and if they allow America to go back to normal and for the pandemic to end
with a whimper they will never get another chance at their precious Reset.
Stakeholders consist of "customers, suppliers, employees, and local communities" in addition
to shareholders. But for Klaus Schwab and the WEF, the framework of stakeholder capitalism must
be globalized. A stakeholder is anyone or any group that stands to benefit or lose from any
corporate behavior -- other than competitors, we may presume. Since the primary pretext for the
Great Reset is global climate change, anyone in the world can be considered a stakeholder in
the corporate governance of any major corporation. And federal partnerships with corporations
that do not "serve" their stakeholders, like the Keystone Pipeline project, for example, must
be abandoned.
...T ake one David Campbell, a British socialist (although non-Marxist) and author of The
Failure of Marxism (1996). After declaring that Marxism had failed, Campbell began advocating
stakeholder capitalism as a means to the same ends. His argument with the British orthodox
Marxist Paddy Ireland represents an internecine squabble over the best means of achieving
socialism, while also providing a looking glass into the minds of socialists determined to try
other, presumably nonviolent tacks.
Campbell castigated Ireland for his rejection of stakeholder capitalism. ... Ireland's
more-radical-than-thou Marxism left Campbell flummoxed. Didn't Ireland realize that his market
determinism was exactly what the defenders of "neoliberalism" asserted as the inevitable and
only sure means for the distribution of social welfare? "Marxism," Campbell rightly noted, "can
be identified with the deriding of 'social reform' as not representing, or even as obstructing,
'the revolution.'" Like so many antireformist Marxists, Ireland failed to recognize that "the
social reforms that [he] derided are the revolution."
Ireland and Campbell agreed that the very idea of stakeholder capitalism derived from
companies having become relatively autonomous from their shareholders. The idea of managerial
independence and thus company or corporate autonomy was first treated by Adolf A. Berle and
Gardiner C. Means in The Modern Corporation and Private Property (1932) and after them in James
Burnham's The Managerial Revolution (1962). In "Corporate Governance, Stakeholding, and the
Company: Towards a Less Degenerate Capitalism?," Ireland writes of this putative autonomy:
"[T]he idea of the stakeholding company is rooted in the autonomy of 'the company' from its
shareholders; its claim being that this autonomy can be exploited to ensure that companies do
not operate exclusively with the interests of their shareholders in mind."
This apparent autonomy of the company, Ireland argues, came about not with incorporation or
legal changes to the structure of the corporation, but with the growth of large-scale
industrial capitalism. The growth in the sheer number of shares and with it the advent of the
stock market made for the ready salability of the of the share. Shares became "money capital,"
readily exchangeable titles to a percentage of profit, and not claims on the company's assets.
It was at this point that shares gained apparent autonomy from the company and the company from
its shareholders.
Moreover, with the emergence of this market, shares developed an autonomous value of their
own quite independent of, and often different from, the value of the company's assets.
Emerging as what Marx called fictitious capital, they were redefined in law as an autonomous
form of property independent of the assets of the company. They were no longer conceptualized
as equitable interests in the property of the company but as rights to profit with a value of
their own, rights which could be freely and easily bought and sold in the marketplace .
On gaining their independence from the assets of companies, shares emerged as legal
objects in their own right, seemingly doubling the capital of joint stock companies. The
assets were now owned by the company and by the company alone, either through a corporation
or, in the case of unincorporated companies, through trustees. The intangible share capital
of the company, on the other hand, had become the sole property of the shareholder. They were
now two quite separate forms of property. Moreover, with the legal constitution of the share
as an entirely autonomous form of property, the externalization of the shareholder from the
company had been completed in a way not previously possible.
Thus, according to Ireland, a difference in interests emerged between the holders of the
industrial capital and the holders of the money capital, or between the company and the
shareholder.
Nevertheless, Ireland maintains, the autonomy of the company is limited by the necessity for
industrial capital to produce profit. The value of shares is ultimately determined by the
profitability of the company's assets in use. "The company is, and will always be, the
personification of industrial capital and, as such, subject to the imperatives of profitability
and accumulation. These are not imposed from the outside on an otherwise neutral and
directionless entity, but are, rather, intrinsic to it, lying at the very heart of its
existence." This necessity, Paddy argues, defines the limits of stakeholder capitalism and its
inability to sustain itself. "The nature of the company is such, therefore, as to suggest that
[there] are strict limits to the extent to which its autonomy from shareholders can be
exploited for the benefit of workers or, indeed, other stakeholders."
Here is a point on which the "neoliberal" Milton Friedman and the Marxist Paddy Ireland
would have agreed, despite Ireland's insistence that the extraction of "surplus value" at the
point of production is the cause. And this agreement between Friedman and Ireland is exactly
why Campbell rejected Ireland's argument. Such market determinism is only necessary under
capitalism, Campbell asserted. Predictions about how companies will behave in the context of
markets are only valid under current market conditions...
Despite this insurmountable "neoliberal"/Marxist impasse, the notion of stakeholder
capitalism is at least fifty years old. Debates about the efficacy of stakeholder capitalism
date to the 1980s. They were stirred up by Friedman's rejection of the "soulful corporation,"
which reached its peak with Carl Kaysen's "The Social Significance of the Modern Corporation"
in 1957. Kaysen viewed the corporation as a social institution that must weigh profitability
against a broad and growing array of social responsibilities: "there is no display of greed or
graspingness; there is no attempt to push off onto the workers or the community at large part
of the social costs of the enterprise. The modern corporation is a soulful corporation." Thus,
in Kaysen, we see hints of the later notion of stakeholder capitalism.
Likely, stakeholder capitalism can be traced, although not in an unbroken line of
succession, to the "commercial idealism" of the late nineteenth and early twentieth centuries,
when Edward Bellamy and King Camp Gillette, among others, envisioned corporate socialist
utopias via incorporation. For such corporate socialists, the main means for establishing
socialism was through the continuous incorporation of all the factors of production. With
incorporation, a series of mergers and acquisitions would occur until the formation of a
singular global monopoly, in which all "the People" had equal shares, was complete. In his
"World Corporation , " Gillette declared that "the trained mind of business and finance sees no
stopping-place to corporate absorption and growth, except final absorption of all the World's
material assets into one corporate body, under the directing control of one corporate mind."
Such a singular world monopoly would become socialist upon the equal distribution of shares
among the population. Stakeholder capitalism falls short of this equal distribution of shares
but gets around it by distributing value on the basis of social and political pressure.
Interestingly, Campbell ends his argument, rather undogmatically, by stating unequivocally
that if Friedman was right and "if these comparisons [between shareholder and stakeholder
capitalism] tend to show exclusive maximization of shareholder value to be the optimal way of
maximizing welfare," then "one should give up being a socialist." If, after all, the
maximization of human welfare is really the object, and "shareholder capitalism" (or
"neoliberalism") proves to be the best way to achieve it, then socialism itself, including
stakeholder capitalism, must necessarily be abandoned.
Last week, a large number of small-time investors drove up the price of GameStop's (GME)
stock a
historic 1,784 percent . But this was no mere spike in some obscure stock. The stock's
price spiked in part as a result of efforts by "an army of smaller investors who have been
rallying on Reddit and elsewhere online to support GameStop's stock and beat back the
professionals." These professionals were hedge fund managers who had shorted GameStop's stock.
In other words, hedge funders were betting billions that GameStop's stock would go down. But
the price went up instead, meaning hedge funds like Melvin Capital (and Citron Research) took
"a significant loss," possibly totaling
$70 billion.
There surely were plenty of insiders on both sides of this deal. Given the complexity of
various schemes employed by seasoned investors, it seems it is very unlikely that this is just
a simple matter of little Davids taking on Wall Street Goliaths.
But it also looks like that's not all that was going on. Had this only been just another
scheme by some Wall Street insiders against some other Wall Street insiders the story would
probably have ended there.
But that's not what happened. Rather, it appears that, for many of the smaller investors who
were involved, much of this "short squeeze" was conducted for the purposes of throwing a monkey
wrench in the plans of Wall Street hedge funds which exist within the rarified world of
billionaires and their friends.
Pro–Wall Street Fearmongering
The reactions to the event from media pundits and other commentators were telling in that
there was clearly fear and outrage over the fact that business as usual on Wall Street wasn't
being enforced. Predictably, much of the reaction to the Reddit rebellion was to label it a
"fiasco," " insanity
," and something sure to leave a "
trail of destruction ." The important thing was to use words designed to make it all look
like the threat to hedge funds represents some sort of grave threat to the overall economy. Jim
Lebenthal at CNBC, for example,
declared the "short-squeeze fiasco is a threat to the proper functioning of financial
markets."
The fearmongering went beyond even the usual places we hear about financial news. On The
View , for example, Meghan McCain delivered the sort of status quo
–defending bromides we've come to expect from her. She insisted the GameStop affair could
spiral into an economy-killing disaster because
If the stock ends up plunging because of this, because of GameStop and Wall Street loses
billions, at a certain point, it will impact stocks like Apple and Disney and stocks that a
lot of average Americans do invest in, and if that happens, average Americans will end up
losing even more money.
Her comment doesn't rally make any sense, and she doesn't seem to have even a rudimentary
understanding of what happened. But her comment delivered the important point: namely, that
anything that causes volatility in the market could be a disaster for every American household.
Translation: and we should all be very, very afraid if something isn't done to keep these
Reddit people --
whom she compared to the Capitol "insurrectionists" -- under control.
Of course, in a functioning and relatively unhampered market, unusual, unexpected things
happen all the time. Entrepreneurial actors do things the incumbent firms and "experts" hadn't
counted on. This leads to "instability" and big swings in prices. This is actual capitalism,
and it doesn't mean the marketplace isn't functioning properly. In fact, it probably means the
marketplace is dynamic and responsive to consumers and other market participants.
But that's not something Wall Street insiders or their pals in Washington like in the modern
era. Although Wall Streeters love to portray themselves as capitalist captains of industry, the
fact is they have very little interest in real, competitive capitalism.
Rather, we live in the era of "too big to fail" (TBTF), when market freedom means nothing
and preserving the portfolios of powerful Wall Street institutions is what really
matters.
Decades of "Too Big to Fail"
It's based on the idea that Wall Street is just too important to the whole economy, and
Washington must intervene to make sure rich guys on Wall Street stay rich. David Stockman
explains this philosophy:
[It is] the notion that the "threat of systemic risk" and a cascading contagion of losses
form the failure of any big Wall Street institution would be so calamitous that it warranted
an exemption from free market discipline.
This goes back at least to the 1994 Mexican bailout -- which was really a bailout of
investors, not of Mexico -- which solidified the process of normalizing huge transfers of
wealth from taxpayers and dollar holders to the Wall Street elite. By then, the "Greenspan put"
was already in place, with the central bank forever poised to embrace more easy money in
pursuit of propping up stock prices. Then came the bailouts of 2008 and the covd-19 avalanche
of easy money -- all of which lopsidedly benefited Wall Street over the rest of the
economy.
This "exemption from free market discipline" is what Wall Street is all about these days.
The financial sector has become accustomed to enjoying bailouts, easy money, and the resulting
financialization which puts ever greater amounts of the US economy into the hands of Wall
Street money managers. The sector is now built on corporate welfare, not "free markets." No
matter what happens, Wall Street expects the deck to be stacked in its favor.
This is why "volatility" has become a bad word, and "stability" is now the name of the game.
It's why Lebenthal thinks anything out of the ordinary is a threat to the "proper functioning
of financial markets." If some free market innovation and inventiveness actually takes place in
some small corner of the marketplace, well, then we're all expected to get very upset.
That's the way Wall Street likes it. ay_arrow 1
Kayman 8 hours ago
The marketing slogan "Too Big Too Fail" conveniently presumed Wall Street was more
important than the Real Economy. A fatal presumption.
Wall Street is a Parasite, backstopped by the Fed, who, in turn, are backstopped by the
Nation. A crumbling nation, where the Fed strangles lending/savings intermediation, and saves
the blood suckers by bleeding the dying core of America.
wmbz 8 hours ago
"The sector is now built on corporate welfare, not "free markets."
This is NOT a new thing. Corporate welfare has been in play for a long, long time. I am
amazed how long it has taken otherwise "smart" people to grasp this fact.
The only difference is, it is out in the glaring sunlight for all to see. TPTB are damn
proud of it!
junction 7 hours ago (Edited)
Except for the involvement of WallStreetBets in temporarily blocking the hedge fund bear
raid on GameStop using "naked" shorts, it is still business as usual on Wall Street. No one
at the SEC does anything but collect a salary, issue press releases and go to lunch as the
Mafia crime families. . . oops, hedge funds run "bust out" operations on businesses. The
lapdog financial press cheered on the hedge funds as they demolished American businesses. The
same gutter journalists who are not yet linking micro-manager Bezos giving up total control
of Amazon right after his cloud service illegally de-platformed Parler for violation of
bogus. made-up community standards. But then, bigger things are afoot. Bolshevik president
Biden just approved deploying B-1 bomber to Norway for the first time. Nuclear bomb carrying
B-1 bombers. Anything to distract people from how rotten things are.
Cognitive rationalist 7 hours ago
Banking financial sector: private profits for me, public losses for thee
gladitsover 8 hours ago remove link
"..the table is tilted folks. The game is rigged.."
George Carlin
Lokiban 8 hours ago
I think it was all about showing to those unawares how corrupt and rigged Wall street
truly is and they have gotten the message out bigtime.
The only question to be asked is who became the proverbial bagholder when average people saw
their 'Bitcoin-Tulipmania' chance to get out with amazing profits and with that breaking the
promise to continue pumping gme till it hits $1500.
One has always to be carefull if these kind of actions are true populism going against the
controllers or is it controllers playing their hideous games again for a reason, like the
great reset.
Greed has never been a good advisor in these times, easy sheoplemoney. It works all the
time..
COMMENT: Message: Re Reddit "WallStreetBets"
Hi Marty,
Thanks for this blog post but I think they are not trying to make money out of short
squeezing GME really, they are trying to make a point. If you follow some of the posts you
see many stories about how badly people and their families were hurt in 2008 when not a
single banker went to prison. Stories of Fathers losing jobs and houses and descending into
alcoholism in front of their children who now are part of WallStreetBets, others who had to
live off of beans and rice or what Mama could grow in the garden and went hungry etc.
So they are not buying GME to see it rise, though that is fine, they are spending money
"they can afford to lose" to punish the hedge funds that have along with bankers hurt the
little guy repeatedly. These same people IMO have bought off our politicians, removed
regulations like Glass Steagal etc all to reap profits to the top while crushing everyone
else.
Listen in June 2008 I got laid off from Palm, in July I broke my arm ( badly ), in August
some tenants left so I tried to put that property up for sale but in September Lehman fell
and the real estate agent told me the market was OFF that I could not sell and needed to rent
it with no one renting for 5 more months. At the same time in September I had a 100K home
equity line I took out just for emergencies and since I was having one I wanted to use it
– but then Wells Fargo pulled the whole thing.
So there I was Marty, sitting on the couch with a cast from fingers to shoulder watching
the world meltdown on a tiny TV set while on lots of pain killers
I was forced to use my small 401K, and ended up using the whole thing through 9 months of
disability, two surgeries and a job search that did not yield a job until the fall of
2011.
So IMO these arrogant SOB cheating hedge fund guys should pound sand on GME for once because
the casino is rigged, heads they win, tails they win, and the taxpayers lose their jobs,
homes, and pay for their bailouts.
I say give it to 'em.
Off my soapbox
REPLY: I fully understand that. I have fought against these people my whole life. I was
more interested in learning HOW the economy functioned where they were only interested in
guaranteed trades. I guess I was the Leonardo da Vinci of finance. Instead of digging up
bodies to figure out how the anatomy functioned, I searched history and developed a computer
model to try to ascertain what made the world economy tick.
A professor from Princeton where Einstein taught said to me that I reminded him of
Einstein. I was surprised, for I did not see myself as comparable to Einstein in any way. He
then explained that what he meant was my curiosity which moved me to try to figure out what
made it all function. I came to understand what he meant. If you are not CURIOUS and seek out
knowledge, then you will NEVER discover anything new! I was not dealing with the physics of
the world, but the finance. People are attracted by this blog and Socrates for that same
reason. They have that spark of curiosity and seek to also understand what makes it all tick!
We need to teach students to be curious. That is the key to all progress we desperately need
to survive this never-ending battle of authoritarianism v independence and freedom.
I have stated many times that I had discovered the 8.6-year frequency in my research I
conducted at Princeton, University in the Firestone Library. Those were fond memories for it
was an amazing resource back then as was the Royal British Newspaper Library, which I
gathered my FOREX database by sifting through the largest newspaper collection in the
world.
This was the difference between me and the "club" where I tried to understand the movement
of the ages that caused the rise and fall of civilization and therein the economy/markets,
and the "club" which seeks to manipulate everything by sheer force armed with bribes. They
own the Southern District of New York courts, the Second Circuit, and the Department of
Justice along with the SEC and CFTC. Goldman Sachs has even stacked the SEC and CFTC with
their former people. Nobody was prosecuted despite the fact that they were involved in the
looting of capital in Malaysia and Greece. And people have the audacity to claim there was
absolutely no election fraud? There is nothing we can trust that goes on in government
anymore and it will only get far worse as we head into 2032.
I am well aware of the sentiment behind this Reddit trend. My concern is simple. Don't put
it past the "club" to be in there making this seem like a sure bet and then set everyone up
for the big crash. Be careful here going into Feb/March 2021.
In neoliberalized universities there are too many PhD degree holders. It is a conveyer to produce them. .And too few real
scientists...
Notable quotes:
"... The previous generation of university educators didn't retire on schedule (I can't really blame them, tenure and ridiculously light teaching loads) and that, coupled with the rise of adjuncts and funding siphoned off for administrators, changed the nature of academia and the number of available jobs. ..."
"... I'm sorry for Herring, but she really should have anticipated what happened. I've read probably a dozen articles and essays repeating her exact experience, and none of them less that 15 years old. ..."
"Today, almost a year after I officially became Dr. Herring, I resigned from my postdoc at Ghent University. There are several reasons that motivated this decision but the
main one is that I no longer enjoy the work enough to justify how demanding it is .
As I neared
the end of my PhD, I worried about my future. It is hard to explain to those who are not in
academia just how bad things are for those who are starting out. Say the words "job market"
within earshot of a junior researcher and watch fatalistic dread cloud their face.
I was
relatively lucky because I secured a research job straight out of my PhD. But despite being
somewhat cushy, my position was still fixed-term. To hope to one day obtain an elusive
permanent contract, I had to accept that my current job would most likely be the first in a
series of short-term contracts in various distant locations.
To succeed in academia, I would
have to make a number of sacrifices. The simple truth is that I am no longer willing to make
these sacrifices. A great deal of enthusiasm is needed to survive early career academia with
its endless applications, rejections and precarity. Sadly, this enthusiasm is too often
exploited. For instance, academics are not paid to publish their research in journals. To
guarantee the quality of the research being published in these journals, they review the
findings of other researchers, also for free.
But journal publishers tend to charge thousands
in yearly subscription fees to university libraries. Increasingly, higher education staff
suffer casualisation and unreasonable workloads, and the pandemic (or rather, the ways in which
governments and university high-ups are dealing with the pandemic) is making things worse.
I do
not mean to discourage anyone who is currently working in academia or who might be considering
it as a profession. The enthusiasm and persistence of researchers is admirable and important.
Their work should be celebrated and their enthusiasm should be nourished rather than exploited.
I am proud of my friends who have managed to make things work despite all these obstacles. For
my part, I have come to terms with the fact that academia is not for me."
Regarding "Why I Am Leaving Academia," this has been true for a long time now, maybe
twenty years or so.
The previous generation of university educators didn't retire on schedule
(I can't really blame them, tenure and ridiculously light teaching loads) and that, coupled
with the rise of adjuncts and funding siphoned off for administrators, changed the nature of
academia and the number of available jobs.
How did the author not know this?
I was halfway through my MA when I understood that a PhD would likely end in economic and
professional disaster, so I gave up my dream (or more accurately, woke up).
I'm sorry for Herring, but she really should have anticipated what happened. I've read
probably a dozen articles and essays repeating her exact experience, and none of them less
that 15 years old.
While Special Counsel John Durham's investigation into the origins of the Trump-Russia probe
is generally focused on the FBI's activities, sources familiar with the investigation told Fox
News the prosecution of high-ranking FBI officials, such as former Director James Comey, is
"unlikely."
In a report
published Tuesday, Fox News reports that sources told the publication that the investigation is
ongoing and that Durham last year concluded the part of his investigation looking into the CIA
and he is now examining the FBI's activities.
Additionally, another source told the news outlet that the special counsel had been pursuing
"new and credible leads" through the end of the Trump administration, however, Fox News noted
that it is unclear at this point what those lines of inquiry entail.
Moreover, a spokesperson for Durham told the outlet that they had "no comment from Mr.
Durham."
Durham's probe is looking into the origins of former Special Counsel Robert Mueller's
investigation into alleged Russian interference in the 2016 presidential election as well as
now-debunked collusion between Russian officials and the Trump campaign. Former President
Donald Trump
and conservatives have called Mueller's yearlong probe a "witch hunt" and accused it of being
motivated by anti-Trump animus.
Mueller's investigation yielded no evidence that collusion occurred between the Trump
campaign and Russian officials during the 2016 election.
Tuesday's report comes after the first and only criminal sentencing stemming from Durham's
investigation was issued last week.
Last Friday,
Kevin Clinesmith , a former FBI lawyer,
was sentenced to one year of probation and 400 hours of community service for altering an
email during the Mueller's investigation that was used as grounds for the surveillance of
former Trump campaign adviser Carter Page.
Previously, Comey has said that investigators have yet to reach out to him.
"I have had no contact with him and haven't talked to him," the former FBI director
told CBS News' "Face the
Nation" back in August.
"I can't imagine that I'm a target."
Last summer, Durham's team also questioned former CIA Director John Brennan for about eight
hours at the CIA headquarters . Brennan later said through a spokesman he was assured he was
"not a target," according to Fox News.
Back in December, Brennan told
"Fox News Sunday" host Chris Wallace that he had no issue with Durham's investigation extending
into 2021 and also divulged briefly about the eight-hour session.
"I think that is fine, I have no problems with it," the former CIA director said, adding
that Durham's team already talked with him for eight hours. "I do believe that John Durham is
going to carry out his responsibilities ably and hopefully not with any political influence."
5,713 64 NEV play_arrow
Clee Torres 4 minutes ago
No sh*t Sherlock.
You mean there are two levels of justice? One for me and one for thee?
When lynch met clinton on the plane and it barely made a ripple.
That's when I knew.
enough of this 11 minutes ago (Edited)
No surprise. Durham and his pals are milking the investigation for all its worth. In the
meantime, Comey skates and the amendment named in his honor remains in full force.
On a happier note, Mr. Durham is looking for a nice beachfront mansion...
WOODisGOOD 3 minutes ago
Deep State gotta protect Deep State. That's just the way it works.
squib 4 minutes ago
I remember, Strzok, Comey, Clapper, Brennan etc. always looked smug bc they knew that
they'd be taken care of.
PaulDF 3 minutes ago
"Insurance Policy" indeed
Alex Jones was right... 4 minutes ago remove link
In other news, water is wet...
Reaper 16 minutes ago
US Law makes Dunham a Principle who abeted the crimes he's investigating. As such, under
US Code, he's liable for the same punishment as the perps. Remember how quickly Roger Stone
was prosecuted for lying.
Those who have the most to say about the burdens of government regulation tend to be silent
about the enormous infrastructure supporting a very specific conception of corporate
personhood, limited liability, and intellectual property.
It's like an industrialist looking out upon a vast landscape of canals, dams, and levees, and
complaining at the "unnatural" construction of a bridge putting a ferryman out of a job.
It's still not clear exactly what the clinic's customers were being injected with...
My guess is that it's something less hazardous to your health than the real vaccine, but
still not what the greatest scientist of all time, Dr. Fauci, and our greatest president of
all time, His Excellency Joe Biden, have mandated that you take.
Mike Konczal has a new book, Freedom from the Market ( Bookshop.org locator , Amazon ). I've been wanting to write about this book for a while,
but first had to wait for it to come out, and then had my working life banjaxed by the madness
of the last few weeks. But it is a great book that looks to remake the American debate about
freedom and largely succeeds. Full disclosure: Mike is a friend of the 'see very occasionally
but like very strongly' variety; I also read an early version of the mss and commented on
it.
When I say that this book is about the American debate, I mean it. Non-Americans will learn
from the book, but they aren't the target audience. The examples that Konczal draws on to
inform modern Americans are drawn from their own, largely forgotten history. This could be seen
as a reflection of the American parochialism that Konczal mentions in passing, but it is, I
think, a deliberate political move. It also is in some ways refreshing – rather than
weaving fairytales about the wonders of Fantasy Sweden or Fantasy Germany, it tells stories
where the ambiguities are necessarily more visible to its readers.
Still, it provides measured hope. By drawing on what has happened in American history,
Konczal makes it easier for Americans to understand that things they might not believe are
possible in America must be, because they have been. He rescues moments such as the WWII
government run daycare centers that allowed women to work, or the use of the power of the
federal state to force through the integration of Southern hospitals, from the enormous
condescension of posterity. Notably, although he doesn't dwell on this point, many of these
changes began at moments that seem shittier and more despairing than our own.
Konczal neither provides a standard linear history, nor a policy textbook. Instead, he is
claiming an alternative American tradition, which has not looked to the market as its
apotheosis, but instead has sought to free Americans from its random vagaries. His history
explains how America has responded collectively to the real and expressed needs of publics, who
have organized to fight for them. And it does so in the plain language that he mentions in
passing was necessary to allow ordinary people to organize and understand who was trying to
stop them.
Konczal's fundamental claim is that people who attribute freedom to markets miss out on much
of the story. Equally important is a notion of freedom from markets, "rooted in public
programs that genuinely serve people and checking market dependency." This notion goes back
much further in time than the New Deal. The nineteenth century is sometimes depicted as a reign
of laissez-faire, both by those who admired it and deplored it. Konczal argues instead that
there was an emerging sense of public needs – and imperfect ways in which the government
provided for them. This helps us understand, for example, the provision of public land through
the Homestead Act and the land grant universities.
The nineteenth century notion of the public was clearly horribly flawed and contradictory
– it did not include slaves or Native Americans. Some, like Horace Greeley ended up
fleeing these contradictions into the welcoming arms of free market absolutism. But within
these contradictions lay possibilities that opened up in the twentieth century. Konczal builds,
for example on Eric Schickler's work to argue that as the New Deal began to provide concrete
benefits to African Americans, it created a new relationship between them and the Democratic
Party, breaking up the old coalition that had held Jim Crow together.
The organizing ideas in this book are Polanyian – the stresses of the market lead to
social rupture, which may in turn create the conditions for political mobilization. But Konczal
doesn't depict this as necessary or inevitable – people's choices have consequences. He
is also more precise than Polanyi in his understanding of how change happens – through
social movements and the state:
While the Supreme Court can be effective at holding back change and enforcing already
existing power structures, it is actually very weak at creating new reform itself. It
controls no funding and is dependent on elite power structures to carry out its decisions.
What really creates change is popular mobilization and legislative changes.
Finally, Konczal not only employs Polanyi's ideas, but the ideas of Polanyi's friendly
critics like Quinn Slobodian, to describe how modern Hayekians have sought to "encase" the
market order in institutions and practices that are hard to overturn. Property rights aren't
the foundation of liberty, as both nineteenth century jurists and twentieth century economists
would have it. They are a product of the choices of the state, and as such intensely
political.
This allows Konczal to turn pragmatism against the Hayekians. Hayek's notion of spontaneous
order is supposed to be evolutionary, to provide a more supple response to what people (thought
of as individuals want). But if there is a need to provide collective goods for people that
cannot be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on
adaptation.
The efforts of Hayekians to enforce binding legal constraints, to cripple the gathering of
the collective knowledge that can guide collective action, to wink at legal doctrines intended
to subvert social protections against the market; all these prevent the kinds of evolutionary
change that are necessary to respond to changing circumstances. Konczal makes it clear that
Oliver Wendell Holmes was no left-winger – but his pragmatist criticisms of the rigid and
doctrinaire laissez-faire precepts of his colleagues rings true. Their "willingness to use a
very specific understanding of economics to override law writes a preferential understanding of
economics into the constitution itself." Although Konczal wrote this book before the current
crisis, he describes Holmes as mentioning compulsory vaccination laws as one of the ways in
which government interference in private decisions can have general social benefits. The
wretched contortions of libertarians and market conservatives over anti-pandemic measures
during the last several months, and the consequences of their intellectual rigidity for human
welfare in states such as North Dakota illustrate the point, quite brutally.
What Konczal presses for is a very different notion of freedom. This doesn't deny the
benefits of markets, but it qualifies them. In Konczal's words, "markets are great at
distributing things based on people's willingness to pay. But there are some goods that should
be distributed by need." Accepting this point entails the necessity of keeping some important
areas of life outside the determining scope of markets. Furthermore, people's needs change over
time, as societies and markets change. Konczal's framework suggests the need for collective
choice to figure out the best responses to these changes, and a vibrant democratic politics, in
which the state responds to the expressed needs of mobilized publics as the best way to carry
out these choices.
All this makes the book sound more like an exercise in political theory than it is. That's
because of my own professional deformities, and because I want you to read the book itself, if
you really to get the good stuff – the stories, the examples, and the overall narrative
that Konczal weaves together. Freedom from the Market has the potential to be a very
important book, focusing attention on the contested, messy but crucially important intersection
between social movements and the state. It provides a set of ideas that people on both sides of
that divide can learn from, and a lively alternative foundation to the deracinated technocratic
notions of politics, in which good policy would somehow, magically, be politically self
supporting, that has prevailed up until quite recently. Strongly recommended.
I'll second this recommendation – it was a great read. I would especially recommend
reading it for the section on Medicare integration, since that's a story that rarely gets
told but is genuinely quite fascinating. It gives me greater respect for LBJ, given that he
was giving them full-support despite a difficult, treacherous political battle to integrate
hospitals in the South despite immense resistance.
He also made a very interesting point after the Homestead section when he got to the
section on work-hour labor movements, about how they needed to specifically make it so that
certain rights couldn't be contracted away, because otherwise even laws establishing
such-and-such rules would get end-runned by businesses requiring their employees to give them
up in contracts.
Henry, you write, "if there is a need to provide collective goods for people that cannot
be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on
adaptation." That seems like a big "if." Other than the classic examples of national defense
and perhaps police and courts, what goods cannot be provided through voluntarism?
There's a nice line in Slobodian's book about Americans not knowing much about the rest of
the world but imagining that the US is a scale-model of it. Isn't the worry about the general
claim here that it is more plausible to see property rights as merely the creature of the
state when you have a vast internal market with many needs catered for by domestic production
than it is when you have small states with relatively specialized domestic production that
need to trade across borders to satisfy their needs. In such a case, where the real economy
transcends borders and where trade barriers at those borders just make everyone poorer, you
need transnational guarantees (or at least a very strong degree of confidence) for property
rights and investment against the potential interference of local governments. So even if
Konczal is right for the US, the question of how to do social democracy transnationally
remains for the rest of us. The EU is one possible answer to that, but the continuation of
national political narratives, blaming other nations within the structure for their own
problems (Germany > Greece, Italy) etc remains a big obstacle to anti-market pushback at
that level.
reason 01.27.21 at 11:20 am (no link)
Just a short aside, this sentence struck me:
" Property rights aren't the foundation of liberty, as both nineteenth century jurists and
twentieth century economists would have it."
Property rights are inherently a restriction of liberty. They restrict the rights of
everybody but the designated owner. It may be that in some circumstances they are net a
positive, that this is clearly not something one can expect from the nature of the thing.
That this point isn't made more often and more strongly puzzles me.
Jake Gibson 01.27.21 at 1:22 pm (no link)
I think it can be illuminating to think of "property rights" in the context that at some
point all property was taken (stolen) from The Commons.
And that property laws are enshrinement of common law on possession (nine tenths).
The "twentieth century economists" like the "nineteenth century jurists" refer just to
those discussed in the book (basically Friedman, Chicago School, market for corporate control
people etc etc). So they're not claims about the general class of economists in the twentieth
century, where there is tons of disagreement on lots of stuff obviously, but a particular
strain of economic thought that Konczal writes about.
There is no "the" market. All markets are not the same.
The Hayekians first insistence is that in fact all markets are the same. They then have
designed the 'markets' they want, and if you design a market you win.
Mike Huben 01.27.21 at 4:11 pm (no link)
Kurt Schuler @ 3 asks: "what goods cannot be provided through voluntarism?"
The glib answer is "none" because you can always find an exceptional case of private
production.
But the problem is "provided" is underspecified: it could mean provision to only one
person, or (better) provision of ENOUGH. And even enough is underspecified.
Look at something like water. Public provision of vast volumes of clean, safe, cheap
drinking water is an alternative to voluntarism's answer: expensive bottled water which must
be used frugally by the poor, consumes much energy in transportation and waste in plastic:
which is enough? Which is proper provision? Should there be only one type of provision?
And of course that question implies another; what goods should not be provided through
voluntarism? Maybe pollution, addiction, crime, and a host of others.
"Voluntarism" is an example of framing, trying to focus the world through an ideological
lens. If you accidentally accept this narrow peephole on the world, your thinking is greatly
constrained because of the things is has misdirected you from. The same kind of framing as
"markets are freedom", which Konczal is apparently decrying. (I have not yet read the
book.)
Given the tenor of most responses, it doesn't seem likely Konczal's book is going to
change the narrative in any significant way.
Bob@2 seems a good example of the pro-market reasoning. For one thing, "economics" says
that if a person with a scarce talent can earn more money than is necessary to induce them to
exercise that talent, the income can be taxed away without affecting the market outcome.
Considering the real life examples of professional athletes, movie stars and artists, the
sage advice to tax the athletes, stars and artists, precisely because it won't endanger the
market outcomes of professional athletics, Hollywood and the art world presupposes the market
outcomes of pro sports, Hollywood and the museum/art gallery circuit are just and wise.
Bob@2 wrote "Economics is wisely silent on people's preferences and needs. The point
surely is not that there is something inherent in certain goods that means they should be
distributed by need–who decides what those "good" goods are that everyone (ought to?)
need?; the point is that income should be redistributed so that everyone can buy whatever
they see fit to buy based on their own understanding of their needs."
Yes, I recall reading a short article by von Hayek explaining there was no scientific way
to distinguish between wants and needs, thus there was no way ever, even in principle, to
deny there was such a thing as scarcity. Like von Hayek, the assumption that, given the
impossibility of pronouncing a difference between needs and wants (nor apparently even a way
of merely satisficing any such distinction,) the only valid way of deciding what must be
produced is by consumer sovereignty. The "votes" by rational consumers are the only possible
means of justice. Like distinguishing between productive and unproductive labor, anything
less than the market is tyranny.
I have no idea why Bob says Konczal's book as presented doesn't pose a problem, given two
market refutations of it are endorsed in the comment. It may be something like compatibilism,
the philosophical position that people have free will in the religious sense despite the
myriad of facts and millennia of experience showing that the religious notion of moral
responsibility is, to say the least, flawed. In words, compatibilists will say they accept
things like mental illness leave old notions of moral responsibility -- which is to say, old
notions about retribution and punishment -- then in practice, they will do things like try
adolescents as adult or arbitrarily limit the definition of mental illness or simply ignore
such fiddling objections to honor time-honored customs. Similarly, market proponents will
give lip service to the notion of market failure, then inexplicably (?) fail to see it.
Chris Bertram@5 writes " the continuation of national political narratives, blaming other
nations within the structure for their own problems (Germany > Greece, Italy) etc remains
a big obstacle " to social democracy. Is the illustrative example meant to condemn Germany
blaming Greece and Italy for creating their own problems and leeching (or trying to) off of
Germany? Or, is it Greece and Italy blaming of Germany for not curing their own failures for
them? Is it somehow both? Also, the definition of the EU as a consortium of states premised
on fiscal integrity may be more of an obstacle to social democracy than political narratives,
however construed?
Well, insulin clearly (see above). But also: schools that make everybody literate and
promote basic social solidarity. Colleges that are cheap enough to educate all of the
talents. Hospitals that treat illnesses irrespective of ability to pay. Universal
vaccinations. Flood defences. Disaster relief. Food inspectors. Drug safety testers.
Buildings inspectors. Fire inspectors. Transport safety inspectors. Highways. Mending
potholes in highways. Keeping bridges safe. Last-mile rural electrification. Universal mail
coverage at a single price. Legal advice to even access to justice by rich and poor.
Excellent daycare at prices poor people can afford. Basic research in particle physics and
astronomy. R & D in far-from-market areas society needs. Drug discovery for diseases poor
people get. Training of specialists in non-profitable yet essential professions. Landscape
conservation. Pollution control. Tech regulation. Setting a carbon price/tax. Railways that
move people fast enough and cheaply enough to take custom away from ecocidal airlines. Mass
transit in cities. Space programmes. A welfare safety net permitting risky careers in the
arts. A welfare safety net to equalise the chances of children. A welfare safety net allowing
every member of a society to go to sleep every night in a state of delicious moral luxury,
knowing that no-one is hungry. Lighthouses. Earthquake detection. Censuses. Diplomacy.
Peacemaking. Peacekeeping. Public broadcasters with editorial independence. Et cetera et
cetera et cetera, in every flavour from civilisational basic to utopian flight of fancy.
Collective action! Getting the job done everywhere on the planet where libertarians
aren't.
" In such a case, where the real economy transcends borders and where trade barriers at
those borders just make everyone poorer, you need transnational guarantees (or at least a
very strong degree of confidence) for property rights and investment against the potential
interference of local governments."
Much of the world did social democracy pretty well last century, without transnational
guarantees. Conversely, the creation of investor guarantees like ISDS has been a gift to
predatory corporations like Philip Morris.
Insulin (and Epi pens) become unaffordable in the U.S. because the government massively
screwed up the regulations. These are off-patent drugs, so in theory anybody can make them.
BUT, getting production facilities FDA-approved is a long, expensive process. So when there's
an effective monopoly on a drug, no other company will enter the market to compete -- even
after huge price hikes. Why not? Because after the new company had invested the time and
money to get its production line built and approved, the original monopolist would drop its
prices back down, and the new entrant would make no money. And everybody knows this, so
potential new entrants don't bother. An obvious solution is reciprocity to allow importation
of drugs already approved in the EU. But there's no way the FDA is going to allow that
to happen and lose its regulatory monopoly.
The bottom line is that these are not failures of unregulated markets, they are cases of
government failure in the most heavily regulated market in the U.S. (and where, in fact, the
strict regulation is the key enabler of the bad outcome and where the obvious fix is blocked
by the regulatory agency defending its turf).
MPAVictoria 01.29.21 at 1:39 am (no link)
"Insulin (and Epi pens) become unaffordable in the U.S. because the government massively
screwed up the regulations."
Just need to point out that this is completely false. Insulin prices are high in the US
because of a lack of price controls. Canada has very similar patent rules and our insulin is
made by the same companies but guess what? We set a maximum price for pharmaceuticals. The US
should do the same.
mw 01.29.21 at 1:23 pm (no link)
MPAVictoria @ 23 Just need to point out that this is completely false. Insulin prices
are high in the US because of a lack of price controls. Canada has very similar patent rules
and our insulin is made by the same companies but guess what? We set a maximum price for
pharmaceuticals. The US should do the same.
Yes, you could layer on additional price-control regulations to fix the problems caused by
the existing regulations. Of course it's one thing for Canada to adopt such rules where the
U.S. has not (and remains a source of profits and R&D incentives) and another when the
U.S. is also controlling prices. Incidentally, if price controls were to be adopted in the
U.S., my suggested approach is that the U.S. should require all pharma companies within, say,
two years to sell drugs here for the lowest price they have negotiated in any industrialized
country with a comparable per-Capita GDP. Then we can all be in it together.
But that's all a discussion for another thread -- the point remains that insulin and epi
pens are not examples of a free, unregulated market failing, they're an example of a very
heavily (but badly) regulated market failing. Yes bad U.S. regulations are responsible --
they create barriers to entry (specifically high costs of setting up a production facility
combined with an FDA regulatory monopoly and a ban on imports) that enable monopoly
pricing.
notGoodenough 01.29.21 at 8:01 am (no link)
mw @ 19, MPAVictoria @ 23
Not to side-track the thread, but I think there was an attempt to explore this on a
previous thread (particularly with respect to Daraprim, though I believe many of the points
are applicable in a general sense) [1]. While I´ll freely admit I am not an economist,
I didn´t find the responses to my queries and concerns from those advocating
"regulations are the issue" sufficiently satisfactory [2, 3] to warrant changing my position
– in short, I see little evidence to support the notion that it is US regulations
responsible for the high price of pharmaceuticals (particularly as it appears that R&D
spending is frequently less than that of marketing and administration). I hope the discussion
at the links provided is of interest.
Apologies to everyone for the interjection, but Pharma is a topic of keen interest and
concern to me.
mw @ 30: I forgot to respond to your by-the-by argument that the pharmas' US profits fund
their R&D. This is, as with the rest of your arguments, untrue.
(1) the US taxpayer funds most pharma research
(2) Last I checked, pharmas spend more on advertising and lobbying than they do on
R&D.
'nuff said.
MPAVictoria 01.30.21 at 1:29 am (no link)
@ NotGoodenough – Interesting links thank you! And I completely agree that I am
unconvinced that over regulation in it the reason the US has uniquely high drug prices.
@ me – Drug approval and manufacturing requirements in the US are not that different
from any other developed country. Neither is it's Drug IP regime. So the argument that these
features are what cause these outrageous pharmaceutical prices doesn't make much sense. In
fact the US had a bit of a reputation of being too ready to approve drugs with limited
effectiveness. The reason that Americans pay more than anyone else in the world is simple
– no price controls.
I have seen classic hoarding psychology, where someone who has accumulated a solid chunk
of unencumbered liquid wealth, stocks or bonds or gold, overvalued it compared to everything
else in the world. For example, suppose a 30 year old worker has accumulated a $40,000 nut.
That will be his treasure, even though he could barely live on it for a year and it wouldn't
carry him through a major medical emergency. He is often willing to sacrifice a lot of
personal, family, and social quality of life to preserve and increase his nut, and in many
cases will also become quite predatory, and political reaction comes with that. And sometimes
he invests it successfully and makes it into a higher class, but often enough his investment
fails and his life is wasted.
There's behavioural finance research that suggests we overvalue something that we own
relative to when we don't. I think it was all focussed on goods or property, but the
rationale would extend to investments too.
Managers of branches of national franchise businesses like McDonald's dependent on cheap
labor too. They are encouraged to identify with the company though unless they move up in the
organization I think they get wise. A very close friend of mine was a Starbucks manager for a
decade or so, and he was eligible to move up to middle manager but found that the New Age
company man zombification required was inhuman and for him impossible.
He cashed out and started his own, better coffee shop, but had to take on too much debt
and is not accumulating much net worth. He things of it as a challenging, rewarding, well
paid job. (H has testified at the legislature in favor of a $15 minimum wage.)
I don't recall W's attempts to privatize Social Security, but I certainly remember Bill
Clinton's. The impeachment scandal prevented him from achieving his goal: Alexander Cockburn
wrote a piece entitled 'How Monica Lewinsky Saved Social Security. '
"One possibility is that investment activities itself–with its focus on material
gain, risk taking, winning and losing–triggers emotions and modes of reasoning that
influence views on issues beyond traditional market activity."
It seems to me that this suggestion raises a deeper issue. Some have argued that the
ultimate success of capitalism (financial, industrial or both) is due to having transformed
human nature such that everyone living within it becomes an excellent calculator of gains and
loss, pleasure and pain.
Is it possible that such a long process of socialization to capitalist logic makes us all
( in many areas of our lives) capitalist calculating machines?
And if so, how could such a system be dramatically changed?
I suspect the catalyst for change would be a substantial market crash that takes the usual
warning:
" Stocks can go down in value as
well as up."
And adds:
"Stocks can also tank down the
pan!"
At that point, the previously unthinkable can rear it's (ugly for some) head!
Good article. I like to call this 'buy in'. Once someone has a stake in stock markets and
the finance industry, e.g. most commonly through their pension (which is becoming mandatory
in many countries, through forced auto-enrolment), the effect described in this article is
triggered.
The antidote to all of this is pretty simple: The ethics of investing.
It's extremely easy to find and point out ethical problems with investments. Ask someone
what pension fund and plan they are invested in, find the pdf listing the individual
companies invested in, and then Google them for ethical issues (usually you don't need to
– you'll already know the bad ones by name).
Then point out the ethical issues to the person, and watch them have a meltdown while they
try to fob off concerns about ethics as passé and childish.
The problem is though, this doesn't provide people with a solution/alternative that is
ethical, so the above is not a perfect antidote to 'buy-in'. People still need to retire at
some point, and those who accumulate money well enough to b able to put money away for
retirement, still want to know what they should do for a sustainable retirement.
I have no idea what to do, myself. I can't depend on political/economic-policy change to
sort this for me. So at some point I'm probably going to have to have a look at how to invest
ethically, even though I feel it is probably impossible.
Last week, a large number of small-time investors drove up the price of GameStop's (GME)
stock a
historic 1,784 percent . But this was no mere spike in some obscure stock. The stock's
price spiked in part as a result of efforts by "an army of smaller investors who have been
rallying on Reddit and elsewhere online to support GameStop's stock and beat back the
professionals." These professionals were hedge fund managers who had shorted GameStop's stock.
In other words, hedge funders were betting billions that GameStop's stock would go down. But
the price went up instead, meaning hedge funds like Melvin Capital (and Citron Research) took
"a significant loss," possibly totaling
$70 billion.
There surely were plenty of insiders on both sides of this deal. Given the complexity of
various schemes employed by seasoned investors, it seems it is very unlikely that this is just
a simple matter of little Davids taking on Wall Street Goliaths.
But it also looks like that's not all that was going on. Had this only been just another
scheme by some Wall Street insiders against some other Wall Street insiders the story would
probably have ended there.
But that's not what happened. Rather, it appears that, for many of the smaller investors who
were involved, much of this "short squeeze" was conducted for the purposes of throwing a monkey
wrench in the plans of Wall Street hedge funds which exist within the rarified world of
billionaires and their friends.
Pro–Wall Street Fearmongering
The reactions to the event from media pundits and other commentators were telling in that
there was clearly fear and outrage over the fact that business as usual on Wall Street wasn't
being enforced. Predictably, much of the reaction to the Reddit rebellion was to label it a
"fiasco," " insanity
," and something sure to leave a "
trail of destruction ." The important thing was to use words designed to make it all look
like the threat to hedge funds represents some sort of grave threat to the overall economy. Jim
Lebenthal at CNBC, for example,
declared the "short-squeeze fiasco is a threat to the proper functioning of financial
markets."
The fearmongering went beyond even the usual places we hear about financial news. On The
View , for example, Meghan McCain delivered the sort of status quo
–defending bromides we've come to expect from her. She insisted the GameStop affair could
spiral into an economy-killing disaster because
If the stock ends up plunging because of this, because of GameStop and Wall Street loses
billions, at a certain point, it will impact stocks like Apple and Disney and stocks that a
lot of average Americans do invest in, and if that happens, average Americans will end up
losing even more money.
Her comment doesn't rally make any sense, and she doesn't seem to have even a rudimentary
understanding of what happened. But her comment delivered the important point: namely, that
anything that causes volatility in the market could be a disaster for every American household.
Translation: and we should all be very, very afraid if something isn't done to keep these
Reddit people --
whom she compared to the Capitol "insurrectionists" -- under control.
Of course, in a functioning and relatively unhampered market, unusual, unexpected things
happen all the time. Entrepreneurial actors do things the incumbent firms and "experts" hadn't
counted on. This leads to "instability" and big swings in prices. This is actual capitalism,
and it doesn't mean the marketplace isn't functioning properly. In fact, it probably means the
marketplace is dynamic and responsive to consumers and other market participants.
But that's not something Wall Street insiders or their pals in Washington like in the modern
era. Although Wall Streeters love to portray themselves as capitalist captains of industry, the
fact is they have very little interest in real, competitive capitalism.
Rather, we live in the era of "too big to fail" (TBTF), when market freedom means nothing
and preserving the portfolios of powerful Wall Street institutions is what really
matters.
Decades of "Too Big to Fail"
It's based on the idea that Wall Street is just too important to the whole economy, and
Washington must intervene to make sure rich guys on Wall Street stay rich. David Stockman
explains this philosophy:
[It is] the notion that the "threat of systemic risk" and a cascading contagion of losses
form the failure of any big Wall Street institution would be so calamitous that it warranted
an exemption from free market discipline.
This goes back at least to the 1994 Mexican bailout -- which was really a bailout of
investors, not of Mexico -- which solidified the process of normalizing huge transfers of
wealth from taxpayers and dollar holders to the Wall Street elite. By then, the "Greenspan put"
was already in place, with the central bank forever poised to embrace more easy money in
pursuit of propping up stock prices. Then came the bailouts of 2008 and the covd-19 avalanche
of easy money -- all of which lopsidedly benefited Wall Street over the rest of the
economy.
This "exemption from free market discipline" is what Wall Street is all about these days.
The financial sector has become accustomed to enjoying bailouts, easy money, and the resulting
financialization which puts ever greater amounts of the US economy into the hands of Wall
Street money managers. The sector is now built on corporate welfare, not "free markets." No
matter what happens, Wall Street expects the deck to be stacked in its favor.
This is why "volatility" has become a bad word, and "stability" is now the name of the game.
It's why Lebenthal thinks anything out of the ordinary is a threat to the "proper functioning
of financial markets." If some free market innovation and inventiveness actually takes place in
some small corner of the marketplace, well, then we're all expected to get very upset.
That's the way Wall Street likes it. ay_arrow 1
Kayman 8 hours ago
The marketing slogan "Too Big Too Fail" conveniently presumed Wall Street was more
important than the Real Economy. A fatal presumption.
Wall Street is a Parasite, backstopped by the Fed, who, in turn, are backstopped by the
Nation. A crumbling nation, where the Fed strangles lending/savings intermediation, and saves
the blood suckers by bleeding the dying core of America.
wmbz 8 hours ago
"The sector is now built on corporate welfare, not "free markets."
This is NOT a new thing. Corporate welfare has been in play for a long, long time. I am
amazed how long it has taken otherwise "smart" people to grasp this fact.
The only difference is, it is out in the glaring sunlight for all to see. TPTB are damn
proud of it!
junction 7 hours ago (Edited)
Except for the involvement of WallStreetBets in temporarily blocking the hedge fund bear
raid on GameStop using "naked" shorts, it is still business as usual on Wall Street. No one
at the SEC does anything but collect a salary, issue press releases and go to lunch as the
Mafia crime families. . . oops, hedge funds run "bust out" operations on businesses. The
lapdog financial press cheered on the hedge funds as they demolished American businesses. The
same gutter journalists who are not yet linking micro-manager Bezos giving up total control
of Amazon right after his cloud service illegally de-platformed Parler for violation of
bogus. made-up community standards. But then, bigger things are afoot. Bolshevik president
Biden just approved deploying B-1 bomber to Norway for the first time. Nuclear bomb carrying
B-1 bombers. Anything to distract people from how rotten things are.
Cognitive rationalist 7 hours ago
Banking financial sector: private profits for me, public losses for thee
gladitsover 8 hours ago remove link
"..the table is tilted folks. The game is rigged.."
George Carlin
Lokiban 8 hours ago
I think it was all about showing to those unawares how corrupt and rigged Wall street
truly is and they have gotten the message out bigtime.
The only question to be asked is who became the proverbial bagholder when average people saw
their 'Bitcoin-Tulipmania' chance to get out with amazing profits and with that breaking the
promise to continue pumping gme till it hits $1500.
One has always to be carefull if these kind of actions are true populism going against the
controllers or is it controllers playing their hideous games again for a reason, like the
great reset.
Greed has never been a good advisor in these times, easy sheoplemoney. It works all the
time..
After the Trump Justice Department
sued Yale following the results of a 2-year Civil Rights investigation which found
"long-standing and ongoing" race-based discrimination, the Biden DOJ just dismissed the case
without explanation .
... ... ...
The Trump DOJ had argued that the Ivy League university had violated federal civil rights
law for "at least 50 years," by favoring Black and Hispanic students over Whites and Asians,
according to
The Hill .
The legal battle represented one of the Trump administration's moves to challenge
affirmative action programs aimed at increasing diversity on campus, which some conservatives
consider unfair and illegal.
Yale, which staunchly defended its admission practices, praised the DOJ's decision to drop
the case in a statement, saying it was "gratified" by the decision. -
The Hill
"Our admissions process has allowed Yale College to assemble an unparalleled student body,
which is distinguished by its academic excellence and diversity," argued the university. "Yale
has steadfastly maintained that its process complies fully with Supreme Court precedent, and we
are confident that the Justice Department will agree."
The Trump administration notably instituted several measures to prevent universities from
considering race as a factor during admissions, even joining a similar lawsuit against Harvard
University.
There is a massive threat to our capital markets, the free market in general, and fair
dealings overall. And no, it's not China. It's a homegrown threat that everyone has been afraid
to talk about.
Until now.
That fear has now turned into rage.
Hordes of new retail investors are banding together to take on Wall Street. They are not
willing to sit back and watch naked short sellers, funded by big banks, manipulate stocks, harm
companies, and fleece shareholders.
The battle that launched this week over GameStop between retail investors and Wall
Street-backed naked short sellers is the beginning of a war that could change everything.
It's a global problem, but it poses the greatest threat to Canadian capital markets, where
naked short selling -- the process of selling shares you don't own, thereby creating
counterfeit or 'phantom' shares -- survives and remains under the regulatory radar because
Broker-Dealers do not have to report failing trades until they exceed 10 days.
This is an egregious act against capital markets, and it's caused billions of dollars in
damage.
Make no mistake about the enormity of this threat: Both foreign and domestic schemers have
attacked Canada in an effort to bring down the stock prices of its publicly listed
companies.
In Canada alone, hundreds of billions of dollars have been vaporized from pension funds and
regular, everyday Canadians because of this, according to Texas-based lawyer James W.
Christian. Christian and his firm Christian Smith & Jewell LLP are heavy hitters in
litigation related to stock manipulation and have prosecuted over 20 cases involving naked
short selling and spoofing in the last 20 years.
"Hundreds of billions have been stolen from everyday Canadians and Americans and pension
funds alike, and this has jeopardized the integrity of Canada's capital markets and the
integral process of capital creation for entrepreneurs and job creation for the economy,"
Christian told Oilprice.com.
The Dangerous Naked Short-Selling MO
In order to [legally] sell a stock short, traders must first locate and secure a borrow
against the shares they intend to sell. A broker who enters such a trade must have assurance
that his client will make settlement.
While "long" sales mean the seller owns the stock, short sales can be either
"covered" or "naked" . A covered short means that the short seller has
already "borrowed" or has located or arranged to borrow the shares when the short sale is made.
Whereas, a naked short means the short seller is selling shares it doesn't own
and has made no arrangements to buy. The seller cannot cover or "settle" in this instance,
which means they are selling "ghost" or "phantom" shares that simply do not exist without their
action.
When you have the ability to sell an unlimited number of non-existent phantom shares in a
publicly-traded company, you then have the power to destroy and manipulate the share price at
your own will.
And big banks and financial institutions are turning a blind eye to some of the accounts
that routinely participate in these illegal transactions because of the large fees they collect
from them. These institutions are actively facilitating the destruction of shareholder value in
return for short term windfalls in the form of trading fees. They are a major part of the
problem and are complicit in aiding these accounts to create counterfeit shares.
The funds behind this are hyper sophisticated and know all the rules and tricks needed to
exploit the regulators to buy themselves time to cover their short positions. According to
multiple accounts from traders, lawyers, and businesses who have become victims of the worst of
the worst in this game, short-sellers sometimes manage to stay naked for months on end, in
clear violation of even the most relaxed securities laws.
The short-sellers and funds who participate in this manipulation almost always finance
undisclosed "short reports" which they research & prepare in advance, before paying
well-known short-selling groups to publish and market their reports (often without any form of
disclosure) to broad audiences in order to further push the stock down artificially. There's no
doubt that these reports are intended to create maximum fear amongst retail investors and to
push them to sell their shares as quickly as possible.
That is market manipulation. Plain and simple.
Their MO is to short weak, vulnerable companies by putting out negative reports that drive
down their share price as much as possible. This ensures that the shorted company in question
no longer has the ability to obtain financing, putting them at the mercy of the same funds that
were just shorting them. After cratering the shorted company's share price, the funds then
start offering these companies financing usually through convertibles with a warrant attachment
as a hedge (or potential future cover) against their short; and the companies take the offers
because they have no choice left. Rinse and Repeat.
In addition to the foregoing madness, brokers are often complicit in these sorts of crimes
through their booking of client shares as "long" when they are in fact "short". This is where
the practice moves from a regulatory gray area to conduct worthy of prison time.
Naked short selling was officially labeled illegal in the U.S. and Europe after the
2008/2009 financial crisis.
Making it illegal didn't stop it from happening, however, because some of the more creative
traders have discovered convenient gaps between paper and electronic trading systems, and they
have taken advantage of those gaps to short stocks.
Still, it gets even more sinister.
According to Christian, "global working groups" coordinate their attacks on specifically
targeted companies in a "Mafia-like" strategy.
Journalists are paid off, along with social media influencers and third-party research
houses that are funded by what amounts to a conspiracy. Together, they collaborate to spread
lies and negative narratives to destroy a stock.
At its most illegal, there is an insider-trading element that should enrage regulators. The
MO is to infiltrate a company through disgruntled insiders or lawyers close to the company.
These sources are used to obtain insider information that is then leaked to damage the
company.
Often, these illegal transactions involve paying off "informants", journalists, influencers,
and "researchers" are difficult to trace because they are made from offshore accounts that are
shut down once the deed is done.
Likewise, the "shorts" disguised as longs can be difficult to trace when the perpetrators
have direct market access to trading systems. These trades are usually undetected until the
trades fail or miss settlement. At that point, the account will move the position to another
broker-dealer and start the process all over again.
The collusion widens when brokers and financial institutions become complicit in
purposefully mislabeling "shorts" as "longs", sweeping the illegal transactions under the rug
and off of regulatory radar.
"Spoofing" and "layering" have also become pervasive techniques to avoid regulator
attention. Spoofing, as the name suggests, involves short sellers creating fake selling
pressure on their targeted stocks to drive prices lower. They accomplish this by submitting
fake offerings in "layers" at different prices to create a mirage.
Finally, these bad actors manage to skirt the settlement system, which is supposed to
"clear" on what is called a T+2 basis . That
means that any failed trades must be bought or dealt with within 3 days. In other words, if you
buy on Monday (your "T" or transaction day), it has to be settled by Wednesday.
Unfortunately, Canadian regulators have a hard time keeping up with this system, and failed
trades are often left outstanding for much longer periods than T+2. These failing trades are
constantly being traded to reset the settlement clock and move the failing trade to the back of
the line. The failures of a centralized system
According to Christian, it can be T+12 days before a failed trade is even brought to the
attention of the IIROC (the Investment Industry Regulatory Organization of Canada)
Prime Brokers and Banks are Complicit
This is one of Wall Street's biggest profit center and fines levied against them are merely
a minor cost of doing business.
Some banks are getting rich off of these naked short sellers. The profits off this kind of
lending are tantalizing, indeed. Brokers are lending stocks they don't own for massive profit
and sizable bonuses.
This layer of what many have now called a "criminal organization" is the toughest for
regulators to deal with, regardless of the illegal nature of these activities.
Prime brokers lend cash account shares that are absolutely not allowed to be lent. They lend
them to short-sellers in order to facilitate them in settling their naked shorts.
It's not that the regulators are in the dark on this. They are, in fact, handing out fines,
left and right -- both for illegal lending and for mismarking "shorts" and "longs" to evade
regulatory scrutiny. The problem is that these fines pale in comparison to the profits earned
through these activities.
And banks in Canada in particular are basically writing the rules themselves, recently
making it easier (and legal) to lend out cash account shares.
Nor do law firms have clean hands. They help short sellers bankrupt targeted companies
through court proceedings, a process that eventually leads to the disappearance of evidence of
naked shorts on the bank books.
"How much has been stolen through this fraudulent system globally is anyone's guess," says
Christian, "but the number begins with a 'T' (trillions)."
The list of fines for enabling and engaging in manipulative activity that destroys
companies' stock prices may seem to carry big numbers from the retail investor's perspective,
but they are not even close to being significant enough to deter such actions:
- The SEC charged Citigroup's principal U.S. broker-deal subsidiary in 2011 with misleading
investors about a $1 billion collateralized debt obligation (CDO) tied to the U.S. housing
market. Citigroup had bet against investors as the housing market showed signs of distress. The
CDO defaulted only months later, causing severe losses for investors and a profit of $160
million (just in fees and trading profits). Citigroup paid $285 million to settle these SEC
charges.
- In 2016, Goldman, Sachs & Co. agreed to pay $15 million to settle SEC charges that
its securities lending practices violated federal regulations. To wit: The SEC found that
Goldman Sachs was mismarking logs and allowed customers to engage in short selling without
determining whether the securities could reasonably be borrowed at settlement.
- In 2013, a Charles Schwab subsidiary was found liable by the SEC for a naked short-selling
scheme and fined
$8.2 million .
- The SEC charged two Merrill Lynch entities in 2015 with using "inaccurate data in the
course of executing short sale orders", fining them $11 million.
- And most recently, Canadian Cormark Securities Inc and two others came under the SEC's
radar. On December 21, SEC instituted cease-and-desist orders against
Cormark. It also settled charges against Cormark and two other Canada-based broker deals for
"providing incorrect order-making information that caused an executing broker's repeated
violations of Regulation SHO". According to the SEC, Cormark and ITG Canada caused more than
200 sale orders from a single hedge fund, to the tune of more than $660 million between August
2016 and October 2017, to be mismarked as "long" when they were, in fact, "short" -- a clear
violation of Regulation SHO. Cormark agreed to pay a penalty of $800,000 , while ITG Canada -- one of
the other broker-dealers charged -- agreed to pay a penalty of $200,000. Charging and fining
Cormark is only the tip of the iceberg. The real question is on whose behalf was Cormark making
the naked short sells?
- In August 2020, Bank of Nova Scotia (Scotiabank) was fined
$127 million over civil and criminal allegations in connection with its role in a massive
price-manipulation scheme.
According to one Toronto-based Canadian trader who spoke to Oilprice.com on condition of
anonymity, "traders are the gatekeeper for the capital markets and they're not doing a very
good job because it's lucrative to turn a blind eye." This game is set to end in the near
future, and it is only a matter of time.
"These traders are breaking a variety of regulations, and they are taking this risk on
because of the size of the account," he said. "They have a responsibility to turn these
trades down. Whoever is doing this is breaking regulations [for the short seller] and they know
he is not going to be able to make a settlement. As a gatekeeper, it is their regulatory
responsibility to turn these trades away. Instead, they are breaking the law willfully and with
full knowledge of what they are doing."
"If you control the settlement system, you can do whatever you want," the source
said. "The compliance officers have no teeth because the banks are making big money. They
over-lend the stocks; they lend from cash account shares to cover some of these fails for
instance, if there are 20 million shares they sold 'long', they can cover by borrowing from
cash account shares."
The Naked Truth
In what he calls our "ominous financial reality", Tom C.W. Lin, attorney at law, details how
"millions of dollars can vanish in seconds, rogue actors can halt trading of billion-dollar
companies, and trillion-dollar financial markets can be distorted with a simple click or a few
lines of code".
Every investor and every institution is at risk, writes Lin.
The naked truth is this: Investors stand no chance in the face of naked short sellers. It's
a game rigged in the favor of a sophisticated short cartel and Wall Street giants.
Now, with online trading making it easier to democratize trading, there are calls for
regulators to make moves against these bad actors to ensure that North America's capital
markets remain protected, and retail investors are treated fairly.
The recent GameStop saga is retail fighting back against the shorting powers, and it's a
wonderful thing to see - but is it a futile punch or the start of something bigger? The
positive take away from the events the past week is that the term "short selling" has been
introduced to the public and will surely gather more scrutiny.
Washington is gearing up to get involved. That means that we can expect the full power of
Washington, not just the regulators, to be thrown behind protecting the retail investors from
insidious short sellers and the bankers and prime brokers who are profiting beyond belief from
these manipulative schemes.
The pressure is mounting in Canada, too, where laxer rules have been a huge boon for
manipulators. The US short cartel has preyed upon the Canadian markets for decades as they know
the regulators rarely take action. It is truly the wild west.
Just over a year ago,
McMillan published a lengthy report on the issue from the Canadian perspective, concluding
that there are significant weaknesses in the regulatory regime.
While covered short-selling itself has undeniable benefits in providing liquidity and
facilitating price discovery, and while the Canadian regulators' hands-off approach has
attracted many people to its capital markets, there are significant weaknesses that threaten to
bring the whole house of cards down.
McMillan also noted that "the number of short campaigns in Canada is utterly
disproportionate to the size of our capital markets when compared to the United States, the
European Union, and Australia".
Taking Wall Street's side in this battle, Bloomberg notes that Wall Street
has survived "numerous other attacks" over the centuries, "but the GameStop uprising could mark
the end of an era for the public short", suggesting that these actors are "long-vilified folks
who try to root out corporate wrongdoing".
Bloomberg even attempts to victimize Andrew Left's Citron Research, which -- amid all the
chaos -- has just announced that it has exited the short-selling game after two decades.
Nothing could be further from the truth. Short sellers, particularly the naked variety, are
not helping police the markets and route out bad companies, as Bloomberg suggests. Naked short
sellers are not motivated by moral and ethical reasons, but by profit alone. They attack good,
but weak and vulnerable companies. They are not the saviors of capital markets, but the
destroyers. Andrew Left may be a "casualty", but he is not a victim. Nor likely are the hedge
funds with whom he has been working.
In a petition initiated by Change.org, the petitioners urge the SEC and FINRA to
investigate Left and Citron Research, noting: "While information Citron Research publishes are
carefully selected and distributed in ways that do not break the law at first sight, the SEC
and FINRA have overlooked the fact that Left and Citron gains are a result of distributing
catalysts in an anticipation of substantial price changes due to public response in either
panic, encouragement, or simply a catalyst action wave ride. Their job as a company is to
create the most amount of panic shortly after taking a trading position so they and their
clients can make the most amount of financial gains at the expense of regular investors."
On January 25 th , the
Capital Markets Modernization Taskforce published its final report for Ontario's Minister
of Finance, noting that while naked short selling has been illegal in the United States since
2008, it remains a legal loophole in Canada. The task force is recommending that the Ministry
ban this practice that allows for the short-selling of tradable assets without first borrowing
the security.
The National Coalition Against Naked Short Selling - Failing to Deliver Securities (NCANS),
which takes pains to emphasize that is not in any way against short-selling, notes: "Naked
short-selling transfers the risk exposure and the hedging expense of the derivatives market
makers onto the backs of equity investors, without any corresponding benefit to them. This is
fundamentally unfair, and must stop."
Across North America, the issue is about to reach a fever pitch over GameStop. For once,
regular retail investors have a voice to use against Wall Street. And for once, Washington
appears to be listening. The House and Senate both have hearings
scheduled over the GameStop saga.
Paradoxically, the same company that basically started the retail investor coup -- zero-fee
trading app Robinhood -- is now under fire for pulling the rug out from under the same
democratic movement.
After retail investors joined forces against Wall Street short-sellers to push GameStop
stock from $20 to a high of over $480 in less than a week, Robinhood made the very unpopular
move of instituting
a ban on buying for retail investors. Under the rules, Wall Street could still buy and
sell, but retail investors could only sell. This new band of investors -- which includes pretty
much all of Robinhood's clientele -- are up in arms, with customers now suing. They won't go
away, and they have Washington's ear and Twitter and Reddit's social media power. This is
shaping up to be an uprising.
What happens with GameStop next could end up dictating a new form of capital markets
democracy that levels the playing field and punishes the Mafia-like elements of Wall Street
that have been fleecing investors and destroying companies for years.
Retail investors want to clean up capital markets, and they just might be powerful enough to
do it now. That's a serious wake-up call for both naked short sellers and the investing
public.
"... U.S. oil production has fallen more than 2 million barrels per day since March 2020. It will fall much lower. ..."
"... EIA's forecast is impossible. It does not account for the low level of drilling and for the high decline rates of U.S. wells. It seems more likely that production will drop by at least another million barrels per day below October's level later in 2021. ..."
U.S. oil production has fallen more than 2 million barrels per day since March 2020. It will
fall much lower.
Output has fallen from almost 13 mmb/d in late 2019 to below 10.5 mmb/d in October 2020
(Figure 1). EIA forecasts an increase in November to 11.0 mmb/d and then an average level of
about 11.1 mmb/d for the rest of 2021.
... ... ...
EIA Forecast is Impossible
EIA's forecast is impossible. It does not account for the low level of drilling and for the
high decline rates of U.S. wells. It seems more likely that production will drop by at least
another million barrels per day below October's level later in 2021.
... ... ...
What About DUCs?
Many reasonably expect that DUCs (drilled uncompleted wells) provide a solution to the lag
between drilling and production. There are, after all, about 5,800 DUCs in the main U.S. tight oil plays.
These are already drilled and could be converted into producing wells for the cost of
completion which is about half the total well cost.
Most DUCs, however, are uncompleted for a reason namely, that their owners don't believe
that their performance will be as good as wells that they chose to complete instead.
... It doesn't matter whether wells are newly drilled and completed or DUCs -- there are
simply too few wells being added to maintain present levels of production.
... ... ...
It is unlikely that the tight oil business will recover from the effect of Covid-19 and
lower oil prices. Markets will continue to send higher price signals until rig counts recover
to the 800 or so rigs needed to support EIA's 11 mmb/d forecast.
The public and many investors have the peculiar belief that the world will be just fine
without oil. The world will be fine. It has survived meteor impacts and mass extinctions
but humans are more fragile. Higher oil prices are the last thing the global economy
needs right now.
Art, I couldn't agree more. Commodities are rising and oil price is set to rise, in the
midst of a global economic crisis. A perfect storm is brewing and no amount of money printing
can fix that. If things take a turn for the worst the economic crisis could be followed by a
monetary crisis. Energy per capita and standard of living are going down for the majority no
matter what.
That could easily add a social crisis whose first signs we are all seeing. Peter Turchin predicted the increase in social instability 10 years ago in Nature Vol 46, 4 February
2010, pg 608.
The pandemic was just a catalyst for what was already brewing. We are living in
interesting times.
"... Today's cultural dominance in much of the South and chunks of the Midwest by boobtoob preachers, Dominationists and the highly heretical oxymoronical "Christian" Zioni$ts can be seen as the afterbirth of cultural Calvinism. Calvinism is Talmudic in its essence and squats at the nexus of what they like to call "Judeo-Christian Civilization". ..."
The author Jafee is confused on Bentham, because Bentham was confused himself, or was a Jewish agent of mammon.
The highlighted terms accord with Benthamian Utilitarianism -- the greatest human happiness of the greatest human number.[1]
Much (but surely not all) pertinent history suggests that Bentham's thinking influenced the construction of the Preamble
The English philosopher Jeremey Bentham (1748-1832) was a defender of usury, which is the opposite of happiness for the greatest
human number.
In 1787 Jeremey Bentham wrote "In Defence of Usury." Bentham was the son of a rich lawyer, and a lawyer himself, not an economist,
which is why he was confused. Bentham created the present mis-definition of usury which prevails to today, so he was very damaging.
"The taking of grater interest than the law allows, or the taking of greater interest than is usual."
Bentham ignored hundreds of years of the Catholic Scholastics work on usury, and also ignored Aristotle. Actually Bentham attacked
Aristotle in order to spread his B.S. Bentham's father was Jewish, and Bentham also ignored the fairly strong Old Testament admonitions
against usury.
Bentham spread the same erroneous B.S. that Calvin did, and both men did enormous damage, and whether by design or confusion
are NOT for the common good. Their connections to our (((friends))) is suspicious.
A Persian Daric is a gold coin. Bentham said this: Though all money in nature is barren, though a Daric would not beget another
Daric yet for a Daric which a man borrowed he might get a ram and couple of ewes and the ewes would probably not be barren (pages
98 to 101 of his screed)
Aristotle and the Catholic Schoolmen clearly showed that it was the Ewes that were fertile, not the coins.
Bentham or Calvin could not read with comprehension and twisted words into new meanings. This twisted language persists in
the brains of modern humans as confusion.
As if every Daric is going to buy an Ewe in order to reproduce.
By 1850 John Whipple wrote "The Importance of Usury Laws – An answer to Jeremey Bentham."
"The purpose of money is to facilitate exchange. It was never intended as an article of trade, as an article possessing an
inherent value in itself, and further than as representative or test of the value of all other articles."
It undoubtedly admits of private ownership, but of an ownership that is not absolute, like the product of individual industry,
but qualified and limited by the special use for which it was designed.
And
The power of money over every other article, arises out of the artificial character given to it by the STATE , AND NOT
OUT OF THE QUALITIES OF THE MATERIAL WHICH IT IS COMPOSED.
Bentham also argued that anti-usury laws were due to prejudice against Jews. Whipple was not frightened by the Jew trick of
anti-semitism claims. Whipple said this in reply, "The real truth is this feeling which he calls prejudice is the result of the
moral instinct of mankind."
Whipple wasn't afraid of calling out the Jew.
In other words, Bentham did not have the moral instinct of mankind, but instead was a usurer, hiding behind his utilitarianism
doctrine.
My view is that the preamble general welfare clause is direct lineage that comes through Benjamin Franklin and his experiences
in the Philadelphia Colony. Franklin was definitely NOT a usurer, and was not confused on money.
The Preamble of the constitution reflects a Liebnizian metaphysic reflected in the notion of the pursuit of happiness, were
are not talking utilitarianism, but a recognition that man is made in the image of the creator, Imago Dei where happiness
reflects an acknowledgement that we are actually creative beings where happiness is a reflection of such creativity, above mere
acquisition of 'property' as the Confederacy devolved the phrase to "Life, Liberty and Property"
@Mefobills eply distorted by Calvinistic Puritanism and its "Chosen People" mythos.
Much of the religious fervor which dominated the American frontier in the latter decades of the 18th Century and early 19th–they
called it "The Great Awakening" -- was infused with the patriarchal form of religiosity as ignited by Calvinistic tropes and memes.
Today's cultural dominance in much of the South and chunks of the Midwest by boobtoob preachers, Dominationists and the
highly heretical oxymoronical "Christian" Zioni$ts can be seen as the afterbirth of cultural Calvinism. Calvinism is Talmudic
in its essence and squats at the nexus of what they like to call "Judeo-Christian Civilization".
My preference is to employ the more objectively truthful description: the "JudieChristie MagickMindfuck.
@Leonard R. Jaffee Anti-semitism card. Bentham even attacked Aristotle for corrupting Christianity.
In Bentham's book, Bentham associates some of the positive attributes of thrift with money lending. Money lending becomes on
the same plane as thrift in his worldview. An here is the coup-de-gras: Compound interest was forbidden in Bentham's day, and
Bentham urged its legalization.
A compound curve for interest is outside of nature, as the claims on nature grow exponentially. Nature does not grow exponentially.
Nature and labor cannot pay the claims, and society polarizes. Jesus started his mission on the Jubilee year, as Jubilees are
coded in the Bible to prevent polarization.
If Bentham wasn't a Jew, he certainly had the Jewish spirit. Bentham was not for the common good.
This book considers the detrimental changes that have occurred to the institution of the university, as a result of the withdrawal
of state funding and the imposition of neoliberal market reforms on higher education. It argues that universities have lost their
way, and are currently drowning in an impenetrable mush of economic babble, spurious spin-offs of zombie economics, management-speak
and militaristic-corporate jargon. John Smyth provides a trenchant and excoriating analysis of how universities have enveloped themselves
in synthetic and meaningless marketing hype, and explains what this has done to academic work and the culture of universities – specifically,
how it has degraded higher education and exacerbated social inequalities among both staff and students. Finally, the book explores
how we might commence a reclamation. It should be essential reading for students and researchers in the fields of education and sociology,
and anyone interested in the current state of university management.
Quotes
If we are to unmask what is going on within and to universities, then we need to look forensically at the forces at work and
the pathological and dysfunctional effects that are placing academic lives in such jeopardy -- hence my somewhat provocative-sounding
title 'the toxic university 5 .
One of the most succinct explanations of what is animating me in writing this book was put by Lucal (2015) -- echoing arguably
the most significant sociologist ever. Charles Wright Mills (1971 [1959]) in his The sociological imagination -- when she said:
...neoliberalism is a critical public issue influencing apparently private troubles of college [university] students and teachers,
(p. 3)
... ... ...
Pathological Organizational Dysfunction
Just on 40 years ago, for all of my sins, I studied 'organizational theory and 'management behaviour' as part of my doctorate
in educational administration. I cannot remember encountering the term, but in light of mv subsequent four decades of working
in universities around the world, I think I have encountered a good deal of what 'pathological organisational dysfunction" (POD)
means in practice. I regard it is an ensemble term for a range of practices that fall well within the ambit of the 'toxic university
5 . The short explanation is that what I am calling POD has become a syndrome within which the toxic university has
become enveloped in its unquestioning embrace of the tenets of neoliberalism -- marketization, competition, audit culture, and
metrification. In other words. POD has become a major emblematic ingredient of the toxic university, which as Ferrell (2011) points
out looks fairly unproblematic on the surface:
Higher education on the corporate model imagines students as consumers, choosing between knowledge products and brands. It
imagines itself liberating the university from the dictates of the state/tradition/aristocratic self-replication, and putting
it in the hands of its democratic stakeholders. It therefore naturally subscribes to the general management principles and practices
of global corporate culture. These principles -- transparency, accountability, efficiency -- are hard to argue with in principle.
(p. 166 emphasis in original)
What is not revealed in this glossy reading of neoliberalism is the way in which it does its work, or its effects, as Ferrell
(2011) puts it in relation to universities, the way it has 'wrecked something worthwhile" (p. 181).
John Gatto. an award-winning teacher of the year in New York, comes closest to what I mean by POD in his description of'psychopathic
5 organizations. Gatto (2001) says that the term psychopathic, as applied to organizations, while it might conjure
up lurid images of deranged people running amuck, really means something quite different; he invokes the term to refer to people
'without consciences' (p. 303). The way he put it is that:
4.0 out of 5 stars Essential reading for anyone working in a UK university today.
Reviewed in the United Kingdom on August 30, 2019
Reviewers of this book seem to conflate the price of, and access to, this book in an ironic context. This isn't fair as this
is very much a book written from a formal academic perspective. In that sense the book is probably priced reasonably.
However, as I don't work in this field I found that I had to read around some of the topics in order to get a deeper understanding
of the issues raised by the book. So one thing I think that author could do is to almost re-write the book in a more "journalistic"
sense and this would make it more accessible to a wider audience.
As it stands, however, this book is right on the money. Reading almost every page brought from me nods of agreement at familiar
practices from university "leaders". This book is therefore absolutely correct in its findings and this then makes it profoundly
depressing as the book describes, in my view, the dismantling of the university system as we know it. Every chapter details things
I have witnessed or heard about from other universities. The "rock star" academics section, usually focusing on "dynamic" researchers,
is the highlight as I know enough people who fit the descriptions given - people who would sell their mothers to get a grant or
get slightly higher up the greasy pole.
The critique of university leadership, marketing functions and financial (mis)management are also spot-on.
Overall, get past the formal academic nature of this book (it is not a book designed for a wide audience, which is a pity)
and it is excellent, timely and deeply depressing.
PHILIP TAYLOR5.0 out of 5 stars
Forensic Analysis of The Toxic Neo-Liberal University Reviewed in the United Kingdom on April 19, 2019
A brilliant exposition of the toxic neo-liberal University
"Schools teach to the test, depriving children of a rounded and useful education."
Boy do they. I work in Business/IT training and as the years have rolled on I and every colleague I can think of have noticed
more and more people coming to courses that they are unfit for. Not because they are stupid, but because they have been taught
to be stupid.
So used to being taught to the test that they are afraid to ask questions. Increasingly I get asked "what's the right way to
do...", usually referring to situation in which there is no right way...
I had the great pleasure of watching our new MD describe his first customer-facing project, which was a disaster, but they
"learned" from it. I had to point out to him that I teach the two disciplines involved - businesss analysis and project management
- and if he or his team had attended any of the courses - all of which are free to them - they would have learned about the issues
they would face, because (astonishingly) they are well-known.
I fear that these incurious adult children are at the bottom of Brexit, Trump and many of the other ills that afflict us. Learning
how to do things is difficult and sometimes boring.
Much better to wander in with zero idea of what has already been done and repeat the mistakes of the past. I see the future
as a treadmill where the same mistakes are made repetitively and greeted with as much surprise as if they had never happened before.
This is a good, short book laying out many of the ways that the market has crept up on us and made our lives smaller.
Konczal provides necessary pushback to the neoliberal project, showing just everything that we have lost as the forces of capital
decided that the Great Society, the New Deal, and the Progressive Era were bridges too far against the corporate form. 8 people
found this helpful
Konczal's book is a compact history of how Americans have tried to remove the constraints imposed on them by the market. Konczal
questions the conventional idea that the market is solely a mechanism that expands choices and opportunity. As he shows, markets
can, and have, achieved precisely the opposite outcomes -- restricting choices and preventing people from having options. In many
instances, Americans successfully reclaimed the liberty they had lost to the market by organizing or taking state action. He thus
makes a more general case for ensuring that societal outcomes are more consistent with Berlin's notion of positive liberty. Libertarians
will not appreciate the book's conclusions.
The book starts with the Homestead Act and ends with the decision to terminate virtually free higher education in the 1960s
and 1970s. In between, he covers a lot of historical ground -- the effort to reduce working hours in the 19th century, the Wagner
Act and Social Security during the New Deal, and the introduction of Medicare and Medicaid, among other things. Despite the book's
ambitious scope, you can read it in a sitting, which is quite a feat. Either Konczal is a naturally efficient writer, or he has
a good editor.
There is one topic I would've liked to see treated in more detail -- finance. Konczal gives the best concise summary of the
economic ideas behind the ideological shift toward neoliberalism I have read. Still, the liberalization of finance during the
past 50 years and its farreaching implications receive a cursory discussion. In an interview, Konczal said he wanted to include
more discussion of this topic and something on the gold standard but didn't see how to incorporate it. In my view, it would have
fit quite naturally into the chapter "Free Economy."
But this is a quibble. Overall, the book is both well researched and well written. It sheds light on an important and timely
question -- to what extent should Americans permit themselves to be subject to market-driven outcomes? The book shows that, historically,
Americans have tried to implement changes that enabled them to live freer lives by organizing and taking political action. Not
all those changes were successful but many were.
For a deeper dive into these and related questions, read this book along with Polanyi's "The Great Transformation," Robin's
"The Reactionary Mind," and Slobodian's "The Globalists." 4 people found this helpful
Freedom from the Market remakes our understanding of American politics. By drawing intelligently on forgotten aspects of American
history, Konczal makes it easier for Americans to understand that things they might not believe are possible in America must be,
because they have been. He rescues moments such as the WWII government run daycare centers, or the use of the power of the federal
state to bring through the integration of Southern hospitals, from the enormous condescension of posterity. And notably, although
he doesn't dwell on this point, many of these changes began at moments that seem shittier and more despairing than our own.
So what Konczal is doing is neither to provide a standard linear history, nor yet a policy textbook. Instead, he is claiming
an alternative American tradition, that has not looked to the market as its apotheosis, but instead has sought to free Americans
from its random vagaries. His history explains how Americans have responded collectively to the real and expressed needs of publics,
who have organized to fight for them. And it does so in the plain language that he mentions in passing was necessary to allow
ordinary people to organize and understand who was trying to stop them.
Konczal's fundamental claim is that people who link freedom to markets miss out on much of the story. Equally important is
a notion of freedom <em>from</em> markets, "rooted in public programs that genuinely serve people and checking market dependency."
This notion goes back much further in time than the New Deal. The nineteenth century is sometimes depicted as a reign of laissez-faire,
both by those who admired it and deplored it. Konczal argues instead that there was an emerging sense of public needs - and how
the government might provide for them. For example, this helps us understand the provision of public land through the Homestead
Act and the land grant universities.
The nineteenth century notion of the public was clearly horribly flawed and contradictory - it did not include slaves or Native
Americans. Some, like Horace Greeley ended up fleeing these contradictions into the welcoming arms of free market absolutism.
But within these contradictions lay possibilities that opened up in the twentieth century. Konczal builds, for example on Eric
Schickler's work to argue that as the New Deal began to provide concrete benefits to African Americans, it created a new conduit
between them and the Democratic Party, breaking up the old coalition that had held Jim Crow together.
Konczal explains how change happens - through social movements and the state:
While the Supreme Court can be effective at holding back change and enforcing already existing power structures, it is actually
very weak at creating new reform itself. It controls no funding and is dependent on elite power structures to carry out its
decisions. What really creates change is popular mobilization and legislative changes.
He also draws on historians like Quinn Slobodian, to describe how modern Hayekians have sought to "encase" the market order
in institutions and practices that are hard to overturn. Property rights aren't the foundation of liberty, as both nineteenth
century jurists and twentieth century economists would have it. They are a product of the choices of the state, and as such intensely
political.
This allows Konczal to turn pragmatism against the Hayekians. Hayek's notion of spontaneous order is supposed to be evolutionary.
But if there is a need to to provide collective goods for people that cannot be fulfilled through voluntarism, the Hayekian logic
becomes a brutal constraint on adaptation.
The efforts of Hayekians to enforce binding legal constraints, to cripple the gathering of the collective knowledge that can
guide collective action, to wink at legal doctrines intended to subvert social protections against the market; all these prevent
the kinds of evolutionary change that are necessary to respond to changing circumstances. Konczal makes it clear that Oliver Wendell
Holmes was no left-winger - but his criticisms of the rigid and doctrinaire laissez-faire precepts of his colleagues rings true.
Their "willingness to use a very specific understanding of economics to override law writes a preferential understanding of economics
into the constitution itself." Although Konczal wrote this book before the current crisis, he describes Holmes as mentioning compulsory
vaccination laws as one of the ways in which government interference in private decisions can have general social benefits. The
wretched contortions of libertarians over the last several months, and their consequences for human welfare in states such as
North Dakota illustrate the point, quite brutally.
What Konczal presses for is a very different notion of freedom. This doesn't deny the benefits of markets, but it qualifies
them. In Konczal's words, "markets are great at distributing things based on people's willingness to pay. But there are some goods
that should be distributed by need." Accepting this point entails the necessity of keeping some important areas of life outside
the determining scope of markets. Furthermore, people's needs change over time, as societies and markets change. Konczal's framework
suggests the need for collective choice to figure out the best responses to these changes, and a vibrant democratic politics,
in which the state responds to the expressed needs of mobilized publics as the best way to carry out these choices.
All this makes the book sound more like an exercise in political theory than it is. You need to read the book itself, if you
really to get the good stuff - the stories, the examples, and the overall narrative that Konczal weaves together. <em>Freedom
from the Market</em> has the potential to be a very important book, focusing attention on the contested, messy but crucially important
intersection between social movements and the state. It provides a set of ideas that people on both sides of that divide can learn
from, and a lively alternative foundation to the deracinated technocratic notions of politics, in which good policy would somehow,
magically, be politically self supporting, that has prevailed up until quite recently. Recommended.
Covid-19 exposed some warts of neoliberalism in higher education... They want to keep those lucrative international students
flooding in, after all.
Notable quotes:
"... We align our identities with our institutions and think in very a short-term, metric-based fashion, seeing "success" (for instance) in terms of student recruitment (tuition fees paid in). Moreover, we're encouraged above all to be global in outlook: we look forward to our perennially "busy" international conference seasons and we emphasize the global and the transnational over the merely local or national ..."
"... our identities as academics are unavoidably embedded in a form of neoliberal hyperglobalisation. We rely on unrestricted flows of (wealthy) bodies across borders. ..."
"... We see this form of globalisation, and the benefits that accrue to us and our institutions from it, as a form of moral necessity : something it isn't possible even to argue against in good faith. Hence our loud assent to principles like open borders and always-on mass migration. ..."
"... Our commitment to the global as a form of moral mission has left us completely unprepared for what's currently unfolding. We are utterly unused to considering the material constraints of the economy our livelihoods depend on; that globalisation might come back to bite us; that the very aircraft that carry us across the world to conference destinations and field work sites would one day turn off the spigot of endlessly mobile bodies our careers and identities depend on. ..."
"... In this respect, I think of this post over at Crooked Timber, where John Quiggin (an economist I have a great deal of respect for) simply cannot bring himself to confront the possibility that the open borders dream might be dead. ..."
"... But the fact that the "export education" model was a disastrous wrong turn will take much longer to be accepted, I think, because of the widespread commitment I've been talking about here to the principle of the global as a form of moral necessity. ..."
we've had a Minsky-like process operating on a society-wide basis: as daily risks have declined, most people have blinded
themselves to what risk amounts to and where it might surface in particularly nasty forms. And the more affluent and educated
classes, who disproportionately constitute our decision-makers, have generally been the most removed.
I see something very similar happening in academia. We align our identities with our institutions and think in very a short-term,
metric-based fashion, seeing "success" (for instance) in terms of student recruitment (tuition fees paid in). Moreover, we're
encouraged above all to be global in outlook: we look forward to our perennially "busy" international conference seasons and we
emphasize the global and the transnational over the merely local or national (denigrated as narrow, provincial, and ideologically
suspect).
We like to see ourselves as mobile subjects, bodies in constant motion, our minds Romantically untethered from the confines
of any one nation state.
So our identities as academics are unavoidably embedded in a form of neoliberal hyperglobalisation. We rely on unrestricted
flows of (wealthy) bodies across borders. Our institutions (or many of them) have become dependent on international students
and their superior fee-paying ability compared with merely "domestic students."
We might agree in principle with ideas of a GND,
say, or take an ecocritical approach to a novel or a play, but we're certainly not going to cut back on the number of international
conferences we attend. Indeed, many of us go further.
We see this form of globalisation, and the benefits that accrue to us and our institutions from it, as a form of moral
necessity : something it isn't possible even to argue against in good faith. Hence our loud assent to principles like open borders
and always-on mass migration. We have to keep those lucrative international students flooding in, after all. (Not that we'd
ever put it in terms as crassly material as that; after all, we don't work in university administration .)
Our commitment to the global as a form of moral mission has left us completely unprepared for what's currently unfolding.
We are utterly unused to considering the material constraints of the economy our livelihoods depend on; that globalisation might
come back to bite us; that the very aircraft that carry us across the world to conference destinations and field work sites would
one day turn off the spigot of endlessly mobile bodies our careers and identities depend on.
Hence the reason why a lot of my colleagues are so lost right now. They're so used to living on a purely symbolic (or moral-symbolic)
level that the materiality of this virus and its consequences seems like a crude insult. Many stubbornly hold on to their old
commitments, unwilling to admit that the world might have changed.
In this respect, I think of this post over at
Crooked Timber, where John Quiggin (an economist I have a great deal of respect for) simply cannot bring himself to confront the
possibility that the open borders dream might be dead.
Where we go from here, I have no idea. But the fact that international and Erasmus students might be gone for the foreseeable
future, and the major implications this will have for the financial viability or our universities, seems to be slowly sinking
in.
But the fact that the "export education" model was a disastrous wrong turn will take much longer to be accepted, I think,
because of the widespread commitment I've been talking about here to the principle of the global as a form of moral necessity.
"As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the
citizen is struggling far in the rear or is trampled to death beneath an iron heel." ~Grover Cleveland
(about that other gilded
age)
"There is fraud at the heart of Wall Street -- deliberate intellectual, business, and political deception. Charles Ferguson is in
hot pursuit.
Inside
Job
shook
up the cozy world of academic finance.
Predator
Nation
should
stir prosecutors into action. And if we fail to reform our political system, you can say goodbye to American democracy." --
Simon
Johnson
,
coauthor of
White
House Burning
and
professor at MIT Sloan School of Management
"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of
opportunity, education, and upward mobility is now largely confined to the top few percent of the population.
Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged)
industries. These policies are implemented and praised by these groups' willing servants, namely the increasingly
bought-and-paid-for leadership of America's political parties, academia, and lobbying industry.
If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry,
uneducated population under the control of a small, ultrawealthy elite. Such a society would be not only immoral but also
eventually unstable, dangerously ripe for religious and political extremism."
4.0 out of 5 stars
Scary
read. Frightening true! HIGHLY recommend!!
Reviewed in the United States on February 11, 2017
Verified Purchase
Just finished this page turner. Wow! Talk about an enlightening read.
Scary too and worse, yet it's so spot on. I always knew that most businesses, especially those dealing with
money are crooked, selfish and good for nothing greedy souls. This book proves my point and more. Personally, I
never heard of this book or the author until my brother recommended it to me in passing. It scared the hell out
of him. Naturally, I had to see what book could do that. After reading it, I understand why.
Not only are the financial industries greedy and crooked but so is our governments and both Democrats and
Republicans. The housing crash of 2008 wasn't the beginning of our problems but the culmination of years of
greed, shady deals and lack of accountability for the financial industry. President George W. Bush was
complicit in protecting the finance industry not the people of America. Worse yet was President Barack Obama.
It's all in there: every dirty little detail. If you think your broker, banker or financial advisor has your
best interest at heart, this couldn't show how very wrong you are. Is the book perfect? No. Is the U.S.
Government or any other world government perfect? Hell no. should we be very afraid of how our bankers are?
Yes.
This is a book I enjoyed reading because I already knew about most of it already just by observing and never
trusting anyone anyway. I highly recommend it. I loved the fact that the author wasn't afraid to speak the
truth. That is always refreshing. I look forward to reading more by Charles Ferguson.
Overall, an informative and compelling read. Everyone whether interested in finances or note needs to read this
book. Seriously!
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OMG!
You owe it to yourself to read what is really going on!
5.0 out of 5 stars
OMG!
You owe it to yourself to read what is really going on!
Reviewed in the United States on November 4, 2014
Verified Purchase
Definitely an eye opener. If I was cynical before, this one pushed me
over the edge. Banks and large corporations in collusion with the government and zero accountability. Our
newspapers, again, did a disservice to the public. It is one thing to talk about the mortgage industry going
under, it is quite another to understand what the banks did to facilitate a world-wide recession with NO
prosecutions. I was particularly appalled that the corporations paid the politicians who voted to remove any
restraints on the banks. Then the banks created derivative markets they knew would fail. Moreover, the bank
made millions of dollars by betting the derivative market would fail. Yet, when the bubble burst, these same
people were standing at the government door (that they paid for) with their hand out for a taxpayer bail-out.
The CEOs were rewarded for their bad behavior with millions of dollars in bonuses and no repercussions for
bilking millions of victims or for causing a world wide downward money spiral.
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4.0 out of 5 stars
Long
on diagnosis, short on solution
Reviewed in the United States on June 9, 2012
Verified Purchase
As a fan of "Inside Job" I was eager to read Predator Nation, which
minces no words in designating the financial industry as "criminal" abetted by the political establishment,
whether Republican or Democrat. The other reviews here lay out what this book accomplishes, to which I would
only underscore the powerful and no-holds-barred approach of Ferguson to establishing responsibility and
labeling it "criminal" as well as "predatory."
Beyond critique of Wall Street and the political "duopoly," the book widely supports the thesis that something
is terribly wrong in America, a cultural malaise rooted in economic thievery and imbalance empowering the
wealthy, and rendering today's America into the equivalent of what we used to call "a banana republic." Charles
Ferguson pulls no punches in laying out his case here.
But, as another review has pointed out, the ending is disappointing. Charles has laid into Obama as part of the
"duopoly" governing America, meaning diverging only on fractious social issues but essentially united in
matters of finance and government, including war. At one point he labels Obama's weak commentary on controlling
Wall Street "horse [manure]" and then at another point says "he [Obama] screwed us." In his concluding five
page chapter which has an "oh, well" feel to it he tells us "hold your nose and vote for him [Obama], as I
will."
With this and various commentaries we seem to be very long on laying out damages and ascribing responsibility,
but have almost nothing to say on what to do other than repair to the lounge on the Titanic and have another
whiskey, hoping somebody will come along with a bright idea or two at some point. If more energy were put into
finding answers, as with ascribing blame, maybe we could be more hopeful.
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9 people found this helpful
"... "I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning." ..."
"... Back in the Oughts when the fraudulent mortgages were grossly inflating Real Estate Investment Trusts (REITs), there were many instances of naked short selling to keep honest REITs down, activities I learned firsthand. We formed a shareholders organization that lobbied the SEC to enforce its laws but to no avail--the regulators were well captured and did zip. ..."
"... There's short selling, and then there's naked short selling. Why do the markets require naked short selling? If those hedge funds already owned the stocks that they are selling short, they would not be in such trouble now. ..."
Early this week a few amateur stock trading nerds decided to promote a stock that was heavily shortened by certain hedge funds.
The idea was to raise the stock price of Game Stop Corp., a vendor for computer games, by having lots of small stock traders to
buy into it. The hedge fund that shortened the stock, and thereby bet on a dropping stock price, would then make huge losses while
the many small buyers would potentially profit.
Instead of greed, this latest bout of speculation, and especially the extraordinary excitement at GameStop, has a different
emotional driver: anger. The people investing today are driven by righteous anger, about generational injustice, about what
they see as the corruption and unfairness of the way banks were bailed out in 2008 without having to pay legal penalties later,
and about lacerating poverty and inequality. This makes it unlike any of the speculative rallies and crashes that have preceded
it.
The movement was successful. The stock price of Game Stop Corp. rose from some $10 to over $400 within just a few days. The
short seller
had
to take cover under a larger firm:
Hedge fund Melvin Capital closed out its short position in GameStop on Tuesday after taking huge losses as a target of the
army of retail investors. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its
finances.
I'm shocked! Absolutely shocked to see that the game of finance is rigged!!!!/snark
There have not been market fundamentals since the beginning of financialization in 1971 when money became fiat instead of gold
backed. I find it interesting that it has taken 50 years for the cancer of financialization to fully compromise the host. It will
be interesting to see where this goes from here.
I think the speed of decline of empire is speeding up as noted by the increase in international investment in China.
I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I
love the smell of burning Wall Street in the morning.
"I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I
love the smell of burning Wall Street in the morning."
Is Max Keiser going after the silver market again? I bet he was posting on r/Wallstreetbets to stir things up!
Back in the Oughts when the fraudulent mortgages were grossly inflating Real Estate Investment Trusts (REITs), there were many
instances of naked short selling to keep honest REITs down, activities I learned firsthand. We formed a shareholders organization
that lobbied the SEC to enforce its laws but to no avail--the regulators were well captured and did zip.
We even ran full pages ads in the NY Times and WaPost to add visibility to our justifiable outrage, which was well proven when
the bubble burst.
But Obama didn't do his job and enforce the law, and the entire mess is far worse now. This episode epitomizes the amazing
amounts of corruption masquerading as well regulated markets and an equitable financial system.
I support Hudson's debt forgiveness for the main reason it will bankrupt the debt holders--the Financial Parasites--who are
also the beneficiaries of the corrupt system; and with their destruction, will allow for the rise of the Public Financial Utility
that will restore law and order to that realm of the economy. Yes, this must be seen as yet another episode of the longstanding
Class War, one of the most brazen ever.
There's short selling, and then there's naked short selling. Why do the markets require naked short selling? If those hedge
funds already owned the stocks that they are selling short, they would not be in such trouble now.
Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances.
-b
How Robinhood was rigged:
Robinhood sells its orderflow to Citadel for execution. Citadel then chiselled the retail investor for pennies per trade by frontrunning (think high freq trading) before execution
of retail order, inflating the price and cheating the customer.
Citadel bailed out Citron, essentially inheriting the short position. Citadel then threatened Robinhood with refusing payment for orderflow
US Presidents are really puppets, figureheads, even if during their campaign they pretend
otherwise. As for the elections, every four years in the US, they are nothing but a grand
brainwashing show whose sole purpose is to give the illusion of people power. They could have
presidential elections every 2 years, or even every year, none of that would change the fact
that the US is a plutocratic dictatorship with much less people power than any other
state in the collective West.
In fact, the argument above is just a tiny fig leaf trying to conceal the undeniable fact
that the US are not ruled by a person, but are ruled by a class, in the Marxist sense of this
world. Personally, I call this ruling class the "US Nomenklatura ". And while both Obama and
Trump pretended to want real change, they both lost that chance (assuming they ever wanted this
is the first place, which I doubt) when they did not do what Putin did when he came to office:
crush the Russian oligarchs as a class (some fled abroad, some died, some lost it all, and some
agreed to play by Putin's new rules). Obama, being the vapid and spineless car salesman that
he, is probably never even contemplated any real move against the US Nomenklatura . As
for Trump, being the pompous narcissist that he is, he might have even entertained some
thoughts of showing "who is boss", but that lasted only 1 month, until the US
Nomenklatura forced Trump to fire Flynn (after that, it was all freefall ).
"Where is the line between a successful global business, in-demand services and
consolidation of big data – and attempts to harshly and unilaterally govern society,
replace legitimate democratic institutions, restrict one's natural right to decide for
themselves how to live, what to choose, what stance to express freely?" Putin wondered.
"We've all seen this just now in the US. And everybody understands what I'm talking
about," he added.
The Russian leader was apparently referring to the crackdown by Big Tech corporations like
Twitter, Facebook, Google, Apple and Amazon, mostly on Donald Trump and his supporters, during
the recent presidential election in the US. The companies, which, according to some critics,
sided with Democratic candidate Joe Biden, blocked President Trump's social media accounts over
accusations of inciting violence, with the same being done to many pages of groups and
individuals who'd backed him.
However, one-sided bias claim voiced by some might be an overestimation – the accounts
of Democrats supporters were also subject to restrictions, but on a much smaller scale.
Conservative Twitter-like platform Parler was also forced offline, and now there are calls
to block the Telegram app as well.
These events have shown that Big Tech companies "in some areas have de facto become
rivals to the government," Putin said.
Billions of users spend large parts of their lives on the platforms and, from the point of
view of those companies, their monopolistic position is favorable for organizing economic and
technological processes, the Russian president explained. "But there's a question of how
such monopolism fits the interest of society," he stressed.
Think your friends would be interested? Share this story!
shadow1369 8 hours ago 27 Jan, 2021 07:51 AM
This is a great opportunity for Russia to create some Big Tech operators which actually allow
free speech. Russia certainly has the expertise and the means, and cannot be bullied by
western regimes.
Proton1963 shadow1369 1 hour ago 27 Jan, 2021 02:54 PM
Sure.. But only after the Russians can build a drivable car or a decent smart phone or a
laptop.
The West is surely giving Russia a lot of opportunities, through its own arrogance and
stupidity, does not it ? It keeps going backwards in its effort to diminish Russia. And the
same goes for China too.
JOHNCHUCKMAN 7 hours ago 27 Jan, 2021 08:45 AM
Putin is a remarkable statesman, and he sets a very high standard for political discourse. I
can't think of any of our Western leaders who speak in these truthful and philosophic terms.
What we hear in the West are slogans or whining or complaining.
Tenakakhan JOHNCHUCKMAN 3 hours ago 27 Jan, 2021 01:03 PM
The patriarch of the west has become extremely weak. It seems like our leaders lack any moral
authority to speak truth and common sense for fear of being cancelled. What we see now is the
virtue signaling dregs sponsored by extreme groups leading our nations down the toilet. If a
real war was to break out now we would be cannon fodder.
Hilarous 7 hours ago 27 Jan, 2021 09:04 AM
I think there's a simple explanation. Big tech is afraid to lose section 230 of the
communications act, which stipulates that online platforms are not legally responsible for
user content. Trump and some Republicans have accused social media sites of muzzling
conservative voices. They said undoing Section 230 would let people who claim they have been
slighted sue the companies. So Big Tech has a strong interest to remove Trump and run down a
few bad examples to convince people and politics that Section 230 must remain.
Count_Cash 8 hours ago 27 Jan, 2021 07:40 AM
In many cases they aren't rivals, but owners of government. Money controls everything in the
west and big tech have it. They have taken control of, or are blackmailing governments. The
Western Liberal Regime straddles both Big Tech and government!
RTaccount Count_Cash 7 hours ago 27 Jan, 2021 08:57 AM
Correct. Let us never forget that in America we are ruled by oligarchs just like the rest of
the world, and that our oligarchs are largely hidden. They are our true government, and so it
is meaningless to make this type of distinction.
Yves here. This is another tour de force from Michael Hudson, derived from a paper he presented in early January at the UPRE session
during the annual ASSA meeting. This time he turns from his recent focus on the economically destructive but oligarchy-advancing
practice of sanctifying debt to another favorite topic, the evolution of capitalism. Hudson looks from the early Industrial Revolution
onward and demonstrates that the dominance of financial capital over industrial capital was neither the likely course of events nor
desirable. A major feature of this development is the increasing weight of rentier activities and how they drain income from workers
and more productive sectors.
One of his key conclusions:
The result is a "deep state" supporting a cosmopolitan financial oligarchy. That is the definition of fascism, reversing democratic
government to restore control to the rentier financial and monopoly classes. The beneficiary is the corporate sector, not labor,
whose resentment is turned against foreigners and against designated enemies within.
For Hudson, the deep state enforcers are the IMF and the World Bank (which pressed emerging economies to develop capital markets,
making them more vulnerable to destabilizing hot money flows). He did not mention them in this article but I imagine Hudson would
add domestic law neutering "investor-state dispute settlement" provisions in trade agreements.
Even with its length (get a cup of coffee!), an article that covers so much terrain is bound to simplify a bit. One small quibble:
While Hudson correctly depicts China as hewing strictly and successfully to an industrial capital model, and keeping finance in check,
Hudson overeggs the pudding a bit in saying, "China has kept banking in the public domain." China's regional governments have supported
real-estate development projects, including a non-trivial proportion of ghost cities. often funded by private "wealth management
products". China's "shadow banking sector" which officials
have just estimated at nearly $13 trillion , or 86% of GDP and nearly 30% of banking assets.
Chinese officials say they are about to crack down on them, after many years of looking the other way, plus the occasional bailout
of particular wealth management product issuances gone sour. Similarly, the dominant mobile payment platform player, Alibaba, is
private.
Marx and many of his less radical contemporary reformers saw the historical role of industrial capitalism as being to clear
away the legacy of feudalism – the landlords, bankers and monopolists extracting economic rent without producing real value. But
that reform movement failed. Today, the Finance, Insurance and Real Estate (FIRE) sector has regained control of government, creating
neo-rentier economies.
The aim of this post-industrial finance capitalism is the oppositeof that of industrial capitalism as known to 19 th
-century economists: It seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism
for real estate, privatization of oil and mineral extraction, banking and infrastructure monopolies add to the cost of living and
doing business. Labor is being exploited increasingly by bank debt, student debt, credit-card debt, while housing and other prices
are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation.
Today's New Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing
transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly
were kept in the public domain of European and American economies so as to keep their costs low and minimize their cost structure.
In the Western economies such privatizations have reversed the drive of industrial capitalism to minimize socially unnecessary
costs of production and distribution. In addition to monopoly prices for privatized services, financial managers are cannibalizing
industry by debt leveraging and high dividend payouts to increase stock prices.
* * *
Today's neo- rentier economies obtain wealth mainly by rent seeking, while financialization capitalizes real estate and
monopoly rent into bank loans, stocks and bonds. Debt leveraging to bid up prices and create capital gains on credit for this "virtual
wealth" has been fueled by central bank Quantitative Easing since 2009.
Financial engineering is replacing industrial engineering. Over 90 percent of recent U.S. corporate income has been earmarked
to raise the companies' stock prices by being paid out as dividends to stockholders or spent on stock buyback programs. Many companies
even borrow to buy up their own shares, raising their debt/equity ratios.
Households and industry are becoming debt-strapped, owing rent and debt service to the Finance, Insurance and Real Estate (FIRE)
sector. This rentier overhead leaves less wage and profit income available to spend on goods and services, bringing to a close
the 75-year U.S. and European expansion since World War II ended in 1945.
These rentier dynamics are the opposite of what Marx described as industrial capitalism's laws of motion. German banking
was indeed financing heavy industry under Bismarck, in association with the Reichsbank and military. But elsewhere, bank lending
rarely has financed new tangible means of production. What promised to be a democratic and ultimately socialist dynamic has relapsed
back toward feudalism and debt peonage, with the financial class today playing the role that the landlord class did in post-medieval
times.
Marx's View of the Historical Destiny of Capitalism: to Free Economies from Feudalism
The industrial capitalism that Marx described in Volume I of Capital is being dismantled. He saw the historical destiny
of capitalism to be to free economies from the legacy of feudalism: a hereditary warlord class imposing tributary land rent, and
usurious banking. He thought that as industrial capitalism evolved toward more enlightened management, and indeed toward socialism,
it would replace predatory "usurious" finance, cutting away the economically and socially unnecessary rentier income, land
rent and financial interest and related fees for unproductive credit. Adam Smith, David Ricardo, John Stuart Mill, Joseph Proudhon
and their fellow classical economists had analyzed these phenomena, and Marx summarized their discussion in Volumes II and III of
Capital and his parallel Theories of Surplus Value dealing with economic rent and the mathematics of compound interest,
which causes debt to grow exponentially at a higher rate than the rest of the economy.
However, Marx devoted Volume I of Capital to industrial capitalism's most obvious characteristic: the drive to make profits
by investing in means of production to employ wage labor to produce goods and services to sell at a markup over what labor was paid.
Analyzing surplus value by adjusting profit rates to take account of outlays for plant, equipment and materials (the "organic composition
of capital"), Marx described a circular flow in which capitalist employers pay wages to their workers and invest their profits in
plant and equipment with the surplus not paid to employees.
Finance capitalism has eroded this core circulation between labor and industrial capital. Much of the midwestern United States
has been turning into a rust belt. Instead of the financial sector evolving to fund capital investment in manufacturing, industry
is being financialized. Making economic gains financially, primarily by debt leverage, far outstrips making profits by hiring employees
to produce goods and services.
Capitalism's Alliance of Banks with Industry to Promote Democratic Political Reform
The capitalism of Marx's day still contained many survivals from feudalism, most notably a hereditary landlord class living off
the land rents, most of which were spent unproductively on servants and luxuries, not to make a profit. These rents had originated
in a tax. Twenty years after the Norman Conquest, William the Conquer had ordered compilation of the Domesday Book in 1086 to calculate
the yield that could be extracted as taxes from the English land that he and his companions had seized. As a result of King John's
overbearing fiscal demands, the Revolt of the Barons (1215-17) and their Magna Carta enabled the leading warlords to obtain much
of this rent for themselves. Marx explained that industrial capitalism was politically radical in seeking to free itself from the
burden of having to support this privileged landlord class, receiving income with no basis in cost value or enterprise of its own.
Industrialists sought to win markets by cutting costs below those of their competitors. That aim required freeing the entire economy
from the "faux frais" of production, socially unnecessary charges built into the cost of living and doing business. Classical economic
rent was defined as the excess of price above intrinsic cost-value, the latter being ultimately reducible to labor costs. Productive
labor was defined as that employed to create a profit, in contrast to the servants and retainers (coachmen, butlers, cooks, et
al .) on whom landlords spent much of their rent.
The paradigmatic form of economic rent was the ground rent paid to Europe's hereditary aristocracy. As John Stuart Mill explained,
landlords reaped rents (and rising land prices) "in their sleep." Ricardo had pointed out (in Chapter 2 of his 1817 Principles
of Political Economy and Taxation ) a kindred form of differential rent in natural-resource rent stemming from the ability of
mines with high-quality orebodies to sell their lower-cost mineral output at prices set by high-cost mines. Finally, there was monopoly
rent paid to owners at choke points in the economy where they could extract rents without a basis in any cost outlay. Such rents
logically included financial interest, fees and penalties.
Marx saw the capitalist ideal as freeing economies from the landlord class that controlled the House of Lords in Britain, and
similar upper houses of government in other countries. That aim required political reform of Parliament in Britain, ultimately to
replace the House of Lords with the Commons, so as to prevent the landlords from protecting their special interests at the expense
of Britain's industrial economy. The first great battle in this fight against the landed interest was won in 1846 with repeal of
the Corn Laws. The fight to limit landlord power over government culminated in the constitutional crisis of 1909-10, when the Lords
rejected the land tax imposed by the Commons. The crisis was resolved by a ruling that the Lords never again could reject a revenue
bill passed by the House of Commons.
The Banking Sector Lobbies Against the Real Estate Sector, 1815-1846
It may seem ironic today that Britain's banking sector was whole-heartedly behind the first great fight to minimize land-rent.
That alliance occurred after the Napoleonic Wars ended in 1815, which ended the French blockage against British seaborne trade and
re-opened the British market to lower-priced grain imports. British landlords demanded tariff protection under the Corn Laws – to
raise the price of food, so as to increase the revenue and hence the capitalized rental value of their landholdings – but that has
rendered the economy high-cost. A successful capitalist economy would have to minimize these costs in order to win foreign markets
and indeed, to defend its own home market. The classical idea of a free market was one free from economic rent – from rentier
income in the form of land rent.
This rent – a quasi-tax paid to the heirs of the warlord bands that had conquered Britain in 1066, and the similar Viking bands
that had conquered other European realms – threatened to minimize foreign trade. That was a threat to Europe's banking classes, whose
major market was the funding of commerce by bills of exchange. The banking class arose as Europe's economy was revived by the vast
looting of monetary bullion from Constantinople by the Crusaders. Bankers were permitted a loophole to avoid Christianity's banning
of the charging of interest, by taking their return in the form of agio , a fee for transferring money from one currency to
another, including from one country to another.
Even domestic credit could use the loophole of "dry exchange," charging agio on domestic transactions cloaked as a foreign-currency
transfer, much as modern corporations use "offshore banking centers" today to pretend that they earn their income in tax-avoidance
countries that do not charge an income tax.
If Britain was to become the industrial workshop of the world, it would prove highly beneficial to Ricardo's banking class. (He
was its Parliamentary spokesman; today we would say lobbyist.) Britain would enjoy an international division of labor in which it
exported manufactures and imported food and raw materials from other countries specializing in primary commodities and depending
on Britain for their industrial products. But for this to happen, Britain needed a low price of labor. That meant low food costs,
which at that time were the largest items in the family budgets of wage labor. And that in turn required ending the power of the
landlord class to protect its "free lunch" of land rent, and all recipients of such "unearned income."
It is hard today to imagine industrialists and bankers hand in hand promoting democratic reform against the aristocracy. But that
alliance was needed in the early 19 th century. Of course, democratic reform at that time extended only to the extent
of unseating the landlord class, not protecting the interest of labor. The hollowness of the industrial and banking class's democratic
rhetoric became apparent in Europe's 1848 revolutions, where the vested interests ganged up against extending democracy to the population
at large, once the latter had helped end landlord protection of its rents.
Of course, it was socialists who picked up the political fight after 1848. Marx later reminded a correspondent that the first
plank of the Communist Manifesto was to socialize land rent, but poked fun at the "free market" rent critics who refused to recognize
that rentier-like exploitation existed in the industrial employment of wage labor. Just as landlords obtained land rent in excess
of the cost of producing their crops (or renting out housing), so employers obtained profits by selling the products of wage-labor
at a markup. To Marx, that made industrialists part of the rentier class in principle, although the overall economic system
of industrial capitalism was much different from that of post-feudal rentiers, landlords and bankers.
The Alliance of Banking with Real Estate and Other Rent-Seeking Sectors
With this background of how industrial capitalism was evolving in Marx's day, we can see how overly optimistic he was regarding
the drive by industrialists to strip away all unnecessary costs of production – all charges that added to price without adding to
value. In that sense he was fully in tune with the classical concept of free markets, as markets free from land rent and other
forms of rentier income.
Today's mainstream economics has reversed this concept. In an Orwellian doublethink twist, the vested interests today define a
free market as one "free" for the proliferation of various forms of land rent, even to the point of giving special tax advantages
to absentee real estate investment, the oil and mining industries (natural-resource rent), and most of all to high finance (the accounting
fiction of "carried interest," an obscure term for short-term arbitrage speculation).
Today's world has indeed freed economies from the burden of hereditary ground rent. Almost two-thirds of American families own
their own homes (although the rate of homeownership has been falling steadily since the Great Obama Evictions that were a byproduct
of the junk-mortgage crisis and Obama Bank Bailouts of 2009-16, which lowered homeowner rates from over 68% to 62%). In Europe, home
ownership rates have reached 80% in Scandinavia, and high rates characterize the entire continent. Home ownership – and also the
opportunity to purchase commercial real estate – has indeed become democratized.
But it has been democratized on credit. That is the only way for wage-earners to obtain housing, because otherwise they would
have to spend their entire working life saving enough to buy a home. After World War II ended in 1945, banks provided the credit
to purchase homes (and for speculators to buy commercial properties), by providing mortgage credit to be paid off over the course
of 30 years, the likely working life of the young home buyer.
Real estate is by far the banking sector's largest market. Mortgage lending accounts for about 80 percent of U.S. and British
bank credit. It played only a minor role back in 1815, when banks focused on financing commerce and international trade. Today we
can speak of the Finance, Insurance and Real Estate (FIRE) sector as the economy's dominant rentier sector. This alliance
of banking with real estate has led banks to become the major lobbyists protecting real estate owners by opposing the land tax that
seemed to be the wave of the future in 1848 in the face of rising advocacy to tax away the land's entire price gains and rent, to
make land the tax base as Adam Smith had urged, instead of taxing labor and consumers or profits. Indeed, when the U.S. income tax
began to be levied in 1914, it fell only on the wealthiest One Percent of Americans, whose taxable income consisted almost entirely
of property and financial claims.
The past century has reversed that tax philosophy. On a national level, real estate has paid almost zero income tax since World
War II, thanks to two giveaways. The first is "fictitious depreciation," sometimes called over-depreciation. Landlords can pretend
that their buildings are losing value by claiming that they are wearing out at fictitiously high rates. (That is why Donald Trump
has said that he loves depreciation.) But by far the largest giveaway is that interest payments are tax deductible. Real estate is
taxed locally, to be sure, but typically at only 1% of assessed valuation, which is less than 7 to 10 percent of the actual land
rent.[1]
The basic reason why banks support tax favoritism for landlords is that whatever the tax collector relinquishes is available to
be paid as interest. Mortgage bankers end up with the vast majority of land rent in the United States. When a property is put up
for sale and homeowners bid against each other to buy it, the equilibrium point is where the winner is willing to pay the full rental
value to the banker to obtain a mortgage. Commercial investors also are willing to pay the entire rental income to obtain a mortgage,
because they are after the "capital" gain – that is, the rise in the land's price.
The policy position of the so-called Ricardian socialists in Britain and their counterparts in France (Proudhon, et al
.) was for the state to collect the land's economic rent as its major source of revenue. But today's "capital" gains occur primarily
in real estate and finance, and are virtually tax-free for landlords. Owners pay no capital-gains tax as real estate prices rise,
or even upon sale if they use their gains to buy another property. And when landlords die, all tax liability is wiped out.
The oil and mining industries likewise are notoriously exempt from income taxation on their natural-resource rents. For a long
time the depletion allowance allowed them tax credit for the oil that was sold off, enabling them to buy new oil-producing properties
(or whatever they wanted) with their supposed asset loss, defined as the value to recover whatever they had emptied out. There was
no real loss, of course. Oil and minerals are provided by nature.
These sectors also make themselves tax exempt on their foreign profits and rents by using "flags of convenience" registered in
offshore banking centers. This ploy enables them to claim to make all their profits in Panama, Liberia or other countries that do
not charge an income tax or even have a currency of their own, but use the U.S. dollar so as to save American companies from any
foreign-exchange risk.
In oil and mining, as with real estate, the banking system has become symbiotic with rent recipients, including companies extracting
monopoly rent. Already in the late 19 th century the banking and insurance sector was recognized as "the mother of trusts,"
financing their creation to extract monopoly rents over and above normal profit rates.
These changes have made rent extraction much more remunerative than industrial profit-seeking – just the opposite of what classical
economists urged and expected to be the most likely trajectory of capitalism. Marx expected the logic of industrial capitalism to
free society from its rentier legacy and to create public infrastructure investment to lower the economy-wide cost of production.
By minimizing labor's expenses that employers had to cover, this public investment would put in place the organizational network
that in due course (sometimes needing a revolution, to be sure) would become a socialist economy.
Although banking developed ostensibly to serve foreign trade by the industrial nations, it became a force-in-itself undermining
industrial capitalism. In Marxist terms, instead of financing the M-C-M' circulation (money invested in capital to produce a profit
and hence yet more money), high finance has abbreviated the process to M-M', making money purely from money and credit, without tangible
capital investment.
The Rentier Squeeze on Budgets: Debt Deflation as a Byproduct of Asset-Price Inflation
Democratization of home ownership meant that housing no longer was owned primarily by absentee owners extracting rent, but by
owner-occupants. As home ownership spread, new buyers came to support the rentier drives to block land taxation – not realizing
that rent that was not taxed would be paid to the banks as interest to absorb the rent-of-location hitherto paid to absentee landlords.
Real estate has risen in price as a result of debt leveraging. The process makes investors, speculators and their bankers wealthy,
but raises the cost of housing (and commercial property) for new buyers, who are obliged to take on more debt in order to obtain
secure housing. That cost is also passed on to renters. And employers ultimately are obliged to pay their labor force enough to pay
these financialized housing costs.
Debt deflation has become the distinguishing feature of today's economies from North America to Europe, imposing austerity as
debt service absorbs a rising share of personal and corporate income, leaving less to spend on goods and services. The economy's
indebted 90 percent find themselves obliged to pay more and more interest and financial fees. The corporate sector, and now also
the state and local government sector, likewise are obliged to pay a rising share of their revenue to creditors.
Investors are willing to pay most of their rental income as interest to the banking sector because they hope to sell their property
at some point for a "capital" gain. Modern finance capitalism focuses on "total returns," defined as current income plus asset-price
gains, above all for land and real estate. Inasmuch as a home or other property is worth however much banks will lend against it,
wealth is created primarily by financial means, by banks lending a rising proportion of the value of assets pledged as collateral.
Chart 10.4: annual changes in GDP and the major components of asset price gains
(nominal, $bn)
The fact that asset-price gains are largely debt-financed explains why economic growth is slowing in the United States and Europe,
even as stock market and real estate prices are inflated on credit. The result is a debt-leveraged economy.
Changes in the value of the economy's land from year to year far exceeds the change in GDP. Wealth is obtained primarily by asset-price
("capital") gains in the valuation of land and real estate, stocks, bonds and creditor loans ("virtual wealth"), not so much by saving
income (wages, profits and rents).The magnitude of these asset-price gains tends to dwarf profits, rental income and wages.
The tendency has been to imagine that rising prices for real estate, stocks and bonds has been making homeowners richer. But this
price rise is fueled by bank credit. A home or other property is worth however much a bank will lend against it – and banks have
lent a larger and larger proportion of the home's value since 1945. For U.S. real estate as a whole, debt has come to exceed equity
for more than a decade now. Rising real estate prices have made banks and speculators rich, but have left homeowners and commercial
real estate debt strapped.
The economy as a whole has suffered. Debt-fueled housing costs in the United States are so high that if all Americans were given
their physical consumer goods for free – their food, clothing and so forth – they still could not compete with workers in China or
most other countries. That is a major reason why the U.S. economy is de-industrializing. So this policy of "creating wealth" by financialization
undercuts the logic of industrial capitalism.
Finance Capital's Fight to Privatize and Monopolize Public Infrastructure
Another reason for deindustrialization is the rising cost of living stemming from conversion of public infrastructure into privatized
monopolies. As the United States and Germany overtook British industrial capitalism, a major key to industrial advantage was recognized
to be public investment in roads, railroads and other transportation, education, public health, communications and other basic infrastructure.
Simon Patten, the first professor of economics at America's first business school, the Wharton School at the University of Pennsylvania,
defined public infrastructure as a "fourth factor of production," in addition to labor, capital and land. But unlike capital, Patten
explained, its aim was not to make a profit. It was to minimize the cost of living and doing business by providing low-price basic
services to make the private sector more competitive.
Unlike the military levies that burdened taxpayers in pre-modern economies, "in an industrial society the object of taxation is
to increase industrial prosperity"by creating infrastructure in the form of canals and railroads, a postal service and public education.
This infrastructure was a "fourth" factor of production.Taxes would be "burdenless," Patten explained, to the extent that they were
invested in public internal improvements, headed by transportation such as the Erie Canal.[2]
The advantage of this public investment is tolower costs instead of letting privatizers impose monopoly rents in the form of access
charges to basic infrastructure. Governments can price the services of these natural monopolies (including credit creation, as we
are seeing today) at cost or offer them freely, helping labor and its employers undersell industrialists in countries lacking such
public enterprise.
In the cities, Patten explained, public transport raises property prices (and hence economic rent) in the outlying periphery,
as the Erie Canal had benefited western farms competing with upstate New York farmers.That principle is evident in today's suburban
neighborhoods relative to city centers.London's Tube extension along the Jubilee Line, and New York City's Second Avenue Subway,
showed that underground and bus transport can be financed publicly by taxing the higher rental value created for sites along such
routes. Paying for capital investment out of such tax levies can provide transportation at subsidized prices, minimizing the economy's
cost structure accordingly. What Joseph Stiglitz popularized as the "Henry George Law" thus more correctly should be known as "Patten's
Law" of burdenless taxation.[3]
Under a regime of "burdenless taxation" the return on public investment does not take the form of profit but aims at lowering
the economy's overall price structure to "promote general prosperity." This means that governments should operate natural monopolies
directly, or at least regulate them. "Parks, sewers and schools improve the health and intelligence of all classes of producers,
and thus enable them to produce more cheaply, and to compete more successfully in other markets."Patten concluded: "If the courts,
post office, parks, gas and water works, street, river and harbor improvements, and other public works do not increase the prosperity
of society they should not be conducted by the State." But this prosperity for the overall economy was not obtained by treating public
enterprises as what today is called a profit center.[4]
In one sense, this can be called "privatizing the profits and socializing the losses." Advocating a mixed economy along these
lines is part of the logic of industrial capitalism seeking to minimize private-sector production and employment costs in order to
maximize profits. Basic social infrastructure is a subsidy to be supplied by the state.
Britain's Conservative Prime Minister Benjamin Disraeli (1874-80) reflected this principle: "The health of the people is really
the foundation upon which all their happiness and all their powers as a state depend."[5]He sponsored the Public Health Act of 1875,
followed by the Sale of Food and Drugs Act and, the next year, the Education Act. The government would provide these services, not
private employers or private monopoly-seekers.
For a century, public investment helped the United States pursue an Economy of High Wages policy, providing education, food and
health standards to make its labor more productive and thus able to undersell low-wage "pauper" labor. The aim wasto create a positive
feedback between rising wages and increasing labor productivity.
That is in sharp contrast to today's business plan of finance capitalism – to cut wages, and also cut back long-term capital investment,
research and development while privatizing public infrastructure. The neoliberal onslaught by Ronald Reagan in the United States
and Margaret Thatcher in Britain in the 1980s was backed by IMF demands that debtor economies balance their budgets by selling off
such public enterprises and cutting back social spending. Infrastructure services were privatized as natural monopolies, sharply
raising the cost structure of such economies, but creating enormous financial underwriting commissions and stock-market gains for
Wall Street and London.
Privatizing hitherto public monopolies has become one of the most lucrative ways to gain wealth financially. But privatized health
care and medical insurance is paid for by labor and its employers, not by the government as in industrial capitalism. And in the
face of the privatized educational system's rising cost, access to middle-class employment has been financed by student debt. These
privatizations have not helped economies become more affluent or competitive. On an economy-wide level this business plan is a race
to the bottom, but one that benefits financial wealth at the top.
Finance Capitalism Impoverishes Economies While Increasing Their Cost Structure
Classical economic rent is defined as the excess of price over intrinsic cost-value. Capitalizing this rent – whether land rent
or monopoly rent from the privatization described above – into bonds, stocks and bank loans creates "virtual wealth." Finance capitalism's
exponential credit creation increases "virtual" wealth – financial securities and property claims – by managing these securities
and claims in a way that has made them worth more than tangible real wealth.
The major way to gain fortunes is to get asset-price gains ("capital gains") on stocks, bonds and real estate.However, this exponentially
growing debt-leveraged financial overhead polarizes the economy in ways that concentrates ownership of wealth in the hands of creditors,
and owners of rental real estate, stocks and bonds, draining the "real" economy to pay the FIRE sector.
Post-classical economics depicts privatized infrastructure, natural resource development and banking as being part of the industrial
economy, not superimposed on it by a rent-seeking class. But the dynamic of finance-capitalist economies is not for wealth to be
gained mainly by investing in industrial means of production and saving up profits or wages, but by capital gains made primarily
from rent-seeking. These gains are not "capital" as classically understood. They are "finance-capital gains," because they result
from asset-price inflation fueled by debt leveraging.
By inflating its housing prices and a stock market bubble on credit, America's debt leveraging, along with its financializing
and privatizing basic infrastructure, has priced it out of world markets. China and other non-financialized countries have avoided
high health insurance costs, education costs and other services freely or at a low cost as a public utility. Public health and medical
care costs much less abroad, but is attacked in the United States by neoliberals as "socialized medicine," as if financialized health
care would make the U.S. economy more efficient and competitive. Transportation likewise has been financialized and run for profit,
not to lower the cost of living and doing business.
One must conclude that America has chosen to no longer industrialize, but to finance its economy by economic rent – monopoly rent,
from information technology, banking and speculation, and leave industry, research and development to other countries. Even if China
and other Asian countries didn't exist, there is no way that America can regain its export markets or even its internal market with
its current debt overhead and its privatized and financialized education, health care, transportation and other basic infrastructure.
The underlying problem is not competition from China, but neoliberal financialization. Finance-capitalism is not industrial capitalism.
It is a lapse back into debt peonage and a rentier neo-feudalism. Bankers play the role today that landlords played up through
the 19 th century, making fortunes without corresponding value, by capital gains for real estate, stocks and bonds on
credit, by debt leveraging whose carrying charges increase the economy's cost of living and doing business.
Today's New Cold War is a Fight by Finance Capitalism Against Industrial Capitalism
Today's world is being fractured by an economic warfare over what kind of economic system it will have. Industrial capitalism
is losing the fight to finance capitalism, which is turning to be its antithesis just as industrial capitalism was the antithesis
to post-feudal landlordship and predatory banking houses.
In this respect today's New Cold War is a conflict of economic systems. As such, it is being fought against the dynamic of U.S.
industrial capitalism as well as that of China and other economies. Hence, the struggle also is domestic within the United States
and Europe, as well as confrontational against China and Russia, Iran, Cuba, Venezuela and their moves to de-dollarize their economies
and reject the Washington Consensus and its Dollar Diplomacy. It is a fight by U.S.-centered finance capital to promote neoliberal
doctrine giving special tax privileges to rentier income, untaxing land rent, natural resource rent, monopoly rent and the financial
sector. This aim includes privatizing and financializing basic infrastructure, maximizing its extraction of economic rent instead
of minimizing the cost of living and doing business.
The result is a war to change the character of capitalism as well as that of social democracy. The British Labour Party, European
Social Democrats and the U.S. Democratic Party all have jumped on the neoliberal bandwagon. They are all complicit in the austerity
that has spread from the Mediterranean to America's Midwestern rust belt.
Finance capitalism exploits labor, but via a rentier sector, which also ends up cannibalizing industrial capital. This
drive has become internationalized into a fight against nations that restrict the predatory dynamics of finance capital seeking to
privatize and dismantle government regulatory power. The New Cold War is not merely a war being waged by finance capitalism against
socialism and public ownership of the means of production. In view of the inherent dynamics of industrial capitalism requiring strong
state regulatory and taxing power to check the intrusiveness of finance capital, this post-industrial global conflict is between
socialism evolving out of industrial capitalism, and fascism, defined as a rentier reaction to mobilize government to roll
back social democracy and restore control to the rentier financial and monopoly classes.
The old Cold War was a fight against "Communism." In addition to freeing itself from land rent, interest charges and privately
appropriated industrial profits, socialism favors labor's fight for better wages and working conditions, better public investment
in schools, health care and other social welfare support, better job security, and unemployment insurance. All these reforms would
cut into the profits of employers. Lower profits mean lower stock-market prices, and hence fewer finance-capital gains.
The aim of finance capitalism is not to become a more productive economy by producing goods and selling them at a lower cost than
competitors. What might appear at first sight to be international economic rivalry and jealousy between the United States and China
is thus best seen as a fight between economic systems: that of finance capitalism and that of civilization trying to free itself
from rentier privileges and submission to creditors, with a more social philosophy of government empowered to check private
interests when they act selfishly and injure society at large.
The enemy in this New Cold War is not merely socialist government but government itself, except to the extent that it can be brought
under the control of high finance to promote the neoliberal rentier agenda. This reverses the democratic political revolution
of the 19 th century that replaced the House of Lords and other upper houses controlled by the hereditary aristocracy
with more representative legislators. The aim is to create a corporate state, replacing elected houses of government by central banks
– the U.S. Federal Reserve and the European Central Bank, along with external pressure from the International Monetary Fund and World
Bank.
The result is a "deep state" supporting a cosmopolitan financial oligarchy. That is the definition of fascism, reversing democratic
government to restore control to the rentier financial and monopoly classes. The beneficiary is the corporate sector, not
labor, whose resentment is turned against foreigners and against designated enemies within.
Lacking foreign affluence, the U.S. corporate state promotes employment by a military buildup and public infrastructure spending,
most of which is turned over to insiders to privatize into rent-seeking monopolies and sinecures. In the United States, the military
is being privatized for fighting abroad ( e.g ., Blackwater USA/Academi), and jails are being turned into profit centers using
inexpensive convict labor.
What is ironic is that although China is seeking to decouple from Western finance capitalism, it actually has been doing what
the United States did in its industrial takeoff in the late 19 th and early 20 th century. As a socialist economy,
China has aimed at what industrial capitalism was expected to achieve: freeing its economy from rentier income (landlordship
and usurious banking), largely by a progressive income tax policy falling mainly on rentier income.
Above all, China has kept banking in the public domain. Keeping money and credit creation public instead of privatizing it is
the most important step to keep down the cost of living and business. China has been able to avoid a debt crisis by forgiving debts
instead of closing down indebted enterprises deemed to be in the public interest. In these respects it is socialist China that is
achieving the fate that industrial capitalism initially was expected to achieve in the West.
Summary: Finance Capital as Rent-Seeking
The transformation of academic economic theory under today's finance capitalism has reversed the progressive and indeed radical
thrust of the classical political economy that evolved into Marxism. Post-classical theory depicts the financial and other rentier
sectors as an intrinsic part of the industrial economy. Today's national income and GDP accounting formats are compiled in keeping
with this anti-classical reaction depicting the FIRE sector and its allied rent-seeking sectors as an addition to national income,
not a subtrahend. Interest, rents and monopoly prices all are counted as "earnings" – as if all income is earned as intrinsic parts
of industrial capitalism, not predatory extraction as overhead property and financial claims.
This is the opposite of classical economics. Finance capitalism is a drive to avoid what Marx and indeed the majority of his contemporaries
expected: that industrial capitalism would evolve toward socialism, peacefully or otherwise.
Some Final Observations: Financial Takeover of Industry, Government and Ideology
Almost every economy is a mixed economy – public and private, financial, industrial and rent-seeking. Within these mixed economies
the financial dynamics – debt growing by compound interest, attaching itself primarily to rent-extracting privileges, and therefore
protecting them ideologically, politically and academically. These dynamics are different from those of industrial capitalism, and
indeed undercut the industrial economy by diverting income from it to pay the financial sector and its rentier clients.
One expression of this inherent antagonism is the time frame. Industrial capitalism requires long-term planning to develop a product,
make a marketing plan, and undertake research and development to keep undercutting competitors. The basic dynamic is M-C-M': capital
(money, M) is invested in building factories and other means of production, and employing labor to sell its products (commodities,
C) at a profit (M').
Finance capitalism abbreviates this to a M-M', making money purely financially, by charging interest and making capital gains.
The financial mode of "wealth creation" is measured by the valuations of real estate, stocks and bonds. This valuation was long based
on capitalizing their flow of revenue (rents or profits) at the going rate of interest, but is now based almost entirely on capital
gains as the major source of "total returns."
In taking over industrial companies, financial managers focus on the short run, because their salary and bonuses are based on
current year's performance. The "performance" in question is stock market performance. Stock prices have largely become independent
from sales volume and profits, now that they are enhanced by corporations typically paying out some 92 percent of their revenue in
dividends and stock buybacks.[6]
Even more destructively, private capital has created a new process: M-debt-M'. One recent paper calculates that: "Over 40% of
firms that make payouts also raise capital during the same year, resulting in 31% of aggregate share repurchases and dividends being
externally financed, primarily with debt."[7]This has made the corporate sector financially fragile, above all the airline industry
in the wake of the COVID-19 crises.
Private equity has played a big role in increasing corporate leverage, both through their own actions and by disinhibiting large
public companies in the use of debt. As Eileen Appelbaum and Rosemary Batt explained, the large buyout firms, following the playbook
developed in the 1980s, produce their returns from financial engineering and cost cutting (smaller size deals target "growthier"
companies, but while those private equity firms assert that they add value, it may just be that they are skilled at identifying promising
companies and riding a performance wave). Contrary to their marketing, private equity fee structures mean they make money even when
they bankrupt firms. And they have become so powerful that it's hard to get political support to stop them when they hurt large numbers
of citizens though exploitative practices like balance ("surprise")billing. [8]
The classic description of this looting-for-profit practice process is the 1993 paper by George Akerloff and Paul Romer describing
how "firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success).
Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves
more than their firms are worth and then default on their debt obligations."[9]
The fact that "paper gains" from stock prices can be wiped out when financial storms occur, makes financial capitalism less resilient
than the industrial base of tangible capital investment that remains in place. The United States has painted its economy into a corner
by de-industrializing, replacing tangible capital formation with "virtual wealth," that is, financial claims on income and
tangible assets. Since 2009, and especially since the Covid crisis of 2020, its economy has been suffering through what is called
a K-shaped "recovery." The stock and bond markets have reached all-time highs to benefit the wealthiest families, but the "real"
economy of production and consumption, GDP and employment, has declined for the non- rentier sector, that is, the economy
at large.
How do we explain this disparity, if not by recognizing that different dynamics and laws of motion are at work? Gains in wealth
increasingly take the form of a rising valuation of rentier financial and property claims on the real economy's assets
and income, headed by rent-extraction rights, not means of production.
Finance capitalism of this sort can survive only by drawing in exponentially increasing gains from outside the system., either
by central bank money creation (Quantitative Easing) or by financializing foreign economies, privatizing them to replace low-priced
public infrastructure services with rent-seeking monopolies issuing bonds and stocks, largely financed by dollar-based credit seeking
capital gains. The problem with this financial imperialism is that it makes client host economies as high-cost as their U.S. and
other sponsors in the world's financial centers.
All economic systems seek to internationalize themselves and extend their rule throughout the world. Today's revived Cold War
should be understood as a fight between what kind of economic system the world will have. Finance capitalism is fighting against
nations that restrict its intrusive dynamics and sponsorship of privatization and dismantling of public regulatory power. Unlike
industrial capitalism, the rentier aim is not to become a more productive economy by producing goods and selling them at a
lower cost than competitors. Finance capitalism's dynamics are globalist, seeking to use international organizations (the IMF, NATO,
the World Bank and U.S.-designed trade and investment sanctions.) to overrule national governments that are not controlled by the
rentier classes. The aim is to make all economies into finance-capitalist layers of hereditary privilege, imposing austerity
anti-labor policies to squeeze a dollarized surplus.
Industrial capitalism's resistance to this international pressure is necessarily nationalist, because it needs state subsidy and
laws to tax and regulate the FIRE sector. But it is losing the fight to finance capitalism, which is turning to be its nemesis just
as industrial capitalism was the nemesis of post-feudal landlordship and predatory banking. Industrial capitalism requires state
subsidy and infrastructure investment, along with regulatory and taxing power to check the incursion of finance capital. The resulting
global conflict is between socialism (the natural evolution of industrial capitalism) and a pro- rentier fascism, a state-finance-capitalist
reaction against socialism's mobilization of state power to roll back the post-feudal rentier interests.
Underlying today's rivalry felt by the United States against China is thus a clash of economic systems. The real conflict is not
so much "America vs. China," but finance capitalism vs. industrial "state" capitalism/socialism. At stake is whether "the state"
will support financialization benefiting the rentier class or build up the industrial economy and overall prosperity.
Apart from their time frame, the other major contrast between finance capitalism and industrial capitalism is the role of government.
Industrial capitalism wants government to help "socialize the costs" by subsidizing infrastructure services. By lowering the cost
of living (and hence the minimum wage), this leaves more profits to be privatized. Finance capitalism wants to pry these public utilities
away from the public domain and make them privatized rent-yielding assets. That raises the economy's cost structure – and thus is
self-defeating from the vantage point of international competition among industrialists.
That is why the lowest-cost and least financialized economies have overtaken the United States, headed by China. The way that
Asia, Europe and the United States have reacted to the covid-19 crisis highlights the contrast. The pandemic has forced an estimated
70 percent of local neighborhood restaurants to close in the face of major rent and debt arrears. Renters, unemployed homeowners
and commercial real estate investors, as well as numerous consumer sectors are also facing evictions and homelessness, insolvency
and foreclosure or distress sales as economic activity plunges.
Less widely noted is how the pandemic has led the Federal Reserve to subsidize the polarization and monopolization of the U.S.
economy by making credit available at only a fraction of 1 percent to banks, private equity funds and the nation's largest corporations,
helping them gobble up small and medium-sized businesses in distress.
For a decade after the Obama bank-fraud bailout in 2009, the Fed described its purpose as being to keep the banking system liquid
and avoid damage to its bondholders, stockholders and large depositors. The Fed infused the commercial banking system with enough
lending power to support stock and bond prices. Liquidity was injected into the banking system by buying government securities, as
was normal. But after the covid virus hit in March 2020, the Fed began to buy corporate debt for the first time, including junk bonds.
Former FDIC head Sheila Bair and Treasury economist Lawrence Goodman note, the Federal Reserve bought the bonds "of 'fallen angels'
who sank to junk status during the pandemic" as a result of having indulged in over-leveraged borrowing to pay out dividends and
buy their own shares.[10]
Congress considered limiting companies from using the proceeds of the bonds being bought "for outsize executive compensation or
shareholder distributions" at the time it approved the facilities. but made no attempt to deter companies from doing this. Noting
that "Sysco used the money to pay dividends to its shareholders while laying off a third of its workforce a House committee report
found that companies benefiting from the facilities laid off more than one million workers from March to September." Bair and Goodman
conclude that "there's little evidence that the Fed's corporate debt buy-up benefited society." Just the opposite: The Fed's actions
"created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized
credit."
The result, they accuse, is transforming the economy's political shape. "The serial market bailouts by monetary authorities –
first the banking system in 2008, and now the entire business world amid the pandemic" has been "a greater threat [to destroy capitalism]
than Bernie Sanders." The Fed's "super-low interest rates have favored the equity of large companies over their smaller counterparts,"
concentrating control of the economy in the hands of firms with the largest access to such credit.
Smaller companies are "the primary source of job creation and innovation," but do not have access to the almost free credit enjoyed
by banks and their largest customers. As a result, the financial sector remains the mother of trusts, concentrating financial and
corporate wealth by financing a gobbling-up of smaller companies as giant companies to monopolize the debt and bailout market.
The result of this financialized "big fish eat little fish" concentration is a modern-day version of fascism's Corporate State.
Radhika Desai calls it "creditocracy," rule by the institutions in control of credit.[11]It is an economic system in which central
banks take over economic policy from elected political bodies and the Treasury, thereby completing the process of privatizing economy-wide
control.
Give special tax favoritism to the finance, insurance and real estate (FIRE) sectors.
Minimize land rent and housing costs by taxing land rent and other rent-yielding assets, not capital or wages
Shift taxes off land-rent taxation to leave it available to pay as interest to mortgage bankers
Provide public infrastructure at low cost
Privatize infrastructure into monopolies to extract monopoly rent
Reform parliaments to block rent-seeking
Avoid military spending and wars that require running into foreign debt
Block democratic reform, by shifting control to non-elected officials
Use international organization (such as the IMF or NATO) to force neoliberal policy
Concentrate economic and social planning in the political capital.
Shift planning and resource allocation to the financial centers.
Concentrate monetary policy in the national treasury
Shift monetary policy to central banks, representing private commercial banking interests.
Bring prices in line with cost-value
Maximize opportunities for rent seeking via land ownership, credit and monopoly privileges
Banking should be industrialized to finance tangible capital investment
Banks lend against collateral, bidding up asset prices, especially for rent-yielding assets
Recycle corporate revenue is into capital investment in new means of production
Pay out revenue as dividends or use it for stock buybacks to increase stock price gains
The time frame is long-term to develop products and marketing plans: M-C-M'
The time frame is short-term, hit-and-run by financial speculation, M-M'.
Industrial engineering to raise productivity by research and development and new capital investment.
Financial engineering to raise asset prices – by stock buybacks and higher dividend payouts.
Focuses on long-term development of industrial capitalism as a broad economic system.
Short-term hit-and-run objectives, mainly by buying and selling assets.
Economy of High Wages, recognizing that well fed, well-educated labor with leisure is more productive than
low-priced "pauper" labor, and long-term employment
A race to the bottom, burning out employees and replacing them with new hires.
Mechanization of labor treats workers as easily replaceable and hence disposable.
M-C-M' Profits are made by investing in means of production and hiring labor to produce commodities to sell
at a higher price than what it costs to employ labor.
M-M' "Capital" gains made directly by asset-price inflation
Banking is industrialized, to provide credit mainly to invest in new capital formation. This increased credit
tends to bid up commodity prices and hence the living wage.
Increased bank credit to finance the bidding up of housing, stocks and bonds raises the cost of
housing and of buying pension income, leaving less to spend on goods and services.
Supports democracy to the extent that the lower house will back industrial capital in its fight against the
landlord class and other rentiers, whose revenue adds to prices without adding value.
Finance capital joins with "late" industrial capitalism to oppose pro-labor policies. It seeks
to take over government, and especially central banks, to support prices for stocks, bonds, real estate and packaged bank loans
gone bad and threatening banks with insolvency.
Industrial capitalism is inherently nationalistic, requiring government protection and subsidy of industry.
Finance capital is cosmopolitan, seeking to prevent capital controls and impose free trade and
libertarian anti-government policy.
Supports a mixed economy, with government paying for infrastructure to subsidize private industry. Government
works with industry and banking to create a long-term growth plan for prosperity.
Seeks to abolish government authority in all areas, so as to shift the center of planning to Wall
Street and other financial centers.
The aim is to dismantle protection of labor and industry together.
Banking and credit are industrialized.
Industry is financialized, with profits used mainly to increase stock prices via stock buyback
programs and dividend payouts, not new R&D or tangible investment.
Favor industry and labor.
Give special tax favoritism to the finance, insurance and real estate (FIRE) sectors.
__________
[1]I provide the charts in The Bubble and Beyond (Dresden: 2012), Chapters 7 and 8, and Killing the Host (Dresden:
2015).
[2]"The Theory of Dynamic Economics," Essays in Economic Theory ed. Rexford Guy Tugwell (New York: 1924), pp. 96 and 98,
originally in The Publications of the University of Pennsylvania , Political Economy and Public Law Series 3:2 (whole No.
11), 1892, p. 96. Europe's aristocratic governments developed their tax policy "at a time when the state was a mere military organization
for the defense of society from foreign foes, or to gratify national feelings by aggressive wars." Such states had a "passive" economic
development policy, and their tax philosophy was not based on economic efficiency. I provide the details in "Simon Patten on Public
Infrastructure and Economic Rent Capture," American Journal of Economics and Sociology 70 (October 2011), pp. 873-903.
[3]George advocated a land tax, but his opposition to socialism led him to reject the value and price concepts necessary to define
economic rent quantitatively. His defense of bankers and interest rendered his policy recommendations ineffective as he moved to
the libertarian right wing of the political spectrum, opposing government investment but merely taxing the rent taken by privatizers
– the reverse of what Patten and his pro-industrial school of economists were advocating, based on classical value and price theory.
[4]"The Theory of Dynamic Economics," p. 98.
[5]Speech of June 24, 1877. He used Latin and said " Sanitas, Sanitatum " and translated it as "Sanitation, all is sanitation."
It was a pun on a more famous aphorism, " Vanitas, vanitatum ," "Vanity, all is vanity."
[6]William Lazonick, "Profits Without Prosperity:Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off,"
Harvard Business Review , September 2014. And more recently, Lazonick and Jang-Sup Shin, Predatory Value Extraction: How the
Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored (Oxford: 2020).
[7]Joan Farre-Mensa, Roni Michaely, Martin Schmalz, "Financing Payouts,"
Ross School of Business Paper No. 1263
(December 1, 2020), quoted by Matt Stoller,"How to Get Rich Sabotaging Nuclear Weapons Facilities," BIG, January 3, 2021.
[9]George Akerloff and Paul Romer, "Looting: The Economic Underworld of Bankruptcy for Profit,"https://www.brookings.edu/wp-content/uploads/1993/06/1993b_bpea_akerlof_romer_hall_mankiw.pdf
[10]Sheila Bair and Lawrence Goodman, "Corporate Debt 'Relief' Is an Economic Dud," Wall Street Journal , January 7, 2021.
[11]Desai, Radhika. 2020.'The Fate of Capitalism Hangs in the Balance of International Power'. Canadian Dimension, 12 October.
https://canadiandimension.com/articles/view/the-fate-of-capitalism-hangs-in-the-balance-of-international-power . See also Geoffrey
Gardiner, Towards True Monetarism (Dulwich: 1993) and The Evolution of Creditary Structure and Controls (London: Palgrave,
2006) and the post-Keynesian group Gang of 8 popularized the term "creditary economics" in the 1990s.
I don't think I'm really on board with this strict separation between finance capital and industrial capital. Marx got a lot
right, but one of many things he got wrong was actually buying into the emancipatory potential of capitalism.
He mistakenly saw
the market and its logic as some sort of quasi-autonomous, internally functioning thing with scientific laws which governed its
motion (this is literal, hence he and Engels talking about "scientific socialism"). He missed that the capitalist marketplace
and money itself were always already political, neither of which have any independent existence from the institutions which create
them.
I believe we have seen a rise in "rentier" capitalism less because it is fundamentally different than industrial capital
and more because the rich and powerful long ago realized that there is no "free market" and that they could construct the market
legally and politically in precisely the way which allows them to maintain and expand their wealth and power.
Marx, for all his
polemics against capitalism was actually too wrapped up in its logic to see this part of it. He didn't really grasp that the supposed
laws of the marketplace could be bent or broken at will be the people with the means to do so (hence, "too big to fail"), thought
the laws of capitalism were something like laws of nature instead of pure fiat made by people.
That's the mistake. At some point the elite just realized that the "free market," far from threatening them was the most effective
way to maintain their control of society.
At least in Capital, I don't see this as Marx's mistake. It is not the dominance of Capital itself that he sees as potentially
emancipatory, but the actual increase in the ability to generate surplus that it creates, which could be deployed to other ends
if the system were surpassed. (And for Marx, it's "progressive" function was already firmly in the past.)
The absolute Hellscape created for the working class, the degradation of the environment, and other disasters he saw as baked
into the system. And this did not depend on whether industrial or finance capital predominated. He certainly would never have
deluded himself with the belief that "the euthanasia of the rentiers" would fix things. That was left to a later economist.
I think that Marx regarded the "laws" of capitalism as different from what you seem to be calling laws.
He was of course in no position to observe the ever-accelerating tinkering with the supposed laws of the system that we've
been witness to for many decades, but what he did see, and what he analyzed in the form of various proposals to eliminate the
"bad" effects of the system while retaining it's essential characteristics he saw as perhaps capable of altering the ways in which
crises manifested but not of avoiding the crises.
This isn't really adequately expressed, but I'm working from my little Lenovo touchscreen and am disinclined to do longer exposition
until I have a keyboard available.
At the end of the 19th C. with capitalism exploiting the environment like never before the reaction in the art world was to
romanticize nature. Dream-scapes of mystical nature. Followed soon by goofball tourism in model-Ts. The industrial revolution
was the economic singularity at the beginning of automation. It gave us the ability to accumulate wealth in a whirlwind. But it
lasted barely a century. At which point nature was no longer beautiful and mystical – it was completely trashed. So this went
hand in glove with a population explosion and capitalism because it required both. Which is now totally counterproductive. In
fact self-destructive. And instead of letting the whole thing implode, bringing essential resources and services to a screeching
halt, we are (apparently) financializing the economy.
M-C-M has become M-debt-M. At least this eliminates the ravaging of the
environment at ever accelerated consumption. What we need, I submit, is M – environment – M. We need to increase our national
and state legislatures by adding a new branch of lawmakers – scientists, now especially environmental scientists, but science
in all its branches. And give science full political authority, along with vested financial interests. Balance sheets can be manipulated;
money can be digitized; but the environment is the only thing that counts.
All this and not a word about the consequences for the world of 'productive' industrial capitalism. The need to produce so-called
goods endlessly and in increasing quantities is destroying the planet yet the author seems to regard it as something to which
a society should aspire. Capitalism itself, with its inherent drive for endless economic growth, is incompatible with a finite
planet. Even some capitalists realise this and suggest, hopelessly, that we must immediately and seriously look for ways to expand
beyond this planet. A piece elsewhere on this site today about Jeffrey Epstein labels him a 'child rapist' in a way that suggests
his activities promoting capitalism were more respectable. 'Capitalist' should carry the same stigma. Or is the extinction of
all complex life – as esteemed climate scientists are telling us we are headed for if we don't stop this growth obsession – a
less wicked end than a sex crime?
We could use more production of solar panels, wind turbines and electric transportation.
We could use an enriched working class with the wherewithal to replace their carbon sourced living standard with a green one.
This is a really good point. Just producing something doesn't produce a net gain for society. I once had this idea that someone
with a better background in economics than I have should write a long essay or a book about how the rise of advertising in the
1950s coincided with the need of industrial capitalists to create demand out of thin air for the products they were producing.
When the actual need for your products doesn't exist, we figured out how to manufacture demand as well. Up to that point, capitalism
had mostly been concerned with the supply side of production but the advent of marketing, advertising, and PR was all about managing
the demand/consumption side as well.
This is another way the rentier/industrial capitalist distinction breaks down. Both are beholden to the same interests.
There was a book called "from the wonderful folks who brought you pearl harbor", which (in a light hearted way) dealt with
madison ave (the series mad men was supposedly taken from this story line) and the creation of "consumers" . in the fifties
The real time version would be george seldes' works multiple books.. and he had a publication called "in fact" which dealt with
the "association of national manufacturers" and how they were controlling the media of the day though advertising.
He was doing stories about the dangers of tobacco and the industry killing of all stories dealing with negative facts about tobacco,
back in the forties and fifties..
A great book was "witness to a century"
It blows my mind that just about everything going on today, has been cooking for about a century and we act like us "figuring
it out" is a big deal . we must be one smart species.
This theme gets a significant amount of space in Baran and Sweezy's "Monopoly Capital (1966), in the chapter on the Sales Effort
in particular, but also scattered elsewhere throughout the book.
au contraire. I say it's described as part and parcel of finance capitalism. The extractive industries create a surplus of
material that must then be sold (analogous is the need to have a war in order to create the need for more bullets), and the extractors
get a massive land rent bonus as the resource is given to them free of charge, and they also benefit from tax advantages and land
appreciation facilitated by the aforementioned finance capitalism . How much of the bezos fortune has been acquired through selling
counterfeit goods touted by fake reviews on the product quality? More junk, sold faster. delivered by an army of gig workers driving
individual polluting cars and the notion that an electric or hybrid bus should be replaced by an army of uber drivers, until they
don;)t need them anymore
From the above "The oil and mining industries likewise are notoriously exempt from income taxation on their natural-resource
rents. For a long time the depletion allowance allowed them tax credit for the oil that was sold off, enabling them to buy new
oil-producing properties (or whatever they wanted) with their supposed asset loss, defined as the value to recover whatever they
had emptied out. There was no real loss, of course. Oil and minerals are provided by nature."
From Buckminster Fuller's last book 'Critical Path' –
" approximately 60 percent of the employed in U.S. America are working at tasks that are not producing any life support .Which
would cost society the least: to carry on as at present, trying politically to create more no-wealth producing jobs, or paying
everybody handsome fellowships to stay at home and save all those million-dollar-each gallons of petroleum?"
Maybe it's time to give the environment a breather from human 'production'. Ecosystems have been loving COVID-19.
I think their exists a confusion as to what constitutes- or is not included in the term – Productive industrial capitalism.
I think the term 'Industrial' evokes images of smoke stacks, endless pollution, misery and environmental degradation and excludes
a positive side that includes polution elimination, contained systems, environmental resoration and blooming, happiness and mission,
higher and more meaningfull fullfillment.
I think the term 'Productive' evokes images of so-called goods as being created endlessly while destroying the planet – whereas
restoration of soils and environment on an industrial scale and the resultant beneficiary of goods produced for the enablement
of biodiversity.
Further, a large component of the term 'productive' having negative connotations is a direct result of Financial capitalism's
take over and, deceptive use of terms and language – they were led by the computer revolutions use of terms and language taken
from long used context and applied to their own narrow doings – See Michael Hudson's -J is for Junk Economics.
This same de-focusing and sly re-working of definitions has left a majority of folks believing that banks use peoples savings
to lend out to people trying to start a business, buy a home, or to business to increase production – and not the reality of most
of it being to boost asset prices and de-regulate any type financial gambling and shicanery – . And what does it say about economics
as science? where economics pretends that itself is self correcting and not entropic like about everything else, will take bad
actors out of the equation of the free market, will produce good corporate citizens, and claims creative destruction without realizing
that destruction applies to only those things previously created.
When has the production of good corporate citizens outweighed the destructive capacity of those produced bad corporate citizens.
There seems to be no distinction between the predatory, destructive and harmful capitalist corporation that only contributes to
overhead, misery and deductive as opposed to productive – that and, those that are productive, useful and positive for all species
and the planet.
Mother nature and this planet does not hold humans in as high esteem as we humans do – if you are religious – I don't think god
does either.
Sorry
Mason is a careful and thoughtful economist, so his take is well worth reading. He points out that interest payments as a percent
of GDP fluctuate with time and Fed-interest rate setting, and in fact are currently back down to roughly the same level as in
1975. I checked some FRED graphs, and this is true for both business interest payments and household interest payments.
He also points out that increases in relative financialization vs. industrialization have generally varied globally, with one
area's increase in one aspect balanced by another area's increase in the other. And while US primary manufacturing has decreased,
companies like Amazon, Walmart, and Google are still "industry", as they produce usable consumer services (mainly logistical and
distributional) that are not "financial". Mason points out that most top fortunes in the US are still made in such "industrial"
realms, not financial.
As Hudson agrees that Marx understood, Mason points out that industrial capitalists still extract "exploitative rent", in the
form of profit extracted from the labor power of workers, via the capitalists' collective monopoly on the means of production.
He feels that both industrial and financial capitalism are largely inseparable and essential (to the extractors) to the extraction
of surplus value from workers.
I'm not sure I fully buy Mason's argument in PB's comment that Amazon, Walmart, et al are "industry". Clearly, they've superseded
Main St as agents to abet consumer culture, and may do so more efficiently (thus adding to GDP), but can this part of the service
industry truly be labelled as "industrial"? It seems to me they're old wine in new bottles, so isn't it a zero sum, at least in
the long run? They've really only made it easier for consumers to increase their indebtedness–it's just a click away instead of
a drive away–so are a more efficient way to abet the FIRE sector more than the industrial sector, especially since so much of
what is on offer is now made offshore.
Further, as JS points out, we need to know how to get to some sort of sustainable economy before the whole thing collapses.
Somehow the financial capitalism vs industrial capitalism conflict has to be replaced, which will require strong government and
far-sighted leaders–both in short supply thanks to Neoliberalism. As many at NC have pointed out, we are now in a race between
nuclear armageddon and climate armageddon. But it's good to know where we are, and how we got here, if we are to find our way
out of our present predicament.
Kilgore,
Good points. Re Walmart, etc., and the label "industrial", Mason's point is simply that those firms aren't "financial", i.e.,
not in the FIRE sector, and hence aren't what Hudson says he's upset with. Yet (claims Mason, I haven't checked), they are the
sort of firms, rather than FIRE, that comprise the dominant chunk of the wealthiest US firms, and of wealth generation in general.
Mason would agree that the problem isn't about one type of capitalism vs. another, but about the whole inhuman, exploitative,
unsustainable capitalist shebang.
One point re FIRE that neither Hudson nor Mason address is Dean Baker's take: that much of what should rightfully be "labor's"
share of GDP doesn't actually instead go to "capitalists" as "profit" OR to rentiers as interest or rent. It simply goes as wages/salaries
to the very highest-paid (and increasingly so) laborers, as opposed to the bottom 90% of laborers. Most top professionals and
managers of firms are not "owners", hence they "work" for a living–but they get paid these days predominatly via wages and salaryies
that have skyrocketed. And FIRE is indeed in this case a major offender, as Dean points out.
While one could argue that these are simply "profits by a different name", the point is that such employees actually have no
"owners" right to the salaries, unlike true owners' rights to (all) profit. They do have a lot of cronyistic, informal power,
however. Baker suggests several ways to regulate and lower their salaries, both for finance (a financial transactions tax), and
for all corporations in general. This would free up money to go to the lower-paid workers and/or customers of these extractive
firms.
Shareholders of public companies do not actually own the company [David Ciepley] and very few have a controlling stake either.
Given the supine boards of most companies the CEOs have effectively complete control and should be considered functionally equivalent
to the "capitalists" of lore. What with their options and so forth they are adept at joining the ranks of "owners" even if they
started as "laborers".
Baker has some good ideas, incremental style, but I don't get a sense he has a big picture like Hudson. Mason quibbles over
details just for the sake of it, it seems to me.
We've regularly referred to the landmark article by Amar Bhide, Efficient Markets, Deficient Governance, which lays out longer
form how US regulations by preferring liquid markets, have created anonymous, transient, arms-length shareholders who do not exercise
control over companies, and due to the need to keep strategically sensitive information confidential, are incapable of supervising
them properly even if they had the power to do so.
The very first sentence of Michael Hudson's post targets: "the landlords, bankers and monopolists extracting economic rent
without producing real value." I believe Amazon, Walmart, et al. fit the category of monopolists extracting economic rent without
producing value. The FIRE sector was prominent but not the only target of Hudson's post. I think Mason works hard to mince Hudson's
words -- to no useful end. "He[Mason] feels that both industrial and financial capitalism are largely inseparable and essential
(to the extractors) to the extraction of surplus value from workers." I believe firms that make physical products, like automobiles
or light bulbs, and select top management from their engineering and production staff have proved very different in their operations
than the same firms run by top management selected from their financial staff.
Regarding "Deep States" and such, their enforcers, IMF, WB etc:
A fascinating history of shifts in the structure and functioning of the Japanese economy -- essentially from serving the population
to serving the speculators -- promoted by a subverted Japanese Central Bank, facilitated and encouraged by the IMF is to be found
in this documentary based on Richard Werner's " Princes of the Yen ":
https://www.youtube.com/watch?v=p5Ac7ap_MAY
Don't get confused between making money and creating wealth.
When you equate making money with creating wealth, people try and make money in the easiest way possible, which doesn't actually
create any wealth.
In 1984, for the first time in American history, "unearned" income exceeded "earned" income.
The American have lost sight of what real wealth creation is, and are just focussed on making money.
You might as well do that in the easiest way possible.
It looks like a parasitic rentier capitalism because that is what it is.
Bankers make the most money when they are driving your economy into a financial crisis.
They will load your economy up with their debt products until you get a financial crisis.
On a BBC documentary, comparing 1929 to 2008, it said the last time US bankers made as much money as they did before 2008 was
in the 1920s.
https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6
At 18 mins.
The bankers loaded the US economy up with their debt products until they got financial crises in 1929 and 2008.
As you head towards the financial crisis, the economy booms due to the money creation of bank loans.
The financial crisis appears to come out of a clear blue sky when you use an economics that doesn't consider debt, like neoclassical
economics.
Once you have a firm grip on what wealth creation and money really are; it all becomes clear.
Banks – What is the idea?
The idea is that banks lend into business and industry to increase the productive capacity of the economy.
Business and industry don't have to wait until they have the money to expand. They can borrow the money and use it to expand today,
and then pay that money back in the future.
The economy can then grow more rapidly than it would without banks.
Debt grows with GDP and there are no problems.
The banks create money and use it to create real wealth.
The interesting point about China would seem to be that, having seen the results that Financialisation has produced in the
West, they are determined to avoid it.
Of course it might be worth adding that it required overturning the lessons of the '30s and comprehensive deregulation for us
to end up where we are, and I cannot see the People's Bank of China ignoring their own analysis of (Western) capitalism to allow
a similar fate to befall their own system. Debt has place and role to play, but ruling the system, as today, is certainly not
it.
In economics they have obviously heeded their lessons well. It's the social side that needs more attention.
"... In reforming the US financial industry, you would need to separate savings and trading banks from investment banks. The 1932 Glass-Steagall legislation and the act based on it did service in that respect up until the late 1990s when it was repealed by the Clinton government. In some countries (Japan being a notable example), the postal service performs savings bank functions. ..."
What in your opinion would be the proper approach [for the Outlaw US Empire to engage
China]? I ask that seriously.
Assuming my reengineering your query is correct, I provided an answer well prior to the
2016 election--Give up on Neoliberalism, the pursuit of Empire and Zero-sumism; go back to
obeying the UN Charter and US Constitution while following the latter's instructions located
in the Preamble; and join with normal nations to help others develop via a global BRI as a
partner with China. Given current political realities, that's just not going to happen.
Instead, I propose the following:
Throw the "vested interests" overboard and work in a Win-Win manner for humanity like
China, its Eurasian Bloc partners, and other like-minded nations. Fundamentally, the pursuit
of Empire and the #1 policy goal of attaining Full Spectrum Domination must be renounced
forever with corresponding adjustments made to the federal government--one of those being an
intense auditing of the entire national defense structure and arrest of those who've
defrauded it for decades. Second, Repeal the Federal Reserve Act and make banking a public
utility, and at the same time arrest the fraudulent banks's and Wall Street firms's people,
seize their assets, and reincorporate the mess into the Treasury Department. Third, repeal
the 1947 National Security Act and all subsequent acts that are incompatible with the ideal
of freedom--Yes, that includes the Patriot Act and such. Fourth, eliminate the Electoral
College via a Constitutional amendment that also makes all elections publicly financed,
mandates a finite amount of free media coverage, removes restrictions on requirements for
appearing on a ballot, and makes "Democracy's Gold Standard" the law of the land. Eliminate
the FBI, the Department of Homeland Security and all other armed agencies not directly
concerned with safeguarding the public welfare against the designs of Corporations, which was
the original regulatory rationale adopted in the late 1890s and 1900s. Use existing
Anti-Trust legislation to break up corporations with oligopolistic power. Legislate Social
Media and all other natural monopolies to be public utilities, that would also include public
health. Eliminate the Death Penalty except for Treason and committing an act of corruption
while holding public office at any level of government. Seriously consider removing all
regulatory agencies from the Executive and placing them within a Fourth Branch, The
Regulatory Branch, which would be non-partisan and electoral for 8 years while eliminating
the "Revolving Door." Alter the system of taxation to eliminate any possibility of attaining
a "Free Lunch" while paying particular attention to Capital Gains instead of payroll
income.
It's very likely I omitted a few items, but IMO the above are the most important. Clearly,
the current political paradigm would need drastic alteration for the above, although I doubt
any of the above would be objectionable to a majority of the public once reasons were
provided--which is to say, none of it's really radical since most of what's being rejected
was reactionary to begin with. Doing all that would turn the clock back 120+ years in many
cases prior to the time when nascent Neoliberals captured the federal government and began
their alterations in 1913. It's very interesting to note the biggest political force against
Wilsonian Democracy as it was euphemized was Teddy Roosevelt and his Square Deal for the
American Proletariat. Yet ironically, he made it possible for Wilson to win the election, and
WW1 would have altered his program in some never to be known manner.
Thanks for asking your question dan of steele as I haven't put any of that together for
quite awhile. Until the "vested interests" are removed, however, nothing's going to change
for the better, including relations with China, making their removal the required first
step.
In reforming the US financial industry, you would need to separate savings and trading
banks from investment banks. The 1932 Glass-Steagall legislation and the act based on it did
service in that respect up until the late 1990s when it was repealed by the Clinton
government. In some countries (Japan being a notable example), the postal service performs
savings bank functions.
The system of taxation to be based on land taxation over income taxation.
Stock market transactions to be subject to a transaction fee charged to sellers that is a
percentage of the profit they make on selling stocks. For that matter, stock exchanges should
be public utilities subject to regulation.
... Tokyo Stock Exchange
The third-largest stock exchange in the world is also the largest to not be
publicly-traded. Though the Tokyo Stock Exchange is organized as a joint stock corporation,
those shares are closely held by member firms like banks and brokerages. By contrast, the
smaller Osaka Stock Exchange is publicly-traded, which perhaps befits long-held Japanese
stereotypes about Osaka being more entrepreneurial and less hidebound than Tokyo ...
...Shanghai Stock Exchange
This is the largest stock exchange in the world still owned and controlled by a
government. [My emphasis - Jen.] The Shanghai exchange is operated as a non-profit
entity by the China Securities Regulatory Commission and is arguably one of the most
restrictive of the major exchanges in terms of listing and trading criteria ...
...The Bottom Line
Running an exchange is a great business; it is effectively a monopoly. Those who own
exchanges can require companies to pay listing fees, traders to pay for market access and
investors to pay transaction fees. It is not altogether surprising, then, that there is so
much activity in this space. In addition to the aforementioned major mergers, the Singapore
Exchange is trying to acquire the Australian Stock Exchange, while Brazil's BM&F
Bovespa (once state-owned and now publicly-traded) is looking to expand through acquisition
as well.
While these transactions are interesting to a point, they do not generally help the
individual investor. Unfortunately, trading stocks listed on foreign exchanges is still
difficult (and expensive) for U.S. investors and none of these mergers will change that. Of
course, it is up to the brokerages to offer these services and for investors to demand
them. (Find out how the third-largest stock exchange in North America came to be. Check out
History Of The Toronto Stock Exchange.)
In the meantime, it looks like there is an unmistakable trend in the market of stock
markets towards greater global integration and fewer small independent operators...
Needless to say Beijing must be in no hurry not to relinquish control and regulation of
the Shanghai Stock Exchange.
In reforming the US financial industry, you would need to separate savings and trading
banks from investment banks. The 1932 Glass-Steagall legislation and the act based on it
did service in that respect up until the late 1990s when it was repealed by the Clinton
government. In some countries (Japan being a notable example), the postal service performs
savings bank functions.
My proposition is that cash is the ownership of the common wealth - that the state creates
and manages it. Others use it for a transaction tax on each use. Keep it simple and non
negotiable.
Glaring inequities can be remediated with a close monitored reimbursement system that is
transparent and under continuous audit.
Every account transfer for whatever reason is taxed . If you withdraw cash you pay tax
similar to an ATM fee. etc.
Complicated concession systems are avoided as they immediately invite scammers to skate
around the rigmarole. Yes there will be minor unfairness issues but that sure beats the major
unfairness issues we have in place now. Illegal money laundering requires multiple moves
across accounts and diverse banks to obfuscate the nature of the transactors etc. That would
generate further taxation on those tricks and perhaps reveal the trail.
Yes there will be double tax. But if transaction tax is set at a low rate to not screw the
low income people then it will get their support as they will see that the higher cash users
will be paying more for the privilege. Sliding scales can be configured in such systems but
avoidance is made incredibly difficult.
As psychohistorian often says : its the global private finance banks that we must seize
control of.
Incisive and grim. As Mr. Putin observed, Presidents come and go but the policy stays the
same. But wait! I think there's more
WRT Iran. Iran recently announced that their sales of oil had increased substantially,
without, of course identifying how much or with whom. If they are doing these transactions in
national currencies, there's nothing other than piracy that the US can do, making the US more
dependent on our vassals to carry our water here. But
In other news, the EU has decided to stop supporting Guido. If some of the OAS vassals get
the idea that they, too, can stand on at least their two knees, maybe Mr. Maduro can get a
bit more of a break. The US is sure to be wroth.
PACE decided to pass a non-binding resolution of more sanctions against Russia for the
Navalny fiasco while Frau Merkel (and her likely successor) remains clear that Nord Stream II
must be finished. The German FM pointed out that they could face serious court battles since
the Pipeline consortium which includes other EU countries has all the permits they
require.
The results are in aaaaannnnnddd – thanx to Covid, for the first time in history
China had more Direct Foreign Investment (DFI) than the US. The US better hope that doesn't
keep up ..
The globalists found just the economics they were looking for.
The USP of neoclassical economics – It concentrates wealth.
Let's use it for globalisation.
Mariner Eccles, FED chair 1934 – 48, observed what the capital accumulation of
neoclassical economics did to the US economy in the 1920s. "a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion
of currently produced wealth. This served then as capital accumulations. But by taking
purchasing power out of the hands of mass consumers, the savers denied themselves the kind of
effective demand for their products which would justify reinvestment of the capital
accumulation in new plants. In consequence as in a poker game where the chips were
concentrated in fewer and fewer hands, the other fellows could stay in the game only by
borrowing. When the credit ran out, the game stopped"
This is what it's supposed to be like.
A few people have all the money and everyone else gets by on debt.
McFaul says that "Biden's team should come up with new ways to grow these ties [with
ordinary Russians] even over Putin's objections. In the long run, forging and sustaining
links with Russian society will undermine anti-American propaganda as well as American
stereotypes about Russia."
To this, McFaul adds that, "The new administration should make it easier for Russians to
study in and travel to the United States," and urges European states to do the same.
My take on this is very simple: the West cannot even absorb their own youth anymore. What
makes them think they can absorb Russia's?
Besides, it's not so simple an operation to attract young people to your country to study.
The logistics are very complicated, and it requires a lot of resources not even counting the
promise of jobs within your own country (in the case of STEM students). Even the brain drain
from countries with large populations such as China and India don't surpass much above the
low to mid six digits. And those programs take time to gain traction - decades in most cases.
And all of this already taking into account the fact that your country still has to be an
attractive place.
Discontent already exists in Americans with Indian STEM from H1B1 visa program. As the
excess population rises, so will resistance to new influx of immigrants - specially
high-skilled ones. This will snowball to a stage where Americans become second-class citizens
in their own country (as you would have to guarantee the jobs for the foreigners in order to
sweeten the deal).
How will the USA regain its advantage in this world?
I was looking back at some earlier reports to gain an insight into the means by which the
USA gave the game away and the means that might restore its place in the economic world. It
has allowed itself to be completely captive to global private finance AND ownership of the
keys to its salvation. If it dfoes not nationalise its key industries then it can rest
assured of its doom. IMO it is now almost impossible for it to nationalise a pizza parlour
let alone an education or engineering sector.
If the USA is to survive the oncoming collapse and break free of its apocalyptic war
agenda, then certain realities WILL have to occur. These realities include (but are not
limited to):
1) Regaining its lost industrial potential, with an emphasis on the machine tool sector
which the west once enjoyed as a world leader
2) Regaining the lost scientific and technological capacities which the USA once had
when it still valued productive thinking under the days of JFK and NASA
3) Regaining a grasp of education which values productive citizens over consumer
subjects
4) Regaining control over national credit under federal banking, dirigisme and other
long-term investment practices that rely on regulating Wall Street speculation and other
unproductive forms of banking.
How might these vital capacities be regained?....
The USA is incapable of nationalising its education sector and is incapable
systemically of having the patience to await the benefits. It will continue to sustain an
education sector that is designed to transfer $$$ in taxation directly to private corporation
pockets and to do so by reducing the the number of salary earners between the input $ and the
$ that end in private corporation pockets. The private corporations will continue to perfect
the swindle of returning the least possible effort in return for those $$$.
Ditto for defence spending and every other sector.
The USAi is hoist by its own petard and has a dull brained president surrounded by
ideological obsessives, cultural paranoiacs, a narcissistic Congress and Senate. It will not
be capable of restoring its real economy and will continue to imagine itself as a world
leader. It will berate and negate and cancel all unorthodox thought from those that favour
nation building.
The rest of the world's nations had better take note. Clearly many have.
I actually talked about this with Kuppy last week.
He considers HFT a problem but not crippling; he says they cost him $10K to $25K a day
but apparently this isn't enough to deter his hedge fund activities. He said that up to 70%
of trading volume activity in any stock is HFT (!).
As for scam: well - the value of the front running exists only so long as the herd is in
the market. Every single market crash - whether bitcoin or the stock market or whatever -
sees the vast majority of players exit (or bankrupt). At that point, the trading volumes
and numbers of people participating plummet dramatically.
How valuable do you think RH's model is then?
Sounds to me that HFT is a scam in itself. Am I to believe that algorithms trading against
each other repetitively at high speed is anything other than machine driven gambling on one
algorithm's interpretation of the behaviour of another algorithm, mostly outside of the human
buy and sell in the market place. Are the humans just strapped on for the ride through a
cabal of trading companies?
@ uncle t # 168 who wrote
"
I was looking back at some earlier reports to gain an insight into the means by which the USA
gave the game away and the means that might restore its place in the economic world. It has
allowed itself to be completely captive to global private finance AND ownership of the keys
to its salvation. If it does not nationalize its key industries then it can rest assured of
its doom.
"
I continue to posit that the key industry that needs to be "nationalized/made totally
sovereign" is finance. If humanity can follow China's lead, the motivations in the other
industries will revert to doing what is right, rather than what is profitable.
In regards to your HFT comment in # 172, you have calling HFT a scam correct. It is
programmed/manufactured theft under the guise of AI.
When guys like Michael Saylor put a half a billion into bitcoin they have done their
homework. Seems to me a scam is an operation containing a lot of lies. I don't see how
bitcoin falls into that category.
As far as a Ponzi scheme I also do not see the connection. It is nothing like a Ponzi.
There are no promises of big returns or large dividends.
When people follow 'guys like Michael Saylor [and see him] put a half a billion into bitcoin
they [think] have done their homework [and follow like fish chasing a lure] THEN they have
been sucked into a ponzi scheme where the lure is a fast buck if they follow the (smart?)
leader. Then the smart leader progressively sells out at a sweet peak and the chumps watch it
dip for a month or two. Unless of course there are lots of paid journalists and bloggers and
facebook praise singers pumping the lure of the endless profit of bitcoin.
Sounds like rumours of gold in them thar hills.
There are a large number of lies (or exaggeration?) in bitcoin and all spun within a
sheath of mystery and complexity and even 'mining' to smear some credible lipstick on the
scheme.
There is a sucker born every minute and they invest in BS and love a veneer of mystique
and bitcoin falls squarely into the category of lies and scams and fancy imaginings and the
lure that suckers are forever chasing. Yes, people buy and sell and some make a profit - same
as any ponzi scheme.
How will the USA regain its advantage in this world?
It will not.....
USA domestic petroleum liquids production is scheduled to drop to 5 million bbl / day by
july. Shale is loss making at prices less than $80 / bbl. Investors/banks have wised up. $$$
has dried up. There are no greater fools with $$ to burn... Drop in production ~ 45% / annum
exponential declining function.
US corporate governance favors quick returns via share buybacks stock kiting schemes
instead of product development. Boeing / GE / Lockheed / and other Fortune 500 firms not
hiring engineers, not developing new products. Experienced engineers going to China for work
or retiring. Shortly, US will not have enough petroleum geologists, mining engineers,
software engineers, hardware engineers, electrical engineers, civil engineers, chemical
engineers, etc to run it's industries.
Lawyers, political scientists, historians, economists... can't do the math.... are
useless....
@Levtraro to travel. It
will be a perk for them – a reward for being good servants. I can even forsee that
airlines will refit their fleets, stripping out coach class altogether, as the people who buy
the cheap seats won't be flying anymore anyway. A lot of industries will down-size so as to
only serve the quality customers.
And rich people are buying up land – lots of it. They are becoming what they already
deem themselves to be: an aristocracy, and a hereditary one at that.
Neo-liberal GloboCap is morping into neo-feudalism. They'll own everthing, and they'll be
happy. You'll own nothing and you'll be happy (or else).
I disagree. Current GloboCap elites and elites thoughout history have needed large
populations to look down to and to harvest for all they can yield. It is not good enough to
have all that you want when all others also have all that they want.
It is not nice enough to travel in your own or rented Gulf Stream or First Class or
Business Class when economy seats are non-existent. It is not good enough that a machine
calls you Sir instead of a real lowly human.
Real respect, admiration and adulation, could never be replaced by programmed respect,
admiration and adulation.
McFaul cautions against what he refers to as "Putin's ideological project" as a
threat to the neoliberal international order. Yet he is reluctant to recognize that the
neoliberal international order is an American ideological project for the post-Cold War
era.
After the Cold War, neoliberal ideologues advanced what was seemingly a benign proposition
– suggesting that neoliberal democracy should be at the center of security strategies.
However, by linking neoliberal norms to US leadership, neoliberalism became both a
constitutional principle and an international hegemonic norm.
NATO is presented as a community of neoliberal values – without mentioning that its
second largest member, Turkey, is more conservative and authoritarian than Russia – and
Moscow does not, therefore, have any legitimate reasons to oppose expansionism unless it fears
democracy. If Russia reacts negatively to military encirclement, it is condemned as an enemy of
democracy, and NATO has a moral responsibility to revert to its original mission as a military
bloc containing Russia.
Case in point: there was nobody in Moscow advocating for the reunification with Crimea until
the West supported the coup in Ukraine. Yet, as Western "fact checkers" and McFaul
inform us, there was a "democratic revolution" and not a coup. Committed to his
ideological prism, McFaul suggests that Russia acted out of a fear of having a democracy on its
borders, as it would give hope to Russians and thus threaten the Kremlin. McFaul's ideological
lens masks conflicting national security interests, and it fails to explain why Russia does not
mind democratic neighbors in the east, such as South Korea and Japan, with whom it enjoys good
relations.
Defending the peoples
States aspiring for global hegemony have systemic incentives to embrace ideologies that
endow them with the right to defend other peoples. The French National Convention declared in
1792 that France would "come to the aid of all peoples who are seeking to recover their
liberty," and the Bolsheviks proclaimed in 1917 "the duty to render assistance, armed,
if necessary, to the fighting proletariat of the other countries."
The American neoliberal international order similarly aims to liberate the people of the
world with "democracy promotion" and "humanitarian interventionism" when it
conveniently advances US primacy. The American ideological project infers that democracy is
advanced by US interference in the domestic affairs of Russia, while democracy is under attack
if Russia interferes in the domestic affairs of US. The neoliberal international system is one
of sovereign inequality to advance global primacy.
McFaul does not consider himself a Russophobe, as believes his attacks against Russia are
merely motivated by the objective of liberating Russians from their government, which is why he
advocates that Biden "distinguish between Russia and Russians – between Putin and the
Russian people." This has been the modus operandi for regime change since the end of the
Cold War – the US supposedly does not attack countries to advance its interests, it only
altruistically assists foreign peoples in rival states against their leaders such as Slobodan
Milosevic, Saddam Hussein, Muammar Gaddafi, Xi Jinping, Vladimir Putin etc.
McFaul and other neoliberal ideologues still refer to NATO as a "defensive alliance,"
which does not make much sense after the attacks on Yugoslavia in 1999 or Libya in 2011.
However, under the auspices of neoliberal internationalism, NATO is defensive, as it defends
the people of the world. Russia, therefore, doesn't have rational reasons for opposing the
neoliberal international order.
McFaul condemns alleged efforts by Russia to interfere in the domestic affairs of the US,
before outlining his strategies for interfering in the domestic affairs of Russia. McFaul
blames Russian paranoia for shutting down American "non-governmental organizations" that
are funded by the US government and staffed by people linked to the US security apparatus. He
goes on to explain that the US government must counter this by establishing new
"non-government organizations" to educate the Russian public about the evils of their
government.
The dangerous appeal of ideologues
Ideologues have always been dangerous to international security. Ideologies of human freedom
tend to promise perpetual peace. Yet, instead of transcending power politics, the ideals of
human freedom are linked directly to hegemonic power by the self-proclaimed defender of the
ideology. When ideologues firmly believe that the difference between the current volatile world
and utopia can be bridged by defeating its opponents, it legitimizes radical power
politics.
Consequently, there is no sense of irony among the McFauls of the world as US security
strategy is committed to global dominance, while berating Russia for "revisionism."
Raymond Aaron once wrote: "Idealistic diplomacy slips too often into fanaticism; it divides
states into good and evil, into peace-loving and bellicose. It envisions a permanent peace by
the punishment of the latter and the triumph of the former. The idealist, believing he has
broken with power politics, exaggerates its crimes."
If you like this story, share it with a friend!
The statements, views and opinions expressed in this column are solely those of the
author and do not necessarily represent those of RT.
Ghanima223 2 days ago 22 Jan, 2021 09:36 AM
In short, the tables have turned since the end of the Cold War. It is no longer communist
ideologues that try to export revolution and chaos while the western world would promote
stability and free markets. Now it's western ideologues that are trying to export revolutions
and chaos while clamping down on free markets with Russia, as ironically as it sounds, being
a force for stability and a strong proponent for the free exchange of goods and services
around the world. The west will lose just as the USSR has lost.
US_did_911 Ghanima223 1 day ago 23 Jan, 2021 01:01 AM
The Dollar is the only fake reason that still keeps US afloat. The moment that goes, it loss
will be a lot worse then of USSR.
US_did_911 Ghanima223 1 day ago 23 Jan, 2021 12:58 AM
That happened not exactly after the end of the cold war. It was about even for a decade after
that. The real u-turn happened after the 9/11 false flag disaster.
Amvet 2 days ago 22 Jan, 2021 10:00 AM
Foreign dangers are necessary to keep the attention of the American people away from the 20
ton elephant in the room--the fact that 9/11 was not a foreign attack. Should any of the main
stream media suddenly turn honest and report this in detail, things will get interesting.
King_Penda 2 days ago 22 Jan, 2021 09:11 AM
I wouldn't worry too much. At the same time Biden will be purging the US military of any men
of capability and replacing them trans and political appointments. The traditional areas
where the military recruited it's grunts are falling as they are waking up to the hostility
of the state to their culture and way of life. The US military will end up a rump of queerss,
off work due to stress or perceived persecution and fat doughballs sat in warehouses
performing drone strikes on goats.
Fjack1415 King_Penda 1 day ago 23 Jan, 2021 01:20 PM
Yes, you point to a paradox. While the globalists are using the US as their military arm for
global domination, they are at the same time destroying the country that supports that
military. Perhaps the US military will be maintained by dint of its being the only employer
for millions of unemployed young men in the American heartland, doughballs or not.
Ghanima223 King_Penda 2 days ago 22 Jan, 2021 09:39 AM
Ideologues will always be more concerned with having political reliable military leadership
as opposed to actually qualified leaders. It took the Russians 2 decades to purge their own
military of this filth of incompetent 'yes' men within their military.
UKCitizen 2 days ago 22 Jan, 2021 09:09 AM
'The Liberal International Order' - yes, that seems a fair description. Led by what might be
termed 'liberal fundamentalists'.
far_cough 1 day ago 23 Jan, 2021 07:01 AM
the military industrial complex and the various deep state agencies along with the major
corporations need russia as an adversary so that they can milk the american people and the
people of the western world of their money, rights, freedoms, etc etc...
roby007 2 days ago 22 Jan, 2021 09:54 AM
I'm sure Biden will pursue "peaceful, productive coexistence" just as his friend Obama did,
with drones and bombs.
Paul Citro 2 days ago 22 Jan, 2021 09:16 AM
I hope that Russian leaders fully realize that they are dealing with a country that is the
equivalent of psychotic.
Fjack1415 Paul Citro 1 day ago 23 Jan, 2021 01:26 PM
True, the ruling party and MSM mouthpieces and their readers and followers are now truly
INSANE. Beyond redemption. Staggering in the depth and power of the subversion of so many
people, including many with high IQs (like my ex girlfriend and housemate in the US).
Anastasia Deko 2 days ago 22 Jan, 2021 10:57 AM
US security strategy is committed to global dominance
Absolutely. Biden has filled up his admin with "progressive realists," which
when it comes to foreign policy, is just a euphuism for neocons and their lust for world
empire. So expect an unleashing of forces in the coming two years that will finally humble
America's war machine.
tyke2939 Anastasia Deko 2 days ago 22 Jan, 2021 01:07 PM
They are desperate for a war with someone but it must be someone they can beat convincingly.
It certainly will not be Russia or China and I suspect Iran will be a huge battle even with
Israel s backing. More than likely they will invade some country like Venezuela as Syria has
Russia covering its back. What a dilemma who to fight.
9/11 Truther Anastasia Deko 2 days ago 22 Jan, 2021 11:24 AM
The "American war machine" has been humbled from Saigon, Vietnam 1975 to Kabul, Afghanistan.
Salmigoni 2 days ago 22 Jan, 2021 09:25 AM
They are not really liberals. They are blood thirsty parasitic neoconservative fascist war
mongers working for the Pentagon contractors. General Eisenhower warned us about these evil
people. A lot of Americans still do not get it.
Joe Biden will ram through warped liberal social experiments masquerading as credible,
time-tested programs designed to stabilize the nation.
It was a stark image never before seen in Washington, DC, and one that bodes ill for the
future prospects of the country. A locked down capital ringed in barbed wire, with 25,000
troops encompassing the Capitol building, provided a surreal backdrop to Joe Biden's
inauguration as the 46 th POTUS.
The excuse Democrats have provided for turning the 'citadel of democracy' into a maximum
security prison is not due to a growing distrust with the electoral process. Nor was it blamed
on the spectacle of the mainstream media and Big Tech silencing the voices of exactly one half
of the U.S. electorate – up to and including that of the now former president, Donald J.
Trump. No, to suggest such irrational things would attract howls of 'conspiracy theory' from
the liberal gallery.
Thankfully, we have Silicon Valley fact checkers and corporate media commentators to lead us
to the valley of truth, which informs us that all those Trump "insurgents" who invaded the
Capitol building on January 6 th were motivated by pure evil intentions rooted in
racism, sedition and white supremacist ideology. And as Hillary Clinton suggested during an
off-the-rails interview with Speaker of the House Nancy Pelosi, Trump and his motley crew of
deplorables may have taken their marching orders from none other than Vladimir Putin himself.
Who needs fiction writers these days when we have the Democratic Party?
Conservatives need to come to grips with the realization that they are not dealing with
rational people who will be willing to engage in cool-headed discussion and debate. Despite a
full sweep of the political landscape, the left remains consumed by a collective fit of rage,
hysteria and raw emotion that shows no sign of abating. Why? Partly due to political immaturity
in the ranks, and partly because 'victory' for the left no longer means victory at the polls;
these fanatics, for that is really what they are, will not rest easy until the political
opposition is shorn of its voice and representation. In other words, when it is completely and
unequivocally obliterated. And given the political proclivities of Big Tech and Big Media,
those dreams are dangerously within reach. Unless the right is able to essentially build its
own internet architecture to bypass the left's censorship machine, they will eventually go the
way of the dinosaurs as a political force.
In the meantime, Joe Biden, or whoever will be pulling his strings, will ram through warped
liberal social experiments masquerading as credible, time-tested programs designed to stabilize
the nation. Of course they are nothing of the sort. These are globalist-backed policies –
such as defunding the police, opening the border, vilifying the right as 'racist,' and
sexualizing the minds of elementary-age children – designed to utterly destabilize the
nation and all of its core institutions, including not least of all the nuclear family. Anyone
who speaks out against these reckless initiatives will be struck down by the harshest cancel
culture cult ever known to man. In fact, 'domestic terrorism' legislation is already drafted
that, if passed by Congress, will go far at stifling any dissenting voices from the right.
The very first line of the proposed legislation , entitled
'Domestic Terrorism Prevention Act of 2020,' which was conveniently prepared just weeks before
the Capitol riots erupted, states that "White supremacists and other far-right-wing extremists
are the most significant domestic terrorism threat facing the United States " Buried deep in
the text is a single line devoted to Antifa, and nothing whatsoever about Black Lives Matter,
yet these groups were responsible for torching and looting a swath of destruction across the
United States following the death of George Floyd during an arrest by a while police
officer.
Days before Biden's ironclad inauguration, the media was out in full force propagating the
notion of a connection between right-wing Trump supporters and – wait for it –
terrorist groups like Al-Qaeda.
"I did see a similar dynamic in the evolution of al-Qaida in Iraq, where a whole
generation of angry Arab youth with very poor prospects followed a powerful leader who
promised to take them back in time to a better place, and he led them to embrace an ideology
that justified their violence," Retired Army Gen. Stanley McChrystal, the former head of
Joint Special Operations Command in Iraq and the commander of all U.S. and allied troops in
Afghanistan, said in an interview. "This is now happening in America." So there you have it,
straight from the horse's mouth: the 'deplorable' right in the United States is almost on par
with the same guys who carried out the terrorist attacks of 9/11.
Needless to say, with such outrageous comments making the rounds, there was little chance of
a balanced message from Joe Biden's inaugural
speech with regards to the myriad problems now stalking America. Indeed, the address was
top heavy with warmed-over clichés about "unity," as well as references to racism and
inequality.
After four years of groundless rhetoric about "racist Trump supporters" (yet no other
conservative president has been so successful at attracting members of the Black
and Latino community to the Republican standard than Donald Trump), it was only natural
that Biden would allude to "a rise in political extremism, white supremacy, domestic terrorism
that we must confront and we will defeat." Coming just days after the riots at the Capitol
building by Trump supporters, which the hapless mainstream media has been at great pains to
label a "racist" event, the message made it amply clear for whom the bell tolls.
Once again, at this dangerous crossroads in American history, any hope for a true bipartisan
breakthrough is doomed to failure, and more so now as the radical neoliberal wing of the
Democratic Party is demanding the most outrageous social, cultural and political overhaul the
nation has ever witnessed. No true conservative will ever abide by these changes.
At the same time, the voice and demonstrations of the right is not only being brutally
vanquished, it is actually being assimilated under the banner of "domestic terrorism." This
marks the widest chasm between the two primary political parties in the United States, which,
unless quickly bridged, will end in imminent disaster for the American experiment in
democracy.
@James
Speaks rn. I'm not fine with assuming that the end product will automatically produce
merit beyond what meritocracy is today – brown-nosing. True merit is you have
demonstrated you can do it.
The last 40+ years have seen an endless stream of "bright boys" graduating university with
MBAs, getting involved in the management structure as "change agents", screwing up the
business for 5 years then "taking another opportunity" to screw up a different company.
Prof. Henry Mintzberg calls them the wrong people, at the wrong time, for the wrong
reason, because they don't have a clue how the real world works. But hey, they are high IQ
people, so they must have merit.
@Curmudgeon
r medicine and sophisticated writing. The issue is that these individual were poorly educated
– first and foremost in the "greed is good" school of the America. After sipping deeply
of this dead-end, destructive ethical framework, these individuals were then carefully
trained on how to extract value from an economy/a company rather than add value.
High IQ is still desperately needed for progress and to maintain civilisation. But put to
ill-use, high IQ individuals can wreak commensurately wreak greater havoc.
Analogies could be made to guns, armies, cars. All of them can be put to exceptionally
ill-use. Few would argue that a modern nation can live without automobiles or some kind of
armed defence force.
By 8 January 2021, Mitch McConnell had determined he would not permit the Senate to try
Trump until 19 January 2021 or later. He ruled that the Senate could not convene for special
session unless all 100 Senators formally agreed; he maintained that ruling consistently,
through 19 January 2021. By 10 January 2021, House majority Whip James Clyburn suggested the
House may not deliver articles of impeachment to the Senate until after Biden has been in
Office 100 days.
Not until today, 20 January 2021, did Pelosi deliver articles of impeachment to the Senate.
The same day, McConnell said: (a) the Senate will receive the House managers at noon ET
Thursday, 21 January, when the managers will present and exhibit the articles; (b) at 2:00 PM
21 January, Chief Justice John Roberts will be escorted into the Senate chamber and swear in
all senators; (c) the impeachment articles' trial will begin Tuesday, 26 January.
Until 20 or 21 January, the Senate majority would remain Republican; and a GOP-majority
Senate would not only acquit Trump but also impeach, strongly, the articles of impeachment. So,
why did Mitch McConnell block early Senate trial? Two possible intersecting reasons:
has
said Trump fed the "mob" lies to provoke the mob to use violence to prevent Congress's
certification of Biden's election.] (b) If trial occurs (as it will) when the Democrats
control the Senate, a conviction might seem a Democrat-framed lynching -- not the GOP's
traitorous assassination of Trump's "populism" and his political career.
I do not suggest such reasons are wise, logical, or even rational, but possibly real.
McConnell is a crafty, dissembling, unscrupulous pseudo-aristocrat, but no Socrates or
Aristotle.
"Liberal" and "moderate" Democrats, never-Trump Republicans,"The Squad, " the "Deep State"
-- the nation's whole jumble of psychopathic and otherwise-psychically-ill "Elite," "woke,"
anti-"White"/anti-male/anti-meritocracy/sexually-deviant members -- all share one mantra :
Trump and populism are evil, inimical to "Democracy" and the "culture," "morality," and "public
interests" of the U.S. Populism must be extinguished. Never again may Trump "hold and enjoy any
Office or honor, Trust or Profit under the United States" [U.S. Constitution Article I § 3
clause 7].
Why ought anyone care?
I voted twice for Trump, the second time (2020) merely because he was the lesser evil. In
2016, Trump promised more than a few moves that would have bettered the nation, e.g.
,
Trump meant and honored some promises -- at least partly. But others -- (a), (b), (f), (h),
(i), and (k) -- were bad jokes. His Israel policy was evil. He railed against growing
impairment of free speech. But his concern was mostly his own freedom of expression; and he
failed to do anything substantial toward restoring the general public's freedom of speech. He
continued, and worsened, Obama's persecution of Julian Assange and Bradley ["Chelsea"] Manning.
Edward Snowden remains exiled. Trump has pardoned or commuted sentence of tens of nefarious
criminals, but not Assange, Manning, or Snowden.
Kennedy, Johnson, Nixon, Carter, Reagan, Clinton, George W Bush, and Obama supported the
illegal "state" called Israel. But Trump lifted Israel-support, and, concomitantly, anti-Iran
policy to insane levels. Trump's Israel-related domestic policy included design of blocking or
impeding first-amendment-protected speech and assembly that opposes Israel's genocidal
persecution of Palestinians. Trump rendered formal equation of anti-Zionism and anti-Semitism
and sought to outlaw the Boycott, Divest, and Sanction movement.
So, why ought we care whether, after Trump is not President, the Senate tries the articles
of impeachment of Trump and rules that Trump shall not "hold and enjoy any Office or honor,
Trust or Profit under the United States"? Why ought we care even whether simply the Senate
tries the articles of impeachment but acquits Trump?
Trump's 2016 election suggested a true populist might become President -- not a closet
"Elite," but one who would resist the Elites and the Deep State, not surround himself with
snakes of the swamp. If the Senate tries Trump and rules that Trump shall not "hold and enjoy
any Office or honor, Trust or Profit under the United States" because Trump and his supporters
exercised their First Amendment freedom of speaking and assembling to support populism and
protest a corrupt election, speech and assembly freedoms will cease and near-certainly no
capable, electable populist will run for the Presidency.
But that consideration is subsumed in another, greater, more vital, fundamental
concern. We have a federal Constitution. Every federal legislator and judge promises, by oath,
not to act contrary to that Constitution. Every federal judge must promise this: "I solemnly
swear (or affirm) that I will administer justice without respect to persons, and do equal right
to the poor and to the rich, and that I will faithfully and impartially discharge and perform
all the duties incumbent upon me under the Constitution and laws of the United States."
...You live in a totalitarian state with arbitrary power.
Your government has three branches: CIA, CIA, and CIA. They infest every other corner of
your government with spies. Until you can accept this you will be an irrelevant muppet
writing bullshit.
... ... ...
4. Every jew ever involved in health care fraud over the past 100 years
If you might be a Trump supporter, just stop. Trump was an incompetent fraud. And Biden
(well his handlers really), will be very competent and will soon make you feel the sting of
systemic punishment.
Everyone can claim some African ancestry. Suggest you get familiar with the process real
quick
Back in 1987, as a young political science major, my constitutional law professor made us
attend a lecture by a visiting scholar on the 200th anniversary of the Constitutional
Convention. I cannot remember who the lecturer was, but I do recall one phrase he used that
has stuck in my mind ever since: the Constitution only works if we have a "constitutional
frame of mind." In other words, the Constitution reflected the culture and the attitudes of
its authors. Today, elites in both parties could give a damn about the Constitution. They
simply ignore the Constitution when it suits them -- or, conversely, use it as a club to
bludgeon their enemies when it suits them.
Today we are reduced to parsing the language of the Constitution because nobody is really
committed to the upholding the culture and the attitudes that informed it when it was
written. Therefore it has become meaningless.
The president must dance to the tune of the bankers and assorted oligarchs who actually
control the US. They enjoy confusing the common people with changing rhetoric and theater,
but at the end of the day, the president is little more than a figurehead, and the policies
remain largely the same. Many do not realize that the Obama administration deported some
2,750,000 illegals.. Under Trump it was only 935,000. Foreign wars? Police brutality? the
rich getting richer? Prison industrial complex? decimation of the middle class? endless
currency debasement? these things are consistent regardless, because they represent the
interests of the actual rulers. The red candidate throws a bone to the "conservatives", the
blue candidate throws a bone to the socialists, but the policy makers continue from one
administration to the next. The last president who tried to stand up to the powers that be
was JFK . and look what they did to him.
Tucker Carlson said Monday or Tuesday night on his show that McConnell warned Trump not to
pardon Assange, and he held the impeachment over Trump's head.
Swampington has gone rogue. I have a feeling that during much of Trump's presidency the
threat of impeachment loomed large, and maybe worse.
Look at Sessions, recusing himself and cowering in the corner. Barr comes in and does
diddly squat. The Durham investigation was a very long joke.
Two years of the Mueller Commission (when everybody in the know knew it was a pack of
lies), spying, leaking, abuse of the FISA Court, Kavanaugh, impeachment over Ukraine, Covid,
Antifa, BLM, stolen election ..never-ending chaos.
These corrupt clowns will do whatever the hell they please. They are the law now. If they
do end up following the law, it will only be because the destruction they've caused already
will be deemed to be enough.
With the federal judiciary's corrupt or cowardly treatment of legitimate
election-result challenges, the federal judiciary has shown it has abnegated its
constitutional duty and will incline to commit impeachable offenses to avoid resisting the
Elites' and the Deep State's subjugation of the People. The Supreme Court has shown that
five or more pseudo-aristocrat judges (two Democrats, three or more Republicans) align with
the Elites and the Deep State. Dr. Paul Craig Roberts is correct. The People are
suffering a revolution wrought by the "Establishment" (of the Elites and the Deep
State).
I would say that they are more cowardly than corrupt.
They know that if they supported Trump's legitimate (good evidence) questioning of the
election result, they would personally be in big trouble, so the Supreme Court is really not
a Supreme Court at all – it's a piece of establishment window dressing – same as
the rest of the hollowed out US Democratic institutions.
Real power in the US lies with the ZioGlob deep state and their MSM, the military
(whichever way they turn), and the 72 million US gun owners (whatever they decide to do).
There's also the aspect of real military power outside the US (Russia and China) that could
be brought to bear, and would be potentially decisive. Accepted that some of these are
TEOTWAWKI (The End Of The World As We Know It) scenarios but that seems to be how it is.
Genuine Democracy isn't coming back to the US any time soon.
@Beavertales at, do you really think Trump will discuss anything that went on in private?
He is not the type to write a memoir.
And some of the most bizarre decisions he made while POTUS were as a result of "advice"
from his favourite daughter Ivanka and her repellant husband. Ann Coulter has an article
where she lists the boneheaded decisions Trump made on "advice" from the two incompetent
rich-kids..
This short video is very indicative of the stupidity of Ivanka: she is so stupid, that she
can't even see the contempt these politicians have for her, and sticks around like a bad
smell:
[French Government Posts Video Of Ivanka Trump At G-20 Summit | NBC News]
McConnell must, not maybe, must be the first person to go if the Republican Senate has any
chance of surviving in a way that serves conservative interests. He has been positively of
Zero support to president Trumps four years in office, only giving lip service to the
interests of the issues the presidents supporters wanted addressed.. For four long years,
McConnell was an expert at bringing every advance, or potential advance in conservative
interests to naught. He however, had no problemo at all in taking advantage of President
Trumps popularity with conservative voters, when his re-election was in doubt. Maybe his
middle name should be Mitt.
@anonymous ChiComs -- from whence In Laws $ all arises . McConnell shows the country is
totally sold out to the ChiComs and in fact "governed" by them -- the rest of Congrassholes
are about the same with various "spies" working them, having sex with them, and screwing us
-- the USA is an occupied country via IsraHell and the Chinese Communists -- very, very bad
days are ahead and most in the USA are moron mask wearers who actually believe the filthy
pieces of cloth do something for their "health" contrary to all actual 41 Medical Studies to
date which state the opposite -- truly Maskholing was an IQ test and the country failed to
reach even the level of "Moron". Easy to steal an election when dealing with Maskhole Morons.
Sad all are being pulled down by them .
@Aardvark you are charged by the Feds you will be railroaded, innocence means zero once
you are charged and all the "Judge" cares about is getting you to plead guilty and move the
case, you will be grossly overcharged to force this to happen and the Judge will glare at you
and let you know he hates you if you go forward -- unless you are a Leftist Political hack or
"activist" then you will be cut loose and probably never even charged ."justice" Roberts is
the "model" -- his rulings in Obamacare etc. show he has no care for the actual "law" at all
-- all the other Federal "judges" follow his example .The best thing that could happen to the
USA is for the end of the Federal Courts, DOJ, and FBI -- all are Enemies Of The People --
get involved with them and find out.
@FoSquare The works of Plato and Aristotle have had much influence on the modern view of
the "sophist" as a greedy instructor who uses rhetorical sleight-of-hand and ambiguities of
language in order to deceive, or to support fallacious reasoning. In this view, the sophist
is not concerned with truth and justice, but instead seeks power.
Societies that value truth but recognize the difficulties involved in discovering it also
put value on freedom of expression. Those interested in power for its own sake, not so much.
Unfortunately the power mongers always have the advantage of moral certainty. For them Alinsky
and the Protocols are the only bibles.
@Anon olling 90% of the mass media of mindfuckery, mesmerization and mass megalomania and
finally, the CIA financed and directed "Social Media", the greatest enemy of our First
Amendment rights;;; those nefarious forces nearing absolute control over the federal regime in
the Di$trict of Corruption have now fully succeeded in driving the last nail into the coffin of
the Constitution AND the Bill of Rights, the enabling precondition for establishment of the
federal system.
Behind the scenes, roaring and howling with fits of schadenfreude laughter; the ultimate
shotcallers, those OWNER$ of the Federal Reserve and most other major international banking
institutions, are rubbing their greasy palm$ with total glee by having pulled off the greatest
heist in world history.
Former President Trump is playing his final scene today, making ready to hand over the
lead part of a government like reality show to the mentally infirm Joe Biden. Biden, with
history of pathological lying and a trail of crimes and associations with other crimes had no
actual chance of winning a real election, but real elections are now only part of America's
history. Trumped & Dumped: The Psychological Operation Scrambles to Survive | Jack Mullen
https://blog.thegovernmentrag.com/2021/01/21/trumped-dumped-psychological-operation-enters-phase-two/
@Old and Grumpy wn individual of blackmail able importance -- was discovered in one of
Ep$tein's logs).
Anyone notice how the Joint Chiefs of $taff for the U$ armed forces put out a notice to all
military personnel that they must not participate in acts of sedition prior to the coronation
of the Kamal's Foote/Biding administration.? Since the days of their attempted Operation
Northwoods false flag scheme to attack Cuba, which was vetoed by JFK (among his other sins
against the Deepe$t $tate); the proof was already in the pudding that the JC$ is dirty and our
military is compromised by their chains of command from the top-down -- which is the way the
enemies of We The People choose to employ their nefarious control system over one and all --
excepting, of course, the Elite$ themselves.
@Mefobills of savvy self-promoter and foil for Hillary. That would explain a lot,
especially Hillary's (and the Democrats) absolute hatred of Trump and his supporters. That his
shtick worked is testament to both his talent for self-promotion and our dislike of Hillary.
Guess she miscalculated
In any case, it became obvious that either the fix was in, when he refused to back Flynn and
appointed swamp creatures to fill his administrations' posts, or Trump was a fool. But that's
not to say he wasn't useful in exposing the media and deep state's contempt, hatred and fear of
us -- deplorables all -- by personifying it in their attacks on him.
The question that matters now, for populists, is how do we avoid the leadership trap?
For the most part, our entire legal profession has been taken over by an overeducated,
inexperienced crowd of people who are not able to deal in "Letter" and "Spirit" of law. They're
prisoners of the letter of the law because their only background is of the spoken and written
word.
There was and is no great "American democracy" to be restored after Trump. As the
mainstream political scientists Martin Gilens (Princeton) and Benjamin Page (Northwestern) had
shown six years into Barack Obama's presidency, the nation had for many decades become
"an oligarchy" where wealthy "elites" and their corporations "rule" and
"ordinary citizens have virtually no
influence over what their government does."
That was clear during Obama's corporatist "Hope" and "Change" presidency,
which gave Americans what commentator William Greider memorably called "a blunt lesson about
power, who has it and who doesn't." Americans, Greider wrote , "watched
Washington rush to rescue the very financial interests that caused the catastrophe. They
learned that government has plenty of money to spend when the right people want it. 'Where's my
bailout,' became the rueful punch line at lunch counters and construction sites
nationwide." Then Americans beheld Obama embrace "entitlement reform" (nice-sounding
cover for attacking Medicare, Medicaid, and Social Security benefits) and pass a health
insurance reform (the so-called Affordable Care Act) that only the big insurance and drug
companies could love.
The Biden team has no more intention of acting sincerely on the Democratic Party's standard
manipulative populist-sounding campaign rhetoric in the wake of the Trump nightmare and the
2020-21 Covid-19 Recession than did the Obama White House in the wake of the George W. Bush
nightmare and the 2007-08 Great Recession.
Biden's cabinet picks are loaded with neoliberal center-right operatives
inherited from the fake-progressive Obama administration. They hail from the same Wall
Street backgrounds and corporate and imperial think tanks that
staffed the George HW Bush, Bill Clinton, George W. Bush, and Barack Obama
administrations.
The "diversity" that CNN and MSNBC applaud in Biden's cabinet and agency picks is all
about the race, ethnicity, and gender of his elections. It does not extend to ideology to
include genuinely progressive Democrats in the mold of Bernie Sanders and Alexandria
Ocasio-Cortez. Under the faux-transformative cloak of identity, these are ruling-class
personnel trained and doctrinally committed to oppose the decent, humane, progressive,
social-democratic, and environmentally sane policies favored by the nation's silenced progressive
majority -- Single Payer health insurance, seriously progressive taxation, the abolition of
parasitic student debt, free public college, a doubling of the federal minimum wage, the
re-legalization of union organizing, and a planet-saving Green New Deal. As liberals fawn over
the many female, nonwhite, and gay people holding top positions, the Biden administration will
be a monument to the persistent rule of the nation's un-elected and interrelated dictatorships
of money and empire.
This follows in accord with the near-octogenarian Biden's promise to super-wealthy campaign
donors at a posh Manhattan hotel last year. Pledging not to "demonize anybody who has made
money," Biden told a gathering of tuxedo-wearing financial parasites that the rich were not
to blame for the nation's savage inequalities (so extreme that the top tenth of the upper US
One Percent had more wealth than the nation's bottom 90 percent by the end of the Obama years).
"Nothing will fundamentally change" and nobody's wealth or income would have to be
reduced if he became president, Biden
said . "I need you badly," he added.
njab 18 hours ago 20 Dec, 2020 08:58 AM
What exactly is "left"? The author doesn't talk about being "anti-war" for example. And
frankly, some of the "left" policies, especially related to LGBQXYZ, I find abhorrent. What
is needed is neither "left" nor "right" but something that benefits the MAJORITY of the
population and not just a few fringe groups.
Ohhho HypoxiaMasks 12 hours ago 20 Dec, 2020 03:11 PM
Americans is the most confused nation on Earth! They confuse plutocracy with democracy,
propaganda with news, debt with wealth, individualism with freedom, corruption with
influencing, bullying with leading, war with peace and looting with help!
ColdFacts 1justssayn 4 hours ago 20 Dec, 2020 11:22 PM
trump is fake anti-establishment, he had 4 years and did not pardon Assange or Snowden, did
not expose corrupt elites, he did not declassify anything "interesting", even now with
exposed election fraud all he did was to file some pseudo lawsuits which were dismissed by
corrupt establishment owned courts.
rubyvolt 16 hours ago 20 Dec, 2020 10:41 AM
'MuriKKKa is run by those who OWN it. Their muscle is the US military. Its fodder, the
citizens. The PEOPLE of this nation have no say and can't get into the streets as most of us
have been so poisoned and brainwashed that independent thought is not possible.
jjikss 13 hours ago 20 Dec, 2020 02:03 PM
There is no such thing as "democratic empire". You either believe that majority decides or
you believe that power decides. America is undoubtedly an empire ( over 600 offshore military
bases), so the democracy part is just a form of " double think" that comes straight from
George Orwell's vision.
Vikiiing 19 hours ago 20 Dec, 2020 08:08 AM
The election process could be fixed to be fair but neither party wants that. US elections
could be modelled after any scandanavian system to get rid of corruption, but there's big
money to be made keeping it corrupt.
DeadRassputin 8 hours ago 20 Dec, 2020 07:05 PM
The working class elected Trump as an outsider in the hope he could curb the corruption that
was becoming apparent in the Federal Government. Second term they tried to elect him again,
however the career politicians were having none of that. MSM propaganda blitz plus social
media censorship added to unverifiable mail in ballots, and rigged counting machines sealed
the deal.
Khanlenin DeadRassputin 7 hours ago 20 Dec, 2020 07:42 PM
Even though he never stopped stuffing millions into the pockets of the super rich, he did
offer some improvement to the economic conditions of the working classes which had been
stagnating since the 1970's Obama and Clinton had made sure any improvements in productivity
and technology were all going to benefit the top financial elites. Having an unstable ego, he
kept throwing grenades at everything he didn't understand. In the case of Iranian government
officials, the grenades were real
Khanlenin DeadRassputin 7 hours ago 20 Dec, 2020 07:42 PM
Even though he never stopped stuffing millions into the pockets of the super rich, he did
offer some improvement to the economic conditions of the working classes which had been
stagnating since the 1970's Obama and Clinton had made sure any improvements in productivity
and technology were all going to benefit the top financial elites. Having an unstable ego, he
kept throwing grenades at everything he didn't understand. In the case of Iranian government
officials, the grenades were real
Joaquin Montano 12 hours ago 20 Dec, 2020 02:54 PM
"There's no great 'American democracy' to be restored after Trump, ..." We used to say
"America is the best democracy money can buy". Not even that anymore. It is so disfunctional
it isn't worth the money ...
westernman 13 hours ago 20 Dec, 2020 02:29 PM
Some 40 trillion dollars that the rich are stashing away in offshore fictitious bank accounts
if taxed even at 1% will more than pay for all social services like single payer health
insurance, student loan forgiveness, free college education and much much more. Correct Obama
was a faux progressive, he would take one step forward and two back. I agree that Biden seems
to be painting a diverse race cabinet portfolio but skin color is no guarantee at all of pro
working people ideologies.
Hasse1 14 hours ago 20 Dec, 2020 12:59 PM
In reality (with hard evidence) Trump is NO different from his predecessors. In fact, if you
compared him with other U.S. presidents, Trump was less violent and caused the death of less
people than Clinton, Bush, Obama or Biden. Just to mention the latest few.
Khanlenin Bill Spence 6 hours ago 20 Dec, 2020 08:57 PM
"general welfare" or "the welfare of the generals" You're correct. When ordinary citizens
opposed the invasion of Iraq, they showed that they did not have the expertise needed to make
the decisions in the best interest of the welfare of the generals (or Standard Oil).
czerenkob 13 hours ago 20 Dec, 2020 01:40 PM
In the USA democracy is talked about, but not practiced.
SheepNotHuman 9 hours ago 20 Dec, 2020 06:14 PM
Democracy a dreamy concept for children only. There is no such thing as Democracy when money
buys the elections and votes remain secretive. America was never a Democracy, from day one
it's a fraud. The first president old George Washington was a blood relative of the UK Royals
and his 50 secret society brothers set up America for 200 + years of fraud. Guess what, the
royals still run things folks. We on the other hand will only be remembered as man or woman
if we turn a blind eye to truth and care nothing for honesty. Some less than human! Now as
people catch on to the facts that they have been played their whole life long while they
pretend and live in the matrix the Deep State must act to clean us out. It's called Agenda
2030 schemed up by the evil WEF. Don't get tested and don't get vaccinated. Now my awakened
ones it's your turn!
shadow1369 15 hours ago 20 Dec, 2020 11:48 AM
The US haas been mythologising its nature from day one, all is fraud and pretence there.
Ohhho 14 hours ago 20 Dec, 2020 01:15 PM
All of it is just a bunch of nonsense by a naive American. All that "great republic" and
"democracy" garbage! Their dear POTUSes are just puppets to the Global financial oligarchy
that "bought them all and in the darkness bound them"! So they underestimated Trump and let
him slip by, big deal! Everything is back to normal baby, hallelujah!
athineos Ohhho 13 hours ago 20 Dec, 2020 01:50 PM
Correct! US has been an Oligarchy since it's Founding when the theft and rape of the land of
the INDIGENOUS AMERICAN PEOPLE by the European Colonizers was being undertaken to benefit the
few as always. Now it has moved into its advanced cancerous stage where the middle class will
be completely assimilated into the poor class to bring about the New Feudal era of the NEW
WORLD ORDER.
Sovietski 10 hours ago 20 Dec, 2020 05:18 PM
Biden's sole election slogan/promise has been: "I'm not Trump" He's a millionaire and
4-decade career political dinosaur. Of course nothing will change!
The_Chosenites 14 hours ago 20 Dec, 2020 01:03 PM
Biden will spend most of his time as the Donald did. It will be Biden the Blind lead around
by his Israelis guide dog Bibi. Biden will be consumed with middle east policy and defeating
the enemies of Israel, allowing Israels continued expansionist policies. The American people
may have lost the election but there is always a clear winner!
IslandT 3 hours ago 20 Dec, 2020 11:45 PM
Trump administration is a complete failure, when Trump comes to power he has basically
started war on so many fronts and attacks so many swamp people which is the main reason why
so many top level people hate him and causes him to lost the presidency! The swamp in US
senate is simply too deep and there is nothing Trump can do about it, when he leaves the
office, the swamp people will come back and continue their party, those generals or officials
Trump puts on the important positions will be overthrew by Joe Biden, those rules that set by
Trump will also get overwritten by Joe Biden, basically it is a complete waste of time for
Trump to do all those unproductive works. Also the Mexican-US border wall will also be
stopped under Biden as well. If both the democrat and republican not realize they need to
change then there is nothing much a President can do to change the entire situation. US is in
the ending stage of it's empire and we will see de dollarisation after Trump steps down,
think about this, what will happen if other nations want US to buy their currency with the US
gold reserves so the American can buy their raw material or finished product? How much gold
reserves does the US actually has and how much money does the US owns the foreign countries
and how much gold does the us has to pay to foreign nations if de dollarisation actually
happen? Do you people realize that Mike Pompeo has just turned into Swamp people as well,
there goes the last hope for the American!
The USA is now the proverbial Whale in a Swimming Pool: it is big, powerful and impressive
- but can't hide its moves anymore and has little to none margin for any maneuver.
The American Center-wing is ossifying, or, in Cold Warrior terminology (Arthur
Schlesinger Jr.), is losing its "vitality". It is entering a stage where it must "burn the
village in order to save it".
... it seems the answer is that Germany plays the role in Europe that the US plays in the
world and both are satisfied with that role even though neo-liberalism, austerity and
war-mongering are leading us to inhumanity and disaster.
Like i said before elsewhere Biden would capitalize on what Trump has put forth and take
the infamy and blame for instead of moving in the opposite directions of whatever Trump
criticized for in foreign policy. That means be it trade war with China, renege on climate
deals, strong arming NATO and EU countries, or giving everything Israel wants nothing stop
Biden from maintaining what has been put in place.
At most they'll just make excuse on why they had to maintain the policies they themselves
criticized Trump for without changing direction.
He said Joe Biden's strong conviction was that the Nord Stream 2 pipeline is a "bad idea"
and that the administration would use "every persuasive tool" to convince partners,
including Germany, to discard the project.
That is pretty much a declaration of war against countries in Europe. Stay
away,
America's
disarray is its own woes, not other countries' opportunity The Financial Times lives in
a world where the USA doesn't have more than 2,000 operational nukes, doesn't control the
financial system (SWIFT), doesn't issue the universal fiat currency (Dollar Standard),
doesn't have a big fucking navy, doesn't enjoy absolute ideological hegemony etc. etc.
...Tronald's foreign policy has been a disaster, even if he has supposedly not sparked a
new war. Let's not talk about all the secret operations, multiplied drone attacks, state
terrorist assassinations, etc. And the new administration is now continuing this...
They've stopped thinking, become utterly predictable.
They just go through the motions. They know that they can't win-achieve their long held
objectives-but they can't stop repeating themselves, including their past errors. They are
not allowed to. The US ruling caste-servants of the ruling class- are only allowed to
operate within very narrow boundaries. They aren't allowed to take radical measures when
faced with new crises- they are confined within ever diminishing political circles. The
duopoly has become an obvious One Party system. And its politics are those of the Gilded
Age-150 years old and still going strong.
The only solution to America's problems is defeat so complete that it cannot be denied
even by the least perceptive. Anyone with money to spare should be buying popcorn
futures.
...Biden is an elderly figurehead. Trump's mistake was being openly bullying and vulgar
instead of underhanded. Already, the EU ( as cowardly vassals ) are falling into line on
Iran and Russia.
...Paul Craig Roberts is correct. There has not been a regime change, there has been a
revolution and treating policies of this "president" as if he is more than a figurehead
being run by oligarchs is foolish in the extreme.
They've stopped thinking, become utterly predictable.
One could say this about the American people who have been herded into two camps so that
the Center can rule. Here's an example: One of Biden's first executive actions is to
include undocumented residents in the Census. This will please the Left immensely and
outrage the Right. But the Census is conducted every 10 years and it was completed in 2020.
So Biden's action is actually meaningless. How many people will actual notice this? Very
few.
It is funny/sad to see the Post Trump Stress Disorder victims are already rationalizing
and making excuses for the war that the establishment drones they voted for will be
starting, and those drones are not even sworn in to office yet. They know that they voted
for war yet their plastic, Hollywood "identities" are so intertwined with their assumed
self-evident moral superiority that they are compelled to defend the evil they are
responsible for even before it is committed. For them, doing nothing crudely is far worse
than murdering millions accompanied by lofty and emotive platitudes.
Meet the Filthy Rich War Hawks That Make up Biden's New Foreign Policy Team
"I expect the prevailing direction of U.S. foreign policy over these last decades to
continue: more lawless bombing and killing multiple countries under the cover of "limited
engagement," – Biden Biographer Branko Marcetic
by Alan Macleod November 13th, 2020
https://www.mintpressnews.com/filthy-rich-war-hawks-make-joe-biden-foreign-policy-team/273039/
Neera Tanden – Reduce US Deficits by Raiding the Economies of Countries We Have
Destroyed:
Neera Tanden, Biden's Pick for Budget Office: Now Is Not the Time To 'Worry About Raising
Deficits and Debt'
by Robby Soave https://reason.com/2020/11/30/neera-tanden-biden-omb-debt-deficit/
She once suggested that if Americans care about the deficit so much, maybe we should make
Libya pay for it.
| 11/30/2020
( Ariana Ruiz/ZUMAPRESS/Newscom )
Trump ripped the mask off US foreign policy and exposed it for what it is - ugly Zionism
and outrageous Jewish supremacy. Trump did many foreign policy changes previous incumbents
and their handlers wanted to do but were constrained by the optics and international
opinion.
I agree the Biden administration will continue the same tired old foreign policy, only
with the mask back on. Of course the media won't notice the similarities, but the public
will. No matter how fervently the managers tinker with the edges it is events that drive
changes and change people.
I just listened to President Biden's speech. It was a good one, even a great one. Thinking
about what Plato means by the 'noble lie' it was a noble speech, and there wasn't much of a
lie about it.
b finished the posting with
"
While Trump had continued the wars the U.S. waged when he came into office he did not start
any new ones. Since Joe Biden first entered the Senate 47 years ago he has cheered on every
war the U.S. has since waged. It would be astonishing to find four years from now that he
did not start any new ones.
"
Prepare to be astonished. Biden isn't going to start any new wars for the same reason
that Trump didn't......MAD
Humanity has been in the MAD phase of the civilization war we are in since the Obama era
push back in Syria.
Biden's chest beating will not be as "impressive" as Trump's but the trajectory is the
same.
The new chief says to tighten the circle of wagons, but those accused of besieging the
Outlaw US Empire's wagon train stopped attacking and moved on long ago. Meanwhile,
supplying the wagon train continues to take resources away from dealing with very real
domestic problems. The upshot is China will continue to pull away and increase its lead
geoeconomically, and together with Russia will continue to solidify and strengthen the
Eurasian Bloc. Very soon, the EU is going to be faced with a very stark choice--to join the
Eurasian Bloc and thus stave-off economic atrophy or continue to allow its brand of
Neoliberal Parasites to eat and risk rupture, perhaps not in 2021 but before 2030.
The key is that the false narrative that was initiated in 1945 and bolstered in 1979
continues to be treated as gospel despite its path to certain ruin. I noted there were no
questions asked about the international call for a Bretton Woods 2.0 that would end dollar
hegemony and Petrodollar recycling, while removing the one source of coercion behind its
illegal sanctions.
The only possible target of opportunity I see is Venezuela as the frack-patch is about
to fold-up shop and fuel prices cause domestic inflation to soar -- Here in Oregon, gas
prices have gone up 50cents/gal since the first of the year--25%. The oil being the obvious
target now the the lower-48 has definitely peaked.
@ 32 juliania... you are the eternal optimist! there is something admirable about that!..
however you have to contend with a lot of cynical people who think like it's business as
well, as b's post notes..... you might not like to hear this, but nothing is going to
change under biden... big wheels set in motion and biden is not interested in the least in
changing any of it... neither was trump as some of his fanbots are coming to see too...
political speeches are just so much b.s... juliania - as the saying goes, talk is cheap, it
is actions that count.... watch peoples actions, not their talk... biden can talk a good
line, but that has nothing to do with his actions... top of the day to you!
@34 Invading Venezuela and 'taking the oil' won't be easy though there is a possibility
Colombia will help out. Which means the total disruption of South America. More economical
to just buy the stuff.
"It is funny/sad to see the Post Trump Stress Disorder victims are already rationalizing
and making excuses for the war that the establishment drones they voted for will be
starting, and those drones are not even sworn in to office yet. They know that they voted
for war yet their plastic, Hollywood "identities" are so intertwined with their assumed
self-evident moral superiority that they are compelled to defend the evil they are
responsible for even before it is committed. For them, doing nothing crudely is far worse
than murdering millions accompanied by lofty and emotive platitudes."
Posted by: William Gruff | Jan 20 2021 16:16 utc | 26
Tnx for expressing this in a much nicer and polite way then i would have written. And
yes, yes it is sad/amusing to watch NPC`s turn into pretzels to explain away their
cognitive dissonans ,utter foolishness and stupidity.
The plan now, on the part of the Swamp, is to declare every Trump supporter a terrorist and
an insurrectionist.
But we did not tear down statues of American heroes.
Antifa and BLM did that. We did not attack the police and call for them to be defunded or
fried like bacon. Antifa and BLM did that.
We did not burn and loot the business centers of dozens of America's major cities. Antifa
and BLM did that.
And what have Republican leaders done? They condemn you, anyone who dares to continue to
express support for Donald Trump, as a domestic terrorist. And when there was ample cause to
call out the real terrorists–Antifa and BLM–many of the Republican leaders cowered
and kept silent.
"Neoliberalism and imperialism do not care about the pseudo-fights between the two
parties or the cable TV bickering of the day. They do not like the far left or the far right.
They do not like extremism of any kind. They do not support Communism and they do not support
neo-Nazism or some fascist revolution. They care only about one thing: disempowering and
crushing anyone who dissents from and threatens their hegemony. They care about stopping
dissidents. All the weapons they build and institutions they assemble -- the FBI, the DOJ,
the CIA, the NSA, oligarchical power -- exist for that sole and exclusive purpose, to fortify
their power by rewarding those who accede to their pieties and crushing those who do
not."
the democrats are led by a bunch of international sociopaths, pariahs, billionaire
psychopaths, paranoid schizos, think tank imbeciles, and endless-war mongers - all of this
fully enabled by a sycophantic a**-kissing and biased press which also has lost its common
sense and collective mind. very sad!!!
I particularly like glenn Greenwald's take on some of this insanity...
Glenn Greenwald @ggreenwald
Remember when Mueller spent 18 months and millions of dollars armed with a team of
prosecutors and subpoena power, then closed his investigation after arresting *zero*
Americans for conspiring with Russia?
Let's do it again! Anything to distract from how rotted neoliberalism is:
LOL. In that above clip, Hillary Clinton explicitly suggests that Trump was plotting with
Putin on the day of the Capitol Riots, as if Putin directed it.
These people are the *last* ones with any moral standing to rant about conspiracy theories
& disinformation.
Michael Hudson and Pepe Escobar last month took a hard look at rent and rent-seeking at
the Henry George School of Social Science.
Michael Hudson: Well, I'm honored to be here on the same show with Pepe and discuss our
mutual concern. And I think you have to frame the whole issue that China is thriving, and the
West has reached the end of the whole 75-year expansion it had since 1945.
So, there was an illusion that America is de-industrializing because of competition from
China. And the reality is there is no way that America can re-industrialize and regain its
export markets with the way that it's organized today, financialized and privatized and if
China didn't exist. You'd still have the Rust Belt rusting out. You'd still have American
industry not being able to compete abroad simply because the cost structure is so high in the
United States.
Michael Hudson. (Wikimedia Commons)
The wealth is no longer made here by industrializing. It's made financially, mainly by
making capital gains. Rising prices for real estate or for stocks and for bonds. In the last
nine months, since the coronavirus came here, the top 1 percent of the U.S. economy grew by $1
trillion. It's been a windfall for the 1 percent. The stock market is way up, the bond market
is up, the real estate market is up while the rest of the economy is going down. Despite the
tariffs that Trump put on, Chinese imports, trade with China is going up because we're just not
producing materials.
America doesn't make its own shoes. It doesn't make some nuts and bolts or fasteners, it
doesn't make industrial things anymore because if money is to be made off an industrial company
it's to buy and sell the company, not to make loans to increase the company's production. New
York City, where I live, used to be an industrial city and, the industrial buildings, the
mercantile buildings have all been gentrified into high-priced real estate and the result is
that Americans have to pay so much money on education, rent, medical care that if they got all
of their physical needs, their food, their clothing, all the goods and services for nothing,
they still couldn't compete with foreign labor because of all of the costs that they have to
pay that are essentially called rent-seeking.
Housing in the United States now absorbs about 40 percent of the average worker's paycheck.
There's 15 percent taken off the top of paychecks for pensions, Social Security and for
Medicare. Further medical insurance adds more to the paycheck, income taxes and sales taxes add
about another 10 percent. Then you have student loans and bank debt. So basically, the American
worker can only spend about one third of his or her income on buying the goods and services
they produce. All the rest goes into the FIRE sector -- the finance, insurance and real estate
sector -- and other monopolies.
And essentially, we became what's called a rent-seeking economy, not a productive economy.
So, when people in Washington talk about American capitalism versus Chinese socialism this is
confusing the issue. What kind of capitalism are we talking about?
America used to have industrial capitalism in the 19th century. That's how it got richer
originally but now it's moved away from industrial capitalism towards finance capitalism. And
what that means is that essentially the mixed economy that made America rich -- where the
government would invest in education and infrastructure and transportation and provide these at
low costs so that the employers didn't have to pay labor to afford high costs -- all of this
has been transformed over the last hundred years.
And we've moved away from the whole ethic of what was industrial capitalism. Before, the
idea of capitalism in the 19th century from Adam Smith to Ricardo, to John Stuart Mill to Marx
was very clear and Marx stated it quite clearly; capitalism was revolutionary. It was to get
rid of the landlord class. It was to get rid of the rentier class. It was to get rid of the
banking class essentially, and just bear all the costs that were unnecessary for production,
because how did England and America and Germany gain their markets?
"We've moved away from the whole ethic of what was industrial capitalism."
They gained their markets basically by the government picking up a lot of the costs of the
economy. The government in America provided low-cost education, not student debt. It provided
transportation at subsidized prices. It provided basic infrastructure at low cost. And so,
government infrastructure was considered a fourth factor of production.
And if you read what the business schools in the late 19th century taught like Simon Patten
at the Wharton School, it's very much like socialism. In fact, it's very much like what China
is doing. And in fact, China is following in the last 30 or 40 years pretty much the same way
of getting rich that America followed.
It had its government fund basic infrastructure. It provides low-cost education. It invests
in high-speed railroads and airports, in the building of cities. So, the government bears most
of the costs and, that means that employers don't have to pay workers enough to pay a student
loan debt. They don't have to pay workers enough to pay enormous rent such as you have in the
United States. They don't have to pay workers to save for a pension fund, to pay the pension
later on. And most of all the Chinese economy doesn't really have to pay a banking class
because banking is the most important public utility of all. Banking is what China has kept in
the hands of government and Chinese banks don't lend for the same reasons that American banks
lend.
Shanghai's Pudong district from The Bund. (CC0, Wikimedia Commons)
(When I said that China can pay lower wages than the U.S., what I meant was that China
provides as public services many things that American workers have to pay out of their own
pockets – such as health care, free education, subsidized education, and above all, much
lower debt service.
When workers have to go into debt in order to live, they need much higher wages to keep
solvent. When they have to pay for their own health insurance, they have to earn more. The same
is true of education and student debt. So much of what Americans seem to be earning -- more
than workers in other countries -- goes right through their hands to the FIRE sector. So, what
seems to be "low wages" in China go a lot further than higher wages in the United States.)
Eighty percent of American bank loans are mortgage loans to real estate and the effect of
loosening loan standards and increasing the market for real estate is to push up the cost of
living, push up the cost of housing. So, Americans have to pay more and more money for their
housing whether they're renters or they're buyers, in which case the rent is for paying
mortgage interest.
So, all of this cost structure has been built into the economy. China's been able pretty
much, to avoid all of this, because its objective in banking is not to make a profit and
interest, not to make capital gains and speculation. It creates money to fund actual means of
production to build factories, to build research and development, to build transportation
facilities, to build infrastructure. Banks in America don't lend for that kind of thing.
"So, you have a diametric opposite philosophy of how to develop between the United States
and China."
They only lend against collateral that's already in place because they won't make a loan if
it's not backed by collateral. Well, China creates money through its public banks to create
capital, to create the means of production. So, you have a diametric opposite philosophy of how
to develop between the United States and China.
The United States has decided not to gain wealth by actually investing in means of
production and producing goods and services, but in financial ways. China is gaining wealth the
old-fashioned way, by producing it. And whether you call this, industrial capitalism or a state
capitalism or a state socialism or Marxism, it basically follows the same logic of real
economics, the real economy, not the financial overhead. So, you have China operating as a real
economy, increasing its production, becoming the workshop of the world as England used to be
called and America trying to draw in foreign resources, live off of foreign resources, live by
trying to make money by investing in the Chinese stock market or now, moving investment banks
into China and making loans to China not actual industrial capitalism ways.
"China is gaining wealth the old-fashioned way, by producing it."
So, you could say that America has gone beyond industrial capitalism, and they call it the
post-industrial society, but you could call it the neo-feudal society. You could call it the
neo-rentier society, or you could call it debt peonage but it's not industrial capitalism.
And in that sense, there's no rivalry between China and America. These are different systems
going their own way and I better let Pepe pick it up from there.
Pepe Escobar : Okay. Thank you, Michael, this is brilliant. And you did it in less than 15
minutes. You told the whole story in 15 minutes. Well, my journalistic instinct is immediately
to start questions to Michael. So, this is exactly what I'm gonna do now. I think it is much
better to basically illustrate some points of what Michael just said, comparing the American
system, which is finance capitalism essentially, with industrial capitalism that is in effect
in China. Let me try to start with a very concrete and straight to the point question,
Michael.
Okay. let's says that more or less, if we want to summarize it, basically they try to tax
the nonproductive rentier class. So, this would be the Chinese way to distribute wealth, right?
Sifting through the Chinese economic literature, there is a very interesting concept, which is
relatively new (correct me if I am wrong, Michael) in China, which they call stable investment.
So stable investment, according to the Chinese would be to issue special bonds as extra capital
in fact, to be invested in infrastructure building all across China, and they choose these
projects in what they call weak areas and weak links. So probably in some of the inner
provinces, or probably in some parts of Tibet or Xinjiang for instance. So, this is a way to
invest in the real economy and in real government investment projects.
Right? So, my question in fact, is does this system create extra local debt, coming directly
from this financing from Beijing? Is this a good recipe for sustainable development, the
Chinese way and the recipe that they could expand to other parts of the Global South?
Michael: Well, this is a big problem that they're discussing right now. The localities,
especially rural China, (and China is still largely rural) only cover about half of their
working budget from taxation. So, they have a problem. How are they going to get the balance of
the money? Well, there is no official revenue sharing between the federal government and its
state banks and the localities.
So, the localities can't simply go to central government and say, give us more money. The
government lets the localities be very independent. And it is sort of the "let a hundred
flowers bloom" concept. And so, they've let each locality just go the long way, but the
localities have run a big deficit.
What do they do? Well in the United States they would issue bonds on which New York is about
to default. But in China, the easiest way for the localities to make money, is unfortunately
they will do something like Chicago did. They will sell their tax rights for the next 75 years
for current money now.
So, a real estate developer will come in and say; look we will give you the next 75 years of
tax on this land, because we want to build projects on this (a set of buildings). So, what this
means is that now the cities have given away all their source of rent.
Chicago's Water Tower
and Water Tower Place. (CC BY-SA 3.0, Wikimedia Commons)
Let me show you the problem by what Indiana and Chicago did. Chicago also was very much like
China's countryside cities. So, it sold parking meters and its sidewalks to a whole series of
Wall Street investors, including the Abu Dhabi Investment Fund for seventy-five years. And that
meant that for 75 years, this Wall Street consortium got to control the parking meters.
So, they put up the parking meters all over Chicago, raised the price of parking, raised the
cost of driving to Chicago. And if Chicago would have a parade and interrupt parking, then
Chicago has to pay the Abu Dhabi fund and Wall Street company what it would have made anyway.
And this became such an awful disaster that finally Wall Street had to reverse the deal and
undo it because it was giving privatization a bad name here. The same thing happened in
Indiana.
High School marching band in Chicago's 2008 Bud Billiken Parade. (Curtis Morrow, CC
BY 2.0, Wikimedia Commons)
Indiana was running a deficit and it decided to sell its roads to a Wall Street investment
firm to make a toll road. The toll on the Indiana turnpike was so high that drivers began to
take over the side roads. That's the problem if you sell future tax revenues in advance.
Now what China and the localities there are discussing is that we've already given the real
estate tax at very low estimates to the commercial developers, so what do we do? Well, I've
given them my advice. I'm a professor of economics at the Peking University, School of Marxist
studies and I've had discussions with the Central Committee. I also have an official position
at Wuhan University. There, we're discussing how China can put an added tax for all of the
valuable land, that's gone up. How can it be done to let the cities collect this tax? Our claim
is that the cities, in selling these tax rights for 75 years, have sold what in Britain would
be called ground rent (i.e. what's paid to the landed aristocracy).
Over and above that there's the market rent. So, China should pass a market-rent tax over
and above the ground rent tax to reflect the current value. And there they're thinking of,
well, do we say that this is a capital gain on the land? Well, it's not really a capital gain
until you sell the land, but it's value. It's the valuation of the capital. And they're looking
at whether they should just say this is the market rent tax over and above the flat tax that
has been paid in advance, or it's a land tax on the capital gain for land.
Now, all of this requires that there be a land map of the whole country. And they are just
beginning to create such a land map as a basis for how you calculate how much the rent there
is.
What I found in China is something very strange. A few years ago, in Beijing, they had the
first, International Marxist conference where I was the main speaker and I was talking about
Marx's discussion of the history of rent theory in Volume II and Volume III of Capital
where Marx discusses all of the classical economics that led up to his view; Adam Smith,
Ricardo, Malthus, John Stuart Mill, and Marx's theory of surplus value was really the first
history of economic thought that was written, although it wasn't published until after he died.
Well, you could see that there was a little bit of discomfort with some of the Marxists at the
conference. And so, they invited for the next time my colleague David Harvey to come and talk
about Marxism in the West.
Well, David gave both the leading and the closing speech of the conference and said, you've
got to go beyond volume I of Capital . Volume I was what Marx wrote as his addition to
classical economics, saying that there was exploitation in industrial employment of labor as
well as rent seeking and then he said, now that I've done my introduction here, let me talk
about how capitalism works in Volumes II and III. Volumes II and III are all about rent and
finance and David Harvey has published a book on Volume III of Capital and his message
to Peking University and the second Marxist conference was – you've got to read Volume
II, and III.
Well, you can see that, there's a discussion now over what is Marxism and a friend and
colleague at PKU said Marxism is a Chinese word; It's the Chinese word for politics. That made
everything clear to me. Now I get it! I've been asked by the Academy of Social Sciences in
China to create a syllabus of the history of rent theory and value theory. And essentially in
order to have an idea of how you calculate rent, how do you make a national income analysis
where you show rent, you have to have a theory of value and price and rent is the excess of
price over the actual cost value. Well, for that you need a concept of cost of production and
that's what classical economics is all about. Post-classical economics denied all of this. The
whole idea of classical economics is that not all income is earned.
Landlords don't earn their income for making rent in their sleep as John Stuart Mill said.
Banks don't earn their income by just sitting there and letting debts accrue and interest
compounding and doubling. The classical economists separated actual unearned income from the
production and consumption economy.
Well, around the late 19th century in America, you had economists fighting against not only
Marx, but also even against Henry George, who at that time, was urging a land tax in New York.
And so, at Columbia University, John Bates Clark developed a whole theory that everybody earns
whatever they can get. That there was no such thing as unearned income and that has become the
basis for American national income statistics and thought ever since. So, if you look at
today's GDP figures for the United States, they have a figure for 8 percent of the GDP for the
homeowners' rent. But homeowners wouldn't pay themselves if they had to rent the apartment to
themselves, then you'll have interest at about 12 percent of GDP.
And I thought, well how can interest be so steady? What happens to all of the late fees;
that 29 percent that credit card companies charge? I called up the national income people in
Washington, when I was there. And they said well, late fees and penalties are considered
financial services.
And so, this is what you call a service economy. Well, there's no service in charging a late
fee, but they add all of the late fees. When people can't pay their debts and they owe more and
more, all of that is considered an addition to GDP. When housing becomes more expensive and
prices American labor out of the market, that's called an increase in GDP.
This is not how a country that wants to develop is going to create a national income
account. So, there's a long discussion in China about, just to answer your question, how do you
create an account to distinguish between what's the necessary cost to production and what's an
unnecessary production cost and how do we avoid doing what the United States did. So again, no
rivalry. The United States is an object lesson for China on what to avoid, not only in
industrializing the economy, but in creating a picture of the economy as if everybody earns
everything and there's no exploitation, no earned income, nobody makes money in their sleep and
there's no 1 percent. Well, that's what's really at issue and why the whole world is splitting
apart as you and I are discussing in what we're writing.
"When people can't pay their debts and they owe more and more, all of that is considered an
addition to GDP."
Pepe: Thank you, Michael. Thank you very much. So just to sum it all up, can we say that
Beijing's strategy is to save especially provincial areas from leasing their land, their
infrastructure for 60 years or 75 years? As you just mentioned, can we say that the fulcrum of
their national strategy is what you define as the market rent tax? Is this the No. 1 mechanism
that they are developing?
Michael: Ideally, they want to keep rents as low as possible because rent is a cost of
living and a cost of doing business. They don't have banks that are lending to inflate the real
estate market.
However, in almost every Western country -- the U.S., Germany England -- the value of stocks
and bonds and the value of real estate is just about exactly the same. But for China, the value
of real estate is way, way larger than the value of stocks.
And the reason is not because the Chinese Central bank, the Bank of China lends for real
estate; it's because they lend to intermediaries and the intermediaries have financed a lot of
housing purchases in China. And, this is really the problem for if they levy a land tax, then
you're going to make a lot of these financial intermediaries go bust.
That's what I'm advocating, and I don't think that's a bad thing. These financial
intermediaries shouldn't exist, and this same issue came up in 2009 in the United States. You
had the leading American bank being the most crooked and internally corrupt bank in the
country, Citibank making junk mortgage, and it was broke.
Sheila Bair in 2016. (Matt
Spangler for Washington College, CC BY-SA 4.0, Wikimedia Commons)
Its entire net worth was wiped out as a result of its fraudulent junk mortgages. Well,
Sheila Bair, the head of the Federal Deposit Insurance Corporation (FDIC) wanted to close it
down and take it over. Essentially that would have made it into a public bank and that would be
a wonderful thing. She said, look Citibank shouldn't be doing what it's doing. And she wrote
all this up in an autobiography. And, she was overruled by President Obama and Tim Geithner
saying, but wait a minute, those are our campaign contributors. So, they were loyal to the
campaign contributors, but not the voters; and they didn't close Citibank down.
And the result is that the Federal Reserve ended up creating about $7 trillion of
quantitative easing to bail out the banks. The homeowners weren't bailed out. Ten million
American families lost their homes as a result of junk mortgages in excess of what the property
was actually worth.
All of this was left on the books, foreclosed and sold to a private capital companies like
Blackstone. And the result is that home ownership in America declined from 68 percent of the
population down to about 61 percent. Well, right where the Obama administration left off,
you're about to have the Biden administration begin in January with an estimated 5 million
Americans losing their homes. They're going to be evicted because they've been unemployed
during the pandemic. They've been working in restaurants or gyms or other industries that have
been shut down because of the pandemic. They're going to be evicted and many homeowners and,
low-income homeowners have been unable to pay their mortgages.
There's going to be a wave of foreclosures. The question is, who's going to bear the cost?
Should it be 15 million American families who lose their homes just so the banks won't lose
money? Or should we let the banks that have made all of the growth since 2008? Ninety five
percent of American GDP of the population has seen its wealth go down. All the wealth has been
accumulating for the 5 percent in statistics. Now the question is should this 5 percent that's
got all the wealth lose or should the 95 percent lose?
Worker installs security panels over
windows after police evict woman from her foreclosed home in South Minneapolis, 2009. (Tony
Webster, CC BY 2.0, Wikimedia Commons)
The Biden administration says the 95 percent should lose basically. And you're going to see
a wave of closures so that the question in China should be that, these intermediate banks
(they're not really banks they are sort of like payday loan lenders), should they come in and,
bear the loss or should Chinese localities and the people bear the loss? Somebody has to lose
when you're charging, you're collecting the land's rent that was paid to the creditors, and
either the creditors have to lose or, the tax collector loses and that's the conflict that
exists in every society of the world today. And, in the West, the idea is the tax collectors
should lose and whatever the tax collector relinquishes should be free for the banks to
collect. In China obviously, they don't want that to happen and they don't want to see a
financial class developing along US lines.
Pepe: Michael, there's a quick question in all this, which is the official position by
Beijing in terms of helping the localities. Their official position is that there won't be any
bailouts of local debt. How do they plan to do that?
Michael: What they're discussing, how are you not going to do it? They think they sort of
let localities go their own way. And they think, well you know which ones are going to succeed,
and which ones aren't, they didn't want to have a one-size-fits all central planning. They
wanted to have flexibility. Well, now they have flexibility. And when you have many different
"let a hundred flowers bloom," not all the flowers are going to bloom at the same rate.
And the question is, if they don't bail out the cities, how are the cities going to operate?
Certainly, China has never let markets steer the economy, the government steers the markets.
That's what socialism is as opposed to finance capitalism. So, the question is, you can let
localities go broke and yet you're not going to destroy any of the physical assets of the
localities, and all of this is going to be in place. The question is how are you going to
arrange the flow of income to all of these roads and buildings and land that's in place? How do
you create a system? Essentially, they're saying well, if we're industrial engineers, how do we
just plan things? Forget credit, forget property claims, forget the rentier claims. How are we
just going to design an economy that operates most efficiently? And that's what they're working
on now to resolve this situation because it's gotten fairly critical.
Pepe: Yes, especially in the countryside. Well, I think, a very good metaphor in terms of
comparing both systems are investment in infrastructure. You travel to China a lot so, you've
seen. You'll travel through high-speed rail. You'll see those fantastic airports, in Pudong or
the new airport in Beijing. And then you'll take the Acela to go from Washington to New York
City, which is something that I used to do years ago. And the comparison is striking. Isn't
it?
Or if you go to France, for instance, when France started development of the TGV, which in
terms of a national infrastructure network, is one of the best networks on the planet. And the
French started doing this 30 years ago, even more. Is there , it's not in terms of way out, but
if we analyze the minutia, it's obvious that following the American finance utilization system,
we could never have something remotely similar happening in United States in terms of building
infrastructure.
So, do you see any realistic bypass mechanism in terms of improving American infrastructure,
especially in the big cities?
TGV 2N2 Lyria train at Paris' Gare de Lyon station. (CC BY-SA
4.0, Wikimedia Commons)
Michael: No, and there are two reasons for that. No. 1, let's take a look at the long-term
railroads. The railroads go through the center of town or even in the countryside, all along
the railroads, the railroads brought business and all the businesses had been located as close
to the railroad tracks as they could. Factories with sightings off the railroad, hotels and
especially right through the middle of town where you have the railway gates going up and down.
In order to make a high-speed rail as in China, you need a dedicated roadway without trucks and
cars, imagine a car going through a railway gate at 350 miles an hour.
So, when I would go from Beijing to Tianjin, here's the high-speed rail, there's one highway
on one side, one highway on the other side. There'll be underpasses. But there it goes straight
now. How can you suppose you would have a straight Acela line from Washington up to Boston when
all along the line, there's all this real estate right along the line that has been built up?
There's no way you can get a dedicated roadway without having to tear down all of this real
estate that's on either side and the cost of making the current owners whole would be
prohibitive. And anywhere you would go, that's not in the center of the city, you would also
have to have the problem that there's already private property there.
And there's no legal, constitutional way for such a physical investment to be made. China
was able to make this investment because it was still largely rural. It wasn't as built up
along the railways. It didn't have any particular area that was built up right where the
railroad already was.
President Donald Trump visiting China in 2017. (PAS China via
Wikimedia Commons)
So certainly, any high-speed rail could not go where the current railways would be, and
they'd have to go on somebody's land. And, there's also, what do you do if you want to get to
New York and Long Island from New Jersey?
Sixty years ago, when I went into Wall Street, the cost of getting and transporting goods
from California to Newark, New Jersey, was as large as from Newark right across the Hudson
River to New York, not only because of the mafia and control of the local labor unions, but
because of the tunnels. Right now, the tunnels from New Jersey to New York are broke, they are
leaking, the subways in New York City, which continually break down because there was a
hurricane a few years ago and the switches were made in the 1940s. The switches are 80 years
old. They had water damage and the trains have to go at a crawl. But the city and state,
because it is not collecting the real estate tax and other taxes and because ridership fell on
the subways to about 20 percent, the city's broke. They're talking about 70 percent of city
services being cut back. They're talking about cutting back the subways to 40 percent capacity,
meaning everybody will have to get in -- when there's still a virus and not many people are
wearing masks, and there was no means of enforcing masks here.
Blue Xs mark social
distancing on the platform of a New York City subway station, May 2020. (Marc A. Hermann, MTA,
Wikimedia Commons)
So, there's no way that you can rebuild the infrastructure because, for one thing the
banking system here has subsidized for a hundred years junk economics saying you have to
balance the budget. If the government creates credit it's inflationary as if when banks create
credit, it's not inflationary. Well, the monetary effect is the same, no matter who creates the
money. And so, Biden has already said that President Trump ran a big deficit, we're going to
run a bunch of surpluses or a budget balance. And he was advocating that all along. Essentially
Biden is saying we have to increase unemployment by 20 percent, lower wages by 20 percent,
shrink the economy by about 10 percent in order to, in order for the banks not to lose
money.
"You're going to price the American economy even further out of business because they say
that public investment is socialism."
And, we're going to privatize but we are going to do it by selling the hospitals, the
schools, the parks, the transportation to finance, to Wall Street finance capital groups. And
so, you can imagine what's going to happen if the Wall Street groups buy the infrastructure.
They'll do what happened to Chicago when it sold all the parking meters, they'll say, OK,
instead of 25 cents an hour, it's now charged $3 an hour. Instead of a $2 for the subway, let's
make it $8.
You're going to price the American economy even further out of business because they say
that public investment is socialism. Well, it's not socialism. It's industrial capitalism. It's
industrialization, that's basic economics. The idea of what, and how an economy works is so
twisted academically that it's the antithesis of what Adam Smith, John Stewart Mill and Marx
all talked about. For them a free- market economy was an economy free of rentiers. Free of
rent, it didn't have any rent seeking. But now for the Americans, a free-market economy is free
for the rentiers, free for the landlord, free for the banks to make a killing. And that is
basically the class war back in business with a vengeance. That blocks and is preventing any
kind infrastructure recovery. I don't see how it can possibly take place.
Pepe: Well, based on what you just described, there is a process of turning the United
States into a giant Brazil. In fact, this is what the Brazilian Finance Minister Paulo Guedes,
a Pinochetista, as you know Michael, has been doing with the Brazilian economy for the past two
years, privatizing everything and selling everything to big Brazilian interests and with lots
of Wall Street interests involved as well. So, this is a recipe that goes all across the Global
South as well. And it's fully copied all across the Global South with no way out now.
Michael: Yes, and this is promoted by the World Bank and the International Monetary Fund.
And when I was brought down to Brazil to meet with the council of economic advisers under Lula,
[Luiz Inácio Lula da Silva, former president of Brazil], they said, well the whole
problem is that Lula's been obliged to let the banks do the planning.
So, basically free markets and libertarianism is adopting central planning, but with central
planning by the banks. America is a much more centrally planned economy than China. China is
letting a hundred flowers bloom; America has concentrated the planning and the resource
allocation in Wall Street. And that's the central planning that is much more corrosive than any
government planning, could be. Now the irony is that China's sending its students to America to
study economics. And, most of the Chinese I had talked to say, well we went to America to take
economics courses because that gives us a prestige here in China.
I'm working now, with Chinese groups trying to develop a "reality economics" to be taught in
China as different from American economics.
"America has concentrated the planning and the resource allocation in Wall Street. And
that's the central planning that is much more corrosive than any government planning, could
be."
Pepe: Exactly, because of what they study at Beijing University, Renmin or Tsinghua
is not exactly what they would study in big American universities. Probably what they study
in the U.S. is what not to do in China. When they go back to China, what they won't be doing.
It's an object lesson for what to avoid.
Michael, I'd like to go back to what the BRICS [Brazil, Russia, India, China and South
Africa] had been discussing in the 2000s when Lula was still president of Brazil and many of
his ideas deeply impressed, especially Hu Jintao at the time, which is bypassing the U.S.
dollar. Well, at the moment obviously we're still at 87 percent of international transactions
still in U.S. dollars. So, we are very far away from it, but if you have a truly sovereign
economy, which is the case of China, which we can say is the case of Russia to a certain extent
and obviously in a completely different framework, Iran. Iran is a completely sovereign,
independent economy from the West. The only way to try to develop different mechanisms to not
fall into the rentier mind space would be to bypass the U.S. dollar.
Occupy Wall Street
picket of HSBC, midtown Manhattan; Feb. 14, 2013. (Michael Fleshman Via Flickr)
Michael: Yes, for many reasons. For one thing the United States can simply print the dollars
and lend to other countries and then say, now you have to pay us interest. Well, Russia doesn't
need American dollars. It can print its own rubles to provide labor. There's no need for a
foreign currency at all for domestic spending, the only reason you would have to borrow a
foreign currency is to balance your exchange rate, or to finance a trade deficit. But China
doesn't have a trade deficit. And in fact, if China were to work to accept more dollars,
Americans would love to buy into the Chinese market and make a profit there, but that would
push up China's exchange rate and that would make it more difficult for her to make its exports
because the exchange rate would come up not because it's exporting more but because it's
letting American dollars come in and push it up.
Well, fortunately, President Trump as if he works for the Chinese National Committee, said,
look, we don't want to really hurt China by pushing up its currency and we want to keep it
competitive. So, I'm going to prevent American companies from lending money to China, I'm going
to isolate it and so he's helping them protect their economy. And in Russia he said, look
Russia really needs to feed itself. And, there's a real danger that when the Democrats come in,
there are a lot of anti-Russians in the Biden administration. They may go to war. They may do
to Russia what they tried to do to China in the '50s. Stop exporting food and grain. And only
Canada was able to break the embargo. So, we're going to impose sanctions on Russia. So
immediately, what happened is Russia very quickly became the largest grain exporter in the
world. And instead of importing cheese from the Baltics, it created its own cheese industry.
So, Trump said look, I know that Russians followed the American idea of not having protective
tariffs, they need protective tariffs. They're not doing it. We're going to help them out by
just not importing from them and really helping them.
Pepe: Yeah. Michael, what do you think Black Rock wants from the Chinese? You know that they
are making a few inroads at the highest levels? Of course, I'm sure you're aware of that. And
also, JP Morgan, Citybank, etc. What do they really want?
Michael: They'd like to be able to create dollars to begin to buy and make loans to real
estate; let companies grow, let the real estate market grow and make capital gains.
The way people get wealthy today isn't by making an income, it's been by making a capital
gain. Total returns are current income plus the capital gains. As for capital gains each year;
the land value gains alone are larger than the whole GDP growth from year to year. So that's
where the money is, that's where the wealth is. So, they are after speculative capital gains,
they would like to push money into the Chinese stock market and real estate market. See the
prices go up and then inflate the prices by buying in and then sell out at the high price. Pull
the money out, get a capital gain and let the economy crash, I mean that's the business
plan.
Pepe: Exactly. But Beijing will never allow that.
Michael: Well, here's the problem right now, they know that Biden is pushing militarily
aggressive people in his cabinet. There's one kind of overhead that China is really trying to
avoid and that's the military overhead because if you spend money on the military, you can't
spend it on the real economy. They're very worried about the military and they say, how do we
deter the Biden administration from actually trying a military adventure in the South China Sea
or elsewhere? They said well, fortunately America is multi-layered. They don't think of America
as a group. They realize there's a layer and they say, who's going to represent our
interests?
"There's one kind of overhead that China is really trying to avoid and that's the military
overhead because if you spend money on the military, you can't spend it on the real
economy."
Well, Blackstone and Wall Street are going to represent their interests. Then I think one of
the, Chinese officials last week gave a big speech on this very thing, saying look, our best
hope in stopping America's military adventurism in China is to have Wall Street acting as our
support because after all, Wall Street is the main campaign contributor and the president works
for the campaign contributors.
The politician works for the campaign contributors. They're in it for the money! So
fortunately, we have Wall Street on our side, we've got control of the political system and
they're not there to go to war so that helps explain why a month ago they let wholly-owned U.S.
banks and bankers in. On the one hand, they don't like the idea of somebody outside the
government creating credit for reasons that the economy doesn't need. If they needed it, the
Bank of China would do it. They have no need for foreign currency to come in to make loans in
domestic currency, out of China.
The only reason that they could do it is No. 1, it helps meet the World Trade Organization's
principles and, No. 2, especially during this formative few months of the Biden administration,
it helps to have Wall Street saying; we can make a fortune in China, go easy on them and that
essentially counters the military hawks in Washington.
Pepe: So, do you foresee a scenario when Black Rock starts wreaking havoc in the Shanghai
stock exchange for instance?
Wall Street, Nov. 21, 2009. (Dave Center, Flickr)
Michael: It would love to do that. It would love to move things up and down. The money's
made by companies with the stock market going up and down; the zigzag. So of course, it wants
to do a predatory zigzag. The question is whether China will impose a tax to stop this, all
sorts of financial transactions. That's what's under discussion now. They know exactly what
Black Rock wants to do because they have some very savvy billionaire Chinese advisers that are
quite good. I can tell you stories, but I better not.
Pepe: Okay. If it's not okay to tell it all, tell us part of the story then.
Michael: The American banks have been cultivating leading Chinese people by providing them
enough money to make money here, that they think that, okay they will now try to make money in
the same way in China and we can join in. It's a conflict of systems again, between the finance
capital system and industrial socialism. You don't get any of this discussion in the U.S.
press, which is why I read what you write because in the U.S. press, the neocons talk about the
fake idea of Greek history and fake idea of the Thucydides' problem of a country jealous of
another country's development.
There's no jealousy between America and China. They're different, they have their own way.
We are going to destroy them. And if you look at the analogy that the Americans draw -- and
this is how the Pentagon thinks -- with the war between Athens and Sparta. It's hard to tell,
which is which. Here you have Athens, a democracy backing other democracies and having the
military support of the democracies and the military in these democracies all had to pay Athens
protection money for the military support and that's the money that Athens got to ostensibly
support its navy and protection that built up all of the Athenian public buildings and
everything else. So, that's a democracy exploiting its allies, to enrich itself via the
military. Then you have Sparta, which was funding all of the oligarchies, and it was helping
the oligarchies overthrow democracies. Well, that was America too. So, America is both sides of
the Thucydides war if the democracy is exploiting the fellow democracies and is the supporter
of oligarchies in Brazil, Latin America, Africa and everyone else.
So, you could say the Thucydides problem was between two sides, two aspects of America and
has nothing to do with China at all except, for the fact that the whole war was a war between
economic systems. They're acting as if somehow if only China did not export to us, we could be
re-industrialized and somehow export to Europe and the Third World.
And as you and I have described, it's over. We painted ourselves into such a debt corner
that without writing down the debts, we're in the same position that the Eurozone is in.
There's so much money that goes to the creditors to the top 1 percent or 5 percent that there
is no money for capital investment, there is no money for growth. And, since 1980 as you know,
real wages in America have been stable. All the growth has been in property owners and
predators and the FIRE sector, the rest of the economy is in stagnation. And now the
coronavirus has simply acted as a catalyst to make it very clear that the game is over; it's
time to move away from the homeowner economy to rentier economy, time for Blackstone to be the
landlord. America wants to recreate the British landlord class and essentially what we're
seeing now is like the Norman invasion of England taking over the land and the infrastructure.
That's what Blackstone would love to do in China.
"There's so much money that goes to the creditors to the top 1 percent or 5 percent that
there is no money for capital investment, there is no money for growth."
Pepe: Wow. I'm afraid that they may have a lot of leeway by some members of the Beijing
leadership now, because as you know very well, it's not a consensus in the political arena.
Michael: We're talking about Volume II and III of Capital .
Pepe: Exactly. But you know, you were talking about debt. Coming back to that, in fact I
just checked this morning, apparently global debt as it stands today is $277 trillion, which is
something like 365 percent of global GDP. What does that mean in practice?
Michael: Yeah, well fortunately this is discussed in the 19th century and there was a word
for that -- fictitious capital -- it's a debt that can't be paid, but you'll keep it on the
books anyway. And every country has this. You could say the question now, and The Financial
Times just had an article a few days ago that China's claims on Third World countries on
the Belt and Road Initiative is fictitious capital, because how can it collect?
Well, China's already thought of that. It doesn't want money. It wants the raw materials. It
wants to be paid in real things. But a debt that can't be paid, can only be paid either by
foreclosing on the debtors or by writing down the debts and obviously a debt that can't be paid
won't be paid.
"Fictitious capital -- it's a debt that can't be paid, but you'll keep it on the books
anyway. And every country has this."
And so, you have not only Marx using the word fictitious capital. At the other end of the
spectrum, you had Henry George talking about fictive capital. In other words, these are
property claims that have no real capital behind them. There's no capital that makes profit.
That's just a property claim for payment or a rentier claim for payment.
So, the question is, can you make money somehow without having any production at all,
without having wages, without having profits, without any capital? Can you just have asset
grabbing and buying-and-selling assets? And as long as you have the Federal Reserve in America,
come in, Trump's $10 trillion Covid program gave $2 trillion to the population at large with
these $1,200 checks, that my wife and I got, and $8 trillion all just to buy stocks and bonds.
None of this was to build infrastructure. None of this $8 trillion was to build a single
factory. None of this 8 trillion was to employee a single worker. It was all just to support
the prices of stocks and bonds, and to keep the illusion that the economy had not stopped
growing. Well, it's growing for the 5 percent. So, it's all become fictitious. And if you look
at the GDP as I said, it's fictitious.
Pepe: And the most extraordinary thing is none of that is discussed in American media.
There's not a single word about what you would have been describing.
Michael: It's not even discussed in academia. Our graduates at the university of Missouri at
Kansas City, we're all trained in Modern Monetary Theory. And as hired professors they have to
be able to publish in the refereed journals and the refereed journals are all essentially
controlled by the Chicago School. So, you have a censorship of the kind of ideas that we're
talking about. You can't get it into the economic journals, so you can't get it into the
economics curriculum. So, where on earth are you going to get it? If you didn't have the
internet you wouldn't be discussing at all. Most of my books sell mainly in China, more than in
all the other countries put together so I can discuss these things there. I stopped publishing
in orthodox journals so many years ago because it's talking to the deaf.
"None of this $8 trillion was to build a single factory, employee, a single worker."
Pepe: Absolutely. Yeah. Can I ask you a question about Russia, Michael? There is a raging,
debate in Russia for many years now between let's say the Eurasianists and the Atlanticists. It
involves of course, economic policy under Putin, industrial capitalism Russian style. The
Eurasianists basically say that the central problem with Russia is how the Russian central bank
is basically affiliated with all the mechanisms that you know so well, that it is an
Atlanticist Trojan Horse inside the Russian economy. How do you see it?
Michael: Russia was brainwashed by the West when the Soviet Union broke up in 1991 . First
of all, the IMF announced in advance that there was a big meeting in Houston with the IMF and
the World Bank. And the IMF published all of its report saying, first you don't want inflation
in Russia so let's wipe out all of the Russian savings with hyperinflation, which they did.
They then said, well now to cure the hyperinflation the Russian central bank needs a stable
currency and you need a backup for the currency. You will need to back it with U.S.
dollars.
"Russia was brainwashed by the West when the Soviet Union broke up in 1991."
So, from the early 1990s, as you know, labor was going unpaid. The Russian central bank
could have created the rubles to pay the domestic labor and to keep the factories in place.
But, the IMF advisers from Harvard said, no you'll have to borrow U.S. dollars. I met with
people from the Hermitage Fund and the Renaissance Fund and others. We had meetings and I met
with the investors. Russia was paying 100 percent interest for years to leading American
financial institutions for money that it didn't need and could have created itself. Russia was
so dispirited with Stalinism that, essentially, it thought the opposite of Stalinism must be
what they have in America.
They thought that America was going to tell it how America got rich, but America didn't want
to tell Russia how it got rich, but instead wanted to make money off Russia. They didn't get
it. They trusted the Americans. They really didn't understand that, industrial capitalism that
Marx described had metamorphosized into finance capitalism and was completely different.
And that's because Russia didn't charge rent, it didn't charge interest. I gave three
speeches before the Duma, urging it to impose a land tax. Some of the people I noticed, Ed
Dodson was there with us and we were all trying to convince Russia, don't let this land be
privatized. If you let it be privatized, then you're going to have such high rents and housing
costs in Russia that you're not going to be able to essentially compete for an industrial
growth. Well, the politician who brought us there, Viatcheslav Zolensky was sort of maneuvered
out of the election by the American advisers.
The Americans put billions of dollars in to essentially finance American propagandists to
destroy Russia, mainly from the Harvard Institute of International Development. And
essentially, they were a bunch of gangsters and the prosecutors in Boston were about to
prosecute them.
The attorney general of Boston was going to bring a big case for Harvard against the looting
of Russia and the corruption of Russia. And I was asked to organize and to bring a number of
Russian politicians and industrialists over to say how this destroyed everything. Well, Harvard
settled out of court and essentially that made the perpetrators the leading university people
up there. (I'm associated with Harvard Anthropology Department, not the Economics
Department.)
So, we never had a chance to bring my witnesses, and have our report on what happened, but I
published for the Russian Academy of Sciences a long study of how all of this destruction of
Russia was laid out in advance at the Houston meetings by the IMF. America went to the leading
bureaucrats and said; look, we can make you rich why don't you register the factories in your
own name, and if you're registered in your own name, you know, then you'll own it. And then you
can cash out. You can essentially sell, but obviously you can't sell to the Russians because
the IMF has just wiped out all of their savings.
You can only cash out by selling to the West. And so, the Russian stock market became the
leading stock market in the world from 1994 with the Norilsk Nickel and the seven bankers in
the bank loans for shares deal through 1997. And, I had worked for a firm Scutter Stevens and,
the head adviser, a former student of mine didn't want to invest in Russia because she said,
this is just a rip off, it's going to crash. She was fired for not investing. They said look,
we know that's going to crash. That's the whole idea it's going to crash. We can make a mint
off it before the crash. And then when it crashes, we can make another mint by selling short
and then all over again . Well, the problem is that the system that was put in with the
privatization that's occurred, how do you have Russia's wealth used to develop its own industry
and its own economy like China was doing. Well, China has rules for all of this, but Russia
doesn't have rules, it's really all centralized, it's President Putin that keeps it this
way.
President Vladimir Putin meeting with German business executives, Nov. 1, 2018. (The
Kremlin)
Well, this was the great fear of the West. When you had Mikhail Gorbachev beginning to plan
to do pretty much what is done today, to restrain private capital, the IMF said hold off. We're
not going to make any loans to stabilize the Russian currency until you remove Mr.
Primakov.
The U.S. said we won't deal with Russia until you remove him. So, he was pushed out and he
was probably the smartest guy at the time there. So, they thought [President Vladimir] Putin
was going to be sort of the patsy. And he almost single-handedly, holding the oligarchs in and
saying, look, you can keep your money as long as you do exactly what the government would do.
You can keep the gains as long as you're serving the public interest.
But none of this resulted into a legal system, a tax system, and a system where the
government actually does get most of the benefits. Russia could have emerged in 1990 as one the
most competitive economies in Eurasia by giving all of the houses to its people instead of
giving Norilsk Nickel and the oil companies to Yukos. It could have given everybody their own
house and their own apartment, the same thing in the Baltics. And instead it didn't give the
land out to the people. And Russians were paying 3 percent of their income for housing in 1990.
And rent is the largest element in every household's budget.
"Russia could have emerged in 1990 as one the most competitive economies in Eurasia by
giving all of the houses to its people."
So, Russia could have had low-price labor. It could have financed all of its capital
investment for the government by taxing, collecting the rising rental value. Instead, Russian
real estate was privatized on credit and it was even worse in the Baltics.
In Latvia, where I was research director for the Riga Graduate School of Law, Latvia
borrowed primarily from Swedish banks. And so, in order to buy a house, you had to borrow from
Swedish banks. And they said, well, we're not going to lend in the Latvian currency because it
can go down. So, you have a choice; Swiss Francs or German Marks or U.S. Dollars. And so, all
of this rent was paid in foreign currency. There came an outflow that essentially drained all
the Baltic economies. Latvia lost 20 percent of its population. Estonia and Lithuania followed
suit.
And of course, the worst hit by neo-liberalism was Russia. As you know, President Putin said
that neo-liberalism cost Russia more of its population than World War II. And you know that to
destroy a country, you don't need an army anymore. All you have to do is teach it American
economics.
Pepe: Yes, I remember well, I arrived in Russia in the winter of 91 coming from China. So, I
transited from the Chinese miracle. In fact, a few days after Deng Xiaoping's famous Southern
tour when he went to Guangzhou and Shenzhen. And that was the kick for the 1990s boom, in fact
a few years before the handover, and then I took the Trans-Siberian and I arrived in Moscow a
few days after the end, in fact, a few weeks after the end of the Soviet Union.
But yeah, I remember the Americans arrived almost at the exact minute, wasn't it, Michael? I
think they already were there in the spring of 1992. If I'm not mistaken.
Michael: The Houston meeting was in 1990. But all before that already in, 1988 and 1989,
there was a huge outflow of embezzlement money via Latvia. The assistant dean of the university
who ended up creating Nordex, essentially the money was all flying out because Ventspils in
Latvia, was where Russian oil was exported and it was all fake invoicing. So, the Russian
kleptocrats basically made their money off false export invoicing, ostensibly selling it for
one price and having the rest paid abroad and, this was all organized through Latvia and the
man who did it later moved to Israel and finally gave a billion dollars back to Russia so that
he went on to live safely for the rest of his life in Israel.
Pepe: Well, the crash of the ruble in 1998 was what, roughly one year after the crash of the
baht and the whole Asian financial crisis, no? It was interlinked of course, but let me see if
I have a question for you, in fact, I'm just thinking out loud now. If the economies of
Southeast Asia and Northeast Asia, the case of South Korea and Russia, were more integrated at
the time as they are trying to integrate now, do you think that the Asian financial crisis
would have been preventable in 1997?
Michael: Well, look at what happened in Malaysia with Mohammad Mahathir. Malaysia avoided
it. So of course, it was preventable, and they had the capital controls. All you would have
needed was to do what Malaysia did. But you needed an economic theory for that.
And essentially the current mode of warfare is to conquer the brains of a country to shape
how people think and how they perceive the economy. And if you can twist their view into an
unreality economics, where they think that you're there to help them not to take money out of
them, then you've got them hooked. That was what happened in Asia. Asia thought it was getting
rich off the dollars inflows and then the IMF and all the creditors pulled the plug, crash the
industry. And now that all of a sudden you had a crash, they bought up Korean industry and
other South Asian industries at giveaway prices.
That's what you do. You lend the money; you pull the plug. You then let them go under and
you pick up the pieces . That's what Blackstone did after the Obama depression began, when
Obama saved the banks, not the constituency, the mortgage borrowers. Essentially that's
Blackstone's modus operandi to pick up distressed prices at a bankruptcy sale, but you
need to lend money and then crash it in order to make that work.
Pepe: Michael, I think we have only five minutes left. So, I would expect you to go on a
relatively long answer and I'm really dying for it. It's about debt, it about the debt trap.
And it's about the New Silk Roads, the Belt and Road Initiative, because I think rounding up
our discussion and coming back to the theme of debt and global debt.
The No. 1 criticism apart from the demonization of China that you hear from American media
and a few American academics as well against the Belt and Road is that it's creating a debt
trap for Southeast Asian nations, Central Asian nations and nations in Africa, etc . Obviously,
I expect you to debunk that, but the framework is there is no other global development project
as extensive and as complex as Belt and Road, which as you know very well was initially dreamed
up by the Ministry of Commerce. Then they sold it more or less to Xi Jinping who got the
geopolitical stamp on it, announcing it, simultaneously, (which was a stroke of genius) in
Central Asia in Astana and then in Southeast Asia in Jakarta. So, he was announcing the
overland corridors through the heartland and the Maritime Silk Road at the same time.
At the time people didn't see the reach and depth of all that. And now of course, finally
the Trump administration woke up and saw what was in play, not only across Eurasia but reaching
Africa and even selected parts of Latin America as well. And obviously the only sort of
criticism, and it's not even a fact-based criticism, that I've seen about the Belt and Road is
it's creating a debt trap because as you know Laos is indebted, Sri Lanka is indebted,
Kyrgyzstan is indebted etc. So, how do you view Belt and Road within the large framework of the
West and China, East Asia and Eurasia relations? And how would you debunk misconceptions
created, especially in the U S that this is a debt trap.
Six proposed corridors of Belt and
Road Initiative, showing Italy inside circle, on maritime blue route. (Lommes, CC BY-SA 4.0,
Wikimedia Commons)
Michael: There are two points to answer there. The first is how the Belt and Road began. And
as you pointed out, the Belt and Road began, when China said, what is it we need to grow and
how do we grow within our neighboring countries so we don't have to depend upon the West, and
we don't have to depend on sea trade that can be shut down? How do we get to roads instead of
seas in a way that we can integrate our economy with the neighboring economies so that there
can be mutual growth?
So, this was done pretty much on industrial engineering grounds. Here's where you need the
roads and the railroads. And then how do we finance it? Well, The Financial Times
article, last week, said didn't the Chinese know that [with past] railroad development, they've
all gone broke? The Panama Canal went broke, you know, the first few times there were European
railway investment in Latin America in the 19th century, that all went broke.
Well, what they don't get is China's aim was not to make a profit off the railroads. The
railroads were built to be part of the economy. They don't want to make profit. It was to make
the real economy grow, not to make profits for the owners of the railroad stocks. The Western
press can't imagine that you're building a railroad without trying to make money out of it.
Then you get to the debt issue. Countries only have a debt crisis if their debt is in a
foreign currency. The first way that the United States gained power was to fight against its
allies. The great enemy of America was England and it made the British block their currency in
the 1940s. And so, India and other countries, that had all these currencies holdings in
sterling, were able to convert it all into dollars.
The whole move of the U.S. was to denominate world debt in dollars. So that No. 1, U.S.
banks would end up with the interest in financing the debt. And No. 2, the United States could,
by using the debt leverage, control domestic politics.
Well, as you're seeing right now in Argentina, for instance, Argentina is broke because it
owes foreign-dollar debt. When I started the first Third World bond fund in 1990 at Scutter
Stevens, Brazil and China and Argentina were paying 45 percent interest per year, 45 percent
per year in dollars debt. Yet we tried to sell them in America. No American would buy. We went
to Europe, no European buy this debt. And so, we worked with Merrill Lynch and Merrill Lynch
was able to make an offshore fund in the Dutch West Indies and all of the debt was sold to the
Brazilian ruling class in the central bank and the Argentinian bankers in the ruling class, we
thought oh, that's wonderful.
We know that they're going to pay the foreign Yankee Dollars debt because the Yankee Dollars
debt is owed to themselves. They're the Yankees! They're the client oligarchy. And you know,
from Brazil client oligarchy is, you know, they're cosmopolitan, that's the word. So, the
problem is that on the Belt and Road, how did these other countries pay the debt to China?
Well, the key there again is the de-dollarization, and one way to solve it is since we're
trying to get finance out of the picture, we're doing something very much like, Japan did with
Canada in the 1960s. It made loans to develop Canadian copper mines taking its payment, not in
Canadian dollars, that would have pushed up the yen's exchange rate, but in copper.
So, China says, you know you don't have to pay currency for this debt. We didn't build a
railroad to make a profit and you want, we can print all the currency we want. We don't need to
make a profit. We made the Belt and Road because it's part of our geopolitical attempt to
create what we need to be prosperous and have a prosperous region. So, these are
self-reinforcing mutual gain. Well, so that's what the West doesn't get -- mutual gain? Are we
talking anthropology? What do you mean mutual? This is capitalism! So, the West doesn't
understand what the original aim of the Belt and Road was, and it wasn't to make a profitable
railroad to enable people to buy and sell railway stocks. And it wasn't to make toll roads to
sell off to Goldman Sachs, you know. We're dealing with two different economic systems, and
it's very hard for one system to understand the other system because of the tunnel vision that
you get when you get a degree in economics.
"We're dealing with two different economic systems, and it's very hard for one system to
understand the other system because of the tunnel vision that you get when you get a degree in
economics."
Pepe: Belt and Road loans are long-term and at very low interest and they are renegotiable.
They are renegotiating with the Pakistanis all the time for instance.
Michael: China's intention is not to repeat an Asia crisis of 1997. It doesn't gain anything
by forcing a crisis because it's not trying to come in and buying property at a discount at a
distressed sale. It has no desire to create a distressed sale. So obviously, the idea is the
capacity to pay. Now, this whole argument occurred in the 1920s, between [John Maynard] Keynes
and his opponents that wanted to collect German reparations and, Keynes made it very clear.
What is the capacity to pay? It's the ability to export and the ability to obtain foreign
currency. Well, China's not looking for foreign currency. It is looking for economic returns
but the return is to the whole society, the return isn't from a railroad. The return is for the
entire economy because it's looking at the economy as a system.
The way that neoliberalism works, it divides the economy in parts, and it makes every part
trying to make a gain, and if you do that, then you don't have any infrastructure that's
lowering the cost for the other parts. You have every part fighting for itself. You don't look
at in terms of a system the way China's looking at it. That's the great advantage of Marxism,
you'll look at the system, not just the parts.
Pepe: Exactly and this is at the heart of the Chinese concept of a community with a shared
future for mankind, which is the approximate translation from Mandarin. So, we compare
community with a shared future for mankind, which is, let's say the driving force between the
idea of Belt and Road, expanded across Eurasia, Africa and Latin America as well with our good
old friends', "greed is good" concept from the eighties, which is still ruling America
apparently.
Michael: And the corollary is that non-greed is bad.
Pepe: Exactly and non-greed is evil.
Michael: I see. I think we ran out of time. I do. I don't know if Alanna wants to step in to
wrap it up.
Michael: There may be somebody who has a question.
Pepe: Somebody has a question? That'll be fantastic.
Alanna: There is a question from Ed Dodson. He wanted to know why there are these ghost
cities in China? And who's financing all this real estate that's developed, but nobody's living
there? We've all been hearing about that. So, what is happening with that?
Michael: Okay. China had most of its population living in the countryside and it made many
deals with Chinese landholders who have land rights, and they said, if you will give up your
land right to the community, we will give you free apartment in the city that you could rent
out.
So, China has been building apartments in cities and trading these basically in exchange to
support what used to be called a rural exodus. China doesn't need as many farmers on the land
as it now has, and the question is how are you going to get them into cities? So, China began
building these cities and many of these apartments are owned by people who've got them in
exchange for trading their land rights. The deals are part of the rural reconstruction
program.
Alanna: Do you think it was a good deal? Vacant apartments everywhere.
Pepe: You don't have ghost cities in Xinjiang for instance, Xinjiang is under-populated,
it's mostly desert. And it's extremely sensitive to relocate people to Xinjiang. So basically,
they concentrated on expanding Urumqi. When you arrive in Urumqi it is like almost like
arriving in, Guangzhou. It's enormous. It's a huge generic city in the middle of the desert.
And it's also a high-tech Mecca, which is something that very few people in the West know. And
is the direct link between the eastern seaboard via Belt and Road to Central Asia.
Pepe
Escobar at the Khunjerab pass, China-Pak border, on New Silk Road overdrive.
Last year I was on an amazing trip. I went to the three borders, the Tajik-Xinjiang border,
Kyrgiz-Xinjiang border and the Kazakh-Xinjiang border, which is three borders in one. It's a
fascinating area to explore and specially to talk to the local populations, the Kyrgiz, the
Kazakhs and the Tajiks. How do they see the Belt and Road directly affecting their lives from
now on? So, you don't see something spectacular for instance, in the Xinjiang – Kazakh
boarder, there is one border for the trucks, lots of them like in Europe, crossing from all
points, from Central Asia to China and bringing Chinese merchandise to Central Asia.
There's the train border, which is a very simple two tracks and the pedestrian border, which
is very funny because you have people arriving in buses from all parts of Central Asia. They
stop on the Kazakh border. They take a shuttle, they clear customs for one day, they go to a
series of shopping malls on the Chinese side of the border. They buy like crazy, shop till it
drops, I don't know for 12 hours? And then they cross back the same day because the visa is for
one day. They step on their buses and they go back.
So, for the moment it's sort of a pedestrian form of Belt and Road, but in the future, we're
going to have high-speed rail. We're going to have, well the pipelines are already there as
Michael knows, but it's fascinating to see on the spot. You see the closer integration; you see
for instance Uyghurs traveling back and forth. You know, Uyghurs that have families in
Kyrgizstan for instance, I met some Uyghurs in Kyrgyzstan who do the back-and-forth all the
time. And they said, there's no problem. They are seen as businessmen so there's no
interference. There are no concentration camps involved, you know, but you have to go to these
places to see how it works on the ground and with Covid, that's the problem for us journalists
who travel, because for one year we cannot go anywhere and Xinjiang was on my travel list this
year, Afghanistan as well, Mongolia.
These are all parts of Belt and Road or future parts of Belt and Road, like Afghanistan. The
Chinese and the Russians as well; they want to bring Afghanistan in a peace process organized
by Asians themselves without the United States, within the Shanghai Cooperation Organization,
because they want Afghanistan to be part of the intersection of Belt and Road and Eurasian
Economic Union. This is something Michael knows very well. You don't see this kind of
discussions in the American media for instance, integration of Eurasia on the ground, how it's
actually happening.
Michael : That's called cognitive dissonance.
Alanna: To try to understand it gets you cognitive dissonance.
Pepe: Oh yeah, of course. And obviously you are a Chinese agent, a Russian agent. And so, I
hear that all the time. Well, in our jobs we hear that all the time. Especially, unfortunately
from our American friends.
Alanna: Okay. I know you have other things to do. This has been fabulous. I want to thank
you so much, both of you, uh, with so easy to get attendance for this webinar. There were 20
people in five minutes enrolled and in two days we were at capacity. So, I know there are many
more people who would love to hear you talk another time, whenever you two are so willing. And
I think you both got much out of your first conversation in person. Everybody listening knows
these two wonderful gentlemen, they have written more than 10 books, and they have traveled all
over the world. They are on the top of geopolitical and geoeconomic analysis, and they are
caring, loving people. So, you can see that these are the people we need to be listening to and
understanding all around the world.
So, thank you so much. Ibrahima Drame from the Henry George School is now going to say
goodbye to you and will wrap this up. Thank you again.
Pepe: Michael it was a huge pleasure. Really, it was fantastic. Really nice, we're on the
same website. So, let's have a second version of this.
Ibrahima: So, let's have a second version of this two months from now. Thank you very much
for participating and I really hope you liked this event. And, we also want to ask for your
support by making a tax-deductible donation to the Henry George School. I believe I shared the
link on the chat. Thank you. And see you soon.
Pepe: Thank you very much. Thanks Michael. Bye!
Michael Hudson is an American economist professor of economics at the university of
Missouri Kansas City and a researcher at the Levy Economics Institute at Bard College. He's a
former Wall Street analyst political consultant commentator and journalist. He identifies
himself as a classical economist. Michael is the author of J is for Junk Economics, Killing
the Host, The Bubble and Beyond, Super Imperialism: The Economic Strategy of American Empire,
Trade Development and Foreign Debt and The Myth of Aid , among others. His books have
been published translated into Japanese, Chinese, German, Spanish and Russian.
Pepe Escobar, born in Brazil, is a correspondent and editor-at-large at Asia Times and
columnist for Consortium News and Strategic Culture in Moscow. Since the mid-1980s he's lived
and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore, Bangkok.
He has extensively covered Pakistan, Afghanistan and Central Asia to China, Iran, Iraq and the
wider Middle East. Pepe is the author of Globalistan – How the Globalized World is
Dissolving into Liquid War;Red Zone Blues: A Snapshot of Baghdad during the Surge . He was
contributing editor to The Empire and The Crescent and Tutto in Vendita in Italy.
His last two books are Empire of Chaos and 2030 . Pepe is also associated with
the Paris-based European Academy of Geopolitics. When not on the road he lives between Paris
and Bangkok.
@42 I'm sure Maduro would take dollars.....or gold. Of course buying Venezuelan oil from an
evil brutal socialist dictator would be a major climb down.
The USA doesn't pay for oil or gas. It takes over the mining company, demands the project
be funded by local or national borrowing from USA banks with sovereign guarantees, sells the
product to a separate US company that pays peanuts to the miner and then onsells for a major
markup (transfer pricing). Its called modern day stealing of other countries resources.
Look at the report on keystone that you cited at #39 where
The Canadian province that invested $1.1 billion of taxpayers' money in the controversial
Keystone XL project is now considering the sale of pipe and materials to try to recoup some
funds.
"If the project ends, there would be assets that could be sold, such as enormous
quantities of pipe," Alberta Premier Jason Kenney said in a press conference Monday.
Meanwhile the directors and shareholders got their fat checks and dividends from the
municipal loan funds ;)
The USA will not pay in gold until it is on its knees - it simply will not pay. See how
the USA 'bought' Tik Tok: blatant extortion/theft. The same as was done to Japan's high tech
in the 60's 70's or whenever. Thieves.
Policy to stop Nord Stream 2 will continue under Biden, although here we're told
Biden will extend New START Treaty by the same person, Biden's nominee for Secretary of
State, Antony Blinken.
Defense nominee Austin was also covered in this article where we can see he reads from
the same playbook as those who went before him. So it seems like continuity of its dystopic
imperial policy will be what we see from the Outlaw US Empire, although we'll soon see if
that also applies to Trump's Farewell boast that he was proud not to have started any "new"
wars.
@42 I'm sure Maduro would take dollars.....or gold. Of course buying Venezuelan oil from an
evil brutal socialist dictator would be a major climb down.
The USA doesn't pay for oil or gas. It takes over the mining company, demands the project
be funded by local or national borrowing from USA banks with sovereign guarantees, sells the
product to a separate US company that pays peanuts to the miner and then onsells for a major
markup (transfer pricing). Its called modern day stealing of other countries resources.
Look at the report on keystone that you cited at #39 where
The Canadian province that invested $1.1 billion of taxpayers' money in the controversial
Keystone XL project is now considering the sale of pipe and materials to try to recoup some
funds.
"If the project ends, there would be assets that could be sold, such as enormous
quantities of pipe," Alberta Premier Jason Kenney said in a press conference Monday.
Meanwhile the directors and shareholders got their fat checks and dividends from the
municipal loan funds ;)
The USA will not pay in gold until it is on its knees - it simply will not pay. See how
the USA 'bought' Tik Tok: blatant extortion/theft. The same as was done to Japan's high tech
in the 60's 70's or whenever. Thieves.
Hi b, Jim Kunstler has an interesting piece this week on the impact of EROI on the US
recovery or lack thereof in the US shake sector. Just not enough cheap energy to get their
economy going. Will Germany hold up against Trumps last minute sanctions against
Nordstream if Biden maintains them? If Germany doesn't won't that put Germany in the same
over expensive boat as US and lead to economic stagnation? Especially if all Russia's
cheap energy ends up in China, which it almost certainly will.
"Why do the USA, UK and Europe so hate Russia? How it is that Western antipathy, once
thought due to anti-Communism, could be so easily revived over a crisis in distant Ukraine,
against a Russia no longer communist? Why does the West accuse Russia of empire-building,
when 15 states once part of the defunct Warsaw Pact are now part of NATO, and NATO troops now
flank the Russian border? These are only some of the questions Creating Russophobia
iinvestigates. Mettan begins by showing the strength of the prejudice against Russia through
the Western response to a series of events: the Uberlingen mid-air collision, the Beslan
hostage- taking, the Ossetia War, the Sochi Olympics and the crisis in Ukraine. He then
delves into the historical, religious, ideological and geopolitical roots of the detestation
of Russia in various European nations over thirteen centuries since Charlemagne competed with
Byzantium for the title of heir to the Roman Empire. Mettan examines the geopolitical
machinations expressed in those times through the medium of religion, leading to the great
Christian schism between Germanic Rome and Byzantium and the European Crusades against
Russian Orthodoxy. This history of taboos, prejudices and propaganda directed against the
Orthodox Church provides the mythic foundations that shaped Western disdain for contemporary
Russia. From the religious and imperial rivalry created by Charlemagne and the papacy to the
genesis of French, English, German and then American Russophobia, the West has been engaged
in more or less violent hostilities against Russia for a thousand years. Contemporary
Russophobia is manufactured through the construction of an anti-Russian discourse in the
media and the diplomatic world, and the fabrication and demonization of The Bad Guy, now
personified by Vladimir Putin. Both feature in the meta-narrative, the mythical framework of
the ferocious Russian bear ruled with a rod of iron by a vicious president. A synthetic
reading of all these elements is presented in the light of recent events and in particular of
the Ukrainian crisis and the recent American elections, showing how all the resources of the
West's soft power have been mobilized to impose the tale of bad Russia dreaming of global
conquest. "By hating Russia, one hurts oneself. Swiss journalist Guy Mettan pieces together
the reasons of detestation of the Kremlin and of a rhetoric that goes back to Napoleonic
times despite the long list of aggressions perpetrated in the meantime by the West. And he
explains why pushing Moscow toward Asia is a very serious error." -Panorama, Italy "Like
Saddam Hussein's mythical weapons of massive destruction in 2003, Peter the Great's fake will
has been used to justify the aggressions and invasions that the Europeans, and now the
Americans, still carry out against Russia." -Liberation, France
"Not at all, the center of russophobia will now be Germany. In is not a surprise that
Russia recently declared that the center of russophobia in the EU are now France and
Germany."
Nord Stream 2 will be completed contrary to the opinions of four to five commenters on
here. This is Germany & Russia that you are talking about. Sanctions did not stop the
Crimean bridge. It makes no economic sense to deny European/West Asian (Russian produced)
Liquid natural gas in order to subsidise 'transit fees' to Ukraine. The U.S.Congress'
sanctions here are untenible, but don't expect Germany & Russia to publish how they will
do it until completion.
Reuters gleeful that Gazprom announced the possibility Nord Stream 2 won't be completed
due to "political pressure." But such a warning is part of all standard potential risks
announcements accompanying any prospectus--a fact Reuters ignored--which in this case is for
the issuance of Eurobonds, although I question the judgement in making them dollar
denominated.
Its not contrary to my opinion, but you appear to be young and naive person. There is
nothing new in that German policy, for example it supported the building of pipelines from
the USSR over President Reagan objections. Which does not mean that it wasn't enemy of the
USSR - its destruction was the key for taking control of Eastern Europe and turning it into
Germany's Latin America.
Someone can hate you and may want to make money at the same time too. But as soon as there
is weakness, they will pounce on you and stab you in the back.
As for the pipeline, it will remain under a puppet russian government. No loss there
too.
What the EU wants is to subdue Russia and later dismember it, taking hold of the
population and natural resources.
In the mean time, there is nothing wrong with making some money too. As the EU worships a
good living too.
"... In a two-Party dictatorship, the important truths are kept away from being publicized on either side, Eric Zuesse writes. ..."
"... Mission accomplished ..."
"... Nice work, Mr. Putin. ..."
"... According to a US intelligence community report, Russia's chief goal in interfering in the 2016 election in support of Trump against Democrat Hillary Clinton was to "undermine public faith in the US democratic process." Four years on, there have been two impeachments and an insurrection against the US legislature. Millions believe Trump's lies that he was illegally ejected from power, and doubt Biden's legitimacy. ..."
"... Conspiracy theorists have seats in Congress. There are serious questions about whether one of the country's great political parties is now anti-democratic. The Covid-19 pandemic exposed weaknesses in a federal system that grants vast power to the states. And America's self-appointed role as an exceptional nation and beacon of democracy is in the gutter. ..."
"... Most of the disorienting events of the last few years can be blamed directly on Trump and his particular skill at tearing at the social, racial and political divides that are just below the nation's surface. So the ex-KGB man in the Kremlin hardly deserves all the credit. But Russia, China and other autocratic nations are gaining much from Washington's agony. They're already using it to promote their own closed and totalitarian societies as models of comparative order and efficiency -- and to beat back brave local voices calling for democracy and human rights. ..."
"... In an effective declaration of victory for Russia's espionage offensive against the US more than four years ago, Vyacheslav Volodin, the speaker of the lower house of the Russian Parliament, slid home the knife. "Following the events that unfolded after the presidential elections, it is meaningless to refer to America as the example of democracy," he said. ..."
"... "We are on the verge of reevaluating the standards that are being promoted by the United States of America, that is exporting its vision of democracy and political systems around the world. Those in our country who love to cite their example as leading will also have to reconsider their views." ..."
In a two-Party dictatorship, the important truths are kept away from being publicized on
either side, Eric Zuesse writes.
Throughout history, aristocrats, and their flaks such as their 'news'-media, cast blame
downward, away from themselves who collectively control the government, and onto, instead, some
minority or other mass group, who can't even plan or function together so as to be
able to control the government.
The U.S. has a two-Party aristocracy, as is clear from the "Open Secrets" list of the 100
biggest political donors in the 2020 U.S. Presidential and congressional campaigns, the
"2020 Top Donors to Outside Spending Groups" . Those are only these individuals' publicly
acknowledged expenditures, none of the dark political money, which, of course, is donated
secretly. At the top there, of the donors' lists, is Sheldon Adelson (who just died, on January
11th in California, and was buried in Israel), who spent far more than anyone in all of U.S.
history had ever spent in any campaign cycle, $215 million, which amount far exceeded even
the $82 million that he had spent in 2016,
which in 2016 was second only to Thomas Steyer's $92 million (the previous all-time highest
amount donated in any campaign year). Adelson gave exclusively to Republicans, whereas Steyer
gave exclusively to Democrats. Steyer in 2020 gave $67 million, which -- though he was running
for President in 2020, and hadn't been running in 2016 -- was only 73% of his 2016 donations,
in that year, when he had been the nation's top political donor. He was only the 5th-biggest
donor in 2020, instead of #1.
The second-biggest donor in 2020 was the liberal Republican Michael Bloomberg, who ran in
the Democratic Presidential primaries in order to defeat the only progressive in that contest,
who was Bernie Sanders. Bloomberg spent $151 million of his own funds for that purpose. In
2016, he had spent
$24 million in order to help Hillary Clinton beat Bernie Sanders, and then try to beat
Donald Trump.
The third-biggest in 2020 was Timothy Mellon, the son of Paul Mellon and grandson of
Andrew Mellon .
Timothy Mellon gave $70 million, all to Republicans.
In 2020, the top ten donors, collectively, spent $776 million to own their chunk of the U.S.
Government. The second group of ten (#s 11-20) donated only $187 million; and, so, the top
twenty together donated $963 million, just shy of $1 trillion. All 80 of the other top-100
donors, together, gave around $370 million, so that the total from all 100 was around
one-and-a-third trillion dollars. 47 gave to Republicans; 53 gave to Democrats.
The smallest publicly acknowledged donor among the top 100, Foster Friess , gave $2.4 million, all to
Republicans.
Most of these 100 donors are among America's approximately 700 billionaires; and, even the
ones who aren't are serving and doing business with the billionaires, and therefore are to some
extent dependent upon having good relations with them, not being enemies of any
billionaire. All of these 100 are, obviously, also dependent upon the governmental decisions
that the public officials whom they have purchased will be making, not only regarding
regulations and laws, but also regarding foreign policies. For example, Friess merged his
company into Affiliated Management Group, which "is a global asset management firm"
that "has grown to approximately $730 billion." Virtually all of the top 100 political
donors are internationally invested, and their personal wealth is therefore affected by
American foreign policies, in ways that the personal wealth of the rest of the population is
not.
When the U.S. invades a foreign country, or issues sanctions against a foreign country, it
benefits some American investors, not only in corporations such as Lockheed Martin and
ExxonMobil, but even in some foreign-headquartered corporations. America's spending around half of the entire world's military expenses
gives an enormous competitive boost to America's billionaires, which is paid for by all U.S.
taxpayers. It takes away money that would otherwise go toward the rest of the U.S. population
-- people who might even become crippled or killed by their military service for the benefit of
America's billionaires. Marketing this military service to thepublic, as "national defense" --
even at a time when no nation has invaded or even threatened to invade America after
1945 -- is good PR for America's wealthiest families, regardless of whether it's of any benefit
whatsoever to other Americans. Because of the success of this PR for the military, Americans
consider the U.S. military to
be America's best institution -- far higher than any other part of the U.S. Government or
any non-governmental institution, such as churches, the press, or the medical system. The U.S.
Department of Defense is, also, by far, the
most corrupt of all Departments of the U.S. federal Government . This fact is carefully
hidden from the U.S. public, so as to keep the public admiring the military.
Billionaires use their media, and their scholars, to point the finger of blame, for the
problems that the public does know about, anywhere else than against themselves; and, though
the billionaires have political differences amongst themselves, they are unified against the
public, so as to continue the gravy train that they all are on.
In order for the aristocracy not to be blamed for the many problems that they cause upon the
public, their first trick is to blame some minority or some other vulnerable mass within the
public. Or else to blame some 'enemy' country. But if and when such a strategy fails, then,
they and their media blame the middle class or "bourgeoisie," in order to fool the leftists,
and also they blame the "communists" and the poor, in order to fool the rightists. That's a
two-pronged PR strategy -- one to the left, and the other to the right. Since the aristocracy
is always, itself, fundamentally conservative, they would naturally rather blame the leftists
as being "communists," than to blame the middle class and poor, because to do the latter would
place the public's ideological focus on economic class, which then would threaten to expose the
billionaires themselves as being the actual economic "elite" who are the public's real enemy
(and as being the elite against which the propaganda should instead be focused). Blaming the
middle class and poor might work amongst their fellow-aristocrats, but if tried amongst the
public, it would present the danger of backfiring. Consequently, there is a return to the days
of Joseph R. McCarthy, but this time without communism. Thus, here is how the White House
correspondent for a Democratic Party 'news'-site, CNN, closed his 'news'-analysis, on January
14th, under the headline "Washington's
agony is a win for autocrats and strongmen" :
Mission accomplished
Nice work, Mr. Putin.
According to a US intelligence community report, Russia's chief goal in interfering in
the 2016 election in support of Trump against Democrat Hillary Clinton was to "undermine public
faith in the US democratic process." Four years on, there have been two impeachments and an
insurrection against the US legislature. Millions believe Trump's lies that he was illegally
ejected from power, and doubt Biden's legitimacy.
Conspiracy theorists have seats in Congress. There are serious questions about whether
one of the country's great political parties is now anti-democratic. The Covid-19 pandemic
exposed weaknesses in a federal system that grants vast power to the states. And America's
self-appointed role as an exceptional nation and beacon of democracy is in the gutter.
Most of the disorienting events of the last few years can be blamed directly on Trump
and his particular skill at tearing at the social, racial and political divides that are just
below the nation's surface. So the ex-KGB man in the Kremlin hardly deserves all the credit.
But Russia, China and other autocratic nations are gaining much from Washington's agony.
They're already using it to promote their own closed and totalitarian societies as models of
comparative order and efficiency -- and to beat back brave local voices calling for democracy
and human rights.
In an effective declaration of victory for Russia's espionage offensive against the US
more than four years ago, Vyacheslav Volodin, the speaker of the lower house of the Russian
Parliament, slid home the knife. "Following the events that unfolded after the presidential
elections, it is meaningless to refer to America as the example of democracy," he
said.
"We are on the verge of reevaluating the standards that are being promoted by the United
States of America, that is exporting its vision of democracy and political systems around the
world. Those in our country who love to cite their example as leading will also have to
reconsider their views."
That's propaganda from "leftist" (i.e., Democratic Party) billionaires. A good example of an
independent American journalist who has been fooled by Republican Party billionaires to blame
some amorphous mass of "leftists" is Sara A. Carter's 12 January 2021 youtube "Rudy Giuliani talks big
tech censorship" , blaming America's problems on "the government," or "the bureacracy,"
and, of course, especially on Democrats. At 10:15 there, she said "My mother fled from
Cuba." Carter, as a conservative, is so obsessed with her visceral hatred of "communism," that
she interpreted America's dictatorship as being communists, instead of as being billionaires --
of both Parties: actually, fascists. In a two-Party fascist dictatorship , she fears the leftists. This is typical of
propagandists on the conservative side. But propagandists on the liberal side (such as the CNN
correspondent exemplified) are no better, just different.
Both propaganda-operations cast blame away from the real culprits.
In a two-Party dictatorship, the important truths are kept away from being publicized on
either side. What the public sees and hears, instead, is political theater, merely
tailored to different audiences.
"... One one hand, this is truly an absolute disaster, because when the US ruling Nomenklatura agrees to drop any past pretenses of objectivity, or even decency, things will definitely get ugly. On the other hand, however, this immense "coming out" of the US Nomenklatura is, of course, unsustainable (just look at history, every time these folks thought that they had crushed the "plebes", the latter ended up rising and showing their supposed "masters" to the door; this will happen here too). ..."
"... Trump really destroyed the USA externally, in terms of world politics. The Dems have done the same thing, only internally. For example, Trump is the one who most arrogantly ignored the rule of law in international affairs, but it was the Dems who destroyed the rule of law inside the USA. It was Trump who with his antics and narcissistic threats urbi et orbi who destroyed any credibility left for the USA as a country (or even of the the AngloZionist Empire as a whole), but it was the Dems who really decided to sabotage the very political system which allowed them to seize power in the first place. ..."
"... What comes next is the illegal rule of an illegitimate regime which came to power by violence (BLM, Antifa, Capitol false flag). This will be a Soviet-style gerontocracy with senile figureheads pretending to be in power (think Biden vs Chernenko here). Looking at the old, Obama-era, names which are circulated now for future Cabinet positions, we can bet on two things: the new rulers will be as evil as they will be grossly incompetent, mostly due to their crass lack of education (even Nuland and Psaki are back, it appears!). The Biden admin will be similar to the rule of Kerensky in "democratic" Russia: chaos, violence, lots and lots of speeches and total social and economic chaos. The next crucial, and even frightening, question now is: what will replace this US version of a Kerensky regime? ..."
"... "domestic terrorism" will, once again, become the boogeyman we will be told to fear. And, as all good boys and girls know, the best way to deal with such a horrible "domestic terrorism" threat is to dismantle the First and Second Amendments of the Constitution. Having corrupt kangaroo courts on all levels, from the small claims level to the Supreme court, will greatly help in this endeavor... ..."
...the US liberals decided that this vote was a slap in their face which, of course, is
quite correct (I still believe that most votes for Trump where not votes for Trump, but votes
against Hillary); it was, so to speak, a gigantic "f**k you!" from the revolting serfs against
their masters. And class consciousness told the US Nomenklatura that this was an
anti-masters pogrom , a US " Jacquerie " if you wish. This "revolt
of the serfs" had to be put down, immediately, and it was: Trump caved to the Neocons in less
than a month (when he betrayed General Flynn) and ever since the US Nomenklatura has
been using Trump as a disposable President who would do all the crazy nonsense
imaginable to please Israel, and who would then be disposed off. And yet it is now quite clear
that the US "deplorables" voted for the "wrong" candidate again! Hence the need for a (very
poorly concealed) "election steal" followed by a "test of loyalty" (you better side with us, or
else ) which eventually resulted in the situation we have today.
What is that situation exactly?
Simply put, this time the USNomenklaturahas truly achieved total
power. Not only do they control all three of the official branches of government, they now
also fully control the 4th one, the "media space", courtesy of the US tech giants which now are
openly silencing anybody who disagrees with the One And Only Official Truth As Represented By
The Propaganda Outlets. This is the very first time in recent US history that a small cabal of
"deep insiders" have achieved such total control of all the real instruments of power. The bad
news is that they know that they are a small minority and they realize that they need to act
fast to secure their hold on power. But for that they needed a pretext.
It is hardly surprising that after successfully pulling off the 9/11 false flag
operation, the USNomenklaturahad no problems whatsoever pulling off the
"Capitol" false flag.
Think about it: the legally organized and scheduled protest of Trump supporters was
announced at least a week before it had to take place. How hard was it for those in charge of
security to make sure that the protesters stay in one specific location? At the very least,
those in charge of security could have done what Lukashenko eventually did in Mink: place
military and police forces around all the important symbolic buildings and monuments and say
"you are welcome to protest, but don't even think of trying to take over any government
property" (that approach worked much better than beating up protesters, which Lukashenko
initially had tried). Yet what we saw was the exact opposite: in DC protesters were invited
across police lines by cops. Not only that, but even those protesters which did enter the
Capitol were, apparently, not violent enough, so it had to be one of the cops to shoot an
unarmed and clearly non-dangerous woman, thereby providing the "sacrificial victim" needed to
justify the hysterics about "violence" and "rule of law".
And the worst part is that it worked, even Trump ended up condemning the "violence" and
denouncing those who, according to Trump, did not represent the people.
The hard truth is much simpler: the "stop the steal" protestors did not commit any real
violence! Yes, they broke some furniture, had some fights with cops (who initially were
inviting people in, only to then violently turn against them with batons, pepper sprays and
flash-bang grenades). Some reports say that one cop was hit by a fire extinguisher. If true,
that would be a case of assault with a deadly weapon (under US law any object capable of being
used to kill can be considered a deadly weapon when used for that purpose). But considering the
nonstop hysteria about guns, the NRA and "armed militias", this was clearly not a planned
murder. Finally, a few people died, apparently from natural causes, possibly made worse by the
people trampling over each other. In other words, the Trump supporters did not kill anybody
deliberately, at most they can be accused of creating the circumstances which resulted in
manslaughter. That was not murder. Not even close. Want to see what a planned murder looks
like? Just look at the footage of the Ashli Babbitt murder by some kind of armed official. That
is real murder, and it was committed by a armed official. So which side is most guilty of
violating laws and regulations?
Furthermore, no moral value can be respected unless it is universally and equally applied.
Which, considering that the US deep state has engaged in a full year of wanton mass violence
against hundreds of innocent US citizens makes it unbelievably hypocritical for the US liberals
to denounce "the mob" now. Frankly, the way I see it, all the US liberals should now "take a
knee" before the pro-Trump protestors and declare that this was a "mostly peaceful" event
which, objectively speaking, it was .
Won't happen. I know.
What will happen next is going to be a vicious crackdown on free speech in all its
forms . In fact, and just to use a Marxist notion, what comes next is class warfare
.
We have all seen Pelosi and the rest of them demanding that Trump either be removed by Pence
and the Cabinet (25th A.), or they will unleash another impeachment. First, if impeached, Trump
won't be able to run in 2024 (which the liberals fully realize is a major risk for them). But
even more important, is to humiliate him, make him pay, show him once and for all "who is
boss"! These people thrive on revenge and victory is never enough to appease them, they simply
hate anybody who dares oppose them and they want to make an example of any and every serf who
dares to disobey them. That is why they always send "messages", no matter how inchoate: they
want to bully all the deplorables on the planet into total subservience.
But they won't stop with just Trump. Oh no! They will also go after all those serfs who
dared defy this Nomenklatura and who objected to the wholesale repudiation of the US
Constitution. For example, in a truly Orwellian move, the NY State Bar now wants to disbar
Giuliani for acting as Trump's lawyer (not a joke, check here ). Which,
considering that Trump already lost several lawyers to such tactics should not come as a
surprise to anybody: apparently, in the "new 2021 Woke-USA", some are more entitled to legal
representation than others.
Don't expect the ACLU to protest, by the way – equal protection under the law is not a
topic of interest to them. Here are a few screenshots take off their website , so see for yourself.
Clearly, the priority for the folks at the ACLU is to destroy Trump and anybody daring to
take up his defense.
One one hand, this is truly an absolute disaster, because when the US ruling
Nomenklatura agrees to drop any past pretenses of objectivity, or even decency, things
will definitely get ugly. On the other hand, however, this immense "coming out" of the US
Nomenklatura is, of course, unsustainable (just look at history, every time these folks
thought that they had crushed the "plebes", the latter ended up rising and showing their
supposed "masters" to the door; this will happen here too).
Last, but not least, let's keep another crucial thing in mind: even if you absolutely hate
Trump, you really should realize that it is not just "the vote" which was stolen, it was the
entire US Constitutional order . While we often focus on the SCOTUS, we should not remember
the many lower courts which showed a total absence of courage or dignity and which caved in to
the hysterical demands of the US Nomenklatura . It is impossible to have a country under
the rule of law when the courts shy away from their obligation to uphold the said rule of law
and, instead, place political expediency above the letter and spirit of the law.
Furthermore, when concepts such as "legal" and "illegal" lose any objective meaning, how can
any action be considered illegal or punishable?
Here is, just as an example, the Oath of Office taken by all Supreme Court Justices:
(emphasis added)
"I, [NAME], do solemnly swear (or affirm) that I will administer justice without respect
to persons, and do equal right to the poor and to the rich , and that I will
faithfully and impartially discharge and perform all the duties incumbent upon me as [TITLE]
under the Constitution and laws of the United States. So help me God."
And this is what each member of the US Armed Forces swears: (emphasis added)
"I, (state name of enlistee), do solemnly swear (or affirm) that I will support and defend
the Constitution of the United States against all enemies, foreign and domestic ; that
I will bear true faith and allegiance to the same; and that I will obey the orders of the
President of the United States and the orders of the officers appointed over me, according to
regulations and the Uniform Code of Military Justice. (So help me God)."
It does not take a genius to figure out that the SCOTUS is now in the hands of a small cabal
of people who clearly are "domestic enemies" of the US Constitution.
Finally, here is what the Preamble to the Declaration of Independence states: (emphasis
added)
"We hold these truths to be self-evident, that all men are created equal, that they are
endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty
and the pursuit of Happiness.–That to secure these rights, Governments are instituted
among Men, deriving their just powers from the consent of the governed,–That
whenever any Form of Government becomes destructive of these ends, it is the Right of the
People to alter or to abolish it , and to institute new Government, laying its foundation
on such principles and organizing its powers in such form, as to them shall seem most likely
to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long
established should not be changed for light and transient causes; and accordingly all
experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable,
than to right themselves by abolishing the forms to which they are accustomed. But when a
long train of abuses and usurpations, pursuing invariably the same Object evinces a design to
reduce them under absolute Despotism, it is their right, it is their duty, to throw off such
Government, and to provide new Guards for their future security."
I don't think that there is any need to further beat this dead horse and I will simply
summarize it as so:
The regime which will soon replace the Trump Administration is an illegal occupation
government, with strong ties to foreign interests (and I don't mean China or Russia here!),
which all those who served in the US military have taken an oath to oppose; this is precisely
the kind of occupation regime which the Founding Fathers foresaw in their Declaration of
Independence . Furthermore, the rule of law has clearly collapsed, at least on the
federal level, this should give the states more freedom of movement to resist the decrees of
this new regime (at least those states still willing and able to resist, I think of TX and FL
here). The leaders of this US Nomenklatura understand this, at least on some level, and we
should expect no decency from them; neither should we expect any mercy. Revenge is what
fuels these ideology- and hate-filled people who loathe and fear all the rest of humanity
because nobody is willing to worship them as our "lords and masters ". But this is also
the beginning of their end.
Conclusion: now we are all Palestinians!
True, no "mob" won on the Capitol, unless we refer to the (disgraced, hated and useless)
Congress as "the mob". And, of course, neither did "the people" or the protesters. The only
real winner in this entire operation was the US deep state and the US Nomenklatura . But
they did not win any war, only the opening battle of a war which will be much longer than what
they imagine in their ignorance.
I have said it many times, Trump really destroyed the USA externally, in terms of world
politics. The Dems have done the same thing, only internally. For example, Trump is the one who
most arrogantly ignored the rule of law in international affairs, but it was the Dems who
destroyed the rule of law inside the USA. It was Trump who with his antics and narcissistic
threats urbi et orbi who destroyed any credibility left for the USA as a country (or
even of the the AngloZionist Empire as a whole), but it was the Dems who really decided to
sabotage the very political system which allowed them to seize power in the first
place.
What comes next is the illegal rule of an illegitimate regime which came to power by
violence (BLM, Antifa, Capitol false flag). This will be a Soviet-style gerontocracy with
senile figureheads pretending to be in power (think Biden vs Chernenko here). Looking at the
old, Obama-era, names which are circulated now for future Cabinet positions, we can bet on two
things: the new rulers will be as evil as they will be grossly incompetent, mostly due to their
crass lack of education (even Nuland and Psaki are back, it appears!). The Biden admin will be
similar to the rule of Kerensky in "democratic" Russia: chaos, violence, lots and lots of
speeches and total social and economic chaos. The next crucial, and even frightening, question
now is: what will replace this US version of a Kerensky regime?
It is way too early to reply to this question, but we should at least begin to think about
it, lest we be completely caught off guard.
But until then, "domestic terrorism" will, once again, become the boogeyman we will be
told to fear. And, as all good boys and girls know, the best way to deal with such a horrible
"domestic terrorism" threat is to dismantle the First and Second Amendments of the
Constitution. Having corrupt kangaroo courts on all levels, from the small claims level to the
Supreme court, will greatly help in this endeavor...
"Americans have been brainwashed into calling things they don't like, or don't understand,
as "Socialist" or even "Marxist". The sad reality is that most Americans sincerely believe
that Alexandria Ocasio-Cortez or Bernie Sanders are "socialists", and when they see modern
movies ridiculously filled with "minorities" and gender fluid freaks – this is a case
of "cultural Marxism" (a totally meaningless term, by the way!). This is all utter nonsense,
neither Marxism nor Socialism have anything to do with BLM, Antifa, Nancy Pelosi or Chuck
Schumer (in fact, Marxism places a premium on real law and order!)."
"class" has been declared heretical and it has been replaced by identity politics
– the best way for a ruling class to (a) hide behind a fake illusion of pluralism and
(b) to divide the people and rule over them
It's a neat bait and switch scheme, identity being substituted for class. Billionaires can
now be hailed as people's champions by instituting 'gender-fluid' toilets and forcing their
peons to kneel. Who knows how much force they'll be willing to use against the deplorables
but probably it would know no limit. The shock and awe unleashed against foreign countries
could now be instituted domestically with things like the Phoenix Program being tried here,
among other things. Anything but relinquish power.
The old war-lovers are coming back in. Although he was considered belligerent the new regime
will be worse. War is probably part of the future agenda. Solidifying it's grip upon the
domestic population may be the precursor to embarking upon an unpopular and certain to be
costly war against Iran or perhaps even some clash with Russia.
From the I Ching: "Large ambitions coupled with meager talent will seldom escape
disaster."
The fervid machinations of the current crop of "self"-glorifying wannabes will not, as The
Saker reminds us here, be any exception to the rule, either. They're hardly the first bunch
of feckless opportunists to take a run at "full spectrum dominance" .aiming to trap Life
Herownself within the suffocating CONfines of their own little nut'shell.
The rampant insanity symptomatic of their virulent "self"-sickness, as it runs its
inevitable course, looks like being somewhat more than usually trying for the rest of us,
though .given all the electro-mechanical and institutional enhancement available to them, for
intensifying the degenerative effects of their folly. At the same time, our best response
will be just what we all know is always organically and in all Ways imperative for our Kind,
anyhow. All our precious attention is best devoted to taking care of the Earth and each
other. Our unconditional affection is best lavished on this Living Creation, all our
Relations, and The Great Spirit whose gift it is.
By 2016 the concept of "liberal democracy," once bright with promise, had dulled into a
neoliberal politics that was neither liberal nor democratic. The Democratic Party's turn toward
market-driven policies, the bipartisan dismantling of the public sphere, the inflight marriage
of Wall Street and Silicon Valley in the cockpit of globalization -- these interventions
constituted the long con of neoliberal governance, which enriched a small minority of Americans
while ravaging most of the rest.
Jackson Lears is Board of Governors Distinguished Professor of History at Rutgers,
Editor in Chief of Raritan, and the author of Rebirth of a Nation: The Making of Modern
America, 1877–1920, among other books. (January 2021)
I see this article is quite relevant to another one on a different blog that I have been
fruitlessly attempting to comment upon. It keeps getting disappeared immediately and not even
sent to moderation where normally all submissions first go. Have had that trouble two days
running on two different articles about i) the impending crackdowns on free speech and ii)
the planned purge of Republican officeholders by the triumphalist Clinton/Obama/Biden mob.
I'll go with my remarks on the coming attempt at a purge since it is closer to the Saker's
treatment of the Nomenklatura (cognate to "nomenclature" specifying ordered classes of
things, including people or their offices, in English) or in American street language simply
identifying who is a "made man," i.e., an untouchable in the mafia. Yeah, the Dem hierarchy
are sure feeling they are all made men (and women) following the set to in the Capitol which
they most possibly facilitated and have certainly exploited to the limit.
46 Follow RT on Outgoing US
President Donald Trump has delivered his "parting gift" to the Moscow-led Nord Stream 2 gas
pipeline, with newly announced sanctions targeting a pipe-laying vessel and companies involved
in the multinational project.
The specialist ship concerned, named, 'Fortuna,' and oil tanker 'Maksim Gorky', as well as
two Russian firms, KVT-Rus and Rustanker, were blacklisted on Tuesday under CAATSA (Countering
America's Adversaries Through Sanctions Act) as part of Washington's economic war on Moscow.
The same legislation had been previously used by the US to target numerous Russian officials
and enterprises.
Russian energy giant Gazprom warned its investors earlier on Tuesday that Nord Stream 2
could be suspended or even canceled if more US restrictions are introduced.
However, Moscow has assured its partners that it intends to complete the project despite
"harsh pressure on the part of Washington," according to Kremlin press secretary Dmitry
Peskov. Reacting to the new package of sanctions on Tuesday, Peskov called them
"unlawful."
Meanwhile, the EU said it is in no rush to join the Washington-led sanction war on Nord
Stream 2. EU foreign affairs chief, Josep Borrell, said that the bloc is not going to resist
the construction of the project.
"Because we're talking about a private project, we can't hamper the operations of those
companies if the German government agrees to it," Borrell said Tuesday.
Nord Stream 2 is an offshore gas pipeline, linking Russia and Germany with aim of providing
cheaper energy to Central European customers. Under the agreement between Moscow and Berlin, it
was to be launched in mid-2020, but the construction has been delayed due to strong opposition
from Washington.
The US, which is hoping to sell its Liquified Natural Gas (LNG) to Europe, has hit the
project with several rounds of sanctions over scarcely credible claims that it could undermine
European energy security. Critics say the real intent is to force EU members to buy from
American companies.
Think your friends would be interested? Share this story!
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Fatback33 4 hours ago 19 Jan, 2021 11:20 AM
The group that owns Washington makes the foreign policy. That policy is not for the benefit
of the people.
DukeLeo Fatback33 1 hour ago 19 Jan, 2021 02:06 PM
That is correct. The private banks and corporations in the US are very upset about Nord
Stream - 2, as they want Europe to buy US gas at double price. Washington thus introduces
additional political gangsterism in the shape of new unilateral sanctions which have no merit
in international law.
noremedy 4 hours ago 19 Jan, 2021 11:22 AM
Is the U.S. so stupid that they do not realize that they are isolating themselves? Russia has
developed SPFS, China CIPS, together with Iran, China and Russia are further developing a
payment transfer system. Once in place and functioning this system will replace the western
SWIFT system for international payment transfers. It will be the death knell for the US
dollar. 327 million Americans are no match for the rest of the billions of the world's
population. The next decade will see the total debasement of the US monetary system and the
fall from power of the decaying and crumbling in every way U.S.A.
Hanonymouse noremedy 2 hours ago 19 Jan, 2021 01:37 PM
They don't care. They have the most advanced military in the world. Might makes right, even
today.
Shelbouy 3 hours ago 19 Jan, 2021 12:25 PM
Russia currently supplies over 50% of the natural gas consumed by The EU. Germany and Italy
are the largest importers of Russian natural gas. What is the issue of sanctions stemming
from and why are the Americans doing this? A no brainer question I suppose. It's to make more
money than the other supplier, and exert political pressure and demand obedience from its
lackey. Germany.
David R. Evans Shelbouy 2 hours ago 19 Jan, 2021 01:58 PM
Russia and Iran challenge perpetual US wars for Israel's Oded Yinon Plan. Washington is
Israel-controlled territory.
Jewel Gyn 4 hours ago 19 Jan, 2021 11:34 AM
Sanctions work both ways. With the outgoing Trump administration desperately laying mines for
Biden, we await how sleepy Joe is going to mend strayed ties with EU.
Count_Cash 4 hours ago 19 Jan, 2021 11:20 AM
The US mafia state continues with the same practices. The dog is barking but the caravan is
going. The counter productiveness of sanctions always shows through in the end! I am sure
with active efforts of Germany and Russia against US mafia oppression that a blowback will be
felt by the US over time!
Dachaguy 4 hours ago 19 Jan, 2021 11:24 AM
This is an act of war against Germany. NATO should respond and act against the aggressor,
America.
xyz47 Dachaguy 42 minutes ago 19 Jan, 2021 03:20 PM
NATO is run by the US...
lovethy Dachaguy 2 hours ago 19 Jan, 2021 01:04 PM
NATO has no separate existence. It's the USA's arm of aggression, suppression and domination.
Germany after WWII is an occupied country of USA. Thousand of armed personnel stationed in
Germany enforcing that occupation.
Chaz Dadkhah 3 hours ago 19 Jan, 2021 12:19 PM
Further proof that Trump is no friend of Russia and is in a rush to punish them while he
still has power. If it was the swamp telling him to do that, like his supporters suggest,
then they would have waited till their man Biden came in to power in less than 24 hours to do
it. Wake up!
Mac Kio 3 hours ago 19 Jan, 2021 12:34 PM
USA hates fair competition. USA ignores all WTO rules.
Russkiy09 2 hours ago 19 Jan, 2021 01:33 PM
By whining and not completing in the face of US, Russia is losing credibility. They should
not have delayed to mobilize the pipe laying vessel and other equipment for one whole year.
They should have mobilized in three months and finished by now. Same happens when Jewtin does
not shoot down Zio air force bombing Syria everyday. But best option should have been to tell
European vassals that "if you can, take our gas. But we will charge the highest amount and
sell as much as we want, exclude Russophobic Baltic countries and Poland and neo-vassal
Ukraine. Pay us not in your ponzi paper money but real goods and services or precious metals
or other commodities or our own currency Ruble." I so wish I could be the President of
Russia. Russians deserve to be as wealthy as the Swiss or SIngapore etc., not what they are
getting. Their leaders should stand up for their interest. And stop empowering the greedy
merchantalist Chinese and brotherhood Erdogan.
BlackIntel 1 hour ago 19 Jan, 2021 02:27 PM
America i captured by private interest; this project threatens American private companies
hence the government is forced to protect capitalism. This is illegal
Ohhho 3 hours ago 19 Jan, 2021 12:15 PM
That project was a mistake from the start: Russia should distance itself from the Evil
empire, EU included! Stop wasting time and resources on trying to please the haters and
keeping them more competitive with cheaper Russian natural gas: focus on real partners and
potential allies elsewhere!
butterfly123 2 hours ago 19 Jan, 2021 01:58 PM
I have said it before that part of the problem is at the door of the policy-makers and
politicians in Russia. Pipeline project didn't spring up in the minds of politicians in
Russia one morning, presumably. There should have been foresight, detailed planning, and
opportunity creation for firms in Russia to acquire the skill-set and resources to advance
this project. Not doing so has come to bite Russia hard and painful. Lessons learnt I hope Mr
President!
jakro 4 hours ago 19 Jan, 2021 11:37 AM
Good news. The swamp is getting deeper and bigger.
hermaflorissen 4 hours ago 19 Jan, 2021 11:49 AM
Trump finally severed my expectations for the past 4 years. He should indeed perish.
ariadnatheo 1 hour ago 19 Jan, 2021 03:06 PM
That is one Trump measure that will not be overturned by the Senile One. They will need to
amplify the RussiaRussiaRussia barking and scratching to divert attention from their dealings
with China
Neville52 2 hours ago 19 Jan, 2021 02:01 PM
Its time the other nations of the world turned their backs on the US. Its too risky if you
are an international corporation to suddenly have large portions of your income cancelled due
to some crazy politician in the US
5th Eye 2 hours ago 19 Jan, 2021 02:03 PM
From empire to the collapse of empire, US follows UK to the letters. Soon it will be
irrelevant. The only thing that remains for UK is the language. Probably hotdog for the US.
VonnDuff1 1 hour ago 19 Jan, 2021 02:10 PM
The USA Congress and its corrupt foreign policy dictates work to the detriment of Europe and
Russia, while providing no tangible benefits to US states or citizens. So globalist demands
wrapped in the stars & stripes, should be laughed at, by all freedom loving nations.
Biden is clearly an enforcer for a faction of what we might call the permanent
establishment, the hidden real government that runs on automatic imperial pilot regardless
who is nominal US President.
That "permanent establishment" is currently becoming "dis-established" everywhere in the
world. It sees with horror that its grip on the entire world is crumbling.
It does only what it has always tried in such cases -- war, war, war. Only of late, those
wars -- war against Russia over Ukraine, war against Assad's Syria, an attempted war against
Erdogan in Turkey, a war against the growing economic muscle in the world of China -- have
been impotent flops.
Biden, a dutiful servant of those interests, carries the flag of war to where he is sent,
much like the character in Monty Python's Ministry of Silly Walks.
It is an Oligarchy of bond holders. I'm using the word bond as an stand-in for debt
instruments, or any sort of claim on productivity. Bond/Bondage/Debt are all closely related
concepts.
The entire Western World is inter-connected double-entry balance sheets.
One side of the balance sheet is "assets" and the other is "liabilities." One person's
liability is another persons asset.
It is best to view the western world as a balance sheet, especially as private bank credit
is the dominant money type of the west. Private banking and debt spreading has metastasized
like a cancer, and is now consuming the host. Debt instruments and finance paper are being
serviced in the finance sector with QE and 'CARES' act shenanigan's, which pays these finance
"assets."
If you want to call the bond holders in finance and elsewhere as a nomenklatura, go ahead
– but it obscures reality. These people are a class, a class of usurers, who are
"taking" wealth in sordid ways by gaming the system.
All through history, plutocracy has arisen out of the population because debts were not
annulled, or land was enclosed.
Oligarchs of various types are harvesting the world through various means, including the
growth of debt claims. These claims grow exponentially, and outside of nature's ability to
pay. The derivative bubble wants to be paid. What cannot go on, will not.
The balance sheet is not really balanced, one side (the debt instrument holder) is making
exponential claims on debtors.
I have, for some time, been mis-naming the Nomenklatura as the Politburo, with the commune
being the many tentacled international banking cartel. It's the same crowd that funded the
original Bolsheviks.
IMO they are only "Neo" by virtue of the old ones having died, but I'm not going to split
hairs. We all know it is those whose loyalty is to a shitty little country on the
Mediterranean.
"... Although there may not be tanks on the streets and a dictator inciting crowds from his bully pulpit, the end result has been pretty much the same. ..."
"... it is important to put aside the notion that fascism is a purely right-wing phenomenon, complete with a chauvinistic demagogue haranguing a frenzied crowd. The new dictator on the block is not some fanatical Fuhrer, but rather Silicon Valley, the fountainhead of technological advancement and the formidable fortress of liberal ideology. In other words, fascism is an ideology that moves fluidly along the political spectrum, although some say the ideology grew out of European progressivism. ..."
"... Liberal Fascism ..."
"... Many years earlier, the late political theorist Hannah Arendt described the Nazi Party (which stands for, lest we forget, the 'National SOCIALIST German Workers' Party') as nothing more than "the breakdown of all German and European traditions, the good as well as the bad basing itself on the intoxication of destruction as an actual experience." That sounds like a pretty accurate description of the cancel culture mentality that has now gripped the 'progressive' left with an almost demonic possession. ..."
"... We are living Orwell's 1984. Free-speech no longer exists in America. It died with big tech and what's left is only there for a chosen few. ..."
"... Big Tech began its slide towards marked fascist tendencies thanks to one of the greatest hoaxes ever foisted upon the American public, known as Russiagate. One after another, Silicon Valley overlords were called before Congressional committees to explain "how and why Russian operatives were given free rein to tamper with 2016 U.S. election," in favor of the populist Donald Trump, no less. ..."
"... Strangely, violence has never shocked the progressive left, so long as the violence supported its agenda. ..."
"... While all forms of 'cancel culture' (which seems to be part of a move to build American society along the lines of the Chinese 'social credit system,' which rewards those who toe the party line, and punishes those who fall out of favor) are egregious and counterintuitive to American values, perhaps the most astonishing was the cancellation of Republican Senator Josh Hawley's book deal with Simon and Shuster. ..."
"... In conclusion, it would be a huge mistake for the Democrats to believe that they are safe from the same sort of corporate and government behavior that has now dramatically silenced the conservative voice across the nation. The United States has entered dangerous unchartered waters, and by all indications it would appear that the American people have inherited a 'soft' form of fascism. ..."
Although there may not be tanks on the streets and a dictator inciting crowds from his
bully pulpit, the end result has been pretty much the same.
Most Americans can probably still remember a time when U.S. companies were in business with
one goal in mind – providing a product or service for profit. It was a noble idea, the
bedrock of capitalism, in which everyone stood to gain in the process.
Today, the monopolistic powers now enjoyed by a handful of mighty corporations, which are no
longer shy about declaring their political bent, have tempted them to wade into the deep end of
the political pool with deleterious effects on democracy. Indeed, corporate power wedded to
government is nothing less than fascism.
In presenting such a case, it is important to put aside the notion that fascism is a
purely right-wing phenomenon, complete with a chauvinistic demagogue haranguing a frenzied
crowd. The new dictator on the block is not some fanatical Fuhrer, but rather Silicon Valley,
the fountainhead of technological advancement and the formidable fortress of liberal ideology.
In other words, fascism is an ideology that moves fluidly along the political spectrum,
although some say the ideology grew out of European progressivism.
Jonah Goldberg argued in his 2008 book, Liberal Fascism , that even before World
War II "fascism was widely viewed as a progressive social movement with many liberal and
left-wing adherents in Europe and the United States." Many years earlier, the late
political theorist Hannah Arendt described the Nazi Party (which stands for, lest we forget,
the 'National SOCIALIST German Workers' Party') as nothing more than "the breakdown of all
German and European traditions, the good as well as the bad basing itself on the intoxication
of destruction as an actual experience." That sounds like a pretty accurate description of the
cancel culture mentality that has now gripped the 'progressive' left with an almost demonic
possession.
It should be shocking to Republicans and Democrats alike that the Commander-in-Chief of the
United States is banished from all of the main social media platforms – Twitter, Facebook
and YouTube – denying him the ability to communicate with his 75 million constituents, or
one half of the electorate. This is real and unprecedented violence being committed against the
body politic and far more worrisome than any breach of federal property, as loathsome as such
an act may be.
The Capitol building is, after all, ultimately a mere symbol of our freedoms and liberties,
whereas the rights laid down in the U.S. Constitution – the First Amendment not least of
all – are fragile and coming under sustained assault every single day. Why does the left
refuse to show the same concern for an aging piece of parchment, arguably the greatest
political document ever written, as it does for a piece of architecture? The answer to that
riddle is becoming increasingly obvious.
We are living Orwell's 1984. Free-speech no longer exists in America. It died with big
tech and what's left is only there for a chosen few.
Big Tech began its slide towards marked fascist tendencies thanks to one of the greatest
hoaxes ever foisted upon the American public, known as Russiagate. One after another, Silicon
Valley overlords were called before Congressional committees to
explain "how and why Russian operatives were given free rein to tamper with 2016 U.S.
election," in favor of the populist Donald Trump, no less.
After this made for television 'dressing down', the Big Tech executives at Google, Facebook,
Twitter and others got busy reconfiguring their software algorithms in such a way that
thousands of internet creators suddenly lost not only a lifetime of hard work and their
sustenance, but their voice as well. This is the moment that Big Tech and the Democrats began
to really march in lockstep. A new dark age of 'McCarthyism' had settled upon the nation, which
gave the left unlimited powers for blocking user accounts they deemed "suspicious," which meant
anyone on the right. Now, getting 'shadow banned,' demonetized and outright banned from these
platforms has become the new dystopian reality for those with a conservative message to convey.
And the fact that the story of 'Russian collusion' was finally exposed as a dirty little lie
did nothing to loosen the corporate screws.
Incidentally, as a very large footnote to this story, Big Tech and Big Business have not
dished out the same amount of medieval-style punishment to other violators of the public peace.
The most obvious example comes courtesy of Black Lives Matter, the Soros-funded social-justice
movement that has wreaked havoc across a broad swath of the heartland following the death of
George Floyd during an arrest by a white police officer.
Both BLM and Trump supporters believe they have a very large grudge to bear. The former
believes they are being unfairly targeted by police due to the color of their skin, while the
latter believes they are not getting fair treatment by the mainstream media due to 'Trump
Derangement Syndrome', and possibly also due in part to their skin color. But at this point the
similarities between BLM and Trump voters come to a screeching halt.
Taking it as gospel that America suffers from 'systemic racism' (it doesn't, although that
is not to say that pockets of racism against all colors and creeds doesn't exist), dozens of
corporations jumped on the woke bandwagon to express their support for Black Lives Matter at
the very same time the latter's members were looting and burning neighborhoods across the
nation. Strangely, violence has never shocked the progressive left, so long as the violence
supported its agenda.
Here are just some of the ways the corporate world responded to charges that America was a
racist cauldron ready to blow, as reported by The Washington Post: "Jamie Dimon, chief
executive of JPMorgan Chase, knelt
alongside employees during his visit to a Chase branch. Bank of America
pledged $1 billion to fight racial inequality in America. Tech companies have
invested big dollars in Black Lives Matter, the Center for Policing Equity, Colin
Kaepernick's Know Your Rights Camp and other entities engaged in racial justice efforts " And
the list goes on and on.
Of course, private corporations are free to express their solidarity with whatever group
they wish. The problem, however, is that these monopolistic monstrosities have an overwhelming
tendency to pledge allegiance to liberal, progressive values, as opposed to maybe steering
clear of politics altogether. Nowhere was Corporate America's political agenda more obvious
than in the aftermath of the siege of the Capitol building on January 6, which led to the death
of five people.
Corporate America missed a very good opportunity to keep quiet and remain neutral with
regards to an issue of incredible partisan significance. Instead, it unleashed a salvo of
attacks on Trump supporters, even denying them access to basic services.
Aside from the most obvious and alarming 'disappearing act,' that of POTUS being removed
from the major social media platforms, were countless lesser names caught up in the
'purge.'
One such person is conservative commentator and former baseball star Curt Schilling, who
says that AIG terminated his insurance policy over his "social media profile," which was
sympathetic to Donald Trump,
according to Summit News.
"We will be just fine, but wanted to let Americans know that @AIGinsurance canceled our
insurance due to my "Social Media profile," tweeted Schilling.
"The agent told us it was a decision made by and with their PR department in conjunction
with management," he added.
While all forms of 'cancel culture' (which seems to be part of a move to build American
society along the lines of the Chinese 'social credit system,' which rewards those who toe the
party line, and punishes those who fall out of favor) are egregious and counterintuitive to
American values, perhaps the most astonishing was the cancellation of Republican Senator Josh
Hawley's book deal with Simon and Shuster.
"We did not come to this decision lightly," Simon & Schuster said in a statement over
Twitter. "As a publisher it will always be our mission to amplify a variety of voices and
viewpoints: At the same time we take seriously our larger public responsibility as citizens,
and cannot support Senator Hawley after his role in what became a dangerous threat."
The so-called "threat" was a photograph of Hawley raising a fist to the crowd that had
assembled outside of the Capitol building before it had breached the security perimeter. It
seems that corporations may now serve as judge, jury and executioner when it comes to how
Americans behave in public. Is it a crime that Hawley acknowledged a crowd of supporters who
were at the time behind the gates of the Capitol building? Apparently it is.
By the way, the name of the Hawley's book? 'The Tyranny of Big Tech'. How's that for
irony?
In conclusion, it would be a huge mistake for the Democrats to believe that they are
safe from the same sort of corporate and government behavior that has now dramatically silenced
the conservative voice across the nation. The United States has entered dangerous unchartered
waters, and by all indications it would appear that the American people have inherited a 'soft'
form of fascism.
Although there may not be troops and tanks on the streets and a dictator inciting crowds
from his bully pulpit, the end result has been pretty much the same: the brutal elimination of
one half of the American population from all of the due protections provided by the U.S.
Constitution due to an unholy alliance between corporate and government power, which is the
very definition of fascism. Democrats, you may very well be next, so enjoy your victory while
you still can.
I am strongly against balkanization of the country. The example of the USSR shows where it
leads -- misery of common pople and dramatic drop of the standard of living, while new gand of
ruthless oligarchs emerge from the ruins.
Pushing the Trump-inspired populist movement underground may only cause it to resort to more
drastic measures. As the leftist libertarian reporter Glenn Greenwald observes ,
"these people know they are scorned and looked down upon... and the more you humiliate
and make them feel powerless, the more you take away their ability to organize and express
that rage, it's gonna find an outlet in more destructive ways."
As a former professor at a top-ranking university, I favored a Trump re-election, not
because I support Trump so much as abhor what the opposition represents and is proving itself
to be. In response to the social media threat to expression, I have inaugurated a new group on
Telegram called 'Thought Criminals'. There, fellow 'thought deviationists' like me are able to
express views that are effectively proscribed on mainstream social media platforms. No one
among us advocates violence or the overthrow of the government. None of us is 'racist'. We
advocate only the rights enshrined in the US Constitution.
But some groups, no doubt, are intent on violence. Yet the violent extremists consist mostly
of Antifa and related 'activists', who will unfortunately trick Trump supporters into another
error during the inauguration, like some appeared to do when involved
in the Capitol siege. It's not as if violent extremists among the Trump base were always there,
ready to pounce on any opportunity to express their "racist," "white nationalist"
views.
Rather, as the rising party has already demonstrated, these people stand to lose the most
under a Biden-Harris regime, whose Big Tech and mainstream media allies act as governmental
enforcement apparatuses.
Trump supporters have been hated and demonized simply for wanting to live without being
reprimanded and punished for their whiteness, their middle-Americanness, or their values. They
face an anti-white, anti-native, anti-middle-America extremism that is set to silence and crush
them into submission.
These and others will form a new underground under the prevailing ideological and political
hegemony. This banishment of millions, and not Trump, is why the nation will fall apart, if
indeed it does.
JJ_Rousseau 5 hours ago 15 Jan, 2021 02:58 PM
The best thing that could happen is for USA to "balkanize". For the rest of the world, and
for Americans too. The founding fathers intentionally put restraints on the federal
government's power to prevent the situation we now face. Both parties (actually the duopoly)
are guilty of breaching the constitution, on so many levels we have lost count
Ronj14848 JJ_Rousseau 1 hour ago 15 Jan, 2021 07:23 PM
The USA have more American in uniform outside America than civilian Americans inside America.
You bleed yourself dry trying to be the boss of the world.
chert JJ_Rousseau 3 hours ago 15 Jan, 2021 04:52 PM
Right, states should have more power than the federal government. Case in point: North Dakota
is trying to pass a law to sue Facebook and Twitter for those who have been censored on those
platforms. But federal law under Section 230 of the Communications Decency Act will supersede
because federal law wins.
apothqowejh 4 hours ago 15 Jan, 2021 04:17 PM
As an American, I can't say a reckoning hasn't been overdue. The myopia in this country, and
the tolerance for evil, was bound to rebound. From a refusal to honestly look at 9/11, a
refusal to accept responsibility for Iraq, Libya, Syria, Afghanistan and a host of other
insanely brutal blunders, to an acceptance of such horrors as the USAPatriot Act and the
COVID scam, everyday Americans have obliviously sleepwalked into a totalitarian dystopia.
Tyranny abroad inevitably leads to tyranny at home, and we have well-earned it by refusing to
vote for peace and non-interventionism; for limited government, for responsible spending. Now
our votes no longer matter, and we are caught helpless in the whirlwind of our own
destruction.
newagerage apothqowejh 4 hours ago 15 Jan, 2021 04:33 PM
The CIA, NSA, Pentagon... all these corporations lead to disaster as the employees have to
keep causing trouble to justify their jobs and spend, spend like crazy, the Army and
intelligence agencies spending the hard worked money from Silicon Valley and other sectors.
The country just doesn't make sense, first outsource jobs to China and then when they see
that Chinese people are smarter than them outsource those to India? are Indians idiots? I
don't think so... both countries will rule the World by the end of the century. And the most
important of all... where is your public education system? you can live without a proper
health system, China does, but without a decent public education system? most Americans don't
know where Portugal or Belgium is placed, no matter black or white...
ceshawn 6 hours ago 15 Jan, 2021 02:31 PM
Trump didn't do this. The irrational reaction to Trump did this. It started with the
now-fully mythological Russia-gate nonsense (that started with an almost ridiculously made up
FISA warrant application). Continued through constant over-the-top challenges by Democrats of
Trump following Obama-era laws (separation of children and adults for illegal border
crossings) and the clear obstruction used by opponents during his entire Presidency. Trump
was a disaster, Biden will be a nightmare (or a complete liar), but the left shouldn't be
complaining when the reaction to their candidate is equally as disturbing as their reaction
to the right (and yes, the circus that was the "raid" at the Capitol is just as bad as the
intel community doing shady things against a sitting President).
Ronj14848 ceshawn 1 hour ago 15 Jan, 2021 07:27 PM
Trump didnt start new wars......but he has created a situation that foriegn wars will spring
from his actions. He has created hate for a country that during the second world war was a
much loved country.
billy brown ceshawn 4 hours ago 15 Jan, 2021 03:36 PM
What could the 'rioters' do? We aren't going to let them poison us anymore. This election
will not be stolen and the new patriot act isn't going to get passed quietly. They are going
to have to crush us or allow a partition of the country
ceshawn 5 hours ago 15 Jan, 2021 02:36 PM
If I were Russia or China, I would be watching carefully. Biden almost HAS to go after Russia
over the Crimean disaster of Obama and China will be his easy-out enemy if things are
complicated otherwise. North Korea will somehow become a big deal again as well. Let those
missiles fly, because the incoming administration has a proven track record of blowing up
innocent women and children for "funsies" (drone strikes on "suspected" terrorists...oh and
their families) without any form of due process or care for the safety of collateral damage.
Ronj14848 ceshawn 58 minutes ago 15 Jan, 2021 07:36 PM
True...the media support the military industrial complex. Their friends own the miltary
industrial complex . See who they support politically and avoid them like the plague.
Ronnie Spelbos ceshawn 2 hours ago 15 Jan, 2021 06:04 PM
if I was Russia or an Eastern European nation I would offer asylum to white heterosexual men
and their families who want to leave the US. Take advantage of the brain capital and work
ethic of this group. The US is no country for white men.
Ohhho 6 hours ago 15 Jan, 2021 01:41 PM
The Evil empire felt vulnerable so it lashed out with vengeance! None if it helps to fix the
issues behind the problem so I expect to see more of it in the near future!
TheFishh Ohhho 5 hours ago 15 Jan, 2021 03:32 PM
There are literally just a few things the US can do to rebound as a decent country, but the
establishment doesn't want to make those moves. They rather see everything collapse than see
their wealth and power decreased by any amount.
OneHorseGuy 6 hours ago 15 Jan, 2021 02:17 PM
"79% of Americans think the US is falling apart" those not accounted for are possibly
homeless or illiterate and don't have the opportunity of putting their view forward.
Ronnie Spelbos OneHorseGuy 2 hours ago 15 Jan, 2021 06:02 PM
102% think the US is falling apart - cites Dominion.
newswithoutbord OneHorseGuy 6 hours ago 15 Jan, 2021 02:31 PM
Spot on, mate!
RTaccount 6 hours ago 15 Jan, 2021 02:22 PM
There will be no peace, no unity, and no prosperity. And there shouldn't be.
TheFishh RTaccount 4 hours ago 15 Jan, 2021 03:38 PM
The US regimes past and present have worn out their bag of tricks. A magician is a con-man.
And the only way they can entertain and spellbind the crowd with their routines is if
everyone just ignores the sleight of hand. But people are starting to call the US out for the
tricks it is pulling, and that's where the magician's career ends.
omyomy RTaccount 5 hours ago 15 Jan, 2021 02:54 PM
We the sane people know who is picking a fight. No matter what the propaganda outlets decree.
Tor Gjesdal 6 hours ago 15 Jan, 2021 02:18 PM
79%,sure? OK. Very soon 85% of Westerners will understand their Countries are heading for
failures. They have been deceived for way too long.
Twenty Tor Gjesdal 5 hours ago 15 Jan, 2021 03:23 PM
The alternative to western governments is dictators, one party rule. Yes, most western
governmental concepts are idealistic, but we wouldn't trade for anything else because we know
better.
JIMI JAMES Tor Gjesdal 6 hours ago 15 Jan, 2021 02:31 PM
0 covid cases,i dont think so.
soumalinna1 4 hours ago 15 Jan, 2021 03:36 PM
Correct. America will never be the same again. Democrats and CNN destroyed a once great
nation.
Ronnie Spelbos soumalinna1 2 hours ago 15 Jan, 2021 06:06 PM
The 1965 Immigration Act destroyed the US. A country too diverse with little in common was
always bound the fall apart.
Drayk soumalinna1 3 hours ago 15 Jan, 2021 04:42 PM
In their efforts to expunge the Trump movement from memory let alone existence, these
neo-Stalinists are hellbent on nullifying constitutionally guaranteed rights – freedom of
speech, freedom of assembly, and the right to bear arms are under assault.
In place of the Bill of Rights, they would impose a Bill of Don'ts:
Don't say what we don't want to hear.
Don't gather where we don't allow, especially if you are a 'deplorable'.
Don't bother petitioning for grievances, because we don't care. Don't own weapons and don't
defend yourself when you or your property are attacked, even as the police are defunded.
Don't tell us about your right to privacy because our right to surveil you supersedes
it.
Don't tell us you have the right to confront the witnesses aligned against you, or see the
evidence alleged against you, or to present evidence and witnesses in your own defense. That's
your white privilege speaking, and we will not tolerate hate speech.
Don't expect us to be bound by due process or the rule of law. Feelings and desired outcomes
trump facts and rules, both of which are tools of oppression, relics of the fascist
patriarchy.
Don't object, or we will cancel you entirely from these Disunited States of Woketopia.
And first and foremost, don't dare have the temerity to question election results that have
handed us uncontested power.
Only authoritarians sanction this state of affairs. The harm they will do, as they neglect
and inflict further pain on the Republic, will be immeasurable. The nation is failing, not
merely because it is divided, but because a contingent has rejected its foundational
principles. That contingent is now in control.
For anybody who listened to state hearings in one or more state if is clear that there was widespread fraud. And its importance
is much larger then the question who won the elections
Notable quotes:
"... Multiple methods of attack on the election outcome have been prepared, all methods well planned, tried and perfected in the string of color revolutions around the World. Because those attacking Trump are the same as those who have been doing the "regime changes" in the vulnerable countries over the past 30 years. ..."
"... The playbook/manual is fully symmetrical – it always addresses both possible outcomes – if their side does not manage to steal the election then they incite an insurrection and oust the winner (the Viktor Yanukovych outcome). ..."
"... It is funny how few people appear to understand that Hunter's laptop was not just a suppressed election decider then an important reason for Biden's suitability – the insurance of ensurance, the media ready Kompromat. ..."
"... Finally, it is very important to keep in mind that none of what transpired would have been possible in a healthy country ..."
"... Maybe it was hostility towards Trump's supporters rather than hostility towards Trump. Trump is a reliable pro-immigration ultra-Zionist rabidly pro-LGBT liberal. The views of a large proportion of Trump's supporters are diametrically opposed to Trump's own views, but his supporters aren't smart enough to figure that out. ..."
"... whatever else Trump may be, he's no white nationalist. But again his supporters can't figure stuff like that out. ..."
"... In extreme situations, it's more important to win than to play by the rules. – This is the moral reasoning **** of the fraudsters. The basic equation they applied is so simple that it hurts (and therefore: worked perfectly well – in all of the West) ..."
"... In the Art of Winning Elections it did not take a genius to develop this solution – the lowest number of night-suitcases (filled with ballots) for the highest number of elector votes . ..."
"... In my mind the election was already unfair when you have the entire MSM and the Internet social media companies rooting for one candidate while attacking the other and banning/censoring the voices of his supporters under various pretexts. Both candidates and their supporters, should have been given equal exposure but I don't know how that could be achieved in practice. ..."
"... At a minimum the circumstantial evidence of vote counts being stopped in swing states along with gerrymandered rules was highly suspicious. To claim a mandate on such a close election while losing house seats is absurd but the Republicans bungling the Georgia Senate run off over $2K checks and a sycophantic MSM ensures they will. ..."
"... We are to believe Biden won 507 counties, the least EVER, but won the most votes ever. Trump won 74 million votes, beating Obama's 69 million in 2008, the previous all-time high. Trump won over 2500 counties. ..."
"... Strange that all these presidential elections are always neck and neck. Just because there are two parties does not mean that election after election the vote will boil down to one or two "swing states" and a few thousand votes. Statistically, it just doesn't make sense. ..."
"... This is strong evidence, if not proof, that these elections are scripted from beginning to end ..."
"... The convenient thing about postal votes is that they make it possible to wait until the opponent's votes are all in and counted – then send in just enough postal votes to tip the balance. It's rather like an auction in which one bidder gets only the one bid, and then a rival can offer $1 more. ..."
"... Well said. I'm sure that it's no coincidence that DJT has been involved with televised wrestling over the years. Every great contest requires a memorable "heel" to engage the spectators. In televised snooker in the UK, final matches often are over best of 35 frames. It's unusual for them not to go to the last ball of the final frame. Got to have a little drama. ..."
"... The point is, it is the average intellect, moral and civic weight of the involved constituencies that allows or doesn't allow what shouldn't be allowed in a real democracy. You don't have actual democracy below a lower threshold of intellect and moral and civic worth of all the main involved parties. ..."
"... When you consider Donald Trump's grotesque antics, his entirely unpresidential behavior, evident falsehoods and blatantly corrupt actions – together with the systematic media blitz taking every opportunity to show him in the worst possible light; it is quite astounding that he received as many votes as he did. Far, far more than could be accounted for by simply ascribing them to his 'deplorables'. ..."
"... I think Trump's greatest legacy will be that he ripped away the curtain and the masks fell and we all got to see just how nefarious and rigged the system is, from federal judges to our intelligence community to the FBI/DOJ to Congress to the media ..."
"... Dominion machines can do anything! They can assign a weight of 1.5 per single vote to one candidate, and .75 per vote to the other, and can adjust as necessary. They can assign batches of "adjudicated" ballots to the candidate of your choice. They can just switch votes from one candidate to the other in increments of several thousand, let's subtract 29,000 votes from candidate a and add them to b's column. They can allow access by a third party to the administrator's identity and password so the third party can enter and participate directly in tabulation of the votes. ..."
"... They won the election the old way: they stole it fair and square. ..."
"... If you like your bourgeois job and want to keep it, you will support the narrative. ..."
"... All of the comments on here that analyze DJT's strengths and weaknesses miss the point. I personally think he made some very poor choices; but, to inappropriately paraphrase Carville, it's the fraud, stupid. ..."
"... Occam's Razor should be applied- instead of the nonsense of Chavez having an interest in voting software; voting machines being manipulated; truckloads of paper ballots being moved across state lines- my favorite; etc. ..."
"... t would be very easy to have individuals in a nursing home or even an adult day care center for mentally (dementia) incapacitated adults sign ballots. There are numerous day care centers in New York City, federally funded, where individuals could be coaxed to sign ballots. Just say Trump will close the day care center -- especially where interpreters must be provided because the individuals cannot understand English due to varying stages of mental incapacity. ..."
"... I wonder how many people have watched the twenty hours or so of state legislature hearings related to the election. Can people just not be bothered? These were historic hearings of huge importance, but I assume they didn't get much coverage in the MSM. I think most of them were livestreamed only by small right-wing networks. ..."
"... What were the results of the 2016 election? Billary received 65 million to Trumps 62 million. Gotcha. So we have roughly 127 million who showed up to vote that time. (Wonder how many of those were legit.) So ONLY 4 years later, Joe "I Look Like I'm Drugged" Biden ALLEGEDLY received 80 million and Trump received 74 million. Okay, that is a turnout of 154 million votes. So if I believe in this fairy tale, I was supposed to believe that in ONLY 4 years the vote count increased by an alleged 27 million. Hell, a lot of our most populous states do not even have that many people. ..."
"... Laws don't say a little bit of fraud is OK, because the fraud committed on or by a business didn't cause bankruptcy. Either there was fraud, or there wasn't. ..."
"... That several courts refused to hear cases for lack of standing, is patently ridiculous. If a candidate has no standing, who does? In an election, everybody has standing because they are affected by the result, and by virtue of Citizens United , corporations do as well. ..."
"... Watch this recent interview of Chris Hedges by Jimmy Dore about the root causes of our current woes. Hedges speaks off the cuff in words that sound as polished, powerful and precise as the language in tracts considered to be classics. His Pulitzer clearly was not found in a Cracker Jack box. ..."
Before the election I polled all my friends who would win. The majority of both left and right oriented said that it would
be Trump. I said, yes Trump would win a fair election, but he will lose on who is counting. Multiple methods of attack on
the election outcome have been prepared, all methods well planned, tried and perfected in the string of color revolutions around
the World. Because those attacking Trump are the same as those who have been doing the "regime changes" in the vulnerable countries
over the past 30 years. Trump never had a grain of chance against this mighty machinery. Corrupt local governors and blackmailed
and co-opted all levels of judiciary, targeted lawlessness, threats and examples of violence and future civil war if the other
side wins, censorship, eviction of election observers, night-time suitcases of ballots, one-sided main sewerage media.
All pure déjà vu – this is exactly how the color revolutions work – the art of winning elections. The US bombers arrive
only if the "peaceful transition of power" (aka the stealing of election and post-election) fails. In the color revolution manual,
there is also a chapter on prevention of resistance to the stolen election – thus the msm and congress screeching like castrated
pigs against Trump's imaginary incitement of insurrection (pure psychological projection). I was always sure that Trump is too
much of a cheap demagogue and hot air filled balloon to be able to initiate a real insurrection.
The playbook/manual is fully symmetrical – it always addresses both possible outcomes – if their side does not manage to steal
the election then they incite an insurrection and oust the winner (the Viktor Yanukovych outcome).
... ... ...
In political terms, in the 2016 election a quasi-populist candidate slipped through. This will never happen again because state
laws will be enacted with built-in mail voting and electronic voting machines. Competent or incompetent populists will never get
through again. This will ensure that the choice will always be only between the approved, controllable candidates with plenty
of skeletons in wardrobes and dirty laptops in their closets. It is funny how few people appear to understand that Hunter's laptop
was not just a suppressed election decider then an important reason for Biden's suitability – the insurance of ensurance, the
media ready Kompromat.
Finally, it is very important to keep in mind that none of what transpired would have been possible in a healthy country
: election of Trump without enough Kompromat to have to invent the dumbest Putin's puppet meme and the consequent exposure
of the manipulative Deep State, the sulfuric acid for the brain MSM and the high-techs fakers. These are all the Hegels' seeds
of destruction in action.
One thing to ask is why was this huge effort made to oust Trump?
Maybe it was hostility towards Trump's supporters rather than hostility towards Trump. Trump is a reliable pro-immigration
ultra-Zionist rabidly pro-LGBT liberal. The views of a large proportion of Trump's supporters are diametrically opposed to Trump's
own views, but his supporters aren't smart enough to figure that out.
In extreme situations, it's more important to win than to play by the rules. – This is the moral reasoning **** of the
fraudsters. The basic equation they applied is so simple that it hurts (and therefore: worked perfectly well – in all of the West):
Trump = Hitler.
**** If I might go with Sigmund Freud here, I'd say: – Their rationalizations instead of "their moral reasoning".
I prefer this model, and it's not being discussed: Someone was making BIG money off of those programs and policies leftover
from Obama. Trade with China? Care to mention one BIG company who peddles Chinese wares? Maybe two or three of them, perhaps?
"Follow the money", is what Deep Throat told Woodward. If we do that with our darling Deep State? Just ask yourself, who stood
to benefit from four years of Hillary, pray tell? There's your answer.
The Deep State regime stole this election in exactly the same states where Trump successfully campaigned in 2016 to win against
Clinton. In the Art of Winning Elections it did not take a genius to develop this solution – the lowest number of night-suitcases
(filled with ballots) for the highest number of elector votes .
Thanks for a balanced assessment. In my mind the election was already unfair when you have the entire MSM and the Internet
social media companies rooting for one candidate while attacking the other and banning/censoring the voices of his supporters
under various pretexts. Both candidates and their supporters, should have been given equal exposure but I don't know how that
could be achieved in practice.
Trump was severely hamstrung by the role played by the MSM and the social media. In a real democracy this state of affairs
should not be allowed: where the rich and powerful who control the media have an unequal say and overwhelming influence compared
to the ordinary voters.
Now we have Ruby Freeman, heretofore only on video rolling out suitcases in Fulton County, now on AUDIO discussing her $100
an hour election heist gig and the "Secretary of State" is mentioned at 2:02 by her boss Ralph Jones:
There is a small element of illogic in the numbers part of the argument, namely in using 2 different metrics to make that argument.
(I agree with the corruption part of the argument covered by Glenn Greenwald. It's censorship in action).
As I've done before, I'll reiterate, I'm no fan of Biden or Trump. In fact I'm worried about the war cabinet Biden already
seems to be assembling just as I still worry about the crazed maniac Pompeo for the next few days left in the current administration.
But here's the point and it is a very subtle one: to say it was a tight race and only 1 in 7,000 Americans had to change their
vote is a bit misleading. In the absurd Electoral College, winner take all the state system (which is far more scandalous in my
view), we take one state at a time. If we accept the vote count, Biden won over 7,000,000 more votes more than Trump, a margin
of victory of 4.4%. Not very close.
Therefore, if it were a one person one vote nationwide system, 2.2% would have to change their minds, meaning 1 out of every
45 Americans.
But it's a state by state margin that we're after. Thus more to the point would be to take each individual state and its margin.
So if we took Georgia as one example, the margin of Biden's lead was 11,779 votes out of 4,935,487 votes cast for Biden and Trump
(we disregard all the third party votes in this argument). 5,890 voters would have to "change their minds". Out of the Biden/Trump
overall vote, that's 1 out of 838 Georgian voters.
To apply a different system, overall US vote count, to one state, Georgia, is using which system you prefer to come up with
an illusionary 1 out of 7000 Americans, not applying the same metric down the line. It's a separate state by state system, not
a nationwide vote. You have to stay consistent to be accurate in this method of argumentation.
Very technical, yes. What about mail-in voting? What is the evidence that this is by definition rigged or manipulated? Mailed
ballots have a paper trail like in-person ballots. Presumably someone could steal your ballot from your home and vote on your
behalf, but this can be traced and found out. At least one state, Washington, doesn't even have in-person voting at all. Does
that mean all of their votes are fraudulent?
What about voter suppression? Shouldn't that be factored in? That seems to happen a lot more often in red states than blue
states. What about Trumps attempts to sabotage the US Postal System? Doesn't that bother anybody who supports him? What about
his refusal to commit to the results prior to Election Day? (He did the same in 2016 by the way). This only added to his
opponents concern about his dictatorial tendencies.
Finally, in all the arguments I've seen anywhere, I haven't seen anyone lay out which states use those ridiculous electronic
voting machines which leave no paper trail. That should be the other real scandal and those should be immediately banned in every
state. Get rid of those and the Electoral College and we might have a fair system.
Oh, and get rid of a system that is eternally dominated by 2 parties as well, whether through run off elections or even better,
proportional representation. The latter that would be truly more democratic.
why was this huge effort made to oust Trump? What did they want him to do that he wouldn't do? Was he an impediment to the
increase of control over the average person? Did not want to start up another action against Syria? Would not attack Iran without
having a coalition of NATO countries lined up? Was against total outsourcing to China? Not confrontational enough against Russia?
Perhaps he gave the deplorables dangerous ideas about them having some rights. If that question could be answered then we'd
know what is coming.
He humiliated the upper echelons of society so thoroughly via his 2016 campaign and victory.
@anon Because Trump
inflames white nationalism, which is anathema to the Jews.
There is evidence that Trump himself is a Jew, and a fanatic Zionist at that, so his self-serving incitement of white nationalism
(whose causes he did little to implement, unlike his steady support for every imaginable Israeli cause, tbe more outrageous the better,
short of war with the "usable" nukes he had had developed for the purpose, that Russia warned him away from) was especially galling
to the top Jews such as the Rothschilds for whom Israel is nothing sentimental, just one more piece in their chess game for world
power.
And thank you for this site which is a beacon of free speech and dissent against our vile, corrupt, incompetent ruling class.
In all the post election rancor little attention has been brought to how razor thin the margin actually was. And with you being
a vociferous critic of Trumps boorish antics and insane foreign policy the candor on this issue is appreciated.
At a minimum the circumstantial evidence of vote counts being stopped in swing states along with gerrymandered rules was highly
suspicious. To claim a mandate on such a close election while losing house seats is absurd but the Republicans bungling the Georgia
Senate run off over $2K checks and a sycophantic MSM ensures they will.
And after abetting barbaric violence and anarchy for months the Democrats will now use trespassing in their "Sacred Temple"
to unleash a crackdown by the national security state and unprecedented censorship and social-credit run by woke-corporate oligarchs.
Interestingly (And as many predicted) it appears they will reopen the economy and declare "victory" over Covid shortly after
Bidens inauguration. Clearly the bizarre excesses of the lockdowns and dynamiting of the economy were calculated to undermine
Trump and consolidate wealth and power from the start.
The question is what exactly this "new normal" will be and how far they're willing to go in order to purge the Trumpists and
populist right. It will be easy to garner support for the latter but if the daily disruptions and financial shocks continue the
system will collapse.
A new, large scale war would be a useful distraction but it's hard to imagine the U.S sustaining one in its current state much
less against capable adversaries like China and Russia.
Then again, arrogant, idiotic, catastrophic policy blunders are the defining feature of this ruling class for the last 30 years
so I wouldn't put it past them given the madness we've seen already.
In effect, America's media and tech giants formed a united front to steal the election and somehow drag the crippled Biden/Harris
ticket across the finish line.
adjustment
via a plastic bag put over their heads. If they were lucky.
There was no real contest. Because? A. Control of the mainstream media was so one sided. And that is where we are at now here
in USA. Imagine, a standing President of the USA has been banned and censored by all the "American" mainstream media giants. Actually,
you do not have to imagine. It just happened: Big Tech and MSM has openly torpedoed the First Amendment and US Constitution. So
we know where they are coming from. It's also kind of disappointing how most of our "representatives" are dealing with this.
The only cause other than himself on which Trump has been consistent is serving Israel. One of the only two major policies
of Obama's that he didn't reverse was support of Israel, though he took it to yet another level. The other one was
increasing military spendings. Obama never cut military spending. My money is on Biden never doing it either, and also
that he will take support of Israel to yet another level. I hope I'm wrong.
On the election night I was listening to two of our New Zealand reporters who were reporting the incoming results. I remember
quite clearly after results had been coming in for a while they remarked: "well that's it another four years of the same". That
were their exact words. That must have been before the postal votes came in, which suddenly changed the picture completely to
Biden's advantage. Postal votes I believe were introduced for the first time in 2020 because of the Corona pandemic. It's believed
that postal votes can be more easily tampered with. Postal votes are expected to remain during future elections I believe.
We are to believe Biden won 507 counties, the least EVER, but won the most votes ever. Trump won 74 million votes, beating Obama's 69 million in 2008, the previous all-time high. Trump won over 2500 counties.
Clarice Feldman at the Americanthinker.com noted that many residences
had multiple votes from the current occupants plus previous occupants (apartment complexes) in this election, because old voter
rolls aren't purged in a timely manner. The same addy might have 3 previous residents voting, plus the same individual voters
legitimately voting at their new addresses.
My advice for whites is this .we will probably be getting in new wars for neocons now, so you might wanna think twice before
signing up for the military. You may find your twenties being used up in multiple deployments in foreign miserable places.
Strange that all these presidential
elections are always neck and neck. Just because there are two parties does not mean that election after election the vote will
boil down to one or two "swing states" and a few thousand votes. Statistically, it just doesn't make sense.
Of course the media loves these nail-biter elections because it drives up their viewership. Every election we get the same
old farcical "debates", scandals and continual ridiculous sound bites. This is strong evidence, if not proof,
that these elections are scripted from beginning to end, even up to and including the "march to the Capitol" and the
ensuing "insurrection".
Exactly. "Spin". He also appears to be entirely ignorant of the fact that the constitution states that each states electors,
and the procedure for choosing them, must be accomplished via the state[s] legislatures, and that in all 6[?] swing states that
recorded early morning, miraculous turn-around votes from Trump to Biden, that that particular constitutional procedure had been
entirely , and very conveniently, ignored:
The Lobby wants Syria by any means, up to a direct confrontation with the Russian Federation. The Jewish hatred for Iran is boundless
(same for Russia – take note, Americans). Zionists care not about human lives.
"I don't know or care anything about Dominion voting machines, whether they are controlled by Venezuelan Marxists, Chinese
Communists, or Martians. But the most blatant election-theft was accomplished in absolutely plain sight".
Cui bono? Obviously the main group profiting from the fraudulent election was the Democratic Party and its supporters. So why drag in foreign governments? Most of them are all too well aware that it's very dangerous to attract the attention of
the USA for good or bad. Like trying to save a drowning whale.
So their sensible strategy is to stand back at a safe distance and watch the monster perish in its own poisons, hoping it doesn't
lash out and harm them in its dying struggles.
The convenient thing about postal votes is that they make it possible to wait until the opponent's votes are all in and counted
– then send in just enough postal votes to tip the balance. It's rather like an auction in which one bidder gets only the one
bid, and then a rival can offer $1 more.
Ridiculous if you want a fair election. But nobody who matters wants or expects anything of that kind. A proper political machine
gets everything cut and dried well in advance.
Trump was unpredictable and, to a degree, uncontrollable. He had to go.
Well said. I'm sure that it's no coincidence that DJT has been involved with televised wrestling over the years. Every great contest requires
a memorable "heel" to engage the spectators. In televised snooker in the UK, final matches often are over best of 35 frames. It's unusual for them not to go to the last
ball of the final frame. Got to have a little drama.
Meanwhile, back at the ranch the rancher counts the silver dollars.
...If ego or narcissism can explain it, so be it. I'll go with insane or suffering from dementia. Any 'drain the swamp' or 'fix
the system', MAGA or "build back better" argument would appeal only to retards. Re-visit Carroll Quigly's succinct description
of political parties in the USA in Tragedy and Hope, pages 1247-1248 (hardcover) or Google same.
I'm beginning to believe that a different species is holding sway and we are the proverbial Eloi.
The point is, it is the average intellect, moral and civic weight of the involved constituencies that allows or doesn't allow
what shouldn't be allowed in a real democracy.
You don't have actual democracy below a lower threshold of intellect and moral and civic worth of all the main involved
parties.
We could in other words say: there will be as much real democracy as is desired by the average citizen, where to desire it
is not to blandly say "I agree with democracy".
It is funny how few people appear to understand that Hunter's laptop was not just a suppressed election decider then an
important reason for Biden's suitability
Yes, few people understand that all regime-approved candidates are people able to be blackmailed for a precise reason, and
not at all by chance. What about Hegel though?
@obvious Globalist
NWO creeps stole the election, they spent 4 years trying to overthrow the 2016 election by coups aided and abetted by the Globalist
Mainslime Media, FBI etc. -- you missed all that of course? .
They also PUBlICLY previewed, as they did the COVID Agenda, stealing
the election a couple months before, gamed and planned it in various outcomes .Anyone who can't see what is up is either willfully
ignorant, lying, or "stupid" as you say.
No decent person is in favor of the Agenda of Harris/Biden serving the NWO "Great
Reset" to crush the Peons -- you must see yourself as above the coming carnage -- I have news for you -- your not.
We'll know we're in an actual civil war when different branches of the military, or units within a branch are fighting each
other or when the police are fighting the military. Don't hold your breath of course because every cop and soldier in America is a traitor and they're all on the same team.
What I still find unfathomable is the fact that the steal was so obvious: so in your face but yet the big media, big tech,
federal and state law enforcements, spooks, judges, big GOP politicians etc still behave like nothing ever happened. Trump and
his supporters are now labeled domestic terrorists and lawfare is about to be unleashed on them. It's surreal.
Had the Orange heeded his MAGA base rather than his (((rat-in-law))) he'd still be President. There was certainly
election fraud; enough of the betrayed base stayed home to make it effective. Trump was a p -- y all four years and got what
he deserved. He was always a stop-gap time-buying non-solution...
...issues can no longer be discussed openly, the reliability of elections in the USA is the most important issue that faces us. The
people will accept an honest winner in a serious election. Nothing is as cleansing to our natural divisions as the result of a
well-contested election, in the knowledge that, in a reasonable interval, the same offices will be up for new contests.
Nothing is as damaging to our peace of mind as knowing that one side won fairly, but was robbed of governing. I thank Ron Unz for writing and publishing such a reasonably argued essay on the matter. It is the gold standard for 2020 election
analyses.
This is sad people. Was talking to a friend and even his 80 something year old mother commented on how decrepit Sleazy Joe
looks and walks. I was watching him deliver "his speech" last night and the guy had a hard time reading a few sentences off the
teleprompter without stammering and stuttering.
After an embarrassing and truly cringe worthy "speech" Biden is seen walking off. The dude can barely walk...
For eighty million who cast their ballots for the old geezer, it's mostly out of economic necessity; however, for the seventy
plus million people who are Trump supporters, it's a fight for their country and more importantly, culture.
Brought to you by the same people who gave us the Weimar Republic, only twice as vicious and vindictive this time because they
know what they did wrong last time -- they weren't vicious and vindictive enough.
When you consider Donald Trump's grotesque antics, his entirely unpresidential behavior, evident falsehoods and blatantly corrupt
actions – together with the systematic media blitz taking every opportunity to show him in the worst possible light; it is quite
astounding that he received as many votes as he did. Far, far more than could be accounted for by simply ascribing them to his
'deplorables'.
And, even if Biden did, in fact, just manage to win – presenting himself as a force of reason, stability and sanity – a great
mass of voters sensed something in him that they distrusted even more than in Trump. That was a stunning rejection – of almost
the same magnitude as Hillary's in 2016!
You're right, and Ron Unz is right. Had Trump retained his white male voters of 2016, the Democrats likely couldn't have pulled
off the steal. But in the end Donald Trump was a mere salesmen selling a con.
...If you had told people in France in 1785 or Russia in 1913 that within a few short years about a quarter of their population
would be slaughtered in revolutionary turmoil and many more displaced, they would have dismissively laughed in your face believing
– as do we – that their civilizations were far too advanced for such nonsense.
Let us hope such a horrific fate is not in store for all of us as the Great Reset is imposed on us all given how western civilization
has clearly failed to the point where some sort of profound, substantive reform is inevitable.
Given that the foundation of this Reset comprises so much ill-will, deception, theft and coercion, it is unlikely that this
new paradigm will benefit the millions of people it will soon dominate.
Another
can of worms, there would be additional Congressional hearings over it, etc. At the time Trump was still in the middle of the
Muller investigation. That special prosecutor investigation tied up Trump until March 2019.
I firmly believe that no man in human history could have taken on and fought Deep State, the Swamp, the Establishment, media,
GOPe, et al., as valiantly as Trump. Even in his 70's the man has superhuman energy, fortitude, and strategizing. I think Trump's
greatest legacy will be that he ripped away the curtain and the masks fell and we all got to see just how nefarious and rigged
the system is, from federal judges to our intelligence community to the FBI/DOJ to Congress to the media
"I don't know or care anything about Dominion voting machines"
Why not? Take a look at Patrick Byrne's summary of evidence for massive election fraud involving the Dominion machines, on
his blog over at DeepCapture.
It will explain how a man who sheltered in his house, did not campaign, drew no more than six or seven or twenty-five people
to his events, got seven million more votes than a man who drew up to thirty thousand people at his rallies.
...An expert witness in Georgia was able to hack into Dominion in front of the legislative committee in less than a minute. "We're
in." In Dominion, and on the internet.
Dominion machines can do anything! They can assign a weight of 1.5 per single vote to one candidate, and .75 per vote to the
other, and can adjust as necessary. They can assign batches of "adjudicated" ballots to the candidate of your choice. They can
just switch votes from one candidate to the other in increments of several thousand, let's subtract 29,000 votes from candidate
a and add them to b's column. They can allow access by a third party to the administrator's identity and password so the third
party can enter and participate directly in tabulation of the votes.
And more. If your disfavored candidate is winning by a landslide and your 1.5/.75 ratio isn't working, you can put in a USB
card and adjust accordingly.
If you're desperate you can upload tens of thousands of votes in a single drop which all, every one, go to your preferred candidate.
And you can do it in one hour on a machine which can only handle a few thousand votes per hour, fed in manually.
If things get out of control you can call a halt to the vote count, send the observers home, and haul out the extra ballots
stashed under the table skirt. But it's best to be mindful of the video cameras. Which they were not.
Really, read about it: Patrick Byrne, DeepCapture, "Evidence That The 2020 Election Was Rigged." Lays out the various ways
by which it was done, then appends evidence using graphs, memos from election administrators, and statistical analysis.
He's no Trump supporter either, is a committed libertarian, and has never voted for either a Democrat or Republican presidential
candidate in his life. He thinks Barack Obama graced the presidency and that Michelle Obama was a class act as First Lady.
Also: The Chinese government acquired Dominion for $400 million in the fall of 2020.
Finally, does anyone think the Dominion case against Sydney Powell potentially offers an opportunity for the evidence of electoral
fraud to be aired in public?
While it's an effective rhetorical tactic by our fearless leader Unz, there's no reason to be agnostic about CIA ballot-stuffing.
That's as blindingly obvious as their censorship.
The ballot-stuffing shows only the most cursory measures to conceal it, consistent with a command structure that exercises
precision control over media attention. CIA can censor adverse information on their candidate's trading in influence and abuse
of function. So naturally CIA dumped votes in statistically absurd proportions, trusting to their Mockingbird media to short-circuit
public inquiry. When you have arbitrary Nazi-grade life-and-death power, as CIA does, it's hard not to get sloppy. They don't
give a fuck that you saw what they did there, cause shut up.
Spot on about postal votes; it's my only slight disagreement with Ron's take on the affair.
These votes were being received for days, if not weeks before the deadline and could have been (and probably were) counted as
they came in. The gross imbalance between Trump and Biden votes in these after-hours counts, along with the sudden spikes obvious
on many graphs, is proof, imo, of the cheat. In order to get ahead of the narrative, the 'rats said it would happen, and, lo,
it did.
If the regime can't provide for trustworthy elections, it can't expect to be regarded as legitimate. Probably by design; they
don't need us.
Navarro's three reports do a good job of summarizing most of the possible vote fraud. He's a Harvard PhD so more than qualified
to pull all the date together etc. They use many graphics and are easy and fast to read.
In this post-Republic new reality, no Court will take a case in which Discovery reveals any sort of election fraud. The election is over and it's now verboten to revisit it. Don't be surprised if
archive.org is forced to delete thousands of articles about it. Orwellian times
Incumbent Donald Trump lost Arizona, Georgia, and Wisconsin by such extremely narrow margins that a swing of less than 22,000
votes in those crucial states would have gotten him reelected. With a record 158 million votes cast, this amounted to a
victory margin of around 0.01% . So if just one American voter in 7,000 had changed his mind, Trump might have received
another four years in office. One American voter in 7,000
Margins of general vote do not matter. Biden won Arizona, Georgia, and Wisconsin by much higher margins than 0.01%. In Arizona
Biden won by 0.3% of all votes in Arizona and in Georgia by 0.2%. These are small margins but probably comparable to margins in
swing states in 2016 where Trump won.
@Garliv It's for
your own good, of course. I once read an article written by someone who had a chance to hang out with the rich, powerful, famous,
etc. and gain some perspective on their thinking. They really do believe that it's their role to shape the future for the
proles. I know someone who's just like that.
If you like your bourgeois job and want to keep it, you will support the narrative.
All of the comments on here that analyze DJT's strengths and weaknesses miss the point. I personally think he made some very
poor choices; but, to inappropriately paraphrase Carville, it's the fraud, stupid.
Occam's Razor should be applied- instead of the nonsense of Chavez having an interest in voting software; voting machines being
manipulated; truckloads of paper ballots being moved across state lines- my favorite; etc.
The mail in ballots could be sent to a nursing home or to individuals, who are very old, and these individuals could be instructed
by a relative to sign their name.
I frequently explain to individuals, whose first language is not English, the papers, which they are signing. I explain their
401K and retirement plan withdrawals.
It would be very easy to have individuals in a nursing home or even an adult day care center for mentally (dementia) incapacitated
adults sign ballots. There are numerous day care centers in New York City, federally funded, where individuals could be coaxed
to sign ballots. Just say Trump will close the day care center -- especially where interpreters must be provided because the individuals
cannot understand English due to varying stages of mental incapacity.
The day care center is a racket. I believe the reimbursement rate under Medicaid-Medicare is $120 per day. Plus, the transportation
fee - approximately $40 per person each way. These centers flourish in cities, such as New York City, Newark, Philadelphia, etc. I have yet to hear anyone mention that Nancy Pelosi's father was Mayor of Baltimore, Thomas D'Alesandro Jr. And Baltimore is
one city that it totally devastated by drugs, prostitution, crime, etc.
Now for the important question. Did Nancy Pelosi have $12 pints of ice cream in her office?
But I wonder how many people have watched the twenty hours or so of state legislature hearings related to the election. Can
people just not be bothered? These were historic hearings of huge importance, but I assume they didn't get much coverage in the
MSM. I think most of them were livestreamed only by small right-wing networks.
Servant of Gla'aki 39, Hapalong 101 anent Willke: Willke sold a million books in less than two months. He was more of a media
phenom than Trump, much hotter at the time of the election. They were going to make a movie of One World. And his message was
more populist, too – basically, fuck your US national interest, we want peace and freedom. He just came out and said what everybody
thought, Oh boy, now that we won the war, we'll get the peace and freedom that we fought for! So he didn't need a Sheldon or a
Gina to rig elections and install him.
Dulles was squirming around under rocks at that time (he cut his teeth at the League of Nations founding,) even before he and
his ultras got their Gestapo in Foggy Bottom, and they arranged Hillary-style party machinations to push Willke aside.
Now of course there's a second line of defense, the CIA proprietaries that steal the election directly:
Diebold and its brass-plate acquirers. CIA set them up to ratfuck Kerry and Maduro and sheep-dipped them to ratfuck Trump.
The whole world knows the USA is a ridiculous fake democracy, a totalitarian CIA pariah state voting alone against peace, development
and human rights. (Just look at the 2nd Committee vote on A/C.2/75/L.4/Rev.1) The USA is North Korea with an ugly leisure squad.
It's the beltway that deserves our fire and fury. Just wipe it out with WMD and start again.
What were the results of the 2016 election? Billary received 65 million to Trumps 62 million. Gotcha. So we have roughly 127
million who showed up to vote that time. (Wonder how many of those were legit.) So ONLY 4 years later, Joe "I Look Like I'm Drugged"
Biden ALLEGEDLY received 80 million and Trump received 74 million. Okay, that is a turnout of 154 million votes. So if I believe
in this fairy tale, I was supposed to believe that in ONLY 4 years the vote count increased by an alleged 27 million. Hell, a
lot of our most populous states do not even have that many people.
Like I say, I concede that Biden might have had about 60-65 million LEGIT votes to Trump's MINIMUM of 74 million. Hmm, so that
means that total vote count would be 134-139 million. Hmm, sounds more reasonable to me. Numbers are not adding up folks.
...Laws don't say a little bit of fraud is OK, because the fraud committed on or by a business
didn't cause bankruptcy. Either there was fraud, or there wasn't. If there was, then the results of the election in those areas
are null and void. The certification of those results expands the fraud to the state level.
That several courts refused to hear cases for lack of standing, is patently ridiculous. If a candidate has no standing, who does?
In an election, everybody has standing because they are affected by the result, and by virtue of Citizens United , corporations
do as well.
In an ideal world, we would be discussing how we can ensure the integrity of our elections, so that both substantively and
the appearance of integrity is upheld. Instead, we are trying to get citizens jailed (right & left) for protesting the sanctity
of a system in which both sides know is corrupt. There is no question in Dems mind that Bush stole the election in 2000, so why
is it any different now that the shoe is on the other foot.
Our oligarch rulers know very well that they rig elections, it has been documented under LBJ, not to mention the long list
of coups all over the world organized by the intelligence agencies over the past 50 years, these are historical facts. But rather
than citizens being able to focus on the real problem, we are beating the crap out of our fellow citizens for something we know
all know is real; and pointing to the other side as the source of the corruption. This is exactly why the rich stay rich and the
poor stay poor.
Mr. Unz, who is always well informed, highly organized and impeccably lucid, gives a credible and succinct analysis of the
dumpster fire that is American politics, indeed of this country's leadership across the board. It creates mostly chaos and suffering
every time it meddles in our affairs these days, certainly over the long run but especially in its current crash program to impose
tyranny over the many so the few can take whatever they want whether they require it or not.
Watch this recent interview of Chris Hedges by Jimmy Dore about the root causes of our current woes. Hedges speaks off the
cuff in words that sound as polished, powerful and precise as the language in tracts considered to be classics. His Pulitzer clearly
was not found in a Cracker Jack box.
He ain't buying that Trump alone was the fount of all our sorrows or that a deceiving sycophantic
grifter like Joe Biden is the fix for anything. There were many bad actors, both GOPers and Dems, both office holders and offstage
string-pullers, who have contributed to the coming collapse of this country, which decapitating Trump will not prevent. Joe just
happens to be the useful idiot who will be left holding the bag when the end comes, which won't be long now. Factoring in Kamala's
possible ascension to the throne will change nothing. Like Joe, she's just a cluck there to take the same orders.
@Carroll Price
...Trump also flew on the Lolita express. If after all the broken promises that Trump made
to his Maga followers anyone still thinks that he is an outsider is, frankly, an idiot.
Trump is a lifetime actor and the entire election was just one big show.
One way we will know if Trump really was a threat to the swamp and an outsider will be what happens after Jan 20. If Trump
ends up dead or impoverished and in prison then we will know that he was a real threat. If he flies off into the sunset, perhaps
even starting a media company, then we will know that it was all one big vaudeville act.
@ Grieved | Jan 14 2021 23:05 utc | 47 who wrote
"
I'm not deep in the mechanics of this, but I've always assumed that the need for continual
growth, after an economy could and should have turned steady-state, is a disease that can be
laid squarely at the door of compound interest.
"
@ karlof1 | Jan 15 2021 0:39 utc | 57 who wrote
"
Yes, compound interest is part of that problem, but so is an expanding population or a
shrinking resource base. Yes, we face all three of those problems and are certainly in an
Overshoot situation few genuinely appreciate.
"
I think humanity needs a frontier more than growth. We need to keep chasing our
ignorance.
We lack the common will to regulate our social interactions at a structural level that
guarantees some level of equality and justice. Having the will I believe we have the
ability.
This is about the consolidation of power after questionable election; Capitol ransacking is
just a pretext for represssions. If it did not occur they would find another one.
Notable quotes:
"... (5) the term "domestic terrorism" means activities that -- (A) involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any State; (B) appear to be intended -- (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and (C) occur primarily within the territorial jurisdiction of the United States. ..."
"... Why all the talk about "domestic terrorism"? I suspect it's because people can't stand the idea that the Trump mob could be guilty of nothing more than trespassing. Time reports sadly that there are no laws against domestic terrorism, but lists the charges it wants brought: seditious conspiracy, which carries a 20-year maximum sentence, homicide, assault, interstate travel in aid of racketeering, restricted-area violations, vandalism, and trespassing. ..."
"... The authorities promise to hunt the rioters -- many of whom just walked through an open door -- to the ends of the earth as if they were Osama bin Laden. The contrast with the handling of BLM and antifa rioters is stark. ..."
Joe Biden has the people who took over the Capitol on Jan. 6 figured out. In just two days,
he had them pegged for "a bunch of thugs, insurrectionists, white supremacists, and
anti-Semites, and it's not enough." Not enough? He also said they were "domestic terrorists."
Curiously, there is a federal definition of domestic terrorism, but it isn't a crime. There
is now tremendous pressure to change that, and depending on what kind of law takes shape, there
could be huge implications for dissidents.
For now, this
definition from 18 U.S. Code § 2331 is worth studying:
(5) the term "domestic terrorism" means activities that -- (A) involve acts dangerous to
human life that are a violation of the criminal laws of the United States or of any State;
(B) appear to be intended -- (i) to intimidate or coerce a civilian population; (ii) to
influence the policy of a government by intimidation or coercion; or (iii) to affect the
conduct of a government by mass destruction, assassination, or kidnapping; and (C) occur
primarily within the territorial jurisdiction of the United States.
Does this apply to the Capitol takeover? Domestic terrorism must be an illegal act
"dangerous to human life" and meant to influence policy. The Trump supporters wanted to
influence policy alright, but what does "dangerous to human life" mean? The
Michigan Penal Code says it is "that which causes a substantial likelihood of death or
serious injury."
That wouldn't include trespassing, breaking and entering, or even scuffling with the police.
Anyone who may have
killed Capitol police officer Brian Sicknick would meet the definition of a "domestic
terrorist," but the circumstances of his death are still not clear. It may be there wasn't a
single "textbook" domestic terrorist at the Capitol that day. Lefties are gloating
over the death of Ashli Babbitt, but the only thing she did that was "dangerous to human life"
was stop a bullet.
Why all the talk about "domestic terrorism"? I suspect it's because people can't stand the
idea that the Trump mob could be guilty of nothing more than trespassing. Time reports
sadly that there are no laws against domestic terrorism, but lists the charges it wants brought:
seditious conspiracy, which carries a 20-year maximum sentence, homicide, assault, interstate
travel in aid of racketeering, restricted-area violations, vandalism, and trespassing.
Sure enough, the Justice Department has set up a task force
to file sedition and conspiracy charges . The investigation is said to be "one of the most
expansive criminal investigations in the history of the Justice Department." The authorities
promise to hunt the rioters -- many of whom just walked through an open door -- to the ends of
the earth as if they were Osama bin Laden. The contrast with the
handling of BLM and
antifa rioters is stark.
Democrat Rep. Bennie Thompson, who chairs the House Committee on Homeland Security,
has another idea . "Given the heinous domestic terrorist attack on the U.S. Capitol," he
wants everyone involved put on the No-Fly List. Rep. Jason Crow, a member of the House Armed
Services Committee, wants the US Army Secretary to track down and
court martial every soldier who entered the Capitol. A court
martial requires a violation of the Uniform Code of Military Justice, usually for a serious
felony. Police departments in
Virginia ,
Washington , and
Pennsylvania are
scouring their rosters , looking for officers who went to the rally, whether they entered
the Capitol or not. Will they be fired?
Wikipedia describes John McCain's daughter Meghan as a
"columnist, author, and television personality." She wants the rioters sent to Guantanamo :
"They should be treated the same way we treat Al-Qaeda" -- yet another American frustrated by
the lack of a law against domestic terrorism.
... ... ...
... [neoliberal] Lefties were of course
pleased that "white supremacists" can
now officially be "terrorists." This is very important for any potential new law because
the occupation of the Capitol has unleashed a wave of vitriol against "white supremacy," even
though there is no evidence the Trump supporters had the slightest racial motivation. NBC News
ran this
headline : "'Vintage white rage': Why the riots were about the perceived loss of white
power." Politico
tells us "there's a term for what happened at the Capitol this week: 'whitelash'." The
Atlantic
explained that "the Capitol riot was an attack on multiracial democracy." The
Guardian 's
headline was "Insurrection Day: When White Supremacist Terror Came to the US Capitol."
Black Congressman Hank Johnson
told Al Sharpton that the black Capitol policeman who killed Ashli Babbitt had
singlehandedly put down a lynch mob: If he hadn't shot her, "I have no doubt that some of us
who look like me would've been hanging from the railings of the 3rd floor, onto the House
floor, swinging like . . . strange fruit." Nancy Pelosi said that
the people who entered the Capitol "have chosen their whiteness over democracy," whatever that
means.
This perfectly matches the views of Richard Durbin, ranking member on the Senate
Subcommittees for Defense and for the Constitution. In 2019, he introduced the Domestic Terrorism
Prevention Act , which called white supremacy "the most significant domestic terrorism
threat facing the United States." The act was only about 3,000 words but used "white
supremacist" 12 times, "neo-Nazi" six times, "far-right" eight times, and "hate crime" 10
times. It was silent on any other kind of domestic terrorism. Sen. Durbin says he will
reintroduce the bill right away in light of the Capitol takeover.
There is no telling what laws could pass in this fevered environment, but it's important to
note what Mr. Durbin's 2019 bill did and did not do. It did not make domestic terrorism a crime
or authorize the designation of "domestic terrorism organizations," which would mean jailing
Americans as if they were Al-Qaeda members and seizing assets without notice. What it
did
do was set up special offices in the FBI, Justice Department, and Homeland Security "to
analyze and monitor domestic terrorist activity and . . . take steps to prevent domestic
terrorism." It's anyone's guess what those "steps" were supposed to be.
The bill also required the three agencies to "review each hate crime incident reported
during the preceding year to determine whether the incident also constitutes a domestic
terrorism-related incident," though it didn't say to what end.
Sen. Durbin loves to quote FBI Director Christopher A. Wray's testimony
before Congress in 2019: "A majority of the domestic terrorism cases that we've investigated
are motivated by some version of what you might call white supremacy . . . ."
However, the bill used the definition of "domestic terrorism" from 18 U.S. Code § 2331
cited above, which is ideologically neutral. That means Black Lives Matter and antifa commit
vastly more "domestic terrorism" than all the "white supremacists," "neo-Nazis," and "far-right
extremists" combined. Anyone who shouts "Defund the police," "Justice for Breonna Taylor,"
"Black lives matter," or even "I can't breathe" is trying to "influence the policy of a
government." If, in that context, someone commits an illegal act "dangerous to human life," he
is a domestic terrorist. Since the
death of George Floyd , there have been countless dangerous-to-human-life acts of arson and
aggravated assault; even attempts to
stop ambulances from bringing wounded officers to emergency rooms. If "white supremacists"
were organizing freeway shutdowns, they would surely count as "dangerous to human
life."
The levels of hypocritical hysteria dominating the corporate airwaves and most electronic
media, together with an even more amplified level among the pro$titicians in the Di$trict of
Corruption means they are scared.
They suddenly feel vulnerable. Are they as vulnerable as the people of Yemen who are being
bombed daily and starvation blockaded by the $audi crime clan with the full. assistance of
those D.C. Pro$titician$? Are they as vulnerable as those half million!!! deliberately
starved Iraqi children whom Madelein Albrietstein declared to be "worth it" in forwarding the
I$raeli agenda?
Could it just simply be that they are themselves guilty of crimes against humanity and in
violation of their oaths to protect the Constitution of the United States from all enemies
foreign and DOMESTIC? The little gal under the streetlight with high heels, short skirt and
low-hanging purse in the midnight hour at least provides a desired service. Can the same be
said for the Pro$titicians on the Hill overlooking Urination'$ Capitol?
As for the media whores and pre$$titute$, being myself a recovering journalist; there is
good reason to believe that I have correctly identified them.
I don't see how it can't be recognized that Trump set-up his own supporters by luring them
to DC.
Going to Wash DC to protest wasn't going to change the vote outcome in Congress and any
fool could anticipate Antifa types would show up (apparently Pelosi, Schumer, McConnell and
DC Mayor were advised they were planning to come and riot. So Trump had to have known
too.)
Now, neither POTUS or Congress members will publicly identify the organized Antifa thug
element. So, Trump supporters, and by extension Repubs, are being widely labeled as "domestic
terrorists'. While Trump releases another video today lecturing about violence which
implicates HIS supporters by no mention of the other elements there.
Congressman Hank Johnson told Al Sharpton that the black Capitol policeman who killed
Ashli Babbitt had singlehandedly put down a lynch mob: If he hadn't shot her, "I have no
doubt that some of us who look like me would've been hanging from the railings of the 3rd
floor, onto the House floor, swinging like . . . strange fruit.
This statement is quite stupid but Johnson has said worse in the past:
During a House Armed Services Committee hearing on March 25, 2010[40] concerning the
U.S. military installation on the island of Guam, Johnson said to Admiral Robert F.
Willard, Commander of U.S. Pacific Command, "My fear is that the whole island will become
so overly populated that it will tip over and capsize", to which Admiral Willard replied,
"We don't anticipate that."
The great thing about language in the 21st century is it means whatever you want it to
mean, sort of like Alice in wonderland. A terrorist is whatever they deem to be a terrorist;
anyone who does not go along with their agenda. "building back better" means repression and
censorship. "the new normal" means global corporate government and the great reset agenda.
"global pandemic" means a plandemic that kills one in a million healthy young people. etc.
Facts and information do not matter to these people; it is 1984. This struggle will be
decided by force, as logical arguments are useless to those who deny the basic axioms of
reality and existence (almost all libtards and most rinos). I think in a way it is a good
thing that things are getting worse for the average middle american. Things will need to get
much worse before they get better as more than half the people are still totally asleep. Of
the minority that are awake, most of us have too much to lose right now . But we need to
organize and prepare to take action soon or we will be bled to death by a thousand cuts as
they have been doing for a while now. What kind of a world will our children inherit if we
stay silent and apathetic?
O MY GOD!
All the discussions around Trump reminded me of Hitler after Stalingrad.
After the defeat at Stalingrad, the Germans waited 2 years for Hitler to use the secret
weapon and win the war. The German army suffered defeat after defeat, the Russian communists
were searching for Hitler's body through Bunkers and the Germans still waited for the
super-secret weapon to save them.
Two months after the election, Trump's team suffered defeat after defeat. Trump is waiting
for jail, but his supporters are convinced that Trump still has a secret weapon with which
will win the election.When you wake up to reality. Trump is a false Messiah and he he doesn't
have a super-secret-weapon.
You have to fight your self for justice and truth and not wait for someoneelse to fight for
you while you button porn, tiktok or chat smalltalk on Facebook.
I can't forget what Mother Teresa said 30 years ago: "Don't wait for a leader because he
won't come. Be your own leaders."
You all are for sure. I just changed my party registration and I'm now a proud Democrat. I
don't want to be denied jobs, loans, transportation, and possibly freedom and life itself for
the sake of a country that has collectively decided to destroy itself.
And that's what false flag with Capitol ransacking accomplished. It fives Clinton/Obama/Biden
clique card blank for suppressing the dissent
This false flag operation like shooting protesters by snipers during Ukrainian Maydan is a
logical end of American Maidan and pursued the same goals -- deposing the current president,
hijacking political power and consolidating it via repressions.
Notable quotes:
"... That is why we are witnessing the fussy, aggressive actions of the Democrats - a ridiculous re-impeachment of the president, who will leave the White House in a week, the most severe censorship and suppression of dissent. There is no need for the real winners of fair elections to behave like that, as they are aware of their legitimacy and are confident in themselves (relying on the real, not imaginary, support of the majority of the population). ..."
From the "Biden Exploits His Capitol Gains" article:
Joe Biden's own language certainly sounded less like a magnanimous winner uniting his
people than like that used by autocrats and dictators to hold onto power, argues Diana
Johnstone.
Diana Johnstone's opinion is quite reasonable. In fact, a "creeping"/"bureaucratic" coup
d'etat took place in the United States. And it wasn't Trump at all, but Biden & Co. The
fact that "Joe Biden's own language sounded like that used by autocrats and dictators to hold
onto power" is further confirmation of this.
If you are in the majority and you win the election honestly, then there is no need to act
the way the Democrats did. The current aggressive rhetoric of Biden (and other Democrats) is
evidence that the elections were stolen/falsified. Biden knows this very well, and therefore
his language is as cruel, irreconcilable and repressive as possible. After the illegitimate
elections, the task is to consolidate own's power and suppress all those who reject what
happened. In fact, this is what happened in Ukraine after the Maidan 2014.
That is why we are witnessing the fussy, aggressive actions of the Democrats - a
ridiculous re-impeachment of the president, who will leave the White House in a week, the
most severe censorship and suppression of dissent. There is no need for the real winners of
fair elections to behave like that, as they are aware of their legitimacy and are confident
in themselves (relying on the real, not imaginary, support of the majority of the
population).
Globalization has made the United States a hollow giant. It has produced an enormous
wealth gap, and this inequality is producing a breakdown in social cohesion. They have faced
crisis before in the form of political polarization, economic hardship and racial tensions,
but the situation now is a combination of every one of the mentioned before amplified by
orders of magnitude by the pandemic.
The power of the MIC, Wall Street and Big Tech along with their MSM minions acting in a
concerted way is the only thing preventing an implosion of the country. Either that or the
notion of "American Exceptionalism" is truly implanted in the hearts and minds of the people,
whether they realize it or not.
Mass protests generally have two distinct but intertwined goals: 1) to "make a statement,"
and 2) to inflict a cost. To state the obvious, mass protests occur because a group of people
are unhappy about something, and they want something to change. Change only occurs, in a large
bureaucratic nation like ours, if a loud "message" is conveyed, or if the price of non-change
becomes too high. If thousands of Trump voters are mad as hell because they believe the
election was stolen, and if they want to protest, they can either make their message heard and
then hope for the best (not much hope there), or they can attempt to punish the thieves
-- that is, make them incur some cost for their malfeasance.
What did the mob achieve on Wednesday? We already knew their message -- Trump won the
election, and it was stolen. We know they have support across the country; even our biased
media admit to some 74 million Trump voters, of whom 70% to 80% (depending on the poll) think
the election was stolen. But then what? "We're mad as hell and we're not going to take it." And
then what? The message is impotent. It has no consequence.
If 'the message' was doomed to impotence, inflicting 'a cost' was much more tangible, and
much more achievable. By forcing their way into the Capitol building, a motivated and
reasonably prepared mob could have caused tremendous damage. If -- and I stress the conditional
here -- if they wanted to inflict damage, they had a golden opportunity. They had guns,
presumably hidden, and far outnumbered the handful of guards. Any firefight would have been
over quickly, with the mob victorious. Security guards, staffers, even congressmen would have
been easy prey, for kidnapping, injury, or worse. But this did not happen.
... ... ...
Notice how congressmen, left and right, responded to the event. All were indignant. All were
outraged. All condemned the "senseless violence" of the crazed mob and the "attempted
overthrow" of American democracy. All of them: left, right, and center; Democrat and
Republican; Trump supporter or not. All of them condemned it.
Again: Why? The answer here is clear: All congressmen, of all stripes, have a vested
interest in sustaining the system, more or less in its current form . This is obvious. They
are all 'winners' in the system. It has made them all rich, famous, and powerful. Yes, they
fight for relative power and relative influence, but this is largely a sham. The
Republican-Democrat battles are only there to give the impression of real competition. Instead,
in reality, we have a deep and radical monopoly -- a monopoly of pro-corporate, pro-capitalist,
pro-war, pro-Israel, and pro-Jewish individuals. On these things, they all agree. I've been
saying as much for many years: We should focus not on what divides the two parties, but on
what unites them . This is far more revealing.
... More than anything, Trump was a symbol: a symbol of resistance, of defiance, and of an
'in your face' attitude. But nothing more. The Trump presidency was all show, no substance. It
was, and is, hardly worth dying over.
And by 'media,' I mean all media. Consider what our beloved Tucker Carlson had
to say , speaking at the beginning of his show on the very first day after the protest:
Political violence begets political violence. That is an iron law that never changes. We
have to be against that, no matter who commits the violence or under what pretext, no matter
how many self-interested demagogues assure us the violence is justified or necessary. We have
a duty to oppose all of this, not simply because political violence kills other people's
children, but because in the end it doesn't work.
No good person will live a happier life because [Ashli Babbitt] was killed in a hallway of
the Capitol today. So our only option, as a practical matter, is to fix what is causing this
in the first place. You may have nothing in common with the people on the other side of the
country -- increasingly, you probably don't -- but you're stuck with them. The idea that
groups of Americans will somehow break off into separate peaceful nations of like-minded
citizens is a fantasy. That will not happen. There is no such thing as 'peaceful separation';
there never has been, and there won't be.
The two hemispheres of this country are inseparably intertwined, like conjoined twins.
Neither can leave without killing the other. As horrifying as this moment is, we have no
option but to make it better, to gut it out.
The entry of the Capitol building was spontaneous. Nobody saw it coming.
In the immediate aftermath, the media didn't know whether to promote it or bury it. It
took hours and days for the narrative to coalesce on orders from the top.
As it was happening, the media was gob-smacked. The 'insurrection' narrative didn't truly
get going until the protest was long over.
It's real tiresome to do this but people need to be reminded that Ziocorporate conman
fraud Trump and his MAGA brand are a product of the same lot that governs the Democrats, and
that he was never on his constituency's side:
And it's necessary because if there's a chance to unite even a small group of people after
realising how they're being had, then there's a chance for a small change to snowball into
something larger. And it should not stay on the white side of the divide, it's not like the
plandemic's been killing the economy for whites only. No "populist anti-Deep State patriot"
or national leader goes around endorsing other countries' politicians, much less Israel's,
the purest manifestation of corporate bankster power acting in unison with neocolonial
globalism, a trait shared by Biden and Trump.
Actions should be peaceful, because entities like the Pentagon and CIA have an absolute
monopoly on violent repression...
One Christian fellow I listened to said that Antifa were definitely there. He took video
of them walking down the street. That just proves to me that even Antifa knew they were no
threat, otherwise they wouldn't have been mingling among thousands and thousands of Trump
supporters.
The fellow said that from what he could see, the Trump protesters were unarmed, well
behaved, smiling, and content with waving their flags. He said they are proud patriots and
would never think of destroying art work or smashing up the Capitol Building.
He said on the 15 to 20 previous trips he's made to the Capitol Building, the pop-up metal
barriers have always been up, but no barriers were up on January 6th. He said on a previous
trip he had stepped onto the grass to take a picture and was quickly told by an officer to
"get off the grass". But on January 6th, the sidewalks were blocked off, forcing people onto
the grass.
We've seen the video of what looks to be an Antifa member breaking a window, only to be
stopped by a Trump supporter.
No, these were salt of the earth people who were no threat to Antifa OR the spineless
politicians. They knew this, but they've played it up for all it's worth.
Amazon includes a couple accurate blurbs on the product description page:
This short book is wicked, truthful, and entertaining. The author, after outlining a
step-by-step procedure for bringing about a coup, analyzes modern (post–Second World
War) coups, and points out why some succeeded and others failed. ( New Yorker )
An extraordinarily competent and well-written work, displaying very wide knowledge of
the ways in which coups, both successful and unsuccessful, have actually been organized. (
Times Literary Supplement )
You don't do a "coup" by invading the congressional discussion bunker in a nominal
democracy. You do a "coup" by ordering up CIA-organized troops to take over communication
centers as checkpoints secured by APCs go up everywhere as congresscritters are frogmarched
to a nearby stadium. The CEOs and salaried Wokers of the social meedja companies would swear
enthusiastic allegiance to the new powers. Antifa would be issued clean shirts, ties and
government-approved truncheons. Then a grand proclamation that there will be a convention to
work towards national unity. Ooops, that last part actually happened.
If there had been a coup, it would 100% evident.
If there had been fair elections, it would 100% evident.
The event was, variously, a "coup," an "insurrection," or at minimum, "a riot." Protesters
were "right-wing extremists" and even "domestic terrorists" who were attacking "the very
basis of American democracy."
A coup?
An insurrection?
Attacking the very basis of American democracy?
The only reason the crowd was there in the first place was to protest against the people
committing those crimes through election fraud. Hopefully at least the crowd has figured out
that the Republicans and Trump are not on their side...
Jazzhand McFeels of https://therightstuff.biz/ has written a very interesting
article on Dissident Mag about some sudden changes in the administration that could explain
this thing.
If the attack on the Capitol was already so clumsy and ineffective, how could those same
people succeed in the much more difficult task of seccession?
You're assuming that the phony attack was planned by the people who would be involved in a
secession movement. I haven't seen any evidence that it was.
Cui Bono? The Key to 6 January is what did NOT happen. The two houses of congress had gone
off to hear, separately, in public broadcast, evidence from objecting congressmen that there
was massive electoral fraud to criminally deliver the election to Biden. MSM transmitted the
opening statements to the debate by McConnell and Schumer. These two said that there was no
election fraud. MSM then pulled away when the other congressmen started presenting the view
that there WAS fraud. Although MSM was not going to carry what the people are not supposed to
know, and filled in instead with their own propagandists and the Party Line, the proceedings
examining election fraud would have been seen by some of the public through the internet
streams and C-Span. This was clear evidence which the courts should have heard, but refused to
hear. BUT, instead of Congress publicly hearing evidence, the hearings abruptly STOPPED. Why?
The Capitol police, following instructions, opened the barricades and waved the demonstrators
to come in. The demonstrators were guided to the spot where the Deep State assassin was
waiting. A person was shot. After that, there were NO MORE discussions of election fraud. Biden
was confirmed without the airing of evidence of fraud. 6 January was a simple, but elegant,
Deep State SETUP. A psyop. The American people have been, once again, deceived. Once everybody
submits to vaccination there will never again be disputed elections, just like in the third
world.
Correction: The media said that the policeman "collapsed when he got back to the Precinct.
.that he MAY have been hit with a fire extinguisher." It was not reported as fact. No other
subsequent report abouthow he died albeit it should have been established by now.
The second poilce officer who the media says was "killed" by the "riots" was a man who we
heard nothing about on the date of the event, but who, five days later, committed suicide. The
suicide story is not speculation. It was given as a fact. They call this suicide a "killing"
because of the riots. It is more likely a police officer shooting his mouth off about these
lies,who, five days later was suicided.
This summer and fall at least a dozen police officers were killed. Many more were injured.
One got his eye knocked out. Many were very gravely injured. The government officials applauded
their killers, posted bail for them, and every step of the way government officials "incited
the violence".
Trump made a speech in front of his supporters laying out the evidence of the election
fraud. He was complaining about the election fraud, a fraud that was never scutinized or
investigated by anyone except his own lawyers and a few other lawyers, like Sidney Powell. They
want to impeach him for publicly complaining about their stealing the election from him. It's
like someone getting their home stolen, and when the victim publicly complains, he is
threatened with arrest.
Again, they fundament their impeachment grounds on the "insurrection" of January 6, but
again, like the election fraud, no one has scrutinized or conducted the most cursory
investigation of it The fact that we still don't know how that policeman died is telling. The
speculations made about him getting hit by a fire extinguisher are still floating around when
at this point, it should be an established fact how he died. The dopiest doctor in this country
would be able to diagnose a trauma to the head or body, if there were any physical trauma of
that kind.
Two people died from natural causes. Yet, no details are given. One woman, age 34 and
overweight was said to have been "trampled by the mob." Minutes after her death her family and
closest friends were bad mouthing her, saying that she was mentally unstable, a conspiracy
theorist, and "had problems in the past." She just died shortly before, and that was their
public statements about their dearest friend and family member.
Ashli Babbits death was a provocative act that would have encouraged Trump supporters to
turn on the police. It is no coincidence that those around her breaking windows, and screaming
that she was dead when she was not, also provoked the crowds of Trump supporters. They are seen
clearly on the video near Ashli not only breaking windows but changing their clothes after they
had done so to hide their identification. This is clearly seen on the video. One guy provoking
the crowds, breaking windows and screaming that Ashli was dead when she was not, was clearly
Antifa, proven to be Antifa by video evidence. Yet, after January 6, he was interviewed by CNN.
Clearly, the Antifa provocateur was not arrested by the Washington police or the FBI, but at
least 6 Trump supporters were arrested for breaking curfew after 6 p.m. when all that happened
at the Capitol was over. Those six were the first arrested – for breaking curfew. I do
not find it a coincidence that both Ashli Babbitt and those breaking the windows around her,
and screaming that she was dead when she was not, all acted to provoke the crowds and were all
proven to be Antifa members. Was it coincidence that Ashli Babbitt's getting shot also acted as
an unwitting provocateur, along with the Antifa members around her in the Capitol that day? Or
was both Ashli and Antifa working for our security agencies that day, all playing their roles
as agents provocateurs.
Why wouldn't the DOJ and FBI investigate the election fraud? Was it because the government
did it? That would be a good reason not to investigate. Sidney Powell has produced an affidavit
from a Serb who said it was the CIA who oversaw the manipulation of the US voting machines from
Serbia, a country completely taken over by the CIA. He also writes about Hunter Biden's
clandestine trip there in August 2020 to meet with these people.
Whoever didn't develop a sense of humor with your Ziocorporate fraud reality TV show
president posing as patriot anti-deep maverick ain't gonna do it now.
Yes, the coup and insurrection had ALREADY happened.
The coup and insurrection happened when the Democrats AND Republicans rigged the election.
Democratic state courts and election officials changed voting laws, and Republican state
legislatures looked the other way.
You are wrong on so many counts. The event was not spontaneous, that is quite clear when the
guards let the protesters in and they mostly went inside peacefully while a handful of rioters
did minimal damage. Some Antifas, yeah, for sure. But someone stole Pelosi's computer or did
they? That smacks of a plan. It achieved the objectives of the groups on the inside. The
marchers that went inside had to have been, for the most part, surprised that they were
welcomed. Did you see how they walked in between the purple ropes? Took photographs and
selfies, some of these with the guards? Did you see the videos of some of the protesters
stopping the people trying to break the glass windows? ...
I see "anti-Semitism" has made it to the floor during these impeachment hearings. LMAO. I
would guess that 97% of Trump's base is the muh Israel crowd and Trump is as pro-Israel,
pro-Jewish as it gets.
Even more laughable is Maxine Waters standing up and decrying violence. I guess Maxine has a
very selective memory. All these demsheviks and the gay guys over at CNN who had no problem
with Antifa/BLM are now staunch advocates for the Constitution and have a problem with riots.
How in the hell do these cretins live with themselves? Have these hypocrites no shame? It can't
be said enuff that Antifa/BLM's and (((the leftoids))) fingerprints are all over these riots.
This is the new 9-11, folks, don't believe your lying eyes. Look at some of those scraggly
people busting windows and attacking cops? Do they look like the average Trump voter? Do these
young punks scaling the walls look like the average Trump voter?
The democratic party is now pretending to "call out" the "white supremacists" in Congress.
Even if there were "white supremacists" in Congress, they would be not one bit different from
"brown supremacists", "black supremacists","yellow supremaicsts", if by "supremacists" is meant
politicians that belong to the Hispanic caucus, Black caucus or Asian caucus , ALL of whom
claim to be looking out for the welfare of their respective group.
This is of course what is going on here. The democratic party politicians, Pelosi, Schumer,
Biden and the whole left has been race baiting against white people as a default manner of
doing politics for over sixty years now. It is the fault of the FAUX REPUBLICAN PARTY, that has
been posing as conservatives who many whites believe "have their backs", against the hate and
shenanigans the anti-white left perpetrates. THEY ARE WRONG. We see plainly now, that what the
U.S. has is a uni-party, that is left and far left and includes good old Republican RINO's, but
the left and far left is used by the elite to keep and gain control of the U.S. for their own
agenda. The idea now operating is to belittle, denigrate and cow white folks as never before,
because many of the protesters at the recent "event", scared the living bleep out of the
politicians who have simply not been representing them. The corporations and tech moguls,etc.
are not taking the side of the left because they are "better" citizens or politicians than
people on the right side of the political spectrum. They take the side of the left because that
is where these corporations know that the radical Americans are, the ones that burn, loot and
murder and therefore can be used to divide the nation for the big corporations and tech
moguls,etc. Any honest person that considers what happened at the so called violent
demonstration in D.C. knows that compared to the violence that ANTIFA, BLM and other groups
perpertrated on innocent Americans last summer, knows perfectly well that there is no
comparison. The anti-white left, enabled by the democratic party and the news media, IN SERVICE
OF THE U.S. ELITE. BURNED, LOOTED AND MURDERED THE CITIZENS OF AMERICA for months, WITHOUT A
SINGLE WORD FROM PELOSI, SCHUMER, BIDEN HARRIS, ETC.
The simple fact is that these D.C. politicians were scared shitless by some plain American
citizens, who finally felt they needed to meet these representatives that keep ignoring and
abusing them. The wrong people are being blamed here.
Before reading this article, the reader might consider the fact that there was NO COUP, by
the accepted meaning that the word "coup" denotes. Now, if the fake news media and the
democratic party want to explain the event by bending the facts and actual events to fit their
own interpretation of it, that's a problem due to their dishonesty.
FoxNews finally showed its true face during the election steal when it declared that
Trump had lost the election long before any evidence in support of this thesis
materialized.
For those that paid attention to Fox News, especially daytime and weekend Fox News its
true face has been obvious for some time.
It is now abundantly clear that with a few exceptions (notably Tucker Carlson), FoxNews
is very much on the same page as CNN and the rest of them.
While Carlson is not the worst on Fox News he is not a friend. His obsession with the
China bad narrative is over the top. He is playing the GOP Inc side of the Deep State
coin.
The A block last night was Carlson reiterating over and over, that he and Fox News were
against violence like that at the Capitol. He stated that violence from the left was also
wrong but that violence from the right was not the answer of course like most articles on
this blog, he didn't say what the answer was.
I've come back to salute this essay as the compendium of truth that it is. Several of the
essays here this week have been intelligent and deserving of the Unz readership.
You are most correct when you say that the current set of Nomenklatura are too weak to
sustain rule. I'd call the Big Tech oligarchy the Nickelodeon class. They have digits, which
are really nothing to be afraid of, but any small farmer in the Midwest is more powerful than
they are.
Big changes are coming and it won't take violence to effect them, just a patriotic week or
two off of the social media.
"... I have, for some time, been mis-naming the Nomenklatura as the Politburo, with the commune being the many tentacled international banking cartel. ..."
FoxNews finally showed its true face during the election steal when it declared that Trump
had lost the election long before any evidence in support of this thesis materialized. It is
now abundantly clear that with a few exceptions (notably Tucker Carlson), FoxNews is very much
on the same page as CNN and the rest of them. So what just happened and what is taking place
now?
Americans have been brainwashed into calling things they don't like, or don't understand, as
"Socialist" or even "Marxist". The sad reality is that most Americans sincerely believe that
Alexandria Ocasio-Cortez or Bernie Sanders are "socialists", and when they see modern movies
ridiculously filled with "minorities" and gender fluid freaks – this is a case of
"cultural Marxism" (a totally meaningless term, by the way!). This is all utter nonsense,
neither Marxism nor Socialism have anything to do with BLM, Antifa, Nancy Pelosi or Chuck
Schumer (in fact, Marxism places a premium on real law and order!). I can't take the time and
space here to discuss Marxism, but I do believe that there is one analytical tool which we can
borrow from Marxist thought to try to make sense of what just happened in the USA. Let's begin
by asking a simple question:
If "the mob" did not win, who did?
Most certainly not the abstract concept of "law and order". For one thing, it is now
abundantly clear that some cops deliberately let a (rather small) subset of protestors not only
across police lines but even inside the Capitol Building itself. That is not exactly law and
order, now is it? Furthermore, it is now also clear that Ashli Babbitt was very deliberately
shot by an (apparently black) cop who was then quickly hidden away from sight by the
authorities. Not exactly law and order either.
Neither did the abstract concept of "democracy" win anything that day. Many protesters were
recorded saying that the Capitol building belonged to the people, not to the people working in
it on behalf of the people. They are right. But even if we accept the notion that those who
entered the building were trespassing, the massive crackdown on free speech which immediately
followed the events at the Capitol is a clear sign that "democracy" did not win that day. More
about that later.
So who won?
Well, look who is celebrating and who is now demanding that punitive and even repressive
measures be taken against Trump supporters:
here
and
here ) The Russia-hating Lobby Antifa/BLM/etc The many freaks of nature leading
various "minorities" Big Tech megacorporations a la Google and Amazon
The list is longer, of course, and it includes pretty much all the folks afflicted with the
now famous Trump Derangement Syndrome (TDS).
Our list looks like a cocktail of very different actors, but is that really the case?
I submit that if we look closely at this list of possible "winners" we can quickly see that
we are dealing with a single social category /group whose "diversity" is only apparent.
Here is what all these groups have in common:
They are numerically small, definitely a
minority They are very wealthy They are very close to the real centers of power They share the
same narcissistic (Neocon) ideology of self-worship They are driven by the same hate-based
ideology of revenge They don't care about the people of the USA They want to dismantle the US
Constitutional order
On the basis of these common characteristics, I believe that we can speak about a social
class united by a common ideology .
Now, of course, in the plutocratic oligarchy (which the United States in reality is), the
notion of "class" has been declared heretical and it has been replaced by identity politics
– the best way for a ruling class to (a) hide behind a fake illusion of pluralism and (b)
to divide the people and rule over them.
I have already written about what I consider to be a US version of the Soviet Nomenklatura , a
special ruling class which was official in the (comparatively much more honest) Soviet system
but which is always hidden from sight by the rulers of the United States.
The actual word we use are not that important: Nomenklatura , class, caste,
establishment, powers that be, deep state, etc. – they all approximate the reality of a
small gang of self-declared "elites" (as opposed to the "deplorables") ruling with total
impunity and no checks and balances mitigating their de facto dictatorship. Some
well-intentioned people began speaking about the "1%" – which is not bad, even if the
actual figure is even smaller than just one percent. Others used "Wall Street" (as in the
"occupy WS" movement), again – not a bad attempt to describe the problem. Whatever the
terms you chose, what is certain is that this entity has what Marx would call a " class
consciousness " which produces a single " class ideology " characterized by an
extremely strong sense of "us versus them" .
By the way, while I disagree with any notion that the US Nomenklatura is Marxist or
Socialist in any way, I very much agree that these "elites" are displaying an ideological
zeal very similar to what Trotskysts or Nazis typically exhibit, especially when confronted
with the "deplorables" or, like FoxNews says, the "mob" (the Polish word " bydło " – cattle
– very accurately renders this contempt for the masses).
In fact, they see us all as their "class enemy" . And they are quite correct, by the
way.
Their ideology is messianic, racist, violent and hate filled while the members of this US
Nomenklatura see themselves as the cream of the crop, the "chosen people", whose
"destiny" is to rule over the "dark and primitive" "mob".
This contempt for the "mob" is something which self-described "liberals" always try to
conceal, but which always comes out, be it in 1917 Russia or in 2021 USA. There is a weird
logic to this, by the way. It goes something like this: " we are clearly superior to the
plebes, yet these plebes seem to reject that notion, these plebes are therefore a "dark mob"
which absolutely needs to be strictly ruled by us ". The underlying assumption is that
plebes are dangerous, they can always riot and threaten "us". Hence the need for a police
state. QED.
We all remember how the Clinton gang was mega-super-sure that Hillary would easily defeat
Trump. And just to make darn sure that the US "plebes" don't do anything stupid, the US legacy
corporate ziomedia engaged in probably the most hysterical candidate bashing propaganda
operation in history only to find out that the "deplorables" did not vote as they were told to,
they voted for "Trump The New Hitler" instead.
What a truly unforgivable affront of these serfs against the masters which God, or Manifest
Destiny, placed above them!
And just as their pseudo-liberal colleagues from the past, the US liberals decided that this
vote was a slap in their face which, of course, is quite correct (I still believe that most
votes for Trump where not votes for Trump, but votes against Hillary); it was, so to speak, a
gigantic "f**k you!" from the revolting serfs against their masters. And class consciousness
told the US Nomenklatura that this was an anti-masters pogrom , a US "
Jacquerie "
if you wish. This "revolt of the serfs" had to be put down, immediately, and it was: Trump
caved to the Neocons in less than a month (when he betrayed General Flynn) and ever since the
US Nomenklatura has been using Trump as a disposable President who would do all
the crazy nonsense imaginable to please Israel, and who would then be disposed off. And yet it
is now quite clear that the US "deplorables" voted for the "wrong" candidate again! Hence the
need for a (very poorly concealed) "election steal" followed by a "test of loyalty" (you better
side with us, or else ) which eventually resulted in the situation we have today.
What is that situation exactly?
Simply put, this time the USNomenklaturahas truly achieved total
power. Not only do they control all three of the official branches of government, they now
also fully control the 4th one, the "media space", courtesy of the US tech giants which now are
openly silencing anybody who disagrees with the One And Only Official Truth As Represented By
The Propaganda Outlets. This is the very first time in recent US history that a small cabal of
"deep insiders" have achieved such total control of all the real instruments of power. The bad
news is that they know that they are a small minority and they realize that they need to act
fast to secure their hold on power. But for that they needed a pretext.
It is hardly surprising that after successfully pulling off the 9/11 false flag
operation, the USNomenklaturahad no problems whatsoever pulling off the
"Capitol" false flag.
Think about it: the legally organized and scheduled protest of Trump supporters was
announced at least a week before it had to take place. How hard was it for those in charge of
security to make sure that the protesters stay in one specific location? At the very least,
those in charge of security could have done what Lukashenko eventually did in Mink: place
military and police forces around all the important symbolic buildings and monuments and say
"you are welcome to protest, but don't even think of trying to take over any government
property" (that approach worked much better than beating up protesters, which Lukashenko
initially had tried). Yet what we saw was the exact opposite: in DC protesters were invited
across police lines by cops. Not only that, but even those protesters which did enter the
Capitol were, apparently, not violent enough, so it had to be one of the cops to shoot an
unarmed and clearly non-dangerous woman, thereby providing the "sacrificial victim" needed to
justify the hysterics about "violence" and "rule of law".
And the worst part is that it worked, even Trump ended up condemning the "violence" and
denouncing those who, according to Trump, did not represent the people.
The hard truth is much simpler: the "stop the steal" protestors did not commit any real
violence! Yes, they broke some furniture, had some fights with cops (who initially were
inviting people in, only to then violently turn against them with batons, pepper sprays and
flash-bang grenades). Some reports say that one cop was hit by a fire extinguisher. If true,
that would be a case of assault with a deadly weapon (under US law any object capable of being
used to kill can be considered a deadly weapon when used for that purpose). But considering the
nonstop hysteria about guns, the NRA and "armed militias", this was clearly not a planned
murder. Finally, a few people died, apparently from natural causes, possibly made worse by the
people trampling over each other. In other words, the Trump supporters did not kill anybody
deliberately, at most they can be accused of creating the circumstances which resulted in
manslaughter. That was not murder. Not even close. Want to see what a planned murder looks
like? Just look at the footage of the Ashli Babbitt murder by some kind of armed official. That
is real murder, and it was committed by a armed official. So which side is most guilty of
violating laws and regulations?
Furthermore, no moral value can be respected unless it is universally and equally applied.
Which, considering that the US deep state has engaged in a full year of wanton mass violence
against hundreds of innocent US citizens makes it unbelievably hypocritical for the US liberals
to denounce "the mob" now. Frankly, the way I see it, all the US liberals should now "take a
knee" before the pro-Trump protestors and declare that this was a "mostly peaceful" event
which, objectively speaking, it was .
Won't happen. I know.
What will happen next is going to be a vicious crackdown on free speech in all its
forms . In fact, and just to use a Marxist notion, what comes next is class warfare
.
We have all seen Pelosi and the rest of them demanding that Trump either be removed by Pence
and the Cabinet (25th A.), or they will unleash another impeachment. First, if impeached, Trump
won't be able to run in 2024 (which the liberals fully realize is a major risk for them). But
even more important, is to humiliate him, make him pay, show him once and for all "who is
boss"! These people thrive on revenge and victory is never enough to appease them, they simply
hate anybody who dares oppose them and they want to make an example of any and every serf who
dares to disobey them. That is why they always send "messages", no matter how inchoate: they
want to bully all the deplorables on the planet into total subservience.
But they won't stop with just Trump. Oh no! They will also go after all those serfs who
dared defy this Nomenklatura and who objected to the wholesale repudiation of the US
Constitution. For example, in a truly Orwellian move, the NY State Bar now wants to disbar
Giuliani for acting as Trump's lawyer (not a joke, check here ). Which,
considering that Trump already lost several lawyers to such tactics should not come as a
surprise to anybody: apparently, in the "new 2021 Woke-USA", some are more entitled to legal
representation than others.
Don't expect the ACLU to protest, by the way – equal protection under the law is not a
topic of interest to them. Here are a few screenshots take off their website , so see for yourself.
Clearly, the priority for the folks at the ACLU is to destroy Trump and anybody daring to
take up his defense.
One one hand, this is truly an absolute disaster, because when the US ruling
Nomenklatura agrees to drop any past pretenses of objectivity, or even decency, things
will definitely get ugly. On the other hand, however, this immense "coming out" of the US
Nomenklatura is, of course, unsustainable (just look at history, every time these folks
thought that they had crushed the "plebes", the latter ended up rising and showing their
supposed "masters" to the door; this will happen here too).
Last, but not least, let's keep another crucial thing in mind: even if you absolutely hate
Trump, you really should realize that it is not just "the vote" which was stolen, it was the
entire US Constitutional order . While we often focus on the SCOTUS, we should not remember
the many lower courts which showed a total absence of courage or dignity and which caved in to
the hysterical demands of the US Nomenklatura . It is impossible to have a country under
the rule of law when the courts shy away from their obligation to uphold the said rule of law
and, instead, place political expediency above the letter and spirit of the law.
Furthermore, when concepts such as "legal" and "illegal" lose any objective meaning, how can
any action be considered illegal or punishable?
Here is, just as an example, the Oath of Office taken by all Supreme Court Justices:
(emphasis added)
"I, [NAME], do solemnly swear (or affirm) that I will administer justice without respect
to persons, and do equal right to the poor and to the rich , and that I will
faithfully and impartially discharge and perform all the duties incumbent upon me as [TITLE]
under the Constitution and laws of the United States. So help me God."
And this is what each member of the US Armed Forces swears: (emphasis added)
"I, (state name of enlistee), do solemnly swear (or affirm) that I will support and defend
the Constitution of the United States against all enemies, foreign and domestic ; that
I will bear true faith and allegiance to the same; and that I will obey the orders of the
President of the United States and the orders of the officers appointed over me, according to
regulations and the Uniform Code of Military Justice. (So help me God)."
It does not take a genius to figure out that the SCOTUS is now in the hands of a small cabal
of people who clearly are "domestic enemies" of the US Constitution.
Finally, here is what the Preamble to the Declaration of Independence states: (emphasis
added)
"We hold these truths to be self-evident, that all men are created equal, that they are
endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty
and the pursuit of Happiness.–That to secure these rights, Governments are instituted
among Men, deriving their just powers from the consent of the governed,–That
whenever any Form of Government becomes destructive of these ends, it is the Right of the
People to alter or to abolish it , and to institute new Government, laying its foundation
on such principles and organizing its powers in such form, as to them shall seem most likely
to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long
established should not be changed for light and transient causes; and accordingly all
experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable,
than to right themselves by abolishing the forms to which they are accustomed. But when a
long train of abuses and usurpations, pursuing invariably the same Object evinces a design to
reduce them under absolute Despotism, it is their right, it is their duty, to throw off such
Government, and to provide new Guards for their future security."
I don't think that there is any need to further beat this dead horse and I will simply
summarize it as so:
The regime which will soon replace the Trump Administration is an illegal occupation
government, with strong ties to foreign interests (and I don't mean China or Russia here!),
which all those who served in the US military have taken an oath to oppose; this is precisely
the kind of occupation regime which the Founding Fathers foresaw in their Declaration of
Independence . Furthermore, the rule of law has clearly collapsed, at least on the
federal level, this should give the states more freedom of movement to resist the decrees of
this new regime (at least those states still willing and able to resist, I think of TX and FL
here). The leaders of this US Nomenklatura understand this, at least on some level, and we
should expect no decency from them; neither should we expect any mercy. Revenge is what
fuels these ideology- and hate-filled people who loathe and fear all the rest of humanity
because nobody is willing to worship them as our "lords and masters ". But this is also
the beginning of their end.
Conclusion: now we are all Palestinians!
True, no "mob" won on the Capitol, unless we refer to the (disgraced, hated and useless)
Congress as "the mob". And, of course, neither did "the people" or the protesters. The only
real winner in this entire operation was the US deep state and the US Nomenklatura . But
they did not win any war, only the opening battle of a war which will be much longer than what
they imagine in their ignorance.
I have said it many times, Trump really destroyed the USA externally, in terms of world
politics. The Dems have done the same thing, only internally. For example, Trump is the one who
most arrogantly ignored the rule of law in international affairs, but it was the Dems who
destroyed the rule of law inside the USA. It was Trump who with his antics and narcissistic
threats urbi et orbi who destroyed any credibility left for the USA as a country (or
even of the the AngloZionist Empire as a whole), but it was the Dems who really decided to
sabotage the very political system which allowed them to seize power in the first place.
What comes next is the illegal rule of an illegitimate regime which came to power by
violence (BLM, Antifa, Capitol false flag). This will be a Soviet-style gerontocracy with
senile figureheads pretending to be in power (think Biden vs Chernenko here). Looking at the
old, Obama-era, names which are circulated now for future Cabinet positions, we can bet on two
things: the new rulers will be as evil as they will be grossly incompetent, mostly due to their
crass lack of education (even Nuland and Psaki are back, it appears!). The Biden admin will be
similar to the rule of Kerensky in "democratic" Russia: chaos, violence, lots and lots of
speeches and total social and economic chaos. The next crucial, and even frightening, question
now is: what will replace this US version of a Kerensky regime?
It is way too early to reply to this question, but we should at least begin to think about
it, lest we be completely caught off guard.
But until then, "domestic terrorism" will, once again, become the boogeyman we will be told
to fear. And, as all good boys and girls know, the best way to deal with such a horrible
"domestic terrorism" threat is to dismantle the First and Second Amendments of the
Constitution. Having corrupt kangaroo courts on all levels, from the small claims level to the
Supreme court, will greatly help in this endeavor. Of course, there will be resistance from the
deplorables who still love their country and their Constitution.
But no matter how long this takes (might be decades) and how violent this confrontation
becomes (and, it will, if only because the regime vitally needs more false flags to survive!),
what will happen with this occupation regime is what happened to all of them throughout history
(could that be the reason why history is not taught anymore?).
As the Russian poet and bard, Vladimir Vissotski, wrote " it is impossible to trample
upon souls with boots " (сапогами
не вытоптать
душу). Now we are all Palestinians. And we, like they, will win!
"Americans have been brainwashed into calling things they don't like, or don't understand,
as "Socialist" or even "Marxist". The sad reality is that most Americans sincerely believe
that Alexandria Ocasio-Cortez or Bernie Sanders are "socialists", and when they see modern
movies ridiculously filled with "minorities" and gender fluid freaks – this is a case
of "cultural Marxism" (a totally meaningless term, by the way!). This is all utter nonsense,
neither Marxism nor Socialism have anything to do with BLM, Antifa, Nancy Pelosi or Chuck
Schumer (in fact, Marxism places a premium on real law and order!)."
"class" has been declared heretical and it has been replaced by identity politics
– the best way for a ruling class to (a) hide behind a fake illusion of pluralism and
(b) to divide the people and rule over them
It's a neat bait and switch scheme, identity being substituted for class. Billionaires can
now be hailed as people's champions by instituting 'gender-fluid' toilets and forcing their
peons to kneel. Who knows how much force they'll be willing to use against the deplorables
but probably it would know no limit. The shock and awe unleashed against foreign countries
could now be instituted domestically with things like the Phoenix Program being tried here,
among other things. Anything but relinquish power.
The old war-lovers are coming back in. Although he was considered belligerent the new
regime will be worse. War is probably part of the future agenda. Solidifying it's grip upon
the domestic population may be the precursor to embarking upon an unpopular and certain to be
costly war against Iran or perhaps even some clash with Russia.
From the I Ching: "Large ambitions coupled with meager talent will seldom escape
disaster."
The fervid machinations of the current crop of "self"-glorifying wannabes will not, as The
Saker reminds us here, be any exception to the rule, either. They're hardly the first bunch
of feckless opportunists to take a run at "full spectrum dominance" .aiming to trap Life
Herownself within the suffocating CONfines of their own little nut'shell.
The rampant insanity symptomatic of their virulent "self"-sickness, as it runs its
inevitable course, looks like being somewhat more than usually trying for the rest of us,
though .given all the electro-mechanical and institutional enhancement available to them, for
intensifying the degenerative effects of their folly. At the same time, our best response
will be just what we all know is always organically and in all Ways imperative for our Kind,
anyhow. All our precious attention is best devoted to taking care of the Earth and each
other. Our unconditional affection is best lavished on this Living Creation, all our
Relations, and The Great Spirit whose gift it is.
It is an Oligarchy of bond holders. I'm using the word bond as an stand-in for debt
instruments, or any sort of claim on productivity. Bond/Bondage/Debt are all closely related
concepts.
The entire Western World is inter-connected double-entry balance sheets.
One side of the balance sheet is "assets" and the other is "liabilities." One person's
liability is another persons asset.
It is best to view the western world as a balance sheet, especially as private bank credit
is the dominant money type of the west. Private banking and debt spreading has metastasized
like a cancer, and is now consuming the host. Debt instruments and finance paper are being
serviced in the finance sector with QE and 'CARES' act shenanigan's, which pays these finance
"assets."
If you want to call the bond holders in finance and elsewhere as a nomenklatura, go ahead
– but it obscures reality. These people are a class, a class of usurers, who are
"taking" wealth in sordid ways by gaming the system.
All through history, plutocracy has arisen out of the population because debts were not
annulled, or land was enclosed.
Oligarchs of various types are harvesting the world through various means, including the
growth of debt claims. These claims grow exponentially, and outside of nature's ability to
pay. The derivative bubble wants to be paid. What cannot go on, will not.
The balance sheet is not really balanced, one side (the debt instrument holder) is making
exponential claims on debtors.
Moritz Hinsch from Berlin collected what Socrates (470-399 BC) and other Athenians wrote
about debt, and the conference's organizer, Prof. John Weisweiler, presented the new view
of late imperial Rome as being still a long way from outright serfdom. The 99 Percent
were squeezed, but "the economy" grew – in a way that concentrated growth in the
hands of the One Percent . In due course this bred popular resentment that spread in
the form of debtor revolts, not only in the Roman Empire but that of Iran as well, leading
to religious reforms to limit the charging of interest and self-indulgent greed in
general.
By now Nazi references are getting thread-bare. We actually need to examine how the
national socialists operated because their situation is analogous to today.
I very much agree that these "elites" are displaying an ideological zeal very similar to
what Trotskysts or Nazis typically exhibit
National Socialism arose as a reaction to finance capitalism's excesses. The very things
we are seeing today, were present in Weimar Germany. The country was being bought up, and the
people were being denied their birthright. Self-indulgent greed of an arising Oligarchy was
smashed by the National Socialists to then re-balance German civilization.
Nazi zeal restoring civilizational balance is quite something different than leftist
bolshevism.
I have, for some time, been mis-naming the Nomenklatura as the Politburo, with the
commune being the many tentacled international banking cartel. It's the same crowd that
funded the original Bolsheviks.
IMO they are only "Neo" by virtue of the old ones having died, but I'm not going to split
hairs. We all know it is those whose loyalty is to a shitty little country on the
Mediterranean.
@Anonymous ties
extract, which makes politicians whores for their donor class. The donor class is the
"holders of debt instruments" as I explained earlier. Or, they can be part of the military
industrial complex, to then whore for more taxpayer dollars. In all cases it is for self
aggrandizement. By the same reasoning, press-titutes are whores for their paymasters.
The easy money is taken in by usury or other sordid schemes; then donated/recycled into
politicians, to then keep the game going. Average laboring people don't have this surplus
wealth to donate.
Unfortunately, the deeper point is being missed. The Transnational Financiers, who control
the Federal Reserve, Wall Street, the Federal Reserve, the military industrial complex,
Silicon Valley, Academia, Education, think tanks, politicians plus political parties, don't
care about the US of the Western world. Their goal is a NWO as described by the insider
Professor Carol Quigley's book, Tragedy and Hope. Rule by a small nucleus of central bankers
ie The Bank of International Settlements and controlled via technocrats. They have no
allegiance to countries, nations, ideology but themselves. Paul is spot on one point it's not
democrat via republican or left via right but them against the rest of humanity!
What is noticeable here is a bit of a contrast between those who live in the US and those
who don't. The former group is naturally very attached to the country and are getting very
emotional over its fate. This is understandable but not defensible. The United States has no
right to a divine appeal or special treatment. It is a witch's cauldron into which the poor
and benighted of the world were thrown only to be turned into tormentors of others by means
of some strange black alchemy. We are now witnessing the weakening of the spell and awakening
of the enchanted masses.
The exhibition of high emotion doesn't seem appropriate here because simply, there is
nothing to mourn. The golden 1950s? That was a fluke based entirely on the outcome of WWII
– the world had been devastated, the US cocooned and protected – and it gave us
the Dulles brothers. 1960s and 1970s? A conservative's nightmare – legions of
long-haired parasites, jangly guitars, LSD, womens' lib and the ultimate humiliation of
NAM!
So when was this golden age? Under Reagan? Well, this is when the dismantling of the inner
core of the empire began. Would Dr Roberts still advocate Reaganomics and dark cold war
threats combined with the destruction of the American working class?
In the end, a number of people have remarked that after decades of ballooning into a
malignant quasi-empire, the US is painfully finding its true level. The "rebellion" being
discussed here was a farce (as confirmed by the stock market) and these are just dummy moves
orchestrated to placate the proles (look, this is just the beginning – since 2016).
Dr Roberts confirms something I said yesterday – what kind of rebellion is possible
in a country with two dozen super-endowed and powerful spying organisations and a super
well-armed internal suppression apparatus? The libertarians over at ZH ask these questions
– but the curse of the CIA is completely self-inflicted and richly deserved. One does
not create a modern unholy inquisition and expect to be able to escape its tentacles.
People talk about hope and optimism. This is the view of an outsider who has been affected
by American global criminality. There cannot be any hope or optimism for the USA until it
fully renounces its collective psychopathy which has cost the world millions of lives and
billions of dollars (not for long) in value.
"It's the height of hypocrisy for people who claim to be the champions of rights for women
to deny the very biological existence of women," former Democratic presidential candidate
Tulsi Gabbard, who just might be the last Democrat in DC with a functioning brain, told
Tucker Carlson. "Instead of doing something that could actually help save people's lives,
they are choosing instead to say 'You can't say mother or father.'"
I would ask for an 'Amen!' at this point, but, thanks to the clown work of lawmaker
Emanuel Cleaver, who ended his congressional prayer opening of the very unsexy 117th
Congress with the words "amen and awoman," even that simple gender-free term (which simply
means 'so be it') is now tainted with foul political intrigue.
With these sort of unforgivable stunts under the belt, the Democrats should be very
grateful they have perfected the art of 'winning' elections, otherwise they would probably
vanish from the political landscape simply out of lack of doing anything positive for the
nation. Indeed, the term 'Democrat' may be on the way out faster than that of 'male' and
'female.'
A Republic is, by definition, an oligarchy. We just refuse to acknowledge what it truly
is. Put some lipstick on the pig.
But ours is not a pure Republic because we do have democratic referendums all of the time
where the people get to make laws that a majority want. We need more of them.
We don't have any at the federal level but there is nothing that prohibits them. Under
Amendment 10 all powers not granted to the federal government are granted to the states and
the people . The implication is that powers left to the people can be exercised by
referendum. Referendums are really the only check on oligarchy.
Definitely staged event, whether the protestors knew or didn't. Going forward, I'm
switching to Signal from WhatsApp and viber, have to rethink my use of Gmail as well. Don't
use faceborg or Jill Dorsey's twat. Enough is enough!
It's what I said would happen in the other thread:
Watching the spectacle from a far a couple of things stand out for me.
This event has really put the fear of God into the DC political class. When you see the
photos of the politicians during this event you see real fear. I bet not one of them ever
thought that the people would be so fed up with the DC political class that they would
storm the Capitol to show their frustration. Such behaviour was simply un-American. It was
things you saw on TV happening in far away places. Never would such scenes ever happen in
the good ole' USA.
The second thing that stands out for me is that the American people have reached their
wits end with the political class and are prepared to do what no-one ever thought they
would do. Storm the Capitol! Disorganised as it was. What can they achieve with real
organisation!
So now the people realise they have power in a collective and this power has put the
fear of God in the people they despise. This has truly been a transformative event both for
the political class and both for the people.
You can see this fear in the hysterical way the DC political class has reacted to this
event. I don't think this hysteria is fake. I think it is quite real. They are so desperate
to regain control of the "narrative" that they are flooding this forum (as pointed out
eloquently by William Gruff, and no doubt many other forums) with sock puppets to denounce
anyone who disagrees with the establishment view.
This hysteria is going to lead to an over reaction which will in turn spur these people
not just to lob a Molotov cocktail (politically speaking) at the DC political class but to
become one themselves.
There is nothing so dangerous as a person with nothing to lose and nothing so fearful as
a man with everything to lose.
How it will play out I don't know, but the old normal has been shattered.
That the USA is a single-party with two branches that play "good cop, bad cop" already
is consensus among serious historians, sociologists, political scientists etc. The news
here is that this system won't change with Biden.
The Vandal sack of Rome of 455 CE was a completely different scenario. By that time,
Rome had only symbolic importance to the Empire, and already was at an advanced stage of
economic decay. Indeed, that's the main factor that differentiates the High from the Late
Empire: the end of Italic hegemony, and the economic rise of the Eastern cities (Nicomedia,
Antioch, Constantinople, Nicephorum etc.). Or, on a second thought, is it? Is the USA in
really such advanced stage of economic decline? Only time will tell.
One last observation is that people usually confuse change with revolution. A given
society doesn't need to go through any revolution in order to change itself. On the
contrary: societal change is always happening, as we talk. What makes revolutions special
is the fact that the previously exploited class becomes the dominant class; they turn the
society upside down (hence the name).
But even a society that avoids any revolution will still change and eventually
degenerate and die. Personally, I like prof. Moniz Bandeira's "Mutazione dello Stato",
literally "mutation of the State", which describes a situation where the contradictions of
society (development of the productive forces and the relations of production) continues to
develop without a revolutionary situation or scenario. In this case, the USA is
"mutating".
We've been in this environment since 911. It's been one continual project, not something
new being being imposed. It's a continual tightening of society, including the
Pandemic.
It's all been allowed to happen for an obvious agenda of compliance and control. From
'riots' of BLM/Antifa to the 'insurrection' of Trumpeteers, the point is to narrow accepted
thought - to manufacture consent, which is much easier with an un or misinformed populace.
A social credit system is coming to the west - call it the Karen Revolution.
Democracy is not an option, and never has been. Time to network with slow-mail and smoke
signals, because as an organizing principle beyond sales and marketing, the internet's days
are numbered.
Yes, the only difference is that one side, the deplorables, are speaking truth to power.
The other side is conviently putting its head in the sand right now and begging for more
federal overreach.
I have tried to explain over the past while, that what we are seeing in the US is an
ongoing coup, This is a coup against the US people by the US corporate and financial
oligarchs. Clearly, they are benefiting by not simply enriching themselves at taxpayers
expense, but securing their own criminal amoral behaviour through the supression of human
rights and what is left of the freedom of speech in the US. This is accelaerating
exponentially and has been going on long before Trump came on the scene.
Avoid paying attention to the distractions, and keep your eye on the ball.
Stealing the election. Trying to remove Trump from office, with two weeks to go, and
'erase' him from the internet (and politics and whatelse?). Turning the U.S. into a
de-facto police state. And the rush to do this all very quickly.
This smacks of desperation.
What are their Dems (rather their Deep State and 'Globalist' bosses) afraid of?
I have tried to explain over the past while, that what we are seeing in the US is an
ongoing coup, This is a coup against the US people by the US corporate and financial
oligarchs. Clearly, they are benefiting by not simply enriching themselves at taxpayers
expense, but securing their own criminal amoral behaviour through the supression of human
rights and what is left of the freedom of speech in the US. This is accelaerating
exponentially and has been going on long before Trump came on the scene.
Avoid paying attention to the distractions, and keep your eye on the ball.
I have tried to explain over the past while, that what we are seeing in the US is an
ongoing coup, This is a coup against the US people by the US corporate and financial
oligarchs. Clearly, they are benefiting by not simply enriching themselves at taxpayers
expense, but securing their own criminal amoral behaviour through the supression of human
rights and what is left of the freedom of speech in the US. This is accelaerating
exponentially and has been going on long before Trump came on the scene.
Avoid paying attention to the distractions, and keep your eye on the ball.
Trump was right on the big tech, he tried to warn about their power for many years, now
big-tech crack down on him and his supporters.
The leftwingers at Big tech really proved his point, they are a enormous threat.
Liberals and leftwingers cheer today, they are people that pick tribalism before freedom
of speeech, so disgusting.
"... Unlike most democracies, the USA is dominated by just two parties that use propaganda to fight for control of the power that Government provides. Republicans stand firmly by Milton Friedman, openly and honestly promoting the best interests of the ruling class and against FDR's New Deal that had transformed the quality of life for hundreds of millions of workers. Republicans are a minority but well organized, well funded and speak with a disciplined message. ..."
"... The Democrat Party leadership has the same agenda because both parties operate in a completely privatized communication system which demands enormous sums of cash to participate. Like everything else in America the two parties can be characterized as businesses that use BS to collect money to give to the mass media, in their endless struggle for political power. Although there are many regional variations across time and geographic regions, Democrats tend to hold a 5% advantage over Republicans, but both parties are rightly held in distain by the 40% of voters who consider themselves to be "independent". Independent or not most elections force American voters back into a choice between Democrat or Republican. ..."
I first became aware of Paul Craig Roberts (PCR) during the depression of 2008 when events
led to my armchair education in economics. PCR contributed to my education along with Michael
Hudson, Steven Keen, Jospeph Stiglitz and others. I learned that economics is an inexact
science full of falsehoods that serve the ruling class in their war against the working
class. A primary falsehood promoted by the Nobel prize winning economist Milton Friedman is
that unregulated free markets produce the greatest prosperity for the greatest number of
people. Friedman's Chicago School of economics, which dominates US policy under the guise of
freedom and democracy, has actually spread poverty, death and destruction for hundreds of
millions of people throughout the world. Friedman's logic seemingly justifies exploitation of
the working class by the ruling class in the great class war defined by Marx. Most Americans
have benefited from these policies in so far as they were imposed on third world countries
even though they are currently suffering as they have been incrementally imposed on our
domestic population, leading to a growing popularity for political outliers like Donald Trump
and Bernie Sanders.
Unlike most democracies, the USA is dominated by just two parties that use propaganda
to fight for control of the power that Government provides. Republicans stand firmly by
Milton Friedman, openly and honestly promoting the best interests of the ruling class and
against FDR's New Deal that had transformed the quality of life for hundreds of millions of
workers. Republicans are a minority but well organized, well funded and speak with a
disciplined message.
The Democrat Party leadership has the same agenda because both parties operate in a
completely privatized communication system which demands enormous sums of cash to
participate. Like everything else in America the two parties can be characterized as
businesses that use BS to collect money to give to the mass media, in their endless struggle
for political power. Although there are many regional variations across time and geographic
regions, Democrats tend to hold a 5% advantage over Republicans, but both parties are rightly
held in distain by the 40% of voters who consider themselves to be "independent". Independent
or not most elections force American voters back into a choice between Democrat or
Republican.
Trump is not a leader, populist or intellectual thinker. His only concern is himself and
his immediate family. He spends his time tweeting, golfing while eating and promoting junk
food. He seeks immediate profits for himself and his donors in a political system which pays
out 10:1 on investments in successful political candidates, where pay back is realized in tax
benefits. Trump is a successful self promoter who has a few good ideas and the most
substantial following of any Republican politician. But his behavior is too erratic to ever
bring his good ideas to fruition, or you could simply say ge is too lazy to bother.
ump used populist issues, Republican gerrymandering, Republican voter caging and purging
to overcome popular vote losses in 2016 but not 2020. Since 2000 American democratic voting
systems have rightly suffered a credibility gap, which Greg Pallast has documented but is
largely ignored by the mass media and Government which prefers to imagine us as the greatest
democracy ever. Trump has been able to use these problems to sow doubts about the credibility
of the 2020 outcome, even though our voting systems have been much improved on since
2000.
A Princeton Study documented that the USA operates more like an Oligarchy than a Democracy
by studying who benefited from 2000 pieces of legislation. The exclusive beneficiaries of all
that legislation by Democrats and Republicans are the wealthiest Americans that fund the
majority of duopoly activity. This fact helps to explain how wealth is being concentrated
into fewer and fewer hands..
You have to look back as far as Eisenhower and Kennedy to find Presidents dedicated to
promoting the general welfare, one of our constitutional mandates. Since that period,
election results have trapped the US population in a neoliberal economic system where the
vast majority of elected officials are mere figureheads. Biden and Harriss's record is no
exception to that rule. The "establishment" can be characterized as the military industrial
complex, ruling class, .001% or in a variety of other ways. I am not sure how PCR defines
that term, but they write and enforce the laws we all live by:
The use of money, the mass media and propaganda to vilify individuals and wage class war
is a great American past time. That is how Johnson attacked Goldwater and Bush 41 attacked
Dukakis. It is hardly unique to Trump's situation and if anything Trump is a master media
manipulator and name caller.
The history of man is the history of man's enslavement of other men usually under some
form of capitalism. When white people gained certain technological advantages over other
people, they used that technology ruthlessly to gain wealth. This is not unique to white
western culture, but it is an undeniable aprt of human history. Abraham Lincoln said that
capital cannot be accumulated without the contribution of labor, and therefore labor deserves
the first consideration. But we live in a world controlled by capitalists and the only thing
worse than being exploited by capitalists is not being exploited by them
Since the New Deal, the US has been on a path determined by the Friedman school of
economics. This has included the shuttering of mental health hospitals. As a result there are
many white psychotic males running around in a country with more individual guns than the
Chinese Army possesses. There is a real need to control access to these weapons, regardless
of the meaning of the original intent of the second amendment. One legitimate interpretation
of the term "militia" was white armed conscripts used to persistently intimidate and lynch
black slaves which far outnumber wealthy plantation owners. That said hunting is a legitimate
use of firearms even if slavery and war are impossible to justify.
Like Reagan, Trump has fomented racial and gender conflict as a successful political
strategy in a country which still is largely white, even though that proportion is
unsustainable. Whether the Covid-19 epidemic serves a similar political function can be
debated. However, as long as the US and other major powers operate bio-weapons and nuclear
weapons labs life on earth faces unnecessary risks. This website has documented that the 1918
"Spanish Flu" epidemic was most likely started in Kansas from a Rockefeller funded biological
research lab. The post 9-11 anthrax attack through the SU mail was almost certainly a
deliberate attack by a misguided rogue scientist in one of our labs. Bio-weapons and Nuclear
labs should be shut down through international agreements, the initiation of which began
during the Kennedy Presidency. But, unfortunately, the reverse is happening. Trump has even
suggested we should be more willing to use nuclear weapons to get our way, as long as we are
building them.
Overpopulation of the world is a serious problem. Global warming and US war mongering has
created tens of millions of refugees which must immigrate or die. Increases in population
densities everywhere decreases the quality of our lives and needs to be controlled. But to do
so effectively we must attempt to address the underlying causes of mass immigration. Most
people would prefer to live in te culture they were raised in as long as they can make a
decent living.
Under J Edgar Hoover, blacks, liberals, socialists and communists were enemy number one.
Our country has a long history of using the police to contain unrest in the working class.
While Hoover was the most extreme, you are still far more likely to suffer death or other
injury promulgated by the State if you are poor and considered to be part of any of the
groups Hoover vilified. Occupy Wall Street and Black lives Matter protestors were treated
much more brutally than any right wing extremists in support of Trump. Compare the caution
exercised by police during the Ted Bundy grazing conflict standoff and its aftermath with the
Black Panthers and PCR's assertions do not hold up.
Actually Tucker Carlson is one of those people and props to the guy for telling us working
class Whites what "our elite white leader trash" have always thought about us. Of course
Tucker won't dare mention the Jew, but at least he clues us in on white traitor trash that
claim to be superior by avoid being seen near chain restaurants and hotels.
Of course we KNOW that the Jew and his elite shabbos goy only think of the common Black
and Brown foot soldiers as pets as well, these cats are the real Supremacists. These
(((elitists))) will dump the Black and Brown grunts for the Yellow ones, believe that as
well.
I've been following her work for several months now and think her premises much sounder
than Matthew Ehret's, who are actually on the same Canadian team. Generally, the three of us
are working on exposing the rise and spread of what's now known as Neoliberalism. And of
course, there's Dr. Hudson who's ahead of us all.
The line of investigation initiated by Upton Sinclair into the shared Board memberships at
key elite universities within the USA that erased the traditional teaching of
political-economy and replaced it with the mathematical economics which lie at the root of
Neoliberalism's Junk Economics
I see as very promising as they're also prominent bankers and Old Money with social
connections to England's Royalty and Nobility--the primary members of Europe's Rentier
Class . When I look over the comments, many have forgotten just what Class owns the
Duopoly and controls the federal government. Trump was never allowed into their circle but
was used by some of its members in the pursuit of interests that are still shrouded in fog.
My working hypothesis there is they were quite worried that too much industrial capacity had
been foreclosed and moved such that it caused a real threat to national security; thus the
need for MAGA.
With the rise of the Eurasian Bloc, the "threat" isn't military; it's economic. As I wrote
earlier today, an economy based on consumerism will collapse when the consumers can no longer
consume. Hudson's 100% correct that debt's that can't be repaid won't. The current degree of
economic polarization is miniscule compared to what might ensue if the Bidenites don't
forestall it--200 Million people bankrupt while 100 Million have good paying jobs and can
afford their debts--the remaining 40-50 Million are mostly impoverished children. This time
the part of the public that gets shafted as in 2009 under Obama isn't going to sit still, and
what happened in DC will be repeated elsewhere with meaning this time. A genuine MAGA Fascist
wanting control will need to disarm the Rentier Class and the Swamp thus ousting the
current "Friendly Fascist" regime--and that would require a paramilitary since that's
basically what composes the Swamp--Civil War between two Factions of Reaction that would also
split the military. Wonder what barflies think of all that?
Earlier in the week I linked to the latest Renegade Inc program which had Dr.
Hudson as one of the guests. That show's
transcript is now available. Here's an excerpt with Ross Ashcroft asking a question:
"Ross: What do you think are the megatrends that we should be looking at in 2021? What do
you think is the direction of travel, if you like, for so-called developed economies?
"Michael Hudson: Well, the big trend in any economy is the growth of debt, because the
debt grows exponentially. The economy has painted itself into a debt corner. We can see that
in real estate. We can see that for small business. There's also almost no way to recover.
The Federal Reserve has been printing quantitative easing to keep stock and bonds high. But
for the real economy, the trend is polarization and lower employment.
"The trend also is that state and local finances are broke, especially in the biggest
cities, New York City, San Francisco and Los Angeles. They're not getting income tax revenue
from the unemployed or closed businesses. They're not getting the real estate tax with so
many defaults and mortgage arrears. In New York City there's talk of cutting back the subways
by 70 percent. People will be afraid to take the subways when they're overcrowded with people
with the virus. So you're having a breakdown not only in state and local finances, but of
public services that are state run – public transportation services, health services,
education is being downsized. Everything that is funded out of state and local budgets is
going to suffer.
"And living standards are going to be very sharply downward as people realize how many
services they got are dependent on public infrastructure."
And this one I must also include:
"Ross: What is the one thing that has really surprised you in 2020? What have you laughed
at? What has given you a chuckle?
"Michael Hudson: The surprise – that I really shouldn't have been surprised at
– is how naive Bernie Sanders supporters were in thinking that they were going to get a
fair deal and that the elections were going to be fair. The illusion is that people were
actually going to have a fair election when the last thing the vested interests wanted was
Bernie Sanders or Elizabeth Warren or any kind of reformer. So what happened to Sanders is
what happened to Corbyn in Britain and the Labour Party's neoliberal leadership.
"So what's for laughs? I guess, Tulsi Gabbard's takedown of Kamala Harris was absolutely
wonderful. Everybody just broke out laughing, cheering for her. And of course, that's why she
was marginalized, and now we have Kamala Harris as the senior vice president."
Of course, none of the dire economic news is being reported with the focus instead on Wall
Street's markets, with much of the public just as brainwashed about it as Trump. The last
third focuses on politics, which is what most barflies want to read about. So, click the link
and read what Dr. Hudson sees in the tea leaves.
"... Democrats decisively outraised their opponents, giving them a critical edge. Ossoff outraised Perdue by $138 million to $89 million while Warnock received $124 million to Loeffler's $92 million. With over 98% of the votes counted, Warnock has been declared the winner, with 50.6% of the vote. Ossoff, meanwhile, is all but assured of winning as well, and has already declared victory. ..."
"... Thus, both contests have conformed to political scientist Thomas Ferguson's "Golden Rule" of politics: that the party that spends the most almost always wins the election. Ferguson's 1995 thesis , "The Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems," argued that elections are essentially contests between rival big businesses and that the two political parties compete to serve those who pay them, not the public. Nearly 20 years later, a University of Princeton study of 1,779 policy issues found that, ..."
"... Economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence." ..."
"... Data from the Center for Responsive Politics shows that, since 2000, the candidate spending the most money has won between 70% and 98% of their races in the House or Senate ..."
"... the real winners in this election were corporate America, who could not lose, whoever won. ..."
In order to beat GOP incumbents David Perdue and Kelly Loeffler in the Georgia Senate
elections, Democrats had to spend big, raising hundreds of millions of dollars in the
process.
The two Georgia Senate elections -- called today for the Democrats -- were easily the most
costly in history, amounting to nearly $830 million in total ($468 million for the race between
Democrat Joey Ossoff and Republican David Perdue and more than $361 million for the special
election between Democrat Rev. Raphael Warnock and Republican Kelly Loeffler.
The Democrats' massive war chest came in no small part from hefty contributions from
corporate America. According to data from the Center for
Responsive Politics , tech companies rallied around the Democratic challengers, plying the
two campaigns with millions of dollars. Alphabet Inc., Google's parent organization, was the
largest single source of funds, their PACs, shareholders, or employees donating almost $1
million to Ossoff's campaign alone with other big tech companies cracking his top ten, all with
hundreds of thousands of dollars worth of donations from the like of Apple, Microsoft, Amazon,
Facebook, and AT&T. The rest of the top ten were made up by universities.
The Republican candidates also relied on large corporations for much of their funding.
Perdue's biggest donors included Delta Airlines, Home Depot, Goldman Sachs, and Bank of
America, while Loeffler was generously supported by oil and chemical giant Koch Industries as
well as a number of financial institutions like Ryan LLC and Blackstone Group.
However, Democrats decisively outraised their opponents, giving them a critical edge.
Ossoff outraised Perdue by $138 million to $89 million while Warnock received $124 million to
Loeffler's $92 million. With over 98% of the votes counted, Warnock has been declared the
winner, with 50.6% of the vote. Ossoff, meanwhile, is all but assured of winning as well, and
has
already declared victory.
Thus, both contests have conformed to political scientist Thomas Ferguson's "Golden
Rule" of politics: that the party that spends the most almost always wins the election.
Ferguson's 1995 thesis , "The Golden
Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political
Systems," argued that elections are essentially contests between rival big businesses and that
the two political parties compete to serve those who pay them, not the public. Nearly 20 years
later, a University of Princeton
study of 1,779 policy issues found that,
Economic elites and organized groups representing business interests have substantial
independent impacts on US government policy, while average citizens and mass-based interest
groups have little or no independent influence."
https://cdn.iframe.ly/oNuYTi0?v=1&app=1
Empirical evidence seems to support this notion. Data from the Center for
Responsive Politics shows that, since 2000, the candidate spending the most money has won
between 70% and 98% of their races in the House or Senate
The 2020 election was already by far the most expensive in history, even before the Georgia
numbers were added into the mix. The sums of $468 million and $361 million are comfortably
higher than any of those from two months ago, the most expensive of which was the $299 million
contest in North Carolina between Thom Tillis (Republican) and Cal Cunningham (Democrat).
Many were heralding the Democratic upset in Georgia as the start of a new era and a victory
against racism and hate. "The votes of Black people have been suppressed in this nation for a
very long time. This is the dawning of a new day," said Bernice King, daughter of
Dr. Martin Luther King Jr. Warnock, who will become the state's first black senator, agreed.
"Tonight we proved that with hope, hard work, and the people by our side, anything is possible
All of us have a choice to make; will we continue to divide, distract and dishonor one another,
or will we love our neighbors as we love ourselves?" he said in his victory speech.
Yet while corporations continue to have such an outsized role in funding both major
political parties, it is unclear whether substantive change is even possible. The debate over
whether this represents a victory for racial justice can be had, but what seems unmistakable is
that the real winners in this election were corporate America, who could not lose, whoever
won.
Feature photo | Senate candidate Jon Ossoff introduces President-elect Joe Biden in Atlanta,
Jan. 4, 2021, as he campaigns for Raphael Warnock and Ossoff. Carolyn Kaster | AP
US Representative Tulsi Gabbard (D-Hawaii) is calling out her party for pushing through a
new code of conduct that essentially denies women exist by requiring gender-neutral language in
Congressional rules.
"It's the height of hypocrisy for people who claim to be the champions of rights for
women to deny the very biological existence of women," Gabbard said on Monday night in an
interview with Fox News host Tucker Carlson.
New guidelines introduced by House Speaker Nancy Pelosi on Friday and passed Monday by
Congress in a party-line vote endeavor to "honor all gender identities" by making all
pronouns and references to familial relationships gender-neutral. For instance, "seamen"
has been changed to "seafarers," and House rules have been scrubbed of such words as
"father, mother, son, daughter, brother, sister.""Aunt" and "uncle" will be
replaced by "parent's sibling." Lawmakers also must inculcate such words as
"parent-in-law,""stepsibling" and "sibling's child" to replace
"mother-in-law,""stepsister" and "niece.""He" or "she" references to House
members are instead "such member,""delegate" or "resident commissioner."
"It's mind-blowing because it shows just how out of touch with reality and the struggles
of everyday Americans people in Congress are," Gabbard said. "Also, their first act as
this new Congress could have been to make sure that elderly Americans are able to get the COVID
vaccine now , but instead of doing something that could actually help save people's lives,
they're choosing instead to say, 'Well, you can't say mother of father in any of this
congressional language.' It's astounding."
Congress also has made permanent its Office of Diversity and now requires all committees to
discuss in their oversight plans how they will address "inequities on the basis of race,
color, ethnicity, religion, sex, sexual orientation, gender identity, disability, age or
national origin." Committees also must "survey the diversity of witness panels at
committee hearings to ensure we are hearing from diverse groups of experts as we craft
legislation."
Gabbard has run afoul of Democratic Party orthodoxy repeatedly in the past two years,
opposing the impeachment of President Donald Trump, speaking out against election fraud,
opposing regime-change wars and blasting the controversial Netflix movie 'Cuties' as "
child porn ." She
embarrassed party favorite Kamala Harris, now vice president-elect, in a Democrat presidential
debate in 2019, and the Iraq War veteran called former Secretary of State Hillary Clinton the
" queen of warmongers
" after Clinton suggested that she's a Russian asset.
Gabbard, who didn't seek a new term in Congress, was attacked as a "transphobe" and
"bigot" after introducing a bill last month to limit participation in women's sports to
biological females. The movement to "deny the existence of biological women – it
defies common sense, it defies basic, established science, it just doesn't make any sense,"
she told Carlson on Monday.
"No wonder they called you a Russian spy," Carlson replied. "It's dangerous to
have you in the Democratic Party. I'm sorry you're leaving [Congress]."
Republicans praised Gabbard's latest contradiction of Democrat talking points. "Can we
please trade Mitt Romney for her?" one Twitter user asked. Brazilian entrepreneur Daniel
Gonzalez called her "the best Democrat since JFK."
House Minority Leader Kevin McCarthy (R-California) was among the many Republicans who
opposed Pelosi's rules changes. "This is stupid," he said. "Signed, a father, son and
brother."
"... It is difficult to know or to ensure that the ballots are actual ballots from registered voters. For example in the early hours of the morning of November 4 large ballot drops occurred in Michigan and Wisconsin that wiped out Trump's lead. State officials have reported that people not registered -- probably illegals -- were permitted to vote. Postal service workers have reported being ordered to backdate ballots that suddenly appeared in the middle of the night after the deadline. These techniques were used to erase Trump's substantial leads in the states of Michigan, Wisconsin, Pennsylvania, North Carolina, and Georgia. ..."
"... Digital technology has also made it easy to alter vote counts. US Air Force General Thomas McInerney is familiar with this technology. He says it was developed by the National Security Agency in order to interfere in foreign elections, but now is in the hands of the CIA and was used to defeat Trump. Trump is considered to be an enemy of the military/security complex because of his wish to normalize relations with Russia, thus taking away the enemy that justifies the CIA's budget and power. ..."
"... The military/security complex favors the disunity that the Democrat Party and media have fostered with their ideology of Identity Politics. ..."
"... I would take it a little further and say that voting by mail is a method of vote fraud. The supposed safeguards are easily circumvented, as some whistleblowers have illustrated with ballots being brought forth in large numbers after election day without postmarks and postal workers being ordered to stamp them with acceptable postmarks. ..."
"... Eisenhower is always lauded for his MIC warning. Frankly he ticks me off. Thanks for the warning AFTER you were in some position to mitigate. ..."
"... the most likely source of fraud that is hard to detect, is ballot harvesting. This should be outlawed as it violates the idea of a secret ballot. Somebody comes to the home of a disinterested voter and makes sure he votes (of course they will never admit to hounding the person) and "helps" them with the ballot. If the voter cannot be cajoled into voting the correct way, you merely throw his ballot in the trash. ..."
"... Living in an urban setting I often had to visit apartment buildings. Without fail, there was always a pile of undeliverable mail in the lobby under the mailboxes. ..."
"... His farewell address was just flapdoodle; it wasn't really dredged up till the 70s. Eisenhower spent eight years spreading tripwires and mines and then said "Watch out." Thanks buddy. ..."
"... As the German newspaper editor Udo Ulfkotte revealed in his book, Bought Journalism, the European and US media speak with one voice -- the voice of the CIA. The very profitable and powerful US military/security complex needs foreign enemies. ..."
"... inventive creative new ways to deceive.. first it was election machines, then mail in votes. ..."
"... The phrase "there's no evidence" is just a public commitment to ignore any evidence, no matter how blatant or obvious. ..."
"... Paper ballots as ascribed by Tulsi Gabbard legislation is the only safe option for elections. Kudos to Tulsi! ..."
"... Everyone knew about the potential for voter fraud to occur, but the entire system is corrupt, including Trump who has allowed the massive corruption within the system that was present when he entered office to persist and grow because he is a wimpy, spineless, coward, that was too afraid to make any waves and take the heat that he promised his voters. ..."
"... Why anyone voted for Trump in 2020 confounds me. I voted for him in 2016 and he has turned out to be one of the worst presidents in history. ..."
"... Trump in his cowardess and dishonesty knew that the ailing economy would harm his chances of being re-elected, so he allowed the health scare scamdemic to occur and destroy the livelihoods, lives, and businesses of hundreds of millions of Americans because he is a psychopath. Trump did not do what he promised. Trump made America worse than it has ever been since the end of slavery. ..."
"... Trump has also demanded the extradition of Assange after telling his voters that he loved wikileaks. Trump is a two-faced, lying, fraud. It has been his pattern. He consistently supports various groups and people like Wikileaks, Proud Boys, and others and panders to them and voters and tells people that he loves them, and then every time without fail when the heat is on, Trump says," I really don't know anything about them." ..."
"... "I know nothing." Trump saying "I know nothing." defines his presidency and who he is as a person, a spineless, pandering, corrupt, two-faced, narcissist, loser, and wimp! ..."
A few months ago it looked like the re-election of Trump was almost certain, but now there was a close race between Trump
and Biden? What happen during the last months?
In the months before the election, the Democrats used the "Covid pandemic" to put in place voting by mail. The argument was used
that people who safely go to supermarkets and restaurants could catch Covid if they stood in voting lines. Never before used on a
large scale, voting by mail is subject to massive vote fraud.
There are many credible reports of organized vote fraud committed by Democrats. The only question is whether the Republican establishment
will support challenging the documented fraud or whether Trump will be pressured to concede in order to protect the reputation of
American Democracy.
It is difficult to know or to ensure that the ballots are actual ballots from registered voters. For example in the early
hours of the morning of November 4 large ballot drops occurred in Michigan and Wisconsin that wiped out Trump's lead. State officials
have reported that people not registered -- probably illegals -- were permitted to vote. Postal service workers have reported being
ordered to backdate ballots that suddenly appeared in the middle of the night after the deadline. These techniques were used to erase
Trump's substantial leads in the states of Michigan, Wisconsin, Pennsylvania, North Carolina, and Georgia.
Digital technology has also made it easy to alter vote counts. US Air Force General Thomas McInerney is familiar with this
technology. He says it was developed by the National Security Agency in order to interfere in foreign elections, but now is in the
hands of the CIA and was used to defeat Trump. Trump is considered to be an enemy of the military/security complex because of his
wish to normalize relations with Russia, thus taking away the enemy that justifies the CIA's budget and power.
People do not understand. They think an election has been held when in fact what has occurred is that massive vote fraud has been
used to effect a revolution against red state white America. Leaders of the revolution, such as Democrat Rep. Alexandria Ocasio-Cortez,
are demanding a list of Trump supporters who are "to be held accountable." Calls are being made for the arrest of Tucker Carlson,
the only mainstream journalist who supported President Trump.
In a recent column I wrote:
"Think what it means that the entirety of the US media, allegedly the 'watchdogs of democracy,' are openly involved in participating
in the theft of a presidential election.
"Think what it means that a large number of Democrat public and election officials are openly involved in the theft of a presidential
election.
"It means that the United States is split irredeemably. The hatred for white people that has been cultivated for many years,
portraying white Americans as "systemic racists," together with the Democrats' lust for power and money, has destroyed national
unity. The consequence will be the replacement of rules with force."
Mainstream media in Europe claim, that Trump had "divided" the United States. But isn`t it actually the other way around,
that his opponents have divided the country?
As the German newspaper editor Udo Ulfkotte revealed in his book, Bought Journalism , the European and US media speak with
one voice -- the voice of the CIA. The very profitable and powerful US military/security complex needs foreign enemies. Russiagate
was a CIA/FBI successful effort to block Trump from reducing tensions with Russia. In 1961 in his last address to the American people
President Dwight Eisenhower warned that the growing power of the military/industrial complex was a threat to American democracy.
We ignored his warning and now have security agencies more powerful than the President.
The military/security complex favors the disunity that the Democrat Party and media have fostered with their ideology of Identity
Politics. Identity politics replaced Marxist class war with race and gender war. White people, and especially white heterosexual
males, are the new oppressor class. This ideology causes race and gender disunity and prevents any unified opposition to the security
agencies ability to impose its agendas by controlling explanations. Opposition to Trump cemented the alliance between Democrats,
media, and the Deep State.
It is possible that the courts will decide who will be sworn into office at January 20, 2021. Do you except a phase of uncertainty
or even a constitutional crisis?
There is no doubt that numerous irregularities indicate that the election was stolen and that the ground was well laid in advance.
Trump intends to challenge the obvious theft. However, his challenges will be rejected in Democrat ruled states, as they were part
of the theft and will not indict themselves. This means Trump and his attorneys will have to have constitutional grounds for taking
their cases to the federal Supreme Court. The Republicans have a majority on the Court, but the Court is not always partisan.
Republicans tend to be more patriotic than Democrats, who denounce America as racist, fascist, sexist, imperialist. This patriotism
makes Republicans impotent when it comes to political warfare that could adversely affect America's reputation. The inclination of
Republicans is for Trump to protect America's reputation by conceding the election. Republicans fear the impact on America's reputation
of having it revealed that America's other major party plotted to steal a presidental election.
Red state Americans, on the other hand, have no such fear. They understand that they are the targets of the Democrats, having
been defined by Democrats as "racist white supremacist Trump deplorables."
The introduction of a report of the Heritage Foundation states that "the United States has a long and unfortunate history
of election fraud". Are the 2020 presidential elections another inglorious chapter in this long history?
This time the fraud is not local as in the past. It is the result of a well organized national effort to get rid of a president
that the Establishment does not accept.
Somehow you get the impression that in the USA – as in many European countries democracy is just a facade – or am I wrong?
You are correct. Trump is the first non-establishment president who became President without being vetted by the Establishment
since Ronald Reagan. Trump was able to be elected only because the Establishment thought he had no chance and took no measures to
prevent his election. A number of studies have concluded that in the US the people, despite democracy and voting, have zero input
into public policy.
Democracy cannot work in America because the money of the elite prevails. American democracy is organized in order to prevent
the people from having a voice. A political campaign is expensive. The money for candidates comes from interest groups, such as defense
contractors, Wall Street, the pharmaceutical industry, the Israel Lobby. Consequently, the winning candidate is indebted to his funders,
and these are the people whom he serves.
European mainstream media are portraying Biden as a luminous figure. Should Biden become president, what can be expected
in terms of foreign and security policy, especially in regard to China, Russia and the Middle East? I mean, the deep state and the
military-industrial complex remain surely nearly unchanged.
Biden will be a puppet, one unlikely to be long in office. His obvious mental confusion will be used either to rule through him
or to remove him on grounds of mental incompetence. No one wants the nuclear button in the hands of a president who doesn't know
which day of the week it is or where he is.
The military/security complex needs enemies for its power and profit and will be certain to retain the list of desirable foreign
enemies -- Russia, Iran, China, and any independent-inclined country in Latin America. Being at war is also a way of distracting
the people of the war against their liberties.
What the military/security complex might not appreciate is that among its Democrat allies there are some, such as Representative
Alexandria Ocasio-Cortez, who are ideological revolutionaries. Having demonized red state America and got rid of Trump (assuming
the electoral fraud is not overturned by the courts), Ocasio-Cortez and her allies intend to revolutionize the Democrat Party and
make it a non-establishment force. In her mind white people are the Establishment, which we already see from her demands for a list
of Trump supporters to be punished.
I think I'm not wrong in assuming that a Biden-presidency would mean more identity politics, more political correctness
etc. for the USA. How do you see this?
Identity politics turns races and genders against one another. As white people -- "systemic racists" -- are defined as the oppressor
class, white people are not protected from hate speech and hate crimes. Anything can be said or done to a white American and it is
not considered politically incorrect.
With Trump and his supporters demonized, under Democrat rule the transition of white Americans into second or third class citizens
will be completed.
How do you access Trump's first term in office? Where was he successful and where he failed?
Trump spent his entire term in office fighting off fake accusations -- Russiagate, Impeachgate, failure to bomb Russia for paying
Taliban to kill American occupiers of Afghanistan, causing Covid by not wearing a mask, and so on and on.
That Trump survived all the false charges shows that he is a real person, a powerful character. Who else could have survived what
Trump has been subjected to by the Establishment and their media prostitutes. In the United States the media is known as "presstitutes"
-- press prostitutes. That is what Udo Ulfkotte says they are in Europe. As a former Wall Street Journal editor, I say with complete
confidence that there is no one in the American media today I would have hired. The total absence of integrity in the Western media
is sufficient indication that the West is doomed.
Never before used on a large scale, voting by mail is subject to massive vote fraud.
I would take it a little further and say that voting by mail is a method of vote fraud. The supposed safeguards are easily
circumvented, as some whistleblowers have illustrated with ballots being brought forth in large numbers after election day without
postmarks and postal workers being ordered to stamp them with acceptable postmarks.
It really seems to me that there would be no democrat majorities in Congress or in so many state legislatures without vote
fraud.
Worse than the fraud available with vote by mail is the voting of people normally who don't bother to vote. Think of how stupid
and uninformed that average American voter is. Now realize how much more stupid and uninformed the non-voter is, only now he votes.
However, the most likely source of fraud that is hard to detect, is ballot harvesting. This should be outlawed as it violates
the idea of a secret ballot. Somebody comes to the home of a disinterested voter and makes sure he votes (of course they will
never admit to hounding the person) and "helps" them with the ballot. If the voter cannot be cajoled into voting the correct way,
you merely throw his ballot in the trash.
I have little doubt that there have been massive "irregularities", particularly in the so-called battleground states, that
are at play in "stealing" the election.
...The favourite phrase these days is "no evidence of wide spread voter fraud". Let's break that down. Only 6 states have been
challenged for vote fraud. In the big scheme of things, 6 states is not wide spread, even if there is massive vote fraud within
those 6 states. That the vote fraud is not widespread, implies that some vote fraud is acceptable, and that the listener should
ignore it. Last and most importantly, in the narrowest of legalistic terms, testimony or affidavits are not evidence. Testimony
and affidavits become evidence when supported by physical evidence. An affidavit with a photograph demonstrating the statement
would be evidence.
Another phrase is something like "election officials say they have seen no evidence of voter fraud". I have yet to hear a reporter
challenge the "seen no evidence of " part of the statement, regardless of the subject, by asking if the speaker had looked for
any evidence. They won't, because they know damn well no one has.
That is how the liars operate. Not so different from Rumsfeld's "plausible deniability".
Living in an urban setting I often had to visit apartment buildings. Without fail, there was always a pile of undeliverable
mail in the lobby under the mailboxes.
The envelopes were mostly addressed to people who had moved out or died. If ballots were sent to these people based on incorrect
voter rolls, then these too would likely have been left sitting on the floor or on a ledge for anyone to take.
It doesn't take a leap of faith to know what a Trump-hating leftist would do when no one is looking. This moral hazard was
intentionally created by Dems, who know that urban dwellers are transient and lean left politically.
Eisenhower is always lauded for his MIC warning. Frankly he ticks me off. Thanks for the warning AFTER you were in some
position to mitigate.
Ike's a mystery. Why did he NOT question Harry Truman's commitments to NATO, the UN, and all that rubbish? Ike was a WWII guy.
He knew Americans hated the UN in 1953 as much as they hated the League of Nations after WWI. But he let it all slide and get
bigger.
His farewell address was just flapdoodle; it wasn't really dredged up till the 70s. Eisenhower spent eight years spreading
tripwires and mines and then said "Watch out." Thanks buddy.
Well, agree on your points however, on the other side of the ledger, he never understood the stupidity of the Korean war (that
he could have ended) and majorly up-ramped CIA activities in all manner of regime change (bay of pigs anyone?). Almost a direct
path to our foreign policy now (and now domestic policy)
He did deploy the military assistance advisory group to Vietnam in 1955. This is considered the beginning of U.S. involvement
in the war. This allowed the French to moonwalk out the back door leaving us holding the bag. In fairness this was Johnson's war
however. Eisenhower did cut the military budget as a peace dividend to fund interstate system and other domestic projects. In
today political spectrum he would be considered a flaming liberal.
As the German newspaper editor Udo Ulfkotte revealed in his book, Bought Journalism, the European and US media speak
with one voice -- the voice of the CIA. The very profitable and powerful US military/security complex needs foreign enemies.
What intrigues me is the ultimate political goal of the UN and the WEF when they anticipate a single global government centered
at the UN and the absence of nation-states.
So what is the MIC going to do when there are no existential threats of competing nation-states? Or will the MIC re-engineer
religious wars between the various religious groups, secular and theological? It seems the aspirations of the WEF and its fellow
travellers preclude the occurrence of future armed conflicts.
Of course one needs capitalistic economies to produce the ordnance and materiels for the engineered social factions to war
with each other. Yet if the Greens have their way, there will be no mining period.
More likely is the possibility that none of them actually understand what they are doing. As Nassim Taleb is alleged to have
remarked, 99% of humans are stupid.
The total absence of integrity in the Western media is sufficient indication that the West is doomed.
It's because Western media is completely under the control of Jews, the world's foremost End Justifies Means people. The Fourth
Estate has become the world's most powerful Bully Pulpit. There are still a few good ones though, brave souls they are: Kim Strassel
of WSJ, Daniel Larison of The American Conservative , Neil Munro of Breitbart.
The rest are more or less lying scums, including everyone on NYTimes, WSJ, CNN, ABC, NBC, CBS, Fox, MSNBC, Fox News (minus
Tucker Carlson and Maria Bartiromo), The Economist , and let's not forget the new media: Google, Facebook, Twitter. The
world would be a much better place without any of them.
@Beavertales
-- with either vote flipping on machines or having the totals that paper ballot scanners tabulate adjust via a pre-programmed
algorithm. Many elections have already been stolen this way.
Nancy Pelosi claims that Biden's victory gives the Democrats a "MANDATE" to alter the economy as they see fit with 50.5%.
This proves that Biden will NOT represent everyone – only the left! I have warned that this has been their agenda from day one.
Now, three whistleblowers from the Democratic software company Dominion Voting Systems, alleging that the company's software stole
38 million votes from Trump. There are people claiming that Dominion Voting Systems is linked to Soros, Dianae Finesteing, Clintons,
and Pelosi's husband. I cannot verify any of these allegations so far.
We are at the Rubicon. Civil War is on the other side. There should NEVER be this type of drastic change to the economy
from Capitalism to Marxism on 50.5% of the popular vote. NOBODY should be able to restructure the government and the economy on
less than 2/3rds of the majority. That would be a mandate. Trying to change everything with a claim of 50.5% of the vote will
only signal, like the Dread Scot decision, that there is no solution by rule of law. This is the end of civilization and it will
turn ugly from here because there is no middle ground anymore. As I have warned, historically the left will never tolerate opposition.
Yes, the theft is blatant. But what are you, us, going to do about it? We really can't do much as the Office of the President
Elect requires us to wear masks. For our safety.
"in the narrowest of legalistic terms, testimony or affidavits are not evidence. Testimony and affidavits become evidence when
supported by physical evidence. " Correct – but they also can become evidence by verbal testimony. ie "I saw the defendant hit
the victim with a rock"
Not only have they stolen the election but when Joe Biden and other democrats claim that President Trump caused the deaths
of hundreds of thousands of Americans because of his handling of Covid 19, they are in sane. No world leader could stop the spread
of this respiratory virus. However, Joe Biden and democrats have caused the deaths of hundreds of white people, while whipping
up weak minded people to kill many whites. Biden and the democrats are criminals. Any one who is white, man or woman, that supports
the democratic party is enabling a criminal organization to perpetrate violence on white people, including murder.
Since the article was from a German magazine it's understandable that there is no mention of "the one who shall not be named".
No mention of the people behind the Lawfare group, the same people behind the impeachment, the same people providing financial
and ideological support for the BLM/Antifa, the same people that own the media that spewed lies for 5 years and censored any mention
of the Biden family corruption, no mention of the people behind this Color Revolution, the same people who promoted the mail in
voting and those that managed the narrative for the media on election night to stop Trump's momentum.
For the public consumption the election will be described in vague terms, like this article, blaming special interests and
institutions like the FBI, CIA and MIC without naming names as if an institution, not the oligarchs and chosen pulling the strings,
are somehow Marxist, anti-white or anti-Christian.
The interviewer quotes the Heritage Foundation does anyone even care what they say? The English Tavistock Institute by way
of the CIA which the British molded from the OSS created programs for the Heritage Foundation as well as the Hoover Institute,
MIT, Stanford University, Wharton, Rand etc. These "rightwing think tanks" were created to counter the CIA's "leftwing think tanks"
at Columbia, Berkeley etc. Thank you British Intelligence.
Steve Bannon was just interviewing someone (can't remember his name). Apparently there are about 200 to 300 IT professionals/engineers
working on these so-called "glitches" (not glitches at all) which mysteriously "disappeared" thousands of Trump votes. Then they'd
dump phony Biden votes into the mix. These IT professionals are going to follow the trail.
I've also heard that Dominion Voting Systems played a big part in this scam by using algorithms. One Trump lawyer said that
big revelations are coming.
We're going to have to be patient and just wait.
"The inclination of Republicans is for Trump to protect America's reputation by conceding the election."
I honestly think it's more like the old established Republicans (corporate bought) want Trump to lose because that is what
their campaign donors want (Big Pharma, Wall Street, etc.) They are part of the elite, and the elite (both the Democrats AND Republicans)
want Trump gone so they can continue their crony capitalist looting. They've got to appear like they're behind Trump, but I don't
think they are. Of course, that's not all Republican representatives.
Sounds like they've been rigging elections for awhile now. I bet they just messed up with Hillary. I think that's why she was
so upset. She had it, but they screwed up and didn't supply enough ballots.
@KenHinventive creative new ways to deceive.. first it was election machines, then mail in votes. next it will be magic carpet
voting. But the votes don't count, cause it is the electoral college that elects the President.
Trump also lost a significant number who did not understand Trump was an Israeli at heart, they thought he was a uncoothed
NYC red blooded American.
As far as white, black or pokadot color or any of the religions ganging up against Trump I don't think that happened, the fall
out into statistically discoverable categories is just that, fall out, not those categories conspiring to vote or not vote one
way or the other.
PCR seems to have trouble seeing a difference between the counting of perfectly proper votes which Pres Trump's post office
delivered late which may or may not be allowed by law which can be determined in court, and fraud like the dead voting or votes
being forged.
The fraud is all so transparent but no one in the power elite seems to give a crap whether the public catches on or not these
days. They know that the entire media which creates the false matrix of contrived "truth" that we all live in will back them to
the hilt because they are actually just one more working part in the grand conspiracy. We all know that when "O'Brian" says 2
+ 2 equals 5 we must all believe it, or at least say we do. We interface with "O'Brian's" minions on a daily basis but we don't
know the ultimate identity of "O'Brian" (in the singular or multiple). Many guesses are made, but they hide that from us fairly
well with the aid of their militaries and "intelligence" agencies (aka secret police in other times and places).
For example in the early hours of the morning of November 4 large ballot drops occurred in Michigan and Wisconsin that wiped
out Trump's lead.
In a very similar vein, it is the same thing that happened to Bernie Sanders during the primary's. Joe was down and out, and
Bernie was enjoying the lead and then "Bam!" Overnight Joe is back on top.
Well, fool me once,,,,,, .,and blah, blah whatever Bush said .
Dr Roberts has referenced in the interview a UR article that goes into considerable detail about the massive electoral fraud
by the Democrats and their partners. You've obviously not bothered to read it.
You're like one of those MSM hacks who denies electoral fraud without making any attempt to look at the evidence.
@Begemot
And it's almost always a closer race than anyone would have guessed beforehand -- which I also find suspicious. How likely is
it that the majority of presidential elections over the last century were decided by more or less even numbers of voters from
each party, between more or less evenly matched candidates?
Really seems like they've perfected the art of putting on rigged political shows that you can't quite believe in, but don't
have anything really solid to back up your suspicions. It's like the "no evidence of fraud" canard -- anything solid enough to
show obvious manipulation is explained away as the exception, rather than the tip of a very deep iceberg
Like the false accusations about Russia, delegitimizing the presidential election as fraud is turning out to be much ado
about nothing.
Let's review. The Democrats perpetrated the phony 2016 Russian influence fraud, and now the Democrats are perpetrating the
phony 2020 election victory.
The common elements are Democrats perpetrate fraud.
IMO this is a simple remedy to settle the election fraud mess or we will be arguing about this 20 years from now .from the
American Thinker.
The candidates on the ballot must have an opportunity to have observers whom they choose to oversee the entire process so
the candidates are satisfied that they won or lost a free and fair election.
That is not what happened in the 2020 election. That is the single most important and simple fact that needs to be understood
and communicated. The 2020 election was not a free and fair election, because poll-watchers were not allowed to do their essential
job. The 2020 election can still be a free and fair election with a clear winner, whoever that may be, but time is running
out.
In every instance where poll-watchers were not allowed to observe the process, those votes must be recounted. They must
be recounted with poll-watchers from both sides present. If there are votes that cannot be recounted because the envelops were
discarded, those votes must be discarded. Put the blame for this on the officials who decided to count the votes in secret.
Consider it a way to discourage secret vote counts in the future.
The pandemic has not been fearful enough to close liquor stores, and it in should not be used as excuse to remove the poll-watchers
who are essential to a free and fair election. If we must have social distancing, then use cameras.
Certainly, there are other issues with the 2020 election. There may be problems with software, and there are issues like
signature verification and dead people voting. Everything should be considered and examined, but no other issue should distract
from the simple fact that both sides must be able to view the entire process. If one side is not allowed to view the vote-counting,
then that side should be calling it a fraud. We should all be calling it a fraud.
...Trump had control of the Senate, the House and of course the Executive between his inauguration in January of 2017 and the
Midterm Elections of 2018, a total time period of 1 year and 10 months. What did he do during this time? He deregulated financial
services and passed corporate tax cuts.
At the end of the day, being emotionally invested in US elections is no different to being emotionally invested in Keeping
up with the Kardashians , that is to say your life wouldn't be that different if your don't follow either.
The Democrats Have Stolen the Presidential Election
The Deep State Has Stolen the Presidential Election. FIFY. But they have been in control for decades they just don't care who
knows now. They are taking final steps to make their control impervious to attack.
This is the reason that the establishment latched on to the Eisenhowerian bon mot but entirely memory hole Trumman's
far more explicit warning a freaking month after a sitting president is shot like a turkey in Dallas: it white washes CIA and
NSC .
The place to begin, and it's mind-blowing when you think about it this way, is that nothing was resolved on election night.
Not who will take the oath on January 20th. Nor which party will control the Senate. Nor even who will be Speaker and which party
will control the House.
Suffice it to say, a still raging factional struggle has simply moved to a greater degree behind the curtain.
I noted this movie reference on another thread here:
If your father dies, you'll make the deal, Sonny.
-- "The Godfather"
My point being, you're foolish if you ascribe certainty as to outcome at this point.
Being rid of Trump has been as close to a dues ex machina for the establishment as imaginable since he took the oath. This
ineluctable observation elicits no end of foot-stomping by those who assume it necessarily says anything positive about the man.
With every persistent revision of the script they wrote for him, all ending with his political demise at least, Trump has not
just survived but grown stronger. While the Democrats turned our elections into something only seen in a third-world shit hole,
Trump legitimately drew 71M votes from Americans.
That's a lot of air in the balloon. Believe me, filth like Russian mole Brennan may think everything is finished once they
get rid of terrible, awful Trump, but those above his pay grade know better.
Like him or hate him, Trump is the only principal not wholly or largely discredited. He was saved from destruction during his
first term by the Republican base moving to protect him. That was the import of his 90-95% approval among them, destroy him and
you destroy the Republican Party.
Now, despite -- or perhaps, because of -- everything they've done, that base now includes a significant number of Democrats
and independents. Trump is merely a vessel for an American majority attached to this constitutional republic thingie we've got
going.
Don't get lost in the details. This isn't a puzzle you can solve by internet sleuthing. The plan they executed -- to steal
sufficiently to make the outcome inevitable by the morning after the election at the latest -- failed. This was evident early
on Election Day (e.g. fake water main breaks in Atlanta) and necessitated their playing their Fox/AZ card and shutting down the
count at least until they had removed Republican monitors.
"In 22 states, Republicans will hold unified control over the governor's office and both houses of the legislature, giving
the party wide political latitude -- including in states like Florida and Georgia."
"Eleven states will have divided governments in 2021, unchanged from this year: Democratic governors will need to work with
Republican legislators in eight states, and Republican governors will contend with Democratic lawmakers in three."
The Democrats have: Joe Biden, and a slim majority in the House of Representatives which they are almost certain to lose in
two years.
What the Republicans are going to do is everything we hate, but they will pretend they were "forced" to do it by the Democrats
– the Democrats being the minority party.
Who else could have survived what Trump has been subjected to by the Establishment and their media prostitutes. In the United
States the media is known as "presstitutes" -- press prostitutes. That is what Udo Ulfkotte says they are in Europe.
Left and right.
(What you small brains do not understand is this.)
Democrats enabling the elite to invest in far east (lower wage costs, higher profits) did abandon the working class in America.
Democrats by this act did throw away the working class as a dirty rug.
Democrats with their TPP exporting most of the production to far east would totally destroy working class in USA. Trump's first
act was to cancel this insanity. Democrats are insanely delusional.
Democrats were left. Left is a party that supports the working people.
So here switch occurred. Democratic party now represent the elite, and Republicans now represent the working people.
(The irony of the fate)
The headline for PCR's article is a prediction, not yet established, and incomplete.
There is an ongoing massive attempt to steal the Presidential election as well as to steal an unknown number of House and Senate
seats, and who knows what else.
The 'game' is still on. Many tens of millions of citizens – actual total unknown but possibly in numbers unprecedented in American
history – voted for Trump. Republican candidates for office generally had strong support, but again, the actual percentage of
support is unknown but presumably larger than now 'recorded'.
There are also the many millions who ardently supported Trump, know that Biden is illegitimate, deeply corrupt, and the precursor
to perils unknown. Their determination and backbone and intelligence will now be tested.
There is the electoral college process; there are the state legislators that have a say in the process; there is the Supreme
Court.
There is also the possibility of pertinent executive orders that mandate transparent processes in the face of, say, apprehended
insurrection via fraudulent voting processes.
There is also the matter of how millions of 'deplorables' with trucks and tractors and firearms and other means to make their
point will react to obvious massive election travesty.
The conjunction of the COVID global scamdemic/plandemic, with crazed Bill Gates and kin lurking in the background with needles,
'peaceful' protesters in many cities setting fires and looting with near impunity, and a mass media that is clearly comprehensively
committed to a demonic degree of dishonesty and manipulation, and lunatic levels of 'identity politics' ideology, are among the
elements setting the stage for what may be an historical watershed.
The American Revolution in the 18th century, against the British Crown's authority, came about after years of simmering anger
and sporadic resistance against British injustice. At some point there was a 'tipping point'. When Germany invaded and occupied
Norway early in the 2nd WW, an effective resistance quickly formed in reaction, where death and torture were the known willing
risk. Two years before, those forming the resistance would have been just going on with their lives.
Who's Afraid of an Open Debate? The Truth About the Commission on Presidential Debates. The CPD is a duopoly which allows the
major party candidates to draft secret agreements about debate arrangements including moderators, debate format and even participants.
Ben Swann explains how the new coalition of EndPartisanship org is working to break the 2 party hold on primary elections,
which currently lock around 50% of voters out of the process.
I am currently watching an interview with SD Governor Kristi Noem, who went on ABC to challenge George Stenopolosus' claim
that there is no fraud in this election. She pointed out that there has been many allegations, including dead people voting in
PA and GA, she says we don't know how widespread this is, but we owe it to the 70+ million people who voted for Trump to investigate
and ensure a clean and fair election. She said we gave Al Gore 37 days to investigate the result in 2000, why aren't we giving
the same to Trump?
She is extremely articulate and sounds intelligent and honest, and what's more courageous to come forward like this. I hope
she runs for president in 2024, I'd vote for her.
Am I the only one who sees something profoundly spiritual happening in front of our eyes?
Yes. In reality, 5% of White men sent Trump packing. That doesn't match the GOP negrophile narrative where "based" Hindustanis
join the emerging conservative coalition to make sure White people can't get affordable healthcare in their own countries, though.
So we'll have to watch you parasites spool up this pedantic "fraud" nonsense until the fat orange zioclown gracelessly gets dragged
out.
Good post. You will gain more insight from this background on the speech and drafting.
Jan 19, 2011 Eisenhower's "Military-Industrial Complex" Speech Origins and Significance US National Archives
President Dwight D. Eisenhower's farewell address, known for its warnings about the growing power of the "military-industrial
complex," was nearly two years in the making. This Inside the Vaults video short follows newly discovered papers revealing that
Eisenhower was deeply involved in crafting the speech.
Great article. Thanks. Agree with you about the big stealing being electronic. Trump tweeted out yesterday that over 2 million
votes were stolen this way. For him to say this, they must have evidence.
Dinesh D'Souza said he hopes that when this matter comes before the Supreme Court that they will tackle once and for all what
constitutes a legal vote.
Some pretty big names are involved with this Dominion Voting. It will be interesting to see what Trump's team of IT experts
discover re the use of algorithms to swing the vote.
Why (Oh, why) did Trump had to go? Because Trump is an enema to the Deep State. He was threatening to expose the biggest lie
of the last 100 years – the supposed "liberalism" of US...
The author refers to a body of overwhelmingly persuasive evidence of voter fraud that can be specified and quantified to provide
proof of guilt beyond a reasonable doubt in criminal cases, not to mention hands down proof in civil cases requiring only a preponderance
of the evidence to establish guilt. Furthermore, the Democrats' easily documented, elaborate efforts at concealing the vote counting
process by shutting down the counting prior to sneaking truckloads of ballots in the back door is by itself powerful circumstantial
evidence of their guilt. You have no idea what "evidence" means, either in general usage or in its strictly legal sense.
The election cannot be trusted at all, just based on the insane entitled emotional state of the Globalist establishment alone.
The system as-a-whole cannot be trusted, for the same reason. They are actively corrupting it in every way they can, and fully
believe (as a matter of religious conviction) that they are right to do so.
That's one of the Jew/Anglo Puritan Establishment's new catch-phrases. There's also "no evidence" that Joe Biden acted in a
corrupt manner in Ukraine, even though he admitted to it on tape. There's "no evidence" that Big Tech is biased against conservative
plebians, despite their removing conservative plebians' published content arbitrarily and with no State compulsion to do so.
The phrase "there's no evidence" is just a public commitment to ignore any evidence, no matter how blatant or obvious.
This newly discovered legal standard goes beyond "preponderance of the evidence" or even "guilt beyond a reasonable doubt"
to establish absolute certainty as the standard.
Just the obvious and necessary complement of the Bob Mueller standard for Russian collusion, don't you think -- "could not
(quite) exonerate"? /s
They went for a softer approach in KY in 2019. The first-term Repub Gov had a Yankee's forthrightness so they just latched
onto comments he made regarding the underfunded teachers pension program and amped-it to high heaven getting teachers all in a
frightful frenzy.
In that solidly Red state, with all other prominent offices on the ballot (AG, SoS, etc.) going overwhelmingly Repub
, somehow the Repub Gov loses to the Dem by around 5000 votes. The "teachers pension" narrative was rolled-out as the reason.
(Btw, it seems that Dominion, or another type, software was used to switch the votes in that race. I've seen video about it.)
@Orville
H. Larson out how the winds are blowing. There is nothing good about it.
Why not this:
-- ONLY in-person voting over a 2-day period, a Sat and Sun, with polls being open from 6AM to 9PM both days.
-- Exceptions are the traditional requested absentee ballot where the voter can be authenticated.
-- Paper ballots must be used at the polls and no single box of 'Straight Vote by Party' is offered.
-- Some kind of SIMPLE scanning tabulator could be used of the ballots and with it NOT being connected to the internet.
There is far too much cheating opportunity built into our current system. That's intended, of course. It needs to end!
Because you don't get it. You are missing the big picture. It was well known that these systems had the ability to be hacked
as soon as they were implemented. It is also a well known fact that massive mail in ballots increases the likelihood that corrupt
individuals are more likely to get away with election fraud.
Everyone knew about the potential for voter fraud to occur, but the entire system is corrupt, including Trump who has allowed
the massive corruption within the system that was present when he entered office to persist and grow because he is a wimpy, spineless,
coward, that was too afraid to make any waves and take the heat that he promised his voters.
Why anyone voted for Trump in 2020 confounds me. I voted for him in 2016 and he has turned out to be one of the worst presidents
in history.
Trump in his cowardess and dishonesty knew that the ailing economy would harm his chances of being re-elected, so he allowed
the health scare scamdemic to occur and destroy the livelihoods, lives, and businesses of hundreds of millions of Americans
because he is a psychopath. Trump did not do what he promised. Trump made America worse than it has ever been since the end of
slavery. Jeremy Powell said today that the economy is dead and will never recover.
The only injustices that Trump gave a damn about were the injustices against himself and his family, and has committed countless
injustices against the entire country and world during his term. Trump is a corrupt narcissist. The facts prove it. Trump is such
a corrupt narcissist that he was willing to destroy the entire economy based on scientific fraud, high crimes, and treason to
use as political cover for his own incompetency which is the most offensive and disgusting diabolical act ever perpetrated on
the entire country.
Trump has also demanded the extradition of Assange after telling his voters that he loved wikileaks. Trump is a two-faced,
lying, fraud. It has been his pattern. He consistently supports various groups and people like Wikileaks, Proud Boys, and others
and panders to them and voters and tells people that he loves them, and then every time without fail when the heat is on, Trump
says," I really don't know anything about them."
"I know nothing." Trump saying "I know nothing." defines his presidency and who he is as a person, a spineless, pandering,
corrupt, two-faced, narcissist, loser, and wimp!
Why would anyone vote for him the second time around after a record of pathological incompetency and pathological corruption?
What's to approve of about him? Go ahead, investigate voter fraud it if is permitted, and if it isn't then ask yourselves why
it is that a system that enables election fraud is in place, and ask yourselves who had the ability to change it and, who had
the ability to benefit from it!
The economy develops momentum on its own because of pent-up demand, and depressed
hospitality and airline stocks become strong performers . Fiscal and monetary policy remain
historically accommodative. Nominal economic growth for the full year exceeds 6% and the
unemployment rate falls to 5%. We begin the longest economic cycle in history, surpassing
the cycle that lasted from 2010 to 2020.
The Federal Reserve and the Treasury openly embrace Modern Monetary Theory as their
accommodative policies continue. As long as growth exceeds the rate of inflation, deficits
don't seem to matter. Because inflation increases modestly, gold rallies and
cryptocurrencies gain more respect during the year.
Even as energy company executives cut estimates for long-term growth, near-term
opportunities are increasing. The return to "normal" increases both industrial activity and
mobility, and the price of West Texas Intermediate oil rises to $65/bbl. Rig counts
increase and energy high yield bonds rally soundly. Energy stocks are among the best
performers in 2021.
The equity market broadens out. Stocks beyond health care and technology participate in
the rise in prices. "Risk on" is not without risk and the market corrects almost 20% in the
first half, but the S&P 500 trades at 4,500 later in the year. Cyclicals lead
defensives, small caps beat large caps and the "K" shaped equity market recovery unwinds.
Big cap tech is the source of liquidity, and the stocks are laggards for the year.
The surge in economic growth causes the 10-year Treasury yield to rise to 2%. The yield
curve steepens, but a concomitant increase in inflation keeps real rates near zero. The Fed
wants the strength in housing and autos to continue. As a result, it extends the duration
of bond purchases in order to prevent higher rates at the long end of the curve from
choking off credit to consumers and businesses.
The slide in the dollar turns around. The post-vaccine strength of the U.S. economy and
financial markets attracts investors disenchanted with the rising debt and slower growth of
Europe and Japan. Treasurys maintain a positive yield and the carry trade continues.
Note: since the Chinese working class' average wage has been doubling in real terms
every ten years since the CPC took over, I'm assuming you're talking about the victimization
of the American working class only (specially, but not only, the white working class from the
Rust Belt).
Some math.....
From US Census Data...
Total US Population = 331,002,651
Average US Per Capita Income (USD 2019) = $35,977.
From World Odometer
Population of China = 1,442,055,798
Chinese Per Capita Income (USD - 2020) = $10,276
US Population X Per Cap Income = 11.9 USD$(trillions) = 54% of US - GDP
PRC population X Per Cap Income = 14.8 USD$(trillions) = 96% of PRC - GDP
By this metric......
Chinese Main Street GDP is 124% of USA Main Street GDP
This means that 46% of US GDP consists of financial manipulation in the FIRE sector, while
the FIRE sector in China is only 4% of the Chinese economy.
The only way really to understand Brexit is as the outcome of a civil war within
capitalism. There are two dominant forms of capitalism. One you could describe as house
trained capitalism. This is corporations and rich people who are prepared to more or less
go along with democracy, as long as democracy doesn't get out of hand and actually
represent the interests of the people, but as long as it's a sort of thin and narrow form
of democracy, they'll go with it. What they want is stability. They want regulations
which protect their market position from rougher and dirtier companies who would
otherwise wipe them out. They're happy with the administrative state.
And then there's another faction who could be described as capitalism's warlords. These
are people who don't want any constraints in their way at all. They see taxation as
illegitimate, they see regulation as illegitimate. In their unguarded moments, they
reveal that they see democracy as illegitimate. People such as Peter Thiel, the guy who
founded PayPal says actually democracy and market freedom are incompatible. The conflict
should be resolved in favor of this thing he calls the market. Τhe market is an
euphemism for the power of money. And they believe that that power should be unmediated,
that it should be able to do whatever it wants without anyone standing in its way. And
they see as their enemy house trained capitalism. And this is really where the power lies
within.
The whole Brexit debate, is on the one side, the august institutions of capitalism,
like the Confederation of British Industry, saying this is terrible, we don't want this
to happen at all. And on the other side, the oligarchs from the City, very powerful
people who are funding dark money think tanks and other lobby groups, saying we want to
clear it all out of the way. In Steve Bannon's words, " we want the deconstruction of
the administrative state ". And it's a second group, the warlords of money who have
won.
First of all, both capitalist factions in this civil war seek the " deconstruction
of the administrative state. " And actually, the administrative state could be
deconstructed much more efficiently through super-national formations like the European Union.
The European Union institutions have been taken over by powerful banking and corporate lobbies.
And these are taking advantage of the legislative power of those institutions in order to
promote more deregulation and destroy the administrative power of nation-states. As the
Corporate Europe Observatory reported
in 2016: Since Jean-Claude Juncker took office as President of the European Commission in November
2014, there has been an even greater deregulation push, not just on specific rules and laws
which should be scrapped, but on how decisions are made about future laws. Under Juncker,
fundamental changes in policy-making are being introduced which will put major obstacles in the
way of new regulations aimed at protecting the environment or improving social conditions.When David Cameron was renegotiating the terms of the UK's membership of the EU with
European Council President Donald Tusk, a greater European emphasis on deregulation was one of
the four priority areas. To pile on the pressure, Cameron and the UK government spearheaded an
appeal from 18 other member states, demanding quantitative targets, meaning that for every new
regulation put in place, a certain number of other regulations should be removed. [...] As
presented here, Cameron and the European Commission – together with big business - share
a common approach on the deregulation agenda.
That's why the "house trained capitalism", as Monbiot describes it, wants the UK to remain
member of the EU. And, in fact, it's rather contradictory to say that this capitalist faction
is "happy with the administrative state" when at the same time supports a super-national
organization whose ultimate goal is to eliminate the administrative power of the
nation-states.
Monbiot describes the pro-Brexit capitalist faction as " capitalism's warlords ... people
who don't want any constraints in their way at all. They see taxation as illegitimate, they see
regulation as illegitimate. In their unguarded moments, they reveal that they see democracy as
illegitimate. " Yet, these are common characteristics with the "house trained capitalism"
faction. That's because both capitalist factions in previous decades were functioning as a
united force through the complete domination of neoliberalism. A domination which was evident
not only in an economic and a political level, but also in a cultural level, especially in the
Western world. And that's why, as we
wrote recently, both the liberal elites and the far right (as representatives of
the capitalist factions), are seeing the real Left as the primary threat which must be dealt at
all costs, after all.
We need to understand that this civil war between the capitalist factions does not come out of
any substantially different ideological or political approach. Essentially, it's only a tough
bargain. Capitalists just pick sides to negotiate terms and secure their position in the
post-capitalist era, which already looks like a kind of 21st century corporate feudalism. Yet,
we would completely agree with Monbiot's remark that " What happens to us, to the citizens
of the UK, is of very little interest. We're just the grass that gets trampled in this civil
war. "
As we already
pointed out , the level of ruthlessness of this capitalist war can also be
identified in the behavior of the US political class against the American people. It's
astonishing that, inside this terrible situation, where thousands die from the pandemic,
millions lose their jobs and live under extreme insecurity, no one is willing to offer
anything. Both Democrats and Republicans have turned the oncoming election into a political
bargain and they don't even try to hide it.
Inside this ruthless capitalist war, people have become almost irrelevant. What only matters
for the political puppets is to secure the interests of the capitalist faction they represent.
The
rampageous bulls of capitalism are fighting each other in an arena in which
democracy has now turned into dust under their violent clatters. Therefore, we would also
certainly agree with Monbiot's conclusion: We need a political economy which is good for the
people, the people who live today, the people of future generations, good for the rest of the
living world and is actually governed by the people themselves. Not by this kind of capitalism
or that kind of capitalism. These corporations or those oligarchs. A democracy which responds
to people not just once every four or five years, but every day, when we have participation as
well as representation. We need a system that transcends both of these warring factions, and
puts the people in charge.
In fact it is exactly like the last civil war englanders had, the local big fish in a
small pond don't want any outsiders making decisions or competing with them.
In 1642 ancestors of the current englander ruling elite became concerned that James
Stuart, then Charles Stuart were not only encouraging types established in that ever so
provincial Scots Court to compete for valuable contracts, they were taking instruction from
some eyetalian in Rome when there was perfectly good advice available from the Archbishop
of Canterbury. They knew that the archbish would give sound advice because they, the
englander elite had selected & promoted him themselves.
The EU is the stuarts with the pope, and england's established hierarchy realised pretty
soon after entry into the old EC that 'johnny foreigner' who they assumed would bow to the
englander elite's superior insight & worth was doing no such thing. Often, they
believed the rejection was just pure spite done out of envy of england's 'success' lol.
Once it became certain that neither the french or the germans would kowtow, the strategy
to extricate england from the eu was begun. Types like johnson the tele's man in Brussels
filled englander media up with lies & beatups - all horror stories about eurocrats
etc.
Why wouldn't the mugs believe this tosh? They had swallowed some fantastic yarns spread
by the media which kept conservative control of england for decades, eu= evil would be no
different and it wasn't.
There are sound reasons for leaving the eu but this brexit business addresses none of
them, if anything it exacerbates things like sweatshop labour as Poles expect pay and
conditions that people in some commonwealth states will not. Plus they will be easier to
control with no 'schengan nonsense' as they'll all be on temporary work visas and can be
sent home if they are troublemakers supporting organised labour or the like.
On Sept. 15, Tucker Carlson brought onto his show Darren Beattie, a former Trump
speechwriter. Beattie explained to viewers that the same networks promoting color revolutions
overseas are now training their sights on President Donald Trump: "What's unfolding before our
eyes is a very specific type of coup called the 'color revolution.' "
Similarly,
Revolver website posted a multi-part series on the color revolution against Trump, with its
Sept. 9 installment taking up Norm Eisen, one of the participants in the Transition Integrity
Project's war gaming of the 2020 election. Eisen was Obama's White House ethics czar and was
hired by the Democratic leadership of the House Judiciary Committee in 2019, where he prepared
ten articles of impeachment against Trump a month before Pelosi announced an official
impeachment inquiry. He himself took part in the impeachment proceedings.
But his involvement in ousting Trump began even before the nomination. Eisen ran Citizens
for Responsibility and Ethics in Washington (CREW), financed amongst others by George Soros's
Open Society, which partnered with David Brock to put forward a blueprint -- issued before the
inauguration -- for attacking Trump through such means as policing social media, getting tech
companies to censor content (media platforms ... will no longer uncritically and without
consequence host and enrich fake news), impeachment itself, fake news (a steady flow of
damaging information, new revelations), and other techniques.
Eisen co-authored "The Democracy Playbook: Preventing and Reversing Democratic
Backsliding," a Brookings guide to the perplexed seeking to institute policies through frankly
undemocratic means. Eisen named Gene Sharp's From Dictatorship to Democracy as an inspiration
for his document.
Consider another color revolutionary. Michael McFaul, former U.S. Ambassador to Russia
and a supporter of the Ukraine color revolution, realized that "color revolution" was taking on
a negative connotation. In August he tweeted a revised nomenclature: "Autocrats have demonized
the phrase, 'color revolutions.' (& revolution generally has a negative connotation for
many.) Instead, I use the term 'democratic breakthroughs.' "
What kind of democratic breakthrough? Consider McFaul's Sept. 4 tweet:
"Trump has lost the Intelligence Community. He has lost the State Department. He has lost
the military. How can he continue to serve as our Commander in Chief?"
Astute readers will note that neither the IC, State Department, or military appoint the
President, who takes that office by means that are actually democratic -- an election!
Eisen also heads the Transatlantic Democracy Working Group, whose website announces that
it is "a bipartisan and transatlantic platform for discourse and coordination to address
democratic backsliding in Europe." What is "democratic backsliding"? Naturally, it's when the
plebes get uppity and vote for their favored candidates, as in, you know, elections.
"... Imagine for a while that Pompeo and Netanyahu were able to ignite the huge conflict with Iran which they have been trying to do for years. The wider Middle East would become a land of ruins, and on top of that we would have also the corona crisis. It would be the end for the Chinese project One belt One road and a very promising beginning for Trump’s programme of “decoupling” from China. The same could happen if we go to a Greek-Turkish war, the most probable result of which is enormous destruction in both states and also in Cyprus. Given the destructive capacity of the Greek and Turkish weapons and the impossibility of destroying them by a surprise first strike, the two countries, if they go to war, risk going back two or three hundred years. A conflict around Iran, or between Greece and Turkey would also put enormous pressure on Russia. ..."
"... Spreading Chaos is another way of staging world war when you cannot use ‘normal’, ‘frontal’ methods of war. The policy of Trump and his allies contributes greatly to preparing for world war by attacking the very institutions of bourgeois democracy, any kind of national or international rule, by attacking the very principles of Logic, Logos and Science, necessary in order to transform human societies into herds of wild animals, in a sui generis repetition of the Nazi experiment. ..."
"... The way to get Greece and Turkey to war is by sending them ‘false signals’, either encouraging and supporting them, or implying a threat from the other country. Somebody was able to persuade Ankara to down the Russian jet in 2015, which was a case of extreme miscalculation. It is easier to make a miscalculation regarding Greece and Turkey, and there is an enormity of contradictory signals emanating from the US and Israel towards the two capitals. ..."
"... PS. The above article provides a possible explanation of the present Greek-Turkish crisis. A second explanation is that big oil multinationals want to provoke a crisis in order to exploit the hydrocarbons of the region, but we have no serious indications that big reserves really exist and are exploitable economically. A third explanation, not mutually excluded from what we have analyzed, is that third forces are trying to provoke a war in order to overthrow Erdogan and also have all the other consequences we described. ..."
Twenty years ago, I was covering the Munich Security Forum as a journalist and I took an interview from Brent Scawcroft,
National Security Adviser for President Bush (the father). I believe he was one of the men who played a huge role in pushing
Boris Yeltsin to the crisis which culminated into the bombing of the Russian parliament in October 1993, thus opening the way to
the biggest looting in the history of mankind, the so-called Russian privatisations. I asked Scawcroft what the US policy
towards Russia and China should be . He answered: “We need to have better relations with Moscow and Beijing, than they can have
between themselves”.
The way for the Empire to dominate in the Eastern Mediterranean, imposing its pax or pushing for war, is by having better
relations with Athens and Ankara than they can have between themselves. Now they don’t have any at all.
Maidan Square, Kiev, 2014
The plane carrying the three EU Foreign Ministers, the French, the German and the Polish, had just taken off from Kiev when
the agreement they had negotiated for a peaceful, negotiated settlement of the Ukrainian crisis collapsed and the carnage began
in the Ukrainian capital. This was followed by the civil war and the unimaginable destruction of European-Russian relations.
The Ukrainian coup was a huge blow to Russia and the Ukraine, which is now in an extremely miserable state, a harbinger of
Nazi militias and mafia groups, but also, indirectly, to Europe, which, destroying its relations with Russia at the behest of
the Americans, is not only ridiculed, but has deprived itself of the possibility of an independent policy, an achievement which
it is now going to ‘complete’ with the Navalny affair, if it leads to the cancelling of the strategic pipeline project
NordStream II.
‘Fuck the EU’ was not only a phrase from Neocon Assistant Secretary of State Nuland to Ambassador Pyatt (then in Kiev, now
in Athens); it was in reality one of the main purposes of the Maidan operation, that is the inauguration chapter of the new Cold
War. Some weeks ago, Mike Pompeo repeated the Nuland coup, by using his influence on the Greek FM Dendias and on the Egyptian
dictator Sissi to blow up the moratorium between Greece and Turkey the German chancellor Merkel had negotiated. ‘Fuck Germany
and its moratoriums’!
The Coming War
The destruction of the Ukraine, Ukrainian-Russian and European-Russian relations was a very big step in the direction of
preparing for world war against Russia and China. This is the central plan that defines many of the individual crises and
episodes around the globe; and if one does not understand this, one cannot understand anything. As for Trump’s friendship with
Russia, we are afraid that it is of no more value than Hitler’s friendship with Stalin or the Ribbentrop-Molotov pact.
The war with China and Russia is the main project of the extremist, radical wing of the Western capitalist establishment. But
such a war cannot happen easily and it will not take a frontal form as WWI and WWII, because of the existence of nuclear
weapons. But it will take all other possible forms.
Imagine for a while that Pompeo and Netanyahu were able to ignite the huge conflict with Iran which they have been trying
to do for years. The wider Middle East would become a land of ruins, and on top of that we would have also the corona crisis. It
would be the end for the Chinese project One belt One road and a very promising beginning for Trump’s programme of “decoupling”
from China. The same could happen if we go to a Greek-Turkish war, the most probable result of which is enormous destruction in
both states and also in Cyprus. Given the destructive capacity of the Greek and Turkish weapons and the impossibility of
destroying them by a surprise first strike, the two countries, if they go to war, risk going back two or three hundred years. A
conflict around Iran, or between Greece and Turkey would also put enormous pressure on Russia.
Spreading Chaos is another way of staging world war when you cannot use ‘normal’, ‘frontal’ methods of war. The policy of
Trump and his allies contributes greatly to preparing for world war by attacking the very institutions of bourgeois democracy,
any kind of national or international rule, by attacking the very principles of Logic, Logos and Science, necessary in order to
transform human societies into herds of wild animals, in a sui generis repetition of the Nazi experiment.
You cannot wage war on Russia or China by any form of ‘liberal capitalism’. To wage such a huge war you need a totalitarian
regime in the West, and this is the real programme, the historic mission of Trump, Pompeo, Thiel, Netanyahu etc.
The way to get Greece and Turkey to war is by sending them ‘false signals’, either encouraging and supporting them, or
implying a threat from the other country. Somebody was able to persuade Ankara to down the Russian jet in 2015, which was a
case of extreme miscalculation. It is easier to make a miscalculation regarding Greece and Turkey, and there is an enormity of
contradictory signals emanating from the US and Israel towards the two capitals.
For example, a very strange article in the Foreign Affairs magazine states that the red line behind which Ankara
will not be permitted to go is south of Crete. This red light is indirectly a green light for Turkey to go to the east or
south-east of Crete. If Turkey sends its ships there the Greek government will be under tremendous pressure from both public
opinion and the Armed Forces to react. This is not something Foreign Affairs can ignore, making us wonder if in fact some
people want a war between Greece and Turkey to overthrow Erdogan, to weaken Turkey for decades, to attack Chinese projects and
the EU. We could multiply such examples, including Trump’s encouragement of Erdogan. Insofar as the Turkish President does not
want to go to a full rupture with the West, he is better prepared to accept as genuine any encouraging signals from Washington.
But they can be a trap, as happened for example with Milosevich or Sadam.
Russia, NATO and a Greek-Turkish war
The other day a friend told me that a conflict between Greece and Turkey would only harm NATO: only the Russians would
benefit, so it could not happen.
I replied that he was wrong. ‘If you are preparing for a world war, you do not even care so much about NATO. Instead you have
to tear down all the institutions of bourgoies society and of the liberal capitalist order, including the EU, maybe even NATO
itself, because they are not really made for such a war. They are certainly made to contain Russia, but not to play Russian
roulette with the very existence of the world. A world war will not be decided by a Senate, no matter how oligarchic it will be.
For such decisions you need Nero, Caligula, Heliogabalus. Such are Trump, Bolsonaro, Pompeo, Netanyahu and those behind them.
They would certainly prefer a Russia-Turkey conflict and have already tried to provoke it. But it is not easy.
A conflict with Greece is their second best alternative, because Greece has the means to destroy Turkey by destroying itself.
A war between the two countries will destroy them and would set them back 200 or 300 years.
It is doubtful, after all, that Russia would benefit from such a development, even if it would be a blow to NATO. First,
because Moscow would see the destruction of Hellenism, the main strategic ally of Russia in the Mediterranean for a thousand
years. Governments and regimes can change, but losing a nation is another matter.
Second, Moscow will likely see, as a result of a war, a pro-Western dictatorship set up in Ankara. Having contributed to the
destruction of a historic country like Greece, Turkey would not have the slightest future. It would be considered the outcast of
all civilised nations, like Germany after World War II.
And of course, the big victims of the war will be China, with the One Belt, One Road plans and Europe itself.
This is the Chaos Strategy. It remains to be seen whether her opponents also have a strategy or not.
PS. The above article provides a possible explanation of the present Greek-Turkish crisis. A second explanation is that
big oil multinationals want to provoke a crisis in order to exploit the hydrocarbons of the region, but we have no serious
indications that big reserves really exist and are exploitable economically. A third explanation, not mutually excluded from
what we have analyzed, is that third forces are trying to provoke a war in order to overthrow Erdogan and also have all the
other consequences we described.
"... I'm still stunned that the paper did a study that confirmed what people have suspected, namely that a high cycle threshold used on PCR testing was creating the appearance of a pandemic that might have long receded. The testing mania was generating wild illusions of millions of "asymptomatic" carriers and spreaders. How severe was the problem? Read this and weep ..."
"... up to 90 percent of people testing positive carried barely any virus, a review by The Times found. ..."
"... A major reason for the ongoing lockdowns are due to the pouring in of positive case numbers from massive testing. If 90% of these positive tests are false, we have a major problem. The whole basis of the panic disappears. All credit to the Times for running the article but why no follow up and why no change in its editorial stance? ..."
"... I am deeply concerned that the social, economic and public health consequences of this near total meltdown of normal life -- schools and businesses closed, gatherings banned -- will be long lasting and calamitous, possibly graver than the direct toll of the virus itself. ..."
"... During the Covid-19 pandemic, the world is unwittingly conducting what amounts to the largest immunological experiment in history on our own children. We have been keeping children inside, relentlessly sanitizing their living spaces and their hands and largely isolating them ..."
"... in the course of social distancing to mitigate the spread, we may also be unintentionally inhibiting the proper development of children's immune systems. ..."
"... The psychological effects of loneliness are a health risk comparable with risk obesity or smoking. Anxiety and depression have spiked since lockdown orders went into effect. ..."
The paper of record in 2020 shifted dramatically to the most illiberal stance possible on
the virus, pushing for full lockdowns, and ignoring or burying any information that might
contradict the case for this unprecedented experiment in social and economic control. This
article highlights the exceptions.
...
Even within the blatant and aggressive pro-lockdown bias, and consistent with the way the
New York Times does its work, the paper has not been entirely barren of truth about Covid and
lockdowns. Below I list five times that the news section of the paper, however inadvertently
and however buried deep within the paper, actually told the truth.
I'm still stunned that the paper did a study that confirmed what people have suspected,
namely that a high cycle threshold used on PCR testing was creating the appearance of a
pandemic that might have long receded. The testing mania was generating wild illusions of
millions of "asymptomatic" carriers and spreaders. How severe was the problem? Read this and
weep:
In three sets of testing data that include cycle thresholds, compiled by officials in
Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried
barely any virus, a review by The Times found.
On Thursday, the United States recorded 45,604 new coronavirus cases, according to a
database maintained by The Times . If the rates of contagiousness in Massachusetts and New
York were to apply nationwide, then perhaps only 4,500 of those people may actually need to
isolate and submit to contact tracing.
The implications of this revelation are incredible. A major reason for the ongoing lockdowns
are due to the pouring in of positive case numbers from massive testing. If 90% of these
positive tests are false, we have a major problem. The whole basis of the panic disappears. All
credit to the Times for running the article but why no follow up and why no change in its
editorial stance?
Gone missing this year in public commentary has been much at all about naturally acquired
immunities from the virus, even though the immune system deserves credit for why human kind has
lasted this long even in the presence of pathogens. That the Times ran this piece was another
exception in otherwise exceptionally bad coverage. It said in part:
Scientists who have been monitoring immune responses to the virus are now starting to see
encouraging signs of strong, lasting immunity, even in people who developed only mild
symptoms of Covid-19, a flurry of new studies suggests. Disease-fighting antibodies, as well
as immune cells called B cells and T cells that are capable of recognizing the virus, appear
to persist months after infections have resolved -- an encouraging echo of the body's
enduring response to other viruses .
Researchers
have yet to
find unambiguous evidence that coronavirus reinfections are occurring, especially within
the few months that the virus has been rippling through the human population. The prospect of
immune memory "helps to explain that," Dr. Pepper said.
Data from monkeys suggests that even low levels of antibodies can prevent serious illness
from the virus, if not a re-infection. Even if circulating antibody levels are undetectable,
the body retains the memory of the pathogen. If it crosses paths with the virus again,
balloon-like cells that live in the bone marrow can mass-produce antibodies within hours.
It's still a shock that so many schools closed their doors this year, partly from disease
panic but also from compliance with orders from public health officials. Nothing like this has
happened, and the kids have been brutalized as a result, not to mention the families who found
themselves unable to cope at home. For millions of students, a whole year of schooling is gone.
And they have been taught to treat their fellow human beings as nothing more than disease
vectors. So it was amazing to read this story in the Times :
So far, schools do not seem to be stoking community transmission of the coronavirus,
according to data emerging from random testing in the United States and Britain. Elementary
schools especially seem to seed remarkably few infections.
Byline Karen Yourish, K.K. Rebecca Lai, Danielle Ivory and Mitch Smith
Another strangely missing part of mainstream coverage has been honesty about the risk
gradient in the population. It is admitted even by the World Health Organization that the case
fatality rate for Covid-19 from people under the age of 70 is 0.05%. The serious danger is for
people with low life expectancy and broken immune systems. Knowing that, as we have since
February, we should have expected the need for special protection for nursing homes. It was
incredibly obvious. Instead of doing that, some governors shoved Covid patients into nursing
homes. Astonishing. In any case, the above article (and
this one
too) was one of the few times this year that the Times actually spelled out the many thousands
times risk to the aged and sick as versus the young and healthy.
Notable Opinion
columns
The op-ed page of the paper mirrored the news coverage, with only a handful of exceptions.
Those are noted below.
I am deeply concerned that the social, economic and public health consequences of this
near total meltdown of normal life -- schools and businesses closed, gatherings banned --
will be long lasting and calamitous, possibly graver than the direct toll of the virus
itself. The stock market will bounce back in time, but many businesses never will. The
unemployment, impoverishment and despair likely to result will be public health scourges of
the first order.
Worse, I fear our efforts will do little to contain the virus, because we have a
resource-constrained, fragmented, perennially underfunded public health system. Distributing
such limited resources so widely, so shallowly and so haphazardly is a formula for failure.
How certain are you of the best ways to protect your most vulnerable loved ones? How readily
can you get tested?
During the Covid-19 pandemic, the world is unwittingly conducting what amounts to the
largest immunological experiment in history on our own children. We have been keeping
children inside, relentlessly sanitizing their living spaces and their hands and largely
isolating them. In doing so, we have prevented large numbers of them from becoming infected
or transmitting the virus. But in the course of social distancing to mitigate the spread, we
may also be unintentionally inhibiting the proper development of children's immune
systems.
Our mental health suffers, too. The psychological effects of loneliness are a health risk
comparable with risk obesity or smoking. Anxiety and depression have spiked since lockdown
orders went into effect. The weeks immediately following them saw nearly an 18 percent jump
in overdose deaths and, as of last month, more than 40 states had reported increases. One in
four young adults age 18 to 25 reported seriously considering suicide within the 30-day
window of a recent study. Experts fear that suicides may increase; for young Americans, these
concerns are even more acute. Calls to domestic violence hotlines have soared. America's
elderly are dying from the isolation that was meant to keep them safe.
The past year began with the assassination of the Iranian military genius General Qasem
Soleimani by the United States, and it ended with the murder of the prominent scholar Mohsen
Fakhrizadeh by the Israelis. In early January, Iran, expecting another aggressive action from
the West, accidently shot down a Ukrainian civil aircraft that had inexplicably altered its
course over Tehran without request nor authorization. Around the same time, Turkey confirmed
the deployment of its military in Libya, beginning a new phase of confrontation in the region,
and Egypt responding with airstrikes and additional shows of force. The situation in Yemen
developed rapidly: taking advantage of the Sunni coalition's moral weakness, Ansar Allah
achieved significant progress in forcing the Saudis out of the country in many regions. The
state of warfare in northwestern Syria has significantly changed, transforming into the formal
delineation of zones of influence of Turkey and the Russian-Iranian-Syrian coalition. This
happened amid, and largely due to the weakening of U.S. influence in the region. Ankara is
steadily increasing its military presence in the areas under its responsibility and along the
contact line. It has taken measures to deter groups linked to Al-Qaeda and other radicals. As a
result, the situation in the region is stabilizing, which has allowed Turkey to increasingly
exert control over most of Greater Idlib.
ISIS cells remain active in the eastern and southern Syrian regions. Particular processes
are taking place in Quneitra and Daraa provinces, where Russian peace initiatives were
inconclusive by virtue of the direct destructive influence of Israel in these areas of Syria.
In turn, the assassination of Qasem Soleimaniin resulted in a sharp increase in the targeting
of American personnel, military and civil infrastructure in Iraq. The U.S. Army was forced to
regroup its forces, effectively abandoning a number of its military installations and
concentrating available forces at key bases. At the same time, Washington flatly rejected
demands from Baghdad for a complete withdrawal of U.S. troops and promised to respond with
full-fledged sanctions if Iraq continued to raise this issue. Afghanistan remains stable in its
instability. Disturbing news comes from Latin America. Confrontation between China and India
flared this year, resulting in sporadic border clashes. This situation seems far from over, as
both countries have reinforced their military posture along the disputed border. The aggressive
actions of the Trump administration against China deepen global crises, which has become
obvious not only to specialists but also to the general public. The relationship between the
collective West and the Russian Federation was re-enshrined in "the Cold War state", which
seems to have been resurrected once again.
The turbulence of the first quarter of 2020 was overshadowed by a new socio-political
process – the corona-crisis, the framework of which integrates various phenomena from the
Sars-Cov2 epidemic itself and the subsequent exacerbation of the global economic crisis. The
disclosure of substantial social differences that have accumulated in modern capitalist
society, lead to a series of incessant protests across the globe. The year 2020 was accompanied
by fierce clashes between protesters professing various causes and law enforcement forces in
numerous countries. Although on the surface these societal clashes with the state appear
disassociated, many share related root causes. A growing, immense wealth inequality, corruption
of government at all levels, a lack of any meaningful input into political decision making, and
the unmasking of massive censorship via big tech corporations and the main stream media all
played a part in igniting societal unrest.
In late 2019 and early 2020 there was little reason for optimistic projections for the near
future. However, hardly anyone could anticipate the number of crisis events and developments
that had taken place during this year. These phenomena affected every region of the world to
some extent.
Nevertheless, Middle East has remained the main source of instability, due to being an arena
where global and regional power interests intertwine and clash. The most important line of
confrontation is between US and Israel-led forces on the one hand, and Iran and its so called
Axis of Resistance. The opposing sides have been locked in an endless spiral of mutual
accusations, sanctions, military incidents, and proxy wars, and recently even crossed the
threshold into a limited exchange of strikes due to the worsening state of regional
confrontation. Russia and Turkey, the latter of which has been distancing itself from
Washington due to growing disagreements with "NATO partners" and changes in global trends, also
play an important role in the region without directly entering into the confrontation between
pro-Israel forces and Iran.
As in the recent years, Syria and Iraq remain the greatest hot-spots. The destruction of
ISIS as a terrorist state and the apparent killing of its leader Abu Bakr al-Baghdadi did not
end its existence as a terror group. Many ISIS cells and supporting elements actively use
regional instability as a chance to preserve the Khalifate's legacy. They remain active mainly
along the Syria-Iraq border, and along the eastern bank of the Euphrates in Syria. Camps for
the temporary displaced and for the families and relatives of ISIS militants on the territory
controlled by the Syrian Democratic Forces (SDF) in north-eastern Syria are also breeding
grounds for terrorist ideology. Remarkably, these regions are also where there is direct
presence of US forces, or, as in the case of SDF camps, presence of forces supported by the
US.
The fertile soil for radicalism also consists of the inability to reach a comprehensive
diplomatic solution that would end the Syrian conflict in a way acceptable to all parties.
Washington is not interesting in stabilizing Syria because even should Assad leave, it would
strengthen the Damascus government that would naturally be allied to Russia and Iran. Opposing
Iran and supporting Israel became the cornerstone of US policy during the Trump administration.
Consequently, Washington is supporting separatist sentiments of the Kurdish SDF leadership and
even allowed it to participate in the plunder of Syrian oil wells in US coalition zone of
control in which US firms linked to the Pentagon and US intelligence services are
participating. US intelligence also aids Israel in its information and psychological warfare
operations, as well as military strikes aimed at undermining Syria and Iranian forces located
in the country. In spite of propaganda victories, in practice Israeli efforts had limited
success in 2020 as Iran continued to strengthen its positions and military capabilities on its
ally's territory. Iran's success in establishing and supporting a land corridor linking
Lebanon, Syria, Iraq, and Iraq, plays an important role. Constant expansion of Iran's military
presence and infrastructure near the town of al-Bukamal, on the border of Iraq and Syria,
demonstrates the importance of the project to Tehran. Tel-Aviv claims that Iran is using that
corridor to equip pro-Iranian forces in southern Syria and Lebanon with modern weapons.
The Palestinian question is also an important one for Israel's leadership and its lobby in
Washington. The highly touted "deal of the century" turned out to be no more than an offer for
the Palestinians to abandon their struggle for statehood. As expected, this initiative did not
lead to a breakthrough in Israeli-Palestinian relations. Rather the opposite, it gave an
additional stimulus to Palestinian resistance to the demands that were being imposed. At the
same time, Trump administration scored a diplomatic success by forcing the UAE and Bahrain to
normalize their relations with Israel, and Saudi Arabia to make its collaboration with Israel
public. That was a historic victory for US-Israel policy in the Middle East. Public
rapprochement of Arab monarchies and Israel strengthened the positions of Iran as the only
country which not only declares itself as Palestine's and Islamic world's defender, but
actually puts words into practice. Saudi Arabia's leadership will particularly suffer in terms
of loss of popularity among its own population, already damaged by the failed war in Yemen and
intensifying confrontation with UAE, both of which are already using their neighbor's weakness
to lay a claim to leadership on the Arabian Peninsula.
The list of actors strengthening their positions in the Red Sea includes Russia. In late
2020 it became known that Russia reached an agreement with Sudan on establishing a naval
support facility which has every possibility to become a full-blown naval base. This foothold
will enable the Russian Navy to increase its presence on key maritime energy supply routes on
the Red Sea itself and in the area between Aden and Oman straits. For Russia, which has not had
naval infrastructure in that region since USSR's break-up, it is a significant diplomatic
breakthrough. For its part. Sudan's leadership apparently views Russia's military presence as a
security factor allowing it to balance potential harmful measures by the West.
During all of 2020, Moscow and Beijing continued collaboration on projects in Africa,
gradually pushing out traditional post-colonial powers in several key areas. The presence of
Russian military specialists in the Central African Republic where they assist the central
government in strengthening its forces, escalation of local conflicts, and ensuring the
security of Russian economic sectors, is now a universally known fact. Russian diplomacy and
specialists are also active in Libya, where UAE and Egypt which support Field Marshal Khaftar,
and Turkey which supports the Tripoli government, are clashing. Under the cover of declarations
calling for peace and stability, foreign actors are busily carving up Libya's energy resources.
For Egypt there's also the crucial matter of fighting terrorism and the presence of groups
affiliated with Muslim Brotherhood which Cairo sees as a direct threat to national
security.
The Sahel and the vicinity of Lake Chad remain areas where terror groups with links to
al-Qaeda and ISIS remain highly active. France's limited military mission in the Sahara-Sahel
region has been failure and could not ensure sufficient support for regional forces in order to
stabilize the situation. ISIS and Boko-Haram continue to spread chaos in the border areas
between Niger, Nigeria, Cameroun, and Chad. In spite of all the efforts by the region's
governments, terrorists continue to control sizable territories and represent a significant
threat to regional security. The renewed conflict in Ethiopia is a separate problem, in which
the federal government was drawn into a civil war against the National Front for the Liberation
of Tigray controlling that province. The ethno-feudal conflict between federal and regional
elites threatens to destabilize the entire country if it continues.
The explosive situation in Africa shows that post-colonial European powers and the "Global
Policeman" which dominated that continent for decades were not interested in addressing the
continent's actual problem. Foreign actors were mainly focused on extracting resources and
ensuring the interests of a narrow group of politicians and entities affiliated with foreign
capitals. Now they are forced to compete with the informal China-Russia bloc which will use a
different approach that may be a described as follows: Strengthening of regional stability to
protect investments in economic projects. Thus it is no surprise that influential actors are
gradually losing to new but more constructive forces.
Tensions within European countries have been on the rise during the past several years, due
to both the crisis of the contemporary economic paradigm and to specific regional problems such
as the migration crises and the failure of multiculturalism policies, with subsequent
radicalization of society.
Unpleasant surprises included several countries' health care and social protection networks'
inability to cope with the large number of COVID-19 patients. Entire systems of governance in a
number of European countries proved incapable of coping with rapidly developing crises. This is
true particularly for countries of southern Europe, such as Italy, Spain, Portugal, and Greece.
Among eastern European countries, Hungary's and Romania's economies were particularly badly
affected. At the same time, Poland's state institutions and economy showed considerable
resilience in the face of crisis. While the Federal Republic of Germany suffered considerable
economic damage in the second quarter of 2020, Merkel's government used the situation to inject
huge sums of liquidity into the economy, enhanced Germany's position within Europe, and
moreover Germany's health care and social protection institutions proved capable and
sufficiently resilient.
Coronavirus and subsequent social developments led to the emergence of the so-called "Macron
Doctrine" which amounts to an argument that EU must obtain strategic sovereignty. This is
consistent with the aims of a significant portion of German national elites. Nevertheless,
Berlin officially criticized Macron's statements and has shown willingness to enter into a
strategic partnership with Biden Administration's United States as a junior partner. However,
even FRG's current leadership understands the dangers of lack of strategic sovereignty in an
era of America's decline as the world policeman. Against the backdrop of a global economic
crisis, US-EU relations are ineluctably drifting from a state of partnership to one of
competition or even rivalry. In general, the first half of 2020 demonstrated the vital
necessity of further development of European institutions.
The second half of 2020 was marked by fierce mass protests in Germany, France, Great
Britain, and other European countries. The level of violence employed by both the protesters
and law enforcement was unprecedented and is not comparable to the level of violence seen
during protests in Russia, Belarus, and even Kirgizstan. Mainstream media did their best to
depreciate and conceal the scale of what was happening. If the situation continues to develop
in the same vein, there is every chance that in the future, a reality that can be described as
a digital concentration camp may form in Europe.
World media, for its part, paid particular attention to the situation in Belarus, where
protests have entered their fourth month following the August 9, 2020 presidential elections.
Belarusian protests have been characterized by their direction from outside the country and
choreographed nature. The command center of protest activities is officially located in Poland.
This fact is in and of itself unprecedented in Europe's contemporary history. Even during
Ukraine's Euromaidan, external forces formally refused to act as puppetmasters.
Belarus' genuinely existing socio-economic problems have led to a rift within society that
is now divided into two irreconcilable camps: proponents of reforms vs. adherents of the
current government. Law enforcement forces which are recruited from among President
Lukashenko's supporters, have acted forcefully and occasionally harshly. Still, the number of
casualties is far lower than, for example, in protests in France or United States.
Ukraine itself, where Western-backed "democratic forces" have already won, remains the main
point of instability in Eastern Europe. The Zelenskiy administration came to power under
slogans about the need to end the conflict in eastern Ukraine and rebuild the country. In
practice, the new government continued to pursue the policy aimed at maintaining military
tension in the region in the interests of its external sponsors and personal enrichment.
For the United States, 2020 turned out to be a watershed year for both domestic and foreign
policy. Events of this year were a reflection of Trump Administration's protectionist foreign
policy and a national-oriented approach in domestic and economic policy, which ensured an
intense clash with the majority of Washington Establishment acting in the interests of global
capital.
In addition to the unresolved traditional problems, America's problems were made worse by
two crises, COVID-19 spread and BLM movement protests. They ensured America's problems reached
a state of critical mass.
One can and should have a critical attitude toward President Trump's actions, but one should
not doubt the sincerity of his efforts to turn the slogan Make America Great Again into
reality. One should likewise not doubt that his successor will adhere to other values. Whether
it's Black Lives Matter or Make Global Moneymen Even Stronger, or Russia Must Be Destroyed, or
something even more exotic, it will not change the fact America we've known in the last half
century died in 2020. A telling sign of its death throes is the use of "orange revolution"
technologies developed against inconvenient political regimes. This demonstrated that currently
the United States is ruled not by national elites but by global investors to whom the interests
of ordinary Americans are alien.
This puts the terrifying consequences of COVID-19 in a new light. The disease has struck the
most vulnerable layers of US society. According to official statistics, United States has had
about 20 million cases and over 330,000 deaths. The vast majority are low-income inhabitants of
mega-cities. At the same time, the wealthiest Americans have greatly increased their wealth by
exploiting the unfolding crisis for their own personal benefit. The level of polarization of US
society has assumed frightening proportions. Conservatives against liberals, blacks against
whites, LGBT against traditionalists, everything that used to be within the realm of public
debate and peaceful protest has devolved into direct, often violent, clashes. One can observe
unprecedented levels of aggression and violence from all sides.
In foreign policy, United States continued to undermine the international security system
based on international treaties. There are now signs that one of the last legal bastions of
international security, the New START treaty, is under attack. US international behavior has
prompted criticism from NATO allies. There are growing differences of opinion on political
matters with France and economic ones with Germany. The dialogue with Eastern Mediterranean's
most powerful military actor Turkey periodically showed a sharp clash of interests.
Against that backdrop, United States spent 2020 continuously increasing its military
presence in Eastern Europe and the Black Sea basin. Additional US forces and assets were
deployed in direct proximity to Russia's borders. The number of offensive military exercises
under US leadership or with US participation has considerably increased.
In the Arctic, the United States is acting as a spoiler, unhappy with the current state of
affairs. It aims to extend its control over natural resources in the region, establish
permanent presence in other countries' exclusive economic zones (EEZ) through the use of the
so-called "freedom of navigation operations" (FONOPs), and continue to encircle Russia with
ballistic missile defense (BMD) sites and platforms.
In view of the urgent and evident US preparations to be able to fight and prevail in a war
against a nuclear adversary, by defeating the adversary's nuclear arsenal through the
combination of precision non-nuclear strikes, Arctic becomes a key region in this military
planning. The 2020 sortie by a force of US Navy BMD-capable AEGIS destroyers into the Barents
Sea, the first such mission since the end of the Cold War over two decades ago, shows the
interest United States has in projecting BMD capabilities into regions north of Russia's
coastline, where they might be able to effect boost-phase interceptions of Russian ballistic
missiles that would be launched in retaliatory strikes against the United States. US
operational planning for the Arctic in all likelihood resembles that for South China Sea, with
only a few corrections for climate.
In Latin America, the year of 2020 was marked by the intensification Washington efforts
aimed at undermining the political regimes that it considered to be in the opposition to the
existing world order.
Venezuela remained one of the main points of the US foreign policy agenda. During the entire
year, the government of Nicolas Maduro was experiencing an increasing sanction, political and
clandestine pressure. In May, Venezuelan security forces even neutralized a group of US
mercenaries that sneaked into the country to stage the coup in the interests of the
Washington-controlled opposition and its public leader Juan Guaido. However, despite the
recognition of Guaido as the president of Venezuela by the US and its allies, regime-change
attempts, and the deep economic crisis, the Maduro government survived.
This case demonstrated that the decisive leadership together having the support of a notable
part of the population and working links with alternative global centers of power could allow
any country to resist to globalists' attacks. The US leadership itself claims that instead of
surrendering, Venezuela turned itself into a foothold of its geopolitical opponents: China,
Russia, Iran and even Hezbollah. While this evaluation of the current situation in Venezuela is
at least partly a propaganda exaggeration to demonize the 'anti-democratic regime' of Maduro,
it highlights parts of the really existing situation.
The turbulence in Bolivia ended in a similar manner, when the right wing government that
gained power as a result of the coup in 2019 demonstrated its inability to rule the country and
lost power in 2020. The expelled president, Evo Morales, returned to the country and the
Movement for Socialism secured their dominant position in Bolivia thanks to the wide-scale
support from the indigenous population. Nonetheless, it is unlikely that these developments in
Venezuela and Bolivia would allow to reverse the general trend towards the destabilization in
South America.
The regional economic and social turbulence is strengthened by the high level of organized
crime and the developing global crisis that sharpened the existing contradictions among key
global and regional players. This creates conditions for the intensification of existing
conflicts. For example, the peace process between the FARC and the federal government is on the
brink of the collapse in Colombia. Local sources and media accuse the government and affiliated
militias of detentions and killings of leaders of local communities and former FARC members in
violation of the existing peace agreement. This violence undermine the fragile peace process
and sets conditions for the resumption of the armed struggle by FARC and its supporters. Mexico
remains the hub for illegal migration, drug and weapon trafficking just on the border with the
United States. Large parts of the country are in the state of chaos and are in fact controlled
by violent drug cartels and their mercenaries. Brazil is in the permanent state of political
and economic crisis amid the rise of street crime.
These negative tendencies affect almost all states of the region. The deepening global
economic crisis and the coronavirus panic add oil to the flame of instability.
Countries of South America are not the only one suffering from the crisis. It also shapes
relations between global powers. Outcomes of the ongoing coronavirus outbreak and the global
economic crisis contributed to the hardening of the standoff between the United States and
China.
Washington and Beijing have insoluble contradictions. The main of them is that China has
been slowly but steadily winning the race for the economic and technological dominance
simultaneously boosting own military capabilities to defend the victory in the case of a
military escalation. The sanction, tariff and diplomatic pressure campaign launched by the
White House on China since the very start of the Trump Presidency is a result of the
understanding of these contradictions by the Trump administration and its efforts to guarantee
the leading US position in the face of the global economic recession. The US posture towards
the South China Sea issues, the political situation in Hong Kong, human rights issues in
Xinjiang, the unprecedented weapon sales to Taiwan, the support of the militarization of Japan
and many other questions is a part of the ongoing standoff. Summing up, Washington has been
seeking to isolate China through a network of local military alliances and contain its economic
expansion through sanction, propaganda and clandestine operations.
The contradictions between Beijing and Washington regarding North Korea and its nuclear and
ballistic missile programs are a part of the same chain of events. Despite the public rhetoric,
the United States is not interested in the full settlement of the Korea conflict. Such a
scenario that may include the reunion of the North and South will remove the formal
justification of the US military buildup. This is why the White House opted to not fulfill its
part of the deal with the North once again assuring the North Korean leadership that its
decision to develop its nuclear and missile programs and further.
Statements of Chinese diplomats and top official demonstrate that Beijing fully understands
the position of Washington. At the same time, China has proven that it is not going to abandon
its policies aimed at gaining the position of the main leading power in the post-unipolar
world. Therefore, the conflict between the sides will continue escalating in the coming years
regardless the administration in the White House and the composition of the Senate and
Congress. Joe Biden and forces behind his rigged victory in the presidential election will
likely turn back from Trump's national-oriented economic policy and 'normalize' relations with
China once again reconsidering Russia as Enemy #1. This will not help to remove the insoluble
contradictions with China and reverse the trend towards the confrontation. However, the Biden
administration with help from mainstream media will likely succeed in hiding this fact from the
public by fueling the time-honored anti-Russian hysteria.
As to Russia itself, it ended the year of 2020 in its ordinary manner for the recent years:
successful and relatively successful foreign policy actions amid the complicated economic,
social and political situation inside the country. The sanction pressure, coronavirus-related
restrictions and the global economic crisis slowed down the Russian economy and contributed to
the dissatisfaction of the population with internal economic and social policies of the
government. The crisis was also used by external actors that carried out a series of
provocations and propaganda campaigns aimed at undermining the stability in the country ahead
of the legislative election scheduled for September 2021. The trend on the increase of sanction
pressure, including tapering large infrastructure projects like the Nord Stream 2, and
expansion of public and clandestine destabilization efforts inside Russia was visible during
the entire year and will likely increase in 2021. In the event of success, these efforts will
not only reverse Russian foreign policy achievements of the previous years, but could also put
in danger the existence of the Russian statehood in the current format.
Among the important foreign policy developments of 2020 underreported by mainstream media is
the agreement on the creation of a Russian naval facility on the coast of the Red Sea in Sudan.
If this project is fully implemented, this will contribute to the rapid growth of Russian
influence in Africa. Russian naval forces will also be able to increase their presence in the
Red Sea and in the area between the Gulf of Aden and the Gulf of Oman. Both of these areas are
the core of the current maritime energy supply routes. The new base will also serve as a
foothold of Russia in the case of a standoff with naval forces of NATO member states that
actively use their military infrastructure in Djibouti to project power in the region. It is
expected that the United States (regardless of the administration in the White House) will try
to prevent the Russian expansion in the region at any cost. For an active foreign policy of
Russia, the creation of the naval facility in Sudan surpasses all public and clandestine
actions in Libya in recent years. From the point of view of protecting Russian national
interests in the Global Oceans, this step is even more important than the creation of the
permanent air and naval bases in Syria.
As well as its counterparts in Washington and Beijing, Moscow contributes notable efforts to
the modernization of its military capabilities, with special attention to the strategic nuclear
forces and hypersonic weapons. The Russians see their ability to inflict unacceptable damage on
a potential enemy among the key factors preventing a full-scale military aggression against
them from NATO. The United Sates, China and Russia are in fact now involved in the hypersonic
weapon race that also includes the development of means and measures to counter a potential
strike with hypersonic weapons.
The new war in Nagorno-Karabakh became an important factor shaping the balance of power in
the South Caucasus. The Turkish-Azerbaijani bloc achieved a sweeping victory over Armenian
forces and only the involvement of the Russian diplomacy the further deployment of the
peacekeepers allowed to put an end to the violence and rescue the vestiges of the
self-proclaimed Armenian Republic of Artsakh. Russia successfully played a role of mediator and
officially established a military presence on the sovereign territory of Azerbaijan for the
next 5 years. The new Karabakh war also gave an additional impulse in the Turkish-Azerbaijani
economic and military cooperation, while the pro-Western regime in Armenia that expectedly led
the Armenian nation to the tragedy is balancing on the brink of collapse.
The Central Asia traditionally remained one of the areas of instability around the world
with the permanent threat of militancy and humanitarian crisis. Nonetheless, despite forecasts
of some analysis, the year of 2020 did not become the year of the creation of ISIS' Caliphate
2.0 in the region. An important role in preventing this was played by the Taliban that
additionally to securing its military victories over the US-led coalition and the US-backed
Kabul government, was fiercely fighting ISIS cells appearing in Afghanistan. The Taliban, which
controls a large part of Afghanistan, was also legalized on the international scene by direct
talks with the United States. The role of the Taliban will grow and further with the reduction
of the US military presence.
While some media already branded the year of 2020 as one of the worst in the modern history,
there are no indications that the year of 2021 will be any brighter or the global crises and
regional instability will magically disappear by themselves. Instead, most likely 2020 was just
a prelude for the upcoming global shocks and the acute standoff for markets and resources in
the environment of censorship, legalized total surveillance, violations of human rights under
'democratic' and 'social' slogans' and proxy wars.
The instability in Europe will likely be fueled by the increasing cultural-civilizational
conflict and the new wave of newcomers that have acute ideological and cultural differences
with the European civilization. The influx of newcomers is expected due to demographic factors
and the complicated security, social situation in the Middle East and Africa. Europe will
likely try to deal with the influx of newcomers by introducing new movement and border
restrictions under the brand of fighting coronavirus. Nonetheless, the expected growth of the
migration pressure will likely contribute to the negative tendencies that could blow up Europe
from inside.
The collapse of the international security system, including key treaties limiting the
development and deployment of strategic weapons, indicates that the new detente on the global
scene will remain an improbable scenario. Instead, the world will likely move further towards
the escalation scenario as at least a part of the current global leadership considers a large
war a useful tool to overcome the economic crisis and capture new markets. Russia, with its
large territories, rich resources, a relatively low population, seems to be a worthwhile
target. At the same time, China will likely exploit the escalating conflict between Moscow and
the US-led bloc to even further increase its global positions. In these conditions, many will
depend on the new global order and main alliances within it that are appearing from the
collapsing unipolar system. The United States has already lost its unconditional dominant role
on the international scene, but the so-called multipolar world order has not appeared yet. The
format of this new multipolar world will likely have a critical impact on the further
developments around the globe and positions of key players involved in the never-ending Big
Game.
* * *
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Andrew Colin SUBSCRIBER 4 hours ago When they decided to count those *7 million at 4am is when things get sticky Sharif.
John Briscoe SUBSCRIBER 4 hours ago This whole piece is an admission that Republicans have lost any credibility with US Citizens aged less than 60 years. Like thumb_up 7 Reply reply Share link Report flag D Daniel Whitworth SUBSCRIBER 4 hours ago I am under 60 years old and am now a Republican; formerly a Democrat. I challenge your assessment.
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