Month: September 2022

Review: HeidiWorld Wants You To Rethink Prostitution


minisHeidiWorld--The-Heidi-Fleiss-Story_iheartpodcasts

Just as the ’90s nostalgia boom is peaking, a new podcast arrives set in the pleasingly seedy world of Hollywood madam Heidi Fleiss. Host Molly Lambert is explicit about her agenda in the first of the series’s 10 episodes: She’s using Fleiss’ story to push listeners to reconsider the criminalization of prostitution, and to critically examine the conflation of sex work and sex trafficking.

Her gambit is mostly successful. Lambert’s presentation of Fleiss as a restless, ambitious woman who serves time for facilitating transactions between consenting adults is sympathetic without being fluffy or flattering. HeidiWorld suffers from a mild case of Wikipedia disease; each new setting or character gets a too-thorough backstory. But the central narrative about sex, money, and power is just as fascinating today as it was to the scandal sheets and magazine shows of Fleiss’ heyday.

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“When You Are Not With Where a Majority of Americans Are, Then, You Know, That Is Extreme”

Here’s the full context, from White House press secretary Karine Jean-Pierre yesterday:

Q But specifically with regards to limiting these freedoms — I guess my question is: The Supreme Court created this space for the anti-abortion movement at the state level and also perhaps at the federal level to try and restrict this freedom. Where do they fit into all of this? How would the President describe them after that decision? Were they just extremists, or were they, you know, part and parcel of a semi-fascist —

MS. JEAN-PIERRE: Look, here’s what I’ll say: We continue to — continue to see attacks on people’s fundamental rights — right? — of Americans with new abortion laws across the country.

And when you have national Republicans who are — who are leaders in their — in their political party; who sit in office; who say that they want to take away the rights even in case of incest, in case — and not — and in case of rape; and taking away a woman’s right to make a decision on her body — that’s extreme.

And — and, you know, the President is going to call that out. He’s going to continue to do everything that he can to make sure that we protect people’s freedoms. He’s going to do everything that he can to call that out. And, you know, that is important to call out. That is important to talk about.

And, again, we see a majority of Americans who disagree. And so, when you are not with where a majority of Americans are, then, you know, that is extreme. That is an extreme way of thinking.

I’m not going to — that’s what I have for you, Phil.

I should note that forbidding abortion even in cases of rape or incest is indeed the view of only a minority, though the results vary from 35% (the “oppose” in “Please tell me if you support or oppose a law that allows abortion at any time during pregnancy in cases of rape or incest”) to 14%-16% (“illegal” in “Do you think abortions should be legal or illegal when the pregnancy was caused by rape or incest?,” “illegal in “How about when the pregnancy was caused by rape or incest? Do you think abortion should be legal in that situation or illegal?”). And “taking away a woman’s right to make a decision on her body” more generally, which I think roughly fits the “abortion should be illegal most of the time” or “always illegal” seems to poll at about 32% to 46%, depending on how the question is worded.

Likewise, allowing abortion on demand generally, including in the third trimester, is supported only by 20% of the public (up from 13% four years ago), and allowing it in the second trimester (basically the Roe v. Wade rule) is supported only by 36% of the public (up from 28% four years ago). Saying that some versions of those views are extreme, whether because they really do have the support of only a small fringe, or because they are logically at the ends of the spectrum (e.g., “always illegal” or “always legal”) may be descriptively defensible, though I’m not sure that this is what the President’s representative should be saying.

But the particular thing she said was:

We see a majority of Americans who disagree. And so, when you are not with where a majority of Americans are, then, you know, that is extreme.

And that strikes me as hard to defend.

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Corey DeAngelis: COVID Lockdowns Made School Choice Inevitable


dorey-deangelis-school-choice

You’ve probably heard the latest news that school lockdowns during the COVID pandemic are responsible for erasing two decades of progress in math and reading test scores. On national tests of 9-year-olds, math scores declined seven points between 2020 and 2022. Reading scores dropped by five points. These are “some of the largest declines” in half a century.

Such news comes on top of the massive frustration about chaotic, nonsensical openings and closings of schools, unscientific mask mandates for K-12 students, and insane policies like one in Washington, D.C., where the mayor and City Council recently decreed that kids ages 12 and older would need to be vaccinated even for remote learning, a measure that would have barred 40 percent of the city’s black teens from getting an education. That policy was, thankfully, pushed back until January 2023, but it’s still on the books, lurking like a bully at the far end of the hallway.

Today’s guest on The Reason Interview With Nick Gillespie is Corey DeAngelis, a senior fellow at the American Federation for Children. Corey used to work at Reason Foundation, the nonprofit that publishes this podcast, has a Ph.D. in education from the University of Arkansas, and is widely recognized as one of the leading activists pushing for radical school choice, in which funding dollars follow children to whatever learning institutions they and their parents decide on, whether private, public, religious, secular, charter, online, you name it.

I caught up with Corey at FreedomFest, the annual gathering in Las Vegas, just after Arizona had passed the biggest school choice law in the country, with $7,000 of state funding now following each student per year. We talked about how COVID lockdowns—so heavily pushed by teachers unions—radically raised parental awareness about how bad most K-12 education is; why top-down attempts to ban critical race theory and other specific curricula are misguided and ineffective; recent Supreme Court decisions that rightly get rid of legal concerns over tax dollars funding students at religious schools; why Texas is so incredibly awful on school choice despite being run by Republicans; why Republicans have nonetheless emerged as the party of school choice; and why all of us, whether we have kids in the K-12 gulag system or not, should be invested in education reform.

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New Loan Program for Black, Latino Neighborhoods Isn’t ‘Explicitly Racist’


reason-BoFA

Bank of America is causing a bit of a stir with the launch of a new program that provides loans to “lower-income,” first-time homebuyers in select cities and, in particular, black and Latino neighborhoods within those markets.

The company launched its Community Affordable Loan Solution program earlier this week. It will offer mortgages that require neither down payments, closing costs, nor minimum credit scores. The lender, per Bloomberg, would also provide down payment grants of up to $15,000. These loans will go to homebuyers in the Dallas; Los Angeles; Charlotte, North Carolina; Detroit; and Miami metro areas.

The announcement has sparked a backlash from mostly right-wing Twitter users and news sources that have declared the new program “explicitly racist,” likely illegal, and a certainly unwise expansion of credit to unqualified borrowers.

 

Former adviser to Donald Trump Stephen Miller even dangled the possibility that his public interest law firm, America First Legal, might sue over the new program.

Fueling this backlash is an unhelpful, since-modified headline from NBC News declaring that the Bank of America program would provide loans to black and Hispanic homeowners—the easy implication being that you have to be black or Hispanic to qualify for a loan.

That’s not the case. A Bank of America spokesperson told Reason that an applicant need not be black or Hispanic to get one of these loans or down payment grants. A Bank of America executive also told Bloomberg that applicants wouldn’t have to disclose their race and that U.S. Census Bureau data would be used to determine the black and Hispanic neighborhoods that would receive loans.

That would seem to absolve it of the charge that it’s “explicitly” racist. Its targeting of neighborhoods by their racial makeup is also, perhaps surprisingly, likely on firm legal footing.

While the federal Fair Housing Act generally bans housing discrimination on the basis of race, sex, national origin, age, and disability, other federal laws and regulations do allow for financial institutions to operate race-based loan programs under certain conditions.

These are known as Special Purpose Credit Programs (SPCP) first created by the Equal Credit Opportunity Act. That law, and subsequent regulations implementing it, allows banks to set up credit programs that require eligible beneficiaries to have “one or more common characteristics (for example, race, national origin, or sex)” provided the program is being used to expand credit to previously excluded groups.

Bank of America’s new loan program is a Special Purpose Credit Program.

The concern that the extension of easy credit to homebuyers will saddle people with unaffordable loans is reasonable. No down payment loans generally perform worse. Borrowers lack equity in their homes and, therefore, have more incentive to walk away from them when prices slump. Bank of America’s down payment grants are supposed to mitigate that risk.

The legal and credit risk issues aside, a major problem with the program as designed seems to be that it would be a gentrification-acceleration machine that cuts against the stated goal of getting low-income people in neighborhoods long discriminated against by the financial system into homeownership.

For starters, anyone with an income of 150 percent of an area’s median income would qualify for Bank of America’s program.

Typically, housing affordability programs require “low-income” people to have incomes of 80 percent of the area median income or less. But Bank of America’s Community Affordable Loan Solution program will go to people earning almost double that. In a place like Los Angeles—the most expensive city Bank of America is trying out its program in—a single-person household earning a little less than $100,000 per year could participate.

The odds are that Bank of America’s loans will generally go toward people at the higher bound of its income limit, as they’re the ones who can afford a larger loan and will be more likely to qualify for credit. (Bank of America says it will vet applicants, not by credit score but by some nontraditional credit rating features like their history of timely rent, utility bill, phone, and auto insurance payments.)

We have evidence of the gentrification accelerating effects of other banks’ loan programs that are targeted at lower-income areas.

The federal Community Reinvestment Act (CRA) gives banks credits for making loans in low-income neighborhoods. Those credits are then considered by bank regulators when evaluating banks’ applications to open new branches or merge with other banks.

Research from the Cato Institute’s Diego Zuluaga has shown that that setup incentivizes banks to loan to the most qualified buyers in those neighborhoods—who are typically higher-income people moving into low-income neighborhoods. It’s an effective subsidy for gentrification.

Banks have promised to expand Special Purpose Credit Programs when seeking regulatory approval for mergers in the past. Bank of America’s new program also follows the federal government’s explicit urging of banks to create Special Purpose Credit Programs. The various federal credit regulating entities issued joint regulatory guidance in February this year encouraging the use of SPCPs to meet the needs of “underserved communities.”

So, while Bank of America’s new loan program falls short of being “explicitly racist” or illegal, it is downwind of federal regulatory incentives that have worked to subsidize gentrification. We can expect similar results here.

The post New Loan Program for Black, Latino Neighborhoods Isn't 'Explicitly Racist' appeared first on Reason.com.

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“Simply Stated, the Pleading Needs More Hemingway, Less Faulkner”

From today’s opinion in Doe v. Univ. of Iowa, by Judge Stephen Locher (S.D. Iowa.), discussing the Complaint (written by lawyers, not by a pro-se litigant):

Plaintiff alleges Defendants discriminated against him during their investigation into his purported sexual assault of a female student. His pleading, however, contains confusing and overly verbose paragraphs that are unreasonably difficult for Defendants to admit or deny. The Court therefore GRANTS Defendants’ Motion to Dismiss without prejudice and directs Plaintiff to amend his Complaint to conform to the requirements of Fed. R. Civ. P. 8, which require a pleading to provide “a short and plain statement of the claim showing the pleader is entitled to relief.” …

The Court agrees the Complaint does not satisfy Fed. R. Civ. P. 8. It further agrees that Paragraph 14 is illustrative of the problem. Clocking in at 443 words and almost one-and-one-half pages in length, Paragraph 14 is a series of run-on sentences and sentence fragments that alternates between the investigation into Plaintiff’s actions and speculation about investigations into the conduct of other, unnamed “male students,” all while using vague terms like “investigators” that may or may not include Defendants. Paragraph 14 also includes unnecessary asides—e.g., “really, one simply can’t make this up”—and fails to provide the “simple, concise, and direct” allegations required by Fed. R. Civ. P. 8(d). And all to allege something that could have been captured in one sentence: Investigations into sexual misconduct are tainted by sex and/or gender bias in which female witnesses are found credible for the same reasons male witnesses are found non-credible.

Similar flaws are found in other paragraphs. Paragraph 13, for example, contains perhaps the longest single sentence (178 words) the Court has ever seen in a pleading:

And that secondly segues into how these investigators routinely approach these cases—whether the male is a complaining party or, as in this case, an accused party—the UI investigators do not work multiple times, let alone even cursory on the single time, that they “interview” the male party’s witnesses—those witnesses are summarily dismissed as it pertains to credibility and on either on or the other of two contradictory grounds: first, if there are substantive deviations in the statements of the witnesses in support of the male student (either accused or complaining), then those witnesses by the investigators, and particularly including the investigators named in this complaint, are dismissed as contradictory (and hence not believable); in contrast, if those witnesses’ statements are in the main consistent—that is, supportive of the male student’s version of the events in question—then these investigators routinely dismiss the validity of these statement on the basis, of all things, bias; and that purportedly is because any consistency among witnesses on behalf of a male student must be the result of such.

(Complaint, ¶ 13.) Paragraph 16 is a long-winded diatribe (more than 330 words in length) asserting, in essence, that hearings are tainted by bias against males. (Id., ¶ 16.) Paragraph 17 is an even longer-winded diatribe (more than 380 words in length) asserting the same thing. (Id., ¶ 17.)

The post "Simply Stated, the Pleading Needs More Hemingway, Less Faulkner" appeared first on Reason.com.

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Over 40% Of Americans Think Civil War Likely Within 10 Years

Over 40% Of Americans Think Civil War Likely Within 10 Years

Over 40% of Americans think civil war is at least somewhat likely in the next decade, which increases to more than half among self-identified “Strong Republicans,” according to a YouGov/Economist survey.

Around 2/3 of those polled also believe that political division in this country has gotten worse since Joe Biden took office, vs. only 8% who say the country has grown less divided. 62% expect political division to increase.

60% of those polled anticipate an increase in political violence over the next few years, while 9% expect a decrease.

By party, Republicans are more likely to say political division has worsened and expect things to continue in that direction.

Civil War?

As YouGov writes in its report: What is the likelihood that political violence will culminate in a civil war in the U.S.? While only 14% of Americans say a civil war is very likely in the next decade, 43% say it is at least somewhat likely. About one in three – 35% – say it is not very or at all likely, and 22% are unsure. People who say they are “strong Republicans” are the political group most likely to anticipate a civil war: 21% say it’s very likely, compared to less than 15% of each of the other four political groups studied. 

Others aren’t so sure about civil war.

As Rachel Kleinfeld, a specialist in civil conflict at the Carnegie Endowment for International Peace told The Guardian earlier this month, “Countries with democracies and governments as strong as America’s do not fall into civil war. But if our institutions weaken, the story could be different.”

Tyler Durden
Fri, 09/02/2022 – 16:40

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If You’re Just Now Getting Mad At The Fed, You’re Much Too Late

If You’re Just Now Getting Mad At The Fed, You’re Much Too Late

Authored by Ryan McMaken via The Mises Institute,

Last week, Jerome Powell insisted that he’s not going to change his mind on allowing interest rates to rise, while allowing the assets on the Fed’s portfolio to (very slowly) roll off the balance sheet. At the Federal Reserve’s annual Jackson Hole conference conference, Powell’s speech lasted only ten minutes. Powell had a fairly simple message. He admitted that “high inflation has continued to spread through the economy” and also admitted a single month of falling month-to-month CPI inflation is hardly enough when year-over-year CPI inflation growth continues to exceed 8 percent. He then insisted that a neutral policy stance is “not a place to pause or stop” and that the Fed would embrace “a restrictive policy stance for some time.”

The Fed’s idea of “restrictive” policy, of course, isn’t very restrictive at all, and usually just means “less expansive than usual.” Powell’s speech, far from being hawkish in any meaningful sense, nonetheless signaled enough of a departure from the usual money-pumping posture to send the Dow down more than 1,000 points the same day while investors and Wall Street hacks immediately got to work complaining that the Fed wasn’t going to “pivot” quickly enough.

The “pivot” narrative has long been the preferred narrative on Wall Street. Having become addicted to Fed-provided easy money-policies, Wall Street is now mostly just about cheering on monetary stimulus at the slightest sign of trouble. When the easy money flows, asset prices surge, and the markets go up. Since 2010, this has been the primary game for big investors. Keeping an eye on market fundamentals is so pre-2009. What matters now is Fed stimulus, always and forever. 

Of course, once price inflation rates started coming in at multi-decade highs, even Wall Street admitted that 40-year highs in price inflation are a problem, and that the Fed will have to ease off the easy money for a little while. But the same narrative also assumes that as soon as any weakness shows up in hiring or home prices, or any other economic indicator, the fed should “pivot” to embracing easy money once again. 

Many critics of the Fed’s ultra-slight hawkishness, for example, expressed rage on Twitter and in financial blogs when Minneapolis Fed president Neel Kashkari said he was “happy” that markets went down in response to Powell’s speech. Kashkari is desperate to be seen as doing something about price inflation, and falling markets are perhaps a sign that Powell’s policies might be working. Meanwhile, Powell is being set up as a villain in a narrative in which the Fed’s slight tightening will be to blame for causing an unnecessary recession when unemployment starts to rise. Many continue to believe that a recession can be avoided and—if Powell really knows what he was doing—it will be possible to get rid of price inflation without any serious economic troubles.

But this narrative gets things very wrong.

I’m not opposed to casting Powell as a villain. But Powell isn’t a villain for pulling his foot a little off the money-creation accelerator. True, this is likely to speed up the arrival of the bust. But that’s a sign he’s actually doing something less bad than usual. No, Powell’s villainy stems from his role in helping create the boom. The problem is the boom, not the bust. 

After all, busts are primarily caused by the booms that come before them.

The fact that recessions are often triggered by a slowing of money creation is only a symptom of the larger problem. 

Without the boom—and all the malinvestment that comes with it—investors and employers wouldn’t depend on ongoing new injections of easy money to stave off a depression. 

In other words, it is the boom, not the bust, for which Fed technocrats ought to be pilloried.  But, we shouldn’t be surprised by this confusion over what is to blame for recessions and depressions that come on the heels of booms.

In Human Action, Ludwig von Mises explains that the misinformed observers who blame the boom rather than the bust for economic misfortune. The average person “does not blame the authorities for having fostered the boom. He reviles them for the necessary collapse. In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils that inflation and credit expansion have brought about.”

This is exactly what we hear from Much of Wall Street right now. Mises explains, moreoever, that the bust is  potentially the good part of the boom-bust cycle. It is the part of the cycle that allows the economy to return to reality, and which allows savers and investors to build the economy on a more firm foundation. The boom, contrary to its appearances, actually makes us worse off:

[W]e must call the boom retrogression and the depression progress. The boom squanders through malinvestment scarce factors of production and reduces the stock available through overconsumption; its alleged blessings are paid for by impoverishment. The depression, on the other hand, is the way back to a state of affairs in which all factors of production are employed for the best possible satisfaction of the most urgent needs of the consumers. …

The malinvestments of the boom have misplaced inconvertible factors of production in some lines at the expense of other lines in which they were more urgently needed. There is disproportion in the allocation of nonconvertible factors to the various branches of industry. This disproportion can be remedied only by the accumulation of new capital and its employment in those branches in which it is most urgently required. This is a slow process. While it is in progress, it is impossible to utilize fully the productive capacity of some plants for which the complementary production facilities are lacking.

Phrased on modern terms, the boom creates zombie companies and zombie investments. These are activities which do not create value in a real economy, but depend on ever greater levels of cheap debt to keep kicking the can down the road. Easy money makes these bubble industries look profitable, however, so savers and investors pour money into these losing bets. Worse yet, the money poured into unprofitable bubble industries was money that would have gone to more productive, profitable, and necessary industries. Thus, bubbles slowly drain economies of productivity and value. Eventually reality catches up with these nonproductive ventures. Unless new waves of easy money keep coming, the lack of real productivity will be exposed. The economy can only be fixed when the nonproductive industries are exposed and allowed to downsize, go bankrupt, or otherwise disappear.  Unfortunately, this process is painful. But, as Mises notes, it is the only way to undo the damage of the boom:

Out of the collapse of the boom there is only one way back to a state of affairs in which progressive accumulation of capital safeguards a steady improvement of material well-being: new saving must accumulate the capital goods needed for a harmonious equipment of all branches of production with the capital required. One must provide the capital goods lacking in those branches that were unduly neglected in the boom. Wage rates must drop; people must restrict their consumption temporarily until the capital wasted by malinvestment is restored. Those who dislike these hardships of the readjustment period must abstain in time from credit expansion.

Rarely is this process ever allowed to actually play out. Instead, government institutions intervene with government-created money, bailouts, and other measures. This is counterproductive: 

There is no use in interfering by means of a new credit expansion with the process of readjustment. This would at best only interrupt, disturb, and prolong the curative process of the depression, if not bring about a new boom with all its inevitable consequences.

However, Mises notes the psychological effects of booms are such that people think of the booms as good fortune while the busts are where things go wrong, and whatever came immediately before the bust is assigned the blame for causing it. 

We now see this at work with Jerome Powell and Fed policymakers who—driven by political expediency to seek an end to mounting price inflation—are finally and slightly backing off the monetary policy that has sustained the enormous bubbles and malinvestments that have persisted in many cases since before the 2008 financial crisis. The real causes of our presently weak economy, however, date back before the current Fed policymakers were even running the show. 

Tyler Durden
Fri, 09/02/2022 – 16:20

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Putin Kills Goldilocks: Stocks Slammed As Russia Wrecks Dove’s Dreams

Putin Kills Goldilocks: Stocks Slammed As Russia Wrecks Dove’s Dreams

Today’s price action was bought to you by the word “Goldilocks” and the number ‘Zero‘.

Goldilocks was the word thrown around by all asunder with regard to the labor market data today – most especially a drop in wage growth – which prompted a dovish response from markets (who apparently are unable to remember what Jay Powell said just last week).

Just to steal the jam out of goldilocks’ donut, we do note that hours worked continued to tumble – not a good sign – sending up recession-risk flares left and right…

Source: Bloomberg

And the number Zero is the amount of Russian gas that Putin will allow to flow to Europe through Nord Stream 1 after ‘coincidentally’ finding an oil leak and keeping the crucial pipeline closed (just after G-7 agreed on the completely unworkable Russian oil-price cap scheme)

That all sent rate-hike odds tumbling, with the odds of a 75bps hike this month dropping from 75% to 55%…

Source: Bloomberg

Powell will be pleased though as financial conditions have tightened significantly back to the tightest of the cycle after the Fed Pivot easing…

Source: Bloomberg

On the day, everything was awesome after the jobs data… until the European close (low liquidity) when stocks tanked as Gazprom ‘coincidentally’ found an oil leak and said it would keep the gas pipeline closed for longer. Nasdaq went from Secretariat to the glue factory in a few brief minutes…

This leaves the Nasdaq down around 8% since Powell’s J-Hole jawbone…

The Nasdaq Composite is down 6 days in a row – something it hasn’t done since early August 2019.

The S&P rallied perfectly up to its 50DMA and then reversed… Putin’s timing was perfect.

All S&P Sectors ended the week in the red with Tech and Materials the worst performers. Energy stocks were the most volatile…

Source: Bloomberg

Treasuries were very mixed on the week after yields puked on the jobs data, leaving the 2Y yield unchanged but the long-end up 15bps…

Source: Bloomberg

The dollar extended its post-Powell gains…

Source: Bloomberg

Litecoin managed some gains on the week but the rest of crypto was dumped with Bitcoin underperforming Ethereum…

Source: Bloomberg

Bitcoin has now hovered around $20,000 for 10 days…

Source: Bloomberg

Zinc headed for its biggest weekly loss in over a decade on concern Chinese demand will be hamstrung by new virus restrictions.

Source: Bloomberg

Oil tanked this week again with WTI back below $90…

Gold rallied on the day extending yesterday’s gains after bouncing off $1700…

And here is what that buys in Germany now…

Finally, if you thought it was bad now, just wait…

Source: Bloomberg

On that happy thought, have a great long-weekend.

Tyler Durden
Fri, 09/02/2022 – 16:00

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White House Asks Congress For $13.7B In Additional Ukraine-Related Funding

White House Asks Congress For $13.7B In Additional Ukraine-Related Funding

While the Biden administration prepares to deploy tens of thousands of IRS agents on average Americans, the White House just asked Congress to approve another $13.7 billion for Ukraine-related expenditures as part of a short-term funding bill.

The request is for $11.7 billion in additional ‘security and economic assistance’ for Ukraine(‘s oligarchs) which will surely be accounted for, and $2 billion to help shore up domestic energy supplies to offset impacts the war has had on global energy markets.

Of the $11.7 billion, $4.5 billion will go towards military equipment and replenishing Pentagon stockpiles, $2.7 billion will go towards ‘defense and intelligence’ for Ukraine, and $4.5 billion will go to budgetary support for Ukraine’s government.

Of the $2 billion, $1.5 of it will be for uranium to fuel nuclear reactors, and $500 million will go towards modernizing the Strategic Petroleum Reserve.

“We have rallied the world to support the people of Ukraine to defend their democracy and we simply cannot allow that support to Ukraine to run dry,” an administration official told reporters on Friday.

The White House says that the funds are needed to sustain the pace of aid to Ukraine for the first three months of fiscal year 2023, which begins at the start of October. The administration official said roughly three-fourths of the funds Congress has already approved for Ukraine have been spent or obligated.  

Congress on a bipartisan basis has approved over $53 billion in security, economic and humanitarian assistance to address Russia’s invasion of Ukraine this year. Biden signed the last package, totaling $40 billion, into law in May. At the time, the White House said it expected those funds to last through the end of the fiscal year. –The Hill

In order to fund the government on a short-term basis in order to allow lawmakers more time to reach an agreement on a larger package, Congress is expected to pass a continuing resolution – the duration of which will be up to them. It will need to be passed before the current fiscal year ends on Sept. 30 in order to avoid a government shutdown.

Meanwhile, in order to allocate even more funding for Ukraine, the White House is also asking Congress to authorize billions more in funding for the federal government’s COVID-19 pandemic response, as well as the response to Monkeypox and disaster relief efforts – a request which totals $4.71 billion according to The Hill.

Remember, we must all sacrifice.

Tyler Durden
Fri, 09/02/2022 – 15:50

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The Lord Of The Things: The Things Of Power

The Lord Of The Things: The Things Of Power

By Michael Every of Rabobank

“One Thing to rule them all; one Thing to find them

One Thing to bail them all and in the ‘market’ bind them.

In the land of More-dosh, where the Shadow Bankers lie.”

Today sees the long-awaited release of a gigantic work of creative fiction on which rides billions of dollars: and apart from US payrolls, Amazon Prime is releasing ‘The Lord of the Rings: The Rings of Power’. It’s a long wait for that jobs number, so I’m going to kill some time with some high fantasy of my own. Watch me weave my magic!

As someone who lived and breathed Tolkien 24/7 until he was old enough to go into pubs, and then lived and breathed pipe weed, I have zero interest in this new TV show. It was always clear this was going to be a fanfiction Tolkien calendar made by people who don’t know about days, months, or years: or Tolkien, given they are compacting thousands of years of his legendarium into just a few to make the story easier to follow. That is like saying you want to make a respectful TV show about British history, because you love Britain, and then you make one where Boudicca, Elizabeth I, Florence Nightingale, and Joan Robinson all decide to go paintballing, as Queen Victoria and Victoria Beckham smash into them in a flaming meteor.

The early reviews are in, and some people love it, with a 83% critic score on Rotten Tomatoes. Then again aggregate critic reviews or cheering social-media bots are like ratings agencies post-2008: nobody thinks they mean anything. The actual market of viewers will do its own thing.

Yet even some ‘ratings agencies’ are crying ‘junk!’ Entertainment Weekly says: “This series is a special catastrophe of ruined potential, sacrificing a glorious universe’s limitless possibilities at the altar of tried-and-true blockbuster desperation.” The Daily Mail gives it one star out of five, and says: “Turkey is not the word. No turkey, however bloated and stupid, could ever be big enough to convey the mesmerising awfulness of Amazon’s billion dollar Tolkien epic. This is a disaster dragon – plucked, spatchcocked, with a tankerload of Paxo stuffed up its fundament, roasted and served with soggy sprouts. The Lord Of The Rings: The Rings Of Power is so staggeringly bad, it’s hilarious. Everything about it is ill-judged to a spectacular extreme. The cliche-laden script, the dire acting, the leaden pace, the sheer inconsistency and confusion as it lurches between styles – where do we start?” If only those working on the show could write as well as the Mail channel T.S. Eliot’s orcish under-current.

That I have zero interest in this Tolkien-a-rama is partly due to me being a purist: I even had problems with the bathos of Jackson’s film trilogy, and the feebleness of his odd attempts to re-write things to make them ‘more exciting’; ‘The Hobbit’ trilogy was a bad videogame.

However, it also partly reflects the embarrassment of riches fantasy fans have today. As a boy, I had to survive with only a beloved VHS copy of Ralph Bakshi’s own spatchcocked ‘The Lord of the Rings’ cartoon: it was the first video I ever rented, and I can still recall watching it to the end, wondering where ‘The Return of the King’ part was, and trying to play the tape upside down to see if it was on the B-side. (It wasn’t.) That aside, we only had very thin fantasy gruel such as ‘Hawk the Slayer’, which I am surprised Netflix aren’t already remaking into something they can immediately cancel.

In my fevered imagination, all of this still ties back to the payrolls number today, even though Tolkien infamously hated allegory.

First, that TV studios can throw so much money at a show –the Mail adds: “There’s no doubt we can see the budget. It casts a throbbing glow over the screen like a chestful of gold”– and it still be so bad in the eyes of some reviewers shows parts of the economy still have too much money. Moreover, talent is rare, and not all that glitters is gold. Indeed, the rareness of talent –and of ‘gold’– versus the abundance of money is why central banks are having to be Hawks the Slayers for markets. When Amazon Prime is remaking that title on a shoestring then we are back towards the right territory. After yesterday’s US ISM data, markets will be hoping today’s payrolls number will be bad enough to blunt the Fed’s vorpal blade. However, even a bad print and a weak CPI number next time would still see a 50bps hike in September: and if we get an upside print in either, the market will be trembling about another 75bps. 

Second, this is not just about supply-demand balancing. It is about power. Power was what the One Ring in Tolkien’s masterwork, and this fanfiction, represents. It isn’t simply “evil”, but rather has the ability to dominate others wills; and cruelty and malice eventually flows from the corrupting influence of that power to dominate – even when it starts with good intentions.

As such, it can be argued the Dark Lord Sauron’s true opposite is not would-be king Aragorn or the wizard Gandalf, but bucolic Tom Bombadil, who has no desire to dominate anyone or anything, and hence cannot be dominated: and so he gets cut out of the films. Take that allegory wherever you like re: markets, but I have a few destinations in mind.

Third, central banks are raising interest rates more than markets had dreamed possible –we now expect the ECB to hike 75bps at its next meeting; and the Aussie press is warning that falling housing prices won’t stop the RBA hiking– because of power. Not just rising energy prices, as crude slumps for another day (but call options for December soar), despite Germany fears further cuts in gas flows from Russia in October, though this is a huge part of our current problem.

Rather, it is about who holds the power to dominate others. Is it Western central banks and their not-so glittery, not-so gold, and not-so commodity currencies; or is it shadowy and shadow-banky lands who prefer glittery, goldy, and ‘commodity’ currencies, e.g., as Russia considers buying $70bn of CNY and “friendly countries’” FX?

Raise rates more than markets expect, and keep them there longer than they expect, and find out who is ‘The Lord of the Things’ and what the real ‘Things of Power’ are!

So, yields are surging, commodities are under pressure, and the US Dollar is still the Dark Lord on its Dark Throne – JPY tested past 140, perhaps close to triggering a domino effect across Asian FX. Ironically, this is because the Dollar isn’t in More-dosh, where the Shadow Bankers lie.

Fourth, for those who like epic struggles, presumed next UK PM Truss –who looks a bit like the action-figure kick-ass version of Galadriel in the trailers for ‘The Things of Power’, without the chainmail– is reportedly to embrace a new foreign policy approach of “geoliberalism”. (See, I kept saying we had to have a new “-ism” to sell policy shifts to a public.)

This odd-sounding “-ism” calls for already-floated ideas: a “Network of liberty” of democratic nations (where she also called for the G7 to be an ”economic NATO”); more AUKUS-type deals; a hawkish line against Russia and China; more sanctions and weapons to help Ukraine; and a UK-US FTA. If you combine that with analysis suggesting Truss backs de facto MMT, as flagged earlier this week in ‘Bank of England Dreaming’, then we have arrived at the Western policy response to a crumbling global order flagged here since 2015. It’s almost as if real, not larping, Elves and Orcs suddenly appeared on our streets, as in ‘Bright’.

Of course, this could be more British high fantasy, as Build Back Better and Levelling Up were. There will be no UK-US FTA while Northern Ireland remains unsettled. Moreover, MMT is very high risk/high reward: “One does not simply walk into More-dosh!” Even so, the key point is we lack any alternative business-as-usual options. On which note, and on ‘The Things of Power’:

“I wish it need not have happened in my time,” said Frodo.

“So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”

Tyler Durden
Fri, 09/02/2022 – 15:25

via ZeroHedge News https://ift.tt/qgJV4Ap Tyler Durden