Category: zerohedge

After the “controversy” this year of junior bankers claiming they are being overworked (stop us if you’ve heard that one before), Goldman Sachs is reportedly weighing whether or not it should raise salaries for its youngest employees. 

There has been pushback from Senior Executives, who have argued that bumping up salaries mid-year could set a “dangerous precedent”, FT reported this week, and break from the company’s long-held “pay for performance” compensation structure. 

Goldman could be following steps taken by banks like Citigroup, which offered an increase of up to $25,000 last week to move its fixed salaries to $100,000 per year. JP Morgan and Barclay’s also lifted salaries to $100,000, from $85,000 at the end of June, FT notes. Bank of America and Wells Fargo increased salaries by $10,000 each, as well.

With Goldman the last to act, one senior executive commented to FT: “We should not participate in this game of moving salaries up and down every few months. If you behave like that you simply end up with mercenaries. We pay at the end of the year for performance.” 

First year analysts at Goldman make, on average, $86,000 in salary plus a $37,500 bonus. Investment banking co-heads James Esposito and Dan Dees have already “promised that younger staff would be generously rewarded to reflect the bank’s surging earnings”, according to the report. The bank, however, is reluctant to part from its pay-for-performance model. 

Another executive commented: “We are still thinking through the split of the base and bonus. We are looking at what peers have done, not just in investment banking but in other industries. The war for talent is more fierce than ever before.”

“Goldman does not want to hire people for whom the most important thing is how many days they have to spend in the office. The others can have them,” another executive commented. 

Recall, just days ago, we noted that Cantor Fitzgerald’s CEO, Howard Lutnick, was pushing back on junior bankers that think they have life too tough. Lutnick said that junior bankers complaining about long hours and stressful demands should “rethink their career choice”.

Lutnick’s comments followed 13 junior bankers at Goldman complaining about their workload earlier this year in a slide deck that was released to the public. They claimed to be working 100 hour weeks and experiencing declining physical and mental health. The public scrutiny caused other banks to offer bonuses and rewards to retain their younger talent (and, more importantly, stave off a PR crisis). 

But when interviewed last week, Lutnick broke from the crowd, stating: “Young bankers who decide they’re working too hard — choose another living is my view. These are hard jobs.”

He continued: “There is a path to becoming an investment banker that requires an enormous amount of work including late nights and weekends. Clients want their deals finished under tight deadlines. You should know that going in.”

Lutnick also broke from the majority by stating he wanted his key employees back at their desks. The pandemic, combined with complaints from junior bankers, had led to some banks relaxing rules on working from home. 

“That is our model. Front-office people are going to be working from the office and that will be a competitive advantage for the firm. Back-office staff, such as technical support, compliance and legal, can be more flexible.”

Cantor’s employees have been in the office since last summer and were given a June 1 deadline to come back to the office. 

And with Goldman and Cantor once again whipping their junior bankers like rented mules, it’s almost as though Covid is a forgotten memory and Wall Street is back, baby…

Authored by Pat Buchanan,

Are the Democrats headed for their Little Bighorn, with President Joe Biden as Col. Custer?

The wish, you suggest, is father to the thought. Yet, consider.

On taking office, Biden held a winning hand.

Three vaccines, with excellent efficacy rates, had been created and were being administered at a rate of a million shots a day. The pandemic was at its peak but looking certain to turn down, and it did.

This welcome news lifted national spirits, and the economy with it.

And the new president was taking office in a brief era of good feelings produced by the departure of the party and president who had given us the Jan. 6 Capitol riot.

Thus did Biden begin his administration with his approval at a level his predecessor never reached in any year of his presidency.

Happy days were here again.

But now the storm clouds are gathering and rumbling.

By last week, Biden’s disapproval rating had risen into the 40s, and half the country believed America was “on the wrong track.”

Yet it is not what has happened but what impends that appears ominous for Biden’s and his party’s prospects.

With not quite 70% of U.S. adults having received a vaccination, a new and more contagious delta variant of the disease is spreading worldwide, and an uptick in new U.S. infections has been reported.

In the economy, with markets at an all-time high, an old demon has reappeared. Writes today’s Wall Street Journal:

“Americans should brace themselves for several years of higher inflation than they’ve seen in decades, according to economists who expect the robust post-pandemic economic recovery to fuel brisk price increases …

“If the economists prove correct, Federal Reserve officials might have to raise (interest) rates sooner or more than they expect to keep inflation under control.”

Inflation and rising interest rates to combat it is usually a near-fatal cocktail for a party in control of the White House and Congress in the year they face the electorate.

In addition to warning lights flashing in the economy, Biden has presided over a sudden crisis along the southern border, where 170,000 illegal migrants are being apprehended every month.

“Getaways” – border-crossers who sneak in and evade contact with the Border Patrol – now number 30,000 a month.

Who these people are and whence they came, we know not.

Former President Donald Trump’s policies secured the border, and this new invasion is traceable to Biden’s trashing of Trump’s policy.

Indeed, Biden’s designation of Vice President Kamala Harris as point person on the border crisis, and her reflexive recoil from the duties of that assignment, testify that this latest invasion could be a killer issue for Democrats in 2022.

Also, the progressives’ adamant stand that rogue cops hostile to people of color are the true police crisis in America has been rendered politically obsolete by a nationwide surge in shootings, murders and mass killings.

How potent is the issue? Eric Adams, a Black former police captain running on the issue of public safety, won the Democratic primary for mayor of New York and is headed for Gracie Mansion.

Almost without exception, the cities where the shootings and killings are occurring have been run by Democrats for decades.

The “defund the police!” chant of Black Lives Matter and its camp followers is now being drowned out by a clamor for more cops to protect the people of color who are the collateral damage and victims of the shootings.

Other stories gracing front pages and evening news reports in coming months will be the horrors coming out of Afghanistan, as the Taliban capture towns and provincial capitals and exact retribution on those Afghans who made the fatal mistake of casting their lot with the Americans.

Biden did not take us into Afghanistan, but he ordered the rapid withdrawal, and his presidency will bear the political consequences of his presiding over yet another lost American war. As JFK said, life is unfair.

If the Democratic Party goes into the election of 2022 defending Biden’s border failures, decrying rogue cops rather than addressing the shootings and killings, and explaining away inflation and rising interest rates as “not our fault,” the result would seem to be foreordained.

Then there is the matter of race.

Is it a winner for the Democrats in 2022 to be seen as the party of tearing down statues of Robert E. Lee, Stonewall Jackson, and Lewis and Clark, of requiring that schoolchildren be indoctrinated in the tenets of “systemic racism” and “white privilege,” and learn about how their ancestors were slave-owners and their grandparents cousins or friends of Jim Crow?

As for the progressives’ agenda, the For the People Act, the John Lewis Voting Rights Act and the George Floyd Justice in Policing Act could all wind up dead on the Senate floor alongside Sen. Bernie Sanders $6 trillion plan for remaking America in the image of Norman Thomas.

All killed by filibusters bravely defended by Sen. Joe Manchin.

In his CPI post-mortem note, Deutsche Bank credit strategist Jim Reid cynically recaps the market action this morning, writing that “after another huge US inflation print and big beat relative to expectations (which saw core CPI rise the most since Nov 1991), the market has already looked through the report and looked at some of the temporary “distortions” as tempering the strength.”

Indeed, as we showed earlier, used cars were up +10.5% mom which surprised the market after surveys from the likes of Manheim had pointed to a recent mean reversion of prices. Sure enough, echoing BofA’s conclusion that used car prices will now detract from CPI in the near term, Reid notes that “at some point soon it will likely do so in the CPI.”

And while it is certainly true that at some point soaring inflation prints will reverse, at this point Reid asks two uncomfortable questions:

• first, whether this current bout of inflation is temporary or not, how did consensus once again (and for the 3rd month in a row) completely miss the scorching hot inflation print?
• second, with inflation forecasts creeping ever higher, at what point will the surge in 2022 inflation render the “transitory” debate moot?

Regarding the latter, in his Chart of the Day, the DB strategist shows the the evolution of consensus forecasts on Bloomberg for 2021 and 2022 FY YoY inflation…

… and says that “as a result of continued beats, expectations for 2021’s FY CPI figure has started to climb and interestingly 2022 has followed. If that is correct it shows it can’t all be transitory, as if you believe it was, you might actually believe that base effects would mean that 2022 FY inflation growth should actually be lower than you’d previously thought.”

Authored by Paul Joseph Watson via Summit News,

Groups allied with the Biden administration are planning on working directly with cellphone network providers to ‘fact check’ private SMS messages if they contain “misinformation about vaccines.”

The revelation is made in a Politico article which explains how the White House is preparing to characterize “conservative opponents of its Covid-19 vaccine campaign as dangerous and extreme.”

The decision to ramp up the information war against vaccine skeptics was made after conservatives showed resistance to the Biden administration’s plan to go “door-to-door” to increase vaccination rates.

“Biden allied groups, including the Democratic National Committee, are also planning to engage fact-checkers more aggressively and work with SMS carriers to dispel misinformation about vaccines that is sent over social media and text messages,” states the report.

“The goal is to ensure that people who may have difficulty getting a vaccination because of issues like transportation see those barriers lessened or removed entirely.”

JUST IN – Biden allied groups, including the DNC, plan to engage fact-checkers and work with SMS carriers to “dispel misinformation” about vaccines that is sent over social media and text messages (Politico)

— Disclose.tv 🚨 (@disclosetv) July 12, 2021

The prospect of the DNC and other government-affiliated groups having access to Americans’ private text messages represents a chilling surveillance dystopia.

Interfering with and trying to ‘fact check’ people’s personal conversations is also utterly demented.

Recall that ‘fact-checkers’ infamously declared the Wuhan lab leak hypothesis to be a “debunked conspiracy theory” at the start of the pandemic, only to be forced into a humiliating reversal later on.

In doing so, they may have helped facilitate one of the biggest cover-ups in modern history, so what business such groups have in snooping on people’s private SMS messages is anyone’s guess.

*  *  *

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*  *  *

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South African President Cyril Ramaphosa deployed the military Monday to restore law and order after days of violent protests and mass looting following the imprisonment of former leader Jacob Zuma. The latest round of social unrest is some of the worst since the mid-1990s. 

The widespread looting and social unrest were triggered by last week’s incarceration of former President Zuma. Ramaphosa addressed the nation Monday evening, pleading for calm and for looters to consider the consequences of their actions.

“We are therefore mobilizing all available resources and capabilities to restore order,” Ramaphosa told the nation.

“Let me be clear: we will take action to protect every person in this country against the threat of violence, intimidation, theft, and looting.”

“What we are witnessing now are opportunistic acts of criminality,” the president said. He also warned that unrest could undermine efforts to quell the virus pandemic.

“Our vaccination program has been severely disrupted just as it is gaining momentum.” 

The president also warned that in a matter of weeks, “there’s a huge risk of food insecurity and medication insecurity.” 

His comments on national television come 24 hours after COVID lockdowns were extended for another two weeks. 

The deployment of the army and other forces have been sent to several townships in KwaZulu-Natal, Gauteng, Mpumalanga, and the North West, as the local police have been overwhelmed by the violence. 

The unrest has already disrupted business activity in parts of the country and could undermine the economic recovery and confidence in the country by foreign investors. 

“The disquiet about Zuma’s arrest is being used as an excuse for sheer, opportunistic looting,” said Busisiwe Mavuso, the chief executive officer of Business Leadership South Africa, which represents some of the largest corporations in the country.

“The anarchy on the ground puts yet another nail in our ailing economy’s coffin.”

Extreme violence in #SouthAfrica following jailing of former president #JacobZuma . Despite calls to maintain calm from govt & deployment of soldiers the chaos is intensifying. People are looting the shops as banks & fuel stations remained shut.

pic.twitter.com/tT2Qj3uIEz

— The World Reviews (@tworldreviews) July 13, 2021

#SouthAfricaIsBurning
JUST IN – Every single store in the Jabulani Mall near Johannesburg has been looted. Reports and videos of riots at more malls in parts of South Africa.pic.twitter.com/Fr7ybe0bxT

— @CitrusRamaphosa (@citrusramaphosa) July 13, 2021

Mams Mall in Mamelodi was gutted last night. Shops here have been fully looted. A shop owner tells me that police eventually left the mall as there was nothing they could do. No police visibility around the Mall this morning. (@AlexMitchley) pic.twitter.com/DkcgkUJUDu

— Team News24 (@TeamNews24) July 13, 2021

#DURBAN

Protesters clashed with police in several areas of South Africa and looters ransacked shopping malls on Tuesday as frustrations over poverty and inequality boiled over into the country’s worst unrest in years.
30 people have been killed—@Reuters
pic.twitter.com/Rp4baVEEiL

— Kennedy Wandera (@VOA_Wandera) July 13, 2021

According to Bloomberg, More than 200 shopping malls were looted on Monday, and retailers had lost an estimated 2 billion rand ($137 million). There’s also been widespread looting of warehouses. 

A helicopters view of the GAME warehouse in Durban, South Africa being overrun by looters. 🚁

Source: Unknown#ShutdownSA pic.twitter.com/1LviUsk58N

— Dylan Moore (@MrCPT) July 13, 2021

Dunlap Warehouse Looted In South Africa#JacobZumaArrest pic.twitter.com/9PoAQuec56

— @TheNPCShow on Twitch (@TheNPCShow) July 12, 2021

LG warehouse in #Cornubia, north of #Durban in #KZN being looted. Criminals leaving with expensive TVs &appliances.#KZNViolence #SouthAfrica #SouthAfricaIsBurning #JacobZuma #CyrilRamaphosa pic.twitter.com/7E0PM00jIv

— Manoj Gupta (@PassionForNews) July 12, 2021

Meanwhile, the reaction in markets was most pronounced in the Rand…

If the growing unrest is not contained, then expect the Rand to weaken against the dollar even more. 

In the latest escalation of tensions between US and China, the U.S. Department of State, Department of the Treasury, Department of Commerce, and the Department of Homeland Security issued a supply chain advisory, warning U.S. companies operating in the Xinjiang Uyghur Autonomous Region (Xinjiang) and elsewhere in China to abandon those supply chains or face consequences.

The US has been an outspoken critic of the Chinese using forced labor, such as the Uyghurs, ethnic Kazakhs, ethnic Kyrgyz, and other Muslim minority groups, in factories in Xinjiang Uyghur Autonomous Region and other manufacturing hubs. 

The advisory highlights three main types of supply chain exposure to entities involved in human rights abuses presented in this advisory are:

• Assisting in developing surveillance tools for the P.R.C. government in Xinjiang;

• Relying on labor or goods sourced in Xinjiang, or from factories elsewhere in China implicated in the forced labor of individuals from Xinjiang in their supply chains, given the prevalence of forced labor and other labor abuses in the region; and

• Aiding in the construction of internment facilities used to detain Uyghurs and members of other Muslim minority groups, and/or in the construction of manufacturing facilities that are in close proximity to camps operated by businesses accepting subsidies from the P.R.C. government to subject minority groups to forced labor.

It also said, “businesses with potential exposure in their supply chain to entities that engage in human rights abuses in Xinjiang or to facilities outside Xinjiang that use forced labor from Xinjiang in the manufacture of goods intended for domestic and international distribution should be aware of the reputational, economic, and legal risks of involvement with such entities.” 

The advisory said for companies to “mitigate reputational and other risks,” they should complete immediate due diligence policies and procedures to make sure their supply chains in China don’t include forced labor. 

US Secretary of State Anthony Blinken commented on the advisory via a tweet that read, “This will help U.S. businesses take steps to ensure their supply chains are not tainted by forced labor or other human rights abuses.” 

Here’s the complete advisory note to U.S. companies with supply chains in China:

The advisory will certainly not go well with Bejing. Expect a near-term statement from the Chinese. 

As discussed earlier, inflation came in smoking hot today, with core CPI rising 0.88% mom in June, up from the 0.74% increase in May, and nearly double the expected 0.5% print. This resulted in the yoy rate surging to 4.47% yoy, more than double the Fed’s inflation target, and up from 3.8%, which is the highest since November 1991. Headline inflation also rose 0.9% mom in June, with the % yoy rate climbing to 5.4% from 5.0%

Looking at the components, there were no surprises: as BofA’s Alexander Lin writes in his CPI post-mortem, used cars and trucks “exploded” for another 10.5% mom, while new cars also rose an impressive 2.0% mom. In total, used cars accounted for one third of the gain in CPI.

Travel related components also saw outsized strength with lodging away from home spiking 7.0% mom and airline fares rising 2.7% mom. The latter supported a broader transportation services gain of 1.5% mom, which was also boosted by a 5.2% jump in car & truck rentals and a 1.2% rise in auto insurance.

Stickier OER stayed hot, rising 0.32% mom, with rent of primary residence somewhat lower at a still solid 0.23% mom. The OER pickup puts it back near the top of the range seen in the last business cycle.

The bottom line: while transitory drivers continue to boost core CPI by unprecedented numbers, persistent inflation – shelter and rent – is also strengthening at an alarming pace (as we discussed in May in “Goldman Warns Of “Substantial” Surge In Home Prices, Expects Bigger Housing Bubble Than 2007“).

Next, looking on a contribution basis, new cars added 9bp to core CPI, used cars added 42bp, lodging added 9bp and transportation services added 10bp. Putting it all together, these components contributed 70bp to core CPI this month. As such, the rest of core accounted for 18bp, which in normal times would be a relatively healthy increase in prices. In other words, even without all the transitory strength, other components of inflation were solid—the aforementioned Owner-Equivalent Rent pickup likely being the primary driver.

This brings us to the $64 trillion question: how much of inflation is transitory and how much is permanent, or as BofA asks “to what extent will we continue to see transitory strength in core CPI?”

The good news is that after some stunning gains, some of the key “transitory” components have topped out. Consider the following:

• Lodging away from home is now 2% higher than Feb 2020 levels, which could mean much more limited upside going forward.
• Meanwhile, airline fares still have scope to rise as they remain 9.5% below prepandemic levels.
• On used cars, the ytd increase for CPI is now at 29%, which is now greater than the ytd increase in Manheim wholesale prices which were up 26% at its high in May and moderated to 24% in June.

As such, BofA believes this may be the end of used car price strength in CPI, versus the bank’s previous belief that it could materialize over the next few months as retail lags wholesale. To the extent that wholesale prices continue to head lower, the bank’s economists note that the US now faces a growing near term risk of negative payback in used cars, which could lead to more depressed core inflation prints. Indeed, as BofA found in a separate report published overnight, such negative payback scenarios could lead to substantial transitory disinflation over the next year that could bring broader core inflation below target, despite improving persistent inflation.

Finally, as to whether any of this data will impact the Fed’s actions, BofA does not believe this report changes much. As BofA summarizes, “transitory price pressures remain rampant in the core inflation data and could be nearing their end, with risk of a negative payback over the next year. Persistent inflation, reflected largely by OER, has improved although it is not signaling troublesome inflation.”

In conclusion, here are the heatmaps of sequential changes in CPI …

… and annual changes:

As President Trump stakes his claim to the leadership of the Republican Party heading into the 2022 midterms, Jenna Ellis, a senior legal adviser to former President Trump’s 2020 campaign, announced late Monday that she would be leaving the Republican Party in protest after exposing alleged skullduggery at the top levels of the party.

On Monday night, Ellis lashed out at top party officials on her Real America’s Voice show “Just the Truth,” slamming GOP chairwoman Ronna McDaniel and other top party officials, saying “all of the should resign now” and insisting she wouldn’t return to the party until they leave.

Ellis says she’s changing her party registration “until the party decides it wants to be conservative again.”

She also laid into McDaniel, insisting that “we need to demand that they resign. And we need to say you’re not getting another dime of our money or our support,” she said. “I’m not even going to be registered as a Republican after this because I am too ashamed to be part of a party that still has Ronna McDaniel as the chairwoman.”

“Even if I stand alone for the truth, I will stand for the truth,” Ellis said on Monday.

BREAKING: @JennaEllisEsq announces she is leaving the Republican Party.

“Even if I stand alone for the Truth, I will stand for the Truth.” – Jenna Ellis

Watch the full segment here: https://t.co/hc88hn3Ytt pic.twitter.com/Kv29y1tyQI

— Real America’s Voice (RAV) (@RealAmVoice) July 12, 2021

Ellis tweeted over the weekend that Chief Counsel for the Republican National Committee Justin Riemer had abandoned efforts to assist Trump just days after last year’s election – even as the party raked in $220MM in fundraising money. Riemer reportedly told another staffer that Ellis and Rudy Giuliani’s campaign to challenge the election was “a joke”.

“I led the RNC legal team in over 55 lawsuits on behalf of the President’s reelection, winning a majority of them, including the only successful post-election lawsuit. Any suggestion that I did not support President Trump or do everything in my power to support the RNC’s efforts to reelect President Trump is false,” Riemer said in a statement reported by the outlet. “I will say publicly now what I then said privately: I take issue with individuals who brought lawsuits that did not serve President Trump well and did not give him the best chance in court.”

Following the twitter fireworks, Ellis posted a screenshot of her Twitter profile purportedly showing McDaniel had blocked her.

Update. I guess she doesn’t want to be confronted about the RNC lying.#RonnaMustGo https://t.co/lUZUKpuXpN pic.twitter.com/qHdloHUriQ

— Jenna Ellis (@JennaEllisEsq) July 11, 2021

By Michael Every of Rabobank

Oh-so Politico; Oh-so Socio

It’s a quiet day here so far in Asia and one of those monsoons where we are unlikely to see any sun: that damp, cool gloom and drip-drip-drip of rain is the perfect backdrop for a little British introspection and rumination rather than frenetic market headline chasing for once.

Yesterday I listed the major major policy shifts – appropriately Catch-22 – we have seen in the US under President Biden this year to date: massive fiscal stimulus, and paying people not to work in some cases; a bipartisan OK to US protectionism; a full employment pledge; talking about labor vs. capital; promising to move supply chains; proposed global corporate tax hikes; reversing 40-years of corporate-friendly anti anti-Trust actions – again Catch-22; talk of a Belt and Road rival; and the shift of monetary policy to address far broader socio-economic goals than inflation. I forgot to add industrial policy, which is clearly ascendant in semiconductors at least – but it can’t stop there given local demand will need to be found for all those chips.

However, perhaps the sine qua non of this new zeitgeist was an op-ed in the Financial Times recently arguing: “For sustainable financing to work, we will need central planning.”

While the FT may be printed on pink paper, it isn’t ‘pinko’, for those old enough to know what that means, and that it used to be a pejorative. Being British, it is certainly to the left of the rabidly Ayn Randian op-eds of the Wall Street Journal of years gone by: it generally offers a market-friendly but ‘been there, done that’ shrug at American ‘Atlas Shrugged’. Even so, one still needs to take a step back and realize that this is the FINANCIAL TIMES carrying an argument for CENTRAL PLANNING OF THE ECONOMY. And we all just, at last, shrugged?

Bear that in mind as the population of communist Cuba takes to the streets calling for “freedom.” Then again, the population of even Western countries have taken to the streets calling for freedom this year.

1989 this is certainly not. Or at least not when walls are going up, not coming down; the CCP just celebrated 100 years with a lavish ceremony; there are cries that free speech is under attack in the West; and as the White House makes clear that a global struggle between authoritarianism and liberal democracies is underway, in a far more 1939 manner. To which many liberal democracies and most of the big businesses born, based, and not paying taxes there, just shrug.

Yet life goes on around us in markets regardless of the zeitgeist moving in a direction that, if appearing as the Ghost of Christmas Yet to Come 10-15 years ago, would have seen most Scrooges quivering in their slippers and nightgowns.

Trades and business are being done – and 24/7, and from home, and for digital ‘currencies’ and tokens with deliberately silly names and equally silly prices. Wall Street profits are expected to be bumper. The ECB is so worried about bank dividends soaring that after removing the cap on such pay-outs later this year it will take steps to ensure banks avoid doing so – which again muddies the waters between the free-will in free markets and centrally-determined determinism. Stocks are, obviously, at record highs: when are they not? So life finds a way.

However, there is little real life in some of these markets and market ‘prices’. As I asked someone a few months ago, what would they pay for a government bond of a functionally-bankrupt country that cannot print its own money, but knowing that its central bank is prepared to do whatever it takes to keep bond yields within a certain range? You know the answer: the going rate. What, I then asked, would they pay if the central bank decided not to buy the bonds? You also know the answer: far, far less. And how does the central bank decide, I asked? Politically. And how is a political decision made? Within a social context. One therefore buys an asset at value X based on a sociological, not econometric assumption.

In short, long before that FT op-ed or the US Overton Window shift, we had ‘free markets’: but built on the foundations of decisions made by unelected central-bank bureaucrats reflecting a broader social dynamic. We all took that as normal because we liked the decisions they were making – keeping rates low enough to allow all other assets to inflate,…and for silly-coin and really-silly-coin to become attractive alternative ‘stores of value’.

To be clear again, this is not a Randian op-ed – just an observation that any spluttering outrage one may have at the idea of a centrally-planned economy is a tad late to the party at this stage.

It is also a further attempt to underline that knowing where markets will trade from here has very little to do with econometrics, and little to do with economics: it has much more to do with political-economy. If you are you are trading ‘widgets’, and ‘widgets’ are politically useful – happy days! Your ‘free market’ will be too. However, if you are busy in the world of ‘gadgets’, and ‘gadgets’ are no longer useful – not so happy days: and if you complain about it, Atlas will shrug.

Arguably, where markets will trade has even more to do with the RIVAL political-economies of the US and China. On which, let me conclude with just one headline: the US is apparently mulling a digital trade deal with the Indo-Pacific excluding China: countries such as Canada, Chile, Japan, Malaysia, Australia, New Zealand, and Singapore would aim to set out common standards for the digital economy, including rules on the use of data, trade facilitation, and electronic customs arrangements. And where digital trade deals are made, real trade will likely follow, at least for digital hardware; and so, perhaps, may the use of some, not other, digital currencies.

This all sounds like a combination of free markets and – you guessed it! – emergent central planning. Are you, your supply chain, or your portfolio going to be on the right side of all the first, second, and third-order effects of such an emerging global widget/gadget divide?

Presumably the EU will want to do something different, and in French because “open strategic autonomy”. Vive la difference

Update (0930ET): Texas’s Republican governor, Greg Abbott, has vowed to arrest the Democrat lawmakers who fled the state in an attempt to stop an overhaul of election laws…

“As soon as they come back in the state of Texas, they will be arrested, they will be cabined inside the Texas capitol until they get their job done,” Abbott said.

*  *  *

Texas Democrats have up and walked out on the legislative process.

As AmericanThinker.com’s Andrea Widburg details, the background to the story is that the Texas legislature, which currently has a Republican majority (18-13 in its Senate and 83-67 in its House) is poised to pass a voting reform bill. As with similar bills across America, the point is to ensure that the people voting have a legal right to vote and are, in fact, who they claim to be.

The most contentious issues for Democrats are cleaned-up voting bills and, especially, photo ID. The problem is that most Americans support photo ID. According to a Monmouth Poll, when it comes to photo ID, 62% of Democrats, 87% of independents, and 91% of Republicans support it. Texas, with a strong Republican majority, is intent upon passing a bill that the vast majority of Americans would back.

So, what do the Democrats do? Like Brave Sir Robin, they run away:

Texas Democrats fled their state on private jets Monday in order to stop Republicans in the state from passing their voting rights bills through the state legislature.

‘Today, Texas House Democrats stand united in our decision to break quorum and refuse to let the Republican-led legislature force through dangerous legislation that would trample on Texans’ freedom to vote,’ the Texas state House Democratic caucus said in a statement.

At least 58 Democratic lawmakers left Austin to fly to Washington D.C. on two private jets chartered for the occasion and will use the time in the nation’s Capitol to rally support for federal voting legislation. 

The Democrats’ departure paralyzed the Texas state house as the legislature requires a quorum of two-thirds of lawmakers be present to conduct business. It’s also akin to a move Democrats used in 2003 when they fled to neighboring Oklahoma to block Republicans‘ plan to redraw the state’s congressional districts.  

The Democrats risk arrest and expect state Republicans to send law enforcement officials, possibly including the Texas rangers, after them.

To permanently block the two voting bills that Texas Republicans are pushing, the Democrats would have to stay away through the end of the special legislative session, which can last as many as 30 days.

In addition to this profoundly anti-democratic (small “d” democratic) act, the Democrats on the lam seem to have forgotten that Greta Thunberg would be very angry at them for using private jets. Depending on how many passengers those jets carry, they “create ten times as much greenhouse gas as an economy class traveller on a commercial flight, as well as 150 times more than those travelling by train.” (Think about that the next time some leftist billionaire who only travels by his private jet scolds you about your carbon footprint.)

One more thing: I hope you noticed those beaming smiles, courtesy of the fact that none of them are wearing masks…

Oh, and there was that alcohol issue. As the Democrats were ferried somewhere on a bus (presumably to the private jet airport), Julie Johnson snapped a selfie in which she proudly boasted about how the Texas Democrats are protecting democracy by refusing to let the Republican majority vote on an act that comports with the public will.

The whole thing would have been a lot more profound if the snap hadn’t caught a case of Miller Lite on the bus too. Johnson deleted the tweet, but Twitchy caught it:

They promptly earned some media coverage and went without masks, in violation of the FAA’s COVID restrictions.

But as PJMedia.com’s Bryan Preston details below, this is not the first time such malarkey has occurred.

Inexperienced media seem to think Texas Democrats abandoning their posts rather than doing their jobs is new.

ON PLANE TO DC: Texas Democratic lawmakers are leaving state to break quorum to stop Republican voting bill. Veteran Capitol observers say this is unchartered territory. Photo from Democrat on the plane. https://t.co/YOuOMb0A2m pic.twitter.com/abWoARvFIC

— ScottGordonNBC5 (@ScottGordonNBC5) July 12, 2021

Who are these “veteran capitol observers” you’re tweeting about?

They must not have been around all that long.

The Texas Democrats did this before, back in 2003. I’ll quote a bona fide veteran capitol observer who wrote about it at the time — who is actually a veteran in addition to observing the capitol: me.

The Ardmore fraternity party, as state GOP types have taken to calling the 53 wayward Democrats, said their flight was to protest what they called a highly partisan Republican redistricting plan. State Rep. Jim Dunham of Waco led the group, insisting that the plan was not only too partisan, but that adopting it in a non-census year was an outrage. Dunham has a short memory — he had his own district redrawn in 1997 so that he could build a house in a different neighborhood without having to run in a new district. Of course, 1997 was not a census year. The Ardmore 53 have also tossed up the canard of “diversity,” arguing that the GOP plan would dilute African-American votes and diminish their representation. That’s a funny argument, given that the state currently has three African Americans holding statewide elected office, and all are Republicans.

The truth is that the only thing about the GOP plan that is unprecedented is the fact that Republicans drew it. Tellingly, none of the fleeing 53 voiced any concern about the plan before heading for the Oklahoma flatlands. The two Democrats that did raise concerns during the legislative session had their questions addressed, and stayed in Austin to support the plan’s passage. Republican party Executive Director Wayne Hamilton recalled a bit of Texas history when summing up the state’s view of the hightailing Democrats: “The fact is, the line was drawn at the Alamo and these guys all cut and run.”

Indeed. Perhaps it’s telling that the Democrats who run the media in San Antonio are trashing the Alamo itself now, just about every day. They never saw a fight they weren’t eager to turn tail and run away from and they’re happy to kick the dead if it suits their political aims. Neither is very Texas behavior.

The 2003 Democrats didn’t accomplish anything by running off to Oklahoma. Today’s Democrats won’t accomplish anything either. They are the butt of informed jokes across the Lone Star State.

This is so embarrassing for Texas Democrats. It may play well with their base, but independents are sick of their antics. Note to Republicans: “You have an opportunity to annihilate the Marxist Mob in 2022. Don’t screw it up.” #txlege #MakeTexasRedder https://t.co/2OmAolJHwm

— Chad Wilbanks (@ChadWilbanks) July 13, 2021

Double gross. They couldn’t even feign being Texan and loft some Shiners? C’mon.

The state House speaker is signaling he may penalize them, following Gov. Abbott, who already has. Democrats hold an awful lot of chairmanships and vice chairmanships in the Texas House despite the fact that Republicans control it. It would be a shame if anything happened to those chairmanships and vice chairmanships.

Then there’s redistricting, which will be the subject of another special session later this year. District lines and therefore seats will be in some state of uncertainty. The Texas GOP also has a new chairman, elected Sunday, who might have thought about all this. The Democrats’ flight north certainly presents an opportunity.

The Texas Democrats have become a full HOA of Karens, seeking to speak with the manager until the manager — Texas voters — tells them something they don’t want to hear. Texas voters want secure elections in which it’s easy to vote but dang near impossible to cheat. The Texas Democrats don’t want to hear that.

So instead of showing up to work for the constituents that elected them and pay their salaries, Texas Democrats grabbed some Miller Lites and hopped on a flight to DC pic.twitter.com/EHEdeX9lTS

— Daily Caller (@DailyCaller) July 12, 2021

So they’ve boarded a comfy chartered flight, sans masks and with weak non-Texas beer, to belch too much carbon into the skies and skedaddle away north. Typical.