Category: zerohedge

Authored by Mike Shedlock via MishTalk,

If you do not accept any part of the climate change story, expect the worst.

Climate Change Parts 

1. Climate is Changing

2. CO2 is the Reason

3. Politicians Have the Solution

It’s Changing

Without a doubt climate is changing. 

There was a move a few years back to change the discussion from “global warming” to the more politically correct meme “climate change” just so no one could reasonably deny it was happening.

Depending on one’s time frame, global warming is happening too. The questions are why and for how long?

Is CO2 the Reason?

An increase in CO2 is likely part of the answer but what part? And why the slowdown vs what the models predicted?

Nature.Com discusses Making Sense of the Early 2000s Warming Slowdown.

Climate models did not (on average) reproduce the observed temperature trend over the early twenty-first century, in spite of the continued increase in anthropogenic forcing. This mismatch focused attention on a compelling science problem — a problem deserving of scientific scrutiny.

Nonetheless, let’s assume the models are correct and that 1950-1970 and 2002-2014 did not happen.

Let’s also assume there was no data manipulation anywhere. 

How Fast is the Sea Rising?

Please consider How Fast is the Sea Rising?

Between 1900 and 2016, the globally averaged sea level rose by 16–21 cm (6.3–8.3 in). More precise data gathered from satellite radar measurements reveal an accelerating rise of 7.5 cm (3.0 in) from 1993 to 2017, which is a trend of roughly 30 cm (12 in) per century.

Let’s assume 100% of the ocean’s rise is due not only to CO2 but manmade CO2 and as a result the oceans will rise by a foot in the next 100 years. 

Existential Threat of Our Time

On February 3, I noted Climate Change Moves to the Forefront of Biden’s Legislation

“It’s long past time for the Senate to take a leading role in combating the existential threat of our time: climate,” said Senate Majority Leader Chuck Schumer.

Allegedly, the existential threat to mankind is a 1 foot rise in the ocean over the next 100 years.

Cheaper to Deal With it Now

On January 28, I noted John Kerry’s Straw Man Arguments for Wasting Money on Climate Change

John Kerry: “There are countless economic analyses now that show it’s now cheaper to deal with the crisis of climate than it is to ignore it. We spent $265 billion 2 years ago on 3 storms, Irma, Harvey, and Maria … We’re spending the money, folks. We’re just not doing it smart” pic.twitter.com/ZGXFCwqZhz

— Aaron Rupar (@atrupar) January 27, 2021

Kerry blamed 4 hurricanes on climate change as if throwing any amount of money at the alleged problem would have stopped the hurricanes.

Some claim I took Kerry out of context. Play it yourself to see. 

Where is the CO2 Coming From?

CO2 Stats

• Please note that the US reduced its carbon footprint from 6.13 billion tons in 2007 to 5.28 billion tons in 2019.

• Meanwhile, China increased its footprint from 6.86 billion tons in 2019 to 10.17 billion tons in 2019.

• In the same timeframe, global output rose from 31.29 billion tons to 36.44 billion tons.

• In 2007, the US accounted for 19.6% of the total global carbon footprint.

• In 2019, the US accounted for only 14.5% of the total global footprint.

A Word About Cherry Picking Data

Cherry Picking?

What the hell do you think is going to happen when everyone in China and India using mostly coal want higher standards of living?

You reaffirm the big problem ahead is totally outside US control.

Yet, Biden, AOC, etc. think the US can solve this with dollars

— Mike “Mish” Shedlock (@MishGEA) February 15, 2021

For pointing out that the US only accounted for 14.5% of the total global footprint, not only was I accused of cherry picking the data it led to charges of me being a racist.

This comment kicked it off: “Mish, please alter the graph. You can’t show that China is a major polluter or in any way shape or form, a bad actor, because that is racist.”

That I believe was sarcasm but many others jumped on the boat.

Take this comment for example.

What verges on racism is believing that the billions in China, Africa, South America don’t have the right to pollute at the same rate as those of us in the developed world. And what verges on willful ignorance is discounting what climate scientists say are the consequences of introducing so much CO2 into the atmosphere.

AOC’s New Green Deal

Please recall AOC’s Green New Deal Pricetag of $51 to $93 Trillion vs. Cost of Doing Nothing.

Here’s another amusing reader comment 

You keep equating the estimated cost of the green new deal with the cost of getting to net zero emissions. That is incorrect, there are a ton of expensive proposals in the green new deal which have nothing to do with carbon emissions.

OK. What portion of AOC’s plan does one want to assign to carbon?

67%? 50%? 33%? 

$90 Trillion Solutions

In 2015, Business Insider noted A Plan Is Floating Around Davos To Spend $90 Trillion Redesigning All The Cities So They Don’t Need Cars

The $90 trillion proposal came from former US vice president Al Gore, former president of Mexico Felipe Calderon, and their colleagues on The Global Commission on the Economy and Climate. 

A Word About Scientific Consensus

The scientific consensus when I was in grade school was the threat of global cooling.

Teachers discussed plans to dump charcoal on the ice to warm the earth as a solution. https://t.co/vwqVwphF4e

— Mike “Mish” Shedlock (@MishGEA) February 17, 2021

Politicians Have the Solution?!

Now we are getting to the heart of the matter. 

Climate change is ongoing for hundreds of millions of years.

I never said otherwise.

I do question the extreme emphasis on CO2, noting lies, coverups, and insane hype.

What I am sure of:

Politicians like AOC, Al Gore, John Kerry are hucksters incapable of solving anything. https://t.co/7rUsUcoLW7

— Mike “Mish” Shedlock (@MishGEA) February 17, 2021

Let’s review the key point: In 2019, the US accounted for only 14.5% of the total global footprint.

Key Questions

1. How much money are we willing to spend to reduce our 14.5% and falling percentage of carbon emissions?

2. What would it cost to cut that by half in 10 years? 

3. Assuming we could cut that in half in 10 years, what would it do to total carbon output?

4. By what force do we get China, India, and all the developing economies in the Mideast and Africa to reduce their carbon output?

5. Assuming we achieve number 4 peacefully by some sort of economic buyout like cap-and-trade what is the cost to the US? 

6. What about inflation?

7. Sure, China is producing goods for the US and EU but do we want that to stop? When? Why? How? Cost?

8. Does not China, India, Africa, etc., have the right to improve their standards of living?

9. What do the above points imply about the US standard of living?

10. How the hell do we pay for this?

Looking ahead over the next 100 years, the US is a minor part of the carbon problem. 

I have yet see AOC, John Kerry, any Mish reader, or anyone else address any of the above 10 questions in detail, and I am sure that set of questions is incomplete.

Final Questions to All Those Demanding Government Do Something

What the hell are you doing? 

The #1 thing someone can proactively do eliminate their carbon footprint is to stop breathing.

Since that seems a bit impractical, the #2 thing someone can do is not have kids. 

Anyone up in arms about carbon ought to not have kids, not eat meat, not drive a car, not have a TV, not listen to the radio, and in general not do much of anything.

Instead, most demand the government do something. What? 

Until someone can put a realistic price on this while addressing my 10 questions, forgive me for not agreeing that a total rise in the ocean of 3 inches in the last 20 years is the existential threat of our time.

GM to Phase Out Gas-Powered Vehicles by 2035, Carbon Neutral by 2040

One day after Kerry’s ridiculous rant, I noted GM to Phase Out Gas-Powered Vehicles by 2035, Carbon Neutral by 2040.

Assuming one believes CO2 is a problem, this is the way problems are solved.

GM is not doing this to save the world, it is doing this because market forces mandate a change.

Similarly, solar power will come into play as storage technology improves.

The free market, not populist ideas will solve real world problems.

Bonus Geopolitical Q&A

Q: What happened when Merkel went along with the Greens and did away with nuclear?
A: Germany imports more coal-based energy from neighboring states and is more dependent on  Russia for natural gas.

Q: Is wind and solar ever going to make a serious dent in China’s growing energy demands.
A: No

Q: What happened in France when Macron pushed through a gas tax to support the Green movement?
A: How quick we forget the Yellow-Vest Revolt that went on for months.

The Real Threat

The “existential threat” is politicians seeking $90 trillion solutions to hyped-up problems. 

The Oneok natgas network connects Great Plains gas fields and major metro areas in the Midwest and East. The natgas network is massive, spans about 2,400 miles of pipe, connecting 130 natgas fields, six storage centers, and a dozen interstate systems. 

Last week, as the polar vortex poured Arctic air into the central US and down into the Gulf of Mexico, Oneok’s network experienced a catastrophic meltdown as frigid temperatures caused equipment failures.

As natgas wellheads froze and supply halted, Oneok OGT nat gas spot exploded from $3.46 to $9 on Wednesday, $60.28 on Thursday, and an insane $377.13 on Friday, up 32,000% in a few days. 

Next-day delivery at the Oneok Gas continued to erupt early this week. On Wednesday, spot prices at Oneok jumped to $1,250. This is one of those markets where having a limit-up circuit breaker could actually be helpful, even though there is nowhere near enough product to satisfy demand at any price hence the explosive move.

Winter blast in plains expected to last through next weekend. Supply is literally frozen. Midcontinent NG could hit GME^batshit levels https://t.co/pFvSgwovxz

— zerohedge (@zerohedge) February 12, 2021

Limit-down circuit breakers would have been good today on Thursday as Oneok NatGas Spot prices crashed down 99% to ‘norms’ around $4 as temperatures rose. 

NatGat futures (Henry Hub) prices also tumbled, erasing the spike from earlier this week as more supply came online and weather conditions improved. 

Earlier today, we showed the worst is likely over as warmer temperatures could be seen by the weekend. 

Texas’s power grid operator ERCOT posted grid data that showed electricity demand above 50 gigawatts, signing that fewer blackouts would be seen today.

With the power grid stabilizing, more customers see their power restored. PowerOutages.US (as of 14:01 ET) showed around 447k customers without power in the state. 

Authored by Mark Glennon via Wirepoints.org,

Despair, as best as we can tell, is the emotion growing most rapidly in Illinois, and yesterday, February 17, was particularly dispiriting.

Three stories told those who believe Illinois is on the wrong track that the state’s political establishment cannot care less about their concerns. Disdain and even hatred about those concerns prevail.

First was Gov. JB Pritzker’s State of the State and Budget Address. It’s not just that it was more of the same refusal to undertake the major reforms needed to solve the fiscal crisis, which we are writing about separately. It was the extreme rhetoric Pritzker used to attack a political obstacle that doesn’t exist.

That political obstacle, Pritzker said, is Illinois Republicans. Their purposeful destructiveness has undermined the mission of putting Illinois on the right path, Pritzker would have us believe.  “In essence, they eliminated the fire department, burnt down the house, and poured gas on the flames — and now they’re asking why we’re not doing more to prevent fires,” he said.

In truth, however, Republicans have been unable to pass or block a single thing of any consequence during the Pritzker Administration because Pritzker’s party has held a supermajority in the General Assembly for years. Nor do Republicans hold even one statewide office. He has faced no political obstacle from those he excoriated.

Second, Illinois finalized the Culturally Responsive Teaching and Leading Standards through a vote by a legislative committee. A firestorm of opposition preceded the vote, expressed by Illinoisans who saw what the standards were plainly designed to accomplish: political indoctrination of kindergarten through high school students, imposing radically divisive critical race theory on classrooms.

Countless parents across the state were livid, but they watched helplessly as the standards were sold to the public through distortion and outright dishonesty, which we wrote about here.

Third, a commission appointed by Chicago Mayor Lori Lightfoot to identify city statutes that perhaps should be removed returned its list of what it called “problematic” statues. The list includes five of Abraham Lincoln and two of George Washington.

One, of a Native American, is titled A Signal of Peace, and was dedicated by an owner who said the monument was intended as a permanent symbol of respect for native people.

Another, directed at antisemitism, bears a quote from a speech George Washington delivered to a Jewish congregation: “The government of United States, which gives to bigotry no sanction, to persecution no assistance, requires only that they who live under its protection should demean themselves as good citizens, in giving it on all occasions their effectual support.” A bronze plaque placed by the donor reads: “Symbol of American tolerance and unity and of the cooperation of people of all races and creeds in the building of the United States.”

And in the height or irony, one, shown here, is simply called The Republic.

The Republic: “problematic.”

Most Illinoisans may think it preposterous that those statues could be tagged for possible removal, but Lightfoot is taking her commission’s list seriously.  “This project is a powerful opportunity for us to come together as a city to assess the many monuments and memorials across our neighborhoods and communities — to face our history and what and how we memorialize that history,” Lightfoot said in a statement.

The common element in each of those stories is the extreme contempt, even hatred, that Illinois’ political leadership shows for the most fundamental values held by many Illinoisans. And they make no effort to hide it. They simply don’t care.

It is therefore understandable if despair is the sentiment growing most rapidly in Illinois.

We can only hope that conviction, courage and resilience remain dominant and prevail against a government so estranged from so many of its own people.

As the US awaits the FDA’s decision on whether to approve JNJ’s COVID vaccine (the committee to review the trial data will convene next week), we’re hearing more negative reports suggesting JNJ vaccine supplies won’t be nearly as prevalent as the US government had hoped.

And now what’s more, White House COVD Advisor Andy Slavitt just said the Johnson and Johnson vaccine might not end up being a one dose vaccine. The company is testing, right now, the effectiveness with a booster, according to Fox Business reporter Edward Lawrence.

White House COVD Advisor Andy Slavitt just said the Johnson and Johnson vaccine might not end up being a one dose vaccine. The company is testing, right now, the effectiveness with a booster. #coronavirus #vaccine

— Edward Lawrence (@EdwardLawrence) February 18, 2021

Later, Dr. Anthony Fauci confirmed that JNJ was working on a two-dose version of the vaccine, although he insisted the company was on track to deliver 100MM doses this year.

We’re still waiting to see if Fox Business’s report will be confirmed by other media organizations (we suspect the White House will mostly ignore it until then), but Slavitt has already struggled in recent TV interviews to explain certain disparities between states’ COVID response.

White House covid adviser Andy Slavitt struggles to answer why states like California are faring no better than Florida despite still being in lockdown:

“There’s so much of this virus … that’s just a little beyond our explanation”pic.twitter.com/jOk8HZHIC9

— Daily Caller (@DailyCaller) February 17, 2021

While Bill Gates promotes the JNJ and Novavax jabs during interviews, the NYT reports that even with the JNJ jab expected to be approved for emergency use early next month, the US will have only “a few million” doses on hand for distribution. The paper cited a “key White House advisor” as its source.

One of the JNJ jab’s major advantages over competitors by Pfizer and Moderna was supposed to be that it was only one dose instead of two, and can stay viable in a refrigerator for three months, while the other two must be kept frozen.

With doubts growing about the availability and, now, potency of JNJ’s jab, this could put even more pressure on doctors to “endorse” delays of second COVID vaccination doses, which the US government appears on the verge of doing.

After all, President Biden has vaccination targets that need to be hit, regardless of what’s going on over at JNJ.

Authored by Michael Snyder via The End of The American Dream blog,

Over the past year we have seen a mass exodus from major cities along the west coast, but what is happening to San Francisco is particularly sad.  Once upon a time, San Francisco was one of the most beautiful cities on the entire planet.  There is so much culture there, and the rolling hills make it a place like no other.  And thanks to the tech boom in Silicon Valley, it has become one of the most prosperous cities in the whole country.  So why have hordes of San Francisco residents decided to leave and never look back?

Well, there are a lot of factors at work.

First of all, the cost of living has gotten wildly out of control.  A postage stamp of an apartment will cost you thousands of dollars per month to rent, and a lot of people don’t like paying 17 dollars for a salad.

For others, the extremely high taxes and the insane politicians are more than enough of a reason to leave the state.  The lockdowns that were instituted by Governor Gavin Newsom have destroyed thousands of small businesses, and many former small business owners have pledged that they will never go back to California under any circumstances.

In San Francisco in particular, open drug abuse in the streets has made headlines all over the globe in recent years.  The streets are constantly littered with drug needles and piles of human feces, and that isn’t pleasant.

On top of everything else, there is always the threat of more wildfires and a giant earthquake could strike the coast at literally any moment.

But none of those things are what this article is about.

This article is about the huge spike in crime that is driving countless people away from San Francisco.

When he was able to get a job with a tech company four years ago, Kieran Blubaugh jumped at the chance to live in San Francisco, and at first everything seemed great…

Kieran Blubaugh dreamed of living in California when he was growing up in Indiana. He played the Tony Hawk Pro Skater video game and envisioned himself skateboarding down San Francisco’s crazy hills.

After paying off his student loans four years ago, he landed a job with a tech company and moved to San Francisco. At first, life was heavenly. He had a seven-minute commute on his motorcycle. He could pay $30 to see Incubus, one of his favorite bands, a short walk from his apartment.

Unfortunately, his infatuation with the region did not last long.

Even though he was located in a good part of the city, crime just kept getting worse and worse, and eventually he decided that enough was enough…

Soon, however, his California dream soured. Thieves broke into his locked garage and did $8,000 worth of damage to his motorcycle, doubling his insurance rates. His dog nearly died after eating human feces on the sidewalk. Seeing people either getting arrested or being treated for an overdose outside a nearby building was a regular occurrence.

“And I live in a nice part of town,” said Blubaugh, 33.

With each passing year, the criminals just keep becoming even more brazen.

Not too long ago, San Francisco resident Ben Couillard had someone watch his house while he was away, and that individual actually had to confront someone that was trying to break into the house…

He said the house sitter came face-to-face with the suspicious person who had turned his attention away from the vehicles and to the house.

“So she saw him through the window and basically when she asked him, you know, ‘Can I help you?’ Like, what are you doing as he’s trying to break in? And he said to her, like, ‘Go upstairs, (expletive) or I’ll kill you.”

What would you do if that happened to you?

You could call the San Francisco police, and they may or may not show up eventually.

Meanwhile, the junkies will continue to roam throughout your neighborhood as they search for things to steal so that they can sell them for more drugs.

The other night, San Francisco officials held a “virtual town hall” to discuss the crime wave.  Residents were told that criminals are starting to target residents more frequently because they don’t have many tourists to prey upon these days…

San Francisco Supervisor Hillary Ronen, District Attorney Chesa Boudin, and the captain of the police department overseeing the area, held a virtual town hall with residents of the community Wednesday night to address their concerns.

They attribute what they say is an increase in crime to “economic desperation” and “tourism has gone down so substantially in San Francisco that criminal rings that targeted tourists in areas that tourists frequent no longer have tourists there,” said Supervisor Ronen.

Please remind me not to visit San Francisco as a tourist any time soon.

Sadly, we are seeing the exact same thing happen to San Francisco that has happened to countless other communities all across the nation.  Like so many other major cities, it has become a crime-ridden, drug-infested hellhole, and this has happened even though northern California is swimming in hundreds of billions of dollars from the tech industry.

After telling a reporter why he left the state, Kieran Blubaugh was asked how conditions in the state could be improved.  This was his answer…

“We need more police. There’s a general lawlessness that’s just scary.”

Isn’t that ironic?

The “defund the police” movement has been pushing California cities such as San Francisco to greatly reduce police funding, but Blubaugh insists that the solution is more police.

And Blubaugh is not exactly an elderly curmudgeon.  In fact, he is just 33 years old.

Of course the phrase “general lawlessness” could be used to describe the condition of the United States as a whole.  We have become an upside down society where good is evil and evil is good, and as a result we have totally lost our way.

Unless we completely reverse course, the “general lawlessness” in our country is only going to intensify in the years ahead.

But we aren’t going to reverse course, are we?

At this point, we appear to have a national love affair with evil, and the consequences of that love affair are going to be very bitter indeed.

*  *  *

Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.

On Tuesday, we noted how California and Florida have strikingly similar COVID numbers despite polar opposite approaches to dealing with the virus; Florida has remained a largely open state without mask mandates or lockdowns, while California has imposed strict lockdowns that have devastated small businesses and contributed to a national mental health crisis.

California Gov. Gavin Newsom, a Democrat, has put some of the strictest measures in place to combat the coronavirus pandemic – while Florida’s Republican Gov. Ron DeSantis has done nearly the opposite. –Daily Mail

New cases, deaths, and hospitalizations between the two states follow virtually the same patterns, with Florida’s data looking even better than California.

In an appearance on MSNBC, White House COVID adviser Andy Slavitt said that the virus was unpredictable and that the differences between the two states are “a little bit beyond our explanation.”

Biden’s adviser struggled to spell out specific reasons that Florida’s lax approach wasn’t just as effective, saying: ‘What we do know is that the more careful people are, the more they mask and social distance, and the quicker we vaccinate, the quicker it goes away and the less it spreads,’ Slavitt said. 

‘This is a virus that continues to surprise us. It’s very hard to predict. And all around the country, we’ve got to continue to do a better job, and I think we are, but we’re done yet,’ he said. –Daily Mail

Watch:

The WH’s Covid adviser, @aslavitt46, is asked why Calif., still in lockdown mode, has numbers that aren’t better than a free state, Florida.

Slavitt: “There’s so much of this virus … that’s just a little beyond our explanation” pic.twitter.com/zZFBugW97r

— Tom Elliott (@tomselliott) February 17, 2021

Authored by Charles Hugh Smith via OfTwoMinds blog,

America’s financial system is nothing more than a toxic waste dump of speculation, fraud, collusion, corruption and rampant profiteering.

What Poisoned America? The list of suspects is long: systemic bias, special interests dominating politics, political polarization, globalization and the offshoring of productive capacity, over-regulation, the rise of rapacious cartels and monopolies, Big Tech’s gulag of the mind, the permanent adolescence of consumerism, permanent global war, to name a few.

The question boils down to this: what problems cannot be addressed by the status quo? Most of the ills listed above can be addressed with existing mechanisms of governance and adaptation. For example, consider systemic bias. The U.S. Armed Forces have demonstrably led the way in dramatically reducing systemic bias via performance-based advancement. The rest of America would do well to copy these organizational improvements.

Many of the other ills could be addressed within current systems of governance–antitrust, etc.

The two that appear impervious to reform are 1) soaring wealth-income-power inequality and 2) the dominance of special interests. In both cases, the corporate foxes are guarding the hen house, so any reforms with real teeth are watered down to PR by those reaping the vast majority of the financial gains. Corporate profits are in the billions while you can buy elected officials’ cooperation for mere millions. There is no way to get around that asymmetry.

I would propose an even deeper systemic poison: zero-interest yield on capital. For a variety of reasons, the yield on capital is either zero or less than zero if we factor in inflation. We now earn (heh) 0.1% on our cash while inflation is somewhere between the “official” rate of 3% and more real-world measures between 5% and 10%.

This is a significant change from the days when savings (in savings and loans institutions) earned 5.25% by regulation.

While ordinary capital earns nothing (or less than zero), the capital and income of the top 0.01% has rocketed to unprecedented levels. This vast asymmetry is poisoning America, and the financial system, from the Federal Reserve on down, is incapable of addressing it other than making it even more distorted and destructive by doing more of what’s failed spectacularly.

To understand why yields on capital have fallen to zero while wealth-income has flowed to the top elites, we need to look at wages share of the economy and capital’s share of the economy. Wages share (i.e. labors’ share) has been falling for the past 45 years, while corporate profits and the wealth of America’s top tier has soared. (see chart below)

It is not coincidence that as interest rates fell to zero the wealth and income of the top 0.01% soared while ordinary wage income fell 10% when adjusted for the purchasing power of the earnings.

A recent report prepared by the RAND Corporation, Trends in Income From 1975 to 2018, documents that $50 trillion in earnings has been transferred to owners of capital from the bottom 90% of American households in the past 45 years.

What happens when the purchasing power of the earnings of the bottom 90% declines for decades? (Even high-earners such as doctors have experienced a decline in the purchasing power of their earnings since 1975.)

Households cannot borrow as much money as they once could because their earnings simply don’t go as far; there is less disposable income to support more debt service.

What happens when corporate profits skyrocket as jobs are offshored and corporations arbitrage all the goodies of globalization? The corporations don’t need to borrow as much money as they have trillions in profits to work with.

In other words, demand for credit stagnates while at the same time, the Federal Reserve has flooded the economy with near-zero rate credit. Demand has stagnated along with wages while supply has rocketed into the trillions thanks to unprecedented central bank credit creation.

The reason why central banks have slashed rates to zero is obvious: if the bottom 90% can’t borrow more money at 5% to consume more goods and services, they can certainly borrow more at 1.5% because the interest part of their monthly payment drops significantly.

And sure enough, crushing rates to near-zero has triggered refinancing/housing bubbles and generated high auto-truck sales based on a few dollars down and 1.9% auto financing.

In other words: as the purchasing power of wages has relentlessly declined, the “fix” is to substitute debt for earnings. The fact that eventually stagnating earnings cannot support more debt at any rate of interest is inconvenient, so it’s been ignored.

Zero-interest rates has played out differently in Corporate America: since capital is so cheap to borrow, why not borrow a few billion dollars at 1.5% and use the money to buy back shares of the company’s stock, which generates a hefty 10% annual increase in the share price? Indeed, why not?

And why not use that cheap capital to automate tasks to reduce costly American labor and move even more staff overseas to low-wage nations? Indeed, why not? Maximizing profits demands it, and the near-zero cost of capital incentivizes it.

The net result of near-zero yields on capital? The top 0.1% own more wealth than the bottom 80%. Roughly 75% of all income gains have gone to the top 0.01%.

This extreme asymmetry has poisoned American society and its economy. This immense distortion in the cost of capital can best be understood by asking: what happens when a resource is free?

The answer is that it’s squandered. But the squandering is only part of the problem.

Consider what happened when air and water were “free”. Both the air and water became toxic waste dumps, and American rivers infamously caught on fire. The same is true of “free” capital: America’s financial system is nothing more than a toxic waste dump of extreme speculation, fraud, collusion, corruption and rampant profiteering.

The rivers are on fire but the Federal Reserve’s plan remains the same: keep the cost of capital at “free” so the extremes of speculation can run to failure. The run to failure will be as extreme as the asymmetries that have poisoned America.

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

*  *  *

My recent books:

A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

NASA’s Mars Rover has finally successfully landed, marking NASA’a largest and most sophisticated science rover on Mars, as the craft, known as the Perseverance, touched down in what appears to be an ancient river delta that may contain signs of whether the planet ever harbored water, or other signs of microbial life.

The occasion was marked with a tweet with some images shared by NASA, with a tweet-by-tweet countdown as Perseverance touched down.

I’m safe on Mars. Perseverance will get you anywhere.

#CountdownToMars

— NASA’s Perseverance Mars Rover (@NASAPersevere) February 18, 2021

Hello, world. My first look at my forever home. #CountdownToMars pic.twitter.com/dkM9jE9I6X

— NASA’s Perseverance Mars Rover (@NASAPersevere) February 18, 2021

This is it. I’m entering the top of the Mars atmosphere. No looking back. Seven minutes to touchdown. #CountdownToMars pic.twitter.com/q4LcKcPfpr

— NASA’s Perseverance Mars Rover (@NASAPersevere) February 18, 2021

As the craft touched down, Cheers erupted at NASA’s Jet Propulsion Laboratory in Pasadena, Calif. on Thursday when flight controllers received a signal Thursday at 1555ET that the craft had successfully landed.

Touchdown confirmed. The #CountdownToMars is complete, but the mission is just beginning. pic.twitter.com/UvOyXQhhN9

— NASA (@NASA) February 18, 2021

Traveling to mars has been a US priority since the administration of George W Bush.

“This is one of the most difficult maneuvers we make in the space business,” Matt Wallace, deputy project manager of NASA’s Mars 2020 mission, told reporters on Wednesday.

Perseverance had traveled 292MM miles (470MM kilometers) since being launched July 30 from Cape Canaveral, Florida. Mars landings are among the toughest challenges in space exploration, and Perseverance’s arrival in Jezero Crater was the trickiest NASA has ever attempted.

Covered in boulders and craggy sand dunes and cliffs as high as 300 feet (about 90 meters), the 28-mile-wide (45 km) crater had been rejected for previous missions, but NASA targeted it after advances in terrain-navigation technology enabled the craft to alter its flight path autonomously. The $2.7 billion rover also carries a drone helicopter known as Ingenuity with 4-foot rotors, which will be the first craft to attempt to fly on another planet. A successful landing would mean the aircraft could fly as soon as next month, depending on how scientists assess different locations for a flight.

This is the fifth time since 1997 that NASA has attempted a landing on the Martian surface, a daunting task of physics and engineering that comes with a dismal record: Over 50 years of attempts, more than half of previous efforts have failed.

The former Soviet Union is the only other country that has successfully placed a spacecraft on Mars.

NASA is expecting big rewards from the $3 billion mission. The Perseverance rover is not only the agency’s most sophisticated robotic explorer, but it’s also the first stage of a broader plan to collect more martian rocks. Right now, engineers are breathing a sigh of relief.

Hopefully this is a sign of improvement in supply and potentially the end of the horrors in Texas (and more broadly).

NatGas prices tumbled today…

Oil prices also fell, despite a big inventory draw as fears over the shut-ins lasting a long time appeared to abate…

And gasoline prices also slid lower…

As energy prices tumbled, crypto prices surged with Ethereum ripping up near $1950 to new highs…

Source: Bloomberg

And after watching the “Game Stopped” hearings today, this seemed appropriate…

Interestingly, GME shares plunged on the day but spiked as ‘RoaringKitty’ began his testimony…

Overall stocks plunged at the open for the 3rd day in a row, and rallied back somewhat for the 3rd day in a row…Small Caps remain the biggest laggards this week and The Dow is clinging to its gains…

With energy prices tumbling, it is likely no surprise that energy stocks actually dared to have a bad day as Utes outperformed…

Source: Bloomberg

TSLA was unable to make it back to the $800 pin today…

The VIX term structure reached a serious extreme this week and is beginning to reverse a little…

Source: Bloomberg

Despite equity weakness, Treasury yields rose on the day (with significant steepening, 2Y unch, 30Y +3bps).

Source: Bloomberg

But we do note that the high yields of the day failed to take out yesterday’s highs…

Source: Bloomberg

Real yields surged to their highest since Thanksgiving…

Source: Bloomberg

The surge in yields recently has sent sub-zero-yielding debt down over $3.5 trillion… (but it’s still at $14.5 trillion)

Source: Bloomberg

The dollar index traded like a Texas nat gas contract today, dumping, spiking, and dumping intraday…

Source: Bloomberg

Bitcoin was stead around $52,000 record highs…

Source: Bloomberg

Gold tumbled to a 7 month low as lumber futures soared to a record high above $1000…

Source: Bloomberg

Finally, just a little reminder, The Fed’s staff warned that “valuations were elevated” yesterday.

“Elevated”?! What the f**k?

Source: Bloomberg

We are not sure that word means what they think it does!

Deutsche Bank employees just can’t catch a break.

For years, workers at Germany’s largest (and according to many, most insolvent) bank were told they won’t get a bonus and they should be happy that they have a job. Then, last year, things finally looked up when the bank whose stock price trades not too far from its all time lows, finally resumed the practice of paid out a modest bonus pool of €1.52 billion for 2019, which is a small fraction compared to what other bank workers get. Excitement then started to pick up in December, when reports circulated that Deutsche Bank was considering raising bonuses for traders by 10%, and peaked in outright euphoria a few weeks ago when Bloomberg reported that the final numbers could be even higher in light of the bank’s impressive Q4 results which included the first annual profit since 2014.

Unfortunately, it was not meant to be and it now looks like any hopes for further bonus inflation have just popped, only instead of blaming management for yet another year, DB bankers have a new nemesis: the European Central Bank.

It was the ECB that objected to DB’s proposed payout levels, which forced the bank to scale back plans for its bonus pool Bloomberg reported, noting that this “highlighting the challenges of rewarding top performers while heeding demands for restraint during the global pandemic.”

CEO Christian Sewing had promised to reward high-performing staff after soaring revenue from securities trading helped keep his turnaround on track even as the global economy slumped. But those traders will be disappointed after regulators urged banks to “show constraint” after receiving unprecedented relief to weather the crisis, which has wreaked havoc on many other industries.

While Germany’s largest bank had initially planned to pay out more than €2 billion euros for staff performance in 2020 – which is a sad fraction of what other, more stable banks pay out –  that amount has been cut after several rounds of talks with the central bank in recent months, Bloomberg sources reported. The ECB has now dropped its reservations, after the final number has been trimmed.

“We’re obviously very mindful of the guidance that we’ve got from the ECB to apply moderation in variable compensation,” Chief Financial Officer James von Moltke said in a Bloomberg TV interview in early February. “We of course need to balance that with what was a strong performance year and the need to compensate people for that performance on a competitive basis.”

Deutsche Bank said earlier this month that overall compensation expenses fell 6% last year to 10.5 billion euros as the lender cut jobs. It’s expected to disclose the bonus pool amount in its annual report next month.