Month: July 2021

Authored by AllahPundit via Hot Air,

Normal store hours are 9 a.m. to 10 p.m. They’re cutting back to 6 p.m. because, the company claims, “for more than a month, we’ve been experiencing a significant and alarming rise in theft and security incidents at our San Francisco stores.”

Only a month? Walgreens has closed 17 stores in San Francisco since 2016 because it didn’t pay to keep them open with so many locals taking the five-finger discount. Target’s new policy raises the ominous possibility that the problem is getting worse, which would make sense. With the pandemic all but over in the highly vaccinated Bay Area, more thieves may be out and about lately.

Read this post for background on San Francisco’s problem with shockingly brazen shoplifting.

A state law that passed several years ago made it a misdemeanor to steal less than $950 worth of goods, a wrist-slap that’s encouraged repeat offenders. Go figure that three California cities (San Fran, L.A., and Sacramento) are among the top 10 in the United States for organized retail crime. Not all of the theft is organized, of course — sometimes it’s random homeless people or addicts acting alone — but a surprising amount is being driven by rings selling the stolen merchandise on the black market.

And so the cost of doing business in the Bay keeps rising, and not just for Target:

Target has now acknowledged that San Francisco is the only city in America where they have decided to close some stores early because of the escalating retail crime…

Target isn’t the only store in San Francisco to make changes because of the continuous shoplifting. After 10 p.m. the 7-Eleven on Drumm St. in the Financial District only does business through a metal door. But first you have to ring the bell to let them know you’re outside.

“This window was installed like two to three months ago because it was not safe. Sometimes they would break that glass of the door,” explained Manager Bobby Singh.

That’s from KGO, which also reports that San Francisco PD has exactly one officer assigned to the organized crime “task force.”

Shoplifting isn’t the only form of theft that locals need to contend with:

SFPD’s Central Station reported auto burglaries skyrocketed 753% in May compared to the same time last year during lockdowns and they’re still up 75% compared to the same period in 2019…

“They don’t even care. They tell us what the hell are you going to do,” said [a] tourism operator who did not wish his business to be identified.

One family who did not wish to be identified showed KPIX 5 pictures they took as they witnessed thieves in action just before pulling into a parking lot on Embarcadero and Bay Street.

Visit beautiful San Francisco and take in the sights: The Golden Gate Bridge, Fisherman’s Wharf, and random derelicts doing smash-and-grabs on parked cars in broad daylight. According to a survey conducted by the local chamber of commerce, 70 percent of city residents say their quality of life is down over the past few years and 44 percent say they’re likely to move within the next few.

Mention this subject on social media and progressives will come out of the woodwork to try to convince you that it’s fine or that it’s … not actually happening. At least, not as rampantly as the media hype would have you believe. Crime data compiled by the local PD suggests shoplifting is down since 2019 — but is that because it’s happening less or because some stores aren’t bothering to report it anymore due to inaction by the police and D.A.?

While shoplifting incidents haven’t surged this year or last, the rate of shoplifting incidents ending in citations or arrests did go down — a continuation of a decline that goes back at least as far as January 2018, the earliest month included in SFPD’s detailed incident data.

The San Francisco Police Department did not return a request for comment on the shoplifting data, and why citations and arrest rates are declining. However, in a recent Board of Supervisors meeting, police officers said that shoplifters are getting more brazen, and that shoplifting incidents are likely underreported.

If the shoplifting wave is a figment of our collective febrile imagination, what’s the theory for why Walgreens bugged out of the city and Target is now scaling back hours? If that’s due to economic factors rather than crime — sky-high rents, difficulty hiring — we’d expect many more local businesses besides convenience stores to be reacting similarly. Are they?

It’s possible, I suppose, that the sort of brazen theft customers have repeatedly witnessed in San Francisco convenience stores tells us nothing about how common shoplifting is in the city. San Fran might not have an unusual number of thieves, just an unusually bold cohort of them. But that would defy common sense. A culture in which theft can happen with so much impunity that perpetrators are willing to commit the crime in front of security guards, while bystanders record them on smartphones, is a culture in which we’d expect to see a high rate of shoplifting. If the deterrent to larceny is weak, there’ll be more larceny. Yet lefties assure us that it’s just not so.

Here’s local news reporting on the new Target policy.

 

As we enter the second half of the year, a quick look at asset returns in June, Q2 and the first half shows that it has been a stellar performance across most financial markets, with 33 of the 38 non-currency assets tracked by Deutsche Bank moving higher over the last three months in local currency terms.

Having been left for dead in much of 2020, it should come as no surprise that the star performer in both H1 and Q2 was oil, with WTI up +51.4% and +24.2% respectively. Even in June it was up +10.8%. On the other end, Gold (-6.8% YTD) saw its worst month in June (-7.2%) since November 2016 with the Federal Reserve’s hawkish shift allaying concerns about inflation that had been very supportive for the precious metal. Silver (-6.8%) lost ground too, but the losses weren’t just confined to precious metals, with the industrial metal of copper (-8.1%) experiencing its worst monthly decline since March 2020 when the initial pandemic selloff took place, amid a Chinese crackdown on commodity prices, but it was still up +7.5% in Q2 and +22.1% YTD keeping it near the top of the pile.

Meanwhile, a favorite of many traders in 2021, DB’s Jim Reid notes that the reopening trade stumbled in Q2 and especially in June with the delta variant spreading. This is best highlighted in more micro numbers with the Euro Stoxx Travel & Leisure index -8.4% in Q2 on a total returns basis, bringing to an end a run of 4 successive quarterly gains as it recovered after the pandemic. Meanwhile in the US, the S&P 500 airlines index is down -11.4% over Q2 and -11.6% in June, similarly ending a run of 4 quarterly advances.

Despite the June swoon in reflation stocks, equities overall had another decent month for the most part that saw them cement their YTD gains, with the S&P 500 (+2.3%) and the STOXX 600 (+1.5%) both rising on a total returns basis in June, leaving their gains for the quarter at +8.5% and +6.8% respectively.

To round things off, after climbing 82.7bps in Q1, 10yr USTs rallied -27.2bps in Q2. Where this goes in Q3 is probably one of the most important variables going forward as it will tell us a lot about inflation, growth, delta, the Fed and more generally about the funding glue that holds financial markets together.

Last but not least, and sadly not on the Deutsche Bank graph, Bitcoin continued to deflate as it fell for a 3rd consecutive month with another -5.7% decline, and was down -41.3% in Q2 meaning it is now ‘only’ +19.3% YTD having been +123.7% at its intraday peak on April 14.

In terms of other currencies, the main story for June was the dollar’s +2.9% gain after the Fed meeting saw the median dot bring forward the first hike into 2023, which (in the reverse image of gold) is the currency’s best month since November 2016. However, for the quarter as a whole the dollar remains -0.9% lower. EM currencies also saw some pretty sizeable moves, with the Brazilian real strengthening +13.4% over Q2 against the US Dollar, whereas the Turkish Lira fell another -2.5% in June as part of its 5th consecutive monthly decline.

The sovereign bonds in the DB sample all remained in negative territory on a YTD basis, though Q2 saw a more divergent performance as Treasuries (+1.9%) and gilts (+1.8%) recovered, whereas their European counterparts including bunds (-0.4%) and BTPs (-0.8%) lost ground. Separately in credit, HY has continued to outperform on a YTD basis.

And here is the performance charted for the month of June in local currency and in USD…

… Q2…

… and YTD.

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

Sometimes the significance of events doesn’t hit you until far after the event took place. One of the hardest parts of this job is knowing when not to write about a subject and let it sink in for a bit rather than burp out the first thing that comes to mind. It also helps to spend that time considering what others say on the subject.

The Saker’s thoughtful post on the outcome of the Biden/Putin summit is worth your time.  He rightly points out that the main outcome was a signal from Biden’s team, and handlers, that the hyper-aggressive war against Russia going on since 2013 is now over.

… what Biden did and said was quite clearly very deliberate and prepared. This is not the case of a senile President losing his focus and just spewing (defeatist) nonsense. Therefore, we must conclude that there are also those in the current US (real) power configuration who decided that Biden must follow a new, different, course or, at the very least, change rhetoric. I don’t know who/what this segment of the US power configuration is, but I submit that something has happened which forced at least a part of the US ruling class to decide that Obama’s war on Russia had failed and that a different approach was needed. At least that is the optimistic view.

I have some ideas about who actually ordered this shift in tone which has become readily apparent in the weeks since the meeting. More on that in a bit.

This summit was the signal of the major shift in policy.  Kissinger is no longer the driving force intellectually for U.S. foreign policy.  Divide and conquer hasn’t worked.

As Alex Mercouris brought up in my talk with him recently, the likely main offer made on Biden’s behalf by Jake Sullivan to his Russian counterpart, was to cut Russia in on the infrastructure deals in Africa if Russia would loosen ties to China. China is the new pivot for U.S. foreign policy.

If that offer was made then it was a calculated move to tell Putin that the U.S. was unserious about changing the dynamic between them.  I think there was a lot more said than just this. But Putin didn’t say it directly to Biden. This summit was a ceasefire in the war against Russia, a typical move to retrench and rethink options after a major defeat. That defeat was not ginnng up a war in the Donbass.  The two events are intimately connected.

In fact, that show of force and ultimatum by Putin to NATO (and more specifically The Davos Crowd) in Ukraine is what catalyzed this summit in the first place. Between that and the collapse of the COVID-19 narrative were all the excuse needed to publicly pivot U.S. aggression from Russia to China.

This was a major summit, with hundreds of people on both sides, as The Saker points out, that took months to put together. My initial reaction to it was that nothing substantive had changed. A ceasefire with Russia isn’t an end to the war with her so, what changed exactly.

That’s why I took some time to think things through.

In order to understand my broader point I’m about to make you have to see things from Davos’ point of view and their goals. I took the time to work through this in Part I of a recent podcast series I did to lay the background out (listen to it here).

Most importantly, keep in mind that Davos isn’t a monolithic organization under complete control of puppet master WEF Chair Klaus Schwab. It is, at best, a loose coalition of interested parties all looking for their piece of the globalist pie. And it only hangs together for as long as Schwab et.al. win and continue doing so.

Davos sees the best path now for them to complete their Great Reset agenda comes from placing the U.S. and China on an irrevocable path to war. Making a temporary peace with Russia is part of that plan. It’s also a major defeat for Davos.

Russia has refused to fight the war Obama’s started and MI-6 ran during the Trump Interregnum on Davos’ behalf. It played the long game of freezing the conflict in Ukraine while allowing the political attrition to take its toll on everyone involved. It also allowed Russia the time necessary to complete its strategic theater dominance in Eastern Europe now having hypersonic missiles capable of neutralizing any thought of NATO air superiority.

Culturally, Russians understand how to deal with this type of European aggression.  The Russian people have pride in themselves but are not nationalistic, i.e. they are not subsumed by cultural hubris the same way both China and Europeans/Americans are. This is a critical difference in understanding why events have played out as they have.

European/American ethnic hubris is nothing new. However, anyone who doubts my read on the Chinese in this respect, I only have to remind you of how easy it was to blow up Japanese/Chinese relations in 2012 over the Senkaku islands, which led to vandalism against Toyota and Honda dealerships… over nearly worthless rocks.

So, by this calculus, now that Ukraine refused to show up for the war Davos threw, war with Russia is off the table for the time being and the pivot to China commences.  You have to force an existential crisis on Russia to get them to fight and failing that there is no point in pursuing it directly.  Putin made the point very clearly that any aggression in the Donbass would be an act of war which would not end at the contact line in Gorlovka.

Their response would target the real enemy, NATO. And this is why both nothing changed and everything changed with this summit.

Davos is still going to run their script of destroying the U.S. and China by pitting them against each other while trying to pull off the full-blown remaking of Europe into a technocratic supranational police state. On that last part, they are more than 80% of the way there.

But, at the same time, the only reason for the European Union’s existence as it has been sold to Europeans is to prevent any further devastating wars fought on European soil. If Putin threatened a wider war with NATO he assured them Russia would this time win, then the whole rationale for the EU vaporizes like the first F-16 or logistics center hit by a Kinzhsal missile.

Rock meet hard place, Herr Schwab. For once someone else presented you with a no-win scenario.

So, in order to insure that Russia remains placated and happy to reopen somewhat normal relations with the EU, Biden was sent to Geneva to craft a face-saving summit and co-sign a simple statement committing to reopening arms control talks, coordinating on terrorism and not nuking Europe.

Part II of my podcast series went over in detail the whys and hows of the summit in much more detail.

The two exceptionalist-minded empires, the U.S. and China, make for much easier adversaries to spark into conflict because of the intense need for both sides not to lose face. For the U.S. as the global ‘hegemon’ losing face is a clear loss of potency. When you rule the hierarchy through dominance and fear, any moment of weakness is deadly.

It’s why Putin’s intervention in Syria, the freezing of the Donbass and reunifying with Crimea were so significant. They were a series of events which blew holes in the perception of U.S. potency. And since then it has been one brush fire after another which has not panned out.

As The Saker rightly points out in his article, Biden took a big hit with the Davos-controlled media for not “standing up to Putin.” And it was significant that that they even entertained that calculus no less made the diplomatic overtures. It’s why I feel my analysis of the situation is right. Only a real, credible military threat by Putin could have forced the outcome we saw at Geneva.

That said, weakening Biden and the U.S. only to sets the stage for when he or (more importantly) his Republican/mid-term successor has to confront China for real.

Now that I’ve laid that out, did anyone miss the Fed’s surprise hawkish statements released the same day as the Biden/Putin summit?  

Did anyone not notice the extreme reaction to the supposed nothingburger statements from the FOMC?  

All the Fed did was move a couple of dots on the rate forecast ‘dot-plot’ and bump IOER and RRP up by 5 basis points.

And yet the Euro crashed into the end of Q2 and opened Q3 still crashing.  And yet the Yen was thrashed. And yet, everyday more people jump on the bandwagon highlighting the huge run up in the Fed’s Reverse Repo Facility. Since that announcement what was a record amount of reverse repos at around $450 billion has more than doubled to just under a trillion.

Since the Fed no longer reports Excess Reserves of the banking system we have no idea how much has flowed into those either. In short, a measly 5 basis points drained at least half a trillion in dollar liquidity in less than two weeks.

And too many people can’t make the connection.

The dollar spiked to a significant bullish monthly reversal in June. The Fed followed up Powell’s statement with Bullard’s to ensure the technical reversal in the minds of currency and bond traders.  

And the question is why?

Just before the meeting I told my Patrons I thought at some point the Fed would have to come in and defend the U.S. dollar. Biden’s consistent trashing the dollar for Davos simply couldn’t stand forever.

I’ve written in the past about what Davos’ Great Reset plans are for the commercial banks, to scapegoat them for the next crisis and throw them to the angry Millennials they’ve taught to hate all things not-Marxist and be pilloried on the altar of egalitarian envy. And honestly, it’s not like these fucking people deserve anything less for what they’ve done to the world.

But at the same time, they still have allies and cards to play. And that means the Fed may align with Davos on some issues but not all of them. And I think it’s clear to everyone now that this is the plan and that plan is not workable.

The Fed is now ready, I think, to go to war with Davos over the future of money and they aren’t ready to hand over the keys to the candy store to a bunch of European commies, at least while also cutting Wall St. out completely of the New World Order.

Part III of the podcast series goes over the Fed’s moves and how it ties into what comes next.

The plan is pretty obvious at this point: hand over the keys to capital formation to the central banks and destroy all risk assessment. Commercial banks aren’t needed.  Only socially acceptable projects going forward will get funded. This is what Christine Lagarde wants with her new all-European Green Stock Exchange she introduced at Ankara last week.

But what’s clear to me now is that Davos went for the boob too fast on Prom Night at the Eschaton.  It’s too much, too soon and the acceleration is exposing its flanks.  Why would China and the U.S. go to war over COVID-19 and trade issues when they are being manipulated into it by a bunch of feckless Eurocrats with delusions of adequacy.

Why not turn on them first, at a minimum, wipe them out with a wave of your hand, i.e. 5 basis point rise in RRP, and remind everyone where the real power in the markets lies.

It’s hard to ignore what’s happened during the week of June 16th both geopolitically and monetarily.  There are no coincidences here.  If Powell hadn’t blown up the markets that week then I would be writing a different take on the Putin/Biden summit today.

But he did so I am.

So many people mischaracterize the Fed’s policies.  They miss the global significance of what they do by hyper-focusing on bad and misleading U.S. economic data. But the dollar is the global reserve currency, a point Martin Armstrong makes every single day, and that means Fed policy is made in the context of global capital shifts and politics.

Most analyst myopia comes from their training. They’ve trained a particular skillset and because of that miss the bigger picture. They get lost in the miasma of low-quality, conflicting and purposefully confusing domestic data and miss the bull rampaging through the political china shop.

What’s lacking, for example, in The Saker’s analysis of Geneva is looking at it, for the most part, from a monolithic Russia v. U.S. perspective, while ignoring the bigger picture of who is vying for control over the monetary system. This isn’t a rebuke, it simply isn’t his top priority.

But it is a rebuke of those trained in these areas to know better.

Geopolitics stems from control over the flow of capital, not the other way around.  So, when you see big changes on both fronts from one major player like the U.S. it means something. The U.S. changed it’s stance on Russia while also course correcting monetary policy and throwing markets into a tizzy on the same freaking day!  

That’s why you have to do the multi-variant analysis of ALL the players, not just the two dominant ones and analyze all of their motivations. This was a story so big I took two hours of podcasts to scratch the surface of it.

The bottom line is this: I maintain that Powell isn’t the same kind of globalist other Fed chairs have been, like Yellen and Bernanke. His private equity background marks him with a different mindset and set of priorities than his predecessors. That means he may be more willing to buck Davos when the time is right.

That understanding along with Davos’ needle-scratch mistakes has a lot of powerful people questioning the plan. It can easily explain why the cracks are beginning to widen as to who should actually be in charge after this is all done.

The real war now isn’t between the Empire and Zone B.  Or the Commies vs. the Conservatives.  It’s Davos against itself and we are now, unfortunately, caught in the middle between these factions.

All hierarchies built on force are meta-stable.  Up until recently Davos maintained its control because it competently managed all of the players, moving pieces where they needed them.  Now, they’ve made fatal errors — COVID, Trump, Brexit, NS2, Russia’s intransigence, the JCPOA, Syria, Ukraine, — and from where I sit it looks like the various factions are going all Knives Out on each other, quickly.

And as Daniel Craig said so eloquently in that movie, “I do suspect… foul play.”

I don’t doubt for a second Powell would crash the global economy in 2021 to protect Wall St. and back China down.  I also don’t think he was given the green light to do so by Biden. I think he was told to fire a warning shot by, for lack of a better term, Wall St.

If Davos listens to that in the same way the Brits listened to Russia’s warning shots at the HMS Defender in Crimean waters recently than the expect a full salvo at Jackson Hole. Can anyone say 25 basis points?  

Biden and Obama have been told to pull back and refocus on China by Davos, but those behind Powell are setting them up for a massive backlash for the mid-terms.  

The smartest thing for Xi Jinping to do during all of this is nothing. If he is truly interested in carving up the world and not replacing the U.S. with a Chinese hegemony then these next few months of turmoil in the West will prove that.

Given his recent actions and statements, however, the likelihood of that is slim.

The more things change…well, you know the rest.

*  *  *

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Once again, the liberal strategy of mining someone’s Twitter from years prior to find “un-woke” statements to implicate them, cancel them and ruin their future has come back to bite the SJW crowd in the back. 

Gwen Berry, most recently known as a self-proclaimed “activist athlete” because she turned her back to the national anthem and U.S. flag at U.S. Olympic Team trials for the hammer throw looks as though she may not have always been so concerned with virtue signaling as she is now.

According to new Tweets unearthed by the NY Post, Berry made disparaging remarks about Asians, Mexicans and white people.

“Mexicans just don’t care about ppl,” she wrote in a Tweet in November 2012.

In another Tweet from 2011, she wrote: “This lil white boy being bad as hell!! I would smack his ass then stomp him!! Smh #whitepplKids hella disrespectful.”

“Just saw this gurl wearing heels with white socks!! What the Hell..#chineseppl always try to start new trends..smh..ggguuurrrllll,” she also wrote in 2011. 

She also made a joke about rape in 2012, Tweeting: “I’m about to rape my lunch. [Shout out] to all the females that’s gon get drunk, get recked by 4 dudes, then cry rape this weekend.” 

The posts came before her Olympic career, the Post article notes, and when she was in her 20’s. However, we all know that such items would not have been – and have not been – off limits for a “woke” SJW that will use any excuse to cancel someone that doesn’t surrender to their ideologies. 

But for some reason, we feel like Berry will be overlooked and won’t get the same treatment. Recall, even the White House came out and defended Berry’s actions last week, with WH press secretary Psaki stating, on behalf of President Biden: “He would also say, of course, that part of that pride in our country means recognizing there are moments where we as a country haven’t lived up to our highest ideals, and it means respecting the right of people granted to them in the Constitution to peacefully protest.“

 

Authored by David Stockman via Contra Corner blog,

According to the mainstream narrative, we were all born yesterday. There is no such thing as context, history or critical analysis – just cherry-picked short-term data-deltas, which are held to be either awesome or at least much improved from last time.

That’s why we predictably got this headline from the Wall Street Journal with reference to today’s June employment release, which allegedly showed “employers added 850,000 jobs last month”: Stocks Tick Higher With Strong Jobs Report

Well, no, it wasn’t and they (employers) didn’t.

In fact, total hours worked in June actually declined from the May level, and, far more importantly, were still down 4.4% from the pre-Covid peak in February 2020.

When expressed in total hours, there is absolutely nothing “strong” at all about the numbers. To wit, at the end of Q2 2021 total hours employed in the nonfarm economy were still down 8 billion hours from the Q4 2019 level.

That’s right. Eight billion worker hours are MIA, yet the lazy shills at the WSJ, Bloomberg, Reuters et. al. keep pumping out bilge about an awesome economic rebound!

Actually, what has never been noted notwithstanding the fact that it sits there in plain sight on the BLS website is that Dr. Fauci and his economy wreckers dug a far deeper hole in the main street labor market last spring than the narrative led you to believe. At the pre-Covid peak in Q4 2019, the nonfarm economy utilized 257.2 billion labor hours at an annualized rate, but that plunged by nearly -12% to just 227.6 billion hours in Q2 2020.

So doing, Fauci & Co wiped out all of the aggregate nonfarm labor hours gain since Q4 2011. That is to say, it obliterated the awesome gains that had been contained in 102 monthly Jobs Friday reports in the interim. And now, after $4 trillion of freshly printed fiat cash and $6 trillion of stimmies and other bailouts and free stuff only 73% of the state-imposed shrinkage of hours worked has been recovered as of June 2021.

Indeed, the not-at-all awesome June jobs report was even more squirrely than usual. Our memory may fail, but we are quite sure that back in the day, June was the time when school let out. The city kids all got to got to go to the beach, and we farm kids got to pick the berries, cherries, sweetcorn, cucumbers, peaches and tomatoes, as they took their turn in rotation.

Perhaps, no longer. The BLS claims that state, local and private educational institutions went on a hiring binge during June, bringing on a total of 269,000 new teachers to superintend presumably empty classrooms!

Moreover, when you add in the 192,000 bartenders and waiters who were rehired in June, that adds up to 461,000 jobs or 54% of the ballyhooed 850,000 gain during the month.

Meanwhile, when it comes to the high pay, high productivity jobs in construction, manufacturing, mining and energy, not so much. Those sectors accounted for 23.338 million jobs in May and reported an increase of, well, 20k jobs in June. That’s a 0.0008 gain, if you have your HP 12c set to four decimal places.

More importantly, the 20.358 million goods producing jobs reported for June were still down by 780,000 from the pre-Covid peak in February 2020; and, on the more appropriate and accurate hour-based measurement, employment in the goodsproducing sector truly remains mired in the dumps.

Thus, the index of aggregate hours worked for June (black line) was down by -6.4% from its 2019 interim high, and off by -21.1% from its turn of the century level, -23.1% from its all-time peak in March 1979 and down by -4.8% from the level first attained in, well, May 1947!

You can’t make this up. Employment in the goods-producing sector of the US economy has been dying on the vine for a half century. And even as these jobs paid a living wage of $56,000 per annum in the month of June, the purchasing power of those paychecks was no higher than January 1979 on an inflation-adjusted basis (purple line).

In summary, after real wages in the goods-producing sector doubled between 1947 and 1979, what has followed is one-half century of real wage stagnation, coupled with a 23% shrinkage of hours worked. That alone should ixnay the “strong” and “blow out” descriptions that have been used hundreds of times in the interim to describe the Jobs Friday reports.

Real Weekly Earnings Versus Aggregate Weekly Hours, Good-Producing Sector, 1947-2021

Then again, there is truly no mystery as to where the Fed’s endless injections of fiat credit have come out in the wash. For three decades, the nation’s central bank has been primarily inflating financial asset prices on Wall Street, not jobs, incomes and prosperity on main street. And that’s especially been the case since the pre-crisis peak in Q4 2007, when today’s $8.1 trillion Fed balance sheet stood at just $800 billion.

For want of doubt, you only need to ponder the message of the chart below in order to ascertain what an 8X increase in the Fed’s balance sheet has actually generated. Since Q4 2007, cumulative gains have been as follows:

• Nonfarm Labor Hours (red line): +4.3%;

• Nonfarm Output (black line): +24.8%;

• Nominal GDP (blue line): +50%;

• NASDAQ 100 (purple line): +600%

Q.E.D.

Do these knuckleheads have the slightest idea that this is their true handiwork?

Really, is there any more proof needed that all of their lunatic money-pumping never actually leaves the canyons of Wall Street?

Cumulative Gains Since Q4 2007: Stocks Versus Main Street

So we perforce return to the central topic. Namely, that the Fed’s MOAAR inflation mantra is one of the most perversely idiotic and inequitable public policies ever imposed by an arm of the state.

In fact, hitting the “averaged over time” 2.00% inflation goal remains the only reason for the Fed’s $120 billion per month of what amounts to financial fraud. After all, with employers from coast-to-coast scrambling to find workers, continued money-pumping is surely not needed to further the so-called “full-employment” goal. For crying out loud, private employers are already on it.

Then again, would it be too much trouble for these power-intoxicated, groupthinkinebriated dolts to examine exactly what their pro-inflation policies have actually produced? And we mean over an extensive period of time where the cumulative impact can be clearly observed?

Well, here’s an inflation-targeting stopper if there ever was one. During the approximate half century since real hourly rates peaked in 1972, the average American worker has been on the mother-of-all-treadmills:

Change From 1972 Through 2020:

• Nominal hourly wages: +533%;

• Real hourly earnings: +2.2%

It doesn’t get any more dramatic than that. Even the proverbial squirrel in the cage would have gotten the bends after that 50-year journey to nowhere.

50-Year Trend: Nominal Versus Inflation-Adjusted Hourly Earnings

As is evident in the chart above, the Fed made a cataclysmic mistake in the 1990s and thereafter. Due to the high inflation of the 1970s and to a lesser extent through the 1980s, nominal hourly wage had tripled between 1972 and 1995, when Mr. Deng’s shiny new export factories were cranking up with ultra-cheap labor drained out of China’s endless rice paddies and peasant villages.

And, thank you, all that 200% gain in nominal wages had not done domestic workers one damn bit of good. In 1995, real hourly wages (purple line) were actually 18% below the level that had obtained in 1972, when Fed Chairman Arthur Burns, to his everlasting shame, grabbed his ankles upon Nixon’s presentation of what amounted to an election year bar of soap.

Nixon got his temporarily booming economy and landslide election victory, of course, but that had also set up the hard hats, Nixon labor Dems and forgotten middle class like sitting ducks vis a vis the new Chinese (and Mexican et. al.) export factories. By the mid1990s the dollar wage gap was now enormous—so what was needed was deflation of domestic prices, wages and costs, not more of the same.

As it happened, under Greenspan’s phony “disinflation” policies and then Bernanke’s formal inflation-targeting regime thereafter, the domestic price level was inflated by another 70% or 2.14% per annum between 1995 and 2020. What that meant was fully two-thirds of the gain in average hourly wages during that period was eaten-up by domestic inflation when the order of the day should have been wringing out some of the staggering 240% increase in the domestic price level that had occurred between 1972 and 1995.

Yes, inflation-adjusted hourly wage rates (purple line above) did manage to crawl back to their 1972 starting point by 2020, but at the expense of another doubling of nominal wage rates. That is to say, the Fed’s idiotic pro-inflation policies drove the wage gap between domestic factories and the new low wage export economies dramatically wider. In all, average dollar wages in the US were 533% higher by 2020 than they had been when Nixon destroyed the gold-backed dollar in 1971-1972.

Needless to say, when the average domestic wage rate went from $3.90 per hour in 1972 to $24.68 per hour in 2020 at absolutely no purchasing power benefit to workers, it left corporate executives with no choice except to outsource and off-shore to the maximum feasible extent. And that set in motion the hollowing out of America’s industrial economy.

The chart below is surely the smoking gun implicit in the Fed’s Faustian bargain. That is, it got its fetishistic 2.00% inflation and showered the household sector with cheap debt to augment living standards that would have otherwise diminished owing to the export of good jobs.

As a result, real consumption spending (PCE) for goods rose by 87% or 3.0% per annum between Q1 2002 and Q1 2021. Yet during the same 19 year period, the industrial production index for manufacturing rose by only 9% or barely 0.41% per year.

Needless to say, we are not talking here about some marginal item that is better produced abroad where some venue has comparative advantage as Adam Smith originally saw it. To the contrary, this is the entire goods economy and for all practical purposes the growth in consumption of goods during this century to date has been supplied by imports.

It is no wonder, therefore, that the burned out zones of the rust belt voted for “high tariff man” Trump. Twice.

Real PCE For Durables Versus Manufactured Goods Output, Q1 2002-Q1

2021 In throwing good-producing workers under the China/import bus, the powers that be urged them to make up the difference by buying stock. Wall Street had plenty of rapidly inflating shares on offer, and the Donald could not stop telling workers to check their 401ks.

But here’s the thing. To ride the drastically inflated stock market higher, you had to have material savings to invest, and growing wages to allocate to investment rather than current consumption.

Alas, American workers had neither. When Greenspan was nominated to head the Fed in July 1987, the average wage was $9.12 per hour and the NASDAQ 100 index stood at 196. That is, it took about 22 hours of work to buy the index.

At the close of June 2021, the average hourly wage– as we learned this AM—was $25.68 per hour, while the NASDAQ 100 had taken flight to another financial planet, posting at 14,554. That is, it now took 566 hours of work to buy the index or 26X more than when Greenspan inaugurated wealth effects monetary policy.

To paraphrase a famous black panther slogan of the 1960s, trickle-down might have been televised on CNBC, but it most definitely did not happen.

Number Of Worker Hours to buy the NASDAQ-100, 1987-2021

What happened, of course, is them’s that had, got.

Our friend Tim Knight, who publishes at the must read Slope of Hope, captured the moral of this story about as well as can be said, while his accompanying chart truly does tell you all you need to know.

Well, if you weren’t born yesterday.

The economy, the capital markets, and wealth distribution have become more grotesquely-distorted, perverted, and warped than at any other time in human history. I have written about this endlessly and prefer to simply point you to this page where I’ve stacked up countless charts to make the point about the maldistribution of wealth.

A stunning video has surfaced on social media showing an explosion of fireworks on a Maryland beach Sunday morning. Beachgoers ran for their lives when a premature detonation of fireworks occurred around 1100ET. 

Ocean City Fire Department said the “unintentional discharge” occurred when employees of a fireworks company were handling fireworks for tonight’s Downtown fireworks event. 

During the unintentional discharge, employees of the fireworks company received minor injuries and refused transport to the hospital by Ocean City Paramedics. No beach or boardwalk patrons were injured.

“Our Fire Marshals are on the scene and will investigate the cause of the unintentional discharge,” said Ocean City Fire Chief Richie Bowers. “Prior to the fireworks being off loaded from the vehicle, Fire Marshals secure a safe zone around the fireworks and put other safety protocols in place. It is this very zone and safety protocols that kept anyone else from being injured,” he concluded. – Ocean City Fire Department said in a statement. 

The video captured by one beachgoer shows the dramatic explosion that appears to briefly transform the beach, packed with thousands of tourists, into a warzone. 

So this just happened in Ocean City, MD. pic.twitter.com/B0djA8JxF7

— Gilly Gene (@GillyOfThe412) July 4, 2021

After the “unintentional discharge,” Ocean City Fire Marshals have “canceled all firework shows” in the beach town, located down the street from President Biden’s vacation home in Rehoboth Beach, Deleware. 

Authored by Charles Hugh Smith via OfTwoMinds blog,

Star Wars 24 plus the novelized version, amusement park ride, podcast, action figure and OnlyFans pages, anyone?

I happened to be in a Big Box Emporium, buying two bags of whole wheat flour, when a strange revelation struck me: almost nothing in this giant emporium was made in the USA. Apologists will quickly point out that the two bags of whole wheat flour were “made in the USA,” and note the US-made items in the food, liquor and beverage aisles; but wander out of these aisles and tell me how many of the hundreds of items are made in the USA (not assembled of foreign components, but made entirely in the USA). The answer is very few.

I suppose this fact is unremarkable to the majority of Americans, but my reaction was, sorry, America, you lost me: how is this not insane to depend on sweatshops thousands of miles away to make virtually everything on the shelves and warehouses of the U.S.?

It’s as if a war was declared on manufacturing in America and we lost–or simply surrendered.

If you want to buy a bulldozer or electric vehicle, you can Buy American, and if you buy an iPhone, the firmware is conjured in Cupertino (the phone is assembled in China of components sourced globally). But below a certain price point and outside the snacks, magazines and beer aisles, U.S.-made good are “special order” if they’re available at all.

Is this because the foreign made stuff is so high quality? No, it’s virtually all garbage quality. A war was declared on quality, and America lost. Virtually nothing on the shelves of America’s Big Box Emporiums and fulfillment warehouses is durable; it’s either designed to fail (planned obsolescence) or it’s so poorly made that it breaks, fades, rips, tears, delaminates or fails, and is dutifully hauled to the landfill as part of the entire Landfill Economy. (Forget trying to repair it; it’s been designed to be impossible to repair, and all the components are junk, too.)

If stuff breaks or fails in short order, it isn’t cheap, no matter what the price says. It’s expensive because it must be constantly replaced. A war was declared on value, and America lost. Sorry, America, you lost me. How is the transition from quality and value to junk not a complete disaster for the nation?

So what is the business of America? Marketing. Everything boils down to marketing in America. Everything is a channel to collect consumer data that can be monetized (no, you can’t monetize your own data; that’s not how it works) or a channel to upsell anyone ensnared in the value chain.

You may naively think an iPhone is a device for phone calls and texts. Silly you! It’s nothing but a channel to upsell you Apple services. The “settings” on my old SE still have a nag notice because “setting up” your iPhone means signing up for Apple TV, Apple Music, Apple Pay, Apple Skim and Apple Scam.

My Mom-in-law is in her 90s and like many in her age group, she enjoys watching TV. She lives with us and so we handle the cable TV subscription for her. She asked us to get the commercial-free English-language network from Japan, NHK, and of course this is only available in a package of rubbish channels.

Since I have a basketball hoop for my fitness amusement and have long been a roundball fan, I clicked to the NBA channel listed. It was nothing but a series of moronic adverts. I tried again later, nothing but moronic adverts. I gave up on the third try, because it dawned on me that apparently this channel doesn’t actually televise any actual basketball, it only promises to do so at some later date; and in the meantime, here is an endless stream of moronic adverts.

Sorry, America, you lost me. Marketing and upselling is not prosperity or success, it’s ruination.

The list of channels that are nothing but data mining, marketing and upselling is endless in America. Every subscription service is nothing more than a channel to upsell you on “Premium services.”

Social media: nothing but data mining, marketing and upselling.

Internet Search: nothing but data mining, marketing and upselling.

Media, telecommunications, banking, etc.: nothing but data mining, marketing and upselling. Look at the most profitable and highest valuation corporations in America, and their sole business model and reason to exist is data mining, marketing and upselling.

The Healthcare Borg is also nothing but data mining, marketing and upselling. If you want to get a look indicating profound suspicion of your motives and beliefs, tell your healthcare provider, “I’m over 65 and don’t take any meds.” Within the Borg, such a statement can only mean 1) you haven’t yet signed up for Medicare/Medicaid, and we need to get you in the gravy-train pronto; 2) you’re some kind of nutcase who refuses medications, or 3) you’re a dangerous subversive who should be reported to Facebook as a potential extremist.

The Healthcare Borg’s marketing has reached extremes of absurdity. Practitioners are under extreme pressure from Corporate HQ to bill you for something on a regular basis, and so I received increasingly frantic phone calls and emails demanding I set up a telemarketing, oops, I mean telemedicine confab with my PCP (primary care physician–the Borg loves acronyms as much as the Pentagon).

I halfway expected to be accosted on the street by thugs informing me to make a telemedicine appointment or “we’re gonna have to break something.” Sorry, America, you lost me. When healthcare stopped being about nurturing health, especially via basic preventative measures, and became a profit center and marketing channel, the well-being of the nation spiraled into the sewer.

While I foolishly waited for a basketball game to appear on the NBA channel–how naive of me!–I clicked through a few movie channels. The offerings were the most recent batch of the super-hero genre. As a huge fan of action films, I had hopes these might reverse my disinterest in the genre. Nope. The movies were not bad, they were simply… uninteresting and derivative.

Sorry, America, you lost me. Everything that’s a derivative of something that was creative and fresh decades ago is uninteresting, and virtually everything is a derivative. America is subjected to a remake of a remake of a remake, with a switch of media being the supposed creative magic.

Star Wars 24 plus the novelized version, amusement park ride, podcast, action figure and OnlyFans pages, anyone?

America’s cultural obsession with super-heroes made me wonder, in a dangerously subversive fashion, what this means beneath the superficiality of reaping reliable profits. Does it now require super-human powers to survive the onslaught of exploitation, profiteering, overwork and exposure to fanatical marketing, data mining and upselling that is life in the USA?

Or does this cultural obsession reflect our fear that we’re so far gone down the road of worshiping billionaires blowing billions on space tourism that only super-heroes can save us?

Sorry, America, you lost me. Many readers will write all this off as the sour rantings of some out-of-it geezer. But ask yourself: what if everything said here is correct, but nobody dares talk about it because that might make it real?

*  *  *

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“We’re not sure if it’s the Russians,” President Biden said Friday in response to the latest allegations that a ‘Russian-linked hacker group’ targeted some 200 US companies in a massive ransomware attack. But he’s vaguely promising a “response” if Kremlin links can be found.

This latest major incident unveiled at the end of this past week is being described as akin to “SolarWinds with ransomware,” which paralyzed the networks of the US companies. Wired explains the inevitability that the “the two dominant cybersecurity threats of the day— supply chain attacks and ransomware—would combine to wreak havoc.” It’s also being called “colossal” in scope and appears to involve blackmail payment demands just as in prior major breaches.

Wired writes further of the aftermath as details continue to fall into place, “That’s precisely what happened Friday afternoon, as the notorious REvil criminal group successfully encrypted the files of hundreds of businesses in one swoop, apparently thanks to compromised IT management software. And that’s only the very beginning.”

The hack targeted the Florida-based software management firm Kaseya, which said Friday afternoon it was the “victim of a sophisticated cyberattack” which caused it to immediately alert all of its clients to shut down their impacted servers. The US Cybersecurity and Infrastructure Security Agency (CISA) quickly said it’s launching an investigation the same day, “taking action to understand and address the supply-chain ransomware attack against Kaseya,” according to its statement.

Soon after disembarking Air Force One, Biden appeared a bit confused but also bluntly insisted there’s no certainty it was the Russians: “First of all, we’re not sure who it is for certain, number one,” he said while being peppered with reporters’ questions over the then developing incident:

“I’ll be in better shape to talk to you about it—hang on a second,” the president said as he reached into his pocket to pull out a note card.

“I’ll tell you what they sent me, OK?” the president continued. “First of all, we’re not sure who it is for certain, number one.”

“And the fact is that I directed the intelligence community to give me a deep dive on what’s happened, and I’ll know better tomorrow. And if it is, either with the knowledge of and/or a consequence of Russia, then I told Putin we will respond,” Biden said.

Here’s his awkward interaction with reporters inside a store during a Michigan stop…

Based on his quickly referencing the initial intelligence he was sent, the president seemed to clearly confirm that US agencies have reached no conclusions on Russian involvement as yet, despite a slew of media reports hastily pointing in that direction, as is usual.

Biden reiterated this position when asked about phoning President Putin over the new breach:

Asked if has spoken with Russian President Vladimir Putin about the hack, Biden said he has not.

“I haven’t called because we’re not certain. And the initial thinking was it was not the Russian government, but we’re not sure yet,” Biden said.

He had said he “got a brief as I was on the plane and that’s why I was late”. The FBI is also said to be involved in probing the large-scale cyberattack which is being called by cyber security specialists a “colossal and devastating supply chain attack.” 

John Hammond, senior security researcher at Huntress Labs, on the Kaseya breach: ~200 companies that use Kaseya’s tech had their networks encrypted by REvil (think of this as SolarWinds but with ransomware).

“This is a colossal and devastating supply chain attack.” pic.twitter.com/c9xDnrJw9f

— Zack Whittaker (@zackwhittaker) July 2, 2021

According to multiple reports that emerged over the weekend, the hacking collective REvil is demanding that victim companies pay $45,000 in the cryptocurrency Monero to gain back access to their systems, warning that the payment will double each week they fail to pay up.

Despite Biden denying anything conclusive pointing to Russia being behind it, US mainstream media will undoubtedly hype a “Kremlin attack” through Sunday into Monday, which will in turn likely put more pressure on the administration to more aggressively put blame on Russian intelligence and in turn “take action” – evidence or not – likely in the form of more sanctions. The president has so far ordered a top level investigation into the ransomware attack.

Authored by Melanie Sun via The Epoch Times,

Former President Donald Trump warned at his third “Save America” rally on Saturday night that Americans no longer have free speech, describing a powerful system “for media and online censorship” that only presents the Democratic Party’s view of politics, including that Trump is attacking democracy by discussing potential election fraud.

“We have a truly sick election system, it’s got to be changed,” the 45th president told thousands of supporters gathered in Robarts Arena in Sarasota, Florida.

“Remember this, I am not the one trying to undermine American democracy,” he said in response to the legacy media and Democrat claims.

“I am the one trying to save American democracy.”

Democrats and Republicans have exchanged barbs since the chaotic 2020 election, which Trump maintains he will not concede, awaiting the results of a complete audit for Arizona’s Maricopa County that has been run independent of the secretary of state’s office. Additional audits are expected to follow in other jurisdictions.

“We can’t let them take away our free speech so we can[‘t] talk about corrupt elections. Otherwise you’ll have … that’s communism. That’s what they do in these communist countries, you have no voice,” Trump warned.

Communist and socialist states like Cuba and Venezuela remain embroiled in repeating cycles of contested elections, with their populations split between recognizing two heads of state, and both sides of politics accusing the other of election fraud.

“Democrats used COVID to cheat. They illegally changed the rules in key states. They stole the votes,” Trump continued.

“They abolished signature verification requirements, created a powerful system for media and the online censorship of their opponents, and did everything possible to facilitate fraud just like you would do in a third world country. That’s what happened with this election.”

Trump gave special mention to the Right Side Broadcasting Network (RSBN), which was suspended by YouTube from live-streaming to their channel for a week just hours ahead of the rally. RSBN has carried feeds of Trump’s public appearances since July 2015. Following the suspension, the company migrated to the video platform Rumble to stream Trump’s speech.

The former president also mentioned how left-wing billionaires had allegedly funded unsecured drop boxes in the 2020 election. He named Facebook as an example, referring to reports that Facebook’s CEO Mark Zuckerberg and his wife, Priscilla Chan, partly funded a nonprofit that irregularly distributed $350 million to nearly 2,500 election officials in 48 states and the District of Columbia, which could have helped increased voter turnout for Democrats.

People listen to former U.S. President Donald Trump during a rally in Sarasota, Florida, on July 3, 2021. (Eva Marie Uzcategui/Getty Images)

Trump, true to the stated mission of his “Save America” campaign office, said he will continue working to help secure support for “Republicans or MAGA” in the upcoming 2022 elections, with the goal of retaking the House and the Senate.

But in order to do so, the 75-year-old said that actions are needed to restore trust and transparency for all Americans in the nation’s election systems.

“We got them by surprise in 2016. And then they work for four years to make sure it didn’t happen again,” Trump said of the Democrats, accusing them of election fraud.

He again questioned President Joe Biden’s vote count, saying that he found it hard to believe that Biden got more votes from black people than President Barack Obama. Trump said that, like many other things including the Wuhan virus lab leak theory and his border policies, he believes his claims about a “rigged election” will be proven right.

“I wonder what I will be proved right about next. Perhaps it will be the election, perhaps,” he said.

Trump said that Republicans around the nation are uniting around efforts to secure future elections, by progressing legislation to demand voter ID, universal signature signature verification, citizenship confirmation, chain of custody integrity controls, and updated voter rolls.

“That’s before the elections, not after the elections,” Trump added, amid his criticism of Democrat actions passed ahead of the 2020 election to expand voter access that he said in effect reduced voter security in the name of needing to allow people to vote from home during the pandemic.

He said that Republicans “will restore the right to free speech in America again, which we don’t have.”

Hundreds of Trump’s supporters had lined up for the event overnight, with a large crowd staying until past 8 p.m. for Trump’s speech despite a thunderstorm ahead of Tropical Storm Elsa.

Trump remarked that if American voters had faith in the integrity of the 2020 election, he wouldn’t have so many people still attending his rallies.

“If we lost the election … I wouldn’t have a crowd that goes beyond what the eye can see, that stays in a thunderstorm,” he said of the crowd.

He then joked that some of the women in attendance were “a mess” from the pouring rain, adding “but the truth is, you look more beautiful now than you did when you went to the beauty parlor … You’re real, it’s great.”

People wait for former President Donald Trump to speak at a rally in Sarasota, Florida, on July 3, 2021. (Eva Marie Uzcategui/Getty Images)

He also dismissed legal efforts launched by New York prosecutors to bring charges against his company, the Trump Organization, and its chief financial officer Allen Weisselberg over “fringe benefits.”

“It’s really called prosecutorial misconduct. It’s a terrible, terrible thing,” Trump said of the legal efforts, contrasting them against cases of murder and human trafficking that he said were not pursued to the full extent by prosecutors. Weisselberg has pleaded not guilty to the charges.

Florida Gov. Ron DeSantis did not join Trump at the rally after both decided the state leader would remain in South Florida to oversee recovery efforts for the condominium collapse at Surfside and preparations for Elsa, according to state GOP Chairman Sen. Joe Gruters, local media reported.

Trump’s speech was followed by a fireworks display in celebration of Independence Day, when “56 brave patriots at Philadelphia proudly declared our independence and boldly proclaimed the eternal truth that we are all made equal by the almighty hand of our creator,” Trump said.

“With the spirit of July 4, 1776 stirring in our souls … We will make our elections free and safe again, we will make America powerful again, we will make America wealthy again, we will make America strong again, we will make America proud again, we will make America safe again, and we will make America great again,” he said in his closing remarks.

After last month quietly dropping sanctions on multiple Iranian entities amid ongoing nuclear negotiations in Vienna, the US Treasury Department on Friday announced the removal of sanctions against three more Iranian officials who have now had their access to their US assets restored.

However, like prior moves toward sanctions relief, the Biden administration is claiming this has nothing to do with Vienna nuclear talks, which have appeared stalled over the past weeks, given lack of any monumental breakthroughs and with both sides threatening to cut things off as neither side wants things to drag on indefinitely.

According to Axios, “Treasury officials said Behzad Ferdows, Mehrzad Ferdows and Mohammad Reza Dezfulian should not be sanctioned but that the roll back had nothing to do with ongoing indirect talks on reviving the 2015 nuclear deal.”

“Their assets had been blocked under Executive Order 13382, which focuses on proliferators of weapons of mass destruction and their supporters,” the report noted. 

An unnamed Treasury official had sought to assure Reuters: “These delistings do not reflect any change in U.S. government sanctions policy towards Iran. They have nothing to do with ongoing JCPOA negotiations in Vienna.”

The attorney representing the three Iranians had argued the US had “insufficient basis” for their initial designation, and thus he said “there was a dismissal of the claims” based on the legal flimsiness of the case.

Meanwhile, a feeling of distrust seems to continue to pervade the atmosphere in Vienna, given that days ago the Iranian side said it is requiring a “guarantee” that the US doesn’t unilaterally leave the JCPOA deal again, as President Trump did in May 2018, after which unprecedented numbers of sanctions were slapped on Tehran.

The talks have gone on for three months and six rounds. Both sides have strongly signaled they wish to see a finalized restored deal before Iran’s new president, hardline cleric Ebrahim Raisi takes office.