Month: August 2023

Authored by Charles Hugh Smith via OfTwoMinds blog,

This is how bubbles collapse: the “vital few” 4% sell at whatever the market will bear, pushing prices down, and the 64% awaken to the rapidly narrowing window for locking in bubble capital gains.

Here’s how we can tell if a speculative bubble is a bubble: everyone says it isn’t a bubble – the market has reached a “permanently high plateau” because valuations are now fairly priced, etc.

Housing globally is in a bubble (See chart below) which we’re constantly assured isn’t a bubble. As I discussed yesterday ( The Problem Isn’t a Housing Shortage, It’s the Concentration of Ownership by the Wealthy), this bubble is fundamentally an artifact of central bank and government policies that enrich the already-rich, who were incentivized to outbid each other with low-cost credit to snap up “investment properties” with their “surplus capital” that generate more income and capital gains that cash, which until recently was “trash” due to near-zero savings yields.

Many wealthy families collect multiple properties via inheritance, as second (vacation) homes or as long-term rentals. This hoarding is (as I explained) the only possible result of policies that asymmetrically distribute credit, and thus income and capital gains, to the already-wealthy rather than to the not-yet-wealthy. This policy-driven hoarding / concentration of housing in the top 10% is one factor driving rents higher due to artificial scarcity–a scarcity created by central bank and government policies, not the “market.”

(Regulations and bureaucratic friction that push the cost of new constriction to the moon are another factor, but that’s a topic for another post. I also want to stipulate that I am not talking about people of modest means who acquired rental properties by scrimping and saving their earned income and making sacrifices for decades–a strategy that is part of Self-Reliance; I’m talking about the already-wealthy who are seeking to “maximize returns” on their unearned “surplus capital.”)

A systemic driver of this bidding war for rental properties is the “AirBnB” model of monetizing individual properties to compete with hotels and resorts for lodging. This model is called short-term vacation rentals (STVR), and the already-rich have been pouring their wealth into STVRs for the past 15 years.

This has led to an artificial scarcity of housing in popular tourist destinations. It’s not uncommon to visit tourist-magnet cities and see entire buildings with only a few lights on, as many units are owned by the wealthy and left empty, as rents are not as important as having a safe place to “park surplus capital.” Thousands of other units have been pulled from the long-term rental market to reap the higher returns of STVRs.

Many cities and locales are finally pushing back against the housing hoarding of the global wealthy, taxing empty units and limiting and/or licensing STVRs.

As I explained yesterday, the flood of post-pandemic price-insensitive “revenge spending” pushed tourist lodging rates to the moon as resorts and STVRs competed on exploiting price-insensitive tourists.

What’s often forgotten about real estate is prices are set on the margin. The Pareto Distribution is a handy tool for understanding how an entire neighborhood’s home prices are re-set by a mere handful of sales.

The Pareto Distribution is often summarized as the 80/20 Rule. The 80/20 rule can be distilled down to 80% of 80% and 20% of 20% to the 64/4 Rule: the “vital few” 4% exert outsized influence over the 64% mass. So 4% of sales can re-set the valuation of 64% of all neighboring houses.

So 40 houses selling for around $450,000 will re-set the valuation of 1,000 nearby homes from $800,000 to $450,000. This is why an apparently modest number of fire sales of money-losing STVRs will dissolve the floor under bubble valuations.

The STVR bubble was entirely an artifact of 1) historically absurdly low mortgage rates and 2) post-pandemic price-insensitive “revenge spending”. Both are over. There is no way the bottom 90% can afford homes at today’s bubble valuations, so the pool of buyers is limited to the top 10% already-wealthy, whose appetite for owning “surplus capital” rentals vanishes once the lofty weekly rates and low vacancies reverse into high vacancies and collapsing rental rates.

The bottom 90% have tapped out their pandemic windfalls and their lines of credit. The erosion of the global economy will deflate bonuses, capital gains and all the other sources of the top 10% “wealth effect,” and credit will tighten as risk aversion and higher rates turn the spigot of easy credit off for the already-wealthy.

The collapse of the STVR bubble will topple a line of dominoes as corporate owners will awaken from their fantasies and realize they better sell now to lock in their gains before they vanish. Wealthy households who “land-banked” properties for capital gains and places to park “surplus capital” will also awaken to the the need to lock in gains by selling.

This is how bubbles collapse: the “vital few” 4% sell at whatever the market will bear, pushing prices down, and the 64% awaken to the rapidly narrowing window for locking in bubble capital gains. This rush for the exits triggers a strike in buyers, who realize there is no way to know how low valuations will fall, and so waiting for a bottom makes much more sense that playing “catch the knife,” i.e. buying as a bubble deflates, hoping you don’t get burned by prices falling after overpaying.

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The city of New York is spending $20 million per month to house approximately 3,000 asylum seekers – 50% more than expected, after expanding its controversial migrant complex on Randall’s Island.

The site, which will consist of five dormitory-style tents, has already begun housing more than 350 migrants after its opening last week, Gothamist reports.

According to city officials, the high occupancy rate is alarming.

“I think New Yorkers are understanding that that’s not sustainable,” said Anne Williams-Isom, the deputy mayor for health and human services, at the city’s weekly migrant briefing on Wednesday (per Gothamist). “Even with the good work that we’re doing, I don’t know that we’re really going to be able to keep up.”

Officials also report that the NYC shelter system is now caring for more than 110,900 people, which includes more than 59,300 migrants, and they’re scrambling to find more space to house everyone.

The crisis is spurring officials to open more shelters to house the migrants. Gov. Kathy Hochul recently announced that after months of trying, she received federal approval from the White House to use Brooklyn’s Floyd Bennett Field as a shelter.

While that’s welcome news for city officials, they continued to paint a bleak picture of the situation on Wednesday. The migrant relief center on Randall’s Island is expected to house up to 3,000 people, while Creedmoor can hold up to 1,000. -Gothamist

New arrivals at the Randall’s Island shelter are being paired with case workers to assist them in various goals – such as reuniting them with US relatives, or helping other family members come to NYC, according to Dr. Ted Long, senior vice president at NYC Health + Hospitals.

I’m telling you: Start getting ready to take over Madison Square Garden.
————————————-

The Randall’s Island “Humanitarian Emergency Response and Relief Center” (HERRC) — the city’s largest such facility to date, opened today.

The “tent city” erected on… pic.twitter.com/MWPv75XZ1j

— Crime in NYC (@CrimeInNYC) August 20, 2023

Officials are also grappling with school-aged migrant children who will need to be enrolled in taxpayer-funded classes.

This was sent to me by one of my sources. This is the inside of Randall’s Island. pic.twitter.com/kzlybjIBNg

— Viral News NYC (@ViralNewsNYC) August 23, 2023

Locals are pissed

NIMBY New Yorkers in the ultra-blue state aren’t happy, particularly because the migrants are taking up space on heavily-used athletic fields that ‘help keep NYC kids off the streets.’

One of Mayor Eric Adams’ own top commissioners, Vilda Vera Mayuga, head of the city’s Department of Consumer and Worker Protection, has even circulated petitions to try to block the use of the youth soccer fields for the mega-shelter facility. –NY Post

“We’re taking away from people who are real New Yorkers,” said Odalisa Abiles, a 47-year-old legal assistant from Queens who was at a family barbecue on Randall’s Island on Sunday (per the Post). “I was born here, on the Lower East Side, and you’re telling me they come first? How is that?”

“I pay my tax money, federal, local, all that beautifulness, and my children don’t get to enjoy New York.“

Well Odalisa, did you vote for politicians who declared New York a sanctuary city?

Authored by Jesse Felder via TheFelderReport.com,

Rapidly rising real interest rates suggest the stock market is severely mispriced.

‘Under prevailing economic theory, the expected forward return of cash from risky assets should be tied to this real rate. Historically it has been reasonably related. Since 2022, not so much. So much for economic theory!’ https://t.co/g3jtkw4AI5 by @profplum99 pic.twitter.com/fMgUNyYnTE

— Jesse Felder (@jessefelder) August 20, 2023

Perhaps investors are simply expecting a return to ultra-low interest rates in the near future but that belief may be misguided.

“In the end, life is simple. Low rates push up asset prices. Higher rates push asset prices down. We are now in an era that will average higher rates than we had for the last 10 years.” https://t.co/8LTQK5fvrq

— Jesse Felder (@jessefelder) August 19, 2023

Because there are structural issues behind the recent move higher in interest rates and they show no sign of improving any time soon.

‘The outlook for the federal budget right now is essentially unprecedented—crisis-size deficits as far as the eye can see, even though the economy appears to be in good health. That prospect is making investors uneasy.’ https://t.co/V0axnLoKag pic.twitter.com/hfMdGLn11X

— Jesse Felder (@jessefelder) August 25, 2023

For this reason, it may be an opportune time to consider real assets versus financial ones, especially due to the fact that they have never been cheaper than they are today.

‘Have real asset prices bottomed relative to financial assets?’ https://t.co/134LQQfGnz via @SoberLook pic.twitter.com/9PDoBT2cvI

— Jesse Felder (@jessefelder) August 25, 2023

And it’s a bit ironic to read of all the troubles in the Chinese economy lately when markets suggest the real troubles are right here at home.

The New York Times revealed a group of Silicon Valley billionaires are behind the $800 million in land purchases, or about the size of two San Franciscos, around Travis Air Force Base in Solano County, California. 

We previously covered the mysterious Flannery Associates, which has quietly amassed a staggering 55,000-acre farmland portfolio encircling three sides of the military base. The landowners weren’t previously known until now: 

Billionaire venture capitalist Michael Moritz, Reid Hoffman, the LinkedIn co-founder, venture capitalist and Democratic donor; Marc Andreessen and Chris Dixon, investors at the Andreessen Horowitz venture capital firm; Patrick and John Collison, the sibling co-founders of the payments company Stripe; Laurene Powell Jobs, founder of the Emerson Collective; and Nat Friedman and Daniel Gross, entrepreneurs turned investors. –NYT

Brian Brokaw, a representative of Flannery Associates, stated the investor group is mainly “Californians who believe that Solano County’s and California’s best days are ahead.” He said the group will begin talking with Solano County leaders, residents, and Air Force officials next week. 

ABC7 News I-Team learned Flannery Associates has purchased a total of 55,000 acres of dry farmland that have been acquired since 2018. 

ABC7’s Stephanie Sierra asked a local official: “Have you seen anything like this in your career?”

“No, I definitely haven’t,” responded Glenn Zook, Solano County’s Assessor.

Zook continued, “We see a lot of investors. There’s usually a target, a plan, but there doesn’t seem to be that in this case, other than targeting the specific area, which happens to be around the Air Force Base.”

One local rancher told the San Francisco Chronicle that Flannery Associates’ buying spree “was like a hostile takeover … it was Shakespearian, a ‘Game of Thrones’ kind of thing.”

NYT said in 2017, one of the venture capitalists sent a pitch deck to potential investors, describing: “A chance to invest in the creation of a new California city.” 

As San Francisco implodes under the weight of crime and Democrat dysfunction, tech billionaires are pivoting, setting their sights on building a new ‘smart city’ on the outskirts of the Bay Area. Perhaps it’s cheaper to build a new metro area rather than salvage the sinking ship that is San Francisco. 

Authored by Pepe Escobar,

Chinese President Xi Jinping defined all the major decisions embedded in the 15th BRICS summit in South Africa as “historic”. That may be seen as an understatement.

It will take time for the Global South, or Global Majority, or “Global Globe” (copyright President Lukashenko), not to mention the stunned collective West, to fully grasp the enormity of the new strategic stakes.

President Putin, for his part, described the negotiations on BRICS expansion as quite difficult. By now a relatively accurate picture is emerging of what really went down on that table in Johannesburg.

India wanted 3 new members. China wanted as many as 10. A compromise was finally reached, with 6 members: Egypt, Iran, Saudi Arabia, United Arab Emirates (UAE), Argentina and Ethiopia.

So from now on it’s BRICS 11. And that’s just the beginning. Starting with the rotating Russian presidency of BRICS on January 1, 2024, more partners will be progressively included, and most certainly a new round of full members will be announced at the BRICS 11 summit in Kazan in October next year.

So we may soon progress to BRICS 20 – on the way to BRICS 40. The G7, for all practical purposes, is sliding towards oblivion.

Bur first things first. At that fateful table in Johannesburg, Russia supported Egypt. China went all out for Persian Gulf magic: Iran, UAE and the Saudis. Of course: Iran-China are already deep into a strategic partnership, and Riyadh is already accepting payment for energy in yuan.

Brazil and China supported Argentina, Brazil’s troubled neighbor, running the risk of having its economy fully dollarized, and also a key commodity provider to Beijing. South Africa supported Ethiopia. India, for a series of very complex reasons, was not exactly comfortable with 3 Arab/Muslim members (Saudi Arabia, UAE, Egypt). Russia assuaged New Delhi’s fears.

All of the above respects geographic principles and imprints the notion of BRICS representing the Global South. But it goes way beyond that, blending cunning strategy and no-nonsense realpolitik.

India was mollified because Russian Foreign Minister Sergey Lavrov, at the table in Johannesburg negotiating on behalf of President Putin, and highly respected by New Delhi, fully understood that a new, single BRICS currency is a long way away. What really matters, short and medium term, is expanding intra-BRICS trade in their national currencies.

That was stressed by New Development Bank (NDB) president Dilma Rousseff in her report to the South African summit hosts – even as Brazilian President Lula once again emphasized the importance of setting up a work group to discuss a BRICS currency.

Lavrov understood how New Delhi is absolutely terrified of secondary sanctions by the US, in case its BRICS role gets too ambitious. Prime Minister Modi is essentially hedging between BRICS and the completely artificial imperial obsession embedded in the terminology “Indo-Pacific” – which masks renewed containment of China. The Straussian neo-con psychos in charge of US foreign policy are already furious with India buying loads of discounted Russian oil.

New Delhi’s support for a new BRICS currency would be interpreted in Washington as all-out trade war – and sanctions dementia would follow. In contrast, Saudi Arabia’s MbS doesn’t care: he’s a top energy producer, not consumer like India, and one of his priorities is to fully court his top energy client, Beijing, and pave the way for the petroyuan.

It Takes Just a Single Strategic Move

Now let’s get into the strategic stakes. For all practical purposes, in Eurasian terms, BRICS 11 is now on the way to lord over the Arctic Sea Route; the International North South Transportation Corridor (INSTC); BRI’s East West Corridors; the Persian Gulf; the Red Sea; and the Suez Canal.

That blends several overland corridors with several nodes of the Maritime Silk Roads. Nearly total integration in the Heartland and the Rimland. All with just a single strategic move in the geopolitical/geoeconomic chessboard.

Much more than an increase of BRICS 11 collective GDP to 36% of the world’s total (already larger than the G7), with the group now encompassing 47% of the world’s population, the top geopolitical and geoeconomic breakthrough is how BRICS 11 is about to literally break the bank on the energy and commodities market fronts.

By incorporating Iran, Saudi Arabia and the UAE, BRICS 11 instantly shines on as an oil and gas powerhouse. BRICS 11 now controls 39% of global oil exports; 45.9% of proven reserves; and at least 47.6% of all oil produced globally, according to InfoTEK.

With BRICS 11 possibly including Venezuela, Algeria and Kazakhstan as new members as early as in 2024, it may control as much as 90% of all oil and gas traded globally.

Inevitable corollary: operations settled in local currencies bypassing the US dollar. And inevitable conclusion: petrodollar in a coma. The Empire of Chaos and Plunder will lose its free lunch menu: control of global oil prices and means to enforce “diplomacy” via a tsunami of unilateral sanctions.

Already in the horizon, direct BRICS 11-OPEC+ symbiosis is inevitable. OPEC+ is effectively run by Russia and Saudi Arabia.

A ground-shaking geoeconomic reorientation is at hand, involving everything from routes plied by global supply chains and new BRICS roads to the progressive interconnection of BRI, the Saudi Vision 2030 and massive port expansion in the UAE.

By choosing Ethiopia, BRICS expands its African reach on mining, minerals and metals. Ethiopia is rich in gold, platinum, tantalum, copper, niobium and offers vast potential in oil and natural gas exploration. Saudi Arabia and the UAE, incidentally, are also involved in mining.

This all spells out fast, progressive integration of North Africa and West Asia.

How Diplomacy Goes a Long Way

The BRICS 11 Shock of the New, in the energy sphere, is a sharp historical counterpoint to the 1973 oil shock, after which Riyadh started wallowing in petrodollars. Now Saudi Arabia under MbS is operating a tectonic shift, in the process of becoming strategically aligned with Russia-China-India-Iran.

Diplomatic coup does not even begin to describe it. This is the second stage of the Russian-initiated and Chinese-finalized rapprochement between Riyadh and Tehran, recently sealed in Beijing. The Russia-China strategic leadership, working patiently in synch, never lost sight of the ball.

Now compare it with collective West’s “strategies”, such as the G7-imposed oil price cap. Essentially the G7 “coalition of the willing” self-imposed a price cap on Russian crude imported by sea. The result is that they had to start buying way more oil products from Global South nations which ignored the price cap and duly increased their purchase of Russian crude.

Guess who are the top two: BRICS members China and India.

After wallowing in several stages of denial, the collective West may – or may not – realize it’s a fool’s dream to attempt to “de-couple” the West-ruled part of the global economy from China, whatever is spewed out by Washington.

BRICS 11 now shows, graphically, how the “Global South/Global Majority/”Global Globe” is more non-aligned with the West than anytime in recent history.

By the way, the president of the G77, Cuban leader Diaz-Canel, was at the BRICS summit representing the de-facto new Non-Aligned Movement (NAM): the G77 actually incorporates no less than 134 nations. Most are African. Xi Jinping in Johannesburg met in person with the leaders of most of them.

The collective West, in panic, regards all of the above as “dangerous”. So the last refuge is, predictably, rhetorical: “de-coupling”, “de-risking”, and similar idiocies.

Yet that may also get practically dangerous. As in the first ever trilateral summit in Camp David on August 18 between the Empire and two Asian vassals, Japan and South Korea. That may be interpreted as the first move towards a military-political Asian NATO even more toxic than Quad or AUKUS, obsessed to simultaneously contain China, Russia and the DPRK.

The Collective Outstripping of the Global North

The UN lists 152 nations in the world as “developing countries”. BRICS 11 is aiming at them – as they outstrip the Global North on everything from population growth to overall contribution to global GDP growth measured by PPP.

In the past 10 years since the announcement of BRI first in Astana and then in Jakarta, Chinese financial institutions have lent nearly $1 trillion for infrastructure connectivity projects across the Global South. The upcoming BRI forum in Beijing will signal a renewed drive. That’s the BRI-BRICS symbiosis.

In the G20 last year, China was the first nation to lobby for the inclusion of the 55-member African Union (AU). That may happen at the G20 summit next month in New Delhi; in that case, Global South representation will be close to parity with the Global North.

Claims that Beijing was organizing a malign conspiracy to turn BRICS into a weapon against the G7 are infantile. Realpolitik – and geoeconomic indicators – are dictating the terms, configuring the Shock of the New: the G7’s irreversible irrelevance with the rise of BRICS 11.

Biden climate envoy John ‘private jet’ Kerry expended several years worth of the average pleb’s emissions to appear in Edinburgh, Scotland, where he said that climate skeptics were in a ‘cult,’ and accused them of ‘lashing out at truthtellers’ (like the ones who made a ‘major math error’ in a widely-cited study? Or the ones who couldn’t answer what good throwing $50 trillion at it will do?).

As far as ‘cult members,’

Like these cult members from Princeton and MIT who say EPA climate regulations are based on a ‘hoax’?

Or researchers from Finland and Japan who found “practically no anthropogenic [man-made] climate change” following a series of studies? (Archived, available to premium members)

Or the fact that solar panels are ‘three times more carbon intensive‘ than the IPCC claims?

Or this NOAA whisteblower who claims world leaders were fooled by fake global warming data?

According to the 79-year-old Kerry, climate skeptics “incite a movement against what they falsely label ‘climate change fanaticism’ as they conveniently forget that the dictionary definition of a ‘cult’ is ‘the dismissal of facts in devotion to a lie.’“

“Despite a vast array of facts beyond any shadow of a doubt, of any reasonable doubt, despite thousands of scientists accumulating hard data [in] all their labs, and without a single piece of peer-reviewed documentation to the contrary, we are again witnessing another moment in which the persuasive force of evidence and with it earth’s future hangs in the balance,” the elite hypocrite continued.

Watch:

Oh?

Brilliant speech addressed to our ‘woke’ youth fighting #climatechange by Konstantine Kisin. pic.twitter.com/mFS8w0t2ip

— Brandon Taylor Moore (@LetsGoBrando45) January 14, 2023

 

Authored by Patrick Barron via The Mises Institute,

Leaders of the Western democracies are unprepared to deal with forces that will end the fiat dollar’s dominance as the preferred medium of international trade settlement, in place since the end of the Bretton Woods Agreement in 1971.

The BRICS summit, currently taking place in Johannesburg, South Africa, is expected to include an agreement on a first step toward establishing an alternative international trade settlement system based on commodities, which would certainly include gold. Dozens of non-Western and even some Western affiliated nations are attending with great interest. Six new members have been invited to join Brazil, Russia, India, China, and South Africa—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.

Although the coming change may be characterized as one between the Western democracies and the BRICS nations, the real battle is one of ideas between Keynesian economic theory and gold. The winner will be gold.

As Murray N. Rothbard explained in What Has Government Done to Our Money?, gold was never proven to be inferior to fiat money. The gold standard was not replaced by a better monetary system. It was suppressed in stages to satisfy the state’s insatiable need for money–first to make war and then to corrupt the people via welfare. The result, of course, has been never-ending wars, creeping expansion of the welfare state, unsustainable public deficits, and accelerating debasement of the currency.

The challenge to the fiat dollar began with its debasement, which lowered its purchasing power to gold by 98% since 1971, and accelerated with introduction of the so-called “Russian Sanctions” of freezing Russian owned assets in the West and denying Russia access to the international dollar trade settlement messaging system known as SWIFT. Russian monetary expert Sergey Glazyev has led the movement toward an alternative system.

Putting “Paid” to Keynesian Fallacies

Introducing gold into the trading system will expose the main fallacy of Keynesian economics; i.e., the elevation of aggregate demand to prominence in a nation’s economy rather than production. Keynes shunned Say’s Law of Markets in his General Theory of Employment, Interest and Money in order to hide his theory’s internal contradictions. As put succinctly by Emile Woolf, “Keynes endows the concept of ‘aggregate demand’ with god-like status while disregarding ‘production’-the only means of satisfying it.” Jean-Baptiste Say shows that production is required in order to enjoy the benefits of consumption.

On the face of it, it is hard to believe that anyone would believe that production either isn’t required for consumption or that it magically appears. Yet, this rather upside down theory appealed to politicians for obvious reasons; i.e., it gave them carte blanche to spend, all with money created out of thin air by the central bank. Rather than economize and prioritize spending that was absolutely necessary for the benefit of the entire nation, politicians were told by Keynes that it was their duty to spend if only to pay people to dig holes and others to fill them up.

Basics of a Gold Settlement System

The new international trade settlement system will require settlement in gold. A possible mechanism has been outlined by Alasdair Macleod of Goldmoney.com. The benefits of the new system will become obvious to every nation, not just the current BRICS members. The political benefits are that no one nation can control or manipulate the system for its unearned benefit. The economic benefits are that government spending will be minimized so that resources can be allocated to production rather than state aggrandizement. A member can expand imports only by expanding exports. This puts market pressure on member governments to reform their internal economies in order to increase production.

To artificially increasing demand, per Keynesian orthodoxy, would be counterproductive, because gold would drain from the nation’s gold settlement account and imports would be suspended. Therefore, the system encourages sound economic practices within its members’ individual economies. Printing money, excessive and unnecessary regulations, excessive taxation, and excessive government spending do nothing to aid a member’s ability to engage in trade. Nations like the US who have huge welfare obligations and who have politically connected industries that do not add to the nation’s capital base will struggle. Having lots of nuclear weapons will be irrelevant and having bases around the world will be liabilities rather than assets.

An important point made by Macleod is that over time the gold settlement system for international trade will expand into members’ internal monetary systems. In other words, fiat currencies, which can be inflated/debased by governments, will be thrown on the ash heap of history. They will become “barbarous relics” instead of gold, as Keynes predicted in 1924.

Florida needs to be prepared for tropical activity mid/late next week. 

Tropical Depression 10 is “meandering” off the Yucatan Peninsula and is forecasted to become a hurricane early next week, with the latest spaghetti models suggesting landfall across the west coast of Florida and the Panhandle. 

Overnight EURO ensembles on https://t.co/j6cXc9Fom0. Tracks solid. Main operational now under 990mb. Meaning a stronger Hurricane likely coming. Important thing to note. A strong fast moving Hurricane will have serious impacts inland. Intensifying storms don’t lose much punch… pic.twitter.com/d99EFHqw5g

— Mike’s Weather Page (@tropicalupdate) August 27, 2023

As of the latest National Hurricane Center update, TD10 is 30 miles south-southeast of Cozumel, Mexico, with winds sustained at 35 mph and moving south at five mph. 

“The depression is moving toward the south near 5 mph (7 km/h), and it is likely to meander near the Yucatan Channel through early Monday. “A faster motion toward the north or north-northeast is expected later on Monday, bringing the system over the eastern Gulf of Mexico,” the NHC forecast said.

In preparation for rapid intensification, Florida Gov. DeSantis declared a state of emergency for 33 Florida counties while campaigning for president in Iowa. 

“I signed an Executive Order issuing a state of emergency out of an abundance of caution to ensure that the Florida Division of Emergency Management can begin staging resources and Floridians have plenty of time to prepare their families for a storm next week,” DeSantis said. 

Latest model landfalls still show anywhere from Apalachicola to Cedar Key, Florida is the main threat zone for #TD10 future #Idalia pic.twitter.com/3yzb3sUj3o

— Allan Huffman (@RaleighWx) August 27, 2023

He continued, “I encourage Floridians to have a plan in place and ensure that their hurricane supply kit is stocked.”

Last week, tropical activity flourished across the Caribbean region and Atlantic basin after a “historic lull” this summer. 

TROPICS | #Franklin is now a hurricane and #TD10 is prepping to enter the Gulf. Franklin will steer clear of the U.S., but T.D. 10 will strengthen to become Hurricane #Idalia with landfall likely in north Florida Wednesday. pic.twitter.com/VCsKn88to5

— Meteorologist Grant Gilmore (@GrantGilmoreWX) August 27, 2023

All eyes on Florida. 

Authored by Lee Fang via leefang.com (emphasis ours),

When should America deploy its armaments and forces to conflicts around the globe? And how much of the American military intervention abroad is shaped by genuine humanitarian and U.S. interests versus the tangled web of foreign alliances, special interest groups, and defense contractors?

These questions, which have long divided both major political parties, were on display in Milwaukee last night week at the first Republican presidential debate as foreign policy loomed as a key point of contention. 

Vivek Ramaswamy, as the only candidate directly against any escalation in the Ukraine-Russia war and against any additional U.S. funds, argued that the conflict represented “another no-win war” like the wars in Iraq and Vietnam. The biotech investor favors a quick negotiated end to the fighting and an alliance with Russia to help contain China against any future aggression, as well as a greater focus on domestic issues, such as immigration.

Several candidates, in contrast, bitterly argued that supporting Ukraine is a moralistic necessity.

Mike Pence, a proponent of increased military support to Ukraine, said that Russian President Vladimir Putin “is a dictator and a murderer, and the United States of America needs to stand against authoritarianism.”

Nikki Haley, who also backs more American funds and military support for the conflict, made similar remarks. “Look at what Putin did today. He killed Prigozhin. When I was at the U.N., the Russian ambassador suddenly died. This guy is a murderer,” said Haley.

But the debate turned personal a moment later, as Haley charged that Ramaswamy is “choosing a murderer over a pro-American country.”

“I wish you well on your future career on the boards of Lockheed and Raytheon,” Ramaswamy shot back.

“You would make America less safe. You have no foreign policy experience, and it shows,” countered Haley. 

The incendiary exchange, which instantly became a viral, made-for-television exchange clip shared widely, belied a deeper divide in foreign policy and the curious background of Haley, who went from near negligible wealth – with virtually no assets or investments other than a bank account with less than $15,000 in 2017 and up to $1 million in debt – to a sizable fortune.

Over the last year, Haley and her husband reported a vast investment stock portfolio and $12 million of income.

The former South Carolina governor left the Trump administration in 2018 at a time when her parents were struggling financially and had just faced foreclosure. Those days are over. Haley now resides in a 5,700-square-foot mansion on Kiawah Island now worth close to $5 million. Haley and her husband also helped sell a strip mall once owned by her parents and worked to clear the family of previous debts.

Along the way, Haley became wealthy in large part from her ties to a network of defense interests and hawkish advocacy organizations tied to U.S. and Israeli intelligence officials.

In one of her first reported private sector jobs after leaving her last government post, Haley joined the board of Boeing, a defense contractor, a position that paid around $300,000 a year in cash and stock. Haley, according to disclosures, still owns up to $250,000 in Boeing stock.

Haley’s primary income, aside from speaking engagements, is from United Against a Nuclear Iran, an advocacy group shrouded in secrecy.

The group, which has lobbied for military strikes on Iran, is advised by Zohar Palti and Tamir Pardo, two former Israeli intelligence officials, as well as many former U.S. national security officials. The Department of Justice previously intervened in a lawsuit to prevent the disclosure of United Against a Nuclear Iran’s donors, claiming that doing so would “cause harm to national security.”

Haley also works as a consultant to Prism Global Management, a New York-based investment fund run by Richard Kang, a position that earned $708,335. While the investment fund has no substantial online presence, Kang is active in the defense world and serves as an advisor to America’s Frontier Fund, a new group backed by former Google chief executive Eric Schmidt and run day-to-day by Gilman Louie, the former head of In-Q-Tel, the CIA’s venture capital arm. 

At a launch event for the fund last year, a participant openly discussed the fact that America’s Frontier Fund is investing strategically in “choke points” in case of war between China and Taiwan, in which case the fund’s portfolio would increase “10x, like overnight.”

Michael Haley, Nikki’s husband, also launched his own defense contracting firm in recent years. Michael who previously served with the National Guard, along with stints in human resources and at a high-end clothing store, earns up to $500,000 from a company called Allied Defense.

An investigation from the Daily Beast showed that Allied Defense appears to overlap with a sister company, Defense Engineering Services, that helps clients “navigate political and legal concerns to allow for defense system acquisition.”

IKOR Systems, a firm founded by Michael, touts clients in “aerospace manufacturing,” as well as gaming. The website for the company provides few details. But the company brought in up to $1 million in income for the couple.

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The Kremlin has confirmed the death of Wagner leader Evgeny Prigozhin, after his private plane crashed Wednesday north of Moscow, which killed the ten total people on board, including other top Wagner commanders.

Russia’s Investigative Committee on Sunday announced that after recovery of the bodies aboard the downed Embraer 135BJ Legacy 600 plane, DNA tests have confirmed that one of them was Prigozhin.

“As part of the investigation into the plane crash in the Tver Region, molecular genetic examinations have been completed,” the committee’s spokesperson Svetlana Petrenko announced of the results. “According to their results, the identities of all 10 victims have been established. They correspond to the list stated in the flight manifest,” the statement added.

The flight list named Prigozhin and multiple other high-ranking Wagner officials, including Dmitry Utkin, widely seen as co-founder of Wagner and in charge of the firm’s global operations.

The Kremlin has rejected reports and officials in the West who say this was President Putin carrying out revenge for the June 23-24 Wagner mutiny.

Prigozhin had long lashed out at the “corruption” and bad strategic decision-making of the Russian chain of command, and shortly before the uprising he even took a rare direct swipe at Putin, at one point questioning the entire decision to invade Ukraine.

As for the airplane downing, it remains uncertain whether it was brought down by an anti-aircraft missile or midair bombing. There’s also the possibility of an air-to-air missile from a Russian fighter jet.

The aviation analysis source AirLive has examined new video of the crash site which its says points in the direction of a bombing which ripped apart the wing and other vital parts of the jet midflight.

The publication, commenting on the wing having so far from the main crash site, writes as follows:

This large piece fell 3 km from the crash site into the river Lodyzhenka, a possible indication of an explosion before impact.

The aircraft was logged by FlightRadar24 taking off from Moscow at 5.46pm local time (15.46 UK), and climbing to a cruising altitude of 28,000 ft, outside the range of many small anti-aircraft missiles.

Thirty-three minutes into the flight, while about a mile south of the village of Kuzhenkino in the Tver region, the aircraft rapidly lost altitude and lost contact.

“In this video footage, the airplane seems to be missing either its vertical stabilizer or one of its wings,” AirLive continues. “These indications could mean an internal explosion caused by a bomb onboard or an air to air missile.” Additionally, “A few hundred meters from the crash site, part the tail of the plane was found,” the report finds.

US officials in the immediate aftermath gave contradictory conclusions to various American media outlets, with more recent statements also strongly suggesting a midair bombing is what brought the plane down.