The Five FUBARs

The Five FUBARs

Authored by James Howard Kunstler via,

“How many of these places where polite society turns out to be provably insane do we have to see before we stop taking their judgment on anything as significant?”

– Bret Weinstein

The USA is a runaway train with a dead man in the engineer’s seat. The conductor goes through the cars assuring the passengers that everything is fine. . . never mind the screeching wheels on the curves. . . or the blinding strobe effect of low sunlight passing through the trees out the window at a hundred and forty mph. . . or the bump that made half the stuff in the overhead luggage rack jump out. More than half the people on-board are at tachycardia levels of fright — some are screeching — but the other less than half just remain fixed on their phones and laptop screens. They can’t be bothered to look out the window…

Okay, that’s a metaphor.

But if you’re a citizen of our country and care about it, these are the matters you’d better pay attention to, because they are all going off the rails:

The war in Ukraine. We started it in 2014 to mess with Russia and Russia is going to finish it. Who knows what our real motives were. A resource grab? A desperate ploy to erase our national debt by creating a global fiasco? Sheer psychopathic hatred of this Putin fellow? We can’t bring ourselves to acknowledge the failure of this ill-conceived venture. Instead, our feckless allies in Europe are foolishly rattling their sabers, apparently forgetting that you don’t bring a sword to a nuclear missile fight.

Mr. Macron in France affects to offer up his army for slaughter on the blood-soaked plains of Ukraine, just as the Ukrainians offered up a half a million of their young men so that Victoria Nuland could feel good about herself. Mr. Macron is insane, but the society he presides over is collectively insane, so perhaps he represents them well. Similarly, Olaf Scholz in Germany, whose top generals were caught on a leaked recording last week discussing their plan to blow up the Kerch Bridge that connects Crimea to Russia. Do you understand that this would be a direct attack on Russia, an act of War by NATO? And what the obvious consequence would be?

The phantom government of “Joe Biden” is too weak and mindless to join any negotiation. Ukraine and Russia are up to some kind of cross-talk down in Riyadh with Prince MBS. Even Mr. Zelensky went down for a day, though video appears to show him coked-up, sniffling and snarfling, not a good sign. If ever there was a time to end this stupid conflict, it’s now, before the Russian election. After that, terms will only be more difficult for Ukraine, up to direct custodial supervision instead of remaining a nation. It was never any of our business (though the Biden family, BlackRock, and the CIA saw fabulous opportunity to profit there).

Next is the border. You saw last year how the blob elite greeted the transfer of illegal immigrants to their happy little island of Martha’s Vineyard. (They were not amused by Governor DeSantis’s prank, and off-loaded the mutts post-haste.) But that same smug demographic doesn’t care if hundreds of thousands are distributed to the big cities, which are now fiscally destabilized by them to an extreme, probably to bankruptcy.

Of course, that is not the main thing to worry about with what altogether amounts to millions of border-jumpers flooding our land. The main reason to worry is what the blob that invited them here intends for them to do, which, you may suspect, is to unleash mayhem in the streets, malls, stadiums, and upon our infrastructure just in time to derail the election — perhaps even to make war on us right in our homeland. The US government is paying for this whole operation, you understand, funneling our tax money to international cut-out orgs who set up the transfer camps in Panama, and buy the plane tickets for the mutts to cross the ocean, and coordinate with the Mexican cartels to shuttle this horde of mystery people among us to work their juju for the Democratic Party. The pissed-off-ness of the public has passed the red line on this.

A third FUBAR is the lawfare campaign of the Democratic Party and its regime in power against the citizens of this land. This folder includes overt and obvious political prosecutions by DA’s and AG’s who make election promises to “go after” individuals without such niceties as probable cause. It includes the gigantic new scaffold of inter-agency censorship and propaganda. It includes the psychopathic struggle sessions mandated by “diversity and inclusion” policy. It includes election-rigging directed by the likes of Marc Elias and Norm Eisen, getting states to fiddle laws on voter ID and mail-in ballots. It includes the political protection of rogue groups ranging from looter flash-mobs to Antifa anarchists who bust up things and people and burn buildings down. It includes state officials who peremptorily kick candidates off the ballot. It includes a nakedly biased judiciary, and especially the use of the DC federal district court to punish people extralegally, unjustly, extravagantly, and cruelly. In short, lawfare is the complete perversion of law, and we-the -people are entreated by reprobate officials such as Merrick Garland and Letitia James to accept it.

A fourth item on this list is the US economy which has been overwhelmed by maladministration of an overgrown monster bureaucracy, and the gross (perhaps fatal) mismanagement of the government’s money. The people of this land are not being allowed to do business, to find a livelihood, to transact fairly. “Joe Biden’s” shadow string-pullers are messing as badly with the oil and gas producers as they have messed with Ukraine. And they are doing it in pursuit of a laughable mirage: their “green new deal.”

John Podesta, the “clean energy czar” who replaced the Haircut-in-search-of-a-brain called John Kerry, sits on a $370-billion slush fund that can be used to just dole out to anyone and everyone a political patronage payoff, especially to janky “community” orgs and NGOs with fake agendas. This really just amounts to an asset-stripping operation that will leave the American people busted and with broken supply chains for everything. Instead of annual budgets, Congress raises the US debt ceiling by “continuing resolutions” to keep the government from shutting down. The national debt races to the $35-trillion mark. As interest rates on debt rise, our debt payments now exceed our military spending. You can be sure that our country will break down financially very soon.

The capper on today’s list is the nation’s health, the racketeering system we’ve set up to care for it, and the public health agencies of the government that enabled the Covid-19 operation to happen. The CDC continues to push vaccines that have killed millions of Americans and more millions around the world, and has probably compromised the well-being of millions more going forward. Corporate medicine — that is, your doctor, and your hospitals — is a sinking Titanic of grift and chaos. Try to get an appointment to even see a doctor for an emergency. Try to avoid being bankrupted by your treatment. Try to get out of a hospital alive. Yeah, it’s that bad.

The doctors have surrendered your trust in them with their lying and their bullshit. The current director of the CDC, Mandy Cohen and her predecessor, Rochelle Walensky, have knowingly presided over the mass killing and injuries imposed on the mRNA vaccinated. Hundreds of their deputies should be liable for prosecution, and so should many of the other prominent characters in the Covid Saga: Fauci, Birx, Collins, Baric, Bourla, Daszak, Califf, Woodcock, Hahn, and many more.

What are we going to do about any of this? Return to the metaphor. The runaway train is still picking up speed. You can’t just jump off at 150 mph. If you’re one of the passengers watching this in horror, maybe you can decouple your car, or get the conductor to do it by any means necessary. Let’s say that each car behind the engine of this train is a state of the United States. Let the engine up front with the dead man at the controls ride that runaway to its terrible conclusion. Cut loose the cars behind it to take care of themselves, to slow down, get a grip on their situation, and make plans to find a better engine to pull the train. Decouple. Cut loose. It’s the only way.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

Tyler Durden
Mon, 03/04/2024 – 16:20

via ZeroHedge News Tyler Durden

Gold & Bitcoin Close At Record Highs As Bonds & Stocks Dip

Gold & Bitcoin Close At Record Highs As Bonds & Stocks Dip

A quiet macro day let the grown-ups play… and today saw gold and bitcoin roar up to record closing highs (amid rising breakevens and falling rate-cut expectations) as all eyes and ears and algos remain glued to any further hints of QE (Reverse Twist) as Waller revealed last week, and Fed’s Bostic didn’t help today.

In a commentary published on the Atlanta Fed website Monday, Bostic said he was worried that businesses have too much exuberance and could unleash a burst of new demand after a rate cut that adds to price pressures.

“This threat of what I’ll call pent-up exuberance is a new upside risk that I think bears scrutiny in coming months,” he said.

“ As my staff and I have talked to business decision-makers in recent weeks, the theme we’ve heard rings of expectant optimism.

That could be another reason not to cut rates at a rushed pace, he told reporters in a press briefing.

“I would probably not anticipate they would be back to back” cuts, Bostic said.

“Given the uncertainty, I think there is some appeal to acting and then seeing how participants in the markets, businesses leaders and families respond to that.”

2024 rate-cut expectations drifted (hawkishly lower) to barely three cuts priced in for 2024 now…

Source: Bloomberg

But breakevens are soaring in the face of disinflationary delusion…

Source: Bloomberg

And it appears gold got the hint…

Source: Bloomberg

…soaring to a new record closing high (just shy of its intraday record high)…

Source: Bloomberg

And the other alternative currency also soared, Bitcoin topping $67,000…

Source: Bloomberg

…up to its record closing high (yes, we know bitcoin doesn’t ‘close’)…

Source: Bloomberg

…amid another high volume day in BTC ETFs…

Source: Bloomberg

Ethereum also caught a bid, topping $3600 for the first time since

Source: Bloomberg

Still has some room to go its record highs…

Source: Bloomberg

Elsewhere, stocks ambled along with Small Caps pumped (at the European open) and dumped back to unchanged-ish. A late-day sell program dragged the Nasdaq to the lows of the day and the ugliest horse in today’s glue factory…

VIX continued to decouple from stocks here (and this time it was not call-buying FOMO malarkey as skews ticked higher)…

Source: Bloomberg

As NYCB collapsed to 28 year lows…

Source: Bloomberg

Bonds were sold with the short-end underperforming….

Source: Bloomberg

Which prompted bear-flattening in the yield curve…

Source: Bloomberg

The dollar limped lower but remains broadly speaking in its recent range…

Source: Bloomberg

Oil prices declined, apparently not enthralled by the idea of The Fed printing money to buy short-dated bills anymore, round-tripping Friday’s gains…

Source: Bloomberg

Finally, NVDA just refuses to drop, up another 6% today…

…overtaking Aramco as the 3rd most valuable company in the world…

Source: Bloomberg

It’s different though this time…

Source: Bloomberg

…probably nothing.

Tyler Durden
Mon, 03/04/2024 – 16:00

via ZeroHedge News Tyler Durden

Powell To Face Pressure On Rates From Democrats, Bank Rules From Republicans

Powell To Face Pressure On Rates From Democrats, Bank Rules From Republicans

Authored by Mike Shedlock via,

Fed Chair Jerome Powell meets with Congress this week. He will face pressure on two different fronts.

Image courtesy of Mortgage News Daily, annotations by Mish

Pressure on Two Fronts

Bloomberg reports Powell to Face Pressure on Rates From Democrats, Bank Rules From Republicans

The Fed chair heads to Capitol Hill on Wednesday and Thursday for his semiannual testimony before Congress, two years after the central bank began its aggressive battle against surging inflation. With the economy powering along and inflation inching toward the Fed’s sweet spot, Powell will make the case for why officials are in no rush to lower rates.

In a Jan. 30 letter, Senator Sherrod Brown urged Powell to cut rates “early this year,” arguing that high rates are hurting small businesses and putting homeownership out of reach for many Americans. That missive from the Senate Banking Committee chair, an Ohio Democrat who is running for reelection this year, could give cover to other committee Democrats who want to press Powell on rates.


Maryland Democrat Chris Van Hollen, in an interview last week, said the Fed needs to focus on housing costs “and taking actions necessary to make things more affordable for more Americans.”

Right now those high interest rates are actually increasing costs for families because one of the big parts of costs for families is housing,” Senator Elizabeth Warren, a persistent Powell critic, said in a Bloomberg Television interview. “It’s time to get those interest rates down.”

Capital Rules

Republicans will use Powell’s appearance to grill him on the Fed’s proposal to ramp up capital requirements for big banks by almost 20%.

Election Year

Powell has repeatedly said the looming election plays no role in policy decisions, but some Fed watchers worry rate cuts this year — investors are betting the first reduction will come in June — could be perceived as the Fed giving a boost to Democrats.

Elizabeth Warren Hoot of the Day

Home prices are at record highs. Just what does she think will happen to home prices and inflation if Powell cuts rates too early?

Small businesses are struggling but why is that?

The answer is Biden’s free money to students, Biden’s regulatory madness, Biden’s union push, and massive minimum wage hikes, especially in places like California are all highly inflationary.

The Fed’s Big Problem

On average, the economy looks OK. But averages are misleading. Several large groups of people are struggling. They all have one thing in common.

Case-Shiller home price index, CPI rent index, and the index of hourly earnings for production and nonsupervisory workers.

The Fed’s Big Problem is There Are Two Economies But Only One Interest Rate

Who’s Unhappy?

Those looking to buy a home but cannot afford the record high prices, are not faring well in this economy.

The last great time to buy a home was in 2012. Over the next eight years, home prices moved further and further away from wages.

When the Covid pandemic hit in 2020, we had record QE, record fiscal stimulus, mortgage rates hit record lows, and inflation hit the highest levels in 40 years.

When the Fed slashed interest rates to zero, mortgage rates fell below 3.0% for an extended period allowing everyone to refinance at 3.0 percent or below. Most did.

Winners and Losers

  • The homeowners are generally doing OK. The home ownership rate is 65.7 percent.

  • The 34.3 percent who rent are generally not doing OK.

The study did not break things down by home owners vs renters, but I suspect most of the use is by renters.

According to the latest CPI report, rent was up at least 0.4 percent for the 29th straight month. Shelter, a broader category, rose 0.6 percent. Food rose 0.4 percent.

CPI data from the BLS, chart by Mish

Credit Card and Auto Delinquencies Soar

Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.

Record High Credit Card Debt

Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.

For nearly all age groups, serious delinquencies are the highest since 2011 at best.

Auto Loan Delinquencies

Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.

Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.

For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39

Generational Homeownership Rates

Home ownership rates courtesy of Apartment List

The above chart is from the Apartment List’s 2023 Millennial Homeownership Report

Those struggling with rent are more likely to Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.

The same age groups struggling with credit card and auto delinquencies.

On Average Everything is Great

Average it up as Fed and all the clueless economic and political writers do, and things look great.

This is why we have seen countless stories attempting to explain why people should be happy.

Hello Mr. Powell

There are two economies (the homeowners/asset holders and everyone else). However, there is only one interest rate. Patience please says Powell.

Lowering rates risks risks fueling the housing bubble and the most expensive stock market in history.

It’s Powell’s move. No matter what he does Elizabeth Warren will howl.

She wants lower interest rates, but that will stoke inflation and it will not do a damn thing for renters who don’t have a down payment and cannot a house no matter what the mortgage rate is.

This is a dilemma of the Fed’s making and there is no solution.

Tyler Durden
Mon, 03/04/2024 – 15:40

via ZeroHedge News Tyler Durden

FAA Finds Non-Compliance Issues In Boeing’s 737 Max Manufacturing Program

FAA Finds Non-Compliance Issues In Boeing’s 737 Max Manufacturing Program

The Federal Aviation Administration’s six-week audit of the clowns running Boeing and Spirit AeroSystems has revealed “multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements.”

The non-compliance issues were found in the Boeing 737 Max program’s manufacturing process control, parts handling and storage, and product control, the FAA said, adding these details have been released to the public as an investigation is ongoing following the near-catastrophic accident when a door plug ripped off an Alaska Airlines 737 Max 9 plane earlier this year. 

The audit is one of the immediate oversight actions the FAA took after a left mid-cabin door plug blew out of Alaska Airlines Flight 1282 on January 5 while in flight. At a meeting at FAA Headquarters in Washington, DC, last week, Administrator Mike Whitaker informed Boeing’s CEO and other senior leaders that the company must address the audit’s findings as part of its comprehensive corrective action plan to fix systemic quality-control issues. The plan must also address the findings from the expert review panel report that examined Boeing’s safety culture. The FAA has given Boeing 90 days to outline its action plan. -FAA

While Boeing is held accountable for quality control issues that led to the 737 Max 9 plug door mishap, the FAA has halted production expansion of the Max jet.

There is word that Boeing might hire a third party to conduct independent reviews of quality systems at its Renton, Washington plant and Spirit AeroSystems facilities in Wichita, Kansas. 

Meanwhile, European aerospace giant Airbus SE has been pulling ahead of Boeing regarding aircraft deliveries, soaking up an increasingly more significant market share of narrow-body planes. 

Wall Street thinks so… 

With Boeing remaining under FAA scrutiny, it was also announced Monday that three passengers on the Alaska Airlines flight in January have filed a billionaire dollar lawsuit against the planemaker. 

Tyler Durden
Mon, 03/04/2024 – 15:00

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Good Story Versus Bad Valuations

Good Story Versus Bad Valuations

Authored by Will Denyer via Evergreen Gavekal blog,

In the run-up to Nvidia’s earnings release late Wednesday, there was a palpable concern in the market that the AI boom’s flagship would disappoint lofty expectations; what is now Wall Street’s most heavily traded stock traded -2% down during the afternoon session. And then Nvidia did it again, exceeding expectations in terms of revenue, earnings and forward guidance. The stock promptly jumped 9% in after-hours trading, which helped to lift Nasdaq futures by 1.5%. And the bullish sentiment spread to Asia Thursday morning, where after a 34-year wait Japan’s Nikkei 225 finally edged above its December 1989 record high.

With the terminals a sea of green, the obvious question for investors is the one Louis raised a couple of weeks ago—will markets in general, and US growth stocks in particular, continue to Party Like It’s 1999? Or are we heading for a 2000-style crunch?

Put differently, will a good story be overcome by bad valuations?

In the late 1990s, the story was that the internet was going to generate exceptional earnings growth for companies in tech, media, and telecoms. The TMT bubble inflated until by early 2000 the prospective earnings yield on US growth stocks was pitiful, both in absolute terms and when compared to the real yields in US fixed income (whether bonds or bills). Eventually, the valuation gap became too great and the market started to have doubts about when clicks would be converted into revenues, and the bubble burst. Investors fled growth stocks for fixed income, with growth stocks losing a quarter of their value in 2000, while bonds rallied. By the end of the year, risk-adjusted real yields on the two asset classes had largely converged (see the chart below). Meanwhile, value stocks, which never got anything like as overvalued, were flat for the year. It was not until the US recession began in March 2001 that value stocks joined the sell-off.

Fast forward to today and the relative valuation story is similar. Equities are generally expensive relative to fixed income. But the biggest gap is between growth stocks and short-term US treasuries.

Given this valuation spread, a continuation of the current rally in US growth stocks likely depends on one or both of the following:

(i) earnings continue to exceed expectations;

(ii) the Federal Reserve cuts rates and real bond yields fall—with no recession.

Either is possible.

On the earnings side, the strong recent economic data helps. January saw impressive payrolls growth and a pick-up in PMIs (February PMIs are out on Friday and will be worth monitoring). It is also encouraging that the leaders of this boom—Nvidia, Microsoft, Amazon, Meta etc.— have seen strong revenue and earnings growth, not just click growth. The balance sheets of these companies are also generally stronger than the balance sheets of the TMT bubble leaders, with less leverage and more cash. And as Louis has pointed out, unlike 1999-2000 there is little IPO activity today to leach away the liquidity supporting the stocks of the market leaders.

One big question is whether final demand for generative AI grows by as much as expected. Currently, Nvidia cannot make chips fast enough to meet the demand of its customers, and specifically of its four biggest customers— Amazon, Microsoft, Google and Meta—which account for 40% of its revenues. So long as final demand for generative AI continues to grow rapidly, these customers will likely continue to demand more chips from Nvidia and others, even as they are all developing their own AI chips. But if final demand for generative AI disappoints, today’s AI investment boom could result in overcapacity.

On the inflation front, the risk is that January’s uptick in US CPI and PPI inflation, along with the year-to-date rebound in oil prices, is not just noise but the start of a reversal from last year’s disinflationary trend. This is the subject of intense debate within Gavekal. From my perspective, I still believe the balance of evidence suggests inflation will remain benign.

But any more upside surprises in the inflation data will make the Fed more cautious about the timing and pace of rate cuts, because inflation remains the principal consideration determining Fed policy. If the Fed keeps short rates elevated while continuing quantitative tightening, the relatively high real yields on bonds and especially on bills could begin to weigh on US growth stocks. If inflation surprises on the upside, and the Fed confounds expectations for rate cuts, “T-bill and chill” will likely prove the investment strategy of choice.

The macro outlook for growth and inflation is always uncertain, and today is no exception. A continuation of the recent “soft landing” or “disinflationary boom” scenario is quite possible. The potential of generative AI appears great.

But given the extreme valuation gap between T-bills and growth stocks today, as in 2000 it is probably wise to take some profits on US growth stocks, and to buy more attractively-valued US value stocks, cheaper markets such as Brazil or China, or simply to load up on US T-bills.

Tyler Durden
Mon, 03/04/2024 – 14:20

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“We Remain Frustrated”: Investors Raise Buyout Bid For Macy’s After Board’s “Delay Tactics”

“We Remain Frustrated”: Investors Raise Buyout Bid For Macy’s After Board’s “Delay Tactics”

On Sunday, Arkhouse Management Co. and Brigade Capital Management raised their all-cash bid to purchase Macy’s at $24 per share, a 33% premium versus Friday’s closing price of $18.01. This comes a little more than a month after the retailer rejected a go-private bid from the group of investors. 

Arkhouse and Brigade disclosed Fortress Investment Group LLC and One Investment Management US as equity partners in the deal to acquire Macy’s. 

Arkhouse highlighted how they had revised the deal higher to entice Macy’s executives: 

  • A 51.3% premium to Macy’s unaffected share price on Nov. 30, 2023, the day prior to Arkhouse and Brigade submitting their original proposal on Dec. 1, 2023;

  • A 33.3% premium to where the Company’s shares closed on March 1, 2024; and

  • An increase of 14.3% from Arkhouse and Brigade’s previous offer of $21.00 per share that was submitted to the Company on Dec. 1, 2023.

Gavriel Kahane and Jonathon Blackwell of Arkhouse expressed their frustrations with Macy’s Board:

We remain frustrated by the delay tactics adopted by Macy’s Board of Directors (the “Board”) and its continued refusal to engage with our credible buyer group. Nonetheless, we are steadfast in our commitment to execute this transaction. In recent months, Macy’s has introduced two restructurings and a dividend hike. The stock price selloff following these announcements is a strong indication of shareholder concern about maintaining the status quo. We continue to offer the Company an attractive alternative solution through a sale of the Company at a substantial premium. This would provide Macy’s stockholders with significant value and immediate liquidity.

While the restructuring plan Macy’s unveiled last week failed to inspire investors, the fourth quarter earnings and year-end results have given us further confidence in the long-term prospects of the Company if redirected as a private company. After coordinating with our financing sources, we have increased our offer to $24.00 per share in cash. We remain open to increasing the purchase price further subject to the customary due diligence.

The notion that the plan we are proposing is not actionable is simply not true. We have tried repeatedly to address the concerns raised by the Company. We clarified the 50% equity contribution we laid out three months ago and disclosed our partnership with two highly regarded investors – Fortress and OneIM. With the help of our advisors, we have identified large global institutional financing sources for each debt component of the transaction with strong interest in finalizing commitments during a customary diligence process. These sources represent 100% of the capital required to buy the shares in Macy’s we do not already own at our proposed price of $24.00 per share in cash. We have struggled to understand what reservations the Board might have at this point and urge the Company to engage with us in good faith with the goal of reaching a transaction that would unlock significant value for all stockholders.

We sincerely hope the members of the Board are not so entrenched in their views about the future direction of the Company that they would ignore their fiduciary duties to explore a potential transaction with a credible buyer. We remain ready to proceed expeditiously with our due diligence toward a mutually agreeable transaction to acquire Macy’s at a substantial premium in cash.”

Shares of Macy’s jumped more than 17% in premarket trading in New York on the revised deal.

Two weeks ago, Arkhouse nominated nine people for Macy’s board of directors, igniting a proxy battle after the department store rejected a go-private bid in mid-January.

Last week, Macy’s announced “a bold new chapter” in the department store’s future, pivoting from catering to low-tier consumers to more affluent ones. In doing so, it will close 150 stores over the next few years while expanding Bloomingdale’s and Bluemercury stores.

Tyler Durden
Mon, 03/04/2024 – 14:00

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Time To ‘Deep-Six’ The Democrats’ Brand Of Democracy

Time To ‘Deep-Six’ The Democrats’ Brand Of Democracy

Authored by Albin Sadar via American Greatness,

The Democrats warn us almost daily that re-electing Donald Trump in 2024 will spell the end of democracy. But, technically, do we even live in a country whose constitution established us as a “democracy?”

When Benjamin Franklin left the Constitutional Convention of 1787, he was greeted by a woman who asked him point-blank, “Well, doctor, what have we got? A republic or a monarchy?” Mr. Franklin’s terse response: “A republic, madam—if you can keep it.”

It is significant that Mr. Franklin did not say that the form of government that the Founders created was a democracy. We are, in fact, as most of us know (or should certainly know), a constitutional republic.

We are not a country where 51% of citizens can outvote the other 49%, then tell them what they can and cannot do. We are a representative government with checks and balances built in as guaranteed safeguards against a majority of strong-willed individuals lording it over the meek, timid, and disadvantaged. Both majority and minority have a true say in how every citizen is governed.

The First Amendment guaranteeing free speech has always been key if we hope to “keep the republic.” Once that is co-opted—then controlled and censored—an unsuspecting public will be easily swayed into thinking in line with whatever insures that an elite few can gain and maintain power. Manipulating the masses is the goal.

Election season is always ripe for the misuse of our First Amendment. If the leftist elites who currently control the many facets of our culture—the press, academia, entertainment, business, and, yes, even many religious institutions—continue unabated, the noble idea and ideals upon which America was established will soon become a regrettable lost cause of the past.

Obviously, two powerful forces remain in the battle to control America through the presidency in this year’s election. On one side, the Democrats with their twisted definition of America as a democracy, aided by a Deep State, far-left, globalist, RINO, and woke contingency; on the other, all those pushing back, whether part of the America First and MAGA crowd or the myriad other freedom-loving citizens of all stripes awake to the evil that has accelerated over these past three years.

Since the 2020 presidential contest, which was declared by the powers that be to be “the most secure election in American history,” there is a majority of citizens who have serious doubts about the validity of the result. Another percentage naively believe that that sort of third-world, election-stealing shenanigans could never happen here. And yet another, smaller group knows for a fact that the election was not secure in the least because they themselves were flat out involved in rigging and stealing it. On November 3rd through 6th of 2020, a group of Democrat operatives blatantly and quite effectively ended the concept of free and fair elections, thus negating one of the keystones of self-rule by We the People.

Building upon that 2020 “win,” Democrats and their tyrannical gang have since targeted anyone who stands in the way of their fundamental transformation of this country, President Trump chief among their adversaries. As Trump so often reminds us, the left is not after him; they are after independent, free-thinking, non-compliant Americans. He’s just standing in their way.

And stand he has.

After everything the left has manufactured to take Trump out—every sort of imagined or concocted crime—Trump still stands. And, undeterred, he fights back. He refuses to simply fade away. Democrats and their machine on the left roll out their revenge and retribution daily on Trump because he had the audacity to run for president in the first place. Then to win. Then to win a second time.

From the primary trail over the past several months, Trump has also highlighted that, besides honest elections, another crucial facet necessary for a country to exist as a sovereign nation is a secure border. We can all clearly see what the Biden administration has allowed to transpire at the southern border. Millions of illegal aliens have simply strolled across our wide open borders and are now who-knows-where throughout our country. Does this indicate a government that is concerned about sovereignty or security in any way, shape, or form?

Other traits indicative of the Democrats’ brand of democracy include publicly labeling political adversaries as “domestic terrorists;” using excessive force and exaggerating charges when arresting dissenters; imprisoning protestors, such as those involved on January 6, without charges and due process; championing mob violence and looting from the progressive far left; and so many additional tactics that might more readily apply to fascism than democracy.

All these destructive features touted by the Biden administration help to reveal the democracy to which the Democrats refer. And we need to squelch it sooner rather than later.

November 5th would be just in the nick of time.

*  *  *

Albin Sadar is author of Obvious: Seeing the Evil That’s in Plain Sight and Doing Something About It, as well as the children’s book collection Hamster Holmes: Box of Mysteries. Albin was formerly the producer of “The Eric Metaxas Show.”

Tyler Durden
Mon, 03/04/2024 – 13:20

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Generals Discussed Secrets Of Ukraine War Using Off-The-Shelf Video Phone Tech, One Dialed In From Hotel Room

Generals Discussed Secrets Of Ukraine War Using Off-The-Shelf Video Phone Tech, One Dialed In From Hotel Room

Germany has been in continued damaged control in the wake of the audio leak of top German generals discussing sending Ukraine missiles and the potential of destroying the Kerch Strait Bridge.

There’s been yet more revelations, including that the generals, which included commander of the national air force Lt. Gen. Ingo Gerhartz, used off-the-shelf and apparently non-secure video phone technology to discuss highly sensitive matters of national security. One general on the line reportedly dialed in from his hotel room. This made the secretive multi-way call easy for the Kremlin to intercept.

Gen. Ingo Gerhartz, Getty Images

According to new details reported in the UK’s Telegraph, “The head of the Luftwaffe told air force officers and a general who dialed in from his hotel room how British and French officials were delivering Storm Shadows to Ukrainian soldiers.”

The publication further blasted it as among the German government’s worst security breaches since the Cold War.

Gen. Gerhartz also confirmed in the conversation that British troops are “on the ground” in Ukraine. But while admitting that the leaked audio – which first appeared in Russia’s RT last Friday after it was obtained by RT editor in chief Margarita Simonyan – is authentic Berlin is also claiming this is part of a Kremlin plot to destabilize Germany.

The Telegraph relays the new German military statement as follows

Boris Pistorius, the German defense minister, said on Sunday that Vladimir Putin was using the recording to try to “destabilize” Germany, sowing divisions with an “information war”.

In the call, Ingo Gerhartz, the Luftwaffe air force Lieutenant General, discusses the possible delivery of German Taurus missiles, which have a longer range and are more precise than Storm Shadows.

“If we’re asked about delivery methods. I know how the British do this,” Gerhartz’s words were further captured as saying. “They do it completely in reach-back [a military term indicating close collaboration with military intelligence, skipping normal protocols]. They have several people on the ground.”

In response came the (presumed) words of Brigadier General Frank Graefe describing that Ukrainian troops were trained on German soil and that a “right course of action” would be for the UK to “take over” the training.

Ironically, Graefe at one point expressed during the discussion, “Just imagine the uproar if the media were to find out.” UK media and British officials have been in an uproar as the leaked audio file spreads globally, and is getting more and more attention.

The Kremlin has since the leak first appeared been demanding answers from the German government, and has said this proves the prior statements of top Russian officials accusing NATO of militarizing Ukraine and having a presence on the ground. No doubt UK and other NATO officials are also calling into German government offices looking for answers on how this serious breach could have happened. Likely they’ll want to know whether other similar leaks of separate conversations are coming.

Tyler Durden
Mon, 03/04/2024 – 13:00

via ZeroHedge News Tyler Durden

Dispersion, Correlation, Volatility And The Stock Bubble

Dispersion, Correlation, Volatility And The Stock Bubble

Submitted by SpotGamma; Join the SpotGamma Volatility Challenge and get ready for 4 days of in-depth exploration into volatility, where traders of stocks, options, and futures will learn to track, assess, and trade with precision.

Dispersion, Correlation, Volatility and the Stock Bubble

Dispersion readings are hitting highs per @SPGlobal, particularly in Mid Caps, while correlation is moving toward lows and volatility is flat.

What does that mean? Why does it matter?

High dispersion means individual components of an index are moving more than the whole, similar to the idea of market breadth. Traders have complained that the current market has “lacked breadth”. Low correlation tells us not all components are moving in the same direction.

Dispersion is measured by calculating the weighted average of the variances (i.e. movement) of individual stock returns relative to a stocks weighting in the index. This therefore reflects the performance of the individual stocks in the index vs the index’s overall performance. ex: “MSFT is +5% while vs SPX +1%, and MSFT is 7% weighting in the SPX” (it really is a 7% weighting).

This is where correlation comes in (chart above, red line plots). As noted, correlation is at lows (SP500 left, SP400 right in the chart above).

Correlation measures the degree to which stocks move in relation to each other, indicating how closely their returns are linked over a given period. Currently we see low correlation with high dispersion, which indicates that stocks are moving significantly but in different directions, highlighting a lack of a unified market trend and suggesting diverse individual stock performances independent of the overall market movement.

This also hearkens back to “lack of breadth” as a risk flag in this rally. ex: “Semi’s and crypto are crushing it, everything else is a drag.”

Conversely, when correlation is high with a high dispersion reading , it suggests that while individual stocks are moving significantly, they tend to move in the same direction as the overall market, indicating a broadly uniform market trend but with varying degrees of intensity.

The prime example of this this was the March Covid crash, where everything was going down, but some stuff crashed more than others. Lastly, note that SPGlobal includes a plot of index volatility (yellow) against dispersion (blue).

As you can see, dispersion is increasing with volatility stagnant (red box). Compare this to the Covid crash wherein vol went up with dispersion (blue box). This current reading is symptomatic of the “stock up, vol up” environment we’re in, wherein there is thematic chasing (i.e. semis gone wild), but other stuff is left more or less drifting.

What’s the significance of dispersion – volatility spread?

The argument is that one would normally view an increase in dispersion to current levels as a signal of volatility (i.e. more movement) more normally associated crashing markets. But the fact that index volatility is not going up is indicative of….bubbles?

SP Global highlights the period of 1999-2001 as showing: “a marked dispersion, driven by the deeply idiosyncratic behavior of the technology sector. But index volatility did not rise, as sectors other than technology performed more normally. Thus, dispersion can better capture periods were only a portion of the market either bubbles or crashes.”

That sounds pretty familiar, regardless of if you think current trading action is more warranted (i.e. the AI revolution is not the internet bubble). These trends can last for some time, as they did in 2001. The dispersion – vol spread started in late 1999 and didn’t close until early ’21. This was after the bubble popped in Q3 of ’20. So, what are some quicker signal that the party is over? For that you want to watch for signals that the “stock up, vol up” regime is stalling out, which should coincide with a reduction in call volumes. One way to catch this shifting behavior is through looking at skew. Consider the 1 month SMH (semi ETF) skew (green), which shows upside calls all with a higher IV than at-the-money IV. This is a signal of high demand. Conversely, put IV is depressed.

If & when the SMH upside demand stalls, we’d expect skew to shift back towards something like Oct ’23 (gray line), which results in call IV deflating, and put IV increasing.

* * *

Join the SpotGamma Volatility Challenge and get ready for 4 days of in-depth exploration into volatility, where traders of stocks, options, and futures will learn to track, assess, and trade with precision.

Tyler Durden
Mon, 03/04/2024 – 12:40

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The End Of “Extend And Pretend”

The End Of “Extend And Pretend”

Authored by Daouglas French via The Mises Institute,

The number of U.S. commercial foreclosures spiked to 635 in January 2024 from a low of 141 in May 2020 reports real estate data firm ATTOM. The January count was up 17% from the previous month and roughly twice as many as in January 2023. 

“Commercial property deals in the US are picking back up at deep discounts—and forcing lenders to face just how far real estate prices have fallen,” notes Sarah Holder on Bloomberg’s “Big Take” podcast.

Bloomberg commercial real estate reporter Natalie Wong detailed a New York office building at 1740 Broadway purchased and renovated by Blackstone at considerable cost and the company has walked away with the debt that’s behind that building being marketed at a 50% discount. 

Ms. Wong said,

So you’re seeing these massive discounts on these prominent buildings start to show up in the market, and it’s a lot harder for, whether it’s the investor or the lender, to tell the regulators that the value of a lot of their buildings haven’t fallen greatly. And I—so I think this is starting to create more pressure. You know, a little bit of panic, too, from parts of, you know, the, the lenders that hold these loans. 

Pretending has become much harder. 

Problem real estate means problem banks. Bloomberg reporter Patrick Clark chimed in “we certainly hear people say over the next couple of years with commercial real estate debt as a catalyst, hundreds, if not thousands of banks are gonna go away, either because they go outta business or they need to be swallowed up or they need to join forces with another weak bank to survive.” (the combination of two weak banks does not make a strong on)

Real estate mogul Barry Sternlicht told Bloomberg “there’s a giant skeleton in the closet of the regional banks,” referring to commercial real estate loans. He made the point that “every piece of real estate is worth less when interest rates go up 500 basis points.”

Sternlicht stressed that there are no lenders for buyers who want to buy properties at deep discounts.

“Commercial banks are already nervous about their commercial office exposure,” he said. 

For some banks multifamily loans are the problem. Wolf Richter reports that 49 relatively small banks which average $1.3 billion in assets “had multifamily nonperforming loans (NPLs) that exceeded 5% of their total multifamily loans. At those 49 banks, the multifamily NPL ratio of 5% is far higher than the default rate [1.9%] of multifamily CMBS.”

CREDiQ reports commercial property distress is now 480% higher than in February last year.

“We are in a period of peak stress and expect the next two quarters to be challenging,” Arbor Chairman Ivan Kaufman told analysts on a call last week, reports Bloomberg.

The firm has “longstanding relationships with many quality sponsors that we’ve been working with to step in and take over assets that are underperforming and assume our debt and recap these transactions.”

Fitch Ratings doesn’t believe we are anywhere near peak stress. 

We expect any deterioration to play out for the banking sector over an extended period,” Fitch said.

“During the Global Financial Crisis, losses did not peak until almost two years after a peak in delinquencies, and problem loans have yet to peak for the sector.”

Extend and pretend may be coming to an end. 

Tyler Durden
Mon, 03/04/2024 – 12:22

via ZeroHedge News Tyler Durden