Sunday, July 31, 2022

Keep Him Out

But you won't get too far
'Cause you got to blame someone
For your own confusion
We're on guard this time
Against your final solution

--Red Rider

Interesting thesis about why leftists, including many on the conservative side, cannot let Trump back in the Oval Office. The primary answer is that it is not Trump, but the tens of millions of 'country class' that he represents. 

The elite cannot afford to have give those rubes, Clinton's 'deplorables,' a voice in the political process. And to keep that from happening, the ruling class will stop at nothing to keep that from happening.

The author suggests that leftists have a string of plans in the queue to keep Trump out of office.

Plan A. Use the Jan 6 show trials to keep Trump from running/winning. By most accounts, however, that isn't working.

Plan B. Indict Trump for 'seditious conspiracy' using the DOJ and other machinery of the deep state. Of course, it will be difficult to convince a large fraction of Americans that any such charges hold a modicum of legitimacy.

Plan C. Declare Trump ineligible to run under the insurrection clause of the 14th Amendment. The legitimacy issue still holds.

Plan D. Simply beat Trump at the ballot box. The trouble is Democrats have no obvious candidate that could compete with Trump head-to-head this time around.

Plan E. Cheat (again) in the election. There is no question that Democrats will do what they can get away with (again) this time around. The issue is, given the heightened public awareness about election process shenanigans, how much they will truly be able to get away with in 2024.

Plan F. Take to the streets and riot. Do this until the 'proper' regime is secured in the White House.

It is easy to see why leftists are husting to grab guns ahead of this cycle.

Saturday, July 30, 2022

Recession Now

When the good times never stay
And the cheap thrills always seem to fade away
When will we fall
When will we fall down?

--Toad the Wet Sprocket

The traditional definition of a recession is two consecutive quarters of negative real GDP growth. This has now occurred based on Q1 and Q2 GDP prints.

As these pages have discussed, political partisans are trying to manage the narrative away from the traditional definition--claiming that recessions only officially occur once they are declared by the 'experts' at the National Bureau of Economic Research (NBER).

Conveniently, such a declaration would occur sometime after the midterm elections in November.

What the partisan narrative managers fail to note is that two consecutive quarters of negative real GDP growth have always coincides with NBER's formal declaration of recession.

Friday, July 29, 2022

Social Networks and Political Correctness

"I'll be subtle. I'm good at subtle."
--John Spartan (Demolition Man)

Political correctness can be defined as behavior intended not to upset a particular group in order to advance an agenda. It often manifests in manipulating language. Political correctness is pretense; it is not genuine.

Political correctness is a product of social learning. Observing others. Watching what gets sanctioned. Fitting in.

As such, it should be no surprise that political correctness has increased alongside capacity for social networking.

Imagine a research experiment studying two groups of people. One group is highly plugged into their phones, tablets, and other social networking devices. 

The other group is rarely, if ever, online. 

Which group is likely to exhibit more politically correct behavior?

Thursday, July 28, 2022

Redline Fed Lines

You'll never say hello to you
Until you get it on the redline overload
You'll never know what you can do
Until you get it up as high as you can go
--Kenny Loggins

Yesterday the FOMC raised the Fed funds rate 75 bips as telegraphed. The overnight rate target now stands at 2.25-2.50%.

As is common anymore, the FOMC statement was 'redlined' for wording changes from the previous statement.

The only substantial change was the first sentence, which went from discussing economic strength to signs of economic weakness.

Couple that with the subsequent statement that the Fed is prepared to adjust its policy stance if risks emerge that threaten the attainment of the committee's goals, and you get early signs of a dovish pivot.

Reaching? Perhaps, but markets are partying on the prospects thus far.

Wednesday, July 27, 2022

Narrative Management

Nancy Oliver: What's the matter with the mistress? She don't look ill to me. Is she?
Elizabeth Tompkins: I don't know. Not as I can see. But the master keeps telling her she is.

Leftists believe that words matter more than actions. This is why they respond like juveniles on the playground when someone says something they don't like. "He called me a name!"

Indeed, it seems that many leftists view hurtful words as equivalent to acts of physical aggression--acts that justify physical violence, perhaps by government agents, to quell the 'hate speech.'

This is also why leftists obsess with controlling narratives. Narratives are story lines. In reality, these story lines may be true or false. But regardless of whether narratives represent fact or fiction, leftists believe that they can manipulate behavior in their favor by manipulating language.

Controlling the narrative often begins by changing the definition of a word or phrase that is central to the storyline.

Leftists are currently focusing on the meaning of 'recession.' Rather than using the traditional definition of two consecutive quarters of negative GDP growth (which likely has occurred in Q1 and Q2 of this year), leftists are now arguing that the definition is more nebulous and requires (very conveniently) a panel of experts to determine--perhaps far after the fact of the recession's actual commencement.

The narrative can then manipulated. We're still in an economic expansion, they say, because the experts haven't called a recession yet.

Should recent history be any guide, leftists will also try to recruit their media cabal to label alternative narratives as 'disinformation.'

If they can get the public to buy in, then perhaps leftists can postpone widespread perception of recession until after the November midterm elections. Leftists well know that people experiencing economic hardship are prone to vote out people and parties in positions of political power.

This time around, that would be Democrats.

Use your capacity for reason. Ignore the gaslights of narrative management.

Tuesday, July 26, 2022

Undercover Hero?

My beacon's been moved
Under moon and star
Where am I to go
Now that I've gone too far?

--Golden Earring

I enjoy reading Tom Luongo's work. Thought provoking--even when his general premise is wrongheaded. 

In this recent piece, for example, Luongo gives the Fed entirely too much credit, arguing that the central bank is essentially the 'good guy'--battling inflation wrought by irresponsible fiscal policies that sent money to people in boxes during CV19. 

He fails to mention the Fed's long history of bailing out markets (and policymakers) when markets break, or of the central bank's $9 trillion of balance sheet assets purchased with money created at the click of a mouse. Because, as Friedman observed, inflation is always a creature of monetary policy, arguing that the Fed is somehow not the Dr Frankenstein that created our present monster seems a bit naive.

However, Luongo does make an interesting point toward the end of his article. He notes (correctly) that the Davos/World Economic Forum crowd would like to put an end to commercial banking, and put all monetary power in the hands of central banks--perhaps even in a one world central bank with digital currency-producing capacity.

He then suggests that, in the United States (and perhaps elsewhere), the Fed represents the interests of those commercial banks. As such, the Fed is motivated to break the EU-centric Davos/WEF threat to US commercial banks by raising rates, pounding the euro, and perhaps even driving the EU toward dissolution.

There's lots of holes in that argument--including the Fed's 'institutional obligations' both domestic and abroad--but interesting to ponder the 'undercover hero' thesis nonetheless.

Monday, July 25, 2022

Cruel Summer

Strange voice are saying
What did they say?
Thinks I can't understand
It's too close for comfort
This heat has got right out of hand


Regional Fed data increasingly suggest that economic activity is quickly contracting. While this may be alleviating near term price pressure per policymaker goals, it also portends nasty political consequences.

As one respondent from the Texas survey commented, "November can't get here fast enough."

Sunday, July 24, 2022

Don't Bet On It

They show you photographs of how your life should be
But they're just someone else's fantasy


Policymakers seem to be betting that people would rather see inflation than recession. Current policies seek to curtail demand, lower wages, and raise unemployment--with the hope that these things will result in falling prices. 

And people are supposed to be happy with that outcome?

Don't bet on it.

I also wouldn't bet on the either/or proposition. What if it turns out that we get inflation and recession?

Saturday, July 23, 2022

Obeying Absurdity

"Private, I know they brainwashed you in boot camp. But sometimes you gotta QUESTION authority!"
--Chief Petty Officer Casey Ryback (Under Seige)

When a reasoning mind reflects on what's gone on, like this nurse has done, it is difficult not to conclude that a large fraction of the population will unquestionably obey authoritarian 'guidance.' 

No matter how absurd.

Friday, July 22, 2022

Tree Truth

See the stone set in your eyes
See the thorn twist in your side


This little decision tree captures lots of logic.

Adding a branch or two for side effect risk would make it even better.

Thursday, July 21, 2022

Zero Coherence

Maybe someday
Saved by zero
I'll be more together

--The Fixx

Earlier today the European Central Bank (ECB) raised its deposit rate 50 basis point The ECB's deposit rate had been in negative territory since 2014, meaning that depositors essentially paid to keep their money in the central bank's vault.

This is also the first interest rate increase by the ECB since 2011.

Needless to say, monetary policy in Europe has been off the rails for quite some time.

To demonstrate that it hasn't suddenly been transformed into an institution with coherence, the ECB unleashed a blizzard of acronym-heavy programs, such as Transmissions Protection Mechanisms (TPI), designed to selectively buy bonds of struggling EU countries (e.g., Italy) to keep sovereign debt from imploding.

Thus, we have a central bank raising interest rates while continuing easy money policy using a quantitative easing (QE) transmission mechanism.

The ECB truly makes the Fed look smart.

Wednesday, July 20, 2022

Greenwood's Good Samaritan

"People rely on the police to keep them safe. That's the problem. The police only arrive after the crime has taken place. That's like trapping the fox as he's coming out of the hen house. If a man really wants to protect what's his, he has to do it for himself."
--Ben (Death Wish)

Last weekend, a 20 yr old shooter opened fire in a Greenwood, Indiana shopping mall food court, killing three and injuring others. 

Tragic for sure. But it could have been much worse.

Within 15 seconds of the shooter's first shot, an armed civilian drew his carry pistol and put down the shooter. Mall security cam footage verifies the timeline.

Not surprisingly, the mainstream media is under-emphasizing this part of the story.

Regardless, as the local police chief recounts, "Many more people would have died if not for a responsible armed citizen that took action very quickly." 

The major added, "This young man, Greenwood's Good Samaritan, acted within seconds, stopping the shooter and saving countless lives. Our city, our community, and out state is grateful for his heroism in this situation."

It should be noted that Indiana became a constitutional carry state July 1.

Tuesday, July 19, 2022

Slanted News, Slanted Ratings

You got me running
Going out of my mind
You got me thinking
That I'm wasting my time

--Electric Light Orchestra

How has unbalanced media coverage translated into perceptions of confidence in news reports? According to a recent Gallup poll, not well.

Confidence in newspaper and television news has dwindled to fractions of what they were a few decades back.

Not surprisingly, Democrats exude more confidence in their media outlets than Republicans do.

Those leaning right average confidence levels in the single digits.

Slanted news creates downward slanted ratings.

Monday, July 18, 2022

Unfair and Unbalanced

And you may ask yourself,
"Well, how did I get here?"

--Talking Heads

Pew study finds that the media generally does not agree with the 'fair and balanced' approach to journalism. While more than three quarters of adults believe all sides of an issue deserve equal coverage, only 55% of journalists do.

Political ideology moderates belief in 'bothsidesism.' Approximately 70% of journalists indicated that they worked for outlets that lean left. 

Unfortunately, the survey did not ask respondents how they themselves leaned politically--or at least it was not reported. However, adults indicating affinity for the left were less likely to endorse 'bothsidesism.'

In a nod toward their increasingly progressive higher ed training grounds, younger journalists appear less likely to strive toward balanced coverage than older journalists.

It would be interesting to see some longitudinal data here. Has this sort of slant been on the increase? Or is it the same as it ever was?

Sunday, July 17, 2022

Handshake Contagion

When it almost seemed too much
I see your face and sense of grace
And feel the magic of your touch

--Thompson Twins

When it is time to 'offer each other a sign of peace' at mass, the new normal has become waves, good old fashioned peace signs, or other non-contact gestures. Certainly no handshakes.

Every now and then, however, people can't resist doing what is natural.

Today, the two people in front of me both offered their hands, which I gladly shook. A person behind me saw our handshakes and got in on the action as well. Genuine smiles all around too.

It felt good to defy the nonsensical and to do instead what humans were made to do. 

True contagion.

Saturday, July 16, 2022

Physics of Freedom

Always searching for the real thing
Living like it's far away
Just leave all the madness in yesterday
You're holding the key
When you believe it

--Michael McDonald

Interesting article discussing the physical, rather than philosophical, aspects of freedom. It has a system dynamics flavor to it.

The author proposes that for systems to persist over time, they must freely evolve to permit currents of resources to flow through the system.

When these flows are forcibly restrained, then adaptation is more difficult.

An optimistic implication of this view is that authoritarian states that seek to restrain freedom by censorship, coercion, intimidation, and other means are doomed to failure. People will eventually throw off those constraints in order to adapt.

Perhaps a better label for this concept is 'an evolutionary theory of freedom.'

Thursday, July 14, 2022

On the QT

It happened one summer
It happened one time
It happened forever
For a short time


Bank of America (BAC) analyst and former Fed staffer who has a good track record of predicting Fed policy shifts forecasts that the central bank's current quantitative tightening (QT) will be ended much sooner than expected. He thinks QT will cease in early 2023 with about $1 trillion in asset rolled off the Fed's balance sheet.

While consistent with what these pages have been suggesting, I'll pick the under on both. Sooner than early 2023 and less than $ trillion unwound.

position in BAC

Wednesday, July 13, 2022


Hundred dollar car note
Two hundred rent
I get a check on Friday
But it's already spent

--Huey Lewis & the News

Another 40 yr high CPI print. Measured consumer goods and services inflation came in at a higher than expected 9.1%.

Interestingly, commodities and their associated stocks are green on the news. Also, interest rate futures are now pricing in 'policy reversal' rate cuts by early 2023.

How long before those rate cut bets start tricking into late 2022?

Tuesday, July 12, 2022

Institutional Confidence

Oh, but I gotta think twice
Before I give my heart away
And I know all the game that you play

--George Michael

New Gallup poll indicates confidence in many US institutions continues to decline.

Outside of small business and the military, the percentage of people expressing considerable confidence is below 50% and, in many cases, in the teens moving toward single digits.

Some institutions, including the presidency, are down more than 10 percentage points in a year.

While these results might concern members of those institutions, they are unlikely to surprise the average person on the street.

Sunday, July 10, 2022

Viral Spreads

There's a room where the light won't find you
Holding hands while the walls come tumbling down
When they do
I'll be right behind you

--Tears for Fears

Ponder the differences indicated here.

Hard to imagine that there are more significant predictors of these spreads than underlying ideologies that determine political party affiliation.

Then comes the real research question: Why should this be--particularly in the context of public health? 

Saturday, July 9, 2022

Rationing and Rationalizing

First, I thought we were fighting for God. Then, I realized we were fighting for wealth and land. I was ashamed.
--Tiberias (Kingdom of Heaven)

Germany has begun rationing energy-related resources to compensate for their self-imposed sanctions with Russia. Am sure German citizens are being told to suck it up

Unfortunately we know that if goods do not cross borders, armies will.

How long will it be before people of G-7 countries, absent power and heat, look longingly at Russian resources and rationalize war to seize oil and gas for the 'greater good?'

Friday, July 8, 2022

Stocks Still

A gambler's share
The only risk that you would take
The only loss you could forsake
The only bluff you couldn't fake

--Bob Seger

Time series of AAII asset allocation indicates that, despite the nasty market pullback, individual investors have maintained their historical allocation to equities.

Usually, big market declines cause investors to dump stocks in favor of cash.

So far, however, stock allocations remain at about 70% of financial assets. There has been a slight uptick in cash to about 18% at the expense of bonds at about 12%.

Another point supporting the narrative that while individual investors feel bad about the market decline, they haven't acted on it in a substantial way--at least not via their investment accounts. 

Wednesday, July 6, 2022

Ceiling Prices

We run though the day
And stare at the night
Is your head full of noises?
For me, well, it's just like
The Fourth of July

--Roger Daltrey

Among the dumbest of economic policies pursued by politicians is the price ceiling. The thinking is typical authoritarian. Think prices are too high? Then simply declare them lower. Set a maximum price for transactions on the market. Punish those who engage in transactions at a higher-than-mandated price.

What happens when producers are forcibly restrained from selling output at higher prices? Supply leaves the market. Shortages develop. 

Not only does present supply leave the market, but future sources do as well. Entrepreneurs are less motivated to develop marginal or substitute sources of supply when the profit signal of higher prices is suppressed.

Over time, prices are likely to be much higher--particularly if it takes a long time to replace capacity once it is taken off the market by the caps.

Cogitate on that as G-7 bureaucrats mull price caps on Russian oil.

Tuesday, July 5, 2022

Deep Church

Desolate loving in your eyes
You used to make my life so sweet
Step out like a God-found child
I saw your eyes across the street

--Culture Club

Interesting interview with an Italian Catholic archbishop concerning the state of the world and of the church. He suggests that events of the last couple of years have been perpetrated by proponents of the Great Reset. Moreover, he argues that officials of the Catholic Church have done little to stop these people and that some are likely complicit.

He draws parallels to what is happening inside the church to the secular political world. Just as we have a deep state, we also have a deep church, with officials sympathetic to un-Godly principles reaching the highest levels of the church hierarchy.

Ultimately, he believes, the Great Reset is destined for failure because "it is inspired by inhuman and diabolical principles." However, its end may take time, depending both on human capacity to oppose it and on God's plans for Divine Providence.

His views will certainly not win him a ton of friends inside the deep church contingent. But his forthright challenge of status quo corruption instills confidence that God is indeed positioning for victory.

Monday, July 4, 2022

Still Radical

Benjamin Martin: May I sit with you?
Charlotte Selton: It's a free country. Or at least it will be.

--The Patriot

Two hundred and forty-six years after our nation's first law, its founding principle of liberty remains radical. From his early days of social existence, man has been tempted to surrender liberty to earthly rulers. As God warned Samuel, doing so invites despotism.

In 1776, the United States startled the world when it chose to 'throw off' that despotism in pursuit of self-determination. Since then, the authoritarians have been seeking to extinguish that flame of liberty and reclaim their power.

Events of the past few years suggest to some that the tyrants have made progress.

Personally, I prefer to believe that the opposite is happening. People tend to wake up when their freedoms are being stolen. 

Nearly a quarter of a millennium ago, we learned that when enough people wake up, they--the true radicals--have the capacity to push back.

Sunday, July 3, 2022

Lambs Among Wolves

Do not answer fools according to their folly, lest you become a fool yourself.
--Proverbs 26:4

In today's gospel from Luke 10, Jesus laments that "the harvest is abundant but the laborers are few." So he appoints 72 'others' to head out to towns ahead of his visits to evangelize--to prepare the way. 

He warns that he is sending them "like lambs among wolves." Many, he knows, will not be receptive. In fact, they may be downright hostile.

For those who are not receptive, Christ advised his evangelists not to dwell on it. Rather, he tells them to shake off the dust of those places from their feet and walk away.

Today, God wants his world back. Those 72 'others' represent us. We are to go forth, like lambs among wolves, on a journey toward spiritual perfection that ends at the gates of heaven. Along the way, we are to try to persuade others to join us on the journey.

Many will react with indifference and hostility. In those cases, Jesus tells us not to engage them on their terms. If we do so, then, as the proverb suggests above, we risk becoming entrapped in their foolishness.

Instead, shake their dust from your feet and move on.

Saturday, July 2, 2022

Pendleton Act

"You guys think you're above the law. Well, you ain't above mine."
--Nico Toscani (Above the Law)

In July of 1881, President James Garfield was shot and killed by an attorney who was furious that the president did not give him a job in the new administration. Operating on the theory that it had to eliminate the system of patronage in government if it was to prevent future assassinations, Congress passed the Pendleton Act.

Signed into law by Chester A. Arthur in 1883, the Pendleton Act created a permanent civil service that could not be undone each election cycle. The administrative, or 'deep,' state was born.

The Constitution does not provide for a permanent class of bureaucrats that possess authority outside of the three branches of government. The Pendleton Act created a layer of statist imposition that the democratic process cannot control.

Perhaps the original intent was to make the civil service class apolitical, but it has become anything but. Indeed, any political party worth its salt would endeavor to place operatives inside the administrative state so that agendas could be advanced regardless of who is in office.

We have seen this in the spades over the past few years as partisans installed at the highest levels of agencies such as the CDC, EPA, DOJ, Federal Reserve, FBI, and CIA render decisions that favor particular political agendas.

I don't know whether the constitutionality of the Pendleton Act has ever been challenged in court. If not, then it should be. This week's West Virginia v. EPA SCOTUS ruling moves in that direction.

Meanwhile, people must continue to wake up to the reality that there is currently a fourth branch of the federal government, one that arguably possesses more power than the other three branches, that essentially operates at its own discretion, and that is largely untouchable by the ballot box.

Friday, July 1, 2022

Suck It Up

"Whatever it takes is something that happens to somebody else."
--Jake Lo

As Americans increasingly question the logic of a distant war--an in particular the associated sanctions--that are jacking domestic cost of living higher, the administration is telling the citizenry to 'suck it up.'

When asked how long US drivers should be expected to pay a 'war premium' for gasoline, the president responded, "As long as it takes."

Hard to imagine replies like this will play well at the ballot box.