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July 8, 2024 Readings
July 8, 2024 Readings
Let’s Stop Arguing About An Imaginary Energy Transition | Art Berman
The Normalization of Madness – by Geoffrey Deihl
“Overlapping Emergencies” Pushes Countries To Bolster Food Supply Stocks | ZeroHedge
A Revolutionary Library–Justin McAfee
The Meme That Is Destroying The World, Part IV–Steve Keen
The Music Just Stopped: Japan Banking Giant Norinchukin To Liquidate $63 Billion In Treasuries & European Bonds To Plug Massive Unrealized Losses
The Music Just Stopped: Japan Banking Giant Norinchukin To Liquidate $63 Billion In Treasuries & European Bonds To Plug Massive Unrealized Losses
Last October, when the wounds from the March 2023 bank failures – which surpassed the global financial crisis in total assets and which sparked the latest Fed intervention, setting the market’s nadir over the past 16 months – were still fresh, we made a non-consensus prediction: we said that since the Fed has once again backstopped the US financial system, “the next bank failure will be in Japan.”
This prediction only got warmer two months later when, inexplicably, Japan’s Norinchukin bank, best known as Japan’s CLO whale, was quietly added to the list of counterparties for the Fed’s Standing Repo Facility, a/k/a the Fed’s foreign bank bailout slush fund.
But if that was the first, and still distant, sign that something was very wrong at one of Japan’s biggest banks (Norinchukin is Japan’s 5th largest bank with $840 billion in assets) today the proverbial canary stepped on a neutron bomb inside the Japanese coalmine, because according to Nikkei, Norinchukin Bank “will sell more than 10 trillion yen ($63 billion) of its holdings of U.S. and European government bonds during the year ending March 2025 as it aims to stem its losses from bets on low-yield foreign bonds, a main cause of its deteriorating balance sheet, and lower the risks associated with holding foreign government bonds.”
See, what’s happened in Japan is not that different from what is happening in the US, where as the FDIC keeps reminding us quarter after quarter, US banks are still sitting on over half a trillion dollars in unrealized losses, as a result of the huge jump in interest rates which has blown up the banks’ long-duration fixed income holdings, sending them trading far below par and forcing banks (and the Fed, see BTFP) to come up with creative ways of shoving these massive losses under the rug.
…click on the above link to read the rest of the article…
Bird Flu Triggers Supply Chain Snarls In Dairy Industry As “Farmers Increasingly Culled Cows”
Bird Flu Triggers Supply Chain Snarls In Dairy Industry As “Farmers Increasingly Culled Cows”
The latest US Department of Agriculture data shows bird flu has infected at least 80 dairy herds across ten states. There are growing concerns about rising cow mortalities from the virus and the risk of farmers culling cows to stop the spread. This could ignite economic stress across the farm belt and unleash a supply shock.
Reuters spoke with a USDA spokesperson who was aware of H5N1 virus-related deaths among cow herds but said that most cows recovered. No official figures have been provided on the number of cow mortalities in South Dakota, Michigan, Texas, Ohio, and Colorado.
Here’s more on the cow deaths:
In South Dakota, a 1,700-cow dairy sent a dozen of the animals to slaughter after they did not recover from the virus, and killed another dozen that contracted secondary infections, said Russ Daly, a professor with South Dakota State University and veterinarian for the state extension office who spoke with the farm.
“You get sick cows from one disease, then that creates a domino effect for other things, like routine pneumonia and digestive issues,” Daly said.
A farm in Michigan killed about 10% of its 200 infected cows after they too failed to recover from the virus, said Phil Durst, an educator with Michigan State University Extension who spoke with that farm.
Michigan has more confirmed infections in cattle than any state as well as two of three confirmed cases of US dairy workers who contracted bird flu.
In Colorado, some dairies reported culling cows with avian flu because they did not return to milk production, said Olga Robak, spokesperson for the state Department of Agriculture.
Ohio Department of Agriculture spokesperson Meghan Harshbarger said infected cows have died in Ohio and other affected states, mostly due to secondary infections.
…click on the above link to read the rest of the article…
Putin Calls ‘Bulls**t’ On ‘Plans’ To Attack NATO, Says He’s Not Brandishing Nuclear Arms
Putin Calls ‘Bulls**t’ On ‘Plans’ To Attack NATO, Says He’s Not Brandishing Nuclear Arms
President Vladimir Putin has continued to address some trends out of the West related to Ukraine… and specifically the way European and US leaders have reacted to the recent escalation in Kharkiv oblast and in the east. Officials in the UK, Germany, and France have of late signaled to their populations that Europe must be ‘war ready’ and on a war footing.
Some have even claimed that Russia is readying to attack NATO countries and that it seeks to expand the conflict beyond Ukraine. For example, on Wednesday German Defense Minister Boris Pistorius claimed that “Putin won’t stop at Ukraine’s borders Russia is a threat to Georgia, Moldova & ultimately to NATO.”
He claimed in an address before German parliament: “Putin’s war economy is working towards another conflict. We must be ready for war by 2029.”
On Friday during a lengthy, wide-ranging discussion panel at the St. Petersburg International Economic Forum (SPIEF), Putin responded to these statements which say he’s looking to attack a NATO country.
“Look, someone has imagined that Russia wants to attack NATO. Have you gone completely insane? Are you as thick as a plank? Who came up with this nonsense, this bulls**t?“ Putin said, as translated by Russian media.
He then explained that Western officials need to keep up the hype and false optimism surrounding their support to Kiev, in order to keep up sentiment among Western populations:
“Why is this being done, really? To maintain their own position of greatness, that’s why. There’s nothing to these scary stories, intended for the townsfolk in Germany and France and elsewhere in Europe,” Putin explained. “In Ukraine, we’re just protecting ourselves.”
…click on the above link to read the rest of the article…
Russian Warships Steam For Caribbean As Ukraine Tensions Go Global
Russian Warships Steam For Caribbean As Ukraine Tensions Go Global
In a show of force perhaps prompted by President Biden’s authorization of Ukrainian strikes inside Russia using US weapons, a group of Russian warships is en route to the Caribbean, a senior US official has told McClatchy and the Miami Herald. White House officials alerted members of Congress to the Russian move on Wednesday.
The deployment signals Russia’s capacity to operate globally while still fully engaged its third year of war in Ukraine. “This is about Russia showing they are still capable of some level of naval power projection,” the official said. “We should expect more of this activity going forward.” In March, Ukraine claimed it had either sunk or disabled a full third of Russia’s ships in the Black Sea.
CBS News reports that long-range Russian bombers will rendezvous with the ships for combined naval and air maneuvers. Such exercises are not without precedent: Russia conducted similar combined-arms Caribbean maneuvers in 2019, and had a streak of sending ships into the Western Hemisphere at least annually from 2013 to 2020. Following the summer exercises, Russia is expected to engage in a worldwide naval exercise this fall, sources tell CBS.
The Pentagon is tracking a “handful” of ships and support craft that are expected to reach Caribbean waters in the upcoming weeks. US analysts speculate that the flotilla will make port calls in both Cuba and Venezuela. Cuba’s likely relishes the opportunity to host the Russian warships: Last year’s docking of a US nuclear submarine at Guantanamo Bay Naval Base ruffled feathers in Havana, with the Cuban government calling it a “provocative escalation.”
…click on the above link to read the rest of the article…
Trust The “Science”…That Just Retracted 11,000 “Peer Reviewed” Papers
Trust The “Science”…That Just Retracted 11,000 “Peer Reviewed” Papers
It’s yet another reminder of why blindly ‘trusting the science’ may not always be the best go-to move in the future.
217 year old Wiley science publisher has reportedly “peer reviewed” more than 11,000 papers that were determined to be fake without ever noticing. The papers were referred to as “naked gobbledygook sandwiches”, Australian blogger Jo Nova wrote on her blog last week.
“It’s not just a scam, it’s an industry,” she said. “Who knew, academic journals were a $30 billion dollar industry?”
According to Nova‘s post, professional cheating services are employing AI to craft seemingly “original” academic papers by shuffling around words. For instance, terms like “breast cancer” morphed into “bosom peril,” and a “naïve Bayes” classifier turns into “gullible Bayes.”
Similarly, in one paper, an ant colony was bizarrely rebranded as an “underground creepy crawly state.”
The misuse of terminology extends to machine learning, where a ‘random forest’ is whimsically translated to ‘irregular backwoods’ or ‘arbitrary timberland’.
Nova writes that shockingly, these papers undergo peer review without any rigorous human oversight, allowing egregious errors, like converting ‘local average energy’ to ‘territorial normal vitality’, to slip through.
The publisher Wiley has confessed that fraudulent activities have rendered 19 of its journals so compromised that they must be shuttered. In response, the industry is developing AI tools to detect these fakes, a necessary yet disheartening development. Nova writes:
The rot at Wiley started decades ago, but it got caught when it spent US $298 million on an Egyptian publishing house called Hindawi. We could say we hope no babies were hurt by fake papers but we know bad science already kills people. What we need are not “peer reviewed” papers but actual live face to face debate. Only when the best of both sides have to answer questions, with the data will we get real science:
…click on the above link to read the rest of the article…
“Global Trade War Looms, But It’s Not Just Trade War To Fear”
“Global Trade War Looms, But It’s Not Just Trade War To Fear”
History, Humility, and Wishful Thinking
The UK election and the “I will protect you, but forgot my umbrella” Tory campaign have both been shaken up by its pledge to bring back conscription for 18-year-olds. This is seen as a desperate gamble and sad joke by many commentators, and even ex-military leaders say it’s silly to enroll unskilled, unwilling young adults when the armed forces need more equipment of all sorts, which the recent 2.5% of GDP defense spending pledge falls very far short of. Yet the joke must also be on those laughing when the global backdrop is so very serious.
Stop thinking about Friday’s US PCE deflator data for a moment and look at the bigger picture. The main Bloomberg headline today is the G7 warning China over its trade practices. They want “balanced and reciprocal collaboration,” and will “consider taking steps to ensure a level playing field.” The US is already going to let tariff exclusions on hundreds of Chinese items expire, and the EU may be leaning towards a high tariff on Chinese EVs. Elsewhere, China is asking South Korea to maintain stable supply chains, as it moves closer to the US, and even Brazil, Chile, and Mexico have recently raised tariffs on Chinese steel.
In short, global trade war looms, and as Bastiat noted, “If goods don’t cross borders, soldiers will.” The problematic inverse is that even Adam Smith implied if some goods cross borders, soldiers don’t need to, and others won’t be able to when needed.
It’s not just trade war to fear. China just finished a huge military exercise that clearly rehearsed a blockade of Taiwan and says it will no longer accept US congressional delegations to Taipei: one including the CEO of Nvidia just opted to visit anyway…
…click on the above link to read the rest of the article…
How Much Of India’s Wastewater Is Left Untreated?
How Much Of India’s Wastewater Is Left Untreated?
As is the case with rapid population growth and urbanization in many so-called developing nations, waste management becomes a problem not only in rural areas but also in densely populated cities.
As Statista’s Florian Zandt details below, a textbook example of this growth outpacing infrastructural capacities is the situation in urban hotspots in India like Delhi, where a report by Euronews from May 2023 mentions neighborhoods with “open gutters […] filled with plastic and grey-colored water”. While the number of operational sewage treatment plants doubled between 2014 and 2020, the capacity for water treatment is still severely lacking.
You will find more infographics at Statista
According to the latest annual report by the Central Pollution Control Board, India generated 72.4 billion liters of wastewater per day across all provinces, with Maharashtra (9.1 billion), Uttar Pradesh (8.3 billion), Tamil Nadu (6.4 billion) and Gujarat (5.0 billion) being responsible for around 40 percent of wastewater.
The 1,093 sewage treatment plants only had operational capacities of 26.9 billion liters of wastewater per day, with around 400 plants either non-operational or under construction as of the latest available tally from 2020/2021. This translates to only 37 percent of sewage being treated, exacerbating the risks of communicable diseases and contaminated food and drinking water.
While India is seemingly hard-pressed to keep up with the amount of wastewater its population generates, measures to grant more people access to potable water and basic sanitation and hygiene were scaled up significantly in recent decades. For example, the Swachh Bharat Abhiyan campaign, translatable to Clean India, initiated in 2014 aims to eliminate open defecation by installing upwards of 100 million toilets in the country.
Nevertheless, in 2022, only 75 percent of rural Indian households had at least basic access to sanitation, while 30 percent of homes didn’t have their own washing facility with soap and water according to data from the WHO and Unicef’s Joint Monitoring Programme for Water Supply, Sanitation and Hygiene.
NATO Country Says Goal Should Be Breakup Of The Russian Federation
NATO Country Says Goal Should Be Breakup Of The Russian Federation
Last week, Russian media took note of the latest provocative statements by Estonia’s Prime Minister Kaja Kallas. She has led Russia’s tiny Baltic neighbor into a firm hawkish anti-Moscow position. The country was part of the wave of eastern European nations to join NATO in the mid-2000s during the Bush era.
She’s calling for the breakup of the Russian Federation. Kallas proposed during a debate in the country’s capital of Tallinn last week that Russia could become much “smaller” as a desired outcome of the Ukraine war.
“Russia’s defeat is not a bad thing because then you know there could really be a change in society,” the prime minister told the 17th Lennart Meri Conference, as translated in Russia’s RT.
She said that currently the Russian Federation can actually be seen as making up “many different nations” and that they could be naturally broken into separate states.
“I think if you would have more like small nations… it is not a bad thing if the big power is actually [made] much smaller,” Kallas asserted.
Despite its small size Estonia has been outspoken over the last several months related to the war. For example it recently appeared to back French President Macron’s call for NATO to consider sending Western troops to Ukraine:
The government of Estonia is “seriously” discussing the possibility of sending troops into western Ukraine to take over non-direct combat, “rear” roles from Ukrainian forces in order to free them up to fight on the front, though no decision is imminent, Tallinn’s national security advisor to the president told Breaking Defense.
Of course, these troops would face the possibility of direct attack by Russian aerial forces, even if in the “rear” and far away from front battle lines.
…click on the above link to read the rest of the article…
CEO Of Russia’s Second-Largest Bank Warns: “US Is Inevitably Headed For A Serious Economic Crisis”
CEO Of Russia’s Second-Largest Bank Warns: “US Is Inevitably Headed For A Serious Economic Crisis”
Last September, we told readers that the US national debt was skyrocketing at a staggering $1 trillion every three months—roughly every 100 days.
Since then, the debt spending has gotten worse.
Out-of-control spending has delayed the US economy’s day of reckoning in this year’s presidential election cycle. But it has become very evident an economic crisis looms in the years ahead.
One River Asset Management CIO, Eric Peters, recently said, “I have a growing conviction that in the coming 2-5 years, we’re going to face a US debt sustainability crisis, sparking a major global market event.”
BofA CIO Michael Hartnett recently noted what we said previously about the unsustainable debt explosion…
And now, fresh comments from Andrey Kostin, CEO of Russia’s second-largest bank, have emerged—comments that Western mainstream media dare not share with their audiences. Why is that? … Well, the Washington censorship blob wouldn’t allow it.
Russian state-owned news agency TASS cited Kostin’s interview with the Fontanka publication, who warned if it wasn’t for the dollar’s status as the world’s reserve currency, a sovereign debt crisis would’ve already been underway in the US. No matter what, he warned the US economy is on the verge of an economic crisis.
“I am thoroughly convinced that America is inevitably headed for a serious economic crisis. The amount of debt currently held by the US today has reached inconceivable, astronomical levels. And the dollar’s monopoly on the global stage is the only thing enabling the Americans to maintain such a level of debt. If the Chinese or the Arabs took their money out of the US, a complete collapse would ensue for the financial sector and the government,” he said.
Kostin added:
…click on the above link to read the rest of the article…
Exposing The CIA’s Secret Effort To Seize Control Of Social Media
Exposing The CIA’s Secret Effort To Seize Control Of Social Media
While the CIA is strictly prohibited from spying on or running clandestine operations against American citizens on US soil, a bombshell new “Twitter Files” report reveals that a member of the Board of Trustees of InQtel – the CIA’s mission-driving venture capital firm, along with “former” intelligence community (IC) and CIA analysts, were involved in a massive effort in 2021-2022 to take over Twitter’s content management system, as Michael Shellenberger, Matt Taibbi and Alex Gutentag report over at Shellenberger’s Public (subscribers can check out the extensive 6,800 word report here).
According to “thousands of pages of Twitter Files and documents,” these efforts were part of a broader strategy to manage how information is disseminated and consumed on social media under the guise of combating ‘misinformation’ and foreign propaganda efforts – as this complex of government-linked individuals and organizations has gone to great lengths to suggest that narrative control is a national security issue.
According to the report, the effort also involved;
- a long-time IC contractor and senior Department of Defense R&D official who spent years developing technologies to detect whistleblowers (“insider threats”) like Edward Snowden and Wikileaks’ leakers;
- the proposed head of the DHS’ aborted Disinformation Governance Board, Nina Jankowicz, who aided US military and NATO “hybrid war” operations in Europe;
- Jim Baker, who, as FBI General Counsel, helped start the Russiagate hoax, and, as Twitter’s Deputy General Counsel, urged Twitter executives to censor The New York Post story about Hunter Biden.
Jankowicz (aka ‘Scary Poppins’), previously tipped to lead the DHS’s now-aborted Disinformation Governance Board, has been a vocal advocate for more stringent regulation of online speech to counteract ‘rampant disinformation.’ Jim Baker, in his capacity as FBI General Counsel and later as Twitter’s Deputy General Counsel, advocated for and implemented policies that would restrict certain types of speech on the platform, including decisions that affected the visibility of politically sensitive content.
…click on the above link to read the rest of the article…
JPM Predicts Global AI Data Centers Will Consume 681 Olympic-Sized Pools Of Fresh Water Daily
JPM Predicts Global AI Data Centers Will Consume 681 Olympic-Sized Pools Of Fresh Water Daily
Wall Street banks are in a frenzy over “The Next AI Trade,” piling into the ‘Powering up America’ investment themes, whether that’s power grid companies, commodities, such as copper, gold, silver, and uranium, and artificial intelligence chipmakers, to accommodate the explosion of generative artificial intelligence data centers anticipated nationwide through the end of the decade and beyond.
JPMorgan’s Asia Pacific Equity Research desk is the latest bank to jump on AI trade in a note titled “Deep Dive into Power, Cooling, Electric Grid and ESG implications.”
Focusing on AI data center power consumption is too repetitive at this point, considering we’ve laid it all out on a silver platter for premium ZH subs in the “The Next AI Trade” and “The Next AI Trade Just Hit An All-Time High.”
As well as this real-world example…
Even Blackstone Chief Executive Officer Steve Schwarzman and BlackRock Chairman and Chief Executive Larry Fink have jumped onto the power grid and AI investment theme as there is plenty of upside in the years ahead – unless AI demand doesn’t shit the bed.
Back to JPM’s note, authored by analyst William Yang and his team, which near the end explained, “While data centers have been scrutinized for heavy electricity use, the water intensive nature of their operations has been comparatively overlooked.”
Citing data from Bluefield Research, Yang said total water consumption by global data centers (including on-site cooling and off-site power generation) has grown 6% annually from 2017 to 2022. He said by 2030, water consumption could jump to 450 million gallons per day. To put this in perspective, that’s 681 Olympic-sized pools of fresh water that will be needed each day to cool global data centers in about 4.5 years.
…click on the above link to read the rest of the article…
I’ve Got A Bad Feeling About This
I’ve Got A Bad Feeling About This
Ideally, I would have written this on May 4th not 14th, but I am going to talk Star Wars.
I was a fan in 1977, kept the flame alive when only battered VHS cassettes of the original trilogy existed, and was delighted to get prequels. Until the opening crawl announced, “The taxation of trade routes to outlying star systems is in dispute.” I recall thinking, “This is my job – boring!” But the prequels were better than the sequels and all the TV shows I don’t watch. Indeed, the prequels’ clunky theme of democracy crumbling into autocracy, dispute over trade routes, then war, seems even more prescient than my 2016 ‘Thin Ice’ report, which underlined how the 21st century could echo the 20th, and our more detailed fragmented ‘World in 2030’ report in 2020.
In just the last week: the IMF warned the world risks splitting into walled-off FX/trade blocs; The Economist stated “The liberal international order is slowly coming apart,” with “a worrying number of triggers that could set off a descent into anarchy”; Germany flagged conscription for all 18-year olds and spending over 3% of GDP on defence; China introduced military training for all High School students; Biden raised tariffs on Chinese EVs to 102.5%, and Trump said he would make it 200%, with tariffs on used cooking oil likely next; Bloomberg warned “The US, China, Russia are in a spiral towards war”; the manager of the Hong Kong trade office in London was arrested for spying; and, as some underline Russia has shifted to a full war economy that incentivises the martial, my prediction that markets will serve national security going forwards came true in Putin firing his defence minister to appoint an economist to the role instead.
…click on the above link to read the rest of the article…
Record Household Debt, Jump In Delinquencies Signal “Worsening Financial Distress”, Fed Warns
Record Household Debt, Jump In Delinquencies Signal “Worsening Financial Distress”, Fed Warns
While the market remains focused on tomorrow’s CPI print, and to a lesser extent the April retail sales reports, which will both be released at 8:30am on May 15. we should flag another important report that doesn’t typically get a lot of attention: the New York Fed’s Household Debt and Credit Report for 1Q 2024 which was just published, and where the latest data on credit card debt and delinquencies has recently been the most important part of the report.
While we already know that in the latest monthly consumer credit report published by the Fed last week and covering the month of March, total consumer debt hit a record high (despite a sharp slowdown in credit card growth) even as the personal savings rate plunged to an all-time low, hardly a ringing endorsement for the strength of the US consumer…
… today’s report provided more granular details which however did not change the conclusion: the US consumer is getting weaker, and while not in a crisis just yet, will get there soon enough.
As the chart from the NY Fed shows, at the end of the first quarter, US household debt reached a record and more borrowers are struggling to keep up: overall US household debt rose to $17.69 trillion, the NYFed’s Quarterly Report on Household Debt and Credit revealed (link here). That’s an increase of $184 billion, or 1.1%, from the fourth quarter.
Consumers have added $3.4 trillion in debt since the pandemic, and that increased debt bears much higher interest rates.
And with both credit card rates and total credit at all time highs, the data corroborate the mounting financial pressures on American families in an age of elevated inflation. The persistent rise in the prices of essentials such as food and rent have strained household budgets, pushing people to borrow against their credit cards to pay for necessities.
…click on the above link to read the rest of the article…
Does Inflation Lead To Civilizational Collapse? A Look At Rome
Does Inflation Lead To Civilizational Collapse? A Look At Rome
With the US national debt at $34 trillion and climbing, USD reserve status under pressure, inflation destroying standards of living, and the Biden administration stoking costly war on several fronts, perhaps it’s time for more thoughts on the Roman empire.
In a Tuesday thread posted to X, user ‘Culture Critic‘ (@Culture_Crit) posted a deep dive into the unraveling of the Rome in the 3rd century. Let’s jump in;
When Augustus slowed the expansion of the empire, wealth stopped flowing from conquered lands into the treasury. Managing expenditures (construction, armies, bureaucracy) became increasingly difficult.
Whenever costs exceeded tax income, emperors minted new coins to cover it. Mining precious metals increased the supply of gold and silver coinage.
Things remained pretty stable for two centuries…
But the army was an immense burden. In the mid-2nd century, it was 70% of the entire budget — half a million soldiers were on the payroll.
Then, crisis struck.
Frontiers across the empire came under attack in the 3rd century. Military expenses soared as entire provinces were being abandoned and their tax yields lost. Plus, the mines were drying up…
When soldiers’ wages could no longer be paid, “debasing” the currency was the only option.
Emperors issued new denarius (the silver coin troops were paid in) with less and less silver content — i.e., further increasing the money supply.
Nero had already begun clipping coins and diluting silver purity in 64 AD. The state soon got addicted to solving its problems this way — and lining the pockets of political insiders at the same time.
The denarius was down to 60% silver purity by the 3rd century AD. Of course, prices inflated with it.
Still, the state kept spending to maintain the illusion of prosperity, until things got really bad…
…click on the above link to read the rest of the article…
