The Fed Can’t Do What It Must

Karl Denninger sees the proximate problem, but not the structural impediment to solving it:

Either Hike 200bps Today and 100 Each Mtg Until PPI Cools. or watch the economy literally burn to the ground.

At the same time all inhibitions on energy production here in the US must be lifted immediately. All of them. All coal plants shut down but still operational and those intended to be retired must have those orders rescinded immediately. Further, all refined product exports must be banned.

If you didn’t get the hint from WalMart and Target’s earnings announcements you’re deaf, blind, stupid and might be starving and homeless within months. Fuel prices continue to ramp, in no small part not because of oil but because we’re exporting products to other nations, specifically Europe. This must end now.

There is no instant solution but if we do not put a stop to the transportation cost and fertilizer problems now by this fall and winter the lower 50% of the economic strata in this nation will be hard-pressed to both feed their families and heat their homes. That is the combination that leads to riots and worse. Witness Sri Lanka where its already happening and politician homes are being set on fire.

Stocks? Who cares. The entire ramp from roughly 2011 onward likely will and should come back off. If you believed that said price advances of roughly a triple over that period of time were reasonable you’re nuts. If you predicated your future or present on it there’s nothing we can do to help you at this point; you ridiculously overpromised to yourself and overspent behind that.

Ditto for real estate. There’s nothing to be done other than let prices go back to where they should be. They will, by the way.

The Fed absolutely should be raising interest rates and raising them very steeply. The last time the USA saw this sort of inflation, it was the 1970s and interest rates went as high as 20 percent. However, there was considerably less debt then, and both consumers and corporations were able to service the debt payments even at those higher rates because the prices were so much lower.

Now that debt-consumption has raised prices by artificially stimulating demand, consumers can’t even make their payments on very low, historically low, interest rates. The level of defaults would be astronomical, and would essentially amount to a debt jubilee that would utterly destroy every single federally-regulated financial institution in the country. So, the Fed cannot, and will not, do what the laws of economics require of it.

My expectation is that there will either be some sort of federalization of the entire US economy, possibly on a neo-global scale that includes the NATO countries, or a recurrent series of defaults in which rates are raised slightly, allowing the weakest institutions to fail first in the hopes that the stronger institutions can survive on the strength of the assets previously held by the failing ones.

Neither option will work, of course, but the Fed has successfully kicked the can down the road for more than a decade already, so perhaps they might be able to buy themselves another year or three.

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Big Evangelical Must Die

It’s apparent than the Southern Baptist organization is every bit as converged as the Roman Catholic Church and the other big Protestant denominations. And it’s so-called leadership is every bit as awful too.

Leaders of the Southern Baptist Convention, the largest Protestant denomination in America, stonewalled and denigrated survivors of clergy sex abuse over almost two decades while seeking to protect their own reputations, according to a third-party investigation sought by the church’s leaders.

These survivors, and other concerned Southern Baptists, repeatedly shared allegations with the SBC’s Executive Committee, ‘only to be met, time and time again, with resistance, stonewalling, and even outright hostility from some within the EC,’ said a 288-page investigative report revealed on Sunday.

The seven-month investigation was conducted by Guidepost Solutions, an independent firm contracted by the Executive Committee after delegates to last year’s national meeting pressed for a probe by outsiders.

‘Our investigation revealed that, for many years, a few senior EC leaders, along with outside counsel, largely controlled the EC’s response to these reports of abuse… and were singularly focused on avoiding liability for the SBC,’ the report said.

‘In service of this goal, survivors and others who reported abuse were ignored, disbelieved, or met with the constant refrain that the SBC could take no action due to its polity regarding church autonomy – even if it meant that convicted molesters continued in ministry with no notice or warning to their current church or congregation,’ the report added.

The report asserts that an Executive Committee staffer maintained a list of Baptist ministers accused of abuse, but there is no indication anyone ‘took any action to ensure that the accused ministers were no longer in positions of power at SBC churches.’

Any and every organization that protects itself rather than expelling child molesters and other predators does not deserve to survive. And I’m not interested in hearing excuses about how each Southern Baptist church is an independent organization; even if the Executive Committee had no power to fire a church minister, they absolutely had the ability to a) inform the congregation and b) expel the church if the congregation did not take action to expel the guilty minister.

Just look at the smug pedoface on this former president of the Southern Baptist Executive Committee. Finding out that he’s involved in some sort of abuse scandal is the exact opposite of surprising. On what planet are these sort of creatures even allowed around children, much less given positions of church leadership? Throw in all the cucked Churchian gammas like Russell Moore and it’s no wonder that the Southern Baptists are in a state of crisis.

This is what comes of persistently seeking the world’s approval rather than obeying the Word of God. And of giving second chances to the fallen and the wicked.

UPDATE: Never, ever, let the lawyers decide the strategy. Because very few lawyers understand that there are worse things than losing a lawsuit, and “on the advice of our lawyers” is not a get out of culpability card.

Armed with a secret list of more than 700 abusive pastors, Southern Baptist leaders chose to protect the denomination from lawsuits rather than protect the people in their churches from further abuse.

Survivors, advocates, and some Southern Baptists themselves spent more than 15 years calling for ways to keep sexual predators from moving quietly from one flock to another. The men who controlled the Executive Committee (EC)—which runs day-to-day operations of the Southern Baptist Convention (SBC)—knew the scope of the problem. But, working closely with their lawyers, they maligned the people who wanted to do something about abuse and repeatedly rejected pleas for help and reform.

“Behind the curtain, the lawyers were advising to say nothing and do nothing, even when the callers were identifying predators still in SBC pulpits,” according to a massive third-party investigative report released Sunday.

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Forza Milan

Il Milan vince lo scudetto: è campione d’Italia dopo il 3-0 col Sassuolo. I rossoneri conquistano il tricolore per la 19^ volta nella loro storia. A Reggio Emilia non c’è partita, match chiuso nei primi 45′: doppietta di Giroud e gol di Kessié.

The Premier League literally went down to the wire, as Manchester City was down 2-0 to Aston Villa until the 76th minute, then scored three goals in five minutes to win the Premiership by a single point over Liverpool.

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Truth Social: A Review

NeonRevolt tries out the new social media platform and shares his opinion:

Truth Social is like being trapped in the world’s gayest Boomer containment unit, where Dan Bongino and Charlie Kirk fanbois celebrate their successful “throuple-ing” alongside the gender reveal of their gay test-tube babies, while posting weak memes from 2014 like they’re somehow still digital owns.

Oh, you can post Chippendale’s Make America Gay Again to your heart’s content, but call anyone a faggot or a retard, and cyber-Nunes will emerge from the clouds to Stalin your post from the timeline, so you won’t hurt Richard Grenell’s feelings.

Anything other than slavish devotion to Durham and the promise of “2 more weeks” is met with all the typical whining.

Sounds like yet another Republican gatekeeper platform. Hard pass.

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A Failure of Deterrence

Dominick Cummings explains

When Pearl Harbor happened, Washington was in shock. Unprovoked attack!

What had really happened?

America had tightened economic warfare against Japan including shutting down oil. Then it suddenly confiscated Japanese assets held in America. Japan won’t do anything, said the high status Washington insiders, because rationally they know attacking America will be fatal.

But in Japan they reasoned differently: America has clearly decided to destroy our regime so we should attack and try to change the balance of forces.

Washington’s ‘insanity’/‘irrationality’ was Tokyo’s rational calculation.

Why is this relevant?

America has many virtues but its ruling class does not have a long culture of imperial success and it has not developed a ruling class that generates leaders good at judgements about other regimes. Britain had people like Lord Cromer ruling the Egyptians — a very smart, cold, calculating cynical aristocrat with empire in his blood, a sort much better suited to imperial politics than the output of American graduate schools who dominate Washington and repeatedly, naively misjudge other countries. We’ll bring democracy to Afghanistan… We’ll stop corruption in Afghanistan… We’ll bring LGBTQ+++ to Afghanistan… Argh we gotta flee Afghanistan…

Even very smart and able Americans such as Dean Acheson were not good at assessing other regimes. Imperial politics is not the same as democratic politics. Also notice that when Tyler Cowen interviewed Brennan, a former CIA director, and asked about the Tetlock project, by now known in outline to many in politics, Brennan didn’t even know what it was — a very telling detail. If the CIA director doesn’t know about the most interesting project to counter intelligence failures, what else doesn’t he know?!

In the Cold War we saw Washington make repeated errors. The Vietcong are about to fold, they said, year after year. Turned out the Vietcong defined their priorities and rationality differently. America had to retreat.

Just last year we could see how bad the trillion dollar network of DoD and intelligence agencies were on Afghanistan and the Taliban. America had to retreat.

And now Washington’s high status insiders are confidently declaring what it would be ‘rational’ and ‘crazy’ for Putin to do.

Given their complete inability to correctly anticipate what Putin – or pretty much any of their other enemies – was going to do previously, what are the odds that they have gotten it right this time? More importantly, most of the people making decisions about the use of US military force have no loyalty to nor concern for the American people or their national interests, so they’re much more willing to take risks than actual Americans would.

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China Prepares for Sanctions

It’s pretty obvious why the Chinese are expecting sanctions to be imposed in the next year or three.

China’s Communist Party will block promotions for senior cadres whose spouses or children hold significant assets abroad, people familiar with the matter said, as Beijing seeks to insulate its top officials from the types of sanctions now being directed at Russia.

WWIII is already underway. The fact that it is primarily unrestricted rather than military doesn’t change the fact that it is observably underway.

Plan accordingly.

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Deflation Cometh

The sudden, rampant inflation that we’re seeing is the result of the neo-liberal rules-based world order’s attempt to preserve its hegemony. It’s not the usual excess money supply caused by low interest rates creating more debt money; if it were, interest rates could simply be raised to keep inflation under control. But with the first sovereign default of the next wave, which comes from an unexpected source, it’s clear that the deflationary forces are going to rapidly overwhelm the government spending meant to substitute for new loan creation.

Sri Lanka has defaulted on its debt for the first time in its history as the country struggles with its worst financial crisis in more than 70 years.

A 30-day grace period to come up with $78m (£63m) of unpaid debt interest payments expired on Wednesday.

The governor of the South Asian nation’s central bank said the country was now in a “pre-emptive default”. Later on Thursday, two of the world’s biggest credit rating agencies also said Sri Lanka had defaulted.

Defaults happen when governments are unable to meet some or all of their debt payments to creditors. It can damage a country’s reputation with investors, making it harder for it to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.

Asked on Thursday whether the country was now in default, central bank governor P Nandalal Weerasinghe said: “Our position is very clear, we said that until they come to the restructure [of our debts], we will not be able to pay. So that’s what you call pre-emptive default. There can be technical definitions… from their side they can consider it a default. Our position is very clear, until there is a debt restructure, we cannot repay,” he added.Sri Lanka is seeking to restructure debts of more than $50bn it owes to foreign creditors, to make it more manageable to repay.

When even relatively small economies vanish $50 billion from the money supply at a shot, it should be easy to understand how it will be impossible to salvage the global financial system when the massive corporate institutions start defaulting.

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Apex Predators, Unleashed

There is going to be a lot of this sort of thing happening around Western Europe, the UK, and the USA:

A British father-of-two has dumped his partner after falling for a 22-year-old Ukrainian refugee who came to live with them to escape the war. Tony Garnett, 29, and his partner Lorna, 28, took in Sofiia Karkadym at the start of May, but just 10 days later their seemingly-happy marriage was torn apart when the he ran away with the refugee.

The security guard, who lives in Bradford, West Yorkshire, says he has fallen in love with the 22-year-old and wants to spend the rest of his life with her.

Sofiia, who fled the city of Lviv in western Ukraine, said she ‘fancied’ Tony as soon as she saw him and that the pair are living their very own ‘love story’. Admitting the pain this will cause Lorna, Tony said he has ‘discovered a connection with Sofiia like I’ve never had before’, adding that they ‘know this is right’.

The family had taken Sofiia in in an effort to do their bit to help Ukrainian’s fleeing the Russian invasion, with Tony telling The Sun he ‘wanted to do the right thing’ and that she was the first person to get in touch on a Facebook page where he offered to house a refugee.

This is about as totally unexpected as the rampant immigrant rapes in Scandinavia and Germany. Ukrainian women are famously mercenary; even Russian women find their cold ruthlessness to be a little on the extreme side. And a Ukrainian refugee without a home or employment prospects is going to value a stable man with a job considerably more highly than the average Western woman, which sets the stage for a series of considerably unfair competitions.

The lesson, as always, is this: sink the ships.

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It’s All Fake

And, of course, gay. Karl Denninger contemplates the possibility that social media is a mirage:

Twitter claims that “less than 5% of the users on their system are bots/spam/fake.” Ok, that’s testable. It’s also very material to the value of the company. Indeed its the entire reason someone buys advertising on these sites and thus forms the basis of the entire firm’s value; if the entire site is full of bots and not people then the value of said “advertising” and thus the company’s value is zero.

So Musk asked (in public, natch) for the evidence that the “less than 5% bot” claim was true.

Twitter’s CEO refused to provide said evidence, claiming that it would require disclosing “non-public” information.

Well, once you have an agreement to acquire something you get to look. It’s no different than a house; if you think there might be something wrong with the foundation you can have it inspected. Your purchase contract allows you to perform diligence to your satisfaction and further, if the seller is aware of a material falsehood that is part of the representations made he’s required to disclose it.

As someone who has sold a company anything you represent as true is certainly fair game for the buyer to ask to see in evidence and that absolutely includes anything you publicly claimed to be true under penalty of perjury in a 10Q or 10K.

The argument that its “non-public” information that is used to prove this is crap; the entire purpose of the NDA that you sign when you enter into such a transaction and perform your diligence is that you get to look under the Kimono to your satisfaction.

So…. what’s really going on here?

Never mind this report — that basically half of Biden’s “follows” are fake. Worse, 70% of Musk’s are too according to that article.

Would you mind explaining to me how “less than 5% of the accounts are bots” when half of the President of the United States’ accounts and 70% of Elon Musk’s are, by audit, fake?

More to the point: What percentage of “people” (“Daily Average Users” and “Monthly Average Users”) allegedly on these social media sites are actually….. people?

Is there any actual value in these “social media” firms at all or are they all ENRON on steroids?

I know it’s all fraudulent, because I’ve been able to see the difference between a) a blog post, b) a Twitter tweet with 33k followers, c) a Facebook post, d) a Gab post with 30k followers, and e) a Darkstream comment for years. The only two that ever moves the needle much were (a) and (e), with a distinct advantage to (a).

Mike Cernovich told me, several years ago, that he had reached similar conclusions, and his Twitter following dwarfed mine.

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