Steve Bull's Blog, page 1307
September 22, 2017
Late summer heat wave causing problems for Canadians
Heat flows into eastern Canada
Thursday, September 21, 2017, 7:57 PM – While fall starts on Friday, the eastern half of the country has been greeted with summer-like heat, and it’s causing problems for Canadians.
The toasty weekend forecast was enough for organizers of the Rock ‘n’ Roll Oasis Montreal Marathon to cancel Sunday’s full marathon. The announcement was made on Wednesday after officials realized Sunday’s daytime high was not going to drop.
The seasonal average this time of year for Montreal typically sits around the 17 oC mark, but Sunday will feel closer to 37 with the humidity, all courtesy of a dominate ridge of high pressure.
“There’s real danger for participants, especially on the marathon side, after five, six hours of running,” Louis Malafarina, executive director of the race told CBC.
Approximately 5,000 people were signed up for the event, and it’s the first time in 27 years that organizers were forced to cancel, the news agency reports.
When the humidex reads over 28, the risk of heat-related illness rises significantly, Dr. François de Champlain, trauma team leader at the Montreal General Hospital told CBC.
According to de Champlain, over 1,000 runners visited the medical tent at the finish line in 2014 due to extreme heat.
Doctor forces himself to sit in a hot car for science, watch what happened
Participants signed up for the full marathon can still run the half on Sunday. In order to skip the peak of the heat, half-marathon runners are scheduled to start at 7:30 a.m., an hour earlier than usual. Runners will be given three hours to complete the race, CBC reports.
Meanwhile, some tenants living in apartment buildings in Toronto say despite the unseasonably warm weather, landlords are turning on the heat.
…click on the above link to read the rest of the article…
The CIA: 70 Years of Organized Crime
Photo by Tom Thai | CC BY 2.0
Lars Schall: 70 years ago, on September 18, 1947, the National Security Act created the Central Intelligence Agency, CIA. Douglas, you refer to the CIA as “the organized crime branch of the U.S. government.” Why so?
Douglas Valentine: Everything the CIA does is illegal, which is why the government provides it with an impenetrable cloak of secrecy. While mythographers in the information industry portray America as a bastion of peace and democracy, CIA officers manage criminal organizations around the world. For example, the CIA hired one of America’s premier drug trafficker in the 1950s and 1960s, Santo Trafficante, to murder Fidel Castro. In exchange, the CIA allowed Trafficante to import tons of narcotics into America. The CIA sets up proprietary arms, shipping, and banking companies to facilitate the criminal drug trafficking organizations that do its dirty work. Mafia money gets mixed up in offshore banks with CIA money, until the two are indistinguishable.
Drug trafficking is just one example.
LS: What is most important to understand about the CIA?
DV: Its organizational history, which, if studied closely enough, reveals how the CIA manages to maintain its secrecy. This is the essential contradiction at the heart of America’s problems: if we were a democracy and if we truly enjoyed free speech, we would be able to study and speak about the CIA. We would confront our institutionalized racism and sadism. But we can’t, and so our history remains unknown, which in turn means we have no idea who we are, as individuals or as a nation. We imagine ourselves to be things we are not. Our leaders know bits and pieces of the truth, but they cease being leaders once they begin to talk about the truly evil things the CIA is doing.
LS: A term of interest related to the CIA is “plausible deniability”. Please explain.
…click on the above link to read the rest of the article…
Does the Central Bank Determine Interest Rates?
According to mainstream thinking, the central bank is the key factor in determining interest rates.
By setting short-term interest rates, the central bank, it is argued, through expectations about the future course of its interest rate policy can influence the entire interest rate structure.
Thus according to the popular way of thinking, the long-term rate is an average of current and expected short-term interest rates. If today’s one year rate is 4% and next year’s one-year rate expected to be 5%, then the two-year rate today should be 4.5% (4 5)/2=4.5%.
Conversely, if today’s one year rate is 4% and next year’s one-year rate expected to be 3%, then the two-year rate today should be 3.5% (4 3)/2=3.5%.
Note that interest rates in this way of thinking are established by the central bank whilst individuals in all this have almost nothing to do and just form mechanically expectations about the future interest rate policy of the central Bank.
Individuals here are passively responding to the possible interest rate policy of the central bank. However, does it make much sense?
We suggest that the key in interest rates determination is people’s time preferences. What is it all about?
People assign higher valuation to present goods versus future goods
As a rule, people assign a higher valuation to present goods versus future goods. This means that present goods are valued at a premium to future goods.
This stems from the fact that a lender or an investor gives up some benefits at present. Hence, the essence of the phenomenon of interest is the cost that a lender or an investor endures.
On this Mises wrote,
That which is abandoned is called the price paid for the attainment of the end sought. The value of the price paid is called cost. Costs are equal to the value attached to the satisfaction which one must forego in order to attain the end aimed at.
…click on the above link to read the rest of the article…
QT1 Will Lead to QE4
QT1 Will Lead to QE4
There are only three members of the Board of Governors who matter: Janet Yellen, Stan Fischer and Lael Brainard. There is only one Regional Reserve Bank President who matters: Bill Dudley of New York. Yellen, Fischer, Brainard and Dudley are the “Big Four.”
They are the only ones worth listening to. They call the shots. The don’t like dots. Everything else is noise.
Here’s the model the Big Four actually use:
1. Raise rates 0.25% every March, June, September and December until rates reach 3.0% in late 2019.
2. Take a “pause” on rate hikes if one of three pause factors apply: disorderly asset price declines, jobs growth below 75,000 per month, or persistent disinflation.
3. Put balance sheet normalization on auto-pilot and let it run “on background.” Don’t use it as a policy tool.
Simple.
What does this model tell us about a rate hike in December?
Disinflation has been strong and persistent. The Fed’s main metric for this (core PCE deflator year-over-year) has dropped from 1.9% in January to 1.4% in July. The August reading comes out on September 29. This time series is moving strongly in the wrong direction from the Fed’s perspective. This is what caused the September “pause” (which we predicted for readers last March).
After seven months of decline, one month of increase, if it comes, will not be enough to get the Fed to end the pause. It would take at least two months of increases to change the Fed’s mind.
That’s unlikely given the impact of Hurricanes Harvey and Irma. Those effects may be temporary, but they come at exactly the time when the Fed was looking for a turnaround in core inflation. They won’t get it. The pause goes on.
How do I know this?
…click on the above link to read the rest of the article…
September 21, 2017
Why Economic Data No Longer Matters
Back in mid-2009, we said that with the Fed and central banks nationalizing capital markets, macro and even micro data and newsflow will matter increasingly less and less, and the only thing that does matter is the Fed’s weekly H.4.1 statement, showing the changes to the Fed’s balance sheet. It also means that so-called “data dependency” is a farce (it is, and has always been “Dow dependency”), and that the impact of incremental newsflow will shrink with every passing week until virtually nobody pays attention (we have largely reached this state now).
Since then it has been entertaining to watch how one after another stoic trader and commentator has thrown in the towel on conventional market orthodoxy to adopt precisely this kind of “tinfoil” thinking, the latest example being Bloomberg’s macro commentator Mark Cudmore, who in his overnight Macro View writes that “traders should should spend less time studying economic releases and listen to the clear guidance from officials instead.”
The relevance of data is declining. Policymakers around the world are trying to make crystal clear that they’ll ignore that which doesn’t fit their narrative. Many financial commentators have failed to make the transition and are incorrectly transfixed by each data release.
Or, in short, data no longer matters in a world of central planning.
Here is his latest Macro View in which Cudmore explains why “It’s Time for Traders To Listen Rather Than Watch“
Data-dependency is becoming passé for global policymakers. Traders should should spend less time studying economic releases and listen to the clear guidance from officials instead.
For years, policymakers have been emphasizing data dependency. Investors took a while to fully register the message and, as a result, often got whipsawed by throwaway comments from officials.
…click on the above link to read the rest of the article…
This Fed is on a Mission
QE Unwind starts Oct. 1. Rate hike in Dec. Low inflation, no problem.
The two-day meeting of the FOMC ended on Wednesday with a momentous announcement that has been telegraphed for months: the QE unwind begins October 1. It marks the end of an era.
The unwind will proceed at the pace and via the mechanisms announced at its June 14 meeting. The purpose is to shrink its balance sheet and undo what QE has done, thus reversing the purpose of QE.
Countless people, worried about their portfolios and real estate investments, have stated with relentless persistence that the Fed would never unwind QE – that it in fact cannot afford to unwind QE.
The vote was unanimous. Even no-rate-hike-ever and cannot-spot-housing-bubbles Neel Kashkari voted for it.
The Fed also telegraphed that it could raise its target range for the federal funds rate a third time this year, from the current range of 1.0% to 1.25%. There is only one policy meeting with a press conference left this year: December 13, when the two-day meeting ends, remains the top candidate for the next rate hike.
This has been the routine since the rate hike last December: The FOMC decides to change its monetary policy at every meeting with a press conference: December, March, June, today, and December.
Even hurricanes won’t push the Fed off track.
The Fed specifically mentioned Harvey, Irma, and Maria. No matter how destructive, they won’t impact the economy “materially” over the “medium term” and therefore won’t impact the Fed’s policies:
Hurricanes Harvey, Irma, and Maria have devastated many communities, inflicting severe hardship. Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term.
…click on the above link to read the rest of the article…
Ban on Kaspersky Software: Hypocrisy of US Internet Agenda
Ban on Kaspersky Software: Hypocrisy of US Internet Agenda
On September 18, the US Senate voted to ban the use of products from the Moscow-based cyber security firm Kaspersky Lab by the federal government, citing national security risk. The vote was included as an amendment to an annual defense policy spending bill approved by the Senate on the same day. The measure pushed forward by New Hampshire Democrat Jeanne Shaheen has strong support in the House of Representatives, which also must vote on a defense spending bill. The legislation bars the use of Kaspersky Lab software in government civilian and military agencies.
On September 13, a binding directive issued by Acting Secretary of Homeland Security Elaine Duke, ordered federal agencies to remove Kaspersky Lab products from government computers over concerns the Russia-based cybersecurity software company might be vulnerable to Russian government influence. All federal departments and agencies were given 30 days to identify any Kaspersky products in use on their networks. The departments have another 60 days to begin removal of the software. The statement says, «The department is concerned about the ties between certain Kaspersky officials and Russian intelligence and other government agencies, and requirements under Russian law that allow Russian intelligence agencies to request or compel assistance from Kaspersky and to intercept communications transiting Russian networks». The Russian law does not mention American networks, nevertheless it is used as a pretext to explain the concern.
Similar bans against US government use of Kaspersky products have been suggested before. In 2015, Bloomberg News reported that the company has «close ties to Russian spies».
According to US News, scrutiny of the company mounted in 2017, fueled by U.S. intelligence assessments and high-profile federal investigations of Russian interference in the 2016 election. This summer, the General Service Administration, which oversees purchasing by the federal government, removed Kaspersky from its list of approved vendors.
…click on the above link to read the rest of the article…
The Terror of Deep Time
Back in the 1950s, sociologist C. Wright Mills wrote cogently about what he called “crackpot realism”—the use of rational, scientific, utilitarian means to pursue irrational, unscientific, or floridly delusional goals. It was a massive feature of American life in Mills’ time, and if anything, it’s become more common since then. Since it plays a central role in the corner of contemporary culture I want to discuss this week, I want to put a few moments into discussing where crackpot realism comes from, and how it wriggles its way into the apple barrel of modern life and rots the apples from skin to core.
Let’s start with the concept of the division of labor. One of the great distinctions between a modern industrial society and other modes of human social organization is that in the former, very few activities are taken from beginning to end by the same person. A woman in a hunter-gatherer community, as she is getting ready for the autumn tuber-digging season, chooses a piece of wood, cuts it, shapes it into a digging stick, carefully hardens the business end in hot coals, and then puts it to work getting tubers out of the ground. Once she carries the tubers back to camp, what’s more, she’s far more likely than not to take part in cleaning them, roasting them, and sharing them out to the members of the band.
A woman in a modern industrial society who wants to have potatoes for dinner, by contrast, may do no more of the total labor involved in that process than sticking a package in the microwave. Even if she has potatoes growing in a container garden out back, say, and serves up potatoes she grew, harvested, and cooked herself, odds are she didn’t make the gardening tools, the cookware, or the stove she uses.
…click on the above link to read the rest of the article…
The return of the peasant: or, the history of the world in 10½ blog posts. 3. From the ancient to the medieval
The return of the peasant: or, the history of the world in 10½ blog posts. 3. From the ancient to the medieval
Continuing my ‘history of the world’ series (a fully referenced version of which is available here), I finished last time by saying we should take a peek at what came after the ‘Axial Age’ states…
…Well, that would be the so-called ‘Dark Ages’ – ‘dark’ if only because of a relative paucity of historical evidence to illuminate them in comparison with what went before. The successor states to the great Axial Age empires were smaller geopolitical units, but the idea that this constituted some kind of civilizational collapse has been subject to considerable debate and revision in recent years, for example in post-Maurya India and in post-Roman Europe. Let me say a little about the latter in particular, as a kind of case study for our times of what a putative ‘collapse’ and a return to more local polities and more agrarian production might look like. Of course, it’s a dodgy business making inferences about the possible future fall of modern London or Washington on the basis of the fall of ancient Rome. But it’s ground we’ve been traversing a little of late in discussions on this site, and when people are confronted with the idea of a ‘return’ to small-scale farming they commonly reach for medieval notions either in order to critique the idea or to express foreboding: a small farm future would be like a small farm past, a return to ‘feudalism’ or to ‘serfdom’.
So let’s start with some terminology. ‘Feudalism’ strictly speaking refers to a situation of so-called ‘parcellized sovereignty’ in which a ruler – typically a politically weak king of a tributary rather than a tax-raising state – grants land (a fief) to a subject, over which the subject has complete jurisdiction, as part of a reciprocal if often unequal bond of loyalty.
…click on the above link to read the rest of the article…
Never Forget: The US Government Has A Known History Of Using False Flags
When it comes to 9/11, there are two groups of people: those who don’t know exactly what happened, and those who orchestrated it.
Nearly everyone on earth belongs in the former category, but a lot of folks like to pretend they have a rock solid understanding of the events which transpired on that fateful day in 2001. Scoffing mainstream adherents like to pretend they’re confident that the official narrative is accurate, but they aren’t. A lot of hardcore conspiracy analysts like to pretend they know the real story, but they don’t. There’s simply not enough publicly available information for anyone to be certain exactly how things went down that day; all we can know for sure is that (A) the official story is riddled with plot holes, and (B) the American power establishment has an extensive and well-documented history of using false flags and propaganda to manipulate the public into supporting evil acts of military interventionism.
If you think you know for a fact that the official story of what happened on September 11, 2001 is the true account and that all conspiracy theories have been “debunked”, you are ignorant. If you think you know the precise details of how what really happened differs from the official story, you’ve spent way too much time diving down conspiracy theory rabbit holes and should probably ease off the weed. There’s no need to get all defensive and go bedding yourself down to one hard doctrine of certainty when the US power establishment has already discredited itself so thoroughly. It’s unnecessary to plunge deep into theory when these people’s track record is so firmly established in fact.
Here are just a few of the times the US government is known to have distorted the reality of events in order to manufacture public support for military intervention, which is per definition what a false flag is:
…click on the above link to read the rest of the article…
