Tuesday, September 20, 2022

"Walmart And Other Retailers Canceling Billions Of Dollars In Orders As Fears Of A Dark Winter Rising"

Full screen recommended.
"Walmart And Other Retailers Canceling Billions
 Of Dollars In Orders As Fears Of A Dark Winter Rising"
by Epic Economist

"Something really strange is happening in the U.S. retail sector. Walmart, Target, and other major retailers are literally canceling billions of dollars in orders right ahead of the busiest shopping season. Do they know something they aren’t telling us? We’ve never seen such a large-scale order cancellation happening before. Under normal conditions, this wouldn’t make any sense. The holiday season is typically the time when retailers record the highest sales volume in the entire year, and this time in 2021, everyone in the industry was extremely worried about whether there would be enough inventory to meet consumer demand due to global supply chain disruptions. But it seems that things have been turned upside down, and all of a sudden, big retail chains are cutting back and calling off a massive number of orders – and this would only make sense if they could tell that a severe economic downturn was imminent.

Earlier this month, Walmart’s EVP and CFO, John David Rainey, revealed that the company had cleared most of its summer inventory, and now it was reducing exposure in electronics, home, and sporting goods, and canceling billions of dollars in orders to realign inventories. That seems like an extremely odd decision for Walmart to take considering that, not long ago, shoppers were flooding social media with images of bare shelves and thousands of complaints about product shortages at several Walmart stores from all over the nation. Canceling billions of dollars in orders means that we will be seeing many more inventory holes in the coming months.

This week, Target also announced that it was chopping a massive amount of orders in preparation for the months ahead. In a note, Target said it had reduced its “inventory exposure in discretionary categories” by canceling more than $1.5 billion of orders in these categories and marking down products. The chain is much smaller than Walmart, which means that cutting so many orders all at once is a really big deal.

A few days ago, we just learned that Kohl’s and Under Armour have also followed the same move. In a nutshell, all of these retailers are getting really scared about the prospect of being stuck with massive amounts of inventory they cannot sell. They can already see that sales are dropping and economic conditions continue to worsen for consumers, which consequently indicates that economic activity is likely to get much lower than originally anticipated over the next few months.

One corporate executive that recently came forward and publicly admitted that he sees a deep economic downturn on the horizon is FedEx CEO Raj Subramaniam. During an interview with CNBC, the CEO actually said he believes we’re “going into a worldwide recession,” and that every sector of the industry is already feeling the early effects of it. The chief executive also highlighted that weakening global shipment volumes drove FedEx’s disappointing results. “We’re seeing that volume decline in every segment around the world, he exposed. “The weekly numbers are not looking so good, so we just assume at this point that the economic conditions are not really good. We are a reflection of everybody else’s business, especially the high-value economy in the world,” he emphasized.

Sadly, that’s the reality many businesses are facing right now. But none of this should come as a surprise. For months, economic numbers have been telling us that big trouble was on the way, and now it’s here for everyone to see it. We must remember that we are already in the midst of a raging economic crisis, and every piece of evidence is telling us that this is just the beginning of something even bigger."
Comments here:

"Broke Americans Buying Halloween Costumes With Credit Cards; Markets Could Be Shocked Tomorrow"

Jeremiah Babe, 9/20/22:
"Broke Americans Buying Halloween Costumes With 
Credit Cards; Markets Could Be Shocked Tomorrow"
Comments here:

Musical Interlude: Walter Murphy, "A Fifth of Beethoven"

Walter Murphy, "A Fifth of Beethoven"

"A Look to the Heavens"

“This pretty, open cluster of stars, M34, is about the size of the Full Moon on the sky. Easy to appreciate in small telescopes, it lies some 1,800 light-years away in the constellation Perseus. At that distance, M34 physically spans about 15 light-years. Formed at the same time from the same cloud of dust and gas, all the stars of M34 are about 200 million years young.
 
But like any open star cluster orbiting in the plane of our galaxy, M34 will eventually disperse as it experiences gravitational tides and encounters with the Milky Way's interstellar clouds and other stars. Over four billion years ago, our own Sun was likely formed in a similar open star cluster.”

"To Really Ask..."

“Very few beings really seek knowledge in this world – few really ask. On the contrary, they try to wring from the unknown the answers they have already shaped in their own minds – justifications, confirmations, forms of consolation without which they can’t go on. To really ask is to open the door to a whirlwind. The answer may annihilate the question and the questioner.”
- Anne Rice, “The Vampire Lestat”

The Poet: William Butler Yeats, "The Second Coming"

"The Second Coming"

"Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the center cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?"

- William Butler Yeats, January 1919

“There Is No Reality Anymore…”

“There Is No Reality Anymore…”
by Thad Beversdorf

“I‘d love to change the world, but I don‘t know what to do,
so I’ll leave it up to you…” 

“What a great lyric that is from the late 60′s, early 70′s English band “10 Years After.” I believe this describes that uneasy feeling of discontent that sits deep in the stomach, beneath the day to day exteriors, of so many people today. The world is like a black hole in that it seems to be getting smaller and smaller as the years go by but also heavier and heavier with each passing day.

When I was a teenager and my friends and I were taking reality obscuring substances, one of my buddies (this means you Nichol) would stop us at certain points throughout the night for a reality check. This was just a few moments where we ‘d all gather our senses to make sure the world was still right and then we’d venture back into obscurity. I feel that reality is an old world term. There is no reality anymore. With advances in technology came unending possibilities of if you can dream it they can make it so. The ubiquitous flow of information ensures that the truth is always available but never known with certainty. It means there is no such thing as a reality check. It’s like that dream inside a dream inside a dream. Which reality is real anymore? How deep does the rabbit hole go?

We are raised with pretty standard ideals of what the world is meant to be but these ideals seem to take place only in the movies. It must be incredibly difficult for our young people to reconcile the two worlds, I know it is for me. That which they learn as a child and that which they find has replaced it as a young adult. Our leaders are despicable, arrogant and egotistical fools who pretend we elect them because we don’t see them for what they are. But we elect them because we feel we have no choice. We know what we want the world to be. We know what it should look and feel like. And we know it is not the world in which we live today. I know I’d love to change the world but I don’t know how and so I’ll leave it up to you. And so we continue to move forward down this path, each step uneasy as though something ungood is lurking just around the next corner.

We are able to put that feeling out of our minds for the most part but our subconscious is always aware that things are off. We have all kinds of self help books and new age theories that attempt to make sense of it all and explain why we just aren t happy the way we envision happy should be. Perhaps the only reality is the reality that the world isn’t what we had hoped it would be and we don’t know how to make that right. I’d love to say that if we just stand up and do the right thing, act from our hearts and have good intentions that it could change the world. But quite honestly there are ill-intentioned people that are constructing this new world in which we sub-exist.It is them and us, but they’d never say it that way. Certainly though their intention is not for us to co-exist along side them.

But so we carry on and we, move forward, to the best of our abilities. We accept the good with the bad and acknowledge that everything is a trade off. We believe that if we go to college we stand a better chance in life and so we borrow our first 10 years of post college wages to get an edge over the next guy who is doing the same. When we get out of school we know that it is time to buckle down and get serious. We put our lives on hold in order to focus on the future with the idea that one day we will be sitting on the porch with the person we love, the one we put on hold for all those years, and we will then enjoy our life’s work then.

But then we get further in debt because we need a sleeker car and we need a bigger house but it’s ok because we can just work a little more. And then the kids come and as far as we got to know them they are great, I think. But it’s ok because they just finished college and now they’ve moved back in as the job market is tough out there and so we’re paying off their student loans. Eventually they get away and begin their life’s journey and they take their debt with them. And then we realize, god I’m almost 60. But it feels great because that means soon I’ll be there on the porch getting to know the one I love again and life will be grand at that point.

But then we turn 65 and we realize all those policies that were implemented by all those well-intentioned decision makers have actually left us with very little. And we say it’s ok because we’d be bored anyway just sitting on the porch. And so we take a job waving at people in Walmart but feel like OMG how did I get here. But the shift ends and we go home anxious to spend time with the one we love because, although it’s a terrible thought, we are aware we’re both getting long in the tooth. And so we arrive home only to realize the one we love is now sick and that it’s too late for our days sitting on the porch getting to know each other again. We do everything we can but we cannot afford to help that person who stood quietly behind us all those years as healthcare costs are unrealistically out of touch with reality. And then it hits us that despite taking all the right steps to ensure we have a great life we failed to ever really be happy, to really love and to really accept love. And then it really hits us, this world provides but one shot.

Well, then that feeling of uneasy discontent that shadowed us when we were young is now an intense pain in our heart. And we look out at the world and we ask ourselves how could this have happened? I did everything they told me I was supposed to do, I did everything right! And it becomes clear that life was a chance to change the world, but we didn’t know what to do, and so we left it up to…”

"It Ends as it Began: As a Political Ploy"

"It Ends as it Began: As a Political Ploy"
by Jeffrey Tucker

"The current US president finally said it during a 60 Minutes interview: “The pandemic is over.” Though obviously true by the classical definition, Biden’s comment seemed almost accidental, said as an echoed response to a direct question. Consider, however, that many times as many people die from Covid daily in the US (300-400) than when the US first announced the outrageous lockdowns of March 16, 2020. In those days, deaths were approaching 50 per day, mostly in New York. It will very likely get worse over the winter months.
Click image for larger size.
Instead of today’s calm and relaxed attitude – just chill because infection, disease, and death are just part of life – there were banshee screams from the whole of governments and media. People were running around with their hair on fire, dousing themselves with sanitizer, wiping down groceries, and hiding under their sofas from the “invisible enemy.”

Back then, if you raised any doubts about closures, masks, forced separation, domestic capacity restrictions, or suggested it might not be the worst thing to keep businesses open, or were caught getting a haircut, you were shamed, shouted down, and banned by social media. You could even get fired.

Ask yourself: why the panic then and the calm now? What precisely has changed?

In those days, every new death – even every new case! – was blamed on the Trump administration. People even today say that Trump had no choice but to lock down because otherwise the criticisms would have been globally deafening. So Trump and his closest advisors sat in their Oval Office hothouse and listened to the wise council of Fauci that the only way to deal with a virus is to stop all human activity.

So here we are today, all nonchalant and casual about the whole thing even as the CDC chart on community spread looks like this right now.
Click image for larger size.
Receiving less attention was Biden’s immediate follow-up. “If you notice, no one is wearing masks. Everyone seems to be in pretty good shape.”
JUST IN – Biden: "The pandemic is over." pic.twitter.com/iS1gq31MD1
- Disclose.tv (@disclosetv) September 19, 2022

Hold on there a minute. Is it really all about such casual perceptions of one guy touring a car show? If everyone was wearing a mask – the Biden administration is still appealing its right to impose a mandate – would it be evidence that the pandemic is still on? If so, might that help explain why the Biden administration was so intent on pushing for mass masking? It served the cosmetic purpose of whipping up public panic…for political and not medical reasons.

If that is true, we live in a dystopian world in which the government itself can create and uncreate a pandemic depending on the political priorities of the day. As for the eyeball test that everyone Biden sees is “in pretty good” shape, that was true throughout the entire period of panicked and egregious statism. The demographic subject to medically significant outcomes was always very small. The 99.8% of people were always going to be in pretty good shape, but for the astounding psychological, economic, and public-health disaster imposed by the lockdowns themselves.

Yes, the “new virus” is now endemic and wholly manageable, due to mass infection and recovery. It was never going to end any other way. We knew this from February 2020. It’s the way every pandemic of this type of virus ends, all extremely well-documented over the past 100 years or, really, thousands of years.

The policy response to the pandemic is what was the outlier. After spending two and a half years watching the unfolding of the great public-health disaster of our lifetimes, it’s impossible to avoid the conclusion that this has always been about politics and the manipulation of public perceptions. The reality that we chose to see was heavily informed by media propaganda and political priorities.

That’s a terrifying reality. For example, it’s impossible to avoid the observation that the pandemic response was motivated at least in part by the desire to drive Trump out of office. What better way to crush a presidency than to panic the president himself into wrecking the economy that was his strongest selling point during a critical election year? It was a masterful plot and you don’t have to be a dreaded “conspiracy theorist” to see it.

Moreover, it was not just about Trump himself. It was about much larger agendas and directions that the administration was headed that threatened some very powerful interests, the investigations of which should consume years of work. Theories abound about the real reasons – Fauci and gain-of-function research, WEF and its agenda, an experiment in unleashing hipster techno-primitivism – and we are still a long way off from knowing the full truth.

Why Mike Pence, Jared Kushner, and other presumed Trump partisans in the inner circle could not see it is the question. For that matter, why couldn’t FOX see it? Why couldn’t the Trump partisans in think tanks and magazines see it? It was perfectly obvious at the time that this was precisely what was going on. Why did observing the obvious become so completely unsayable?

In the same way, it is perfectly obvious that the new calm that Biden is hawking is all about creating an environment of normalcy leading to midterm elections just 6 weeks away. The Democrats obviously need every advantage. Declaring an end to the pandemic provides some help on the margin.

It should rattle any concerned citizen of the US – or just any rational person – that such a massive issue as a deadly pandemic could be turned on and off by perception management by powerful elites in government, tech, and media. And yet, the evidence is overwhelming that we have seen just such an operation at work over these pandemic years.

Even now, despite more sophisticated data collection and distribution than we’ve ever had, we are at a loss to state with precision just how severe this pandemic truly was. Between wild inaccuracies of PCR testing plus rampant death misclassification, not to mention the ongoing confusions over infections vs cases, there is no real consensus on the basic measurements one might need to make a scientific assessment.

To be sure, there are those who believe that the arrival of the Omicron variant is itself a good enough reason for the shift from panic to calm. The variant is said to be more prevalent but less severe. But this is a confusion: such variants do not arrive with a preset severity stamp on them, programmed to impact the population in a particular way. It always depends on preexisting immunities.

Whether and to what extent these viruses are nothing alarming or massively devastating is largely contingent on the immunological mappings of the population itself. It was exposure to previous Covid variants that resulted in less medically significant outcomes from the mutations that occurred later.

An isolated tribe in the Outback or Amazon rainforest that had never been exposed to any coronaviruses could face terrible disease and death from the variants that the developed world now regards as mild. For such people, Omicron could be just as devastating or more so than the original wild type. (I owe this point to the ever-brilliant Sunetra Gupta.)

In addition, one might suppose that the end of the panic would also mean the end of the restrictions and mandates. Not so. The state of emergency is still on. People are still being fired for refusing the vaccine. My unvaccinated friends from the UK, Australia, and Europe are still not even allowed into this country! The whole thing is outrageous and embarrassing.

And as Jonathan Turley has written: "Now the President is declaring that the pandemic is over as the Justice Department is defending pandemic policies in various courts. Even if one were to argue that the policy should be reviewed as supported at the time, the continued viability of the policy can now be questioned in light of the President’s own statements. The President’s comments also highlight the fluidity of pandemic policies. While we often look to the CDC on such status statements, it is the President who ultimately decides federal policies on pandemic measures."

Interesting phrase: the fluidity of pandemic policies. Keep in mind that most of the powers that allowed them to lock you in your home, quarantine the well, shut churches and schools, restrict travels, even prosecute people for holding parties, weddings, and funerals all still exist. There has been no rollback of any powers presumed by the CDC. Their website even now lays out their own quarantine plans for the next time.

There must absolutely be a serious challenge to all these government powers. They were abused for political reasons and ended up brutalizing the whole population here and around the world, in violation of all law and tradition. There have been no apologies from the top, only vague promises of reforms that end only in more centralization and funding. This must change before the whole disaster is repeated.

It is not enough for the president to declare an end. It does not end until we end the emergency powers and get an ironclad guarantee that nothing of this sort can ever happen again. One might suppose the Bill of Rights would have been enough but it was not. We need more. And it needs to be explicit and enforceable. That cannot happen until there is a full accounting of the outrages that have been visited upon the country. Only then can we say that everything and everyone “seems to be in pretty good shape.”
Related truth:

"Veterans Committing Suicide At 37% Higher Rate Than VA Claims: Report"

"Veterans Committing Suicide At 37% 
Higher Rate Than VA Claims: Report"
by Tyler Durden

"A new report by a suicide prevention group has found that veterans are committing suicide at a 37% higher rate than the Department of Veterans Affairs claims. The 'exhaustive' study which was four years in the making examined suicides and "self-injury mortality" - or deaths classified as accidental or undetermined, in those aged 18-64, over the period between 2014 and 2018, Stripes reports. The VA, meanwhile, gets its suicide figures from county authorities where the deaths occur - which fails to identify veterans around 18% of the time.

America’s Warrior Partnership, a suicide prevention group, contracted with the University of Alabama and partnered with Duke University to gather state-provided death data and coordinate with the DOD to corroborate military affiliation. It was funded by the Bristol Myers Squibb Foundation. The study identified a 37% greater suicide rate than reported by the VA. That was because “Operation Deep Dive,” as the study is called, worked to get specificity of the decedent’s demographics, military experience and death details. "It’s not the VA’s fault. The issue is the counties," said Air Force veteran Jim Lorraine, president of America's Warrior Partnership.

The study looked at death data for Alabama, Florida, Maine, Massachusetts, Michigan, Minnesota, Montana and Oregon. If death information these eight states is applied to the rest of the country, around 24 veterans die each day by suicide, as determined by a coroner or medical examiner, vs the VA's average of 17.7 veteran suicides per day. What's more, around 20 former service members die each day by self-injury mortality - which is defined as accidents or an undetermined cause of death, of which over 80% were overdoses, Lorraine told Stripes. Those most at risk of suicide are veterans who had served for under three years, had been demoted, and lived alone in a suburban or rural area.

According to Lorraine, the study will continue for anther four years in order to accumulate more data from states and drill down into the particulars of suicides, with the goal of preventing them. "We’ve got to get those numbers down," he said."

"Walmart Finally Did It..."

Full screen recommended.
The Economic Ninja, 9/20/22:
"Walmart Finally Did It..."
"Something Just Changed At Walmart. Walmart is having a hard time dealing with a glut of inventory that is finally coming in from China. What Walmart deals this week will happen as you learn how to save money. Learn about Walmart couponing matchups. First there were supply chain shortages now there is too much inventory so stores like Walmart need to either store the goods or mark them down dramatically."
Comments here:

"The Closure Economy is Alive and Well"

Full screen recommended.
Dan, iAllegedly 9/20/22:
"The Closure Economy is Alive and Well"
"If you are in the business of repossessions, evictions, foreclosures, moving people or bankruptcies you are doing incredibly wrong right now. Every other industry in general is suffering. From cars to home improvements every other industry is feeling a pinch."
Comments here:

The Daily "Near You?"

Winnipeg, Manitoba, Canada. Thanks for stopping by!

Gregory Mannarino, "Post Market Wrap-up 9/20/22"

Gregory Mannarino, PM 9/20/22:
"Post Market Wrap-up 9/20/22:
UN Warns Of Dire Financial Situation; 
Morgan Stanley Warns Of Global Stock Market Sell-Off"
Comments here:

Judge Napolitano, "Col. Doug Macgregor: Ukraine/Russia Latest"

Judge Napolitano - Judging Freedom:
"Col. Doug Macgregor: Ukraine/Russia Latest"
"Ukraine brushes off Russian plan to annex occupied regions."
Comments here:
Related:
Excerpt: "Though the under socialist siege American peoples “don’t understand what is going on” in this “great power conflict”, this report continues, the Biden Regime most certainly does, which is why Ambassador Anatoly Antonov just declared that the United States is openly a party to the conflict in Ukraine, and factually stated: “Washington’s statements that the United States is not a party to the conflict sound absolutely ridiculous and unfounded. Facts and interviews of former and current politicians and generals say otherwise. Videos currently shown on Western channels clearly demonstrate that soldiers and officers who speak fluent English, many with pronounced British and American accents, are fighting against us. The current situation of Washington inciting Kiev against us is an indisputable, obvious fact. If the Americans go along with Ukraine’s insane demands for long-range rockets, such a scenario would mean direct involvement of the United States in a military confrontation with Russia”.
So, Good Citizens, YOU, and all of us collectively, have sent at least $65 billion in military and other "assistance", but we're "not a party to the conflict"? THIS is what you're risking -  is it worth it? Why?

Bill Bonner, "Billy Clubs and Water Cannons"

"Billy Clubs and Water Cannons"
Markets are already black and blue...
 but the real pain is yet to come.
by Bill Bonner

Youghal, Ireland - "The beatings will continue until morale improves. Understanding today’s market is very simple. For the last 40 years, the Fed has been rewarding stock holders. Now, it’s punishing them. Investors are beginning to understand. Barrons: "The Stock Market Finally Gets It. FedEx’s Bad News Helped Drive the Point Home." From a certain point onward, there is no turning back. The stock market reached that point this past week.

Oh, the market was hopeful, entering the week, that inflation had reached its peak, that the Federal Reserve would stop raising rates soon, that the bottom was in. But Tuesday’s release of August’s consumer-price-index data showed that inflation hadn’t been tamed and dashed all the goodwill, sending the major indexes to their worst day since 2020.

Fox News tacked into the same wind: "Bank of America strategist Michael Hartnett…warned in an analyst note this week that the "inflation shock ain't over," and that a subsequent earnings recession will precipitate further declines in the market. Hartnett said that past bear markets show an average peak-to-trough decline of about 37% for the S&P 500, the benchmark index, over 289 days. That would suggest the current bear market – which began in early June – will end in October with the gauge around 3,020 points. That would mark a nearly 22% decline from current levels."

Good and Hard: All over the world, with the notable exception of Japan, almost all central banks have brought out their cudgels and tasers. Already, US markets are black and blue. But central banks have only just begun. Investors anticipate another 75-basis point (0.75%) increase this week. But some economists are urging the Fed to strike harder. Larry Summers, for example, the only Democrat to have any idea of what is going on, suggested a 100-basis point hike. And Komal Sri-Kumar, head of Sri-Kumar Global Strategies, told CNBC that the Fed should go for 125 basis points.

But Argentina, always a leader with crackpot financial trends, shows the way forward. Reuters: "Argentina Hikes Interest Rate 550 bps After Inflation Overshoots." "Argentina's central bank hiked the country's benchmark interest rate 550 basis points to 75% on Thursday, a day after inflation overshot forecasts to near 80% on an annual basis. The hike followed a 950 basis points-raise in August of the 28-day Leliq benchmark rate, as the government tries to bring down spiraling prices that are hurting Argentines' savings and salaries and denting the popularity of the Peronist government."

Rates are rising. The economy is slowing. Stocks are falling. The only question is: how long will the beatings go on? “It is clearer by the day that markets were overly lavishly supported by central banks for too long,” writes Katie Martin in the Financial Times. “Correcting this imbalance will keep on sparking the ugly declines and head-fake bear market rallies that characterized the crisis of 2008-2009.”

The Kübler-Ross Model: A real bear market proceeds like a death sentence. First, there is denial. Then, anger and depression… followed by bargaining, and finally, acceptance. Until last week, ‘denial’ was the name of the game. But then, investors began to realize – the Fed is serious. It intends to inflict a lot more pain.

Markets move faster than economies. First, the P gives way. Then the E. Stock Prices are supposed to ‘look ahead,’ anticipating future Earnings. So, in the initial stages, prices drop before the bad recession-era earnings become apparent. Then, the lower prices mislead investors. They think stocks look ‘fairly priced.’ Advisers urge them to ‘buy the dip.’ At current prices, for example, Alphabet almost looks like a value stock.

But then comes more bad news. The recession causes sales and earnings to fall. Soon, it doesn’t look like such a bargain anymore. As of last week, investors are no longer in denial. They’re just trying to understand how bad it will get. Analysts look to the recent past for clues. Will it be like the Nasdaq crash in 2000? Or the mortgage finance crisis after 2007? Or, maybe the Covid Panic selloff of 2020?

In our view, those riots are irrelevant. They’re from a different era, when the Fed was on hand… with warm blankets and hot coffee. Now, the Fed is back on the scene… but with billy clubs and water cannons. More to come…"

Joel’s Note: It’s hard to fathom what an Argentine-style, 550 basis point hike would look like in the U.S., much less the carnage it would unleash on the markets. And yet, with a nominal Fed target rate still below 2.5%… and inflation running at 8.3% (17.1 according to ShadowStats - CP)… such a mammoth hike would still leave real rates floundering in negative territory. (2.5 plus 5.5 still equals 8… even in modern economics classrooms.) And if inflation “hiccuped,” say because energy prices come roaring back after the Strategic Petroleum Reserve release ends next month, we could be off to the races again… with the Feds chasing down 9… 9.5… or even double-digit inflation.

What does all that mean? In a nutshell: more distortion of the most important price of all. Dan explained as much in last Friday’s note to Bonner Private Research members…"In a ‘normal’ financial world, time has a price. That price is the interest rate you earn by loaning or investing your savings. The benchmark interest rate – currently set by central banks – determines the returns for all other asset classes. When you leave it too low for too long, you get diminishing marginal returns. Worse, too much of a good thing becomes a bad thing.

We’re reckoning with many ‘bad things’ and bubbles right now. When you distort that price (lower it to zero) you distort the values of all other assets (making it very difficult to figure out what to pay today for future cash flows). By mis-pricing the cost of capital, you distort capitalism itself.

Which brings us to 2022… and the beginning of the reckoning we’re witnessing across markets right now. “A lot of people made a lot of stupid money in the low interest rate era,” Dan reminded us Friday. “A lot of them are going to lose even more in a grinding, volatile, bear market.”
Market Data Center, Live Updates:

Gregory Mannarino, "The Worst Is Yet To Come: Debt Market Sell-off Continues, Inflation Rises Worldwide"

Gregory Mannarino, AM 9/20/22:
"The Worst Is Yet To Come: Debt Market 
Sell-off Continues, Inflation Rises Worldwide"
Comments here:

"Strange Prices At Trader Joe's! This Is Crazy!"

Full screen recommended.
Adventures with Danno, 9/20/22:
"Strange Prices At Trader Joe's! This Is Crazy!"
"In today's vlog we are at Trader Joe's, and are noticing some strange prices! We are here to check out skyrocketing prices, and a lot of empty shelves! It's getting rough out here as stores seem to be struggling with getting products!"
Comments here:

"How It Really Is"

You don't like things now? Well...
Oh, you ain't seen nothing yet, but you will...

"Gerald Celente Warning: They Don't Want You To Know How Bad It Is"

Full screen recommended.
The Atlantis Report, 9/20/22:
"Gerald Celente Warning: 
They Don't Want You To Know How Bad It Is"
"Economic crash, stock market crash, housing 
market crash, it's already here you just don't know it yet!"
Comments here:

Monday, September 19, 2022

"The Kharkov Game-Changer"

"The Kharkov Game-Changer"
By Pepe Escobar

"Wars are not won by psyops. Ask Nazi Germany. Still, it’s been a howler to watch NATOstan media on Kharkov, gloating in unison about “the hammer blow that knocks out Putin”, “the Russians are in trouble”, and assorted inanities.

Facts: Russian forces withdrew from the territory of Kharkov to the left bank of the Oskol river, where they are now entrenched. A Kharkov-Donetsk-Lugansk line seems to be stable. Krasny Liman is threatened, besieged by superior Ukrainian forces, but not lethally.

No one – not even Maria Zakharova, the contemporary female equivalent of Hermes, the messenger of the Gods – knows what the Russian General Staff (RGS) plans, in this case and all others. If they say they do, they are lying.

As it stands, what may be inferred with a reasonable degree of certainty is that a line – Svyatogorsk-Krasny Liman-Yampol-Belogorovka – can hold out long enough with their current garrisons until fresh Russian forces are able to swoop in and force the Ukrainians back beyond the Seversky Donets line.

All hell broke loose – virtually – on why Kharkov happened. The people’s republics and Russia never had enough men to defend a 1,000 km-long frontline. NATO’s entire intel capabilities noticed – and profited from it. There were no Russian Armed Forces in those settlements: only Rosgvardia, and these are not trained to fight military forces. Kiev attacked with an advantage of around 5 to 1. The allied forces retreated to avoid encirclement. There are no Russian troop losses because there were no Russian troops in the region.

Arguably this may have been a one-off. The NATO-run Kiev forces simply can’t do a replay anywhere in Donbass, or in Kherson, or in Mariupol. These are all protected by strong, regular Russian Army units.

It’s practically a given that if the Ukrainians remain around Kharkov and Izyum they will be pulverized by massive Russian artillery. Military analyst Konstantin Sivkov maintains that, “most combat-ready formations of the Armed Forces of Ukraine are now being grounded (…) we managed to lure them into the open and are now systematically destroying them.”

The NATO-run Ukrainian forces, crammed with NATO mercenaries, had spent 6 months hoarding equipment and reserving trained assets exactly for this Kharkov moment – while dispatching disposables into a massive meat grinder. It will be very hard to sustain an assembly line of substantial prime assets to pull off something similar again.

The next days will show whether Kharkov and Izyum are connected to a much larger NATO push. The mood in NATO-controlled EU is approaching Desperation Row. There’s a strong possibility this counter-offensive signifies NATO entering the war for good, while displaying quite tenuous plausible deniability: their veil of – fake – secrecy cannot disguise the presence of “advisers” and mercenaries all across the spectrum.

Decommunization as de-energization: The Special Military Operation (SMO), conceptually, is not about conquering territory per se: it is, or it was, so far, about protection of Russophone citizens in occupied territories, thus demilitarization cum denazification. That concept may be about to be tweaked. And that’s where the tortuous, tricky debate on Russia mobilization fits in. Yet even a partial mobilization may not be necessary: what’s needed are reserves to properly allow allied forces to cover rear/defensive lines. Hardcore fighters of the Kadyrov contingent kind would continue to play offense.

It’s undeniable that Russian troops lost a strategically important node in Izyum. Without it, the complete liberation of Donbass becomes significantly harder. Yet for the collective West, whose carcass slouches inside a vast simulacra bubble, it’s the pysops that matters much more than a minor military advance: thus all that gloating on Ukraine being able to drive the Russians out of the whole of Kharkov in only four days – while they had 6 months to liberate Donbass, and didn’t. So, across the West, the reigning perception – frantically fomented by psyops experts – is that the Russian military were hit by that “hammer blow” and will hardly recover.

Kharkov was preciously timed – as General Winter is around the corner; the Ukraine issue was already suffering from public opinion fatigue; and the propaganda machine needed a boost to turbo-lubricate the multi-billion dollar weaponizing rat line.

Yet Kharkov may have forced Moscow’s hand to increase the pain dial. That came via a few well-placed Mr. Kinzhals leaving the Black Sea and the Caspian to present their business cards to the largest thermal power plants in northeast and central Ukraine (most of the energy infrastructure is in the southeast). Half of Ukraine suddenly lost power and water. Trains came to a halt. If Moscow decides to take out all major Ukraine substations at once, all it takes is a few missiles to totally smash the Ukrainian energy grid – adding a new meaning to “decommunization”: de-energization.

According to an expert analysis, “if transformers of 110-330 kV are damaged, then it will almost never be possible to put it into operation (…) And if this happens at least at 5 substations at the same time, then everything is kaput. Stone age forever.” Russian government official Marat Bashirov was way more colorful: “Ukraine is being plunged into the 19th century. If there is no energy system, there will be no Ukrainian army. The matter of fact is that General Volt came to the war, followed by General Moroz (“frost”)."

And that’s how we might be finally entering “real war” territory – as in Putin’s notorious quip that “we haven’t even started anything yet.” A definitive response will come from the RSG in the next few days. Once again, a fiery debate rages on what Russia will do next (the RGS, after all, is inscrutable, except for Yoda Patrushev). The RGS may opt for a serious strategic strike of the decapitating kind elsewhere – as in changing the subject for the worse (for NATO). It may opt for sending more troops to protect the front line (without partial mobilization).

And most of all it may enlarge the SMO mandate – going to total destruction of Ukrainian transport/energy infrastructure, from gas fields to thermal power plants, substations, and shutting down nuclear power plants.

Well, it could always be a mix of all of the above: a Russian version of Shock and Awe – generating an unprecedented socio-economic catastrophe. That has already been telegraphed by Moscow: we can revert you to the Stone Age at any time and in a matter of hours (italics mine). Your cities will greet General Winter with zero heating, freezing water, power outages and no connectivity.

A counter-terrorist operation: All eyes are on whether “centers of decision” – as in Kiev – may soon get a Kinzhal visit. This would signify Moscow has had enough. The siloviki certainly did. But we’re not there – yet. Because for an eminently diplomatic Putin the real game revolves around those gas supplies to the EU, that puny plaything of American foreign policy.

Putin is certainly aware that the internal front is under some pressure. He refuses even partial mobilization. A perfect indicator of what may happen in winter is the referenda in liberated territories. The limit date is November 4 – the Day of National Unity, a commemoration introduced in 2004 to replace the celebration of the October revolution. With the accession of these territories to Russia, any Ukrainian counter-offensive would qualify as an act of war against regions incorporated into the Russian Federation. Everyone knows what that means.*

It may now be painfully obvious that when the collective West is waging war – hybrid and kinetic, with everything from massive intel to satellite data and hordes of mercenaries – against you, and you insist on conducting a hazily-defined Special Military Operation (SMO), you may be up for some nasty surprises. So the SMO status may be about to change: it’s bound to become a counter-terrorist operation.

This is an existential war. A do or die affair. The American geopolitical /geoeconomic goal, to put it bluntly, is to destroy Russian unity, impose regime change and plunder all those immense natural resources. Ukrainians are nothing but cannon fodder: in a sort of twisted History remake, the modern equivalents of the pyramid of skulls Timur cemented into 120 towers when he razed Baghdad in 1401.

If may take a “hammer blow” for the RSG to wake up. Sooner rather than later, gloves – velvet and otherwise – will be off. Exit SMO. Enter War."
Update 9/20/22:
*"With the accession of these territories to Russia, any Ukrainian counter-offensive would qualify as an act of war against regions incorporated into the Russian Federation. Everyone knows what that means."
Related, highest recommendation:

"What Would a Nuclear War Look Like?"

"What Would a Nuclear War Look Like?"
by Jeff Thomas

"For eight years, NATO has backed puppet rulers in Ukraine, funded attacks on Donbass, repeatedly violated the Minsk Treaties, outlawed the speaking of Russian in the Luhansk and Donetsk Republics, and has destroyed democratic opposition and free media in Ukraine, leaving it a one-party government, essentially owned and financed by the US and administrated by US operatives. Not much subtlety there. Yet, somehow, the US has managed to convince the people of the US and other Western countries that Russia is the bad boy, is out of control and must be stopped.

In spite of all the above, Russia remained stoic and sought continually to keep a lid on the situation. It did, however, state firmly that the "red line" would be if Ukraine were to go nuclear, becoming a direct threat to Moscow. That would not be tolerated. Surely, this was a sober heads-up to any sensible country that the one thing that must not happen would be for Ukraine to go nuclear. After all, once that Pandora’s Box was opened, the last barrier to possible nuclear war would be crossed.

For eight years, Russia had been goaded again and again by the West, yet they did not take the bait. Then, in February of 2022, at the annual Munich Security Conference, the President of Ukraine announced his intent to make Ukraine a nuclear country. Five days later, Russia invaded Ukraine. Immediately, the US propaganda arm went into operation, and for months, even as Ukraine was consistently losing the war, at every turn, the Western media renewed its claims that the war was turning; that Russia was faltering, and the heroes of Ukraine were beating back the Great Bear.

But all the above is old news. Why, at this juncture, should we be reviewing it? Well, its continued significance is that NATO (or the US – they are virtually interchangeable at this point) has, from the beginning, behaved recklessly with the prospect of nuclear conflict. Are they mad? Or are they so foolish as to think that they have some sort of "edge" in a nuclear conflict? Or do they see this as a game of one-upmanship in which the only important concern is which antagonist has the greater bluster?

We can only speculate as to the answer to this quandary. But, setting this aside, we should be questioning, a) what is the likelihood that the West would be so foolhardy as to actually push the button and, b) what would the outcome look like?

As to the first question, considering that it’s now becoming increasingly evident that the West have been misrepresenting the progress of the war; that the trained Azov forces are spent and replacements cannot be trained fast enough to go against the experienced Russian forces, the US is going to have to come up with another plan… and it will need to be something dramatic. At this point, the one card they have not played is the nuke card.

They’ve claimed that the Russians have been either firing on or causing explosions in the Zaporizhzhya nuclear plant that they have held for some time. In essence, they’re being accused of bombing themselves in a facility that has long-since been taken. At this point, not many listeners are buying this explanation. So, what do they have left in their toolbox?

I’ve long felt that, as an end-run, what the West might do would rely on an old favorite technique – a false flag attack. Create a narrative and videos of an attack on, say, Kiev by Russia with a small nuclear warhead. Then announce that the warhead had been fired, killing hundreds of thousands. Then let loose the pre-prepared media blitz and invoke Article 5, justifying nuclear warfare. It just might turn the tide of sympathy. But it would also open a door that could not once again be closed.

For decades, both Russia and the US have had large numbers of nukes aimed at each other, with a system of timed releases. Once the first button is pushed, interrupting the progression is difficult. So, as to that second question – "What would a nuclear war look like?" there are many studies, but the most illustrative one I’m familiar with was produced by Princeton.
Full screen recommended.

Well, each major US city would be targeted with multiple ICBMs, each big enough to destroy it. Most of the US would be carpeted with other ICBMs. The US would be destroyed within a few hours. An estimated 90 million people would be killed initially.

Those at ground zero would be vaporized. Those on the periphery of a bomb could escape if they were to get to concrete shelter very quickly. They would then need to remain sealed up for weeks, if not longer, until the majority of fallout had settled. It would be a gamble as to when exiting the building would be safe.

The northern border of the US would be destroyed, taking in Canadian border cities, such as Vancouver and Toronto. The southern border, with Mexico, would also go.

Next would be the movement of fallout. As the video shows, those who live in or near a direct target would have no hope, but as can be seen, there are locations outside the US that are not targeted at all. Those locations that have no strategic advantage would not be targeted. So, if you were located in, say, Jamaica, you would not be hit, but, just as importantly, the Caribbean weather system – the trade winds – would carry any northern fallout away from you, as would the Gulf Stream.

Better still, the world is separated at the Equator by two weather systems that do not mix. Fallout in the north will be unlikely to travel to the south. If you’re located in South America, there are very few likely targets. It’s unknown whether, say, Rio de Janeiro or Buenos Aires would be targets, but if not, South America may be the best place to be in the Western Hemisphere. If anything, Europe and the Middle East would fare worse than North America.

Finally, there is the question of nuclear winter. No one can know whether this would last months or years and whether it would be localized or global. Nuclear war is not a certainly, yet the West has been dangerously rattling sabres as though they are invincible and only others can be destroyed. This is quite false.

We cannot be certain that nuclear war will be undertaken, but if so, it will be quick. There will be no time to create an escape plan. You must already be in a location that you deem to be as safe as possible."
A must view article by Jim Kunstler:
"NUKEMAP"
"NUKEMAP is a web-based nuclear weapons effects simulator. I created it in 2012 (and did all programming, design, and research on it). Since then it has had many updates to its effects model and capabilities. It has been used by over 20 million people globally, and has been featured in both academic and general-audience publications and television shows for depicting nuclear weapons effects"

"Housing Crash Begins! We Just Witnessed Something That Hasn’t Happened Since 2008"

Full screen recommended.
"Housing Crash Begins! We Just Witnessed 
Something That Hasn’t Happened Since 2008"
by Epic Economist

"The disaster we’re about to witness didn’t have to happen. The desperate attempt to control this horrifying inflation spiral is absolutely crushing the US housing market – and we are all going to feel the impact of the coming crash. In recent years, irresponsible monetary policies were put in place, fueling an unprecedented inflation boom that sent housing costs to extreme levels. Now, policymakers at the central bank and politicians in Washington are scrambling to tame the beast they unleashed by themselves. But everyone knows that rapidly rising interest rates are going to wreak havoc on financial markets, and most notably, in the housing sector. When mortgage rates soar higher, more and more potential homebuyers are pushed to the sidelines.

Fewer buyers mean fewer sales, which translates into downward pressure on home prices. This is basic economics, you don’t need to be an expert to understand any of this. But it seems that Fed officials are either clueless or very much aware that what they are doing is going to be exceedingly destructive to the U.S. economy as a whole but they’re still waiting for some magical solution to come about to dig us out of this hole. Once again, the housing market is in shambles, and we’re on the cusp of a housing collapse that will make the 2008 crash look like a Sunday picnic.

Do you remember the pain that we all went through in 2008? Well, a similar scenario is now unfolding right before our eyes, only this time, things are about to get a whole lot worse. In fact, something that hasn’t happened in the market since 2008 actually happened again last week. According to data released on Thursday, the average interest rate on a 30-year fixed-rate mortgage rose above 6 percent for the first time since the financial crisis.

The truth is that higher interest rates predominantly hurt low-and-middle-income Americans while the wealthy can still afford to purchase homes because many of them don’t even need mortgages, they can just buy them with cash. But for the rest of us, aggressive rate hikes make a world of difference. Each and every increase adds hundreds of dollars or more to the monthly cost of a potential buyer’s mortgage payment, slowing what was a red-hot market not so long ago. Since the start of the year, the average mortgage payment has surged 38.5% to $2,306 from about $1,700 in January. With mortgages weighing even more on already expensive home prices, mortgage demand is drying up really fast right now. Numbers released by the Mortgage Bankers Association showed that the number of applications plunged by nearly 30% compared to a year ago. And the number of applications to refinance mortgages has fallen off a cliff, with refinancing activity collapsing over 80%, MBA revealed in a new report.

The chief economist at Redfin, Daryl Fairweather, says that the ongoing meltdown is the deepest since the previous crash. “This is the sharpest turn in the housing market since the housing market crash in 2008,” she outlined in a recent interview. At this point, an estimated 39 million would-be buyers are being forced to continue renting. At the same time, more than one in 10 renters across the country are behind on rent. We have to remind ourselves that very rough weather is headed our way, and a number of crises may simultaneously burst this winter. The wise will prepare in advance, but those that are foolish will do nothing because they still believe that our leaders have everything under control."

Canadian Prepper, "It's Official. Prep for Total War”

Canadian Prepper, 9/19/22:
"It's Official. Prep for Total War”
"The march towards global conflict is unrelenting. 
Get prepared while you can."
Comments here:

“Walmart Cancels Billions In Orders; Economic Crash Landing, Brace For Impact”

Jeremiah Babe, 9/19/22:
“Walmart Cancels Billions In Orders; 
Economic Crash Landing, Brace For Impact”
Comments here:

Musical Interlude: 2002, "Cycle of Time"

Full screen recommended.
2002, "Cycle of Time"

"A Look to the Heavens"

“While drifting through the cosmos, a magnificent interstellar dust cloud became sculpted by stellar winds and radiation to assume a recognizable shape. Fittingly named the Horsehead Nebula, it is embedded in the vast and complex Orion Nebula (M42). A potentially rewarding but difficult object to view personally with a small telescope, the above gorgeously detailed image was recently taken in infrared light by the orbiting Hubble Space Telescope in honor of the 23rd anniversary of Hubble's launch.
The dark molecular cloud, roughly 1,500 light years distant, is cataloged as Barnard 33 and is seen above primarily because it is backlit by the nearby massive star Sigma Orionis. The Horsehead Nebula will slowly shift its apparent shape over the next few million years and will eventually be destroyed by the high energy starlight.”

The Poet: Theodore Roethke, “The Geranium”

“The Geranium”

“When I put her out, once, by the garbage pail,
She looked so limp and bedraggled,
So foolish and trusting, like a sick poodle,
Or a wizened aster in late September,
I brought her back in again
For a new routine -
Vitamins, water, and whatever
Sustenance seemed sensible
At the time: she’d lived
So long on gin, bobbie pins, half-smoked cigars, dead beer,
Her shriveled petals falling
On the faded carpet, the stale
Steak grease stuck to her fuzzy leaves.
(Dried-out, she creaked like a tulip.)
The things she endured!
The dumb dames shrieking half the night
Or the two of us, alone, both seedy,
Me breathing booze at her,
She leaning out of her pot toward the window.
Near the end, she seemed almost to hear me -
And that was scary -
So when that snuffling cretin of a maid
Threw her, pot and all, into the trash-can,
I said nothing.
But I sacked the presumptuous hag the next week,
I was that lonely.”

- Theodore Roethke