ECONOMY | WHAT REALLY HAPPENED

ECONOMY

Sep 23 06:31

Nuclear Power, Food and Other Industries Affected by UK CO2 Shortage, Which is Spilling into Europe

Soaring prices for natural gas have severely affected Europe’s energy sector, driving many companies out of the market and prompting bankruptcies. Fertiliser plants, which use natural gas as a feedstock, have also been troubled by the increased costs. These factories have been an important source of food-grade CO2…

Britain’s carbon dioxide crisis, which has put the medical, nuclear and food industries under threat, has already been acutely felt in Europe, according to one of the world’s largest distributors of gas, Nippon Gases.

Sep 23 06:29

In Full: Boris Johnson talks COVID-19, gas disruption and Russia, in New York

Sep 23 06:08

'I Don't Say That Lightly': GOP Senator Attacks Schumer And Pelosi Over 'Reckless' Spending Bill

Sep 23 06:05

Sinophobia Meets Prison Labor in a Think Tank Down Under

The West has been literally swamped by a non-stop propaganda offensive about Uyghur forced labor camps – thoroughly debunked, for instance, here. Now let’s examine the other – Western – side of the story.

In early 2021, Defense for Children (DCI) took the Australian Strategic Policy Institute (ASPI) to court in New South Wales. DCI’s lawsuit charges that ASPI may have been receiving funds from a number of weapons manufacturers and government agencies in the US and UK profiting from prison labor.

Although lawyers for ACPI assured these funds would be cut off if any serious evidence surfaced, the case got murkier, and there are doubts it will ever go to trial.

Sep 22 13:44

US risks defaulting its debts, which could set off 'cataclysmic' situation for economy, analysts say

The fight over raising the nation's borrowing limit underscores a reality for Democrats as they are in the midst of their highest-stakes moment for President Joe Biden's sweeping legislative agenda: thrusting a potential default into the mix may have devastating consequences.

A mild recession, according to analysts, would likely be the best-case scenario in the event of the US government defaulting on its debts, a limit the country is expected to reach next month and for which Congress must act to increase. The worst case scenario would involve downstream effects of potentially cascading job losses, a shut down in tens of billions in Covid-19 economic recovery aid still set to be delivered, a near-freeze in credit markets and gross domestic product taking a tangible hit that could last for multiple quarters.

Sep 22 11:27

Dems In Trouble As AOC Progressives Blackmail Pelosi On Spending Bill

House Speaker Nancy Pelosi (D-Calif.) tried to reassure moderate members of her conference late Monday that they would not be required to pass a spending bill with a higher price tag than any legislation the Senate approves.

In a so-called “Dear Colleague” letter, Pelosi told her fellow Democrats that while she hoped the bill that comes to the floor will call for $3.5 trillion in spending, in accordance with the budget framework passed by the House last month, “[w]e must be prepared for adjustments”.

Pelosi has held off on bringing a $1.2 trillion bipartisan infrastructure bill previously passed by the Senate up for a vote while congressional Democrats and the White House try to beat out the details of the larger proposal — which they hope to force through both chambers without Republican help through the parliamentary maneuver of reconciliation.

Sep 22 10:34

Time To Say Goodbye To The Everything Bubble

Sep 22 09:24

BREAKING: China Evergrande said to be in talks with firms including NIO, XPeng to sell EV unit

Chinese property developer Evergrande Group is currently in talks with several companies, including NIO, XPeng Motors and Xiaomi, to sell its electric vehicle business, chinastarmarket.cn reported Thursday.

As of now, the results of the talks have not been finalized. However, Xiaomi will still choose to build its own car, and the address will be officially disclosed next week at the earliest, the report said.

NIO, XPeng and Xiaomi have not yet responded to the information, the report said.

Sep 22 08:50

Inflation Is Killing The Recovery

Sep 22 08:15

Gavin Newsom Signs Bills to Roll Back Single-family Zoning in California

California Gov. Gavin Newsom signed three housing bills last week after he beat back a recall effort, all aimed at rolling back local single-family zoning laws and encouraging new housing to be built, especially dense housing developments.

SB 8, SB 9, and SB 10 were all signed into law on Thursday, Sep. 16.

SB 8 overrides some local government authority to reduce the capacity of housing projects; and SB 10 promotes high-density developments in certain urban areas.

The most controversial of the three is SB 9, which would allow homeowners to split single-family lots into two, and allow them to build duplexes on each, without the approval of local authorities, and regardless of single-family zoning in those areas.

The idea is to encourage more housing units to be built, providing more supply and potentially lowering prices. However, the law is not likely to promote much new housing in urban areas like San Francisco, though it may have an impact in the suburbs.

Sep 22 07:38

While Democrats Try To 'Kill Coal' In US, Asia Heads In The Opposite Direction

Congressional Democrats and the Biden administration are working towards an ambitious goal of eliminating coal-fired electricity and 'decarbonize' the US electric grid by 2035.

To meet such an aggressive deadline, House Democrats unveiled a $150 billion 'clean electricity' program to incentivize utility companies to phase out fossil fuels for clean energy. The Clean Electricity Performance Program, or CEPP, would reward utility that boost their percentage of electricity supplied to the grid from green sources - such as solar, wind and hydro, between 2023 and 2030.

S&P Global explains more about the program:

Sep 22 07:33

China Syndrome? Is Evergrande A Symptom Of Deeper Malaise

Evergrande’s imminent default is rocking markets – but few believe the collapse of a Chinese property developer could trigger a global financial crisis. What if Evergrande is just a symptom of a deeper malaise within the Chinese economy and its political/business structures? Maybe there is more at stake than we realise? What if Emperor Xi decides he needs a distraction?

Amid this week's market turbulence, and the overnight headlines, Evergrande dominates thinking this morning. The early headlines say the risk is “easing”. Don’t be fooled. S&P are on the wires saying it’s on the brink of default and is unlikely to get govt support. It’s Asia’s largest junk-bond issuer. Anyone for the last few choc-ices then?

Sep 22 07:33

Sens McConnell, Shelby Offer Short-Term Govt. Funding Bill Without Debt Ceiling

Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. Richard Shelby (R-Ala.) on Sept. 21 offered a competing short-term government funding bill, just as House Democrats passed a stopgap measure that also suspends the debt limit until after the 2022 election.

The bill from McConnell and Shelby does not include a debt ceiling suspension, as Republicans have urged Democrats—the majority party—to raise the $28.4 trillion debt ceiling themselves through reconciliation, a special parliamentary procedure that would expedite the passage of a budgetary measure through the Senate.

[ZH: The introduction of the bill likely increases the probability of no Senate deal, and for now, the market is tending to agree as debt ceiling anxiety has not eased at all]

Sep 22 07:32

Offshore Creditors Remain In Limbo As Evergrande Agrees To Pay Thursday's Interest On Local Bonds Only

Update (1015ET): US futures are giving back their kneejerk gains as the penny starts to drop that this is not the euphoric 'all clear' after all.

As we detailed below - and traders are starting to realize - Beijing may have just found a brilliant solution to the Evergrande problem, effectively rescuing the company and averting a systemic crisis all at the same time:

it will pay local bondholders and soft nationalize/bailout Evergrande,

but will avoid allegations of backsliding on tightening/deleveraging promises and improving "common prosperity" by stuffing foreign creditors.

And that is not what the market wants to hear...

Chinese stocks are fading back too (after reopening from the holiday)...

The question is - will Beijing use this as a strawman to judge the impact of such a restructuring strategy? And what will be the impact on the foreign dollar bond market after this?

Sep 22 07:02

The Great Reset: Population Control and the Plotting of a “Managerial Revolution”

The roots of the Great Reset agenda can very clearly be traced back to 80 years ago, when James Burnham, wrote a book on his vision for “The Managerial Revolution,” Cynthia Chung writes.

Klaus Schwab, the architect of the World Economic Forum (f. 1971), a leading, if not the leading, influencer and funder for what will set the course for world economic policy outside of government, has been the cause of much concern and suspicion since his announcement of “The Great Reset” agenda at the 50th annual meeting of the WEF in June 2020.

The Great Reset initiative is a somewhat vague call for the need for global stakeholders to coordinate a simultaneous “management” of the effects of COVID-19 on the global economy, which they have eerily named as “pandenomics.” This, we are told will be the new normal, the new reality that we will have to adjust ourselves to for the foreseeable future.

Sep 22 05:44

The Pentagon Spent $15 Trillion Since 2001. 54% Went to the Private Contractors

The Costs of War project released a report last week concluding that from fiscal year (FY) 2001-FY2020, the Pentagon spent $14 trillion, “one-third to one-half of which went to defense contractors.”

This estimate seemed too low and unnecessarily broad so I did my own analysis. I found that over half (54%) of the money Congress gave to the Pentagon since FY2001 ended up being passed along to the private sector.

Findings
To the author’s credit, the report’s more precise estimate for the percentage of Department of Defense (DOD) contracts that went to the top 5 firms since FY2001—Lockheed Martin, Raytheon, General Dynamics, Boeing, Northrop Grumman—is pretty much on the money.

The author says “one-quarter to one-third”—my analysis shows that it’s 27%.

Sep 22 05:09

Zelensky meets with European Commission President, U.S. investors

President of Ukraine Volodymyr Zelensky met with the President of the European Commission, Ursula von der Leyen, as well as with a group of American investors.

The meeting took place at Ukraine’s Permanent Mission to the United Nations, according to Ukrinform’s own correspondent in New York.

Zelensky thanked von der Leyen for supporting Ukraine's independence in the face of Russian aggression and supporting the Crimea Platform initiative.

Sep 22 05:07

How the Great Reset Was First Thought Up by the Original Proselytizer of Totalitarianism and the Father of Neo-Conservatism

Burnham describes how it is necessary that the masses believe the revolution to be beneficial to them, when in reality it is just to transition from one ruling class to the other.

“[James Burnham is] the real intellectual founder of the neoconservative movement and the original proselytizer, in America, of the theory of ‘totalitarianism.’”

– Christopher Hitchens, “For the Sake of Argument: Essay and Minority Reports”

In the first part of this two part series, I went over how the roots for the World Economic Forum’s Great Reset can very clearly be traced back to 80 years ago, when an American, former high-level Trotskyist who later went on to become the intellectual founding father of neo-conservatism, James Burnham, wrote a book on his vision for “The Managerial Revolution.” And that it was in fact, these ideologies of Burnham that triggered Orwell to write his “1984”.

Sep 21 14:28

It's happening... BUCKLE UP!

Sep 21 12:39

Misguided Petition Demanding Permanent Monthly $2,000 Stimulus Checks Nears Huge Milestone

By Brad Polumbo

The federal government has already spent an astounding $42,000+ per federal taxpayer on ostensibly-COVID-related relief and spending programs. (Did you see that much in benefits?) Yet millions of Americans are evidently unsatisfied—and are demanding permanent $2,000 monthly “stimulus” checks.

A Change.org petition originally created in 2020 continues to gain support and is now closing in on 3 million signatures. As Newsweek reports, reaching this huge milestone would make it one of the most popular Change.org petitions of all time...

Sep 21 10:43

Breaking: Biden Capital Gains Taxes To Wipe Out Iowa Farmers

A recent study by Iowa State University showed that the administration’s American Families Plan if passed into law, would have a significant negative effect on Iowa’s family farms. In order to pay for new spending in the American Families Plan, the Biden administration has proposed, amongst other tax hikes, taxing accrued capital gains at death. AMAC Action and a number of small business organizations have been pushing back strongly on the proposal. This new Iowa State University study confirms that this issue should be front and center for small businesses and family farms.

Sep 21 10:38

THE FED IS BAILING OUT THE WEALTHY AS EVERYONE ELSE PAYS THE PRICE

The Federal Reserve says that inequality is a problem. At the same, the Fed also pretends to have nothing to do with it.

Last September, for instance, Jerome Powell bemoaned the “relative stagnation of income” for people with lower incomes in the United States, but then claimed the Fed “doesn’t have the tools” to address this issue. Instead, Powell, being the chairman of this ostensibly “independent” and “nonpolitical” central bank, called for the federal government to engage in fiscal policy efforts at income redistribution.

Powell, of course, is wrong, and he probably knows he’s wrong. In any case, if the Fed were actually concerned about wealth and income inequality, the Fed would stop doing what it has done over the past decade. It would end its ultralow interest rate policy and quantitative easing.

Sep 21 08:20

"It Drives Me Nuts" - Credit Suisse Infuriates Clients By Charging $145MM Fee In Greensill Bankruptcy

After suffering one of the worst quarters in the Swiss bank's 165-year history. Credit Suisse was forced to suspend its dividend amid the fallout (while also being forced to raise $2 billion in convertible notes) from the the bankruptcies of Greensill Capital - the troubled Australian trade finance firm - and Archegos Capital Management - the family office of former Tiger Global trader Bill Hwang that was a client of Credit Suisse's prime brokerage. The two blowups, which occurred within weeks of each other, just happened to fall most heavily on Credit Suisse, which had the largest exposure to Archegos of the half dozen or so bulge bracket prime brokerages that were caught up in the blowup, when Archegos's positions turned sour, eliciting a $20 billion margin call that drained the firm of practically all of its assets (and left Hwang, formerly a billionaire, nearly penniless relative to his former wealth).

Sep 21 08:18

How Evergrande Became Too Big To Fail And Why Beijing Will Have To Bail It Out

While the world is obsessing with the fate of Evergrande, and more importantly when, or if, Beijing will bail it out, another just as interesting question is how did the company many call "China's Lehman" get to the point of no return and become a global systematic risk. For a fascinating look into how we got here, we turn our readers' attention to a recent article from Caixin titled "How Evergrande Could Turn Into ‘China’s Lehman Brothers'," and which provides one of the most comprehensive insights into why Beijing will have to, even if it is kicking and screaming, bail out Evergrande which, at its core, is just one giant shadow-banking black box whose time has finally run out.

Sep 21 08:01

In Legislative Hail Mary, Democrats Link Debt Ceiling To Spending Bill

In a risky move inviting a showdown with Republican lawmakers, House Democrats are linking a suspension of the US debt ceiling to a must-pass spending bill required to keep the government operating past September.

If it works, the debt ceiling - which GOP leaders have balked at raising - would be suspended through December 2022.

If nothing is done, the federal government will shut down and default on payments as soon as next month - a prospect which already has anxiety through the roof as measured by the spread between Oct and Nov T-bill yields.

Sep 21 08:00

DALLAS FED PRESIDENT TRADED S&P 500 FUTURES. DALLAS FED WILL NOT SAY IF HE SHORTED THE MARKET DURING PANDEMIC CRISIS IN 2020.

A transaction that has been missed by major news outlets on the financial disclosure form for Dallas Fed President, Robert Kaplan, is a line item showing that Kaplan made “multiple” trades of more than $1 million in S&P 500 futures.
This is a stunning revelation for a multitude of reasons. First, Kaplan’s financial disclosure form shows that he already had exposure to the S&P 500 through more than $1 million in an S&P 500 Exchange Traded Fund (ETF), which trades during regular stock market hours.

Using S&P 500 futures gave Kaplan access to making directional bets on where the market would go after the stock market closed, which is typically when the Fed makes market-moving announcements.

The most popular and liquid S&P 500 futures contract is the E-mini S&P 500. A person can get as much as 95 percent leverage on this contract – far more than the 50 percent leverage that is available for stock trades.

Sep 21 07:13

China’s Real Estate Sector in Trouble?

Sep 21 07:08

"Quite Alarming" - UK Energy Crisis Sparks Fresh Chaos For Food Suppliers

Last week Fertilizer producer CF Industries Holdings Inc suspended operations at two UK plants because of soaring natural gas prices. As a result, these fertilizer plants that make carbon dioxide as a byproduct are in sudden shortages and are rippling through the UK food sector, according to Bloomberg.

The shortage of carbon dioxide has forced Online grocer Ocado Group Plc to halt all deliveries of frozen products to customers, and the meat industry warned slaughterhouse operations could "grind to a halt" in weeks.

The UK food industry, already stressed from supply chain woes and labor shortages due to Brexit and the pandemic, is under even more pressure with the lack of carbon dioxide. It's an important chemical used to stun chicken and pigs before slaughter, as well as packaging to extend shelf life and dry ice that keeps perishable items frozen during delivery. Without it, food supply chains break.

Sep 21 06:16

US Treasury Chief Warns ‘Economic Catastrophe’ Will Befall America If Debt Ceiling Deal Not Reached

The Treasury Department invoked emergency cash-saving measures last month to stop the United States from defaulting on its tens of trillions of dollars in federal debt, with Congress failing to extend the suspension of the debt ceiling before departing for a six-week vacation, and Republicans refusing to raise it after returning to Washington.
Treasury Secretary Jannet Yellen has warned that a failure by Congress to raise the debt limit will “plunge” the US into a financial crisis.

Sep 21 06:08

Paying More, But Buying Less

Sep 21 05:54

Twenty Years After 9/11: US & NATO Allies Less Safe and Closer to Economic Abyss, Analyst Says

The 20-year “War on Terror” has not made the US and its NATO allies better off or safer, according to Wall Street analyst Charles Ortel. Irresponsible monetary policies and costly wars may lead the US and the world to a repetition of the 2008 global financial crisis, he says, warning against new open-ended military adventures.

The Costs of War Project at Brown University calculated that the total cost of the US' global “War on Terror” stands at about $8 trillion in current dollars, and human losses amount to nearly a million people. The report was released on 1 September, ahead of the 20th anniversary of the 9/11 terrorist attacks in New York City, Washington, D.C., and Pennsylvania.

"The war has been long and complex and horrific and unsuccessful," said Catherine Lutz, co-director of Costs of War during a 1 September virtual event. "The Pentagon and the US military have now absorbed the great majority of the federal discretionary budget, and most people don’t know that."

Sep 21 05:42

Poland must pay €500,000 DAILY for ignoring top EU court’s ruling on Turow mine

Poland must pay a daily penalty of €500,000 ($585,550) for ignoring a previous order from the European Union’s top court to cease operations at the Turow lignite mine, with its CEO slamming the fine as “bizarre”.

On Monday, the EU’s Court of Justice (CJEU) confirmed it was enforcing the financial penalty against Warsaw, stating that Poland must pay the European Commission the daily half-million euro fine until it sees compliance with the earlier order.

Judges from the Luxembourg-based court said that the fine is “necessary… to deter that member state from delaying bringing its conduct into line with that order.”

Sep 21 05:41

EXCLUSIVE: John Kerry's Heinz ketchup heiress wife has millions of dollars in Chinese investments, leaving Biden's climate change envoy facing an ethical dilemma as he regularly meets with the country's top leaders to cut deals

Joe Biden's climate change envoy and former secretary of state John Kerry disclosed millions of dollars in Chinese investments held by his wife's family trust, government documents show.

Kerry's latest filing with the Office of Government Ethics (OGE) in March shows his wife benefits from an investment of 'at least $1 million' in a hedge fund that specializes in private partnerships and investments with Chinese government-controlled funds.

In his senior government role Kerry regularly meets with Chinese diplomats and leaders, and is in the delicate position of negotiating with the industrial superpower to cut deals on reducing carbon emissions.

Sep 20 14:26

Americans Haven’t Been This Down on Housing Market Since 1982

The last time Americans were this turned off by the U.S. housing market, borrowing costs were over five times the current rate.

Sep 20 11:49

Haven't we seen this movie before?

Sep 20 11:42

And Another: Shanghai-Based Property Developer Crashes 87% In Minutes Before It Is Halted

It's not just Evergrande that is about to keel over. Overnight, one of its smaller peers, Shanghai-based Sinic Holdings Group which focuses on the development of residential and commercial properties in China, was halted trading after it shares cratered in a freak 87% plunge on Monday afternoon. The plunge slashed the market value to just under $230 million, which is laughable for a listed developer in the city.

There was no reason for the selloff - an officer at the firm’s Hong Kong office said there’s no one to attend to media inquires which is probably not a good sign - which was attributed to the general panic resulting from Evergrande's imminent default, nor did the company give a reason for the trading halt in Hong Kong.

Sep 20 11:42

US Stocks Hit With 2nd Biggest Sell Program In History

As futures indicated, the US cash equity open was greeted by an avalanche of selling, breaking the S&P back below its 50DMA...

This was the second largest sell-program in history with TICK crashing to -2067 (record low as -2069 on 5/11/21)...

Sep 20 11:41

Futures Slide, Europe Tumbles As Evergrande Contagion Shockwave Goes Global

In retrospect, China, Japan, South Korea and Taiwan picked a great day to take a holiday, which as we noted last night hammered Hong Kong stocks more than 3%, slamming the Hong Kong property sector and sending Evergrande - which is expected to default within hours to a bank loan due Monday while crucial interest payment deadline on its offshore bonds looms on Thursday - to its lowest market cap ever (it closed down 10.2% just off the worst levels of the day) before the rout spread to European bourses and US equity futures as Evergrande's escalating liquidity - and now solvency - crisis spread beyond the sector.

Sep 20 11:40

Goldman Issues A Dire Warning On China's Property Sector

No matter how the Evergrande drama plays out, whether it culminates with an uncontrolled, chaotic default and/or liquidation which sparks a crash in real estate values, or with Beijing blinking and bailing out the core pillar of China's housing market, remember that Evergrande is just a symptom of the trends that have whipsawed China's property market in the past year, which has seen significant contraction as a result of Beijing policies seeking to tighten financial conditions as part of Xi's new "common prosperity" drive which among other things, seeks to make housing much more affordable to everyone, not just the richest.

Sep 20 11:40

Now That The American Dream Is Reserved For The Wealthy, The Smart Crowd Is Opting Out

Clueless economists are wringing their hands about the labor shortage without looking at the underlying causes, one of which is painfully obvious: the American economy now only works for the top 10%; the American Dream of turning labor into capital is now reserved for the already-wealthy.

As a result the Smart Crowd is opting out of the conventional workforce's debt-overwork-deadend-treadmill. What clueless economists, pundits and politicos don't dare acknowledge is that credentials and hard work are not a ticket to middle-class security; they're a ticket to impossible workloads demanded by global corporations and high-cost lifestyles anchored by student-loan debt, high rents and out-of-reach real estate.

Sep 20 11:39

Six Evergrande Execs Face 'Severe Punishment' Over Early Redemptions For Themselves

Six senior Evergrande executives are facing "severe punishment" for securing early redemptions for themselves on investment products which the imploding Chinese real estate giant told retail investors they couldn't repay on time.

According to the Financial Times, over 40 group executives had personally invested in its investment products - with six of them securing early redemptions. All six will return the money.

"All funds redeemed by the managers must be returned and severe penalties will be imposed," said the company, which has offered to repay investors with discounted apartments and parking lots.

Sep 20 11:20

Credit Default Swap on the U.S. Debt...

Sep 20 11:05

IT’S A FOURTH TURNING: WHAT DID YOU EXPECT?

Sep 20 11:04

Average NFT price down 99% today

Sep 20 09:54

Democrats Get Big Mad That Republicans Won't Do Their Dirty Work for Them

While much of the legislative attention has been on the bipartisan infrastructure deal and the far-left $3.5T reconciliation bill, a more pressing battle is taking shape. In order to avoid default and to pay for all the Democrats’ wildest dreams, the debt ceiling needs to be raised. Treasury Secretary Janet Yellen has already called Senate Minority Leader Mitch McConnell in a desperate plea to get Republicans to play along.

He was having none of it though, as McConnell let it be known that Democrats were on their own in their quest to further blow out the budget. Now, the media blitz is on to paint that move as some kind of national betrayal.

Sep 20 09:05

Riptide in the World Economy

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