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2023-03-25 07:00 by Karl Denninger
in Health Reform , 622 references
[Comments enabled]  
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Who's got the nuts to put this on the table in the upcoming elections for CMS and HHS?

No cure, no pay.

Not less pay, no pay.

How different would the last three years have been if Trump had stood up in March of 2020 and given this speech:

We have a novel virus circulating in our nation and indeed the world.  We understand little of it at the present time, but this is America, the land of innovation, and I'm convinced we have the capacity to understand what this virus is doing and how to stop it from being lethal.

We will not learn that in a day, and there are no certainties in life.  We are all mortal, myself included.  But, what we know from history, both here and elsewhere, is that incentives matter and driven men and women will find answers.  We have set foot on the moon and conquered atomic power for peaceful generation of electricity despite both appearing, at first glance, to be impossible.

But since incentives must never make failure profitable under the Emergency Authorities delegated to myself in the event of a public health emergency I am issuing the following constraints:

  • No medical provider will be paid by the Federal Government, and no private insurance concern that is regulated and authorized under federal jurisdiction, including but not limited to PPACA, otherwise known as Obamacare, VA and similar entities, for failure to reach a successful conclusion of a *****-19 case.  Success means you leave medical care under your own power in essentially the same condition before you were stricken by this infection.  Death is the most-obvious failure -- but not the only one. Death within one year after infection from a *****-related cause, as but one example, is a presumptive failure.  CMS, the VA and all auditing agencies under Obamacare will be directed to examine all such events under which payment is made.

  • The Federal Government will act with all of its authority to facilitate the use by the medical arts of any and all available medical interventions applied to or upon willing patients to prevent, lessen or treat this disease, subject to the above.  No State government, licensing board or other entity shall interfere with the clinical judgment of a physician or other entity in this regard, provided that informed consent is obtained from the person with the illness.

  • The Federal Government will require, and all medical providers shall document via electronic means, which was introduced as a requirement for charting with the PPACA, all such contacts, all interventions, treatments or preventatives that are applied, and the resulting outcomes.  That data, de-identified, will be placed into a public-facing database that is searchable by any member of the public, including but not limited of course to clinicians, hospitals, doctors, nurses and laypeople.  Any attempt to obstruct, delay or otherwise tamper with this data flow and access shall be treated as computer tampering under existing United States federal law and prosecuted.  We trust that the people of this nation, the finest on the planet, will be able to sift through that which works, that which does not, and make decisions on an ever-refined basis until the risk of this novel virus fades.  I call upon Congress to mandate this on a permanent basis and will veto every bill that comes across my desk until it is passed.  We have the capacity to empower everyone, from the lowliest service industry worker up the line, to evaluate and choose countermeasures and treatments for all manner of disease and disorder.  We can do this and we will do this -- right now for this virus, and forevermore for every medical malady that befalls humankind in this nation.

  • For the duration of this public health emergency any countermeasure in the form of a drug that currently requires a prescription and is desired to be used by a member of the public for his or her own personal use shall be made available over the counter at all licensed pharmacies.  This shall not be construed to permit the dispensation of opioids, their analogs, or other scheduled drugs that have substantial addictive capacity, such as methamphetamine analogs used for ADHD and similar.  Pharmacists shall check for drug interactions or known contra-indications should a member of the public desire such a drug and warn against any known interactions or cautions but may not refuse to dispense the drug.  A pharmacist who so dispenses an amount suitable for personal use is immune from all sanction, civil or criminal, for so doing and the outcome of such use and shall label all such dispensations as "at personal risk" conspicuously on the bottle.  Any pharmacist refusing to dispense, or any corporate entity refusing to so permit shall be personally, severably and corporately liable for manslaughter should the person seeking that drug subsequently die from *****-19.  

Finally, no party in this nation shall violate your Constitutional right to free assembly, engage in interstate travel, worship or commerce -- not now, and not ever in the face of this or any other disease, disorder or virus.  The Department of Justice will bring immediate prosecution against any and all actors who attempt to do so and place all such persons under immediate arrest.  This does not prohibit a state or local health authority from enforcing a quarantine upon an actually-ill and contagious individual but no person shall be deemed guilty by association or inference in that regard and any intent or attempt at mass-declarations are hereby deemed void and whatever federal force is necessary to prevent that from occurring will be used.  We will vigorously enforce the law against all corporate and State actors who take any action whatsoever in violation of the Constitutional Rights of the citizens of this nation, without exception.  There shall be no forced medical treatment in this nation -- not now and not ever.  This is not Nazi Germany and never shall be.  If you have the absolute right to engage in risky personal sexual practices that could kill you, and the Supreme Court has found that indeed you do, then you have the right to refuse any medical treatment or prophylaxis; if other persons are threatened by your mere presence as a result of your decision to refuse or accept some medical intervention they have every right to take the protective measures they deem fit for their person but have no right to force it upon you.  If a prophylaxis will protect you then it will protect those who choose it, and those who do not are free to make that decision just as we allow people to consume any amount of alcohol they wish even though we know that in excess it is dangerous and even lethal.  In a free society individuals make these decisions and accept the consequences.  This is America, that is the precept on which it was founded, and for as long as I am President that principle shall be upheld and enforced with every authority at my command.

America is the finest nation this planet has ever known.  I took an oath to defend and protect the Constitution from all enemies, foreign or domestic; that oath was neither a suggestion or mere political theater.  May God bless America for as long as we respect the foundational principles of our great nation, and for as long as I hold this office I shall do exactly that.

Trump was no man and unfit to be President.  He was a scared mouse believing that a virus was an evil cat about to eat him and everyone else.  That was false, known false within weeks as soon as Diamond Princess occurred and not a thing has changed since.

That speech above, perhaps with a declaration that if we found that another nation was the source due to malfeasance or worse they would be held fully accountable for the final toll of cost in both treasure and money, is what a person who is fit to be President would have delivered.

Trump's failure to do so cost over one million American lives, most of which should not have been lost.  Biden's failure to correct this course publicly before the election and immediately upon taking the office confirms he is no more fit than Trump and equally liable. 

This may have been speculation in March of 2020 but no longer is; it is all now known to be fact.  While retrospection cannot change the past it must guide our future and any person who wishes to sit in the left seat of this nation from the election of 2024 forward must deliver this speech's equivalent right here, right now.

Where is the candidate that will deliver this speech and demand it be backed with force of law, not just a threat to do so by Executive Order, down the road?  Were this to be policy there would be no market for "cancer treatments" that don't actually cure cancer.  You'd have to find answers to whatever is going on or you don't get paid.

The doctor who puts you on Statins and then 10 years later we find no change in all-cause mortality would have all of the funds paid by any PPACA or government program (e.g. Medicaid, Medicare, etc.) clawed back along with all the funds paid for the drugs.  No cure, no pay.

Is "Ozempic" the answer to obesity?  I don't know -- but if it isn't, and the all-cause rate of death does not go down in people using it for "weight loss" the same thing happens.  No cure, no pay.

Can you choose to do it anyway?  Sure!  You most-certainly can; this is a free country.

But if there is no cure, then no subsidized, socialized and forced payment scheme will fork up a single nickel, and during the period of time when something new is going on that we do not understand very well, such as *****, the people choose -- not the government, not the hospitals, not the doctors and not the pharmacists.  Those who try to prevent you from choosing take personal criminal liability if you are prohibited that choice and then die.  If a threat to your person is in fact lethal then you have every right to make the decision as to which countermeasures you will use and which you will not in a free nation.

You choose, and you accept the consequences since, in the end, all such consequences are always personal.

No?  You won't stand up here and now and enforce all of the above?

Then we deserve to fail as a nation, and fail we shall.

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2023-03-24 07:00 by Karl Denninger
in Musings , 484 references
[Comments enabled]  
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Let's run a bit of a thought experiment.

There are two of us in this economy -- you and I.  We're both adult males.

We both desire sex but there are no women around.  Therefore I agree to pay you $100 for two blowjobs.  You deliver them and I give you the $100.  Then, as you didn't get any satisfaction out of that, you agree to pay me $100 for buttsex; I bend over, we complete that transaction and you give me back the original $100 I had in my wallet.

GDP has increased by $200, but was there net economic benefit to anyone from this pair of transactions?

No.

The same $100 that was in my pocket when we started is still there.  Your wallet is still empty.

Exactly zero economic benefit inured to anyone.  Not you, not I, nobody.

Further, our activity could not generate a child (that's physically impossible) so propagating the species and thus furthering the economy down the road (which is a net economic benefit, albeit in the longer term) is impossible.  Worse, if one of us has a sexually-transmissible disease the entire exercise now has a risk of negative net economic outcome in that one or both of us might be materially harmed.

You can scream about the contrived nature of this but it makes a very clear point: While some services (e.g. repairing your car) involve an exchange of tangible benefit on the part of both parties, and advance both party's economic position (your car now operates properly and the mechanic now has $100 he did not have before) many do nothing of the sort.

What "benefit", for example, does Facebook have to you as a consumer?  Actual tangible benefit?  Do you get anything from said interaction that is of tangible value?  99.9% of the time -- no.  Ditto for Twitter and all other forms of social media yet every "dollar" spent to deliver them all accretes to GDP.

As economies tend toward service delivery everyone seems to think this is fine in terms of GDP and treats them all such services equally in that regard.  That's nonsense.

Every delivery of a tangible good is in fact a tangible good.  The chicken is edible, and therefore sustains life.  The water delivered from the tap, likewise -- you can drink it, wash your clothes or body in it, etc.  The electrical power or natural gas runs your lights, stove and heats the house.

But many services in fact deliver very little or nothing at all.  This is not universally true, of course -- the hotelier delivers something of tangible benefit although it is a service -- shelter that allows you to rest in relative safety and comfort compared with the alternative on the sidewalk.  The restaurant or bar delivers food and beverage; that its more expensive than the same thing prepared or consumed at home doesn't change the fact that both do contain calories and thus sustain life.

You can argue that the above exchange at the top of this article provides joy to both participants but you'll note that nobody ended up with an economic advantage; the distribution of "things" and "money" were the same at the beginning and end of the process.

Perhaps its time to segregate out services such that some have their "price" imputed to GDP in whole (e.g. the mechanic who fixes your car), some have none (the blowjob) and some have only part of the whole imputed (e.g. the caloric content of a restaurant meal or the physical value of the beer in a bar.)

The rest we still count as "gross" GDP but the percentage of services that are parasitic -- that is, have no actual return to anyone in terms of improving their condition -- is totaled up and stated as a percentage of the whole as a cost offset against the whole, with the actual net, and thus our view of whether the economy is expanding or contracting being only counted as the net of parasitic loss.

Think about how this would change views on the economy in America.

Now only that which actually improves someone's condition in a tangible way would count.  Handing $100 bills for a "service" that has no tangible outcome improves nothing and thus is accounted for as no more than economic masturbation.

The worthless cancer treatment that costs $500,000 but you still die does not count toward GDP at all.  You had to earn the money but you got nothing for it so it does not count.

However, the treatment that actually saves your life does count because it is a net addition to your person.

None of the money paid to a hospital over the last three years if the patient with ***** died would have been counted in GDP.  Further, to the extent that the government paid said funds all of that would be tallied officially as government WASTE exactly equivalent to lighting $100 bills on fire.  Treasury would be forced to account for this percentage among government spending just like everyone else.

Even better within government and the private sector we could now separate out and state as a statistic the percentage of funds that a particular entity (e.g. business or government organ) wastes .vs. that which produces something of value.  A school, for example, that failed to produce students that could meet math or reading standards would have its entire economic cost -- salaries, building depreciation, maintenance, power and similar -- counted as government waste -- and not accrete to GDP.

Money spent on a war has no tangible benefit to anyone, obviously.  That would count as economic waste as well -- unless, following said war, we seized the land and extracted the expense back into our nation in which case its neutral.

Are some parasitic expenses necessary?  Of course.  You do proactive things to evade a potential larger cost even though you get no tangible benefit from the act itself.  Avoidance is not benefit.  That's common and there's nothing wrong with it but you have to account for it properly.

How different would our view of the economy and forward outlook for America be if the data was presented this way, and in order to "count" toward GDP real benefit had to be quantified and realized by the parties in the transaction?  Ephemeral (e.g. "feelings") outcomes do not count as they can't be quantified, so the two "transactions" at the top are analyzed entirely on the monetary exchange which nets to zero.  Those two transactions therefore count as zero net-net.

This also eviscerates the "intellectual property" component of the GDP series, of course, in that until said is monetized and someone gets actual value out of the transaction it doesn't count.

How different would our economic worldview be of the United States with this discount applied as we've offshored production of physical things -- replacing them with alleged "GDP" that is in fact ephemeral and does not supply actual tangible value to anyone?  How would this change our way of evaluating businesses, not just elements of the government?

Something to contemplate....

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2023-03-23 07:00 by Karl Denninger
in Market Musings , 691 references
[Comments enabled]  

"Nearly all participants see the risk for GDP growth to the downside." - Powell, yesterday, presser statement.

So what?

The terminal expected rate remains over 5%.  If inflation is in fact under 5% then this is a positive real interest rate.

In real terms for the lower strata of earnings real wages are decreasing on a per-week basis.  Per-hour does not matter if your hours are being cut; what matters is real return on labor by the person performing the labor.

2% inflation is in fact theft of your productivity gain, times two.  Historically the American worker has produced about a 2% productivity increase per year; this should be yours across the economy and not stolen and redirected to only a few, such as stockholders and executives.

A positive real interest rate curve detonates the existing "cash furnace" games and prevents new ones.

Powell is correct in that allowing banks 12 months to figure out their duration and rate issues and resolve them was probably reasonable in light of the conditions.  But they caused those conditions and imbued the markets -- particularly the lending markets -- with the idea that they would never restore a positive real rate across the curve.

Nobody in their right mind would give you under 3% 30 year mortgage money otherwise, as that would require literally zero inflation over the entire 30 year period to be reasonable.

But those rates did in fact exist, didn't they?

Those rates drove "price" because people buy payments, not a house.  The same is true for autos and other major consumer purchases.

Again as I wrote yesterday if you want to know the sort of crazy that "Zero interest rates" -- or negative real rates of any sort -- enable and cause you need only look at the employees who obviously do nothing valuable for the organization paying them.  Indeed a person "paid" $100,000 a year if the company can borrow at 1% can be "employed" not for $100,000 a year but for $1,000 a year -- the cost of interest on the $100,000!  So long as rates never go up neither does that long-term and forward cost.

From the standpoint of the "company" involved in this that's "free."  It isn't free; you pay for it, and its forcibly extracted from you with no capacity to refuse except by actually toppling the government by force.

At the same time Congress apparently came to believe that they too could run the credit card without limit and not have to pay for it.  Just as META could hire someone simply to keep them from working for someone else and pay them $100,000 while costing them only $1,000 the government could hand out trillions of dollars without having it immediately show up in inflation to the extent that their spending exceeded collected taxes.

Both of these paradigms require the impossible, and the time that we can pretend it will continue has now passed.

The press still considers "tighter credit conditions" will "choke off growth."

A bunch of people seeking a cry room as a primary employment benefit and being hired to keep them from working for someone else, or even themselves, is not "growth."  It's a scheme and it robs you, the person who actually does perform some sort of labor, of some of your money to give to those who do nothing of value.

The premise of capitalism is that markets figure this out -- that is, the 330 million Americans make that determination by spending money where they think there is value and not spending it where they don't.  How do we do this when despite 30 "dating apps" there is one company that owns all of them?

How do we decide that we'd rather rent than buy as a pushback to too-high house prices when Blackstone comes in and for one percent of the cost of the apartment buildings buys them all up and doubles the rents?

How do we decide which car we'd like to buy when all of the companies double their prices because most people buy payments and thus instead of a $30,000 reasonably-equipped half-ton pickup the same truck is now $60,000 no matter which company you buy it from?

And how do we decide which cellular phone we want to buy when there are only two operating systems and only one where more than a single manufacturer makes the hardware?  Yes, Samsung and Google have different cameras in them but the operating system in both is the same and your only other choice is Apple -- all made by them.

How about health care?  Didn't we just have a virus show up a few years ago?  Originally some doctors tried different things, and some of them found great success too.  They all got stepped on if any of it interfered with the adopted narrative which, by the way, was to offer no treatment of any kind until you got sick enough to go to a hospital and then the hospital was paid a literal bounty if they followed a certain treatment modality.  This was very-clearly intended to cause a significant percentage of people to have a medical bill 100 or even 1,000 or more times what it should have been -- and they didn't care if you died as a result as the hospitals got paid extra for that too.  It wasn't just physicians that got blackballed for going against this -- Henry Ford Hospital system, arguably the finest in the Detroit metro area, published study results from their clinics and hospitals in July of 2020.  That article is no longer online and has been scrubbed from the internet archives; it detailed their strongly-positive results with "as soon as trouble is detected" treatment with a particular drug of note against ***** which was not part of the bonus program and then after Fauci went after them published a note saying they would have no further comment due to his attack -- and quite-effective blackmail. Those folks are not a "one off" or some "witchdoctor" outfit; this is a highly-respected and huge medical system that has served a major US metro area for decades and their original note reported a fifty percent reduction in mortality by using their treatment paradigm.

Think about that folks -- half, and this was waiting until people got extremely sick and were at the hospital entrance.  What if they had started sooner?

Even if this later proved to be wrong isn't the entire point of capitalism that people make decisions and own the results?  By observing other people's decisions and the results the market ejects those poor outcomes and rewards the good ones.  When you can forcibly exclude that consideration either by monopolist practice or simply allowing people to steal their funding from others via inflation and both exclude productive innovation and the penalties for engaging in non-productive, wasteful ideas then that healthy feedback mechanism is destroyed.

Like it or not the "easy money" monetary polices are over.  Real wages in terms of actual, real earnings power for the service industry are falling.  Without those people you have no gas stations, you have no bars or restaurants, there is no hospitality and thus no tourism and everything that goes along with that collapses.

"Oh, just pay the bartender more?"  Will you pay $10 for a beer?  No?  Well that's the consequence of your simpleton "solution" and guess how many beers the bar sells at $10?  If they try to do that nobody buys the beer and the bar closes -- and now the bartender makes zero.

The "free money" era is over.

It will not restart because it can't.

You can't have 5, 6 or 8% inflation for the next several years; consumer credit card balances are at all-time highs, most of those cards are charging 20%+ interest on carried balances, real wages in the industries required for everything else to be functional are declining and there is no absorption available in the economy for more extraction.

The ramp in M2 over the last ten-plus years must come back out.

When it does the impact on asset prices will be dramatic.

Prices must not go back to "2% inflation" the inflation of the last 20+ years must come back out.  All of it, especially in housing, food, hospitality and those places that have "gone corporate-extraction racket" such as health and dental care for both humans and animals along with post-secondary education.

Congress must halt all deficit spending.  Now.  Not some fairy-tale land nonsense about "over 10 years", now.

Those firms that make nothing, have no reasonable path to make anything and are cash furnaces will fail.

The people employed by said places will lose their jobs.

The places where that has wildly driven up housing costs and similar (which, due to the pandemic and "remote work" is most of them) will see massive waves of defaults and said prices will collapse.

Commercial Real Estate is in severe trouble because virtually all of that is financed on rolling paper and the next roll is going to come at much higher rates.  Attempt to raise rents and the tenants blow up.  I'm already seeing this on both sides in this region -- attempted rent increases by the landlords along with falling ticket sizes from the customer and fewer customers buying anything.  This is not going to go away for a long time until balance is restored and that may well take five to ten years complete with the knock-on effects in tax collections (both sales and property taxes, specifically.)

The ZIRP-driven shift in tourism-driven places and those "businesses" that are arbitrages on the people allegedly providing the "services" (e.g. AirBNBs, Uber, etc.) will see their pricing get reamed as the cost of buying a house or car to put on that sort of program or operate within it has gone way up at the same time the money that people can spend goes down.  A 75% loss in price is not unreasonable and that might be optimistic.

Do not be surprised if SPX trades 1576 -- or less.

The bubble has been that big, that broad and that ridiculously overinflated.

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2023-03-22 08:49 by Karl Denninger
in POTD , 99 references
 

 

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2023-03-22 07:00 by Karl Denninger
in Federal Reserve , 791 references
[Comments enabled]  

So let me guess -- you think The Fed should, or even must, halt rate increases -- and even cut rates?

Why?

"Oh, because SVB failed, Credit Suisse had to be taken over, and if we don't the markets might crash"?

Really?

Would this be a terrible thing?

Tell me again how its economic for companies like Facebook ($META) to pay people they have no current need for simply because they don't want someone else to hire them?  Pay them to sit on their hands or play with themselves, which sounds ridiculously stupid until you realize exactly how and why that happened.

Do you know how it happened?

The company goes out and "borrows" the money to pay said person and believes, because of extremely low rates that "never go up", they will never have to pay it back.  So instead of $100,000 a year (for example) they're just paying the below-inflation interest on it, 1% of the wages, or $1,000.  Yes, the rest is technically borrowed but remember they never intend to pay the principal and, if you look at the corporate borrowing level on FRED you'll see that until rates started to go up in earnest they never did pay of any of it back.  Indeed during previous recessions the decrease in corporate borrowing was in fact bankruptcies.

What damage does this do the economy as a whole?  Lots.  That person could go work somewhere else, start a small business, invent something.  Instead they're paid to literally masturbate, and if you think this is one company or two tell me how Elon Musk fired more than half of the employees at Twitter and the firm is still operating.

The long-term damage of negative real interest rates is found right there.

Is that all?

No, of course not.

The same thing happens across the board.  SVB failed not because it made bad loans; the bank failed because it was a conduit for startups which had no income of note; they were all money losers, and their book of business was concentrated there.  This meant that unlike every ordinary bank in the United States nobody was depositing their paychecks and no car dealers were depositing the checks with which cars are bought into that bank.  Their cash was replenished only because of new money-losing deals funded by VC guys who could borrow at 1%.  As soon as that went away the financing costs to remain liquid by pledging things rapidly increased beyond their cash flow and, when they tried to sell long-term assets nobody would pay full price because the new ones of the same sort paid more interest; the discount to get someone to take them sunk the firm.

The entire bank's operation was uneconomic from the outset of their doing this and nobody cared as long as the music played.  The regulators are supposed to prevent this but not only didn't they they allowed the bank's CEO to sit on the regulator's board (San Francisco Fed) and had other directors who had been part of other institutions that blew up in 2008 and thus had a history of doing and permitting stupid, uneconomic things the last time around.

Do you think the regulators didn't know?  They did -- for more than a year and intentionally failed to stop it.  Just as they did with IndyMac and, most-infamously, with WaMu which published their quarterly report in early 2007 that showed they were paying dividends with money they didn't actually earn and which I reported on at the time.  Obviously if you do that for long enough you will blow up, no matter how much you start with.

Why didn't The Fed stomp on this?  Isn't it obvious?  The bubble was good; all those worthless start-up companies employ people at $200,000 a year even though they can't code (or think, for that matter) worth a damn and this doubles the price of houses and taxes in California and elsewhere.  At the same time stock prices roar.  It matters not that you're paying people to be a Chief Risk Officer with a Masters in Public Administration; she checks all the right boxes and cry rooms are more important than lines of working code, you see, so it's all good since it makes everyone feel good and both stocks and house prices go higher.

For a while anyway, until you can't borrow at 1% anymore and you can't maintain that illusion because inflation spikes since you keep putting credit into the system without improving the amount of actual value in goods and services you get back out in amounts greater than the credit put in.  In fact you get less than $1.00 worth of output for every $1.00 of credit in real terms and thus the more of this you do the worse the problem gets as you keep discounting the actual value of every dollar of credit -- which spends just like produced money -- that is in the system.

How many other institutions are and have been doing the same sort of garbage?  It appears that Signature Bank in NY which had Barney Frank on the board was doing the same sort of thing in the crypto space.  Was it as egregious?  I don't know; there isn't enough public information to know but what's reasonable to assume is that any institution that is playing "conduit" to these sorts of loss-making events where the only way you can keep the game going is for the next deal to show up because your book of business is wildly-unbalanced and doesn't get the ordinary cross-flow of transactions that your local bank or credit union does is subject to the same risk.

When the METAs of the world, never mind banks, can no longer fund speculative, pie-in-the-sky nonsense at essentially zero carrying cost and in fact are threatened with a roll-over of that existing debt at several times the current interest payment then all of these uneconomic schemes stop.

When that happens I have to actually get more than $100,000 worth of work out of that employee to keep him on the books as I can't just keep forking up $1,000 a year to fill the seat and stop him from working for someone else.  In other words I have to actually have something productive that comes out of the money I spend because I have to pay for it out of cash flow and actually pay down some of the debt.  If I can't do that the person loses their job and if I can't repay the debt or pay the new interest rate when that debt rolls over my company blows up, it should blow up, the shareholders will and should lose everything and the bondholders should get whacked too because they bought something stupidly on the premise that trees grow to the moon and, in the case of public companies it is in fact all in the quarterly reports so you can't say "I didn't know."  You were either willfully refusing to look or you were a willing and active participant in the candy-crapping Unicorn fantasy.

The entire concept of "climate change" as a reason to drive business one way or another is dumb.  If climate is changing and you're wrong about why or fail to force everyone else to go along then you are putting all of your eggs in the wrong basket and you will fail as a concern or even a NATION if you lose the bet on the why, even if the event occurs.  That is a bet nobody has a right to force on anyone else, ever, period and thus such a course of action is STUPID.

If you're reasonably sure the water will rise, for example, your options are to try to change what you believe is causing it or you could build a seawall.  If you try to change what is causing it and are wrong, or even if you're right but can't get everyone else to go along with your scheme you blow all the money on that so-called directional change and get nothing in return -- and worse, your nation, city or building floods anyway.

If you build the seawall you spend the same money but irrespective of why the water rises provided the wall is high enough your investment in said insurance functions as designed.

There is only one of those two options that a dispassionate analysis will ever choose without either force or fraud unless you can prove, beyond any doubt, that the reason the event is coming is in fact what you think it is and you can get everyone to go along with your analysis.

So much of what has gone on over the last 15 years since the 2008 crash, and in fact all the way back to the 1990s tech bubble, is predicated on this sort of fantasy-land nonsense.  Its not just in "climate" -- its also in what we did with *****.  Paying people to use "treatment protocols" kills, while paying for live, unharmed persons who get the disease will cause people to innovate because the only reward comes from success.  We killed one million Americans this way over the last three years and exactly nobody has been held accountable for it.  This stupidity is also found in all elements of "ESG" and "DIE" generally.  Hiring on anything other than merit is stupid because the other guy will hire the person you overlooked who had a superior capability and then will pound you over the head with his better enterprise productivity.  Without some sort of force or fraud any sort of "ESG" or "DIE" component, no matter if it is in business, education or anywhere else fails every time for this precise reason.

You may think you "benefit" from these uneconomic schemes in some way.  You're wrong; they all steal from you.  Every one of them.  The dude yanking off at META is not developing something that has a crack at being successful.  Every dating app is basically the same these days, is it not, and none of them have done a positive thing for long-term pair relationships.  Why?  Because Match.com owns essentially all of them and has since 2019 -- thus the destruction they all serve up on the American "commercialize women's sexuality, wreck men and ruin the pair-bonding dynamic" paradigm goes unchallenged and as they have had access to near-zero-cost capital they've simply bought up or stomped anyone that might break that and put their "success" at risk.

Housing?  The "big builders" all have destroyed the single-family home landscape in concert with municipalities and states on "requirements" to build with the result of raising prices to the point that a young couple can't find a way to make home ownership work.  Then the Blackstone's of the world buy up all the potential rentals with the very same 1% interest rate loans and double the rents.  So if you're a young person -- or a young couple wanting to have and raise a family -- you're hosed unless you gamble on this continuing forever so you can manage to refinance out of the hole at some point into even lower rates.  That is a sucker bet and likely to ruin you; it was a reasonable wager in the 1980s, but not now.  If you owned a house before the crazy started before roughly 2004 or the latest cycle of insanity in 2019 you were probably told how "great" that price ramp is for youYou're wrong and the person who tells you that is lying -- if you sell you must buy another overheated house so you gain nothing except potential exposure to capital gains taxes if your difference in sale price and basis is above the threshold.  The Realtor however gets paid a percentage of the sale price so he or she loves a doubled house price as that directly doubles their commission, the bank writes a loan on the inflated price so you pay much more interest over time and your property taxes are assessed as a percentage on the alleged "value" as well so your county and local authorities absolutely love giving it to you without lube!

The only way to "win" when it comes to a housing bubble is to die in that then your heirs get the inflated value of said house!

How about cars?  How do you "win" when the truck that was $35,000 now costs $70,000?  You don't; you either pay double the payments or, if you can't, you take a much longer loan, you're upside down for a huge amount of time, the vehicle is more complex and more-likely to break as a result and to add insult to the situation your car insurance cost skyrockets as well because it costs much more to fix or, if its destroyed or stolen replace, a $70,000 truck than a $35,000 one.

Wake up folks.

I don't know what Powell is going to do today but what he should and indeed must do is stay the course until there is a positive real rate of interest everywhere on the curve.  At today's inflation rates this means 8% Fed funds and a 10%+ 10 and 30 year Treasury yield, along with a roughly 10% mortgage rate and corporate borrowing rates about 100 bps over those Treasury yields.

Oh by the way the inflation target should be negative the rate of productivity gain.  Why?  Because all of us caused that by working better and smarter -- that is, doing more with less.  The fruits of that effort over time are not the banks or our employers, they belong to everyone and thus absent active interference what you'd have is a mild deflation -- that is, you can buy more with less by the same ratio as you improved productivity.

If you want to borrow as a corporation you have to be able to produce more than the interest cost in additional output or you will go bankrupt.  Since the output is measured in nominal (that is, "inflated") dollars the interest cost must always be higher than inflation or you are funding non-economic wastes of capital which, over time, eventually destroy the capital base that allegedly backs the loans and all the other businesses get screwed out of competing as a result of it.

Mathematics is not a suggestion.

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