{"id":1436666,"date":"2023-11-01T12:43:44","date_gmt":"2023-11-01T16:43:44","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1436666"},"modified":"2023-11-01T12:43:44","modified_gmt":"2023-11-01T16:43:44","slug":"war-for-longer-to-think-markets-can-keep-sailing-through-what-we-are-seeing-is-delusional","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/war-for-longer-to-think-markets-can-keep-sailing-through-what-we-are-seeing-is-delusional\/1436666\/","title":{"rendered":"“War For Longer” – To Think Markets Can Keep Sailing Through What We Are Seeing Is “Delusional”"},"content":{"rendered":"

“War For Longer” – To Think Markets Can Keep Sailing Through What We Are Seeing Is “Delusional”<\/span><\/p>\n

\n

Authored by Michael Every via Rabobank,<\/em><\/p>\n

Friends: The One With the Pogroms<\/a><\/strong><\/h2>\n

This Daily tries to hammer home that the world we all loved from 1994 to 2004 is over. Symbolically, actor Matthew Perry, Chandler Bing from Friends, the must-watch sit-com from that era still popular on streaming today, sadly died this week at 54. Of course, the world where you were \u2018always stuck in second gear\u2019 and yet lived in vast apartments in Manhattan on low-wage jobs went long before Matthew.<\/strong> Contemporary Friends episodes would be \u2018The One Where Nobody Can Afford to Go to Central Perk\u2019, or \u2018The One With Homelessness\u2019.<\/p>\n

Friends also took place under the invisible shield of US global hyper-power. 9\/11 was three years before the show ended, but it didn\u2019t ruffle Rachel\u2019s hairdo<\/strong>. The second Iraq War was in 2003, yet nobody enlisted. Yet now we have rolling coups in Africa, war in Ukraine and the Middle East, and worries of where next. Indeed, some argue the \u201cUS isn\u2019t ready for a war of great powers<\/a>\u201d, and, \u201cAmerica\u2019s adversaries are preparing for wider conflict – to prevent war, it needs to do so as well<\/em>.\u201d Do you know what that will cost given that the US cannot *physically* do it? And do you know what the cost is of\u00a0not<\/em>\u00a0doing it? The Friends episodes here are \u2018The One With Rate Hikes and MMT\u2019, and \u2018The One With Global Bifurcation\u2019. Even if Biden and Xi meet this month, it\u2019s no longer the day, week, month, or even the year to think that there are friends out there.<\/p>\n

At home, a Friends episode few would have foreseen in 2023 is ‘The One With the\u00a0Pogroms<\/a>‘. The \u2018Hannukah Armadillo<\/a>\u2019 needed his armour-plating to waddle round Manhattan or Brooklyn this year, as real-life Borat scenes play out in Dagestan\u2019s airport and in Western schools and universities<\/strong>, and Stars of David and swastikas are sprayed on Jewish homes and businesses in Western cities.<\/strong><\/p>\n

<\/a><\/strong><\/p>\n

My Alma Mater just saw its academic union call for \u201cIntifada until victory\u201d, being a \u201csocialist federation in the Middle East\u201d, which is not what\u00a0Islamist\u00a0<\/em>Hamas is aiming for: even Joey could see that.<\/p>\n

It should go without saying that no matter how angry one gets, how well intentioned one is, or how just the cause might be, Star of David graffiti, broken windows, and modern echoes of \u201cDeutsche, kauft nicht bei Juden!<\/em>\u201d trigger painful memories in Europe and Israel. They only harden attitudes; and at worst, they are part of the pogrom, not the solution.<\/strong><\/p>\n

Russia blamed Ukraine for events in Dagestan(!) However, the Moscow Times notes, \u2018\u2018National Emergency\u2019: Russian Officials Slam Failure to Prevent Anti-Israeli Riot in Dagestan<\/a>\u201d, and adds:<\/p>\n

\u201cThe anti-Israeli riot in Russia\u2019s republic of Dagestan has exposed the Kremlin\u2019s failure to maintain stability as it has exerted total control over the country, three Russian officials, a former Kremlin official and independent experts\u00a0[said].\u00a0<\/em><\/p>\n

“This is\u00a0a national emergency. It’s a failure of everyone: the domestic policy supervisors in the Kremlin, the special services and the local authorities,” <\/strong>said a Kremlin official who previously worked in the security services…\u00a0<\/em><\/p>\n

[Another]\u00a0former Kremlin official\u2026 agreed with that assessment. <\/em><\/p>\n

Another\u2026 in the Russian government said he and his colleagues felt confused as they watched the events\u2026. <\/em><\/p>\n

“In my inner circle, almost everyone is at a loss. This is a complete replay of the Prigozhin rebellion,” <\/strong>a Russian government official said.\u201d<\/em><\/p>\n

For markets – because this IS about markets, even if markets can\u2019t see it – anyone with historical memory or cross-disciplinary thinking, or common sense, can see that\u00a0once societies get to the point where \u2018pogrom\u2019 is reintroduced into the vocabulary, things can spin out of control fast.<\/strong><\/p>\n

In related respects, they already are.<\/p>\n

One of the Stanford law students who organised the shouting down of a federal judge judge this year has just been appointed to serve on a search committee for the Law School\u2019s next dean; and the final of a prestigious US national High School debate contest on the role of the IMF (a good economic topic!) was just won by the team which (\u201cbravely\u201d, said judges)\u00a0refused to debate that topic at all<\/em>, instead talking about social justice.<\/p>\n

In reply, evolutionary biologist Bret Weinstein argues:<\/p>\n

\u201cThese kids ARE learning. They aren\u2019t learning how to think, but how to get what they want with credible threats.<\/strong> <\/em><\/p>\n

Imagine you\u2019re on trial for a notorious crime of which you are innocent, and one of these kids, now all grown up, is representing you but doesn\u2019t like your politics. <\/em><\/p>\n

Or the judge, prosecutor and defence attorneys all agree that your adherence to some belief that nearly everyone shared at the turn of the 21st century makes you very bad – and so the facts of your case are beside the point because society is better off with you safely locked away.<\/em>\u00a0This madness is already affecting the courts. At some point it will dominate them. And there can be no West without impartial courts obligated to follow rules that favour no one. We must #RekindleTheWest. Immediately.\u201d<\/em><\/p>\n

One of the key problems we face in doing so is that the IMF represents the ideas responsible for economies that produces the zero-sum outcomes that have led us to a mentality where we can win debates about it by not mentioning it; and that was before we threw the truly zero-sum Middle East conflict into the mix.<\/p>\n

As comedian\u00a0Konstantin Kisin<\/a>\u00a0noted in a recent address to the \u2018Alliance for Responsible Citizenship\u2019, a new think-tank aimed at rekindling the West while the Global South wants to throw it on the kindling, our youngsters won\u2019t try to conserve a system which gives them no hope of a good job or ever owning a home.<\/strong> He exhorted the rich and big business to develop a higher calling and give back in order to save the system that made them wealthy. As I\u2019ve flagged before, this echoes the economist Schumpeter\u2019s late-life switch from free markets<\/strong> to backing \u2018Catholic Economics\u2019 with a moral core focused not on the bottom line, but on the common good.<\/p>\n

Can you imagine the market implications? <\/strong><\/p>\n

Better start trying, perhaps(?) \u00a0<\/p>\n

Meanwhile, an Israeli airstrike has killed dozens in Gaza after buildings collapsed into the cobweb of Hamas tunnels built underneath them. Yemen\u2019s Iran-backed Houthis have declared war on Israel after firing more ballistic missiles at it, which were brought down by the US and Saudi Arabia. Israel has stated it intends to deal with Hezbollah once it is done with Hamas, underlining our view that Hezbollah is likely to fight\u00a0alongside\u00a0Hamas once Israel fully commits on the ground, and that Iran will back Hezbollah, leading to a regional war.\u00a0The Saudis confirm they are still ready for an Israel peace deal and US defence guarantee<\/a>\u00a0(once the war is over: if the US wins), which surely brings them into the future line of fire: their military went on high alert yesterday. Elsewhere, Turkish protestors are threatening to force the US to remove nukes from the Incirlik airbase, and Chile, Colombia, and Bolivia are all recalling their ambassadors from Israel.<\/em><\/p>\n

For those thinking that China might help,<\/strong> note\u00a0Baidu and Alibaba have both removed Israel\u2019s name from their online maps, and have changed the country\u2019s border back to those prevailing under the UN Partition Plan<\/a>\u00a0(which Israel accepted and the Arab states universally rejected).<\/p>\n

China is incredibly fastidious with map names and the lines on them, as we know.<\/p>\n

Think past the BOJ moving away from yield curve control as JPY slumps past 151, bringing pointless threats of intervention;<\/strong> German CPI being close to its 1994 level again; the Fed presiding over the largest yield-curve shift since 1994, even as they do nothing on Fed Funds today; and China saying it will set up an unspecified long-term mechanism to resolve local-government debt, as it did in the 1990s (when it actually just grew its way out \u2013 something no longer possible).<\/p>\n

To think markets can keep sailing through what we are seeing\u00a0within<\/em>\u00a0the West and\u00a0between<\/em>\u00a0the West and others is delusional. <\/strong><\/p>\n

You want rising \u201cterm premia\u201d?<\/p>\n

How about military figures saying \u201cwar for longer\u201d, or intellectuals asking if Western society as we understand it will even exist in a decade or two?<\/p>\n

Try to put the right price on a stock, the long bond, or the exchange rate in a humourless world where there are no Friends, and everything is \u2018Bang!\u2019 not Bing.<\/strong><\/p>\n

Day ahead<\/strong><\/p>\n

Today\u2019s key data already saw a drop in the pace of growth of Q3 Kiwi wages with unemployment up to 3.9%, the highest in two years, and a m-o-m tumble in Aussie building approvals, along with a dip in the China Caixin manufacturing PMI from 50.6 to 49.5.<\/em><\/p>\n

Next, we see monthly PMIs from the UK and Europe, ADP employment in the US (+113k vs +150k exp), then the US S&P PMI, JOLTS job openings, and the ISM manufacturing survey.<\/em><\/p>\n

Then it\u2019s the Fed, where no changes are expected. \u00a0\u00a0\u00a0\u00a0<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 11\/01\/2023 – 08:43<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/war-longer-think-markets-can-keep-sailing-through-what-we-are-seeing-delusional<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

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