- The Return Of Industrial Warfare
The Return Of Industrial Warfare
Authored by Alex Vershinin via the Royal United Services Institute,
Can the West still provide the arsenal of democracy?
The war in Ukraine has proven that the age of industrial warfare is still here. The massive consumption of equipment, vehicles and ammunition requires a large-scale industrial base for resupply – quantity still has a quality of its own. The mass scale combat has pitted 250,000 Ukrainian soldiers, together with 450,000 recently mobilised citizen soldiers against about 200,000 Russian and separatist troops. The effort to arm, feed and supply these armies is a monumental task. Ammunition resupply is particularly onerous. For Ukraine, compounding this task are Russian deep fires capabilities, which target Ukrainian military industry and transportation networks throughout the depth of the country. The Russian army has also suffered from Ukrainian cross-border attacks and acts of sabotage, but at a smaller scale. The rate of ammunition and equipment consumption in Ukraine can only be sustained by a large-scale industrial base.
This reality should be a concrete warning to Western countries, who have scaled down military industrial capacity and sacrificed scale and effectiveness for efficiency. This strategy relies on flawed assumptions about the future of war, and has been influenced by both the bureaucratic culture in Western governments and the legacy of low-intensity conflicts. Currently, the West may not have the industrial capacity to fight a large-scale war. If the US government is planning to once again become the arsenal of democracy, then the existing capabilities of the US military-industrial base and the core assumptions that have driven its development need to be re-examined.
Estimating Ammo Consumption
There is no exact ammunition consumption data available for the Russia–Ukraine conflict. Neither government publishes data, but an estimate of Russian ammunition consumption can be calculated using the official fire missions data provided by the Russian Ministry of Defense during its daily briefing.
Number of Russian Daily Fire Missions, 19–31 May
Although these numbers mix tactical rockets with conventional, hard-shell artillery, it is not unreasonable to assume that a third of these missions were fired by rocket troops because they form a third of a motorised rifle brigade’s artillery force, with two other battalions being tube artillery. This suggests 390 daily missions fired by tube artillery. Each tube artillery strike is conducted by a battery of six guns total. However, combat and maintenance breakdowns are likely to reduce this number to four. With four guns per battery and four rounds per gun, the tube artillery fires about 6,240 rounds per day. We can estimate an additional 15% wastage for rounds that were set on the ground but abandoned when the battery moved in a hurry, rounds destroyed by Ukrainian strikes on ammunition dumps, or rounds fired but not reported to higher command levels. This number comes up to 7,176 artillery rounds a day. It should be noted that the Russian Ministry of Defense only reports fire missions by forces of the Russian Federation. These do not include formations from the Donetsk and Luhansk separatist republics, which are treated as different countries. The numbers are not perfect, but even if they are off by 50%, it still does not change the overall logistics challenge.
The Capacity of the West’s Industrial Base
The winner in a prolonged war between two near-peer powers is still based on which side has the strongest industrial base. A country must either have the manufacturing capacity to build massive quantities of ammunition or have other manufacturing industries that can be rapidly converted to ammunition production. Unfortunately, the West no longer seems to have either.
Presently, the US is decreasing its artillery ammunition stockpiles. In 2020, artillery ammunition purchases decreased by 36% to $425 million. In 2022, the plan is to reduce expenditure on 155mm artillery rounds to $174 million. This is equivalent to 75,357 M795 basic ‘dumb’ rounds for regular artillery, 1,400 XM1113 rounds for the M777, and 1,046 XM1113 rounds for Extended Round Artillery Cannons. Finally, there are $75 million dedicated for Excalibur precision-guided munitions that costs $176K per round, thus totaling 426 rounds. In short, US annual artillery production would at best only last for 10 days to two weeks of combat in Ukraine. If the initial estimate of Russian shells fired is over by 50%, it would only extend the artillery supplied for three weeks.
The US is not the only country facing this challenge. In a recent war game involving US, UK and French forces, UK forces exhausted national stockpiles of critical ammunition after eight days.
Unfortunately, this is not only the case with artillery. Anti-tank Javelins and air-defence Stingers are in the same boat. The US shipped 7,000 Javelin missiles to Ukraine – roughly one-third of its stockpile – with more shipments to come. Lockheed Martin produces about 2,100 missiles a year, though this number might ramp up to 4,000 in a few years. Ukraine claims to use 500 Javelin missiles every day.
The expenditure of cruise missiles and theatre ballistic missiles is just as massive. The Russians have fired between 1,100 and 2,100 missiles. The US currently purchases 110 PRISM, 500 JASSM and 60 Tomahawk cruise missiles annually, meaning that in three months of combat, Russia has burned through four times the US annual missile production. The Russian rate of production can only be estimated. Russia started missile production in 2015 in limited initial runs, and even in 2016 the production runs were estimated at 47 missiles. This means that it had only five to six years of full-scale production.
If competition between autocracies and democracies has really entered a military phase, then the arsenal of democracy must radically improve its approach to the production of materiel in wartime
The initial stockpile in February 2022 is unknown, but considering expenditures and the requirement to hold substantial stockpiles back in case of war with NATO, it is unlikely that the Russians are worried. In fact, they seem to have enough to expend operational-level cruise missiles on tactical targets. The assumption that there are 4,000 cruise and ballistic missiles in the Russian inventory is not unreasonable. This production will probably increase despite Western sanctions. In April, ODK Saturn, which makes Kalibr missile motors, announced an additional 500 job openings. This suggests that even in this field, the West only has parity with Russia.
Flawed Assumptions
The first key assumption about future of combat is that precision-guided weapons will reduce overall ammunition consumption by requiring only one round to destroy the target. The war in Ukraine is challenging this assumption. Many ‘dumb’ indirect fire systems are achieving a great deal of precision without precision guidance, and still the overall ammunition consumption is massive. Part of the issue is that the digitisation of global maps, combined with a massive proliferation of drones, allows geolocation and targeting with increased precision, with video evidence demonstrating the ability to score first strike hits by indirect fires.
The second crucial assumption is that industry can be turned on and off at will. This mode of thinking was imported from the business sector and has spread through US government culture. In the civilian sector, customers can increase or decrease their orders. The producer may be hurt by a drop in orders but rarely is that drop catastrophic because usually there are multiple consumers and losses can be spread among consumers. Unfortunately, this does not work for military purchases. There is only one customer in the US for artillery shells – the military. Once the orders drop off, the manufacturer must close production lines to cut costs to stay in business. Small businesses may close entirely. Generating new capacity is very challenging, especially as there is so little manufacturing capacity left to draw skilled workers from. This is especially challenging because many older armament production systems are labour intensive to the point where they are practically built by hand, and it takes a long time to train a new workforce. The supply chain issues are also problematic because subcomponents may be produced by a subcontractor who either goes out of business, with loss of orders or retools for other customers or who relies on parts from overseas, possibly from a hostile country.
China’s near monopoly on rare earth materials is an obvious challenge here. Stinger missile production will not be completed until 2026, in part due to component shortages. US reports on the defence industrial base have made it clear that ramping up production in war-time may be challenging, if not impossible, due to supply chain issues and a lack of trained personnel due to the degradation of the US manufacturing base.
Finally, there is an assumption about overall ammunition consumption rates. The US government has always lowballed this number. From the Vietnam era to today, small arms plants have shrunk from five to just one. This was glaring at the height of the Iraq war, when US started to run low on small arms ammunition, causing the US government to buy British and Israeli ammunition during the initial stage of the war. At one point, the US had to dip into Vietnam and even Second World War-era ammo stockpiles of .50 calibre ammunition to feed the war effort. This was largely the result of incorrect assumptions about how effective US troops would be. Indeed, the Government Accountability Office estimated that it took 250,000 rounds to kill one insurgent. Luckily for the US, its gun culture ensured that small arms ammunition industry has a civilian component in the US. This is not the case with other types of ammunition, as shown earlier with Javelin and Stinger missiles. Without access to government methodology, it is impossible to understand why US government estimates were off, but there is a risk that the same errors were made with other types of munitions.
Conclusion
The war in Ukraine demonstrates that war between peer or near-peer adversaries demands the existence of a technically advanced, mass scale, industrial-age production capability. The Russian onslaught consumes ammunition at rates that massively exceed US forecasts and ammunition production. For the US to act as the arsenal of democracy in defence of Ukraine, there must be a major look at the manner and the scale at which the US organises its industrial base. This situation is especially critical because behind the Russian invasion stands the world’s manufacturing capital – China. As the US begins to expend more and more of its stockpiles to keep Ukraine in the war, China has yet to provide any meaningful military assistance to Russia. The West must assume that China will not allow Russia to be defeated, especially due to a lack of ammunition. If competition between autocracies and democracies has really entered a military phase, then the arsenal of democracy must first radically improve its approach to the production of materiel in wartime.
The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.
Tyler Durden
Sat, 06/25/2022 – 23:30 - Airlines Say Understaffed FAA "Crippling" East Coast Traffic
Airlines Say Understaffed FAA “Crippling” East Coast Traffic
Last week, Transportation secretary Pete Buttigieg warned airlines that they faced federal government action—presumably including fines—over mounting flight cancellations and delays. While pilot shortages won’t be quickly resolved, Buttigieg urged airlines to hire more customer service representatives to help customers rebook when things go wrong.
On Friday, the airline industry group Airlines for America (A4A) turned the tables, saying the Federal Aviation Administration’s own understaffing is “crippling” East Coast air traffic. The group’s members include American Airlines, Delta, United, Southwest, JetBlue and Alaska Airlines as well as shippers FedEx and UPS.
“One of our A4A member carriers estimates that air traffic control (ATC) related issues were a factor in at least one-third of recent cancellations,” the letter said. The group asked Buttigieg to arrange a meeting in which the FAA would share its controller staffing plan for the July 4th weekend and the rest of the summer travel season.
In a diplomatically-worded letter to Buttigieg, Airlines for America called out air traffic control shortages at two key FAA facilities:
- New York Terminal Radar Approach Control (TRACON N-90). Located in Westbury, Long Island, this facility acts a single hub controlling approaches to JFK, Newark and LaGuardia airports, along with dozens of smaller airports, including Teterboro and Long Island MacArthur.
- Jacksonville Center (JAX). This Jacksonville, Florida facility controls 160,000 square miles of airspace parts of Florida, Georgia, Alabama and the Carolinas—including airspace over 225 civilian and 20 military airports.
The two-page letter notes that “JAX has been understaffed for 27 of the last 30 days, which is crippling to the entire east coast traffic flows.”
Jacksonville Center is one of 20+ domestic control centers overseeing flights during the “en route” phase between departure and destination Buttigieg’s earlier shot across the industry’s bow came after his own flight was cancelled, forcing him to drive from Washington to New York. Fittingly, the cancellation happened on the day after Buttigieg met with airline executives.
“That is happening to a lot of people, and that is exactly why we are paying close attention here to what can be done and how to make sure that the airlines are delivering,” Buttigieg told the Associated Press. Approximately 2,800 U.S. flights were cancelled over Memorial Day weekend, and now July 4th looms large.
Airlines for America identified other opportunities to reduce pressure on the nation’s air traffic system, including:
- The establishment of “a real-time, dynamic scheduling and management tool of special activity airspace used by the Department of Defense (DoD) to optimize the use of the national airspace system for all stakeholders”
- “Reduction of airspace closures due to commercial space launches and more optimal scheduling of such events to avoid high-volume air traffic times”
The group also noted that U.S. air carriers reduced their planned summer flights by 15% compared to what they’d targeted at the beginning of 2022, and have “accelerated robust hiring and training programs in all areas, including flight crew, customer service agents and airport staff in addition to increasing pay for many positions.”
On Friday, the Air Line Pilots Association announced its approval of a new contract that would hike the pay of United Airlines pilots by more than 14% over the next year and a half, seemingly paving the way for similarly-large pay-hikes at competing carriers.
As we’ve previously reported, a pilot shortage is a major factor in the deluge of flight cancellations and delays. As United CEO Scott Kirby told investors,
“The pilot shortage for the industry is real, and most airlines are simply not going to be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years.”
We’ve also noted that an exorbitant training requirement imposed by Congress in 2010 as a knee-jerk reaction to a 2009 plane crash is needlessly contributing to the pilot shortage.
Tyler Durden
Sat, 06/25/2022 – 23:00 - CDC Investigating "Large, Ongoing" Outbreak Of Rare Disease In Florida
CDC Investigating “Large, Ongoing” Outbreak Of Rare Disease In Florida
Authored by Jack Phillips via The Epoch Times,
The U.S. Centers for Disease Control and Prevention (CDC) is investigating a “large, ongoing outbreak” of a rare disease in Florida.
In a press release, the CDC said Wednesday that meningococcal spread among homosexual males, including those with HIV, in the Florida outbreak.
“Getting vaccinated against meningococcal disease is the best way to prevent this serious illness, which can quickly become deadly,” said Jose R. Romero, the head of the CDC’s immunization and respiratory disease division, in the release.
“Because of the outbreak in Florida,” he added, ”and the number of Pride events being held across the state in coming weeks, it’s important” that homosexual men get the vaccine.
At least 24 cases and 6 deaths among homosexual males have been reported so far, according to the agency.
“People can find a meningococcal vaccine by contacting their doctor’s office, pharmacy, community health center, or local health department,” the news release said.
“Insurance providers should pay for meningococcal vaccination for those whom it is recommended for during an outbreak. In Florida, anyone can get a MenACWY vaccine at no cost at any county health department during the outbreak.”
The Florida Department of Health first issued an alert about an outbreak in Leon County several months ago.
…
Despite treatment, 10–15 in 100 people die of the disease, the agency says. Up to 20 percent of survivors may have long-term disabilities such as loss of limbs, deafness, brain damage, and problems with the central nervous system.
…
Tyler Durden
Sat, 06/25/2022 – 22:30 - FBI Raids Three Cult-Like Churches Said To Prey On US Veterans
FBI Raids Three Cult-Like Churches Said To Prey On US Veterans
FBI agents on Thursday raided three churches in the southern United States that have been accused of functioning as cults that prey on military veterans and active duty service members—and profiteer from their government benefits.
The Savannah Morning News reports that the three raided churches are associated with each other. Each is located near a U.S. Army base:
- The Assembly of Prayer Christian Church near Augusta, Georgia is just outside the gate of Fort Gordon
- The House of Prayer Christian Church in Hinesville, Georgia is less than eight miles from Fort Stewart
- The Assembly of Prayer Christian Church in Killeen, Texas is less than four miles from Fort Hood
Agents outside the Assembly of Prayer Church near Fort Gordon on Thursday (via WFXG FOX54) While the FBI has not released a statement, reporting suggests agents were executing search warrants without making arrests…yet.
In 2020, an advocacy organization called Veterans Education Success sent an 11-page letter to the Department of Veterans Affairs and the Georgia Veterans Service alleging that the churches “target veterans in order to access GI Bill funding, VA disability compensation and VA home loans.”
Former member Gladys Jordan—whose 28-year-old son remains in the church near Fort Gordon and refuses to talk to her—told The Daily Beast:
“They have a fraudulent Bible college and a so-called ‘home’ for the soldiers. They bring them in and give them a home-cooked meal, and from there… they have them lie to the VA to get into the Bible college, they steal their benefits, and they never get a diploma from there that’s worth anything because it’s not valid.”
In its letter, Veterans Education Success said it was approached by multiple veterans who said the church organization had defrauded them. In addition to being coached on how to mislead the VA during its curriculum inspections, the veterans said the church is “coaching veterans [to apply] for VA disability so they will receive 100% ratings and pressuring them into paying their disability compensation to [the church] through tithes.”
Many veterans who applied for VA disability had “nothing wrong with them and were told to falsely state whatever was necessary to get 100% for a specific disability,” former students told Veterans Education Success.
Police outside the House of Prayer Church near Fort Stewart (Lewis Levine for The Savannah Morning News) Former church members also say the church takes out mortgages in members’ names and forges signatures to do so. One service member said he returned from a deployment to Iraq to find five houses had been purchased in his name.
Former students at the bible college said they were compelled to recruit new students during class time. When base authorities shooed the student-recruiters away from barracks and post exchanges, the church resorted to sending students who were still on active duty to recruit in uniform. Some say higher-ranking active duty members would use their rank to force lower-ranking soldiers to attend the church.
Veterans Education Success says all of the military veteran former students interviewed by the organization’s lawyers used or exhausted their GI Bill benefits without receiving a completion certificate—for whatever that would be worth. Some attended the “college” for over 10 years.
Financial shenanigans are only part of the troubling tales. Former members also allege cult-like practices, including stalking of members who try to leave the church and even an attempted abduction. One church leader is said to claim to be one of the “last prophets” and that he communicates directly with God.
Amber Fitz-Randolph lives near Fort Hood and manages a Facebook page honoring installation soldiers who’ve died. She told Daily Beast the Assembly of Prayer is “absolutely a cult…(they) were sneaking into barracks at all hours to torment and threaten soldiers who wanted to stop going, or wouldn’t give them enough money.”
The Assembly of Prayer Church in Killeen, Texas (Lauren Dodd/Killeen Daily Herald) “The cult leader, Rony Denis, is infatuated with Jim Jones,” said Jordan. “This is a modern-day Jim Jones cult. That’s my scare, that he’s gonna take my son to another country and do the same thing that Jim Jones did.”
The three raided churches are just the tip of the iceberg: Former member says there are 12 churches in the network, 11 of which are near military installations.
If the organization and its leaders are truly comparable to Jim Jones, the FBI’s raid could foreshadow dangerous events for church members in the near future. After all, government scrutiny of Jones triggered the mass suicide of 909 people at his commune in Jonestown, Guyana.
From the FBI files, an aerial photo of the aftermath of the November 1978 mass suicide in Jonestown, Guyana Tyler Durden
Sat, 06/25/2022 – 22:00 - Canada To Spend Billions On NORAD So US Can Rule World
Canada To Spend Billions On NORAD So US Can Rule World
Authored by Yves Engler via AntiWar.com,
The Liberals are intent on funneling ever more of our collective resources to bolster the US Empire, spending lavishly to “modernize” Canada’s chief bi-national military accord. Early this week, Canada’s Defense Minister Anita Anand announced the government would spend $4.9 billion to upgrade the North American Aerospace Defense Command. The federal government said it will devote $40 billion to NORAD over 20 years, but it may be far more than that noted David Pugliese in a story headlined: “Cost to modernize NORAD set at $40 billion, but will final tally be higher?”
The media and government framed the announcement as strengthening Canada’s defenses. According to the Globe and Mail report, “the Canadian government has pledged $4.9 billion over six years to help upgrade North America’s air defenses, addressing the growing threat posed by hypersonic missiles and advanced cruise missile technology developed by Russia and China.”
Image source: Canadian Armed Forces But it’s absurd to present NORAD as a defensive arrangement. Its lead actor has 1,000 international bases and special forces deployed in 149 countries. Rather than protect Canada and the US, NORAD supports violent missions led by other US commands. In 1965 NORAD’s mandate was expanded to include surveillance and assessment sharing for US commands stationed worldwide (United States European Command, United States Pacific Command, United States Africa Command, etc.).
The Pentagon has put satellites into space to enable first strike ballistic missile defense (BMD). While Paul Martin’s Liberals claimed to oppose BMD, they granted “full cooperation by NORAD in missile defense work,” explained Richard Sanders in a Press for Conversion report on the subject. In 2004 Ottawa formally permitted the US BMD system to use data from NORAD’s “Integrated Tactical Warning/Attack Assessment.”
It’s called “missile defense” because it’s designed to defend US missiles sites after they launch offensive operations. US-installed missile defense systems in Romania and Korea, for instance, are designed primarily to stop opponents’ missiles following a US first strike. US space-based missile defense interceptors able to eliminate Russia’s early warning satellites without warning puts that country on edge. This ratchets up the arms race and the likelihood of nuclear war.
NORAD has also drawn Canada into US belligerence in other ways. During the July 1958 US invasion of Lebanon NORAD was placed on “increased readiness” while US troops checked secular Arab nationalism after Iraqis toppled a Western-backed king (at the same time British troops invaded Jordan to prop up the monarchy there).
In a higher profile incident, Canadian NORAD personnel were put on high alert when the US illegally blockaded Cuba in October 1962. This transpired even though Prime Minister John Diefenbaker hesitated in supporting US actions during the Cuban Missile Crisis.
During the 1973 Ramadan/Yom Kippur/Arab – Israeli War NORAD was placed on heightened alert. Washington wanted to deter the USSR from intervening on Egypt’s behalf. NORAD systems offered surveillance and communications suppozsart to the 1991 war on Iraq. It monitored the region and provided information to launch US Patriot surface-to-air missiles. NORAD ballistic missile warnings were also sent to Ottawa and Canadian units in Bahrain.
Department of National Defence Photo: Underground Canadian NORAD complex under Armed Forces Base North Bay NORAD also supported the 2003 invasion of Iraq. The same can be said for US bombing in Afghanistan, Libya, Somalia, etc.
Thousands of Canadian military personnel assist NORAD’s operations. One hundred and fifty Canadians are stationed at NORAD’s central collection and coordination facility near Colorado Springs, Colorado. Hundreds more work at regional NORAD outposts across the US and Canada and many pilots are devoted to the Command.
A Royal Canadian Air Force general is the vice commander of NORAD and runs the entire command when the US commander is absent. In discussing the two countries’ most significant bilateral military accord, Ann Griffiths explains, “NORAD brings the Canadian military more deeply within the US defense establishment than any other ally. The United States quite simply, would not entrust such responsibilities to the military of any other close ally, not even Britain.”
NORAD makes Canada a junior partner to US militarism. If Canada was truly a force for good in the world, a peacekeeper and adherent of a rules based international order, Ottawa would withdraw from NORAD, rather than spend billions more strengthening it.
Tyler Durden
Sat, 06/25/2022 – 21:30 - Optimism Slowly Returns To The Tourism Sector
Optimism Slowly Returns To The Tourism Sector
Coming off the worst year in tourism history, 2021 wasn’t much of an improvement, as travel remained subdued in the face of the persistent threat posed by Covid-19.
According to the United Nations World Tourism Organization (UNWTO), export revenues from tourism (including passenger transport receipts) remained more than $1 trillion below pre-pandemic levels in 2021, marking the second trillion-dollar loss for the tourism industry in as many years.
As Statista’s Felix Richter details below, while the brief rebound in the summer months of 2020 had fueled hopes of a quick recovery for the tourism sector, those hopes were dashed with each subsequent wave of the pandemic.
And despite a record-breaking global vaccine rollout, travel experts struggled to stay optimistic in 2021, as governments kept many restrictions in place in their effort to curb the spread of new, potentially more dangerous variants of the coronavirus.
Halfway through 2022, optimism has returned to the industry, however, as travel demand is ticking up in many regions.
You will find more infographics at Statista
According to UNWTO’s latest Tourism Barometer, industry experts are now considerably more confident than they were at the beginning of the year, with 48 percent of expert panel participants expecting a full recovery of the tourism sector in 2023, up from just 32 percent in January. 44 percent of surveyed industry insiders still think it’ll take until 2024 or longer for tourism to return to pre-pandemic levels, another notable improvement from 64 percent in January.
Tyler Durden
Sat, 06/25/2022 – 21:00 - Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey
Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey
Authored by Naveen Anthrapully via The Epoch Times,
A majority of C-suite executives are considering leaving their jobs, according to a Deloitte survey of 2,100 employees and C-level executives from the United States, Canada, the UK, and Australia.
Almost 70 percent of executives admitted that they are seriously thinking of quitting their jobs for a better opportunity that supports their well-being, according to the survey report published on June 22. Over three-quarters of executives said that the COVID-19 pandemic had negatively affected their well-being.
Roughly one in three employees and C-suite executives admitted to constantly struggling with poor mental health and fatigue. While 41 percent of executives “always” or “often” felt stressed, 40 percent were overwhelmed, 36 percent were exhausted, 30 percent felt lonely, and 26 percent were depressed.
“Most employees (83 percent) and executives (74 percent) say they’re facing obstacles when it comes to achieving their well-being goals—and these are largely tied to their job,” the report says. “In fact, the top two hurdles that people cited were a heavy workload or stressful job (30 percent), and not having enough time because of long work hours (27 percent).”
While 70 percent of C-suite execs admitted to considering quitting, this number was at only 57 percent among other employees. The report speculated that a reason for such a wide gap might be the fact that top-level executives are often in a “stronger financial position,” due to which they can afford to seek new career opportunities.
Interestingly, while only 56 percent of employees think their company executives care about their well-being, a much higher 91 percent of C-suite administrators were of the opinion that their employees believe their leaders took care of them. The report called this a “notable gap.”
Resignation Rates
The Deloitte report comes amid a debate about resignation rates in the U.S. workforce. Over 4.4 million Americans quit their jobs in April, with job openings hitting 11.9 million, according to the U.S. Department of Labor. In the period from January 2021 to February 2022, almost 57 million Americans left their jobs.
Though some are terming it the “Great Resignation,” giving it a negative connotation, the implication is not entirely true since most of those who quit jobs did so for other opportunities. In the same 14 months, almost 89 million people were hired. There are almost two jobs open for every unemployed person in the United States, according to MarketWatch.
In an Economic Letter from the Federal Reserve Bank of San Francisco published in April, economics professor Bart Hobijn points out that high waves of resignations were common during rapid economic recoveries in the postwar period prior to 2000.
“The quits waves in manufacturing in 1948, 1951, 1953, 1966, 1969, and 1973 are of the same order of magnitude as the current wave,” he wrote. “All of these waves coincide with periods when payroll employment grew very fast, both in the manufacturing sector and the total nonfarm sector.”
Tyler Durden
Sat, 06/25/2022 – 20:30 - "It's Infuriating": DC Democrats In Chaos, Demand Biden Act On Abortion
“It’s Infuriating”: DC Democrats In Chaos, Demand Biden Act On Abortion
Democrats are seething with rage over Friday’s 6-3 majority decision by the US Supreme Court to overturn Roe v. Wade, sending the question of abortion rights back to the state-level.
“The Constitution does not confer a right to abortion; Roe and Casey are overruled; and the authority to regulate abortion is returned to the people and their elected representatives,” read the opinion, written by Justice Samuel Alito.
Pro-abortion protesters sprung to action, deploying posters which read “Bans off my Body” and other slogans.
Hours after the news broke, Rep. Alexandria Ocasio-Cortez (D-NY) called the decision “illegitimate,” and encouraged people to get “into the streets” to protest.
BREAKING: Congresswoman @AOC has arrived in front of the Supreme Court and is chanting that the Supreme Court’s decision to overturn Roe v Wade is “illegitimate” and calls for people to get “into the streets” | @TPUSA pic.twitter.com/jNkCYDrLtz
— Drew Hernandez (@DrewHLive) June 24, 2022
Her call for what we’re sure will be ‘mostly peaceful’ protests prompted Rep. Marjorie Taylor Greene (R-GA) to accuse the Democrat of ‘launching an insurrection,’ adding “Any violence and rioting is a direct result of Democrat marching orders.”
“I will explain this to you slowly: exercising our right to protest is not obstruction of Congress nor an attempt to overturn democracy,” AOC replied, to which Greene asked AOC why she won’t support pardons for Julian Assange or Edward Snowden, why she is “a shill for the MIC (military industrial complex) funding war in Ukraine,” or “are you too busy organizing baby killing riots?”
How about you explain slowly why you won’t support a pardon for Julian Assange and Edward Snowden.
And then continue to explain why you are a shill for the MIC funding war in Ukraine.
Or are you too busy organizing baby killing riots? https://t.co/eOY5YpG25f
— Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) June 24, 2022
https://platform.twitter.com/widgets.jsBehind the carnival tent curtain, DC insiders are furious and are demanding that the Biden administration DO SOMETHING!
“It’s infuriating. What the hell have we been doing?” one Democratic strategist told The Hill. “Why are we not talking about this every single day? Why hasn’t Biden made this the issue for Democrats? If we don’t step up, we’ve got ourselves to blame.“
Since a leaked draft of the gut-punching Supreme Court opinion surfaced in early May, Democrats have said they wanted to see more guidance from Biden. But the president has been consumed by domestic issues including record-high inflation and the latest mass shootings in the country, in addition to Russia’s war in Ukraine.
Democrats say Biden must do more to lead and fire up the base if he hopes to get Democrats to turn out this fall.
“A more forceful stance would be welcome from the rank and file,” said William Galston, who chairs the Brookings Institution’s governance studies program. -The Hill
On Friday, Biden delivered a weak address from the White House, at one point struggling to find the words to describe the moment before spitting out: “It’s a – it just – it just stuns me,” even though the Supreme Court decision leaked on May 2 and everybody knew this was likely coming.
And what is Biden’s solution? After acknowledging that he’s ‘severely limited’ in what he can do as president, he encouraged Democrats to vote for pro-abortion candidates in November’s midterms that would make it possible to pass a ‘right to abortion’ law.
“This decision must not be the final word. My administration will use all of its appropriate, lawful powers, but Congress must act,” said Biden, adding: “This fall, Roe is on the ballot. Personal freedoms are on the ballot, the right to privacy, liberty, equality, they’re all on the ballot. … And with your vote, you can act. You can have the final word. This is not over.”
Former President Obama, who in 2009 said that legislation to codify abortion rights into federal law was ‘not the highest legislative priority’ – tweeted: “Today, the Supreme Court not only reversed nearly 50 years of precedent, it relegated the most intensely personal decision someone can make to the whims of politicians and ideologues—attacking the essential freedoms of millions of Americans.”
House Speaker Nancy Pelosi (D-CA) ripped the “GOP’s dark and extreme goal of ripping away women’s right to make their own reproductive health decisions.”
Pelosi on abortion: “I’m a very Catholic person, and I believe in every woman’s right to make her own decisions.”pic.twitter.com/22EihZgn5m
— Daily Wire (@realDailyWire) June 16, 2022
https://platform.twitter.com/widgets.js
Democratic strategist Joel Payne said, very strategically: “What’s challenging for the president is that all the other domestic challenges have prevented him from having the political capital to galvanize the base in a moment like this.”
“Because of Donald Trump, Mitch McConnell, the Republican Party & their supermajority on the Supreme Court, American women today have less freedom than their mothers. Radical Republicans are now charging ahead with their crusade to criminalize health freedom.” Of course, unborn American children have more protections than they’ve had in 50 years.
Senate majority leader Chuck Schumer (D-NY) called the decision “one of the darkest days our country has ever seen.”
And the Attorney General, Merrick Gardland, got extremely political, saying in an official statement: “The Justice Department strongly disagrees with this Court’s decision. This decision deals a devastating blow to reproductive freedom in the United States.”
Kamala?
Another Democratic strategist suggested that failure to employ Kamala Harris as the face of the White House’s pro-abortion stance is a huge mistake.
“How great would that have been?” the anonymous strategist asked rhetorically. “Why aren’t we deploying someone who understands and could speak to this moment from the heart?”
Eh…
THE ORATOR
pic.twitter.com/oZr5zzTb9x— The_Real_Fly (@The_Real_Fly) June 24, 2022
Young Democrats feel abandoned
According to HIT Strategies’ chief researcher Roshni Nedungadi, 75% of young voters 18-34 years-old want abortion rights protected and don’t believe Democrats are doing enough to fight back on the issue.
“They feel that they need to see Democrats and the White House fighting for them,” she said, adding “I really think as many voices as they can have, saying the same thing over and over again.”
The question for November; can Democrats rally the base around the right abort an unborn child, after a summer of ‘mostly peaceful protests’?
Tyler Durden
Sat, 06/25/2022 – 20:00 - New Monkeypox Study Holds Possible Clue To Fast Spread Of Virus
New Monkeypox Study Holds Possible Clue To Fast Spread Of Virus
Authored by Tom Ozimek via The Epoch Times,
A new study into monkeypox holds a possible clue as to why the virus is spreading so quickly, with researchers saying they have discovered that the virus contains an unusually high number of mutations, which may represent “accelerated evolution.”
The new monkeypox strain was found to have an average of 50 mutations in samples examined by Portuguese researchers, while only around 10 would normally be expected, according to the new peer-reviewed study, published on June 24 in the medical journal Nature Medicine.
The unexpectedly high number of genetic variations in the currently spreading monkeypox variant suggests that the virus may be fast-adapting, with possible implications for transmission speed.
“Our data reveals [sic] additional clues of ongoing viral evolution and potential human adaptation,” the research team wrote in the study.
…
The current outbreak has seen a total of 2,103 lab-confirmed monkeypox cases, including one death, according to the World Health Organization (WHO).
“The outbreak of monkeypox continues to primarily affect men who have sex with men who have reported recent sex with new or multiple partners,” the WHO said.
…
In the United States, health authorities said in a June 24 tally that they’ve identified 201 cases of monkeypox.
The Biden administration said on June 22 that it was expanding monkeypox testing capacity by shipping tests to five commercial laboratory companies.
“By dramatically expanding the number of testing locations throughout the country, we are making it possible for anyone who needs to be tested to do so,” said Xavier Becerra, Secretary of the Department of Health and Human Services (HHS).
“All Americans should be concerned about monkeypox cases,” he added.
…
Tyler Durden
Sat, 06/25/2022 – 19:30 - Keith Olbermann Calls For The Supreme Court To Be Dissolved
Keith Olbermann Calls For The Supreme Court To Be Dissolved
With all the wailing and gnashing of teeth going on over the Supreme Court’s decision to end Roe vs. Wade and pass the lawmaking onus on to the states, the court’s decision to overturn New York’s ban on conceal carry and other gun rights might get buried in the chaos. Extreme leftist and corporate “journalist” Keith Olbermann certainly had a lot to say about it, though.
Incensed by the idea that a government body might actually rule against common leftist policy, the calls for violence and even (*gasp) insurrection have been rising. Specifically, the left believes that intimidation or outright dissolution of the Supreme Court is justifiable.
Olbermann argues for exactly that, while also presenting a bizarre assertion that states should ignore the decision and violate our 2nd Amendment rights anyway because they are “just a court” and “can’t enforce the ruling.” One could apply the same logic and say that the states should have ignored Roe vs. Wade and made abortion illegal this entire time because the Supreme Court “can’t enforce the ruling.”
One factor that Olbermann also seems to overlook is the reality that the people of a particular state could also ignore the state government’s attempts to enforce unconstitutional gun laws. How is New York going to compel the citizenry to give up their gun rights if millions of them take up arms and refuse to submit? Two can play that game, and this dynamic never crosses Olbermann’s mind.
The left appears to be intent to abandon any semblance of diplomacy or checks and balances to get what they want, but they may be greatly overestimating their chances should political disagreement turn into physical conflict.
Tyler Durden
Sat, 06/25/2022 – 19:00 - The World Is Failing In Both Energy Affordability And Climate Goals
The World Is Failing In Both Energy Affordability And Climate Goals
Authored by Alex Kimani via OilPrice.com,
-
Global energy investment is forecast to rise by 8 percent to $2.4 trillion this year.
-
Investment in renewables is rising, but it’s nowhere near the levels necessary to limit global warming within a 1.5 degrees Celsius increase.
-
IEA: Inflation has brought the first increases in the cost of renewables in a decade.
-
U.S. shale spending remains far below 2019 levels in 2022.
Global energy investment is on the rise and expected to grow by 8 percent annually this year, pushed up by record spending on clean energy, the International Energy Agency (IEA) said in its new report World Energy Investment 2022.
On the face of it, that’s great news for global energy supply and climate goals. But in reality, the rising trend is a function of galloping inflation, a deepening divide between developed and emerging economies’ investment trends, and an increase in coal investments as the biggest economies in Asia prioritize energy security amid soaring energy prices and upended energy markets following the Russian invasion of Ukraine.
“As things stand, today’s energy investment trends show a world falling short on climate goals, and on reliable and affordable energy,” the IEA itself admitted as much in its report.
Inflation To Eat Up Nearly Half Of Investment Increase
Global energy investment is forecast to rise by 8 percent to $2.4 trillion this year, with renewables and grid investments increasing at the fastest pace.
Still, nearly half of the $200 billion increase in investment in 2022 is likely to be eaten up by higher costs rather than bringing additional energy supply capacity or savings. Costs are soaring amid supply chain pressures, tight labor, and energy services markets, and surging steel and cement prices, the Paris-based agency said.
Inflation has also brought the first increases in the cost of renewables in a decade, and as capital-intensive technologies, renewables face a stronger impact from pressures affecting the cost of raw materials and financing than other forms of power generation, the IEA notes.
“Renewable equipment manufacturers are passing on some of these pressures in their products, with increases in the cost of solar PV panels and wind turbines of 10-20% and attempts to renegotiate existing contracts, depending on the technology and region,” the agency said.
Cost pressures could raise the levelized cost of electricity (LCOE) from variable renewables by 20-30 percent this year compared to 2020.
Nevertheless, the IEA says, investment in renewables remains attractive due to the role of clean energy in the energy transition, especially if backed by supportive government policies and incentives.
Renewable Investment Is A Tale Of Two Worlds
While renewables investment and capacity installations are continuously rising in developed economies and China, the developing and emerging economies are stuck at the same level of clean energy investment as in 2015, when the Paris Agreement was signed, the IEA’s estimates showed.
Apart from some bright spots such as growth in wind and solar in Brazil and utility-scale renewables in India, the developing economies except China struggle to see renewable energy investment take off. Those major regional variations in clean energy investment “underline the risk of new dividing lines on energy and climate,” the IEA notes, adding that “overall, the relative weakness of clean energy investment across much of the developing world is one of the most worrying trends revealed by our analysis.”
The cost of capital can be up to seven times higher in developing markets than in advanced economies. Moreover, in developing economies excluding China, public funds to back renewables are lacking, policy frameworks are often weak, economies are threatened by soaring inflation and increased poverty, and borrowing costs are rising.
“Much more needs to be done to bridge the gap between emerging and developing economies’ one-fifth share of global clean energy investment, and their two-thirds share of the global population,” the IEA said.
Fossil Fuel Investment Caught Between Climate Goals And Energy Security
Investment in renewables is rising, but it’s nowhere near the levels necessary to limit global warming within a 1.5 degrees Celsius increase. At the same time, investment in fossil fuels, including coal, is set to increase this year, undermining the global pathway to climate goals on the one hand, but still insufficient to meet rising global energy demand, on the other hand.
“Overall, today’s oil and gas spending is caught between two visions of the future: it is too high for a pathway aligned with limiting global warming to 1.5 °C but not enough to satisfy rising demand in a scenario where governments stick with today’s policy settings and fail to deliver on their climate pledges,” the IEA said.
Investment in new coal supply is rising amid energy security concerns.
“High prices and Russia’s invasion of Ukraine mean that fuel supply investment is currently viewed through an energy security lens, but climate pressures cannot be put aside,” the IEA said.
Investment in coal supply jumped by 10 percent last year, led by Asia, and is likely to rise by another 10 percent this year to reach $116 billion, which would be higher than the 2019 investment of $104 billion.
In upstream oil and gas, investment is also set for a 10-percent rise this year, to $417 billion, but it lags the $500 billion investment in 2019, per the IEA’s estimates. Moreover, cost escalation is diminishing the impact of higher spending on activity levels. Only the national oil companies in the Middle Eastern oil exporters are set to spend more this year than in 2019, as Saudi Arabia and the UAE look to boost oil production capacity.
Despite an expected increase of U.S. shale investments, the level of 2022 spending is still expected to be around 30 percent below 2019 levels, as operators focus on profitability and capital discipline rather than production expansion, the IEA noted.
In refining, the sector saw in 2021 the first net reduction in global capacity for the first time in 30 years, as near-record levels of capacity were retired in 2020 and 2021, contributing to the current tightness in global fuel markets. Investment in refining, however, is not certain going forward, the IEA says.
“However, the strong financial performance and high utilisation rates seen in recent months may not necessarily translate into higher investment levels given lingering uncertainty around the long-term outlook for oil demand.”
Tyler Durden
Sat, 06/25/2022 – 18:30 -
- IMF Slashes US Growth Forecast But Claims Recession Will Be 'Narrowly Avoided'
IMF Slashes US Growth Forecast But Claims Recession Will Be ‘Narrowly Avoided’
The IMF was one of the first establishment institutions to admit that inflation was a legitimate threat to the US economy last year, however, they were very late to the game compared to economists in the alternative media. In March of 2021 IMF analysts were still arguing that inflation would be “transitory” despite the enormous $6 trillion covid stimulus in 2020 which was injected by the Federal Reserve directly into US retail markets through covid checks and PPP loans (helicopter money). Nearly all of the IMF’s predictions on inflation turned out to be wrong.
This fact should be taken into consideration as the IMF now claims that US Growth will cool but recession will be ‘narrowly avoided’ while stating that the economy is ‘in recovery.’ The IMF does not really explain its logic on this prediction, but that’s usually how they operate. Whenever they are wrong, they don’t admit it and they move on to the next wrong prediction. Either that, or they know that circumstances are about to get worse and they don’t want the public to have the opportunity to prepare.
The IMF is predicting positive growth in US GDP this year even though GDP entered a decline in the first quarter of 2022 before the Federal Reserve began raising interest rates. Prices also continue to rise in most necessities despite indications that the Fed plans to continue rate hikes through the year. In the meantime, the jobs market is edging towards renewed losses as covid money and credit dry up. In other words, the classic conditions for a stagflation crisis are in place.
This means that even with recession pressures on the horizon price inflation remains a problem, which suggests that the Fed will have to continue raising interest rates in order to combat it. Further recessionary consequences are baked into the cake on top of rising prices.
It should be noted that the IMF among many other globalist institutions and major banks warned only a month ago that a ‘dire’ global food shortage was on the way this year, and that a storm was on the horizon. Yet, as soon as the Fed raised interest rate by a mere 75bps the establishment shifted to a different narrative, asserting suddenly that deflationary conditions will “balance out” price spikes.
The IMF seems to be painting a future economy in which the rest of the world is in crisis, but the US will be just fine. And, like we saw with their inflation predictions, this fanciful notion should be taken with a grain of salt.
Tyler Durden
Sat, 06/25/2022 – 18:00 - Doctors' Group Urges Biden Administration To End Quarantine, Vaccine Recommendations For Children
Doctors’ Group Urges Biden Administration To End Quarantine, Vaccine Recommendations For Children
Authored by Zachary Stieber via The Epoch Times (emphasis ours),
A group of doctors is urging top government officials to quickly reverse recommendations that have left children in isolation for days and advice that virtually every child get a COVID-19 vaccine.
“We strongly urge you to revise the CDC’s COVID-19 guidelines with regards to testing, isolation, and vaccine recommendations for children to ensure that public health policies are not doing more harm than good,” the group, Urgency of Normal, wrote in a June 21 open letter to Dr. Ashish Jha, the White House’s COVID-19 response coordinator, and Dr. Rochelle Walensky, the director of the Centers for Disease Control and Prevention (CDC).
Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, speaks in Washington on June 16, 2022. (Joe Raedle/Getty Images) The CDC’s guidelines say that people, including children, who are exposed to COVID-19 should quarantine for at least five days, and encourage widespread COVID-19 testing.
The agency also recommends that all children 6 months of age or older get a COVID-19 vaccine, following the recent authorization of the Moderna and Pfizer shots for kids under 5.
The doctors noted that many European countries, U.S. states, and other areas have updated COVID-19 policies to greatly reduce periods of quarantine, COVID-19 testing frequency, and forced vaccination.
They’re asking U.S. officials to adapt to a “test-to-treat” approach, which would focus on recommending vaccination and treatments to those at the highest risk from COVID-19, which are primarily the elderly and others with serious underlying health conditions.
Read more here…
Tyler Durden
Sat, 06/25/2022 – 17:30 - Remote-Working Americans Don't Even Need Passport For World's Best Work And Play City
Remote-Working Americans Don’t Even Need Passport For World’s Best Work And Play City
There has always been a clear division between work and play. Yet there’s a new travel trend dubbed “workcations,” where white-collar workers can remotely work from mountain cabins in Jackson Hole, Wyoming, to a beach resort in Tulum, Mexico, to the jungles of Costa Rica and even large metro areas like Paris, Tokyo, and Miami. Once they’re finished work for the day, they explore the outdoors, local food markets, and whatever the nightlife has to offer.
Booking a workcation could be challenging because there are so many factors about a metro area that workers need to be aware of for a productive and fun time.
Icelandair, the top airline carrier in Iceland, commissioned a study examining 150 cities around the world for various factors related to a wellness workcation. They did the heavy lifting and uncovered the best 25 cities globally for remote work while also focusing on the importance of personal wellbeing and acts of self-care.
Icelandair used several factors to determine the top metro areas for a workcation, including quality of life, internet speed, air pollution, cost of living, health care, and safety.
They found that the best city in the world for remote work is one where Americans don’t even need a passport, and it’s not the beaches of San Diego or the vast forests of Yellowstone National Park, but Kansas City, Missouri.
For those unfamiliar with Kansas City, it’s a metro area on Missouri’s western edge, straddling the border with the state of Kansas — known for barbecue, jazz heritage, and fountains. It ranks the highest on Icelandair’s factors than any of the 150 cities worldwide that the airline examined.
Vienna, Austria, and Wellington, New Zealand round out the list of the top three metro areas for remote work worldwide.
Tyler Durden
Sat, 06/25/2022 – 17:00 - Maxine Waters: "To Hell With The Supreme Court! We Will Defy Them!"
Maxine Waters: “To Hell With The Supreme Court! We Will Defy Them!”
Authored by Paul Joseph Watson via Summit News,
Congresswoman Maxine Waters responded to the landmark abortion ban by vowing, “To hell with the Supreme Court! We will defy them!
Waters made the comments shortly after it was announced that abortion is being sent back to the states, with Roe v Wade being overturned.
“They ain’t seen nothing yet, women are going to control their bodies no matter how they try to stop them,” insisted Waters.
“To hell with the Supreme Court! We will defy them! Women will be able to control their bodies and if they think black women are intimidated, are afraid, they got another thought coming,” she added.
Maxine Waters tells people to “fight,” “the hell with the Supreme Court! We will defy them!”
“You ain’t seen nothin’ yet.”
Didn’t they impeach Trump for this?
pic.twitter.com/XlBuC6b7ks— Greg Price (@greg_price11) June 24, 2022
https://platform.twitter.com/widgets.js
“Black women will be out in droves – we will be out by the thousands, we will be out by the millions, we’re going to make sure we fight for the right to control our own bodies,” asserted Waters.
As we highlighted earlier, Congresswoman Alexandria Ocasio-Cortez is spewing similar rhetoric, gathering outside the Supreme Court to shout that it is “illegitimate.”
Now watch as all the same people who accused Trump of “inciting” January 6 incite actual violence in the form of riots over the next few nights.
Far-left pro-abortion groups have already vowed to stage a “night of rage” in response to the ruling.
The Department of Homeland Security has also warned crisis pregnancy centers, Catholic churches, and pro-life institutions that they should brace for attacks, with several having already been targeted in recent weeks.
Buckle up for the next few nights, there might be a few “mostly peaceful” demonstrations ahead.
Large numbers of riot police are being mobilized in Washington, DC in response to and anticipation of mass violence by the left over Roe v Wade. pic.twitter.com/kmMOyPdqq9
— Andy Ngô 🏳️🌈 (@MrAndyNgo) June 24, 2022
https://platform.twitter.com/widgets.js
* * *
Brand new merch now available! Get it at https://www.pjwshop.com/
In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Get early access, exclusive content and behinds the scenes stuff by following me on Locals.
Tyler Durden
Sat, 06/25/2022 – 16:30 - Russia To Transfer Nuclear-Capable Missiles To Belarus "Within Months": Putin
Russia To Transfer Nuclear-Capable Missiles To Belarus “Within Months”: Putin
At a moment US media and much of the West is consumed with the historic Supreme Court decision to overturn Roe v. Wade, Russian President Vladimir Putin just issued what’s possibly the most alarming and escalatory statement thus far in the four-month long Ukraine war.
On Saturday Putin for the first time informed his close ally Belarusian President Alexander Lukashenko that he has approved supplying Belarus with nuclear capable long-range missiles. Minsk has long offered to host Russian nukes as a ‘deterrent’ against the West – a prospect which Lukashenko had very provocatively offered even in the months leading up to the Feb.24 invasion of Ukraine. This move will likely be viewed from Washington as a first step in moving toward a heightened nuclear posture in Eastern Europe.
Image source: BelTA Reuters writes of the announcement, “Russia will supply Belarus with Iskander-M missile systems, Russian President Vladimir Putin told a televised meeting with Belarusian President Alexander Lukashenko on Saturday. Delivery will take place within a few months, he added.”
Putin referenced nuclear-capability, according to a transcript of the televised remarks: “In the coming months, we will transfer to Belarus Iskander-M tactical missile systems, which can use ballistic or cruise missiles, in their conventional and nuclear versions.”
The report underscores further that “The Iskander-M is a mobile guided missile system with a range of up to 500 km (300 miles). The missiles can carry conventional or nuclear warheads.”
Currently, Putin and Lukashenka are meeting face-to-face in St. Petersburg on the 30th anniversary of the two countries establishing diplomatic relations, which eventually led to the so-called ‘Union State’ pact of 1999, and has persisted till now, which also enabled Russia to muster much of its forces on Belarusian territory just ahead of the Ukraine invasion.
Belarus has maintained that it has not been a direct participant in hostilities in Ukraine; however, it’s well-known to have played the role of a key hub of Russian logistics and support. In the past days, Ukrainian defense and intelligence officials have alleged that the Kremlin is actively trying to draw Belarus into the war on its side.
Kiev on Saturday said the northern Chernihiv region came under “massive bombardment” from rockets “fired from the territory of Belarus and from the air” in a major cross-border attack, which isn’t the first time the Ukrainians have leveled such a charge.
Ukrainian intelligence: #Russian bombers fired cruise missiles from #Belarus for the first time
According to them, on the night of June 25, a massive missile and bomb strike was carried out on the territory of #Ukraine from Belarusian airspace, during which 6 Tu-22M3 were used. pic.twitter.com/6nVv75Qyyz
— NEXTA (@nexta_tv) June 25, 2022
https://platform.twitter.com/widgets.js
“Today’s strike is directly linked to Kremlin efforts to pull Belarus as a co-belligerent into the war in Ukraine,” a Ukrainian intelligence statement said.
Likely, Putin’s announcement of an impending transfer of Iskander missiles to Belarus is also intended as a counter-action in response to Ukraine achieving EU-candidate status. While it’s obvious that actual EU membership could take years, if it happens at all, the view from Moscow is that EU integration is typically followed by a bid for NATO membership.
Tyler Durden
Sat, 06/25/2022 – 16:00 - The Great Crash Of 2022
The Great Crash Of 2022
Authored by Kristoffer Mousten Hansen via The Mises Institute,
We are now well past the corona crisis of 2020, and most of the restrictions around the world have been repealed or loosened. However, the long-term consequences of arbitrary and destructive corona policies are still with us—in fact, we are now in the middle of the inevitable economic crisis.
Proclaiming the great crash and economic crisis of 2022 is at this point not especially prescient or insightful, as commentators have been predicting it for months. The cause is still somewhat obscure, as financial and economic journalism still focuses on whatever the Federal Reserve announces. But the importance of the Fed’s moves is greatly exaggerated. The Fed cannot set interest rates at will; it cannot generate a boom or a recession at will. It can only print money and create the illusion of greater prosperity, but ultimately, reality reasserts itself.
The real driver of the present crisis is monetary inflation. Back in 2020, I (along with many others) pointed out the role of inflationary monetary policy in the corona crisis. While consumer price inflation is now the most apparent consequence, the real damage occurred in the capital structure of the economy. This is the cause of the present crisis.
A Business Cycle, of Sorts
While to most people the most obvious consequence of the corona inflation was the transfer payments they received from the government, the real action occurred in the business sector. Through various schemes, newly created money was channeled to the productive sector from the Fed via the Treasury. The result was a classic business cycle of unsustainable expansion ending in inevitable depression.
The immediate effect of the inflow of easy money was twofold. First, it hid some of the economic distortions that lockdowns and other restrictions caused. Since they received government funds to make up for lost revenue and to cover higher costs, businessmen maintained production lines that really should have been shut down or altered in some way due to lockdowns. Second, easy money induced capitalists to make new, unsound investments, as they thought the extra money meant greater capital availability.
These investments were unsound not because the government quickly turned off the money spigot again: they were unsound because the real resources were not there; people had not saved more to make them available. The supply of complementary factors of production had not increased, or not as much as suggested by the increase in money available for investment. As the businesses expanded and increased demand for these complementary factors, their prices therefore rose. To keep the boom going, businesses have started to borrow more money in the market, driving up interest rates. But there is no cheap credit to be had at this point, since there haven’t been additional infusions of cheap money since the initial inflation of 2020, so interest rates are quickly rising. This is the real explanation of the inversion of the yield curve: businesses are scrambling for funding as they find themselves in a liquidity shortage, since their input prices are rising above their revenues. It’s not the market front-running the Federal Reserve or any other fancy expectations-based cause: interest rates rise because businesses are short on capital.
The following chart shows the increase in producer prices compared to consumer prices—an increase of almost 40 percent since the beginning of 2020 is clearly unsustainable. That consumer prices have not increased as much is a clear indication that we’re dealing with a business boom and that businesses can’t expect future revenues that will cover their elevated costs. Nor are we simply seeing oil price increases due to disruptions in supply. Oil and energy commodities complement virtually all production processes, so inflation-induced investment will lead to an early rise in oil and energy prices.
Figure 1: Producer and Consumer Price Indices, January 2019–May 2022
Eventually, interest rates will be bid too high, and businessmen will have to abandon their investments. Many will throw inventories on the market at almost any price to fund their liabilities, cut back their workforces, and likely go bankrupt. This appears to be happening already, as CNBC is reporting many layoffs in tech companies.
A likely consequence of this bust will be a banking crisis: as the share of nonperforming loans increases, bank revenues will dry up, and banks may find themselves unable to meet their own obligations. A crisis could develop, leading to what has been called “secondary deflation”: the contraction of the money supply as deposits in bankrupt banks simply evaporate. While that is a consummation devoutly to be wished, it is unlikely, to put it mildly, that the Federal Reserve will let things get to that point. This neatly brings us to a central question: What is the central bank doing right now?
The Contractionary Fed
Surprising as it sounds, the Fed really is pursuing a tightening policy. Not necessarily the one they officially announced—they are not, in fact, reducing their balance sheet, but an extremely tight policy nonetheless.
It is worth pointing out that the Fed is really a one-trick pony: all it can do is create money, either directly or indirectly by giving banks the reserves necessary for bank credit expansion. All the stuff about setting interest rates is secondary, if not irrelevant: the market always and everywhere sets interest rates. Central banks can only influence interest rates by, you guessed it, printing money.
Figure 2: M2 (billions of dollars), January 2019–April 2022
While the Fed was very inflationary back in 2020 as figures 2 and 3 show, it has since reversed course and become not only conservative, but outright contractionary. That is, not only has the growth rate slowed down, but there was a real, if small, fall in the quantity of money in early 2022.
Figure 3: M2 (percent change), January 2019–April 2022
This contraction is not immediately evident if we only look at the Fed’s overall balance sheet, because since March 2021, the Fed has aggressively increased the amount of reverse repurchase agreements (reverse repos) they hold (or owe, technically). In a reverse repo transaction, the Fed temporarily sells a bond to a bank (just as they temporarily buy a bond from a bank in a repo transaction). This sucks reserves from the system, just as repos add reserves to the system. From virtually zero in March 2021, the amount of reverse repos has increased to $2,421.6 billion as of June 15, reducing the amount of available reserves by the same amount. The Fed balance sheet has not shrunk due to simple accounting: the bond underlying the repo transaction is still recorded on the Fed balance sheet. Banks, meanwhile, benefit from this transaction even though their reserves are temporarily reduced, earning a practically risk-free 0.8 percent (the Fed increased the award rate on reverse repos to 1.55 percent on June 15 and will likely increase it in the near future as the market rate keeps rising).
Figure 4: Reverse Repurchase Agreements, March 2021–June 2022
Whatever this is, it’s not a policy that will feed inflation—in fact, inflation really will be transitory if the Fed continues its present policy. This is somewhat ironic, as the Fed has increased its holdings of inflation-indexed bonds, suggesting its economists themselves do not believe the transitory narrative. Of course, it’s possible that the Fed may simply be gearing up for the next round of inflationary policy.
What is certain is that the Fed is now neutralizing its previous inflation. The great 2020 inflation went first to the US Treasury account at the Fed and then to the government’s favored clients. As the government drew down its account, money went to the banks and was deposited at the Fed as reserves. At this point, the inflation could have accelerated. The banks were already flush with reserves and could have extended credit on top of the tidal wave of additional reserves flowing into them. This would likely have happened as the market rate of interest started rising, if not earlier, but by sucking banks’ reserves out the Fed is limiting banks’ inflationary potential. Credit expansion is still possible, as the banks maintain a historically elevated reserves-deposits ratio of around 20 percent and have since 2020 been liberated from any kind of legal reserve requirement. But by reducing the reserves in the system, the Fed is effectively preventing this development. After peaking at over 23 percent, the reserve ratio has steadily declined since September 2021, hitting 19 percent in April, as shown in figure 5. Since reverse repo transactions have continued in May and June, the monetary contraction seen in the first quarter is likely ongoing, although we will have to wait for more recent money supply figures to confirm this.
Figure 5: Banks’ Reserve Ratio, May 2020–April 2022
What Happens Now?
Whatever happens next, one thing is clear: the crisis is already upon us. Stock market declines and financial market chaos are really epiphenomena, headline capturing though they may be. The damage has already been done. And while I’ve here focused on the covid era, we were already heading for crisis in 2019—the coronavirus just provided an excuse for one last gigantic inflationary binge.
This means that it’s not simply the malinvestments of the last two years that needs to be cleared out—it’s the accumulated capital destruction of the last fifteen years that’s now becoming apparent. How much capital was wasted in tech start-ups that had no chance of ever turning a profit? As this piece in The Atlantic points out, enormous amounts of capital were poured into technology projects aimed at the hip urban millennial lifestyle—and now that they cannot cover operating costs with endless infusions of venture capital, prices are spiking and companies are laying off workers. The boom in construction is also at an end, as demand for housing is unlikely to remain elevated as mortgage rates rise.
In all likelihood, the Fed is not going to stay the course. Pressure from finance and from government is likely to force it back into inflation, but this inflation can’t prevent the bust. As Ludwig von Mises pointed out, you can’t paper over the economic crisis with yet another infusion of paper money; the crisis will play out, whatever the central bank decides to do. What the Fed can do is continue funding the government and bailing out the financial system when they come under pressure. Both will be very inflationary.
We should not celebrate the Fed for refraining from inflating the money supply at the moment—after all, its previous recklessness caused the problems to begin with—but let’s hope the Fed stays the course for now. The longer a new round of inflation is delayed, the more radical will the purge of malinvestment and clown-world finance be. High inflation is also possible, perhaps even more likely, given the political pressures.
In that case, Weimar, here we come!
Tyler Durden
Sat, 06/25/2022 – 15:30 - Gallup: Confidence In Supreme Court Hits 'Historic Low'
Gallup: Confidence In Supreme Court Hits ‘Historic Low’
With the US Supreme Court handing Democrats their biggest defeat in recent memory; repealing both Roe v. Wade and New York’s prohibition on conceal and carry, Gallup is out with a new poll suggesting that confidence in the highest court in the land has hit a ‘historic low.’
According to the report, 25% of US adults have a “great deal” or “quite a lot” of confidence in the US Supreme Court, a drop from 36% a a year ago, and 5% below the previous low in 2014.
And of course, Keith Olbermann has called for the court’s dissolution…
More from Gallup’s Jeffrey Jones (emphasis ours),
These results are based on a June 1-20 Gallup poll that included Gallup’s annual update on confidence in U.S. institutions. The survey was completed before the end of the court’s term and before it issued its major rulings for that term. Many institutions have suffered a decline in confidence this year, but the 11-point drop in confidence in the Supreme Court is roughly double what it is for most institutions that experienced a decline. Gallup will release the remainder of the confidence in institutions results in early July.
The Supreme Court is likely to issue a ruling in the Dobbs v. Jackson Women’s Health Organization case before its summer recess. The decision will determine the constitutionality of a Mississippi law that would ban most abortions after 15 weeks of pregnancy. A leaked draft majority opinion in the case suggests that the high court will not only allow the Mississippi law to stand, but also overturn Roe v. Wade, the 1973 court ruling that prohibits restrictions on abortion during the first trimester of pregnancy. Americans oppose overturning Roe by a nearly 2-to-1 margin.
In September, Gallup found the Supreme Court’s job approval rating at a new low and public trust in the judicial branch of the federal government down sharply. These changes occurred after the Supreme Court declined to block a Texas law banning most abortions after six weeks of pregnancy, among other controversial decisions at that time. Given these prior results, it is unclear if the drop in confidence in the Supreme Court measured in the current poll is related to the anticipated Dobbs decision or had occurred several months before the leak.
The prior low in Supreme Court confidence was 30% in 2014, which was also the year when confidence in major U.S. institutions in general hit a low point, averaging 31%.
Public confidence in the Supreme Court has been lower over the past 16 years than it was before. Between 1973 and 2006, an average of 47% of U.S. adults were confident in the court. During this 33-year period, no fewer than four in 10 Americans expressed high confidence in the court in any survey, apart from a 39% reading in October 1991 taken during the Clarence Thomas confirmation hearings.
Since 2006, confidence has averaged 35% and has not exceeded 40% in any survey.
Democrats, Independents Behind Confidence Slide
Confidence in the Supreme Court is down by double digits among both Democrats (30% to 13%) and independents (40% to 25%) this year, but it is essentially unchanged among Republicans (37% to 39%).
The Democratic figure is the lowest Supreme Court confidence rating Gallup has measured for any party group historically, eight points lower than the 21% figure among Democrats in 2019. Independents’ 25% confidence rating is the lowest registered for that group historically, with the prior low being 28% in 2015.
Republican confidence has been lower in the past than now, with the 26% measured in 2010 still the lowest for GOP supporters to date. That low point occurred after Barack Obama picked a liberal justice, Sonia Sotomayor, in 2009 and nominated another, Elena Kagan, in 2010 before the poll was conducted.
While Republicans’ confidence hasn’t changed much in the past year, it has come down significantly from 53% in 2020. That measure was taken during Donald Trump’s reelection year — after he had two of his nominees confirmed to the Supreme Court, but before a third Trump justice was confirmed days prior to his being defeated for reelection in November.
Bottom Line
The Supreme Court is likely to issue one of its most consequential rulings at a time when public confidence in the institution has never been lower. If, as expected, the conservative-leaning court rules to overturn Roe v. Wade, it is unclear whether that decision would further harm the institution’s reputation among Americans or perhaps improve it if Americans agree with the court’s reasoning. Invalidating Roe would allow state governments to decide whether abortion is legal or illegal in their state.
The public may have already taken the Supreme Court’s stance on the abortion issue into account, with its decision on the Texas law and the leaked draft majority opinion on the Mississippi law. But an actual, rather than hypothetical or expected, decision may have more potency in shifting Americans’ views of the court.
To stay up to date with the latest Gallup News insights and updates, follow us on Twitter.
Learn more about how the Gallup Poll Social Series works.
Tyler Durden
Sat, 06/25/2022 – 15:00 - Diesel Demand Set To Drop As Economies Enter Recession: Kemp
Diesel Demand Set To Drop As Economies Enter Recession: Kemp
By John Kemp, senior energy analyst
U.S. diesel consumption is likely to decline by 200,000 to 600,000 barrels per day (5%-15%) over the next year as the economy slows in response to rising interest rates.
The Federal Reserve is not deliberately trying to induce a recession to bring inflation under control, central bank chief Jerome Powell told legislators on Wednesday. But he said that was a possible and foreseeable outcome of rapid rate rises – an interesting application of the doctrine of double effect.
The central bank hopes for soft landing but feels it must risk a hard one to reduce inflation running at the fastest rate for 40 years. Distillate fuel oil, a category that includes diesel, gas oil and heating oil, are the petroleum products most sensitive to changes in the business cycle so they will be impacted most as the rate of growth slows.
Even if the central bank can engineer a mid-cycle slowdown, rather than a cycle-ending recession, consumption of distillates is very likely to decline over the next year.
Both recessions and mid-cycle slowdowns have tended to reduce consumption of distillates by between 5% and 15% compared with the previous year.
With the volume of distillates supplied to domestic customers in the United States running at a little over 4 million barrels per day, the expected decline is equivalent to between 200,000 and 600,000 bpd.
Eurozone Recession
Europe’s distillate consumption is likely to see a similar or greater fall as the region’s economy enters a recession in response to Russia’s invasion of Ukraine and the impact of sanctions.
Eurozone manufacturers are already on the leading edge of a recession, according to preliminary data from purchasing managers’ surveys for the first part of June.
The eurozone composite manufacturing activity index slumped to 52.0 (47th percentile for all months since 2006) in early June, down from 54.6 (65th percentile) in May and 63.4 (100th percentile) in June 2021.
Rapidly escalating prices for crude, diesel, gasoline, gas and electricity as well as food are likely to force households and businesses to reduce spending over the next few months, pushing the economy into recession.
Lower volumes of manufacturing, construction and freight transportation activity will in turn cut diesel and gas oil consumption in the region, likely by a similar amount to the United States.
Lower distillate consumption is the only way to resolve shortages caused by the rapid rebound in economic activity after pandemic lockdowns, Russia’s invasion of Ukraine, and sanctions imposed by the United States, the EU and their allies in response on Russia’s oil exports.
In time, reduced distillate consumption will give the global refiners a chance to replenish severely depleted inventories and take some of the heat out of diesel crack spreads and prices.
Ultimately, reduced distillate consumption will stabilize and then lower fuel prices and transportation costs, which will flow through into slower inflation later in 2022 and 2023.
But the transition to lower oil prices and slower inflation is likely to involve a painful contraction in manufacturing and construction activity and employment first.
The Fed and the other major central banks may not intend to induce a recession or a significant mid-cycle slowdown, but that is the logical effect of sharply higher interest rates and tighter financial conditions.
Tyler Durden
Sat, 06/25/2022 – 14:30
Digest powered by RSS Digest
Saving...
