Posts Tagged ‘Economics’

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What Is Maintaining The Ruble-USD Band?

Monday, April 29th, 2024

I’m hardly an expert in foreign currency exchange, but something odd seems to be happening in the Russian Ruble-U.S. Dollar exchange rate.

Obviously, the ruble has lost value because of the extensive sanctions and cutoff from SWIFT following Russia’s launch of its illegal war of territorial aggression against Ukraine. For most of the last year, the exchange rate has bounced from a high of 75 rubles to the dollar to a low of just over 100 rubles to the dollar.

However, in the last month, the ruble-dollar exchange rate has traded within an extremely narrow band between just over 90 and just over 94 rubles to the dollar.

That’s a pretty unusual, and pretty narrow, band to be trading in. The question is who, or what, is maintaining that band. Russia could be intervening to make sure the ruble doesn’t go too much above 94, but it wouldn’t make sense for them (if they’re trying to defend the currency) to be sellers on the other side when the ruble appreciates to 90 or less per dollar. Could it be China, trying to move some of the rubles taken in bilateral trade, or some institutional investor somehow stuck with rubles for two two years, unloading them whenever it hits that peg?

But it’s not just the dollar! We see the same thing with the Pound:

And the Euro:

It even seems true of two of Russia’s remaining big trading partners. The Indian rupee:

The Chinese Renminbi/Yuan:

All seem to be trading within very narrow, oscillating bands.

Is it a data artifact? Other currency exchange sites don’t show quite as obvious oscillation, but all do show trading within that narrow band.

I don’t know what to make of it. I don’t know enough to hazard any more educated guesses than that. But someone seems to be manipulating ruble exchange rates, and I’m not sure why.

If you have any ideas, feel free to share them below.

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Posted in Economics, Foreign Policy | 9 Comments »

90% Of Chinese Factories To Close?

Saturday, April 27th, 2024

It turns out that unleashing a deadly engineered plague on the world, bellicose posturing, currency manipulation, intellectual property theft, treaty breaking, and genocidal actions against ethnic minorities isn’t a recipe for winning friends and influencing people.

Who knew?

Evidently not Xi Jingping, as under his leadership, it looks like some 90% of Chinese factories will close due to lack of business.

  • “My factory closed down, ended up losing over 10 million.” I’m assuming that’s Yuan.
  • “China continues to face a harsh winter, with reportedly 90% of factories either closing down or falling into difficulties.”
  • Factories that has been in business and profitable for 15 years got walloped by Flu Manchu in 2020. “After the outbreak, the factory started and stopped production intermittently, basically losing money for a year. Unexpectedly, the following three years were worse.”
  • “At the start of the year, there were almost no new orders. The old customers who used to order every month also significantly reduced their orders. The entire industry had fewer orders than during the 3 years of the epidemic.”
  • This lead to “severe competition within the industry this year to get orders. Besides low profits, customers also demanded goods to be made before payment.”
  • “In the second half of 2023, he was basically just chasing payments. Many customers were withholding final payments, and his factory had long run out of operational funds. During this period, he had already mortgaged his house in Shinjin for business loans. For these three years, his factory had been barely surviving on loans, and he didn’t know when it would all end. Recently he’s been exhausted, so he decided to shut” everything down.
  • “Bosses like us in small manufacturing factories will soon become the bottom of society. Becoming a bad debtor is only a matter of time, My factory in Guangdong is quite typical of those in the industry. Most of my customers products are for export.”
  • Factory workers, of course, are losing jobs and hours left and right due to the shutdowns. Plus those few factories still hiring can afford to be picky. “Those over 33 can go back! Those under 33 stay! Not accepting anyone over 33!”
  • “China’s products such as petrochemical raw materials, fuel and electric vehicle power batteries and non-core chips are all facing overcapacity.”
  • “After the pandemic, China’s economic recovery has been weak. Traditional export orders are insufficient, and products manufactured by Chinese factories exceed the domestic markets absorption capacity causing almost every industry to face overcapacity as other countries strive to curb inflation.”
  • “China is experiencing rare deflation.”
  • China’s plan to combat this is exporting high tech goods to the rest of the world. The rest of the world doesn’t seem enthused.
  • I’m skipping over some Q1 growth statistics for China I don’t believe.
  • “Due to overcapacity in China, companies are squeezing each other’s profits by lowering export prices.”
  • “In the first quarter, China’s manufacturing capacity utilization rate plummeted to 73.8%, the weakest level since 2015.”
  • “The utilization rate of the automotive manufacturing industry has now dropped to below 65%.”
  • And the electric car bubble bursting has hit China hard. “For years the CCP has spared no effort, using high subsidies and various preferential policies to fully support the development of new energy vehicles.”
  • “It is estimated that from 2010 to the present, over 200 billion yuan, about $28 billion US, has been directly subsidized to new energy vehicle companies by the CCP.”
  • “The CCP’s irrational economic measures not only harmed the global economy, but also damaged China’s own economy. The subsidy policy has not only led to the emergence of numerous purported new players in the automotive manufacturing sector, but has also notably spawned a significant number of counterfeit car companies that rely solely on deceiving subsidies through presentations and mockup models.” In other words, the same smoke and mirrors companies seen throughout the rest of China economy.
  • “The Wall Street Journal reported that in 2018 there were already more than 487 Chinese electric car manufacturers, but now there are only over 40 remaining.” (Previously.)

    • Is the 90% factory closure estimate way too high? Probably. But if it’s even of factories, imagine the devastating economic and social dislocation effects this will have on China’s aging economy.

    Much of China’s economic miracle was built on smoke and mirrors, and by one estimate China GDP was overstated by 60%. And thanks to Xi Jinping’s gross mismanagement of just about everything, the bill for all those illusions is now coming due.

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    Posted in Communism, Economics, video | 14 Comments »

    Why Saudi Arabia’s Neom Is Doomed

    Sunday, April 21st, 2024

    I’m not sure I’ve mentioned Saudi Arabia’s Neom project before, the plan to build a 170km long, 500m tall linear city arcology in the northwest Saudi desert.

    As this Patrick Boyle video shows, things aren’t going swimmingly.

    Pitched in a mock “I think it’s a great idea, so please don’t Khashoggi me” tone, Boyle points out a few niggling problems with the entire concept.

  • “Neom The Line is a 170 km long city being built in the deserts of Saudi Arabia that was supposed to cost $200 billion to build. It’ll accommodate nine million people in a massive structure that is 200 meters wide and 500 meters tall. It’s conveniently located in an allegedly empty area of desert.”
  • It will have “all of the modern features that you would want, like an artificial moon, robot dinosaurs, flying cars, human gene editing and glow-in-the-dark sand.”
  • “The only abundant resources that a group of consultants could identify were sunlight and unlimited access to salt water.”
  • “Bloomberg reports that the Saudi Sovereign Wealth Fund cash reserves have fallen to $5 billion as of September, the lowest level since 2020, The Live City according to the latest reports, is now only expected to extend 2.4 km and house 300,000 people by the end of the decade. This is a 98.6% reduction from the initial plans. So it’s still going ahead, it’ll just be a little bit smaller than had been hoped for a while.”
  • “Building an unusually densely populated 170 kilometer long city that’s as tall as some of the tallest buildings in the world in what is described as a harsh dry desert with great temperature extremes strikes me as a great idea. Other people have not been as positive about these plans.”
  • Mohammed bin Salman (MBS) announced plans for Neom four months after being named Crown Prince successor to current king Salman bin Abdulaziz Al Saud.
  • “The project is being overseen and financed by the Saudi Arabian Sovereign wealth fun, which the Crown Prince also chairs. It was pitched as costing $200 billion, but upon reflection might cost a bit more than that.”
  • “Off the top of my head I can’t think of any other cities that are 170 kilometers long while only 200 meters wide and 500 meters tall. In fact, I struggle to think of any cities that are taller than they are wide.”
  • “Historically, skyscrapers have been built in very dense urban locations where the price of land is so high that it makes economic sense to build upwards to minimize the cost of the land per total floor area of a building.”
  • “I found a paper by Brinkley and Raj which explains that in open systems, perfusion guides form and growth. They explain that ecosystems grow as fractals, with new branches sprouting in order to maximize profusion and resource uptake. They go on to explain that most cities grow as fractals branching out maximizing the urban interface with available fuel and arable land.”
  • Of course, Neom has no fuel or arable land nearby. In Larry Niven and Jerry Pournelle’s Oath of Fealty, they argue that an arcology needs to be built near an existing city (in their case Los Angeles) to prosper.
  • “A long narrow city guarantees that inhabitants are always the maximum distance from wherever they need to go.”
  • Boyle examines the claim that you can travel from one end of Neom to the other in 20 minutes and has a little fun with math:

    To travel 170 km in 20 minutes, you’d have to be traveling at 510kmph, which is a bit faster than and the world’s fastest train. Of course, 510kmph assumes no stops along the way, which might be a bit inconvenient for people who live near the middle of the city. London Underground stations and New York subway stations are usually about a quarter of a mile apart from each other. [I believe Boyle is mistaken here, and London tube stations are closer to an average of a mile apart. -LP] 170km is 105.6 miles, so the line would need 412 train stops along the way subway trains usually stop and open their doors for at least 30 seconds at each station so with 42 stations the train would be stopped for 206 minutes allowing people to get on and off the train at the stations. 206 minutes is of course a bit more than 20 minutes, so people would need to get on and off the trains a bit quicker than that. If the train stopped for just two seconds at each station, the train would only be stopped for 14 minutes leaving us with six minutes to travel 170 km, so we would just have to travel at 1,700km hour which is a bit over 1,000mph. 1,000mph would, of course, be an average speed. There would have to be a lot of extreme acceleration and deceleration going on, meaning that the top speed would have to be well over 1,000mph. You’d have two seconds to get on or off a train that would quickly accelerate up to, let’s say, three times the speed of sound before slamming on its brakes for the next station.

    Enjoy the g-lock.

  • “The Line is going to be a fairly busy city. Nine million people will be living on a footprint of just 34 square kilometers, which is 13 square miles. Manila in the Philippines has the world’s highest population density with 119,600 people per square mile. Neom would have 686,000 people per square mile, which is almost six times the population density of Manila.”
  • “The Wall Street Journal reviewed 2300 pages of documents put together by Consultants at BCG McKenzie and Oliver Wyman, the consultants were directed by MBS to help turn his idea into a reality. And the documents highlight that the project is so ambitious that it incorporates many technologies that don’t yet exist.”
  • “The Line is going to be 500 meters tall, which is about the same height as Taipei 101, which was the tallest building in the world when it was built 20 years ago at a cost of just under $2 billion. Taipei 101 is 75 meters wide, so you would need to build 13.3 of these for each kilometer. 2,270 of these buildings would equal just one wall of The Line. For both city walls you would need 4,540 Taipei 101s.”
  • “And that’s just the external walls. There’s still all the inner buildings, the hyperloop, the floating gardens, the autonomous flying pods and the artificial moon. Let’s not forget power plants, water desalination plants, airport, sewage treatment, human gene editing facilities, and everything else needed for a modern city.”
  • “The Line will have about half of the population of New York City, and thus should require around 5,000 megawatts of power per day. It might need a lot more than that, as water desalination is very energy intensive, and being based in the desert, people might want to run their air conditioners most of the time.”
  • “New York City requires hundreds of power plants to run, but gets around one third of its power from four nuclear power plants. Let’s say The Line is a very energy efficient city and can get by on one third of the power consumed by New York City. You would then need to build four or five nuclear power plants to supply that power.”
  • “Each power plant would cost between $6 and $9 billion, so we’re looking at $30 to $40 billion just for the power plants to supply electricity.”
  • “The 4,500 140 Taipei 101 buildings needed just as the exterior walls for The Line would cost $9.1 trillion dollars, assuming that construction costs have not gone up in 20 years, which they probably have. MBS was initially going to build all of this for $200 billion, which is less than 2% of the cost I’ve estimated for just the walls.”
  • “Thunderf00t estimated the overall build cost of a city like this to be $100 trillion.” Thunderf00t also looked at the failure of all of Dubai’s land reclamation projects in the Persian gulf save the very first, none of which are remotely as ambitious as Neom.

    • I think you get the idea.

    Murdering the occasional jihad-friendly journalist aside, MBS actually has carried out some significant reforms (like sidelining the hardline Wahabbist clerics), but his pet Neom project is clearly 95% delusional. Despite which, they’ve already done fairly ridiculous amounts of earthmoving on the project.

    They are a few decent ideas among the delusions: It wouldn’t be a bad idea for the Saudis to incubate a tech sector, they get enough sun that getting into manufacturing solar panels to help plan for a post-oil future might be a viable option, and they probably should invest in desalinization plants to develop some agricultural self-sufficiency.

    But the idea of building the full Line is a delusional fantasy.

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    Posted in Economics, Foreign Policy | 19 Comments »

    LinkSwarm For April 12, 2024

    Friday, April 12th, 2024

    It’s been a week of petty frustrations, with simple things like paying for online transactions made impossible by websites that send out the wrong information despite the right information being on file. Speaking of frustration, Americans continue to be battered by high inflation, blacks continue to abandon Biden, and it turns out that the Pope might, just might, be Catholic after all.

  • Core inflation is up yet again.

    A hotter-than-expected consumer price index report rattled Wall Street Wednesday, but markets are buzzing about an even more specific prices gauge contained within the data — the so-called supercore inflation reading.

    Along with the overall inflation measure, economists also look at the core CPI, which excludes volatile food and energy prices, to find the true trend. The supercore gauge, which also excludes shelter and rent costs from its services reading, takes it even a step further. Fed officials say it is useful in the current climate as they see elevated housing inflation as a temporary problem and not as good a measure of underlying prices.

    Supercore accelerated to a 4.8% pace year over year in March, the highest in 11 months.

    Tom Fitzpatrick, managing director of global market insights at R.J. O’Brien & Associates, said if you take the readings of the last three months and annualize them, you’re looking at a supercore inflation rate of more than 8%, far from the Federal Reserve’s 2% goal.

    (Hat tip: Stephen Green at Instapundit.)

  • Speaking of inflation, welcome to $7 Tree.
  • Black voters continue to abandon Biden in droves.

    According to a Wall Street Journal Swing State Poll, blacks, especially black males are abandoning Biden in huge numbers.

    While most Black men said they intend to support Biden, some 30% of them in the poll said they were either definitely or probably going to vote for the former Republican president. There isn’t comparable WSJ swing-state polling from 2020, but Trump received votes from 12% of Black men nationwide that year, as recorded by AP VoteCast, a large poll of the electorate.

    That’s an 18 percentage point swing, minimum, for black males, if the national results and the swing state voting is similar.

    By confirmed, I mean those who said they intended to vote for Trump.

    The gap is even larger if we factor in undecided voters. Biden is down by a massive 30 percentage points vs 2020.

  • Biden may not be on the ballot for the Ohio general election because the Democratic National Convention falls too late to certify him.
  • Pope turns out to be Catholic, comes out against child genital mutilation.
  • “Nebraska state Sen. Mike McDonnell announces that he’s switching from Democrat to Republican.”
  • Country musician Jason Aldean refuses to let Biden campaign use hit song “Fly Over States.”
  • Good: A teacher helping her son with homework. Bad: A teacher helping her son force female students into sex trafficking. “Klein Cain High School cosmetology teacher Kedria McMath Grigsby is accused of helping her son, Roger Magee, force the troubled teens into prostitution.”
  • Man driving eighteen-wheeler interntionally crashes into DPS office in Brenham, killing one.
  • Hard evidence that temperature data is being manipulated to show global warming.

    Investigative science writer Paul Homewood last year discovered considerable tampering in 2022 with the recent CET record. He initially found that in version one, the summer of 1995 had been 0.1°C warmer than 2018. In version 2, the two years swapped places with 1995 cooled by 0.07°C and 2018 warmed by 0.13°C. Alerted to these changes, Homewood then analysed the full record from version 1 to 2, and the graph below shows what he found.

    As can be seen, the adjustments up to 1970 are small with ups and downs offsetting each other. Homewood then found that the years from 1970 to 2003 had been cooled markedly, followed by significant rises to 2022. Homewood concludes that “unfortunately it is part of a much wider tampering with temperature globally – and the tampering is always one way, cooling the past and heating the present”. Given that we now know that the Met Office has been using class 4 statistics for two thirds of its database since 2006, the recent higher adjustments would seem to call for clarifying explanations from the state-funded Met Office.

    (Hat tip: Boreptach.)

  • Ukrainian drone attack hits radar site 650km inside Russia.
  • Speaking of drones, China is supplying tens of thousands of drones…to Ukraine. I did not see that coming, but China certainly can use the money.
  • Texas Lt. Governor Dan Patrick lays out his legislative priorities for 2025.

    Lt. Gov. Dan Patrick has announced his interim charges for the Senate, a set of 57 issues he is calling on Senate Committees to investigate and research ahead of the legislative session next year.

    The list of charges runs the gamut of issues conservatives have called on the legislature to address, including property tax relief, protecting Texas land from hostile foreign ownership, and strengthening laws preventing electioneering by school districts and other political subdivisions.

    Some of the biggest reform proposals, however, have been reserved for higher education.

    Patrick has asked the Higher Education Subcommittee to study and make recommendations regarding the role of ‘faculty senates’, antisemitism on college campuses, as well as to review the implementation of a new state law banning DEI (Diversity, Equity, and Inclusion) in state universities that went into effect earlier this year.

    “The Senate’s work to study the list of charges will begin in the coming weeks and months. Following completion of hearings, committees will submit reports with their specific findings and policy recommendations before December 1, 2024,” said Patrick.

  • When you think Houston Democratic Congresswoman Shelia Jackson Lee has already said the stupidest thing she possibly can, she goes out and proves you wrong.
  • I know you’re shocked, shocked to find out that gun-grabbing opportunist David Hogg’s political group Leaders We Deserve spent way more on administration than backing candidates.
  • Thanks to New York City’s idiotic rent control laws, not only would a hotel guest refuse to pay rent or leave, but a court actually ruled that he was the owner of the hotel.
  • First class stamps are going up to 73 cents. Thanks, Joe Biden.
  • If the commies running Vietnam accuse someone of a crime, I don’t automatically trust them, but Truong My Lan may actually be guilty.

    Behind the stately yellow portico of the colonial-era courthouse in Ho Chi Minh City, a 67-year-old Vietnamese property developer was sentenced to death on Thursday for looting one of the country’s largest banks over a period of 11 years.

    It’s a rare verdict – she is one of very few women in Vietnam to be sentenced to death for a white collar crime.

    The decision is a reflection of the dizzying scale of the fraud. Truong My Lan was convicted of taking out $44bn (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27bn, a sum prosecutors said may never be recovered. Some believe the death penalty is the court’s way of trying to encourage her to return some of the missing billions.

    The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved.

    The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five others were tried with Truong My Lan, who denied the charges and can appeal.

    All of the defendants were found guilty. Four received life in jail. The rest were given prison terms ranging from 20 years to three years suspended. Truong My Lan’s husband and niece received jail terms of nine and 17 years respectively.

    Snip.

    By 2011, Truong My Lan was a well-known business figure in Ho Chi Minh City, and she was allowed to arrange the merger of three smaller, cash-strapped banks into a larger entity: Saigon Commercial Bank.

    Vietnamese law prohibits any individual from holding more than 5% of the shares in any bank. But prosecutors say that through hundreds of shell companies and people acting as her proxies, Truong My Lan actually owned more than 90% of Saigon Commercial.

    They accused her of using that power to appoint her own people as managers, and then ordering them to approve hundreds of loans to the network of shell companies she controlled.

    The amounts taken out are staggering. Her loans made up 93% of all the bank’s lending.

    According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong, more than $4bn (£2.3bn) in cash from the bank, and store it in her basement.

    That much cash, even if all of it was in Vietnam’s largest denomination banknotes, would weigh two tonnes.

    Yeah, none of that seems kosher…

  • Memorial Hermann Hospital: No liver transplant for you!
  • How CD sales and rock music both collapsed in the early 21st century.
  • A very interesting O.J. Simpson story:

    (Hat tip: Commenter Kirk.)

  • Strange news from Russia: Chechnya has banned music that’s slower than 80 beats per minute, or faster than 116 beats per minute. Both the Russian and Chechen national anthems are slower than that…
  • “John Tinniswood of Southport, UK is now the world’s oldest man.
  • How a programmer managed to rip off casinos for years. It helped that he worked for the Nevada Gaming Control Board…
  • “New ‘Biden Diet‘ Sweeps Nation: Pay The Same Amount Of Money But Eat 50% Less Food.”
  • Vatican Reluctantly Sides With God On Gender Theory.
  • Adorable prison break.

    • Hit the tip jar if you’re so inclined.





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    Posted in Budget, Democrats, Economics, Elections, Global Warming, Military, Social Justice Warriors, Texas, video, Waste and Fraud | 3 Comments »

    LinkSwarm For March 29, 2024

    Friday, March 29th, 2024

    Lies trying to hide how bad the Biden Recession sucks continue to unravel, a mini Texas-vs.-California update, Ukraine makes another oil refinery go boom, true depths of human depravity, some Bill Burr and Critical Drinker links, and two tons of Murica. It’s the Friday LinkSwarm!

  • Dallas Fed manufacturing survey: “It’s A Far Deeper Recession Than Publicized.”

    Against expectations of a small improvement from -11.3 to -10.0, the headline sentiment gauge dropped to -14.4 (the lowest end of analysts’ forecasts).

    Furthermore, the production index, a key measure of state manufacturing conditions, fell five points to -4.1, a reading that suggests a slight decline in output month over month.

    Other measures of manufacturing activity also indicated declines this month.

    The new orders index – a key measure of demand – dropped 17 points to -11.8 after briefly turning positive last month.

    The capacity utilization index edged down five points to -5.7, and the shipments index plunged from 0.1 to -15.4.

    The decline in new orders came alongside a surge in prices as raw materials costs rose to 13-month highs…

    That has the stench of stagflation lathered all over it.

  • Also worse than reported: employment numbers. “Philadelphia Fed Admits US Payrolls Overstated By At Least 800,000.”

    We first have to go back to December 2022, when we reported something shocking: as part of its data analysis of the “more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program”, the Philadelphia Fed found that the BLS had overstated jobs to the tune of 1.1 million! This is what the Philadelphia Fed wrote in its quarterly Early Benchmark Revision of State Payroll Employment report at the time:

    Our estimates incorporate more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program to augment the sample data from the BLS’s CES that are issued monthly on a timely basis. All percentage change calculations are expressed as annualized rates. Read more about our methodology. Learn more about interpreting our early benchmark estimates.

    So what did this “more accurate”, “more comprehensive” report find? It found that…

    In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES estimated net growth of 1,047,000 jobs for the period.

    Lots of detailed analysis snipped.

    Putting it all together, we now know – as the Philly Fed reported first – that the labor market is far weaker than conventionally believed. In fact, no less than 800,000 payrolls are “missing” when one uses the far more accurate Quarterly Census of Employment and Wages data rather than the BLS’ woefully inaccurate and politically mandated payrolls “data”, and if one looks back the the monthly gains across most of 2023, one gets not 230K jobs added on average every month but rather 130K.

    Of course, none of that paints Bidenomics in a flattering picture, because while one can at least pretend that issuing $1 trillion in debt every 100 days to add 3 million jos per year is somewhat acceptable, learning that that ridiculous amount buys 800,000 jobs less is hardly the endorsement that the White House needs.

  • I think I link a story like this every year: “California Leads Among U.S. States Sending People to Texas in 2022. Florida and New York combined sent fewer people to Texas than California.” Leave any leftwing politics behind when you move…
  • California has a $55 billion deficit. But don’t worry, for the 24-25 fiscal year, it’s a $73 billion deficit.
  • Ukraine hits another Russian oil refinery, this time in Samara.
  • “Russian network that ‘paid European politicians’ busted.”

    A Russian-backed “propaganda” network has been broken up for spreading anti-Ukraine stories and paying unnamed European politicians, according to authorities in several countries.

    Investigators claimed it used the popular Voice of Europe website as a vehicle to pay politicians.

    The Czech Republic and Poland said the network aimed to influence European politics.

    Voice of Europe did not respond to the BBC’s request for comment.

    Czech media, citing intelligence sources, reported that politicians from Germany, France, Poland, Belgium, the Netherlands and Hungary were paid by Voice of Europe in order to influence upcoming elections for the European Parliament.

    The German newspaper Der Spiegel said the money was either handed over in cash in covert meetings in Prague or through cryptocurrency exchanges.

    Pro-Russian Ukrainian oligarch Viktor Medvedchuk is alleged by the Czech Republic to be behind the network.

    Mr Medvedchuk was arrested in Ukraine soon after the Russian invasion, but later transferred to Russia with about 50 prisoners of war in exchange for 215 Ukrainians.

    Czech authorities also named Artyom Marchevsky, alleging he managed the day-to-day business of the website. Both men were sanctioned by Czech authorities.

    (Hat tip: Stephen Green at Instapundit.)

  • “Abbott says he needs ‘two more votes’ to pass school choice.” Presumably he’ll get those (and then some) in the May runoff.
  • “$100M missing from Bay area trust fund management company. A Bay area father who counted on a local non-profit to handle a trust fund designed for his daughter’s long-term care feels duped.” And this is a trust for special needs kids.
  • Another dispatch from the decline of Charm City.

    The radical leftists in control of Baltimore City Hall have plunged the metro area just north of Washington, DC, into apocalyptic levels. We advise readers to entirely avoid the metro area as violent crime spirals out of control.

    Failed social justice reforms, defunding the police, and widespread mistrust of the police have resulted in a skeleton police force that will no longer be able to protect residents in some regions of the city.

    Fox Baltimore reported last Tuesday that only three police officers were on duty for the Southern Police District, which includes more than 61,000 residents.

  • Joe Lieberman, RIP. One of the least reprehensible Democratic senators of the last 30 years or so. But I still remember this:

  • Don’t click on this link unless you want to plumb the depths of human depravity. Noteworthy: “He and his husband.”
  • Flagstaff school board wants to parents to know they’re going to shove social justice down their children’s throats no matter what.
  • “GOP Delegates Adopt Resolutions Criticizing H-E-B CEO Charles Butt for Anti-School Choice Donations.”
  • Republicans file bill to strip money from woke medical schools.
  • Stellantis, AKA The European Monster That Ate Chrysler, just just laid off a whole bunch of white collar workers. Note their mention of focusing on “implementing our EV product offensive.” Oh yeah, they’re boned.
  • Speaking of EV layoffs, Ford is cutting down the staff of their F-150 Lightning plant to one third of what it was. The Lightning is enjoying a double whammy, in that people don’t want EVs, and Ford’s core customers can no longer afford trucks with an average selling price north of $80,000.
  • Florida Governor Ron DeSantis declares victory over Disney, as the latter has dropped their lawsuit over the the elimination of their special district status.
  • Sean Combs, AKA “Puff Daddy,” AKA “Diddy,” raided by the FBI. “A source close to the investigation told NBC News that the raid was connected to allegations of sex-trafficking and sexual assault and the solicitation and distribution of illegal narcotics and firearms.” “Source close” caveats apply.
  • The federal government is going to allow a shuttered nuclear power plant to be restarted. “The federal government announced that it would provide a $1.5 billion loan to restart a nuclear power plant in southwestern Michigan. NJ-based Holtec International acquired the 800-megawatt Palisades plant in 2022 with plans to dismantle it, but with support from the state of Michigan and the Biden administration, the emphasis has shifted to restarting the nuclear power plant by late 2025 instead.” Not wild about the loan part, but restarting America’s nuclear energy growth is long overdue.
  • Used Japanese homes are worthless Not just because of the shrinking population, but because they’re designed to be.
  • Bill Burr answers questions from the Internet.
  • The Critical Drinker is not impressed with the Road House remake. “The Patrick Swayze original wasn’t exactly peak cinema. It was dumb and over-the-top and silly, and I don’t imagine people were exactly crying out for a remake. But damn, man, it’s like Citizen Kane compared to this version.”
  • School tries to ban American flag from truck. Result: Two tons of Murica.
  • Twitch is cracking down on streams that “focus on intimate body parts.” After watching this, I have one question: Where exactly did the lady featured obtain her “automatic butt jiggler?”
  • Feel-good crime aftermath story:

    (Hat tip: Ace of Spades HQ.)

    • Hit the tip jar if you’re so inclined.





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    Posted in Border Control, Budget, Crime, Democrats, Economics, Foreign Policy, Military, Republicans, Social Justice Warriors, Texas, Waste and Fraud | 5 Comments »

    Japan Ends Negative Interest Rates

    Monday, March 25th, 2024

    The Bank of Japan just ended 8 years of negative interest rates.

    Indeed, this is the first interest rate hike for Japan in 17 years.

    According to Keynesian economics, Japan should have experienced an economic boom from all that monetary stimulus. It did not. Prices were stagnant. Wages were stagnant. GDP growth was anemic.

    Japan spent more than 1.2 quadrillion yen in deficit spending trying to boost its economy, and all they have to show for it is a debt that’s over 200% of its GDP.

    Yet deficit spending remains the preferred policy solution of just about every damn country in the world.

    Back in the dim mists of time (i.e., the 1980s), Japan Inc. was going to take over the world. That didn’t happen either. Instead, the Japanese bubble, based in huge measure on wildly unsustainable real estate valuations (“At the peak of the bubble economy, Tokyo real estate could sell for as much as US$139,000 per square foot, which was nearly 350 times as much as equivalent space in Manhattan. By that reckoning, the Imperial Palace in Tokyo was worth as much as the entire US state of California.”) popped. There then followed three decades of economic stagnation.

    Many will point out that Japan’s shrinking demographics make it an economic outlier, but a whole lot of Western nations aren’t too far behind.

    You can’t deficit spend your way to prosperity, and attempts to do so end in disaster.

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    Posted in Economics, video | 5 Comments »

    Cuba Runs Out Of Money

    Tuesday, March 19th, 2024

    Margaret Thatcher said “The problem with socialism is that you eventually run out of other people’s money,” but Cuba appears to have gone them one better: Bad policies means that they’re now running out of their own money.

    ‘There is no money in the banks’: Cubans stand in line since dawn to cash their paychecks.

    “There is no money in the banks to pay people, everyone is upset and they haven’t even given us an explanation,” said Leydis Tabares, a Cuban who resides in Camagüey, to Martí Noticias this Friday.

    The problem is nationwide, said Cubans consulted from different provinces by our editorial team. The lack of cash in ATMs has caused state workers to be unable to withdraw the salary deposited onto their magnetic cards.

    “In Sancti Spíritus, queues start forming since dawn because by nine or ten in the morning there is no cash left. Some employees have had to wait up to 45 days to be able to withdraw,” reported independent journalist Adriano Castañeda.

    According to the journalist, the process of banking and the limitation of cash withdrawals is the cause of this crisis. “That system is a disaster,” he opined.

    “A general reform is needed in Cuba, of all kinds, social, political, and economic,” commented independent journalist Guillermo del Sol. According to him, many owners of private businesses in the country have stopped depositing cash due to the same restrictions imposed by the regime.

    “The money that Micro, Small, and Medium-sized Enterprises (MSMEs) deposited in the bank they couldn’t retrieve, so they stopped depositing money in banks. And since they are the ones carrying the weight of what little works within Cuba, the banks ran out of money. That’s what’s happening right now,” he explained.

    So even in communist Cuba, small and medium size business are what keeps the economy running, and the commies are destroying them by withholding their access to their own money. That’s some mighty fine management, Lou.

    In Guantánamo, the shortage of money for worker payment affects all sectors and is creating another type of business in the streets.

    “Some charge for making the long queues in the early mornings for employees. There are also people who have cash and charge a 10% fee to deliver the amount of money they have on the card,” commented independent journalist Anderlay Guerra Blanco.

    “When there’s an ATM with money, the queues are endless,” said opposition member José Rolando Cásares, who resides in Pinar del Río.

    Independent journalist Vladimir Turró explained that in the capital, there are even people who line up pointlessly because at dawn, the bank doesn’t supply cash to the ATM.

    “We’re talking about people who gather at banks, some even go to sleep at the ATMs, trying to get some cash, and so they spend days trying to withdraw money,” he said.

    The source of the problem (besides, you know, the communism) is Cuba’s push for a cashless economy.

    When Cuba in early August announced it was taking a major step towards electronic banking and a “cashless” society, the offices of fledgling small businesses across the communist-run country were left scrambling to figure out how to respond.

    Most alarming to many budding entrepreneurs was a new 5,000 peso ($20) daily cap on cash withdrawals for businesses, one of several measures the government said were aimed at forcing Cubans to do their transactions electronically, via transfer, online payment and bank cards.

    So commies limit bank access to a business’s own cash, and they’re shocked that businesses stop depositing it in banks.

    Lack of folding money isn’t the only economic malady befalling the Cuban people. Inflation is actually down, from an eye-watering 46% in the middle of last year to a still terrible 30%.

    Cubans are preparing for a new wave of inflation after the government last week rolled out details of an austerity plan that economists say will touch nearly every facet of the communist-run island’s already flailing economy.

    I guess the austerity plan means the usually tactic of just printing more money is off the table.

    The measures – which include price and tax increases and cuts in subsidies – will slow a soaring budget deficit forecast to exceed 18% of gross domestic product and set the stage for growth, according to Prime Minister Manuel Marrero.

    Authorities have already announced gas at the pump will jump nearly five-fold on Feb. 1. But some economists say less visible government price increases such as on wholesale fuel and moving freight, as well as sales and import taxes, are sure to ignite substantial hikes on most products and services at the retail level.

    “In economics, such prices are not increased in one area without affecting others,” Cuban economist Omar Everleny said in an interview in Havana. “And in general they are passed on to consumers. I think they will increase 400% to 500%.”

    Reuters spoke with several Cubans in Havana who said prices were already rising following the announcements and in anticipation of the price hikes – and were set to soar further in the coming weeks.

    Snip.

    Inflation was 30% last year, cooling slightly from 38% in 2022, according to the government. Many economists say those rates fall short of reality as the government does not adequately monitor a booming informal market pegged to an informal exchange rate much higher than the official one.

    In Holidays in Hell, P. J. O’Rourke talks about exchanging $480 for a gymbag full of cordobas in Sandinista Nicaragua. “You probably have to take economics over and over again two or three times at Moscow U before you can make cash worth this little.”

    Government officials have announced wholesale fuel prices will double next month, freight transportation will jump between 40% and 60% in March and for the private sector import duties will increase five-fold. Private companies will also be charged a new 10% sales tax on wholesale transactions.

    So prices are soaring, but people can’t get their own money out of the bank to make ends meet. So Cuba’s communist government has accomplished the rare feat of a liquidity crunch and soaring inflation at the same time.

    A very special kind of fail indeed.

    (Hat tip: The Other McCain.)

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    Posted in Budget, Communism, Economics | 14 Comments »

    Report On The State Of Hillsboro

    Sunday, February 25th, 2024

    Hillsboro is a large town/small city of some 8,000+ people that most Texans have probably driven through at some point. They’re a county seat, sit smack dab in the great plains agricultural belt and have some light manufacturing, but their main economic advantage is being right where I-35E and I-35W join/split to I-35 traveling south to Waco, Austin and San Antonio. Hillsboro is perfectly positioned to be a road trip snack and restroom break stop.

    For years one of Hillsboro’s most notable features was its outlet mall, with a variety of national brands. I bought a Fossil watch from their store many, many years ago.

    Well, I traveled through there to and from the Metroplex for a funeral, the outlet mall is dead. Though the two open air mall segments have space for some 86 stores, there’s now precisely one open, a Bath and Body Works. The Hillsboro outlet mall was already ailing before the Flu Manchu lockdowns, but that seems top have accelerated the decline. (San Marcos outlet malls, also on the I-35 corridor, seem to done a much better job weathering the economic headwinds.) This would suggest Hillsboro has entered a period of economic stagnation and decline.

    Not so fast! Buc-ess, the Texas mega convenience store chain, is opening a store in Hillsboro. Also, Buc-ess pays pretty good wages for a convenience store: “$18.00 * Medical * Dental * Vision * 3 Weeks Paid Time Off * 401k 100% Match up to 6%.”

    This is the point where I’m supposed to insert some pithy “when one door closes another opens” aphorism. But I rather strongly suspect this particular mall closing scenario plays out very differently in a blue locale like New York or California, where everyone with the means to do so is moving away from those failing high-tax, high-crime states as fast as they can.

    There’s no one coming to save those towns.

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    Posted in Democrats, Texas, Uncategorized | 10 Comments »

    Zeihan on Evergrande: 1.5 BILLION Unsold Condos?

    Tuesday, February 6th, 2024

    I haven’t been updating every twist and turn of the Evergrande collapse, but we’re going to look at it again because this Peter Zeihan video has a fairly staggering statistic. He asserts that there are 1.5 BILLION (with a B) unoccupied housing units in China. Even though we already knew about the ghost cities, that’s like an entire ghost nation for a China that was already headed down the economic crapper.

  • “A Hong Kong court has ruled that China’s largest property development group, Evergrande, is bankrupt and needs to be broken up. This is something that the Chinese government has spent a lot of effort on the last two years not happening.”
  • “There’s two big things that dominate the Chinese economy. The first is something I call hyperfinancialization: The idea that the government both de facto confiscates the savings of the citizen population so it can only go into projects funded by Chinese State Banks, as well as massively expanding the money supply to a tune of like almost triple what we have here in the United States.”
  • “It’s a public stability political control approach to finance. It’s not about profit, it’s about throughput, because throughput requires a lot of bodies.”
  • “Number one, you get companies like Evergrande, who gorge on all this bottomless supply of debt to build build, build, build, build, even if there’s no demand.”
  • “Second, you get a population who knows that their private savings is almost worthless, because the Chinese government is forcing them to keep it in the state banks, and they want to put it into a hard asset that preferably the state can’t control. And if they can’t get their money out of the country, then the next best thing is a hard asset in the country, which typically is property.”
  • “You have somewhere probably in the vicinity of 1.5 billion units in the country that have never been lived in, never will be lived in. So you’re talking about 100% overbuild, conservatively. Some estimates say it’s as high as three billion, which is just so far beyond stupid.”

    • This is such a huge number that I’m having trouble believing it. After all, 1.5 billion is more than at least once current estimate for the current total number of houses in Asia. Is there supporting evidence? Well, I found this.

    “How many vacant homes are there now? Each expert gives a very different number, with the most extreme believing the current number of vacant homes are enough for 3 billion people,” said He Keng, 81, a former deputy head of the statistics bureau.

    “That estimate might be a bit much, but 1.4 billion people probably can’t fill them,” He said at a forum in the southern Chinese city Dongguan, according to a video released by the official media China News Service.

    That’s people, not homes. Still, even if you cut it in half, to 750 million vacant condos, that’s a huge number. That’s the equivalent of 30 empty Shanghais.

    Back to Zeihan:

  • “Evergrande going down means that their debts aren’t going to be serviced anymore, and the physical assets they have are going to be parceled up and foreign investors are going to be coming in seeing what bits that they can get.” Any foreigners investing in Chinese real estate need their heads examined.
  • “These things are things that the Chinese Communist Party would not normally allow to happen, so there’s a couple ways that this can go, none of them are good.”
  • “Option number one is we follow a western style bankruptcy and restitution program where this system is broken up and a lot of their assets are sold at pennies, maybe dimes, on a dollar.”
  • “You can count on private citizens being up in arms. I mean, the best estimate I’ve seen out of China is at 70% of total private savings is wrapped up in real estate, and most of these assets are worth no more than 10 cents on the dollar.”
  • “You have a fire sale of the single largest player which controls one sixth of the market, holy shit, things are going to get real very, very, very quickly.”
  • “Option number two is that the Chinese step in and abrogate the Hong Kong ruling. Now legally this cannot happen, but the Chinese Communist party is not really big on legal details when it comes to Hong Kong in particular.”
  • “Then Evergrande goes on some sort of state drip and everything with the system just kind of limps on, with the understanding now that Hong Kong has no legal authority over its own holdings, which will start an exodus of what few international firms are still there.”
  • “Regardless how this goes, don’t expect anything in the market to get better.”
  • “Evergrande may be the biggest player in this market, but it is by far not the only one who’s been doing stupid things like this, building condos that have no demand or running it like a Ponzi scheme. Every development company in the country basically operates this this way, and the second and third largest players in the industry are state-owned.”
  • “Even if all of a sudden this place were run by a bunch of Austrian economists, it’s too late.” Because of the one-child policy, there simply aren’t enough people of home-buying age.”
  • “I don’t want to say anything overly dramatic as ‘This is where it all starts to fall apart,’ because we’ve had a lot of things like that go down in the last 18 months. But this cuts to the core of what enables the average [Chinese] citizen to actually support the government, and there’s no way we move forward from this without a lot of side damage.”

    • The Chinese economy is already sucking. If the housing oversupply is really as bad as Zeihan makes out, China is in for an economic upheaval that makes 1929 look like a mild case of the hiccups.

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    Posted in video | 32 Comments »

    Ukraine Switching To A War Of Attrition Against Russia?

    Sunday, February 4th, 2024

    Two videos on increasing Russian logistics difficulties in the Russo-Ukrainian War. First up: A video that suggests Ukraine has switched from a territory recapture strategy to an attrition strategy.

  • “Russia is burning whether it’s oil terminals on the Baltic and the Black Sea, factories in far-flung Siberia, or military bases in Crimea, it seems almost every day something bursts into flames in Putin’s backyard. And Ukraine is thought to be the one behind it.” It’s an open question whether structure hits in places like Siberia are Ukrainian “werewolf” teams operating behind enemy lines, or native anti-Putin/anti-war (or even anti-Russian) partisans, but the effect seems the same: Russia now has to worry about attacks to its military, transport, energy, and manufacturing infrastructure far from the frontlines in Ukraine.
  • Zelensky warned Putin that if Russia attacked Ukrainian cities with indiscriminate missile attacks again, Ukraine would hit back. When it did, “Ukraine struck back a fire at the electrical substation outside Moscow, plunged three districts of the capital into darkness. Water pipes also burst, leaving people freezing in their homes. The plague of accidents soon spread to the cities of Omsk and Novosibirsk, deep in Siberia, which were left without heating as temperatures fell below -2.” Actually, Omsk and Novosibirsk aren’t “deep” in Siberia, because the place is so vast there another five time zones east of there.
  • “Soon after attacks began on critical infrastructure, including oil refineries upon which Putin’s economy relies. To date, three refineries have been blown up or set on fire, including two which were hit by long-range Ukrainian drones. One of those the Ust-Luga oil refinery near St. Petersburg, is almost 600 miles from Ukraine.”
  • “Railways and factories have also been blown up or burned down at the same time the Ukrainians have stepped up their campaign against Crimea.” Naval successes we’ve covered here already skipped.
  • At this point the video argues that Ukraine’s strategy was to liberate Ukrainian territory, no matter the strategic value. I don’t think that was the case.
  • Following the “failure” of the summer offensive (I would say “limited gains”), “Ukraine is digging in and refocusing liberation of territory is no longer the main goal hitting Russia where it hurts most.”
  • “Ukraine knows that victory in a long war depends on two things above all else: The will of people to keep fighting, and the ability of the country to provide weapons for them to fight with, and that’s where these drone missile and sabotage attacks come in.”
  • It then argues (as many others have) that Crimea is Putin’s main weakness, and that losing it will cripple his prestige and ability to stay in power and continue the war.

    • I think there has been a shift in Ukrainian strategy, but that shift has mainly been driven by the development and availability of longer-ranged weapons Ukraine lacked earlier in the war, combined with the effects of a long-term campaign to degrade Russia air power, naval assets and SAM systems, opening up avenues for longer range strikes. Ukraine focused on attacking Russia’s logistics systems right after the Battle of Kiev was won, but now they have the capability to hit much deeper into Russia’s logistics infrastructure.

    Actually, I’m surprised there haven’t been any reported attacks on the Trans-Siberian Railway, given what a long, slender link that is. A few medium-to-long range drone teams inserted into northern Kazakhstan or Mongolia could wreck real havoc on trains, lines, bridges, etc.

    Next, a video from Kanal 13 (very much a pro-Ukrainian source) suggests that the war and sanctions are cratering Russia’s military industrial complex.

  • “The Russian military industrial complex is being destroyed because of the war against Ukraine.”
  • Dimitri Fidive, CEO of the Muram Machine Building Plant, wrote in an email intercepted by the activists, that inflation and the shortcomings of Russia’s bureaucratic approach prevents plants that form the country’s military industrial complex from fulfilling government orders.”
  • “Plants are forced to sell their goods at prices set in 2019, but are at the same time expected to purchase details at market prices and in advance.”
  • “The money received from the government was not enough to cover the interest on the credit that his firm would need to take out to pay its suppliers.”
  • “Money is tied up until the completion of the government contracts, which normally last 3 to 5 years, meaning during this time the money is effectively frozen.”
  • “There is a shortage of staff at the plants due to both mass mobilization and a lack of accommodation [housing] in the area.”

    • Hell of a way to run a railroad. One wonders how extensive these problems are with other companies in Russia’s military industrial complex

    Ukraine’s strategy has shifted more in relation to the way the war developed, and the changing availability of western weapons, than any fundamental shift in strategy. It became apparent that this was going to be a war of attrition in the first year, and the question of which would break first: The west’s willingness to send Ukraine weapons, or Russia’s economy and ability to wage it’s illegal war of territorial aggression?

    Nothing about that strategy has changed, only Ukraine’s greater reach to affect the latter.

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    Posted in Economics, Foreign Policy, Military, video | 16 Comments »

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