Discover more from Super Macro by Christian Whiton
Arguing Against Progressives’ Climate Religion (Finance Friday)
Evergrande placing icebergs in path of unsinkable equity markets
It’s silly season for climate change alarmists as the UN holds its autumn hootenanny in New York and we lurch closer to the annual “Conference of the Parties,” which meets in early November for the 26th year, this time in Glasgow, Scotland.
The elite media and political class assure us that we are now trapped in a climate crisis. This crisis is evidenced by the occurrence of droughts, wildfires, hurricanes and other weather events that have been consistently observed here since explorers discovered the New World 500 years ago—and despite the fact that climate scienticians preached as recently as a few years ago that individual weather events should not be attributed to climate change.
The fake science pushed on the public by the government and media has worked somewhat. A Pew poll last year indicated 62% of adults think climate change is affecting their local community. Gallup, exhibiting the trademark arrogance and refusal to countenance disagreement that mark the climate debate, said that 64% of adults “acknowledge the scientific consensus” that human activities cause climate change. On the other hand, a poll in 2019 revealed that 68% of Americans would not pay $10 more per month on their electricity bill to combat climate change. The same poll showed that if you lower that amount to $1, then 57% of the public would pony up. We see that the American public as usual knows better than the elites. The climate is changing as it always has and carbon emissions are something we should probably curb gradually through nuclear power, natural gas, and renewables, but there is no “crisis.” Certainly raising the cost of energy, which would stunt human progress generally, is not the right answer.
Undaunted, our blue-pilled betters in Hollywood and New York are plunging ahead with alarmist propaganda. All of the major late night hosts on the leftwing networks emphasized climate on Wednesday night. It bombed. My colleague, Steve Yates, summed up this latest affront to comedy perfectly:
My kids can’t believe it, but there once was a time when young folks (ya know, the demo) stayed up late to be entertained. Now it’s late night Sesame Street for liberals. Keep pushing viewers to [Greg Gutfeld]. Cool with dads who grew up with free speech and real humor!
In the same way that Roger Ailes, creator of Fox News, made it big by discovering this small demographic called half of America, real comedians and satirists can strike a gusher if they ignore the woke mob. The appetite is out there. They’ll have to work around the mostly hopeless existing distribution channels, but that is becoming easier as barriers to entry wobble. (Conservatives could jumpstart this transition by ceasing to waste money on things like the Heritage Foundation, RNC, their college, or the local ballet, and instead fund either conservative or apolitical media companies, screenwriters, real writers, documentarians, videographers and producers, comedians, etc.)
How best to make a fact-based argument against climate change alarmists? Don’t do what I once did when a young man in a Washington, DC bar earnestly told me that he had embarked on a career of fighting climate change. I asked him if he knew that there were actually vineyards in England among the resident blue-painted savages when the Romans arrived or shortly thereafter, which tells us that the climate is always changing, and that he was wasting his life in fretting about the topic professionally. Neither he, nor my friend who was courting him seemed remotely impressed with my argument.
Far better at making the skeptical pitch are people like Bjorn Lomborg, a former Greenpeace activist who came around after studying the lack of evidence behind alarmist environmentalist claims, including those about climate. He has a new book out, “False Alarm,” which I haven’t yet read, but his 2001 opus, “The Skeptical Environmentalist,” was always within arms-reach of my desk in my first stint at the State Department in the Bush administration. It was my privilege to work on speeches explaining to foreigners why we would not be party to the Kyoto Protocol, the world’s greatest Rube Goldberg Machine until it was supplanted by the Paris climate deal. Lomborg has a blog worth reading.
Another persuasive resource is Judith Curry, a climate scientist formerly of Georgia Tech. Curry has a web site that goes deep into climate developments. In a gem of a post from July, “5 minutes,” she recounts how in that limited amount of time she made the case against alarmism. Have a look. Her week in review summary recently linked to an inconvenient study that showed Antarctic glaciers are melting because of geothermal heat, not climate change. She and her colleagues apply a true scientific measure to news and data about climate in a way others can’t since they are dependent on grants that require them to be alarmists.
If you look up video of these or any other measured voices on YouTube, you’ll see that the Google-owned company has appended all content featuring them with “context” that points you to Wikipedia’s entry on climate change, which is a masterpiece of politics passed off as science. The page neatly reflects the fanaticism, groupthink, data falsification, and hysterical rejection of any healthy doubt that mark the debate over raising energy costs dramatically to fight the carbon boogeyman. Take a look for a good laugh and a reminder that progressive keyboard warriors are rewriting reality on Wikipedia.
Unfortunately, as others have pointed out, climate change for progressives is more like a religion than a political belief that might be debatable. To the extent that some religion is hardwired into the human brain, climate change alarmism is the perfect substitute for those who wish make a religion out of politics instead of God. You have Earth in its pristine state (Eden) before the evil internal-combustion engine (the snake and the apple), a forlorn savior (previously Al Gore, now Ugly Greta), man’s current mostly sinful existence (non-Tesla drivers), and a prophesized apocalypse if we don’t straighten up and fly right to close out the allegory.
Yes, these guys ripped off the Bible.
Moderate Dog Mattis the Stock Picker
A surprise witness turned up in the trial of former Theranos CEO Elizabeth Holmes: former Secretary of Defense James “Mad Dog” Mattis. It turns out that Moderate Dog wasn’t any better at picking companies than managing the Defense Department, which he inherited and imparted in a state completely unprepared to fight China. Before his stint as SecDef, Mattis was on the board of Theranos. He told the court that he also bought $85,000 of stock in the company that fraudulently claimed to have breakthrough blood-testing technology “to have skin in the game.” As to why he was on the board, the Wall Street Journal reported:
He testified that he was hesitant to join the board when invited.
“I cautioned her I was not a medical person,” Gen. Mattis said, adding that Ms. Holmes assured him she wanted board members with a broad base of backgrounds.
Gen. Mattis said Ms. Holmes was interested in his expertise building elite teams, creating a corporate culture and getting commitments out of people.
Mattis certainly didn’t build much of an “elite team” at Defense; he used plenty of McCain retreads and other mediocrities. Perhaps Holmes wanted a potted plant with no capacity to suspect her of alleged fraud and got one. Mattis shouldn’t feel too bad about losing $85K on the venture; Rupert Murdoch reportedly put in $150 million.
Other gems about the highly credentialed dimwits who define American corporate culture today are coming from the trial. While texting her lover, who was naturally also the company’s president, about a full moon in 2014, the then 30-year-old Holmes waxed poetic:
My new life as of this night and forever more: - total confidence in myself best business person of the year – focus – details excellence – don’t give what anyone thinks – engage employees in meetings by stories and making it about them (ie prepare well).
Vomit. A story about Holmes that would really engage employees is the one that few in our culture and media are honest enough to discuss: that she was elevated far beyond her level of competence and allowed to escape accountability until after it threatened people’s lives because Silicon Valley was desperate for a successful woman-run company. The current woke crusade running through corporate America will lead to untold scores of dangerous failures just like Holmes.
How fragile is the currently massively overvalued stock market? Apparently pretty fragile if it can fall out of bed over a Chinese real estate heavyweight defaulting on its debt. Evergrande is a behemoth in China, although it has little direct exposure to the USA. But everyone knows that real estate and associated debt in China is a house of cards. In fact, the broader economy is riddled with questionable debt that is often allocated based on political influence rather than merit. Such is the way with commies.
For those who can remember all the way back to 1997, a currency devaluation in Thailand of far less importance to U.S. equity markets than turbulence in China today caused a regional financial meltdown and a 12% decline in U.S. stocks (7.2% in one day).
The turbulence Evergrande caused on Monday shows how jittery markets are about something that can pop the bubble. The steep market recovery later in the week is cause for more concern, not comfort.
Will the Chicoms bail out Evergrande? There are reports that Beijing is telling local officials to prepare for the firm’s failure. That outcome still allows for a bailout with Chinese characteristics. Instead of an orderly trip to bankruptcy court where the equity holders are wiped, bond holders take a haircut, and new management is installed, China will likely stick it to some people, require some old and new creditors to provide zero-interest loans to Evergrande, send some people to prison, take direct control of some property, and so on. CCP boss Xi Jinping is already well into his left turn, having shaken down Jack Ma and dozens of other businessmen who flew too close to the sun. Xi will use a hybrid restructuring of what’s left of Evergrande to augment his power and that of his cronies in the Party. He has made clear that he does not fear economic risk to the degree of his predecessors, so hold on.
The Sheriff of Nuttingham
The SEC probably has Robinhood in its crosshairs. The company has an obscene market cap of $39 billion on a run rate of about $2 billion in revenue and a similar level of net loss. The zero-fee darling of new meme trader bros has raised concerns with the SEC, which is examining its business model of “payment for orders.” In effect, Robinhood and others make money by sending trades to market makers who profit from the spread between buyers’ bidding price and sellers’ asking price. It’s unclear what the cost to investors of this arrangement really is. It undoubtedly hits high-frequency day traders the hardest: the spread is irrelevant to long-term buyers but significant to people who jump in and out of positions. Robinhood also just announced that it was launching its own cryptocurrency wallet as bitcoin becomes a bigger part of its business. The company might as well send customers a bright red stamp that reads “PLEASE AUDIT ME” for their tax returns.
The SEC is also reportedly concerned about meme trading in general and Robinhood customers who trade as if it were a video game. It’s hard to imagine that they won’t seek greater regulation. For those who remember the 2000 dotcom meltdown, what happens next is not a big mystery. Day traders think their level of information matches professional traders, but it does not. You’ll never be faster or wilier than well-paid geeks at Bloomberg terminals on trading floors. When markets rise sharply, day traders convince themselves of their genius. (You can do the same if you only check your account on days the market is up.) When the bear market arrives and it dawns on day traders that equities can decline dramatically, and losses accrue, they trade less or abandon their accounts. E*Trade itself ran ads before the 2000 crash that appealed to day traders by suggesting you be “your own sugar daddy.” The amusing spots disappeared when markets tanked.
I’ve tried to short HOOD before but balked at the 70% interest rate E*Trade wanted before it declared the equity too hard to borrow at any interest rate. I settled for put options.
Sorry Karen, the Pandemic May Be Over
Democrats have to keep the pandemic going to some degree, at least for a while. The Biden administration’s mixed messages and general incompetence with WuFlu have helped bring Joe Biden’s approval rating into negative territory (although they were not the prime mover). A state of emergency must exist for at least a few more weeks for Democrats to pass their multiple spending bonanza bills (“infrastructure,” several trillion more in just-for-fun spending, and the Fiscal Year 2022 federal budget and tax hikes).
But what do the actual numbers tell us? Judging from the seven-day moving average of new cases, the delta wave peaked on September 3rd and has begun a gradual decline. Deaths, which topped out at about one-half the January peak, have also leveled off and should trail case declines by a week or two.
The silver lining to the delta surge is that is appears to have been surmounted without lockdowns or similar restrictions except for big sillies wearing masks on the left coast and in Northeastern cities. What brought it down? More immunizations? Herd immunity? The more infectious nature of delta may have finally led to the discovery of how many infections and recoveries are necessary for herd immunity. But that topic is off limits. Because of science.
Another Bad Week for Geritol Joe
The year 2000 called and wants its talking points back. At the UN General Assembly, President Joe Biden said he does not want a new Cold War with China. His spokeswoman Jen Psaki added that “...the President’s view and this administration’s view is that our relationship with China is one not of conflict, but of competition.”
Incidentally, a president and his administration are one and the same if you believe in the unitary executive, as mandated by the Constitution. But it’s amusing when presidential aides imply that Joe Biden isn’t really calling the shots. As for China, it was a firmly held establishment view that Beijing would be a healthy competitor instead of an adversary or enemy from when Bill Clinton signed a bill in 2000 giving China normal trade status until Donald Trump was elected in 2016. Are we going back to pretending that the Chinese Communist Party can be a friend? Western progressives seem to imagine that China will be what we define it to be, forgetting that Beijing actually decides how Beijing acts, and will do so without reference to our creative word salad.
Biden also talked up the “rules-based International order” at the UN as a construct we must love and support. I first noticed this nonsense when I was back at the State Department in the early Trump administration. I tried to remove it from speeches and talking points whenever I saw it, with mixed results. Weenies at the NSC and in the vice president’s office sometimes put it back in. The main problem with the rules-based order is that it doesn’t exist. It’s a make-believe construct from the highly credentialed bobos of our national security establishment. When China or Iran attack your country, whether with physical force, digitally, or through political warfare, how do you contact this rules-based international order? Can Joe Biden or the UN put you through? The idea is simple and simply dumb: that the collection of treaties, executive agreements, institutions, annual gatherings like APEC and G7, and other activities on which or at which the “international community” (which also doesn’t exist) and its bureaucrats (who certainly do exist) waste their lives will somehow contain bad actors.
The problem is that the people we have trouble with today—Chicoms, Iranians, Islamists, terrorists, and others who might mess with Texas—don’t actually care about any of those “rules-based” things. The Chinese of course say they do and enjoy duplicitously condemning the USA for acting unilaterally, but no institution or paper is remotely sacrosanct to the Chicoms. Just look at how seriously they took their treaty agreement not to enslave Hong Kong.
Biden has exceeded all of his recent predecessors at creating a gap between his words and reality. He spoke of diplomacy, but there is little chance of any diplomatic breakthrough after a president has undermined American power as Biden did in Afghanistan. Even France and other governments in Old Europe with delusions of adequacy feel little need to concede anything to Biden.
He spoke of human rights, but normal people around the world will juxtapose that phrase with the reality that the military, under pressure from the White House to change the headlines from the jihadist attack that killed thirteen servicemembers in Kabul, ordered a bombing that killed seven children and no bad guys.
Speaking of that, I was on NewsNation opposite a retired Army general who said that Central Command boss Kenneth McKenzie deserves credit for taking responsibility for the killing. But McKenzie’s statement of accountability is about as sincere as Joe Biden saying the bucks stops with him right before he blames Donald Trump for something. If McKenzie really wants to take responsibility for the killing of seven children in a political expediency operation, he should turn in his stars and face prosecution for negligent homicide.
Joe Biden is still losing altitude and even pointless CNN is worried. Chris Cillizza cited a poll showing only 32% of Iowans approve of the job the Joe Biden is doing, writing:
If Biden’s numbers are anywhere close to this bad in other swing states—and districts—Democrats’ hopes of holding onto their very narrow three-seat House majority are somewhere close to nonexistent.
Nationally, even liberal Gallup has Joe Biden at 43% approval, down from 49% in August. Other polls show Trump slightly edging out Joe Biden in approval. The trend is so positive for Republicans I worry that they aren’t going to swing for the bleachers in next year’s elections, instead making the mistake of playing it safe.
Mediocrity of the Week
You’d think the current director of the greatest non-gay film franchise in history would be protective of the franchise’s legacy. (I say “non-gay” to exclude the Fast & Furious series.) But like every other wimp in media and entertainment, Cary Fukunaga, director of the upcoming James Bond film No Time to Die, thinks he can buy some woke insurance by preemptively playing to the mob. As reported in the New York Post, Fukunaga lamented that Sean Connery’s James Bond was “basically” a rapist. He added: “It’s a story about a white man as a spy in this world, but you have to be willing to lean in and do the work to make the female characters more than just contrivances.” Oh, come on. You’re not remaking Gandhi. This is Bond. I’d be more impressed if he “leaned in” by figuring out a way to recycle Pussy Galore from Goldfinger. (Prequel?!)
Even more wokeism may be in store for the franchise. Current Bond actor Daniel Craig, who is almost as good as best-Bond-ever Roger Moore, saved the franchise with his patina of violence and even malevolence, and the reinsertion of something called plot into the movies. He will pass the reins to someone else after No Time to Die, and felt the need to say that Bond should be played by a man. Good for Craig; Ian Fleming of course created Bond with his identity as a Scottish male orphan the fundament of the character. What will happen if the new Bond is a transgender, vegetarian, aboriginal, lesbian of color?
It would kill a franchise that might actually warrant euthanasia. Hollywood is in a severe and enduring drought of creativity. Like Cortés, sometimes burning your own ships to motivate the troops is the right path.
Have a great weekend!