Thursday, January 27, 2022

Why Ukraine?

One has hesitated to weigh in on the current  showdown over Ukraine. You remember Ukraine. Joe Biden entered into a quid pro quo with the Ukrainian government, in order to shield his grifter son from prosecution, and the American Congress decided to impeach Donald Trump for entering into a quid pro quo with Ukraine.

Somehow, somewhere America can no longer think straight.

But, then again, when it comes to Ukraine, or, more specifically, to Russia, Western Europe is reaping what it sowed. After all, the green leftists in Europe have been shutting down coal generating plants in favor of natural gas. And the sainted former German Chancellor Merkel shut down Germany’s nuclear facilities, in order to be greener than thou.

So, Europe now depends on Russia for its energy requirements. This means that however much the Biden administration is thumping its chest in order to pretend to be tough and resolute, it is doomed to be a leader without very many followers. 

Given that the Biden presidency has been circling the drain, and given the appalling show of weakness that Biden showed in surrendering Afghanistan, one understands that the Ukraine crisis appears to be a wag the dog moment, a distraction and a chance for our enfeebled president to show that he still has some backbone left.

And yet, Republicans are all-in for war over Ukraine. One will not offer any more explanation than their wish to show how tough and resolute they are, but still, is Ukraine worth a military confrontation with Russia? To that we must add that those on the right, like Tucker Carlson and Tulsi Gabbard, who oppose military conflict with Russia are  now being branded Russian stooges, or some such. 

One has a right to be somewhat confused. One also has a right to think that the American mind, whatever portion remains, has seen better days. The stupidification of America proceeds apace. Public debate about consequential political issues has been reduced to chest thumping and macho posturing. It is not a good thing. If you were Vladimir Putin would  you be quaking in your shoes?

Speaking of the American mind, one of our leading intellectuals, one Francis Fukuyama, he of the end of history fame, has weighed in on the issue. You recall that the reconstructed Hegelian once imagined that history would end when the world entire decided that liberal democracy was the best form of government.

When Fukuyama pronounced this dopey idea in 1989, the world took notice. It seemed prescient, a perfect summation of German idealism. Of course, Hegel himself did not see history ending with a spasm of liberal democracy, but that is for another day. One still finds it passing strange that a supposed conservative thinker would be promoting something called liberal democracy in the name of the godfather of Marxism.

As I said, the American mind has seen better days.

And yet, failed prophets do not give up easily. And, however much the world has been moving away from liberal democracy, Fukuyama believes that it is ascendant, and that we need to fight for it, in Ukraine. 

This shows that he is a true idealist. True idealists only credit facts that make them appear to be right. The rest they dismiss as static.

Anyway, here is Fukuyama’s reasoning about Ukraine. Read it and weep:

There is one fundamental reason why the United States and the rest of the democratic world should support Ukraine in its current fight with Putin’s Russia: Ukraine is a real, but struggling, liberal democracy. People are free in Ukraine in a way they are not in Russia: they can protest, criticize, mobilize, and vote. In 2017 they voted for a complete outsider to be president, and turned over a majority of their parliament. On two occasions, during the Orange Revolution in 2004 and the Revolution of Dignity in 2014, Ukrainian civil society came into the streets in massive numbers to protest corrupt and unrepresentative governments.

Stirring, don’t you think? Now, Putin might be playing his Ukraine card because he is happy to make the United States look feeble and decadent.

Fukuyama is more sophisticated:

This is the real reason that Vladimir Putin is preparing to further invade Ukraine. He sees Ukraine as an integral part of a greater Russia, as he indicated in a long article last summer. But the deeper problem for him is Ukrainian democracy. He is heavily invested in the idea that Slavic peoples are culturally attuned to authoritarian government, and the idea that another Slavic state could successfully transition to democracy undermines his own claims for ruling Russia. Ukraine presents zero military threat to Moscow; it does, however, pose an alternative ideological model that erodes Putin’s own legitimacy.

What evidence does he present?

My view has been shaped by the young Ukrainians I have met and worked with over the past few years. There is a younger generation coming up that does not want to be part of the old corrupt system, that believes in European values, and that wants nothing more than for Ukraine to become part of Europe. These Ukrainians are extremely well educated and highly motivated. They are the ones who have led the Maidan Revolution and who are at the forefront of the effort to make Ukraine part of Europe. Their generation will gradually come to power, and will hopefully exercise power more democratically than their predecessors.

Anyway, Fukuyama is a big picture thinker. He sees Ukraine as a frontline state in the conflict between liberal democracy and authoritarianism. Thus, we should prepare to go to war over it:

Ukraine today is the frontline state in the global geopolitical struggle between democracy and authoritarianism. Europeans who value liberal democracy for themselves need to understand that they cannot be bystanders in this conflict. Putin has ambitions well beyond Ukraine; he has made clear in recent weeks that he would like to reverse the gains to European democracy since 1991 and create a Russian sphere of influence throughout the territory of the former Warsaw Pact. Beyond Europe, the Chinese are watching how the West responds in this crisis very closely, as they calculate their prospects for reincorporating Taiwan. This is why the defense of Ukraine should be of urgent importance to anyone who cares about global democracy.

So, do you care about democracy? It's a big idea and we must care about big ideas. We might note that the best way to sell the world on democracy is to make it work in America. That point seems less salient than the chance to fight a war with Russia. What the fuck?

A more important issue would be whether you care about the stature and the  influence of the United States-- which is not the same thing. 

Anyway, one is happy to juxtapose Fukuyama’s deliria about liberal democracy with a few facts. One David Goldman has offered them for your delectation.

You will note that the Ukraine Goldman describes has nothing to do with Fukuyama’s airy fantasy world. Goldman sees Ukraine in a decline-- it’s almost as though it is willing itself out of existence:

Ukraine is disappearing, for two reasons. It has one of the world’s lowest birth rates at just 1.23 children per female, and one of the world’s highest rates of out-migration. No other country has willed itself out of existence so decisively.

Ukraine’s demographic decline is so pronounced that it should be high on the list of strategic considerations. For what, and for whom, might NATO and Russia go to war?

In any event, Germany will never support a war with Ukraine, so this puts something of a kibosh on the notion that NATO is ready for war. As it happens, Goldman continues, Ukrainians have been leaving the country in droves:

Ukrainians vote with their feet. Nine million have work abroad, according to the National Security and Defense Council of the Ukraine, and 3.2 million have full-time jobs in other countries. There are only 21 million Ukrainians between the ages of 20 and 55, which suggests that more than two-fifths of prime working-age Ukrainians earn their living elsewhere.

I do not know whether this estimate includes half a million Ukrainian prostitutes working abroad since independence, according to one scholarly estimate.

How does Goldman see Ukraine’s future? Not very brightly, I fear:

Ukraine in a few decades won’t be a sovereign nation, let alone a democracy; it will be a geriatric ward supported by a dwindling flow of remittances.

Remittances from overseas workers already comprise 11% of Ukraine’s GDP, according to the World Bank, by far the highest proportion in Eastern Europe with the exception of tiny Moldova.

And then, in another analysis of the geopolitical chess game, Goldman offers this (via Maggie's Farm):

NATO is weak, China is ascendant, and the U.S. is confused; Russia is well-armed and prepared. That’s why Putin is making his move now.

As though to answer Fukuyama, Goldman writes:

Why do we do this? To defend the brave little democracy in Ukraine against totalitarian oppression? Puh-leeze. The Kiev kleptocracy is an embarrassment to itself as well as everyone else. Since the Soviet Union fell, the White Whale of the liberal internationalists (like Antony Blinken) and neocons (like Undersecretary of State Victoria Nuland) has been to export democracy to Russia. The regime-change fantasy has dominated U.S. policy since we sponsored the 2004 “Orange Revolution” in Ukraine, through the 2014 Maidan Square coup.

Is it all about turning Russia into a liberal democracy? That would belong to the theatre of the absurd, but then again, where else did we find our current cohort of political leaders:

China meanwhile is watching this unfold with a bucket of popcorn. From (hawkish website close to the State Council): “Everyone is studying the experience of history. The United States is studying how to avoid the decline of empires, China is studying how to avoid Thucydides’ trap. Russia is studying how to plug leaks. And Europe is studying how to eat melons. What is Ukraine studying? The most important thing to study is the historical experience of neighboring Poland.” Of course, is referring to the repeated partition of Poland.

I make no excuses for Putin. But it’s worth asking when Russia has ever been governed by the sort of enlightened liberal that our Wilsonians and neo-cons prefer. No-one in Russia talks about Ivan the Reasonable. Russia’s tragedy is not ours to fix.

The comparison between Fukuyama’s vision and Goldman’s reality could not be more stark.

Have a nice day!

Wednesday, January 26, 2022

Nearly Insurmountable Learning Loss

Normally I do not take the United Nations very seriously. I do not wait breathlessly to read the latest from UNICEF, the children’s fund sponsored by the UN. I have lived within a half a block of the UN headquarters for decades now, and have not stepped foot in the building. Evidently, this qualifies me to comment on the latest UNICEF report on school closures.

Now, UNICEF has reported on the cost of school closures around the world. I have been reporting on this story for some time now. Unfortunately, it seems that the more pessimistic analyses of learning loss in children are true.

Fair enough, the scum that calls itself teachers’ unions have insisted that children will be able to make up what they have lost during the school closings, but all the evidence that I have found, reported scrupulously on this blog, has pointed in the opposite direction.

Inner city children in particular, those who do not have internet access or who do not have parents who can fill in as teachers, are the most negatively affected.

UNICEF has found the same story around the world. The author of the report takes a somewhat optimistic tone by saying that the learning loss is “nearly insurmountable,” but how would you like it if your physician told you that your chances of surviving an illness were “nearly insurmountable.”

Of course, we can always blame it on the virus, but obviously the fault lies with the government officials who went all hysterical and all apocalyptic-- shutting down business, shutting down society, shutting down schools. As the evidence has shown clearly, a child’s risk of catching Covid or getting very sick from Covid was miniscule-- research has shown that children were safest in school.

So, here is some more evidence, consistent with the evidence from America’s inner cities, reported by the New York Times. Credit to the Times for reporting the story:

Almost two years into the coronavirus pandemic, more than 635 million children globally remain affected by full or partial school closures, the United Nations said Monday in a report that called the setbacks to education “nearly insurmountable.”

The report from the United Nations Children’s Fund, UNICEF, said that many of these children had lost basic numeracy and literacy skills from the prolonged loss of classroom learning.

Consider that for a minute. Losing basic numeracy and literacy skills is catastrophic for children. If, as we suppose, they do not make up the loss, however will they make a living. One suspects that they will eventually head to the United States where the Biden administration and the do-gooder caucus and even the United Nations is conspiring to flood the nation with illegal migrants who are merely capable of living off the government dole-- when they are not looting and stealing.

It is happening in foreign countries, and not merely in the poorest foreign countries:

In low- and middle-income countries, UNICEF said up to 70 percent of 10-year-olds could not read or comprehend a simple text, up from 53 percent before the coronavirus became a pandemic in March 2020.

Notable data points in the report included Brazil, where 75 percent of second graders in some states are behind in reading, compared with 50 percent prepandemic; and South Africa, where schoolchildren are up to a full year behind where they should be.

And, rather than show how badly the school closures have hurt inner city children in places like New York, the UN offers the evidence of other states where learning loss has been marked. Of course, this assumes that all states have tested for learning loss, which is far from obvious.

In the United States, the report said, states including California, Colorado, Maryland, North Carolina, Ohio, Tennessee, Texas and Virginia have reported that two-thirds of their third graders scored below grade level in mathematics last year, compared with half in 2019.

UNICEF prescribes intensive support. It is obviously smoking the wrong kind of cigarettes. As it happens, the Biden administration has already started trying to overcome this insurmountable loss. And yet, given that the program is run by bureaucrats, with help from the teachers’ unions, the means of transmission is Zoom calls. The children who could not learn in front of a computer, and thus who suffered learning loss that is most likely unsurmountable, will be subjected to more remote learning.

“Quite simply, we are looking at a nearly insurmountable scale of loss to children’s schooling,” Robert Jenkins, the chief of education at UNICEF, said in the report. “While the disruptions to learning must end, just reopening schools is not enough. Students need intensive support to recover lost education.”

The UNICEF report tells the sad story:

Globally, the report said, “disruption to education has meant millions of children have significantly missed out on the academic learning they would have acquired if they had been in the classroom, with younger and more marginalized children facing the greatest loss.”

Despite efforts to mitigate the effects of school closures with remote learning, that solution is impractical or impossible where families lack internet access and home computers. And many students in low-income countries are not returning to class even when schools reopen.

Of course, more and more American children are not returning to class. The reason is, they are being homeschooled or enrolled in private or charter schools. In poor countries the children go to work.

Earlier this month in Uganda, where schools reopened for the first time since the pandemic began, educators estimated that up to one-third of students, who had taken jobs to help support their struggling families, might not return.

Education is one of the 17 Sustainable Development Goals, benchmarks established by the United Nations to help measure basic improvements in people’s lives. According to the U.N.’s Department of Economic and Social Affairs, which monitors each goal on its website, the coronavirus has “wiped out 20 years of education gains.”

In fairness, it was not the virus, in and of itself, that wiped out two decades of education progress. The blame falls on political leaders in a diverse collection of countries who decided to shut down society and to close schools. We will all be paying for their policies for decades to come. At a time when the world needs more capable tech savvy employees, political leaders have figured out a way to make this impossible. 

One assumes that Asian countries, our international competitors, did not implement the same policies and did not sacrifice their children to the gods of pseudoscience.

Tuesday, January 25, 2022

Luc, or is it Lucy Sante

Luc or is it Lucy Sante is a Belgian writer. Normally he chronicles urban life in New York City and other parts of America.

Now he has set out on something of a crusade. In the pages of Vanity Fair, of all magazines, he has chosen to open up about becoming a woman. By his dim reasoning he had always wanted to be a woman, but now at age 67, he has transitioned, and is now poisoning his body with hormone treatments. Taking opposite sex hormones is bad for your health.

In truth, we do not care about Luc or is it Lucy Sante. We do not want to be cruel. We do care about his and the magazine’s effort to persuade young people to transition before they reach senescence. Yesterday, a mother in California sued two of her child’s schoolteachers for trying to brainwash an 11 year old into thinking, first, that she is bisexual and second that she is really a boy.

We are happy that the mother brought the suit, and we emphasize that a society that routinely rationalizes child mutilation is doomed. 

Sante, whose name is French for health, discovered the joys of changing sexes by using a computer app. It shows his life as a girl. And it shows a desire fulfilled.

Changing genders was a strange and electric idea that had lived somewhere in the recesses of my mind for the better part of my 67 years. But I had seldom allowed myself such a graphic self-depiction; over the years I had occasionally drawn pictures and altered photographs to visualize myself as a woman but had always immediately destroyed the results. And yet I didn’t delete that cyber-image. Instead, over the next week or so I hunted down and fed in every image of myself I possessed, beginning at about age 12: snapshots, ID card pictures, studio portraits, book jacket photos, social media pictures. The effect was seismic. I could now see, laid out before me on my screen, the panorama of my life as a girl, from giggling preteen to last year’s matron. I had always hated seeing pictures of myself, but these made every kind of sense. My desire to live as a woman, I could now see, was a coherent phenomenon, consistently just under the surface of my nominal life for all those decades, despite my best efforts to pretend it wasn’t there.

Note that it is a question of fulfilling a desire. Forget about reality; forget about genetic makeup. Desire uber alles-- that is the slogan for what he has done. If you want to be something  you should be it, even if reality militates against it. In truth, Sante has not become a woman. He has become a simulacrum of a woman. I defy anyone to look at his picture and conclude that he is a woman.

Naturally, there is a therapy aspect of the problem. Sante’s transition follows upon some forty years of therapy. I introduce this paragraph in order to show what you can learn from forty years of therapy. Sante is surely someone who has had too much therapy.

We note in the ensuing paragraph that his new therapist was all-in with his notion that he should fulfill his desire. We note that he had been seeing her for four or five years and had not brought up the issue. Doesn't this suggest that his desire for femaledom is not quite as strong as he pretends? Doesn't it seem that he is self-aggrandizing by latching on to a fad.

Trembling but resolute, I told Dr. G at our weekly Zoom session that I had always wanted to be a woman and now felt it urgent that I take the necessary steps. Dr. G had consistently maintained an imperturbable nothing-human-is-alien-to-me equanimity, but I was nevertheless stunned by her quick and unsurprised assent. “It makes sense,” she told me. “It sounds like a good idea.” In the four or five years I’d been seeing her, I had never broached any mention of gender. My inner omertà relegated all such thoughts to the deepest, darkest corners, guarded by dragons. I’d seen therapists for nearly 40 years by then, but only one previous practitioner had ever come close to breaking the silence. Around 1991, Dr. P got me to admit that I had tried on my mother’s dresses and undergarments in early adolescence, although we never got a chance to explore the ramifications. Not long after I made that admission, Dr. P died of a massive heart attack 20 minutes after I left his office. My relationships with therapists had been checkered before and after—one tried to convert me to New Age spirituality; one spent most sessions talking about herself; one admitted that her expertise was in child psychology—and I never fully trusted another until I began seeing Dr. G.

So, that is what therapy has offered one Luc or is it Lucy Sante. One does not know what to make of the fact that Dr. P-- I can guess who it is but will refrain-- had a heart attack after hearing about Sante’s cross dressing, but obviously Sante would have done better to keep it all to himself. Does Sante believe that he killed his therapist with some remarks about cross dressing?

Why would he or the editors of Vanity Fair think it was a good idea to encourage children to transition, to engage in biochemical mutilation by taking puberty blockers or even to suffer surgical mutilation in order to pretend to be something they are not?

Monday, January 24, 2022

Should She Sue?

Should she sue?

And, what we really want to know, from this victim of workplace harassment, is this: what does her therapist say? I emphasize this aspect of the issue because the woman who wrote to New York Magazine’s Charlotte Cowles seeking advice has been goaded into doing it by her therapist. 

I am assuming that the letter writer is female, though naturally, there is no real indication in the letter. But, we know that her former boss was a woman, an abusive woman who made life miserable for her underling. It caused the letter writer to resign and to find another job somewhere else. Good for her. 

But now, she has been told by her therapist that she needs to find justice, both by retaliating against the bad old boss and presumably ensuring that it does not happen to anyone else. So, a mix of egotistical and altruistic motives.

Here are some excerpts from the letter:

I just got a new job, thank goodness, and part of me thinks that I should focus on that and move on. But my former boss was so awful that I feel a sense of responsibility to do something about it. I worked for her for two years, and it was terrible. She was verbally abusive, made derogatory and racist comments, and at one point told me that she would “make sure” I never found another job in our field if I repeated something inappropriate that she said in a meeting (I am still too scared to repeat what it was). For a while, I figured I could put up with it, but now I’m realizing I basically had Stockholm syndrome, and no one should have to work like that. 

Think about that-- someone made a derogatory comment in a meeting. Now, we must tattle on her, report her to the ministry of mind control and try to destroy her life. No one believes that it is good to make such remarks, but do you want to live in a world where people routinely police thought and turn offenders over to the Stasi. 

The letter writer continues:

I recently started seeing a therapist, and she has told me that I could sue for emotional distress. I have evidence to back up my claims (I saved some emails, at my therapist’s urging), but the problem is that I have no resources for an attorney or any sort of legal fees.

Bu then, in a seeming aside, she adds the simple fact that if she sues, her career prospects will very likely diminish significantly. We do not like this fact. No one likes this fact, but it is certainly true.

I don’t know what it would cost or if there are lawyers who take on these types of cases pro bono. I also worry that acting on this could impact my career prospects (and, by extension, my income) long term. I work in the nonprofit sphere in New York, and it’s a pretty small world. What are my options, and what will they cost?

What does Charlotte Cowles have to say. Well, she believes that closure can best be achieved by seeking legal action. This is absurd on its face. Seeking legal action will keep it all alive. It will not close the chapter or the book.

Cowles is all in with the therapist because the letter writer might come away with lots of money for taking action. I have myself heard of situations where a plaintiff walked away with a ton of money and never again got another job.

Cowles writes:

I can also understand your instinct to be done with this person and her outsize role in a painful chapter of your life. This would not be the wrong choice. But it sounds like you might get better closure if you seek legal action, and I suspect that’s why your therapist suggested it. The rewards for doing so, both financially and psychologically, could be substantial. And the monetary risk to you will be minimal if you engage an employment lawyer who works on a contingency (as most do), which means that they get a percentage of whatever damages they help you win but otherwise are free.

In truth, she is aware of the risks that the plaintiff will incur. Among them, she will forever be branded a troublemaker and will probably never again get another job. And this does not merely apply in the non-profit world. Companies do not like troublemakers, however just the cause.

If you do file in court, one thing to be aware of is that it will become public record, says Edward Cerasia, an employment lawyer and a founding partner of Cerasia Law. “If someone does a Google search on your name, they will be able to see it,” he explains. “And sometimes people are concerned that a future employer may view them as ‘troublemakers’ and that it would have a negative impact on their careers.” To be clear, there should not be a stigma against workers who stand up for their rights! But be prepared that your experience will no longer be a private matter, for better or worse.

Mostly this will be for worse.

I recall a situation that Malcolm Gladwell described in his book, Talking to Strangers. He was reporting on an investigation undertaken by an American intelligence agency designed to expose a mole in the ranks. When the agents interviewed the woman who turned out to be the mole, she simply lied to their faces. It is not very surprising. And yet, the trained agents simply believed the lies. They did not throw doubt on the stories that she was spinning out.

Gladwell concluded, quite correctly, that our devotion to the truth normally takes second place behind our need to belong to a cohesive social group.

If a Google search exposes you as a troublemaker, your love of the truth and the satisfaction you might gain for punishing your appalling ex-boss will pale in comparison with any company's wish to hire people who are, as the saying goes, team players.

So, one demerit for the woman’s therapist and for Cowles. They are encouraging actions that might well be thoroughly just, but that ought to be undertaken only in the most extreme cases.

What Happened to Netflix?

What happened to Netflix? How did it happen that its stock dropped from nearly $700.oo a share to less than $400.oo a share. That is a crash. It is not just a correction.

One reason, Holman Jenkins remarks, is that the world can only support so many streaming services. How many do you subscribe to? And why is it necessary to subscribe to so many services when each one has barely a handful of shows that you might ever want to watch.

Because, that is the bottom line. Jenkins is quite right to point out that Netflix has been producing garbage. The company has unlimited funds, but its largesse has merely exposed the fact that there is not enough talent out there to keep producing very many quality shows. And that is the case even though Netflix has enough clout to produce shows around the world. If it were just American talent, the company's stock would have cratered ages ago.

He explains:

This is where Friday’s Netflix wipeout is a harbinger, with a 20% drop in the streamer’s share price, worth $44 billion, because investors questioned whether subscriber growth can justify the billions Netflix keeps investing in new content.

In the year just ended, a record 559 scripted series were produced, most of which were not worth watching or did not sustain interest past the first few episodes. Unlimited dollars may exist to produce such shows but not unlimited talent to make them good, or to sustain the number of subscription streaming services competing to be among the likely handful of survivors.

While we are here, let’s not overlook the fact that Netflix has also gone woke. How many of its shows are feminist fairy tales, with strong empowered women saving the day, beating up men who are twice their size, running the world, solving all problems-- all the while being irresistible to men, having great husbands and great children.

And how much of the content represents what Peggy Noonan aptly called “moral harassment.” By that she meant that these shows present that world as the diversity crowd would like it to be. If your world is not as diverse as what you see on your television set, you can feel yourself condemned as a bigot.

So, the novelty has worn off. Netflix has gone woke. The competition has stiffened. And the company is in trouble. Richly deserved, I dare say.

Sunday, January 23, 2022

The Vampire Phase of the Bull Market

To be scrupulously fair, famed investor and market strategist Jeremy Grantham has been wrong before. He has advised against investing too heavily in the stock market for years now. As recently as a year ago, he said that the market was in a bubble. He has been making the same prediction for quite some time now. In that he is not alone. Link here.

While we all chuckle about how the experts get things wrong, the truth is that experts like Grantham do not stay wrong for very long. If anything they tend to be early in their predictions. 

Ignore them at your peril.

As for our own somewhat dubious presumptions in this area, we recall that we reported on an article declaring that Bitcoin was a bubble. The time was October, not too many months ago. The price of Bitcoin at that moment was around $61,000. Today, it is  around $35,700.

And, I would also add that even your humble blogger suggested that there are asset bubbles across the investing spectrum, from bitcoin to stocks to real estate to art. Link here.

Now, Grantham, undeterred by his prior slightly dubious predictions, has doubled down on his pessimism, declaring that we are living in a “superbubble” and that we are facing a massive “markdown of wealth.” It is what happens when you inflate the currency beyond reason and get used to living on borrowed money.

Given the abysmal  recent market performance, this time Grantham seems to be on the mark.

Marketwatch has the story:

The U.S. is approaching the end of a “superbubble” spanning across stocks, bonds, real estate and commodities following massive stimulus during the COVID pandemic, potentially leading to the largest markdown of wealth in its history once pessimism returns to rule markets, according to legendary investor Jeremy Grantham. 

“For the first time in the U.S. we have simultaneous bubbles across all major asset classes,” said Grantham, co-founder of investment firm GMO, in a paper Thursday. He estimated wealth losses could total $35 trillion in the U.S. should valuations across major asset classes return two-thirds of the way to historical norms.

“One of the main reasons I deplore superbubbles — and resent the Fed and other financial authorities for allowing and facilitating them — is the underrecognized damage that bubbles cause as they deflate,” said Grantham.

The Federal Reserve doesn’t seem to “get” asset bubbles, said Grantham, pointing to the “ineffably massive stimulus for COVID” (some of which he said was necessary) that followed stimulus to recover from the bust of the 2006 housing bubble. “The only ‘lesson’ that the economic establishment appears to have learned from the rubble of 2009 is that we didn’t address it with enough stimulus,” he said. 

Equity bubbles tend to begin to deflate from the riskiest parts of the market first — as the one that Grantham is warning about has been doing since February 2021, according to his paper. “So, good luck!” he wrote. “We’ll all need it.”

Considering that the NASDAQ has dropped some 10% this month alone, Grantham seems more right than not.

“We are in what I think of as the vampire phase of the bull market, where you throw everything you have at it,” Grantham wrote. “You stab it with COVID, you shoot it with the end of QE and the promise of higher rates, and you poison it with unexpected inflation – which has always killed P/E ratios before, but quite uniquely, not this time yet – and still the creature flies.”

That is “until, just as you’re beginning to think the thing is completely immortal, it finally, and perhaps a little anticlimactically, keels over and dies,” said Grantham. “The sooner the better for everyone.”

Of course, it is not just the stock market. The bond market and the real estate market are also in a final blowoff top:

Beyond the recent record highs of the U.S. stock market and “crazy” investor behavior that has accompanied its rise, Grantham warned that “we are indeed participating in the broadest and most extreme global real-estate bubble in history.” He said that houses in the U.S. are at “the highest multiple of family income ever, after a record 20% gain last year.”  

Plus, said Grantham, “we also have the highest-priced bond markets in the U.S. and most other countries around the world, and the lowest rates, of course, that go with them, that human history has ever seen.”

Commodity prices are similarly inflated.

And, of course, the inflationary bubble produces greater inequality between the haves and the havenots.

And then there’s the “incipient bubble in commodities,” he added. Oil CL00, -0.36% and most of the “important metals” are among commodities priced broadly “above trend,” while the “U.N.’s index of global food prices is around its all-time high,” according to his paper.

“The combination, which we saw in 2008, of still-rising commodity prices with a deflating asset price bubble is the ultimate pincer attack on the economy and is all but guaranteed to lead to major economic pain,” he wrote. 

Grantham also considered how wealth compounds more slowly at “bubble pricing,” while making it hard for people to afford their first house or to build an investment portfolio. 

“There is the terrible increase in inequality that goes with higher prices of assets, which many simply do not own, and ‘many’ applies these days up to the median family or beyond,” he wrote. “They have been let down, know it, and increasingly (and understandably) resent it. And it absolutely hurts our economy.”

As for where Grantham advised clients to invest now, here are his recommendations:

… Grantham summarized them as avoiding U.S. equities while emphasizing value stocks in emerging markets and cheaper developed countries, “most notably Japan.” On a personal note, he said, “I also like some cash for flexibility, some resources for inflation protection, as well as a little gold GC00, +0.23% and silver.”

Have a nice day!

Saturday, January 22, 2022

The Night Riders of the Language Police

The mini-minds of Silicon Valley have set out to wreck English prose. In a despotic and totalitarian act they have taken it upon themselves to mutilate the English language, thereby to make English writing into a grotesque distortion, the kind that will damage your mind and cause you to give up reading. Writers beware, your prose is going to become illiterate.

For the record, language usage is one of the freest of free markets. Now, however, the tech titans of Silicon Valley have taken it upon themselves to take over the free market, the better to impose their jejune ideologies on everyone.

Case in point, Google is now imposing new and inclusive language in documents. Physicist Lawrence Krauss explains in the Wall Street Journal this morning:

Google has created guidelines for “inclusive” language in software and documentation that describe how software should reflect the hypersensitive feelings of programmers who are immersed in woke culture and fixated on victimhood and offense. Apparently these guidelines will be enforced in the future in all new open-source projects, and the company will scrub earlier versions as well. Various other technology groups, including some at universities and professional associations, have developed their own guidelines. Microsoft recently introduced a feature for its popular Word software that can ferret out and replace noninclusive words and phrases.

It would be nice indeed if it were merely a question of thin skin. That is, if it were merely about the hypersensitivities of woke millennials. In truth, there is more to it. These people want to own the language. Since most of them do not know how to read or write, they do not care how good the writing is.

Krauss continues:

The list of terms excluded in the name of inclusion often borders on ridiculous. I was amused to picture some millennials, programmed by years of training in diversity, equity and inclusion, sitting around at a sensitivity-training meeting coming up with this list.

Krauss points out the self-defeating absurdity of the project. First, the people who are straining their mini minds to exert despotic control over the way you use language are not engaging in more important tech projects:

This is all rather silly, but there are at least two underlying problems with scrubbing words from language. First, it’s a waste of time. While groups like the Association for Computing Machinery waste time debating whether the term “quantum supremacy”—the threshold where a quantum computer first solves a problem a classical computer cannot solve in any feasible time—should be replaced because it alludes to “crimes against humanity,” computer scientists in China and elsewhere are working to achieve quantum supremacy.

Perhaps more importantly, cleansing the language of colorful phrases will impoverish communication. When people risk having their syntax corrected by a dimwitted woke millennial they will be less likely to communicate with said person. And this will also diminish prose writing, to the point where people will be less likely to bother with it. Using bad grammar is offensive; it rankles the educated mind; it ought not to be imposed by people who know nothing of grammar. 

Sadly, the less people read the more stupid they will become. That means, the more easy it will be to control their minds.

More important, many colorful phrases—the very thing that makes language vivid and enjoyable—too often now are perceived as dangerous, and excising them risks diminishing the possibilities of communication. Few of us would want to read a novel devoid of colorful wording. And for anyone who has had to read computer documentation, a hint of humor would be a welcome addition. Give us, not to mention the smartphones of the future, a break.

In the same context, the Daily Caller reports that the New York Times has eliminated women from its pages. So much for women's liberation. Now it's going to be menstruater's liberation.

Again, it is tyrannical and despotic, designed in order not to hurt the feelings of trans women or even of trans men who continue to menstruate.

It would be hilarious if it were not pathetic. Unfortunately, it is not satire.

The New York Times referred to women as “menstruators” for the first time in a Thursday article on changing attitudes towards feminine hygiene products.

“New menstruators,” the article said in reference to young girls who have recently started their periods, “often turn to a parent for products and advice — now parents can hand over more than a disposable pad or tampon.”

The article avoided using feminine pronouns when noting that “the average menstruator can use thousands of tampons in their lifetime.”

The author did not use the words “woman” or “female” at any point in the article, and the article only says “girls” in reference to two specific girls the NYT interviewed for the piece. Instead, the author says “people” when referring to women experiencing menstruation periods and “young people” to describe girls experiencing menstruation.

“Young menstruators are having a completely different experience in terms of managing their periods with reusables throughout their life,” Michela Bedard, executive director of Period Inc., told the NYT.

Dare we point out that the morons who edit the New York Times made one significant mistake. They failed to notice that menstruation, like the word menopause, contains the word-- men. How can we have that? Isn’t that a sign of patriarchal control over the female body.

So, I propose that henceforth we use the words personstruation and, for good measure, personopause. Don’t you feel better knowing that the female body has been liberated from patriarchal verbal oppression?