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A Train Wreck That Everyone Saw Coming

A report from CNBC. “‘The fact that almost all participants agreed that it was appropriate to initiate the balance sheet runoff after the first increase in the target range for the fed funds rate implies that there’s not a big appetite for ‘let’s wait and see.’ Kathy Jones, chief fixed income strategist at Charles Schwab, said of the Fed minutes, which had a special section titled ‘Discussion of Policy Normalization Considerations. ‘Last time, they waited two years. This time, it looks like they’re ready to go.'”

Fromm Yahoo Finance. “‘There is no question that Fed members are becoming more worried about the higher inflation that they’ve so aggressively tried to stoke,’ said Peter Boockvar, chief investment officer at Bleakley Advisory Group. Not only is the central bank openly musing about higher rates and a quicker end to bond-buying stimulus, policymakers are also entertaining the once unthinkable: a reduction of a balance sheet that’s been swollen since the 2008 financial crisis.”

“‘The Fed’s unprecedented injection of $120 billion of liquidity into the capital markets per month heavily favored higher risk, speculative investments such as meme stocks, money losing concept stocks and cryptocurrency,’ noted Jay Hatfield, CIO of Infrastructure Capital Management.”

From Nasdaq. “The fact that ZG stock has had losses of about 57% over the past year does not make me bullish on the stock. On the contrary, I am bearish on Zillow Group as the company is unprofitable, and its business model has yet to prove its effectiveness in delivering value to the shareholders. The business decision to exit the iBuying business in 2021 was a very important one that has to do with the financial performance of the company. Zillow Group lost money in this business venture. It is fine yet unpleasant to fail, and it is finer to accept that bad decisions in business cannot be supported forever.”

“A red flag of paramount importance is that in Q3 2021 the firm had cash and investments of $3.2 billion on its balance sheet. The reported negative free cash flow of $2.82 billion in this quarter signals that the firm has less than a year of cash runway. Zillow Group has been reporting net losses in the past five years, despite robust sales growth. Q3 2021 financial results showed a quarterly sales growth of 32.57%, yet a very large net loss of $328.17 million and a similar negative free cash flow figure.”

From KTXL. “The nation’s biggest effort to help homeowners who are struggling to pay their mortgage because of the pandemic is underway in California. ‘Twelve percent of California homeowners are facing foreclosure and 6% percent are behind on mortgage payments due to the pandemic,’ said Consumer Services and Housing Agency Secretary Lourdes Castro Ramirez.”

“The architect of it all, Congresswoman Maxine Waters, D-Los Angeles, fought for $10 billion to be included in the plan. Californians will benefit from the biggest state pool in the country, $1 billion. ‘I was so very worried that while we were doing forbearance and people were not be able to pay and not forced to pay their mortgages for maybe several months and the devil would come due,’ Waters said.”

The Los Angeles Times in California. “As of now, no rent hikes will be allowed for most L.A. tenants until 2023. And possibly beyond. What is celebrated by tenants and their advocates is lamented by landlords, who say the freeze puts them in an untenable situation. ‘We have to pay a mortgage and pay utilities,’ said Ari Chazanas, president of Lotus West Properties, which manages about 1,000 apartments across the city. ‘I think there’s a lot of fatigue from people like me because it’s been going on for so long.'”

“Landlords have also been frustrated. Chazanas said he also has been waiting for months for the state to clear payments for his tenants, with $1 million in back rent still outstanding. State officials say they’re moving money much more quickly since the program began in March and expect to send out an additional $1 billion in the next three months.”

From Chronicle Live in the UK. “In the Chathill postcode NE67, one sale was recorded last month with an average drop of £27,000 between asking and sold prices. Meanwhile, both the Corbridge postcode NE45 and the Bamburgh postcode, NE69 had an average drop of £20,000 with one recorded sale in each area last month. Also seeing hefty differences between asking and sold prices was the Barnard Castle postcode DL12 which saw 15 recorded sales last month and an average difference of -£18,213.”

From News.com.au in Australia. “Geelong’s home value jumped more than $160,000 in 2021. But CoreLogic is showing further signs that the rate of growth is easing in Geelong. Houses in Geelong climbed 1 per cent in December to $820,000, with units up 2 per cent to $574,000. CoreLogic head of Australian research Eliza Owen said it was ‘inevitable that the rate of growth of going to soften and the downturn in the cycle would follow.'”

“‘We’ve had a very strong period of growth, which has incentivised more vendors to come to market,’ she said. Ms Owen said that increased supply is also seeing less urgency among buyers. ‘They understand that if they miss out on this one, because they’re not willing to pay an exorbitant price, there might be another listing that will come up soon.'”

From Bloomberg. “Shimao Group Holdings Ltd., a bellwether for financial contagion in China’s embattled property industry, suffered its biggest-ever bond rout on Thursday after a creditor said one of the developer’s units defaulted on a local loan. The Shimao unit failed to pay 645 million yuan ($101 million) of a total 792 million yuan due by Dec. 25, according to a notice sent to investors by China Credit Trust Co. The trust firm had demanded early repayment by Dec. 25 after the developer failed to meet installment requirements, according to the notice.”

“Long considered one of the healthier builders, Shimao Group had until recently appeared largely unscathed even as junk-rated rivals including China Evergrande Group and Kaisa Group Holdings Ltd. defaulted. The plunge in Shimao bonds is likely to stoke fears of financial contagion in a sector that accounts for about a quarter of output in the world’s second-largest economy.”

From Reuters on China. “Guangzhou R&F Properties said it did not have sufficient funds to buy back a $725 million bond as sales of its assets had not come through as planned. It said in a filing late on Wednesday that the funds available to settle its tender offer for an offshore bond were materially less than the $300 million it previously expected, due to continued volatility in the property sector.”

“Last month, R&F proposed two tender offer options to bondholders of the 5.75% notes, while seeking their consent to extend by six months the maturity of the bond due Jan. 13. The options were buying back the notes at a 17% discount, or $830 for every $1,000 in principal; or buying back at most half of bondholders’ notes in full, both with accrued interest. R&F said in the filing that 71.7% of the bondholders had tendered for the first option and 24.2% for the second – but it added that it expected to have ‘materially less’ than the $300 million previously anticipated to buy back the bonds.”

“‘Proceeds from certain asset sales contemplated by the group may fail to materialise by the settlement date,’ it said, adding the settlement date has been postponed by two days to around Jan. 12.”

From Vision Times. “Many experts compare the Evergrande crisis to the Lehman Brothers event. Just like the bankruptcy filing of Lehman Brothers played a big role in pushing the United States into the 2007 financial crisis, some feel that Evergrande’s collapse under the weight of its debt will also trigger an economic crisis in communist China.”

“However, Vinesh Motwani of Silk Road Research notes a major difference between the Lehman event and what is happening with Evergrande. ‘The biggest difference between the two is that Evergrande was a train wreck that everyone saw coming… When the ‘three red lines’ policy was announced more than a year ago, it was clear that Evergrande was one of the worst offenders, so the reaction in China was ‘this was a long time coming,’ Motwani said.”

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This Post Has 123 Comments

  2. ‘The Fed’s unprecedented injection of $120 billion of liquidity into the capital markets per month heavily favored higher risk, speculative investments such as meme stocks, money losing concept stocks and cryptocurrency’

    Money losing concept stocks?

    ‘Zillow Group has been reporting net losses in the past five years’

  3. ‘the Fed minutes…had a special section titled ‘Discussion of Policy Normalization Considerations’

    There was also a special section titled: ‘Breakin it Off in the Shack Gamblers’ A$$e$.’

    2. At least cryptocurrency investors don’t face any problems as the Fed openly discusses shutting down its moonshine still…or so the HODLers will reassure each other.

  4. ‘Twelve percent of California homeowners are facing foreclosure and 6% percent are behind on mortgage payments due to the pandemic’

    Is that a lot?

    ‘The architect of it all, Congresswoman Maxine Waters, D-Los Angeles, fought for $10 billion to be included in the plan. Californians will benefit from the biggest state pool in the country, $1 billion. ‘I was so very worried that while we were doing forbearance and people were not be able to pay and not forced to pay their mortgages for maybe several months and the devil would come due’

    1 billion pesos ain’t much maxine.

    1. ‘According to the program’s website, among the documents you will need to provide are a mortgage statement, bank statements, utility bills and records that show the income earned by every adult in your household, such as pay stubs, tax returns or a statement of unemployment benefits. Applicants who are not reliant on public assistance or paying more than 40% of their household income to their lenders will also be asked for proof that their lender refused to defer debt or modify their loan to help them avoid foreclosure.’

      ‘The site provides links to the application in English, Spanish, Chinese, Korean, Vietnamese and Tagalog.’

      ‘The money will be awarded on a first-come, first-served basis, with one important exception: Forty percent of the aid must go to “socially disadvantaged homeowners.” Those are residents of the neighborhoods most at risk of foreclosure, based on the Owner Vulnerability Index developed by UCLA’s Center for Neighborhood Knowledge.’

      https://www.msn.com/en-us/money/news/california-has-a-new-covid-mortgage-relief-program-here-e2-80-99s-how-to-get-up-to-2480k-in-help/ar-AASsTpQ

      How do you say ‘yer fooked’ in Tagalog?

      1. Q. How do you say ‘yer fooked’ in Tagalog?

        A. By saying these two words: “Trust me”.

        Variations of these two words work in all languages.

      2. based on the Owner Vulnerability Index developed by UCLA’s Center for Neighborhood Knowledge

        Speechless

    2. Who are these current California foreclosure victims? It seems like half the people we knew over the past few decades cashed in $1+ million in home equity wealth gains and moved east. But I guess if you cashed out all your equity and blew it on fancy cars and vacations, that plan is not an option in hard times.

  5. ‘Houses in Geelong climbed 1 per cent in December to $820,000, with units up 2 per cent to $574,000’

    When I saw this I thought, holy mother of baby jeebus, is there any fresh hell that’s not going to revisited?

  6. ‘it added that it expected to have ‘materially less’ than the $300 million previously anticipated to buy back the bonds. ‘Proceeds from certain asset sales contemplated by the group may fail to materialise’

    Ring ring!

    R&F.

    So just how much is ‘materially less’ than $300 million?

    We got three fity.

  8. The pearl-clutching & histrionics from the globalist propaganda mouthpieces and Democrat-Bolshevik Quislings will reach a fever pitch today.

    Media’s January 6th Insurrection Against Truth

    https://townhall.com/columnists/tomtradup/2022/01/06/medias-january-6th-insurrection-against-truth-n2601459

    Yes, the January 6th“insurrection” is real.

    Oh, not the riotous behavior at the U.S. Capitol a year ago. I mean the one today… January 6, 2022. When MSNBC, CNN, The Washington Post and other alleged “news” organizations make Third Reich propaganda queen Leni Reifenstahl look like a piker by comparison as they roll out hour after hour of hysterical, hand-wringing coverage of events last January. Nazi films like “Triumph of the Will” giving way to shaky cellphone images of the Q-Anon Shaman in that dumb Viking hat and ominous, Darth Vader music.

    Not since the canonization of George Floyd and the alibis the media made for the violent riots and looting that followed (as if smashing store windows and grabbing 10 bags of Doritos somehow amounted to “social justice”) has more ridiculous, over-hyped coverage been ramped up for today’s “first anniversary of the worst assault on American democracy that ever occurred.”

  9. Not only is the central bank openly musing about higher rates and a quicker end to bond-buying stimulus, policymakers are also entertaining the once unthinkable: a reduction of a balance sheet that’s been swollen since the 2008 financial crisis.”

    So riddle me this: what kind of moron “investor” is going to buy debt from the Fed’s balance sheet when the pathetic interest rates on offer are far below the true rate of inflation?

    1. As a noted economist stated so eloquently, “Get rates back up into the long term historic range of 12%-15% and most of these problems go away on their own.”

      He’s right. And rates turn on a dime and most don’t react until the losses really pile up.

  10. ‘Twelve percent of California homeowners are facing foreclosure and 6% percent are behind on mortgage payments due to the pandemic,’ said Consumer Services and Housing Agency Secretary Lourdes Castro Ramirez.”

    Is that a lot?

  11. “As of now, no rent hikes will be allowed for most L.A. tenants until 2023. And possibly beyond. What is celebrated by tenants and their advocates is lamented by landlords, who say the freeze puts them in an untenable situation.

    Gosh, I fear this could have a chilling effect on new would-be real estate moguls, and that previous landlord assumptions of return on investment might now prove to be overly sanguine. In fact, I fear there is a real possibility some LLs could bleed money on their “investments.” Oh, the pathos, the tragedy!

  12. The parallels between how Lenin’s Bolsheviks – with massive financial backing from the New York banking houses of Schiff & Loeb – seized power in Russia, and the playbook the Democrat-Bolsheviks are following today, are uncanny.

    Who Are the Real Insurrectionists?

    https://townhall.com/columnists/victordavishanson/2022/01/06/who-are-the-real-insurrectionists-n2601486

    Recently, Democrats have been despondent over President Joe Biden’s sinking poll numbers. His policies on the economy, energy, foreign policy, the border, and COVID-19 all have lost majority support.

    As a result, the Left now variously alleges that either in 2022, when they expect to lose the Congress, or in 2024, when they fear losing the presidency, Republicans will “destroy democracy” or stage a coup.

    1. You should upgrade your statement for 2022 to include politicians and journalists. I’m not sure which order they should be in but they belong together:

      “In this ever-changing world we live in, one constant remains: realtors, politicians, and journalists are liars.” (see… they’re a natural fit.)

  14. Bend, OR Housing Prices Crater 12% YOY As Default Rates Soars On Surging Unemployment And Crime

    https://www.movoto.com/bend-or/market-trends/

    As one broker disclosed, “There are no bidding wars here nor has there ever been… It’s just something we deliberately misrepresent to get the buyer to pay far more.”

  15. I’m no economist but it’s very obvious the fleet of Amazon, UPS, & USPS vehicles has tapered off dramatically on my street in the last 4-6 months.

    1. Theres a tangled up mangled up mess of delivery wagons, donkey carts and debtdonkeys in the bottom of these craters forming everywhere.

      As one noted economist questioned;

      The market is booming
      where are the buyers
      inventory is looming
      realtors are liars

  16. I am bearish on Zillow Group as the company is unprofitable,
    I truly believe every bonus package for every manager, including non-Operational/non-production managers, should have a profitability component and that component should be simple. Make money, you get your bonus, lose money, sorry no bonus.
    And, yes, I have been told I am “out of touch” with today’s world.

    1. So, who owns Zillow? Let’s take a look:

      Major Holders:

      3.42% % of Shares Held by All Insider
      87.72% % of Shares Held by Institutions
      90.83% % of Float Held by Institutions
      470 Number of Institutions Holding Shares

      Source: https://finance.yahoo.com/quote/ZG/holders?p=ZG

      The institutions, the pukes who handle Other People’s Money, are the majority owners of Zillow.

      Pukes who feel they cannot properly handle their own hard-earned money hand their wealth to various money-handling institutions (who then extract some hefty fees) and these institutions then put this money into money losing companies such as Zillow.

      Go figure.

      1. But that still doesn’t answer why the CEO et al are getting huge bonuses for losing money for 5 year straight. What is the board doing. Obviously not their job. The board should be asking some damn serious questions. Remember, it’s a damn mortgage/realtor company, they are not inventing the next super sonic rocket to Mars.

        1. What is the board doing. Obviously not their job.

          From that Finance Yahoo link, select Profile then scroll down for a yellow, if not red, flag.

          Corporate Governance

          Zillow Group, Inc.’s ISS Governance QualityScore as of September 26, 2021 is 10. The pillar scores are Audit: 3; Board: 9; Shareholder Rights: 10; Compensation: 9.

          Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.

          2. I learned about that rating in a business school course entitled “The CEO, the Board of Directors, & Corporate Governance.”

        2. But that still doesn’t answer why the CEO et al are getting huge bonuses for losing money for 5 year straight.

          As George Carlin once said: It’s a big club, and you’re not in it.

        1. “Retirement funds and 401K holders.”

          Especially the public retirement systems. Wall street loves screwing them real good as the squirm a little, but they’re always ready for more!

          1. Always roll a 401K into a self directed IRA if changing jobs. Then you get to pick which criminal companies stocks to buy.

    2. I had to chuckle at the part where he said it was fine to fail. What’s a few billion in losses here and there, at least they tried. (…tried to destroy entire regions.)

    1. There’s a hint of doubt regarding the sincerity of the Fed’s resolve to contain inflation.

      1. Don’t fergit to hit the clickbait ad with the photo of a bearded, wise-looking Millennial, and the alliterative caption, “Crypto for the curious and confident”.

  20. Freddie Mac’s 30 year rate;
    1 year ago 2.65% now 3.22% (I ignored the points)
    Found on a 300K house the payment would be up $92/month.
    Freddie Data announced latest rates on 1/6 based on rates offered by lenders from (1/3-1/5 )
    Today the 10 year is up 2.7 bps as of now. Fully expect 30 year rate to increase next week as well.

    1. “Found on a 300K house the payment would be up $92/month.”

      Better question for you to answer: Given the same monthly payments, how much smaller of a loan than 300K could you get at today’s interest rates?

      That should provide some indication of how much housing demand will get hammered as rates increase, as incomes and wealth don’t normally adjust upwards in lockstep with interest rates.

      1. how much smaller of a loan than 300K
        A loan of $278,828 yields the same payment at 3.22% as a $300,000 loan at 2.65% does. (30 year term)

        1. Excellent.

          I guess you can see why sellers might find it increasingly difficult to get 2021 peak bubble prices as interest rates normalize.

          1. The bigger problem for sellers as interest rates normalize may be a sudden disappearance of corporate flippers, like Zillow, as rates increase. Without the prospect of a high rate of nearterm application, what’s in it for a corporate flipper?

            And without corporate flippers to outbid Mom and Pop buyers, who is going to set the mania bid?

          2. PS My wife was eyeballing the local real estate sales results yesterday. She casually mentioned that nothing sold in our area within the past three months.

        3. yields the same payment

          A yes, the good ol’ howmuchamonth. I once calculated that if you can afford a $300K house at 4% interest, and interest rates increase to 7%, the same house would have to fall to $225K to keep the same howmuchamonth.

          But even then, that’s not the best measure, because that assume that the only buyers are end consumers with 30-year mortgages at 7%. In truth, in that environment, the main buyers will be banks and investors who can borrow money at 2% and buy the properties for cash. That $300K house would never fall to $225K. Some investor would snap it up long before.

  22. Does it seem like China faces a cockroach population explosion?

    At least everybody saw it coming.

    1. The Financial Times
      The Big Read Chinese economy
      China’s economy: the fallout from the Evergrande crisis
      The crackdown on real estate ordered by Xi Jinping is putting growing pressure on local governments and many companies
      © FT montage/EPA-EFE/Shutterstock/AFP/Getty Images |
      The ripple effect from the crisis at Evergrande and other property companies is affecting the Chinese economy
      Sun Yu in Shijiazhuang and Tom Mitchell in Singapore yesterday

      Last month, China’s State Council, the government’s most powerful organ, unleashed its wrath on an unusually small target, accusing officials in a county of just 660,000 people of effectively extorting private sector businesses.

      In a long and detailed statement issued on December 17, the State Council said the local government in Bazhou, situated just 90km south of Beijing in Hebei province, had seriously violated both government and Chinese Communist party orders by embarking on a fee-collection spree from small and medium-sized enterprises in order to offset its own declining land-sale and tax revenues.

      Like many jurisdictions across the country, Bazhou had been hit hard by the party’s year-long crackdown on highly leveraged real estate developers such as China Evergrande Group, a colossus that teetered for months before it finally defaulted on bond payments on December 6 and entered into a formal restructuring process.

      According to China’s cabinet, in October the Bazhou government ordered officials to drum up Rmb300m ($47m) in new revenues, mainly through the imposition of arbitrary fees and fines. Over the course of nine weeks more than 2,500 local businesses were hit with penalties totalling Rmb67m, compared with the just Rmb6m in penalties collected over the first nine months of the year.

      “Every government department has a way to make up for lost revenues,” says Martin Li, who runs a chemical factory in Bazhou and was forced by the local meteorological bureau to buy an expensive lightning rod from a government-designated supplier. The rod cost Rmb1,100, far more than comparable units he could have purchased online for just Rmb200.

      In targeting entrepreneurs such as Li, the State Council said Bazhou had “seriously hurt the interest of small businesses, severely damaged the local business environment and undermined the credibility of the party and [central] government”.
      …

  25. Another tidbit about how leftists refuse to understand market forces. Whether it’s recycling or growing organic crops, if it isn’t profitable it won’t happen. From the Colorado Sun:

    Schlagel and the winged scavengers are on public land. Boulder County long ago decided to preserve more than 25,000 acres of Open Space lands and world class views by leasing most of them to farmers like Schlagel. Like his father and now his son, Schlagel tills 1,000 acres of Boulder County Open Space, plus about 500 acres more owned by his family in nearby fields.

    County residents opposed to conventional seed engineering and pesticide use had over the years persuaded leaders to outlaw the methods on public land, hoping those acres would become a utopian garden of organic vegetable plots and locally in-demand crops.

    Schlagel knows full well that farming public land in Boulder County is performative, visually and politically. As he wheels the John Deere around the cornfield he harvested in November, third-floor patients from UC Health’s Longs Peak Hospital on the east side of Longmont can watch him make the dust fly. He’s been willing to work within that constant judgment of Boulder County consumers.

    But he’s not willing to lose his family farm raising crops that people won’t pay for.

  26. If you ask me, the biggest news of the week was the Insurance Company CEO stating a 40% increase in death claims.

    Apparently a 10% rise would normally be considered highly unusually, but 40% is so off the charts unusual.

    Yet fake news is more concerned about reporting how many people tested positive for the latest mutation on Covid 19.

    Insurance Companies will not be able to financially survive with 40 to. 50 % rise in death claims between 18 and 64 age group in one year.

    How about all the disability claims that will skyrocket.
    But a Medical ethic expert was on CNN screaming that the unvaccinated should be charged more for heath insurance. No proof the unvaccinated make more health claims .
    So, either these insurance Companies won’t be able to have death insurance, or the price will be so high , or they will make so many exclusions that the insurance will be meaningless.
    No talk about what all these people are dying of in a normally low death rate working age 18-64.

    The overall death count this year is going to be shocking , and how are they going to declare the different causes of death now. Big increase in heart attacks and strokes no doubt.
    Just unreal.

    1. The big question is what is the curve going to look like? Is this a front loaded spike or are we just seeing the first signs of a much larger spike that is going to extend out for years? My guess is the latter but I hope I’m wrong. How many investments will they have to sell in order to fund increased claims? Is the big boomer sell off finally going to happen??

      The next big question is where in that curve will the narrative be forced to change or will they continue to lie themselves into irrelevance?

    2. biggest news of the week

      Supreme Court oral arguments tomorrow regarding vaccine mandates may rival it.

    3. Insurance Companies will not be able to financially survive with 40 to. 50 % rise in death claims between 18 and 64 age group in one year.

      They’ll have to raise premiums. Maybe at some point they’ll be able to ask if you ever got jabbed, and how many times, and raise premiums accordingly to the risk

  27. Advanced Child Tax Credit payments ended last month. Forbearance’s are expiring. Stimulus checks are pretty far in the rear view (March 2021). Mortgage rates are rising. Inflation is sky high … and next week Powell gets a four year contract extension as Fed Chairman. Is Powell going full Volcker?: “policymakers are also entertaining the once unthinkable: a reduction of a balance sheet that’s been swollen since the 2008 financial crisis.”

      1. Good point. We haven’t heard anything about UBI or canceling rent for a while. I think there were three things that put the kibosh on such talk.
        1. News stories of millions of “Help Wanted” signs. You can’t have unfilled jobs and welfare talk at the same time. Most of the US still believes in “na na na na get a job.”
        2. The 2021 midterms, especially in Virginia. Canary in the coal mine for Dems, so to speak.
        3. Manchin killing BBB live on Fox News. (FYI, I saw a news story where Manchin had to come out and say no, despite the rumors, he’s not in any more negotiations on BBB.)

  28. Here’s a viewpoint eminating from Cambridge University …

    Political Legitimacy, Authoritarianism, and Climate Change | American Political Science Review | Cambridge Core
    https://www.cambridge.org/core/journals/american-political-science-review/article/political-legitimacy-authoritarianism-and-climate-change/E7391723A7E02FA6D536AC168377D2DE

    (snip)

    “Is authoritarian power ever legitimate? The contemporary political theory literature—which largely conceptualizes legitimacy in terms of democracy or basic rights—would seem to suggest not. I argue, however, that there exists another, overlooked aspect of legitimacy concerning a government’s ability to ensure safety and security. While, under normal conditions, maintaining democracy and rights is typically compatible with guaranteeing safety, in emergency situations, conflicts between these two aspects of legitimacy can and often do arise. A salient example of this is the COVID-19 pandemic, during which severe limitations on free movement and association have become legitimate techniques of government. Climate change poses an even graver threat to public safety. Consequently, I argue, legitimacy may require a similarly authoritarian approach. While unsettling, this suggests the political importance of climate action. For if we wish to avoid legitimating authoritarian power, we must act to prevent crises from arising that can only be resolved by such means.”

    FWIW.

    1. I argue, legitimacy may require a similarly authoritarian approach. While unsettling, this suggests the political importance of climate action. ”

      uh huh it seems to me they just screw everything up either because they favor narrow special interests and /or just plain clueless.

      1. While unsettling, this suggests the political importance of climate action

        I’m sure sending people to death camps like Dachau was of “political importance”. And yeah, I am expecting them to make their “climate move”. You won’t like it, but you will be told that it is imperative and there is no time for discussion. So, surrender your car, freeze in the winter, swelter in the summer, and eat bugs to save the world. Refusal to comply will mean that you are a horrible, irresponsible person. And don’t complain about billionaires living it up while you starve. They are the special people who matter. and they will save the world from deplorables like us.

        1. freeze in the winter, swelter in the summer,”

          Yes this makes me hesitant to move my climate doesn’t really need heating or cooling very often and if this continues it could be very expensive to heat and cool in many “cheaper” areas like the AZ desert. So many moving parts hard to predict.

          2. It’s about time! We had one of the longest stretches of temperatures below 60 degrees in decades…

          5. Wenatchee, WA broke a snowfall record last set in 1971, with 24-inches. We had roughly 7-inches of snow in 10-hours, and then freezing rain this afternoon. Government offices and schools were closed today, Thursday, and likely tomorrow too.

          6. It’s a gorgeous 73 degree day here this January 6th.

            As a former resident of the metro San Diego area, I know it can get a lot colder at night, and since most of the shanties are abysmally poorly insulated the bill payable to SDG&E can be substantial.

          7. the bill payable to SDG&E can be substantial

            Particularly if the old single-pane windows haven’t been replaced.

          9. Particularly if the old single-pane windows haven’t been replaced.

            Our old shanty in Escondido was built in 1989. It has dual glaze windows. Then, one Thanksgiving, the furnace broke down. It got really cold in there, fast.

            Compare that to the current Colorado shanty. One day, it was warm and we opened the windows (and turned off the furnace). We forgot to turn it back on. It was in the low 30’s that night, yet next morning the thermostat showed that it was still 62F inside. The Escondido house quickly dropped into the low 50’s the first night, even though it wasn’t quite as cold outside. I had to go out and buy electric space heaters as no one would come out to fix the furnace until Monday.

            Anyway, the lesson was learned: California houses are junk. Decent insulation wouldn’t have cost that much. It also doesn’t help that the houses there are built on concrete slabs.

        2. “deplorables like us”

          That electric car charger we were going to install in your garage for $1,000 will now be $3,500, because of Green New Deal “administrative fees” LMFAO.

          I spent enough time in the government contractor cubicle farm to understand how this all works, and it’s never been anything other than being the fattest pig at the trough. America isn’t a country, it’s a game…

        1. Whatever Happened to Alleged Capitol Rioter John Sullivan?

          https://redstate.com/nick-arama/2022/01/06/whatever-happened-to-alleged-capitol-rioter-john-sullivan-n502773

          I wrote yesterday about Attorney General Merrick Garland’s claim that there is “one rule” of law that should apply to everyone. That’s what should be the case, under our Constitution.

          Except that hasn’t been the case, as I noted, using as an example the glaring difference between the way that the DOJ has handled Jan. 6 versus the way it has approached the BLM/Antifa riots. I noted several aspects of the differences yesterday.

          There are continuing questions regarding the treatment of John Sullivan.

          You may recall that John Sullivan was one of the people who went into the Capitol and encouraged others to do so. He also filmed the killing of Ashli Babbitt by Capitol Police officer Michael Byrd. He sold that footage for at least $90,000. Babbitt was the only person who was killed that day as a direct result of actions taken during the riot.

          But Sullivan also had been an organizer of BLM protests and run a website called Insurgence USA that sold Antifa black bloc gear. He’d been previously arrested for his involvement in a violent BLM protest in Utah where a driver was shot after his car was surrounded. Someone else was accused of that shooting but according to a police affidavit, Sullivan allegedly organized the action, encouraged people to block the roadways, threatened to beat a woman, and kicked her car.

    3. On C-SPAN’s Washington Journal program this morning on the topic of the January 6th “insurrection” a caller was speaking about CHAZ in Seattle in summer 2020.

      And how that was specifically the occupation of territory, with a statement that it was an “autonomous zone” not subject to municipal, state, or federal laws.

      The Capitol a year ago was a LARP that turned into a riot.

      And yes, the 2020 election was stolen. Globalists, GFY.

      1. Local news showed big Trump rallies (Hundreds of people) on Southern Blvd a couple of miles from Mara Logo and up in Stuart which looked much bigger.

        They also showed about 13 Biden supporters (once again not enough to fill a parking lot) who the reporter said were blaming Trump for the January 6 and saying they were going to march to Mara Logo.

    1. Those cratering bond futures directly correlate with rising interest rates, including mortgage rates.

      See discussion and numerical examples above to understand the cratering housing demand implications.

  31. Why is our school district offering to send home 2 rapid antigen tests 22 months into this? It seems too little, way too late and a waste of money.

    1. Why is our school district offering

      Well, we know that anything they (the deep state and its stooges) do is about propaganda and spreading fear and uncertainty. They want as many people to test themselves and get false positives as possible. Since Omicron is relatively harmless, they need another angle to scare the masses: oh noes! I tested positive, and even though I feel perfectly fine there must be something terribly wrong with me!

      1. I went back and read the emails from the school district. Our governor promised, but failed to deliver, the rapid antigen tests before kids returned from winter break. My son’s teacher informed me this afternoon that 20% of the student population is out with some parents refusing to send their kids to school without the rapid antigen tests.

        1. In other COVID news, my husband and I went to Costco this morning. The entrance was staffed with a mask Nazi. I pulled one out but didn’t put it on. My husband wore his. The store was fairly busy with only two other unmasked people at the return counter.

  32. On this great anniversary date of the brave souls who marched into the lions den of DC I am confident their sacrifices will not be in vain.

    Soon the globalist pukes will meet their ends at the hands of regular citizens. They will die in their driveways, cars, and office parking lots.

    Their sentences have already been handed down and Godly citizens will take matters into their own hands to fulfill them.

  33. Destroying a Democracy to Save it: Democrats Call for the Disqualification of Dozens of Republican Members – JONATHAN TURLEY
    https://jonathanturley.org/2022/01/06/destroying-a-democracy-to-save-it-democrats-call-for-the-disqualification-of-dozens-of-republican-members/

    (a snip)

    “What is maddening is that Democratic groups and commentators are seeking to remove as many as 120 Republicans from the ballots in the name of democracy. It is like burning books in the name of literacy. Yet, on this anniversary of the January 6th riot, members of Congress and Democratic groups want to block voters from reelecting their preferred representatives. Like villages in Vietnam, it appears that some members and activists believe that you have to destroy democracy to save it from itself.”

    (another snip)

    “This week, Democratic lawyer Marc Elias predicted that 2022 would bring a renewed interest in disqualifying Republican members from office based on an obscure Civil War-era provision. Elias — the former Hilary Clinton campaign general counsel — is a well-known figure in Washington who has been prominently featured in the ongoing investigation of Special Counsel John Durham. Elias has founded a self-described ‘pro-democracy’ group that challenges Republican voting laws and pledges to ‘shape our elections and democratic institutions for years to come.’

    “In the age of rage, nothing says democracy like preventing people from running for office.

    “Elias and others are suggesting that — rather than defeat Republicans at the polls — Democrats in Congress could disqualify the Republicans for supporting or encouraging the Jan. 6 ‘insurrection.’ Last year, Democratic members called for the disqualification of dozens of Republicans. One, Rep. Bill Pascrell (D-N.J.) demanded the disqualification of the 120 House Republicans — including House Minority Leader Kevin McCarthy(R-Calif.) — for simply signing a ‘Friend of the Court brief’ (or amicus brief) in support of an election challenge from Texas.

    “These members and activists have latched upon the long-dormant provision in Section 3 of the 14th Amendment — the ‘disqualification clause’ — which was written after the 39th Congress convened in December 1865 and many members were shocked to see Alexander Stephens, the Confederate vice president, waiting to take a seat with an array of other former Confederate senators and military officers.”

    (end of snips. click on the link to read the rest)

  34. Oh dear….

    Chinese developer Shimao defaults on trust loan – letter

    https://www.reuters.com/markets/rates-bonds/chinese-developer-rf-says-short-funds-settle-bond-tender-offer-2022-01-06/

    SHANGHAI/HONG KONG, Jan 6 (Reuters) – Chinese developer Shimao Group (0813.HK) has defaulted on a loan after missing a 645 million yuan ($101 million) payment, the lender said in a letter seen by Reuters on Thursday, in the latest sign of distress in China’s property sector.

    China Credit Trust Co said in the letter, confirmed by two sources familiar with the matter, that 755 million yuan of the trust loan had been repaid. However, the absence of the remaining payment meant the loan was now in default, it added in the letter to investors in the loan.

  35. Will the Fed’s balance sheet shrinkage and pandemic stimulus unwind lead to another train wreck that everyone could see coming?

    Should be interesting!

    1. The Financial Times
      Federal Reserve
      Fed warns faster rate rises may be needed to tame soaring inflation
      Minutes from latest meeting show central bankers gearing up for more aggressive tightening
      Federal Reserve building in Washington, DC
      Federal Reserve officials expect the central bank to begin raising interest rates from rock-bottom levels this year
      © Bloomberg
      Colby Smith in New York yesterday

      The Federal Reserve may need to raise interest rates “sooner or at a faster pace” than officials had initially anticipated as the central bank seeks to tame soaring inflation, according to minutes from its latest meeting.

      Minutes released on Wednesday from the December meeting of the Federal Open Market Committee showed officials were fully on board with plans to accelerate the withdrawal of the massive bond-buying programme adopted at the onset of the pandemic. Doing so would give the central bank greater flexibility to raise interest rates this year.

      The account of the meeting provided additional detail on why the Fed abruptly pivoted in late 2021 to embrace a more aggressive approach to withdrawing its unprecedented support for financial markets.

      A sell-off in US stocks gathered pace after the minutes were released, with the S&P 500 closing down nearly 2 per cent on Wednesday while the technology-heavy Nasdaq Composite was 3.3 per cent lower. Short-dated US government bonds also sold off, with the two-year yield at 0.82 per cent, its highest level since March 2020.

      Kathy Bostjancic, chief US financial economist at Oxford Economics, said the minutes showed “rising discomfort with elevated inflation” among Fed officials, who appeared to be confident that the US economy will recover strongly despite the risk of the Omicron variant.

      Thomas Simons, an economist at Jefferies, described the minutes as “some of the most hawkish in recent memory”.

      December’s meeting also featured the first substantive discussion about the Fed’s balance sheet, which has more than doubled in size since early 2020 and now hovers at just below $9tn.

      The minutes suggest broad support for the Fed to begin reducing the size of its balance sheet after the first interest rate increase. Some said a move could happen “relatively soon” afterwards.

      “Some participants judged that a less accommodative future stance of policy would likely be warranted and that the committee should convey a strong commitment to address elevated inflation pressures,” the minutes said.
      …

      1. Fed warns faster rate rises may be needed to tame soaring inflation

        It would help if the gooberment stopped with the multitrillion dollar deficits. They haven’t given up on BBB, as it’s clear they are blowing in Manchin’s ear. What’s another $2T down the rat hole?

  36. From the Dumver Post:

    Marshall fire cleanup will take months as toxic debris is removed from burn sites

    Just wait. Government officials will roll as many logs as possible to delay rebuilding, making anyone who wants to rebuild jump through endless hoops. No doubt to create artificial scarcity and boost prices, while the same people will sit on “affordable housing taskforces” and bemoan that housing in metro Dumver is unaffordable. Come to think of it, the Marshall fire is an answer to their prayers.

    1. The Financial Times
      Property sector
      Shimao’s debt woes deepen concerns over cash crunch in Chinese property
      Shanghai bonds of once highly rated developer suspended after failure to make loan payment
      A man walks past a wall carrying the logo of Shimao Group in Shanghai
      Shimao Group was until recently considered one of China’s less risky property bets, compared with rivals such as Evergrande, which has already defaulted
      © Stringer/Reuters
      Thomas Hale, William Langley and Andy Lin in Hong Kong
      2 hours ago

      The Shanghai Stock Exchange suspended trading in several bonds of Chinese property developer Shimao, a day after the company’s failure to make a loan payment increased fears that a cash crunch will spread more widely across the country’s embattled real estate industry.

      Trading in three renminbi-denominated bonds from the residential developer, which unlike many of its struggling peers recently held an investment-grade credit rating, was temporarily suspended after sharp falls followed reports on Thursday of the missed payment.

      The problems at Shimao suggested that China’s real estate sector woes, which have mainly affected companies with riskier credit ratings such as Evergrande and Kaisa Group, could spread to more highly rated developers as they grapple with a slump in housing sales and a loss of investor confidence.
      …

  38. On California News people who look perfectly healthy in line to get the Covid test.
    High Court taking up the mandate issues starting today.

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