Can the pound reach parity versus the dollar? It’s now a one-in-four chance when it comes to options pricing.
The UK currency is heading for its biggest daily loss since early May after Chancellor of the Exchequer Kwasi Kwarteng outlined the government’s plans to stimulate the economy with tax cuts and spending. The simultaneous sharp sell off in Gilts [historical term for UK government bonds – LP] suggests that tackling inflation will be a very hard task for UK authorities and that the currency market sees no easy way out for the Bank of England.
To attract foreign investors, a weaker pound may be the answer and that is what FX traders are betting on.
Cable fell as much as 2.1% to touch $1.1021, the lowest since March 1985, and was at $1.1036 as of 12:38pm in London. Risk reversals, a barometer of market positioning and sentiment, show that traders see the greatest downside risks for the pound over the medium term in two years.
According to Bloomberg’s options pricing model, the pound holds a 26% chance of touching parity versus the greenback in the next six months. That compares to a reading of 14% Thursday.
I think the real odds are probably higher than that.
Dollar-pound parity is something that’s never happened, with the nearest it came to some 1.05 dollars to the pound in the mid-1980s. But there’s always a first time for everything, and with the Bank of England doing more quantitative easing and the UK government going on a spending spree during soaring inflation while the Fed ratchets up interest rates, now is as good a time as any.
Besides making imports from the UK less expensive, what effects will dollar-pound parity have on the financial world? Hard to say for sure, but my prediction is: Weird things.
There are a variety of reasons for this, starting with the fact that currency trading is itself a weird thing. You may think “American financial houses buy pounds to purchase English goods, while UK financial houses buy dollars to purchase American goods,” but there’s a whole ecology of counter-party trades, hedging strategies, currency reserve requirements, portfolio balancing, and a host of other considerations.
Here’s a brief video that cover some of the basics for how brokerages handle FX trading:
That’s a fairly streamlined view, as it doesn’t cover how liquidity pools are set up, different hedging strategies, etc.
There are even traders who specialize in just trading different duration T-Bills, selling the eight-week-out and buying the four-week-out (or vice versa) for esoteric arbitrage reasons.
None of that will change if the market hits dollar-pound parity. So where’s the danger? That comes from the possible non-linear effects of the market doing something that a lot of algorithmic instrument designers never considered a possibility.
For a simple example, let’s talk about the swaps cases. To summarize a whole lot of very complex cases, a whole bunch of local UK governments entered into interest rate swap agreements. Interest rate swap agreements are a legitimate hedging strategy to minimize exposure to interest rate swings, but a few municipalities saw it as a license to print money. To quote Wikipedia, the source of all vaguely accurate knowledge:
The position of Hammersmith and Fulham London Borough Council was quite different from most of the other local authorities. From about 1985 onwards Hammersmith had entered into interest rate swap transactions on an extremely large scale. At one stage it was calculated that Hammersmith was a counterparty to 0.5% of the global trade in swaps, and 10% of the sterling denominated trade. Moreover, quite exceptionally, all of Hammersmith’s positions in the swap market were betting on a fall in interest rates. Most large participants in the swap market have their exposure balanced by taking positions on both sides and across multiple currencies, but Hammersmith was essentially repeatedly entering into one-way bets that sterling interest rates would fall; a bet that they would end up losing spectacularly when interest rates climbed from around 8 per cent to 15 per cent in the space of ten months.
This was, to put it in technical terms, “a really fucking stupid thing to do.” The swaps cases were unwound with great expense and difficulty, and various English banks ended up taking a bath (which you know they must have regarded as some sort of diabolical violation of the natural order) after courts determined that the authorities in question didn’t have the authority under English law to enter into such agreements.
The possibility that interests rates can rise should be an obvious one. But the idea that the pound might be worth less than the dollar is one that people have probably thought about a good deal less, since it hasn’t happened ever. It’s quite possible it hasn’t been contemplated in some percentage of the trillions in derivatives markets and hedging instruments around the world.
For many financial systems, this is going to be an untested use case. Some systems may work just fine, others may break down, and still others may experience race conditions or cascading failures; think of the flash crash of 2010, or the 1987 Black Monday crash. Somewhere, somehow, something is likely to go off the rails.
Hopefully, whatever does blow up won’t be big enough to take down the entire market, or at least not for long. Hopefully it won’t uncover massive problems like the 2008 subprime meltdown uncovered, and there won’t be a firm of systemic importance like AIG was there.
Ukraine is carving out big gains in Kharkiv, Texas is in the money, Biden taps Clinton’s bagman to divy up the graft manage climate change funds, more groomers unmasked, and some big changes in the UK. Plus a bit about tanks. It’s the Friday LinkSwarm!
Ukrainian successes on the Kharkiv City-Izyum line are creating fissures within the Russian information space and eroding confidence in Russian command to a degree not seen since a failed Russian river crossing in mid-May.
Ukrainian forces in the Kharkiv Oblast counteroffensives advanced to within 20 kilometers of Russia’s key logistical node in Kupyansk on September 8.
Ukrainian forces will likely capture Kupyansk in the next 72 hours, severely degrading but not completely severing Russian ground lines of communication (GLOCs) to Izyum.
Ukrainian forces are continuing to target Russian GLOCs, command-and-control points, and ammunition depots in Kherson Oblast.
On Thursday, the state comptroller reported that the Lone Star State’s tax revenue rocketed by 25.6% to a total of $75.21 billion.
It’s only the fifth time since 1988 that revenue grew by a double-digit percentage — and it’s double the next largest increase over that 34-year span.
“Revenues continue to outpace even our most recent forecast as All Funds tax collections closed the fiscal year $841 million above the projection in our Certification Revenue Estimate,” said state Comptroller Glenn Hegar in an official release.
That’s a stark contrast to California, which saw July revenue come in 12% below forecast.
Texas has been a major beneficiary of migration from California: Over the last census cycle, 34% of new Texans arrived from California alone. Meanwhile, New York saw personal income tax collection fall 3.2% from April 1 through July.
Joe Biden has hired John Podesta to be the new Clean Energy Czar, citing his experience in progressive causes….
Bottom line, John Podesta is being now being hired to divvy up the $316 billion in Green New Deal money recently authorized by congress. That is what Podesta specializes in, the distribution of taxpayer money to DNC allied groups and networks in advance of the 2022 midterms. Podesta, Hillary’s fixer, is a bagman, nothing more.
Worse, one of the many bag clients he’s adept at channeling money into Democratic pockets for is China.
President Joe Biden on Friday tapped John Podesta to oversee $370 billion in climate spending, a move that has China hawks on Capitol Hill concerned over Podesta’s encouragement of Chinese investment in American infrastructure and praise for the top U.S. adversary on climate change.
Podesta has called for Chinese investment in American infrastructure, arguing in 2013 that there are “great opportunities for Chinese firms to directly invest in this nation, to build American infrastructure, to create American jobs, and generate steady and handsome returns.” He added, “There’s also the ability for Chinese firms to invest here and learn best practices, and take those home to the tremendous and growing middle class market in China.”
Instead, in the intervening decade, the Chinese government has committed widespread economic espionage—one 2017 estimate found that China steals up to $600 billion in trade secrets a year. Engineers in China, meanwhile, use popular social media platform TikTok to access nonpublic data from U.S. users.
Podesta has also praised China’s efforts to combat climate change, arguing in 2015 that the Chinese “are beginning to do a fair amount.” China, which is the world’s top carbon emitter, went on to dramatically accelerate its coal consumption, which reached a record high in 2020.
That record has China hawks on the Hill concerned that America’s top adversary has a new—and powerful—ally in the White House. Podesta’s role will see the liberal consultant implement $370 billion in spending toward alternative energy, a sector that China dominates when it comes to raw materials. As such, alternative energy companies receiving the Podesta-steered funding could turn to China to secure supplies. The new Biden aide will likely take no issue with that dynamic, given that he has argued the United States and China should “align” on a green economy. Sens. Marsha Blackburn (R., Tenn.) and Ted Cruz (R., Texas) argued that the move reflects the White House’s soft-on-China stance.
Democratic County Administrator Robert Telles charged in the death of journalist Jeff German, “an investigative reporter with the Las Vegas Review-Journal who had spent the last few months exposing misdeeds and turmoil in the official’s office.” For all Sundown Joe’s dark mutterings about “UltraMAGA,” it seems like Democrats are the ones doing all the killing…
A now-former elementary school teacher previously charged with sexual abuse of a 7-year-old student was arrested again and charged with sexually assaulting a second victim.
Victor Moreno, 28, was charged in July with continuous sexual abuse of a child, a first-degree felony, and an improper relationship between a student and educator, a second-degree felony.
The accused pedophile’s victim was a second-grade girl in Irving Independent School District, where Moreno was a teacher at the time of the alleged assaults during the 2020-2021 school year.
Snip.
Meanwhile, a teacher’s aide in Mesquite Independent School District was arrested Tuesday after being accused of engaging in inappropriate relationships with students.
Bryan Garcia, 22, was charged with two counts of sexual assault of a child and one count of indecency with a child.
“Higher Ed’s New Woke Loyalty Oaths: A ballooning number of hiring and tenure decisions require candidates to express written fealty to political doctrines.” And you can bet those doctrines have nothing to do with constitutionally limited government based on universal rights…
Indeed, they’re talking about restarting old production lines to start manufacturing older BMP-2s. “The costs and challenges of bringing more modern designs into production are now surely aggravated by Western sanctions cutting access to many basic electrical components, requiring pricey and time-consuming workarounds.”
This is like a scene from a porn movie, only a lot creepier. “Las Vegas landlord requires tenant to sign sex contract in order to lease home.”
“Kim Kardashian Is Starting Her Own Private Equity Company.” Why not? But I’m betting being a genius at self-promotion doesn’t equate to being a genius at investing, especially since she’s starting in the middle of a fierce, widespread downturn…
Easiest way to win Dad of the Year? Pick your son up from school in a tank. Looks like a Scorpion light tank, most likely the FV107 Scimitar reconnaissance variant.
“FBI Drops Investigation After Discovering Trump’s Top Secret Nuclear Documents Were Just Print-Outs Of Hillary Clinton Emails.”
The House on Thursday passed the bipartisan Chips and Science Act, which aims to increase domestic production of computer chips to allow the U.S. to become more competitive against China in the global technology market.
The bill passed the House in a 243-187 vote one day after passing the Senate in a 64-33 vote. The legislation now heads to the desk of President Joe Biden.
Biden called the passage of the bill on Thursday “exactly what we need to be doing to grow our economy right now.”
“Today, the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper,” Biden said. “It will lower the costs of every day goods. And, it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.”
Twenty-four Republicans voted to pass the measure, despite Republican leadership making a last minute push to discourage GOP lawmakers from supporting the bill. GOP leaders sought to keep the bill from passing after news broke on Wednesday that Senator Joe Manchin (D., W. Va.) had reached a deal with Democratic leaders on a nearly half-a-trillion dollar spending package targeting energy and climate, health care, and increased taxes on the wealthy.
Snip.
The measure includes $39 billion to “build, expand, or modernize domestic facilities and equipment” for semiconductors, $2 billion to specifically manufacture semiconductors and $11 billion for Department of Commerce research and development.
“Research and development” is no doubt going to be a rich conduit of graft to Democratic Party cronies having nothing to do with semiconductors.
For reference, $29 billion is probably just enough to build two state-of-the-art 300mm chip fabrication plants.
As I’ve argued before, the reasoning behind the bill is specious and it won’t result in a single new chip being fabbed in the next two years.
The most recent stats I can find show that the United States has some 47% of the semiconductor market. We (and Taiwan, and South Korea) are kicking China’s ass in semiconductors.
The chips China make are generally either: A.) Cheap, or B.) intended for their internal market. No one sends cutting edge chips to be fabbed in China because they don’t have the tech to do it and everyone know they’ll steal your designs and crank out knock-offs on the sly whenever possible. China’s semiconductor industry is mostly smoke and mirrors all the way down.
Semiconductor subsidies have all the hallmarks of a classic Washington boondoggle: The wrong action at the wrong time for the wrong problem.
Second, the shortage wasn’t the result of a “chip shortage,” it was the result of “a lack of available foundry wafer starts.” Automakers cancelled their orders for display drivers when it looked like Flu Manchu lockdowns were going to depress the economy for a while, and were caught off-guard by the V-shaped recovery under Trump, and got sent to the back of the line to get their product fabbed after they changed their mind. Remember, just about all foundries are running flat-out 24/7/365, pausing only to switch to different chips for different customers. There’s no slack in the system, and those wafer starts are already spoken for (and possibly paid for) by other customers well in advance. Just as nine woman can’t give birth to a fully grown baby in one month, you can’t just “make chips quicker” in an existing fab.
Third, remember that cutting edge semiconductor fabs are hideously expensive. Moore’s second law states that the cost of a new, cutting edge semiconductor plant doubles every four years. Samsung’s planned fab in Taylor, Texas is going to cost $17 billion.
Fourth, nothing about these subsidies will address the real problem with American semiconductors, which is that the overwhelming majority of cutting edge chip designs have to flow through TSMC fabs in Taiwan. What will solve that problem is TSMC opening a state-of-the art fab in Arizona in 2024. No amount of U.S. taxpayer money will make that already-under-construction fab start producing chips any quicker.
Could these subsidies boost American semiconductor manufacturing 2-3 years from now? Possibly. Knowing the cycling nature of the industry and the tendency of government subsidies to backfire, new/upgraded fab lines might come online just as the industry is experiencing a glut.
But the real key to restoring America to the cutting edge of semiconductor manufacturing is the already-in-progress inshoring of cutting edge foreign owned fabs from Samsung and TSMC, and having American semiconductor manufacturers like Intel and GlobalFoundries master sub-10nm chip fabrication processes, something they have heretofore been unable to do. (Intel is closer, having been on the cutting edge until they lost their way, while GlobalFoundries stopped all development on their 7nm node because they couldn’t find a way to make the investment pay off.)
Throwing buckets of budget-busting borrowed taxpayer money around isn’t going to make any of those things happen any faster.
Russian forces have retreated from a Ukrainian airfield that was key to their original plan of overthrowing Volodymyr Zelensky’s government.
Hostomel airport, just oustide Kyiv, was the scene of some of the fiercest fighting of the Ukraine war, as Vladimir Putin, the Russian president, sought to establish an air bridge to the capital.
Control of the airport, 20km from Kyiv, changed hands several times, as Ukrainians at first defended fiercely and then attacked the Russian occupiers.
Five weeks on, the Russians have moved out having failed in their mission, according to a senior US defence official, as it abandons plans to take the capital and shift forces to the east.
This is a huge win for Ukraine, but it also means that surviving Russian forces can shift over to east Ukraine where the war is still hot.
Also: “Ukraine forces pulled off a rare attack on Russian soil Friday when two military helicopters destroyed a fuel depot in the city of Belgorod, situated roughly 40 miles north of the border with Ukraine.”
A key inflation metric monitored by the Federal Reserve soared 6.4 percent in February compared to a a [sic] year ago, reaching a new 40-year high.
The latest price surge, which affected the price of fuel, groceries and other consumer essentials, represents the largest year-over-year increase since January 1982, according to data released by the Commerce Department on Thursday.
Not taking into account food and energy fluctuations, which tend to be more erratic and can overemphasize inflation, the personal consumption expenditures price index, the preferred inflation gauge of the Federal Reserve, jumped 5.4 percent in February from a year prior. Including gas and groceries, PCE surged 6.4 percent.
It’s gonna get worse…
The Biden Administration is evidently all-in on tranny madness and grooming your children:
The Biden Administration has now determined that "gender affirming care" – including puberty blockers, hormones and surgeries – is a right of trans youth and "appropriate" and "necessary" for their health.
The Biden Justice Department will come after states that disagree.
Speaking of DeSantis, he has some pretty sweet talent lined up for this:
Johnny & Ronnie Van Zant, brother of original Lynyrd Skynyrd lead singer Ronnie Van Zant, made DeSantis’s new campaign video, “Sweet Florida,” replete with shots at the press, a dig at Fauci and loads of beach and flag-waving b-roll pic.twitter.com/Wd3F7u466Q
Through brand names like “comprehensive sex education” and one of its parent programs, “Social-Emotional Learning (SEL),” our government schools have been turned into Groomer Schools, and parents are beginning to notice. What many will not understand, however, is that this isn’t just a fluke of our weird and increasingly degenerate times. It is, in fact, a long-purposed Marxist project reaching back into the early 20th century. In this episode of the New Discourses Podcast, join James Lindsay as he explains the long history of the sexual grooming that has come into our schools through Critical Gender Theory and Queer Theory as they have crept into educational programs.
There’s an hour long video there I haven’t watched all of yet…
Speaking of groomers:
An Oregon elementary school teacher has been arrested near Seattle for two charges of attempted child rape & more. Andrew Bert Hammond, a fourth-grade teacher at Newby Elementary School, allegedly proposed to meet at a hotel & had handcuffs & duct tape. https://t.co/o2aJnzmZpX
Just how bad is the graft, waste and fraud in that $1.5 trillion porkulus bill? This bad. Look over that vast list of special subsidies and ask yourself “How many of these programs are designed to channel taxpayer money into the pockets of Democratic activists.” The answer seems to be “Most of them.”
“8 Joe Biden Scandals Inside Hunter Biden’s MacBook That Corporate Media Just Admitted Is Legit.” China, Ukraine, Russia, etc.
White House Press Secretary Jen Psaki is leaving for MSNBC. So many angles: A.) Rats, sinking ship. B.) That revolving door between Democratic staffers and the MSM continues apace. C.) I hear she has an offer to star in Chairman of the Board 2.
Just when you thought it was safe to go back in the supply chain: “22,000 Union Workers At 29 West Coast Ports May Strike…West Coast union dockworkers may strike if they don’t come to an agreement to replace their existing contract with marine terminals. The contract is set to expire at the end of June.” Labor strikes are yet another part of the classic winter of discontent formula the Biden Administration is using to bring back the worst of the 1970s.
Philadelphia district attorney Larry Krasner has presided over a surge in violent crime, and his new policy promises more of it. Krasner recently announced plans to de-prosecute crimes for offenders aged 18 to 25, ignoring how this age group tends to contain the most violent of criminal defendants.
Krasner’s office has established a new unit that will move some 18-to-25-year-old defendants into “rehabilitative programming” instead of seeking criminal punishments. As Krasner’s data dashboard demonstrates, “rehabilitative programming” is just a euphemism for dismissing charges. Krasner promises that the program will be limited to nonviolent offenses, including drug trafficking and other offenses. (The Philadelphia Inquirer reports that gun crimes will not be included, but Krasner has previously stated that prosecutions for illegal gun possession are “not only ineffective but unjust and racially discriminatory.” The link in the district attorney’s office data dashboard about Philadelphia’s Gun Violence Task Force takes the reader to a page that states “Article Not Found.”)
This new program reflects Krasner’s determination not to think like a prosecutor, but instead to think like the criminal defense lawyer he was. The program was developed by Sangeeta Prasad, a fellow with the district attorney’s office who previously served as a public defender in New York, New Mexico, and Philadelphia. Before assuming her current post, she had no prior experience as a prosecutor, just like Krasner. The chief public defender for Philadelphia has called the new unit “an incredible initiative,” but Philadelphia courts were not invited to the press conference announcing the plan and stated that they were not aware of the experiment.
The new initiative comes at an awkward time. In 2021, Philadelphia experienced the highest number of homicides in its history, and the violence is continuing in 2022. Indeed, Philadelphia homicides have risen every year that Krasner has been in office, as carjackings, shootings, and drug overdoses soar. What makes the policy more bizarre is that it runs counter to decades of criminological research. One of the iron laws of criminal conduct is the so-called age-crime curve, which demonstrates that the majority of serious crimes are committed by defendants between the ages of 15 and 25. This finding obtains around the world and has been replicated time and again.
Speaking of repeat offenders, Millen, Georgia police Officer Larry “Ben” Thompson quit after being caught on tape having public sex while on-duty. Fair enough, but his lengthy record of misdeeds makes you wonder why he wasn’t fired long ago, since he managed to shoot another officer in the arm (“negligent discharge”) and killed a guy in a traffic accident in route to a call. (Hat tip: Dwight.)
Nevada/Utah Ponzi scheme leads to FBI shootout. “The alleged $300 million scheme, run by a lawyer named Matthew Beasley, came to a head when FBI agents went to his home earlier this month and Beasley drew a gun on himself, before pointing it at agents, prompting them to shoot him.”
“[Fort Worth Superintendent] Kent Scribner will leave the district this August instead of in 2024, when his contract ends. In response to recent outcry from parents regarding Superintendent Kent Scribner’s support of CRT-based policies, Fort Worth ISD’s school board voted 7-0 to move up Scribner’s last day as superintendent to August 31, 2022.”
Ouch! Texas “Taxpayers’ Property Appraisals Rising 20% to 50% as Supply Chain Disruptions Meet Population Growth.” Austin-Round Rock is slated for the biggest increase, some 35.4%.
Don’t look now, but there’s another big Zero Day Internet infrastructure exploit out in the wild. “Spring4Shell is a remote code execution vulnerability in Spring Framework that can be exploited for remote code execution without authentication.” Spring is a Java framework that’s almost 20 years old, so the issue could potential be lurking in a lot of places…
Speaking of false accusations of racism, Gibson’s Bakery win over Oberlin in court yet again. “A three-judge panel on the Ninth District Court of Appeals issued a unanimous decision to uphold a 2019 ruling by Lorain County Judge John Miraldi, who initially awarded the bakery more than $40 million in punitive and compensatory damages, Cleveland.com reported. However, the sum was later reduced to $25 million, though the bakery was awarded more than $6 million for lawyers’ fees.”
We were driving on the PA Turnpike when a warning came across about sudden snow squalls and possible dangerous highway conditions. We got snow but nothing like THIS! Prayers for all involved. 🙏🏻 pic.twitter.com/IrNX6inRQi
I know there’s a lot going on in the world today, but can we just take a moment to reflect on how crazy it is that the United States House of Representatives just passed a $1.5 TRILLION spending bill that no one has read?
The House passed an expansive $1.5 trillion spending bill on Wednesday night that includes funding for the government through the end of the fiscal year…
So that piddling, measly $1.5 trillion isn’t the full budget, it’s just through the end of the fiscal year, which is to say September 30. That’s more than Ronald Reagan’s first two budgets for their entire fiscal years combined.
…emergency aid for Ukraine’s war effort, but also a number of ambiguous programs abroad…
Really, who doesn’t like paying for “ambiguous programs abroad”?
..with pandemic relief funding being thrown out at the last minute.
The omnibus package was bifurcated into two votes, both of which received bipartisan support: one for defense spending and one for domestic social spending. For the former, which included funding for the Pentagon, Department of Homeland Security, and national security, the House voted 361-69. For the latter, the vote was 260-171. The renewal of funding for the government came before a federal funding was set to expire Friday.
Over 2,700 pages in length…
And here’s how you know that no single human being read all 2,700 pages, because it was unveiled yesterday. Of course, that’s the entire point, so no one can point out the graft and payouts earmarked for political cronies.
…the bill includes approximately $14 billion for humanitarian, security, and economic support for Ukraine and Eastern European countries as they counter the Russian invasion but also under $40 million for “democracy programs” for Venezuela, an authoritarian socialist country. Another provision allocates $6 million in spending to an international leadership fund with some Russian recipients that are “engaging in free market development, humanitarian activities, and civic engagement.” However, the money will “not be used for officials of the central government of Russia,” it specifies.
The $15.6 billion in Covid-19 funding was scrapped due to a disagreement between the parties over how to finance it. Republicans had proposed redirecting previously allocated pandemic funds from state governments to offset the federal cost of Covid-19 relief, which Democrats opposed. The White House and Democratic leaders were reportedly angered that the Covid-19 money was abandoned, with a number of members airing their discontents and potentially jeopardizing the entire spending measure. The removal of the funds came as a shock to many rank-and-file Democrats and delayed the legislative process for hours.
Inflation is hitting 40 year highs, and the U.S. budget deficit for this year is estimated at over a trillion dollars, but the federal budget never, ever undergoes a diet. The last balanced budget was back in 2001.
Uncontrolled spending is the root issue for many of our current woes, and if left unchecked will be the ruin of this nation.
With several of the Biden administration’s COVID-19 vaccine mandates still in effect — such as those affecting members of the military, federal contractors, and healthcare workers — Rep. Chip Roy (R-TX) is calling on lawmakers to block government spending that funds the enforcement of those mandates.
Roy, along with 48 other Republicans in Congress, sent a letter to the GOP leadership in each chamber pledging to refuse consideration of “any federal government funding vehicle [. . .] that funds the enforcement of COVID-19 vaccine mandates at any level of government.”
The letter comes in advance of February 18, 2022, the date through which the federal government is currently funded thanks to two continuing resolutions (CRs) that were passed by Congress last fall.
According to the top-ranking Republican in the Senate Appropriations Committee, Congress is headed toward passing another stop-gap measure to continue funding the government without any shutdowns.
Republicans like Roy — who also expressed frustration with the national debt surpassing $30 trillion — don’t want to see that funding continue to support the COVID-19 vaccine mandates.
During a House floor speech on Friday, Roy explained his position, saying, “[W]hen members of this body or the United States Senate vote for a continuing resolution — I want every American to listen to me — when they vote for a continuing resolution to fund government, they are voting to fund the enforcement of vaccine mandates that are causing our men and women in uniform to be forced out of service, to be discharged.”
Members of the Texas delegation who signed Roy’s letter include Sen. Ted Cruz (R-TX) and Reps. Louie Gohmert (R-TX-01), Dan Crenshaw (R-TX-02), Lance Gooden (R-TX-05), Ronny Jackson (R-TX-13), Randy Weber (R-TX-14), Pete Sessions (R-TX-17), Troy Nehls (R-TX-22), Michael Cloud (R-TX-27), Michael Burgess (R-TX-26), and Brian Babin (R-TX-26).
Opposition to vaccine mandates is widespread in America, and almost universal among Republicans, which makes defunding them an excellent hill to defend. The only question is why more GOP legislators haven’t signed this pledge.
If Biden and congressional Democrats didn’t want their unconstitutional regulatory schemes held hostage to continuing resolutions, they should have tried to get them passed into law and passed an actual budget rather than a continuing resolution. Too bad pandering to their far left-wing base was more important than writing a budget Manchin and Sinema could sign off on.
He who lives by the continuing resolution dies by the continuing resolution.
[The sound you hear is the countless multitudes clicking off to another blog.]
Way back last decade, dispatches on the ongoing crisis were a regular staple of the blog. To summarize the crisis for those who weren’t paying attention back then:
A bunch of countries joined the Eurozone without following the requirements outlined for membership, including limiting budget deficits to 3% of less of their GDP, and overall debt-to-GDP ratio of 60% or less. How were they able to join? Simple: They lied and the Eurocrats turned a blind eye, because EU.
Foremost among those running into trouble were the PIIGS (Portugal, Italy, Ireland, Greece and Spain). (Cyprus and Malta also had serious issues, but their tiny size meant they presented no systematic risk for other nations, and Cyprus relieved its problems by becoming the dirty Russian money laundering capital of Europe.)
Ireland was probably the most incongruous of the five, since their debt only spiked when the Irish government nationalized Anglo Irish Bank to prevent it from collapsing.
In all other cases, the cause of of the problem was obvious: Each ran huge budget deficits to underwrite generous welfare state programs for countries with below replacement birth rates, and they were allowed to get away with it for a while because they used Germany’s credit rating in lieu of their own thanks to the Euro.
The problem finally came to a head after the SubPrime Meltdown in 2008 made various banks and regulatory agencies actually scrutinize balance sheets and realize just how broke the PIIGS were.
Greece was the worst, being the most dysfunctional, and absolutely refusing to slow down spending on their own. There followed a reoccurring farce where various Euro regulatory agencies (including the International Monetary Fund, the European Commission, and the European Central Bank, collectively known as “the Troika”) demanded Greece end their ridiculous high levels of deficit spending, Greece refused, the Troika threatened to cut off the tap entirely, Greece promised to be better, the Troika reluctantly extended them another loan, and then Greece continued to spend recklessly, setting up the next round of the farce.
A bunch of Eurozone countries then implemented “austerity,” which involved not cutting spending to balance their budgets, but merely reducing the deficits slightly.
None of these “austerity” measures eliminated deficit spending, and none addressed the issue that’s driving all of Europe (and us) bankrupt, namely unwillingness to carry out structural reforms of the welfare state. The few tiny reforms that have been undertaken have been, as NRO’s Michael Tanner notes, ridiculously timid, and even those have been heavily weighted in future years. “So far, European governments haven’t even been willing to take a penknife to the welfare state, let alone an axe.” Plus a huge round of tax hikes…
Actual austerity would mean (at a minimum) reducing spending to the amount of money actually taken in. As best I can tell, none of the PIIGS, or France, or the UK has undertaken such real austerity. That “severe” Greek austerity that just caused a change in government? It reduced Greece’s official deficit spending from 9.0% of GDP to 7.5% of GDP. They didn’t even want Greece to stop digging a hole, they just wanted them to dig more slowly.
Austerity did not fail, it was declared difficult and left untried.
Eventually growth in the Eurozone picked up just enough, and the Troika managed to install enough of their own functionaries in various PIIGS positions to ensure that their half-assed, anemic austerity programs were actually followed that, along with Brexit and the Rise of Trump, it got Eurozone debt crisis off the front page and back under the rug.
So fast forward to today. Has the European debt crisis been solved?
Hah! Of course not. Does the EU ever really solve anything? European debt grew during the pandemic, but this time they get to blame Flu Manchu rather than slow growth, high taxes, declining births and a bloated welfare state.
Spain, Italy and Greece have all continued their PIIGS-ish ways. The UK, under ostensibly conservative Tory governments for the entire pandemic and constant attack for “austerity,” and they’re still piling up debt like one of the PIIGS, though the double-whammy of Brexit dislocations and idiotic lockdowns are more to blame than increased spending per se.
Ireland, with the lowest deficit for the period, seems to have proved that their membership among the PIIGS was transitory.
What then of Portugal? Have they improved? It turns out only slightly and relatively. Their debt increased by 13.9% for the period, making them better not only than Spain, Italy, Greece and the UK, but also France, Cyprus, Malta, Hungary and Slovenia. They evidently managed a balanced budget in 2019 (at least on paper). Their Flu Manchu deficit spending is still unsustainable, just slightly less unsustainable than many of their fellow Eurozone grave-diggers.
We don’t have much standing to condemn others, as the United States ratio stands at 106.70%. Donald Trump had numerous virtues as President, but he was no deficit hawk, and Biden would crank up deficits even higher if the Senate let him.
We can see the fruits of this orgy of deficit spending in the worldwide inflation we’re seeing. (Feel free to argue whether government budget deficits or central bank quantitative easing is more at fault.) Inflation may ruin nations, but it’s the deficit-spender’s friend, letting him pay off debt on the cheap with now devalued currency. And it’s the working poor whose lives are most impoverished by it.
Robbing Peter to pay Paul has always been a popular proposition to get Paul’s vote, but we’re now robbing Peter and Paul’s unborn grandchildren to delay financial reckonings until after the next election cycle.
“What can be said about him that hasn’t already been said about bubonic plague?”
Strike that.
Man, I’m really having trouble staying on the high road for this Harry Reid obit.
It’s pretty much the job of the Senate Majority Leader to be the Bad Cop and hated by the opposition, but there was just something repugnant and unpleasant about late Democratic Senate Majority Leader Harry Reid, who just died at age 82. Certainly Chuck Schumer is no improvement, but still…
Democrats probably love him for ramming through ObamaCare and the initial 2009 Porkulus. Reid (like all Democrats) supported lots of horrible legislation (remember SOPA/PIPA, possibly the first and last time the Internet as a whole rose up to slap down bad legislation?), but that’s not it. Nor is it his hatred of the Tea Party or gun owners. Or his proud manifest lies about Mitt Romney’s tax return. Or even his reported Mafia ties.
Speaking of Harry Reid and the Mafia, did anyone ever determine exactly who beat the crap out of Reid and way?
There simply seemed something sinister and unpleasant about the man. Harry Reid made Kamala Harris look likeable and genuine by comparison. And his drive to change the rules to help Democrats changed the tenor of the senate and paved the way for the current political moment.
Harry Reid fundamentally & permanently altered the Senate, created America's current political landscape, paved the way for Donald Trump, & made it possible to put Gorsuch, Kavanaugh, & Barrett on the Supreme Court. https://t.co/Lfk3nLk4A8
Merry Christmas Eve, everyone! For some reason, corrupt scumbags seem to be a theme of this LinkSwarm.
This week marks the 30th anniversary of the dissolution of the Soviet Union, an evil empire who’s passing made the world a better place. Ronald Reagan, Margaret Thatcher, Pope John Paul II and even George H. W. Bush all had key roles in bringing the Cold War to a successful close.
Biden’s vaccine mandates go before the Supreme Court. There’s a good chance they lose there on federalism grounds, even as the Supremes have avoided overturning state vaccine mandates. (Hat tip: Stephen Green at Instapundit.)
Tom Cotton has a modest proposal: “Recall, Remove & Replace Every Last Soros Prosecutor.”
Last year, our nation experienced the largest increase in murder in American history and the largest number of drug overdose deaths ever recorded. This carnage continues today and is not distributed equally. Instead, it is concentrated in cities and localities where radical, left-wing, George Soros progressives have captured state and district attorney offices. These legal arsonists condemn our rule of law as “systemically racist” and have not simply abused prosecutorial discretion, they have embraced prosecutorial nullification. As a result, a contagion of crime has infected virtually every neighborhood under their charge.
Soros prosecutors refuse to enforce laws against shoplifting, drug trafficking, and entire categories of felonies and misdemeanors. In Chicago, Cook County State’s Attorney Kim Foxx allows theft under $1,000 to go unpunished. In Manhattan, District Attorney Cyrus Vance Jr. refuses to enforce laws against prostitution. In Baltimore, State’s Attorney Marilyn Mosby has unilaterally declared the war on drugs “over” and is refusing to criminally charge drug users in the middle of the worst drug crisis in American history. For a time, Los Angeles District Attorney George Gascon even stopped enforcing laws against disturbing the peace, resisting arrest, and making criminal threats.
All of these cities have paid a terrible price for these insane policies. Last year, the number of homicides in Chicago rose by 56%, and more than 1,000 Cook County residents have been murdered in 2021. In New York City, murder increased 47% and shootings soared 97%. In 2020, the murder rate in Baltimore was higher than El Salvador’s or Guatemala’s — nations from which citizens often attempt to claim asylum purely based on gang violence and murder—and this year murder in Baltimore is on track to be even higher. Murder in Los Angeles rose 36% last year and is on track to rise another 17% this year.
Soon after taking office in Boston, Suffolk County District Attorney Rachel Rollins published a list of 15 crimes that she would refuse to prosecute except under special circumstances. Among the charges on her “do not prosecute” list was drug trafficking, malicious destruction of property, trespassing, driving with a revoked license, and resisting arrest. Rollins also declared that she was “going to battle” against the U.S. attorney in Massachusetts and has slandered Boston police officers as “murderers” before accusing the department of “white fragility.”
Unsurprisingly, Boston’s violent crime rate surged shortly after Rollins took over, as the number of murders in Boston skyrocketed by 38% in 2020. As Rollins implemented leniency for drug trafficking, opioid overdose deaths increased by 32% in Suffolk County. As a reward for her ineptitude and extremism, President Biden nominated her to run the U.S. Attorney’s office in Massachusetts, the very office she had gone “to battle” against only months before. Every Democrat in the Senate voted to confirm her.
Another Soros prosecutor, Philadelphia’s District Attorney Larry Krasner, came to office after suing the Philadelphia Police Department 75 times as a private citizen. He began his tenure by purging dozens of veteran prosecutors in his office and then slashed his jurisdiction’s prison population by over 30%. In most cases, Krasner also refuses to seek bail for accused criminals and has maintained a highly antagonistic relationship with the police, once accusing the Fraternal Order of Police lodge president of being “with the Proud Boys.”
The number of homicides in Philadelphia has increased every year that Krasner has been DA. Last year, the murder rate rose 40% and this year it reached an all-time high.
In San Francisco, the voters elected the son of two cop-killing terrorists as their district attorney. Chesa Boudin (pictured) has since unleashed chaos on the streets of a once-great city and inaugurated what the San Francisco mayor labelled the “reign of criminals.” San Francisco’s homelessness crisis has spiraled out of control, smash-and-grab looters are such a menace that the city had to close its downtown during Black Friday, and shoplifters have closed down retailers throughout the city. Since Boudin took over, car theft has increased by 27%, murder by 29%, arson by 36%, and burglary soared 38%.
The liberal mayor of San Francisco, as if struck by amnesia of her own tenure and complicity in the crime wave, recently emerged to condemn her city’s appalling rise in crime. Speaker Nancy Pelosi also condemned the disorder and “attitude of lawlessness” in her city. However, in one of the great examples of “see no evil, hear no evil,” Speaker Pelosi pretended to be baffled by what could have caused the crime wave. The answer is obvious: Liberal extremists like Nancy Pelosi and Chesa Boudin caused this crisis.
Conclusion: “The Republican Party must then join with independents and common-sense Democrats to wage an unrelenting war on crime. That war must begin with a campaign to recall, remove, and replace every last Soros prosecutor. Throw the bums out.”
One rule for you, another for them. “California Dems Sip Champagne, Violate State Mask Mandate While Celebrating Successful Gerrymander.”
“According to data from Nielsen/MRI Fusion, Fox News is watched by more Democrats than CNN and by more Independents than both MSNBC and CNN.” Average network news viewers want truth, not a force-fed Narrative at odds with reality. (Hat tip: Instapundit.)
Two defund the police state Democratic congresscritters carjacked. “In late December, two Democratic politicians were carjacked just hours apart in Philadelphia and Chicago. Ironically, both women – Rep. Mary Gay Scanlon and Illinois State Senator Kimberly Lightford – supported slashing police budgets and other reform measures, which many Republicans have blamed as the cause of the rapid increase in crime.” It would take a heart of stone not to laugh…
In the now three and a half years since I have decamped with my family from Los Angeles to Nashville—some have called us “early adopters”—I have spent considerable time on phone, email and texts with old friends and acquaintances in New York and California who are asking me what it’s like. Am I happy? Should they move? What’s best—Florida, Tennessee, Texas or someplace else?
Although answering the question “should they move?” for someone else is rather like answering for them should they marry or divorce—it’s too big a decision and really none of your business—that doesn’t stop me from almost universally saying yes.
I do this because I have been in L.A. and NY lately and know them to have turned into the ghosts of their former selves—basically hellholes.
I haven’t been to Chicago for a few years, but it seems to be, if anything, worse. And when I was in L.A., covering the late, lamented Larry Elder campaign, I didn’t even want to go to San Francisco. That was a Golden Gate Bridge too far.
It’s not just the pervasive homelessness and the escalating Clockwork Orange-like ultra-violence, the actual souls of the cities that I knew very well—born in NY and lived decades in LA—seem to have vanished.
Who wants to sing “New York, New York” or “I Love L.A.” anymore? And can you imagine leaving your heart in San Francisco? What has happened is a true American tragedy—and it’s not just because of COVID, although that helped. The cancer has been growing for a long time.
It could be said you should stay to help resuscitate these cities although I would argue you do more for them by leaving, making those governing the cities—universally Democrats, as everybody knows—and even more those dopey enough to have voted for that governance, wake up.
But even in red states, the culture war continues…
Hundred of holiday flights have been cancelled due to “staffing shortages.” How’s that vaccine mandate working out for you, Biden voters?
How bad did New York Corrections screw up for the courts to free someone on 8th Amendment grounds? This bad. Holy crap!
8th Amendment claims are almost impossible to win, and the picture that this case paints is GRIM: inmates being kept in intake without a bed for days at a time, days without food or water, no access to medical treatment, forced fighting for entertainment bc there's no rec time pic.twitter.com/xJ085nFNGE
“They figured surely to God we can move one person. We surely can badger and beat one person up. Surely we can get enough protesters to make that person uncomfortable enough that they’ll just say, ‘OK I’ll vote for anything,'” Manchin continued. “Well, guess what? I’m from West Virginia. I’m not from where they’re from and they can just beat the living crap out of people and think they’ll be submissive, period.”
• Spends nearly $5 trillion more on a path to big-government socialism over 10 years
• Gives tax breaks for the wealthy political donor class in mostly Democrat-run states at the expense of other Americans
• Imposes new mandatory programs that create dependency on government and cycles of poverty
• Expands existing inefficient welfare programs
• Adds $24,000 in debt on every American taxpayer, increases each taxpayer’s national debt burden to $111,000
• Wastes billions of dollars on unreliable “green energy” boondoggles
• Empowers new IRS agents to spy on Americans’ bank accounts
• Raises childcare costs for families by more than twice
• Adds more marriage penalties to the tax code, especially
hurting married, small-business owners
• Imposes new taxes on tobacco and nicotine
• Limits how much you can save for retirement
• Wastes even more money on failed ObamaCare programs
• Provides healthcare subsidies for wealthy Americans who don’t need assistance
• Increases taxes on petroleum that will further increase the price of gasoline
• Raises taxes on business that will lower wages, increase prices, and reduce return on investment
And that’s just the topline.
Of course, the things that made Build Back Better such an odious dumpster fire are what made it holy to Democratic Party grandees and the hard left, who are fuming that they have nothing to show for negotiations, and imploring Biden to somehow “get tough” with Manchin, as though a President can have a Senator arrested and put on a rack for disobeying his will.
Democrats are also worried that it will result in an electoral disaster in 2022. With Slow Joe’s horrendous first year, including record inflation and record Flu Manchu deaths from a virus he said he was going to eradicate, they were always going to have a disasterous midterm, but now they have a handy scapegoat.
Lots of Democrats have said that Manchin should be ejected from the party for his apostasy. Manchin says make his day.
Twenty groups have helped lead the “Save America” Coalition, including Americans for Prosperity, American Legislative Exchange Council (ALEC), Americans for Tax Reform, Center for Renewing America, Committee to Unleash Prosperity, Freedom Works, Heritage Action, Texas Public Policy Foundation, Goldwater Institute, Independent Women’s Forum and Job Creators Network.
[America First Policy Institute head Brooke] Rollins said she first realized while working as president and CEO of the Texas Public Policy Foundation, an Austin-based free-market think tank, that if conservative groups put differences aside and worked together for a common cause they could make a powerful change.
The very first call the coalition held, Rollins remembers saying, “If we do this right and if we put all the egos aside and we don’t worry about who gets the credit, it’s a new day for our entire movement.”
Knowing what was at stake and what the other side was capable of — Democrats are estimated to have spent between $50 to 100 million building public support for the bill — Rollins told the group it was “time to really come together.”
The coalition did polling nearly everyday with Scott Rasmussen to find the “weak underbelly of the bill,” Moore said, and joined together to run millions of dollars worth of advertising to “pound the airwaves” in West Virginia and Arizona where the two senators who were most likely to oppose the bill — Manchin and Senator Kyrsten Sinema (D., Ariz.) — are from.
Althouse thinks it’s all theater. “Whatever they say publicly I will test against the hypothesis that making it all about Manchin is political theater, designed to concentrate the blame where it will not hurt other Democrats, moderate Democrats, while they gain the opportunity to edit the excessively left-wing material out of the bill.”
On the surface this makes a lot of sense, as the Corrupt Wing letting the Insane Wing get so far out in front of their skis that Manchin is the only one who gets blamed when their insane ambitions get chopped down to size. On the other hand, little about the Biden Administration suggests Machiavellian geniuses steering the ship of state through subtle stratagems, and their manifest failures are far more likely to pink-slip remaining moderate Democrats in 2022 rather than dethroning the hard left.
The competing theory is that Democrats know they’re going to be wiped out in 2022, and all of them (even most of the so-called “moderates”) are hellbent on shoving radical change down America’s throat because they’re never going to get the chance again.
And that’s why they’re so furious with Manchin. He’s not only keeping their snouts out of that giant trough of taxpayer money, he’s keeping them from rigging the game and insuring they never get a chance to again, because they’ll be out of office and out of power.
