Category: It’s Probably Nothing

Nothing to see here…

Claws of the Panda It's Probably Nothing 9 Comments

With focus of the world’s mainstream media and their political and intellectual cohorts almost exclusively being on Covid or climate, its not surprising that news like this flies well under the radar.

Is it 2008 in the Chinese property market? Will the rot spread, given the deep ties between the Chinese economy and the rest of the world?

The relentless contagion inside China’s property sector pushed the country’s dollar high-yield bonds to fall for a ninth straight day Tuesday after tumbling nearly 9 cents on the dollar in October, closing out the worst two-month slide in a decade. The average yield in the dollar junk bond index touched a record 21.5% on Tuesday, surpassing even the Sept 2011 repo crisis highs.

It’s Probably Nothing

It's Probably Nothing 21 Comments

Luckily, Australians are now trained to be properly submissive.

Australia’s central bank on Friday lost all control of the yield target key to its stimulus policy as bonds suffered their biggest shellacking in decades and markets howled for rate hikes as soon as April.

An already torrid week for debt got even worse when the Reserve Bank of Australia (RBA) again declined to defend its 0.1% target for the key April 2024 bond , even though its yield was all the way up at 0.58%.

More: Is Australia the Dead Canary in the Global Bond Market?

So let’s dig in…

First up is the market action. On Thursday, Australia’s two-year bond yield more than doubled after the Reserve Bank of Australia declined to buy two-year bonds.

What does this mean? If the Australian government were to borrow money for two years, the interest rate they’d have to pay doubled in a single trading session.

Can you imagine if your mortgage rate doubled?

How rare is this doubling? ZeroHedge calculates it’s a five-sigma move, which is supposed to happen one day in every 13,932 years. In other words, it’s the biggest surprise for the Aussie bond market since the Lehman crisis.

What’s the explanation for why it happened?

Via Instapundit.

Not 100%, but….

It's Probably Nothing Unsettled Science Wuhan Flu 47 Comments

In what seems to be a remarkable turn of events, the CBC actually ran this story  without attempting to hide a whole lot.

The cases are linked to a three-on-three league for men over the age of 50, who had been playing at the rink for several years. All are considered breakthrough infections because they were among fully vaccinated people, the health unit said.

“I’m still trying to figure out how this all sort of happened.”

The medical authorities may have a lot of “figuring” to do over the next few months. Perhaps they could start by walking back the widely accepted but absolutely false idea that vaccination means you cannot spread Covid. If I had a dollar for every time I’ve heard that since last spring I’d be considering early retirement.

Consuming capital

Great Moments In Socialism It's Probably Nothing 24 Comments

If you, like most, are wondering how anyone can afford a house these days, here’s part of the answer: a multi-generational transfer of wealth. Absent that, the housing boom could never have gotten to the point where prices behave like a homesick angel.

The issue is not that capital is being transferred. Rather, the problem is that capital currently deployed to finance productive ventures where it earns dividends and income is being cashed out to purchase a consumption good.

So where do parents get the money? Based on data from Equifax, the study estimates that only 5.5% use debt to finance gifting, with the highest share in Toronto and Vancouver.

It would appear that most is coming from parents’ savings, which grew during the pandemic, but also perhaps from grandparents.

The vaccines are “working”….

Gain of Function It's Probably Nothing Unsettled Science 39 Comments

A vaccine proclaimed as 98% effective combined with a mass vaccination program was supposed to allow a return to normal existence. Judging by what is now happening in the UK, the window for normal existence may be closing rapidly, less than 4 months after most restrictions were lifted.

The culprit? That could never be a vaccine whose effectiveness was deliberately oversold to the public. Rather, the problem arose when the failings were not covered up with the permanent imposition of a bewildering myriad of restrictions on normality. The vaccination program is starting to resemble an inept worker whom the authorities must “protect” from the consequences of his own incompetence, instead of demanding accountability:

“We have the vaccines and we know which public health protections are effective … but the government has removed all public health protections to protect the vaccination programme.”

 

“The circulatory system our globalized economy depends has collapsed.”

It's Probably Nothing 69 Comments

Ryan Petersen, CEO of of Flexport;

Yesterday I rented a boat and took the leader of one of Flexport’s partners in Long Beach on a 3 hour of the port complex. Here’s a thread about what I learned.

First off, the boat captain said we were the first company to ever rent his boat to tour the port to see how everything was working up close. His usual business is doing memorial services at sea. He said we were a lot more fun than his regular customers.
The ports of LA/Long Beach are at a standstill. In a full 3 hour loop through the port complex, passing every single terminal, we saw less than a dozen containers get unloaded.

There are hundreds of cranes. I counted only ~7 that were even operating and those that were seemed to be going pretty slow.
It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.
Right now if you have a chassis with no empty container on it, you can go pick up containers at any port terminal. However, if you have an empty container on that chassis, they’re not allowing you to return it except on highly restricted basis.
If you can’t get the empty off the chassis, you don’t have a chassis to go pick up the next container. And if nobody goes to pick up the next container, the port remains jammed.

With the yards so full, carriers / terminals are being highly restrictive in where and when they will accept empties. […]

And with all the containers piling up in the terminal yard, the longshoremen can’t unload the ships. And so the queue grows longer, with now over 70 ships containing 500,000 containers are waiting off shore. This line is going to get longer not shorter.
This is a negative feedback loop that is rapidly cycling out of control that if it continues unabated will destroy the global economy.

Alright how do we fix this, you ask?

They Fixed This, Right?

Democrats It's Probably Nothing 9 Comments

I mean if they knew about it back in May.

Andolfatto is right that no one really knows the debt tipping point. But it’s worth noting that the US debt-to-GDP ratio—essentially a country’s debt compared to its annual economic output—was 129 percent at the end of 2020. In other words, the official US debt was nearly a third larger than the entire US economy.

That is considerably higher than Greece’s debt-to-GDP ratio in 2010, when it received a bailout from the International Monetary Fund to avoid defaulting on its obligations.

The collapsing economy

Great Healing Forward It's Probably Nothing 14 Comments

Squeezed as they are between green energy boondoggles, Covid restrictions and zero percent interest rates, its no surprise that companies like CNH are shuttering production facilities.

The company said it will shut down several of European agricultural, commercial vehicle and powertrain manufacturing facilities in response to ongoing disruptions to the procurement environment and shortages of core components, especially semiconductors.

Y2Kyoto: State Of Anorexia Envirosa

Alternative Subsidy It's Probably Nothing Y2Kyoto 16 Comments

WUWT;

Hostility toward fossil fuels in the West is already having an adverse effect on individual access to energy and on economies in general. The U.K., which has adopted an anti-fossil fuel stance, is facing severe increases in natural gas prices.

“Wholesale gas prices have surged by 250% this year, including a 70% rise since August,” reported Sky News. This is a major blow for 22 million households that are dependent on gas for heating and cooking. In addition, gas is a key fuel for electricity generation and industrial processes.

One immediate impact could be felt by food processors, who uses carbon dioxide derived from natural gas for carbonation of drinks, refrigeration and animal slaughter. The chief executive of the British Meat Processors Association said that product could be disappearing from supermarket shelves in two weeks.

So, what led to the U.K. gas crisis? Part of the answer lies with government policy to not extract the country’s massive gas reserves, depending instead on imports.

Philip Cross for the Financial Post: Record prices in Europe and Asia have siphoned off 10 per cent of U.S. natural gas production, with American exports rising 42 per cent in the past year. The U.S. had the foresight, appetite for risk and co-operation of governments to build LNG export terminals, mostly along the Gulf coast. Canada didn’t.

Faster, please: Gripped by Energy Crisis, Europe Considers Breaking Climate Promises and Turning to Coal

A bonfire of capital

Great Moments In Socialism It's Probably Nothing 19 Comments

As the rot of the economy’s capital structure accelerates, expect more, not less, of problems like these in manufacturing.

In the former Soviet Union, unfinished equipment rolling off the assembly line was the norm, not the exception. The negation of competent production management has now arrived in the west:

CNH estimates that supply chain constraints ranging from increases in freight to higher raw materials prices have cost the company $1 billion.

That lag has forced the company to turn some factory parking lots into storage lots. At CNH’s combine plant in Grand Island, Nebraska, hundreds of unfinished combines sit outside, waiting for parts.

Digital Dollars

It's Probably Nothing 16 Comments

Zerohedge-The ‘War On Cash’ Endgame Is Here

Building on the bitcoin model, central banks are planning to produce their own “digital currencies”. Removing any and all remaining privacy, granting total control over every transaction, even limiting what ordinary people are allowed to spend their money on.

From the moment bitcoin and other cryptocurrencies first emerged, sold as an independent and alternative medium of exchange outside the financial status quo, it was only a matter of time before the new alternative would be absorbed, modified and redeployed in service of the state.

Woke Catholics

It's Probably Nothing 34 Comments

The woke blob swallows the University of San Diego.

Many conservative parents looking for moderately traditional college options for their children seek schools that are under the protective cover of a church. The University of San Diego (USD), a Catholic school with a law school not unfriendly to conservatives, may once have been such a safe haven, but no longer. Under President James Harris, the school has undergone a kind of hostile takeover by the forces of wokeness.

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