Recent Stock Rally Not Likely To Last

Estimated Reading Time: 3 minutes

Stocks and bonds have had a rough year in 2022.

Readers might remember, we forecast this as a “risk off” year quite some time ago, meaning a high probability of a dual bear market in both stocks and bonds.  From the beginning of the year, stocks had lost about 26%, putting us officially into “bear” market territory.

However, around the middle of October stocks began to rally and have retraced about 18% and taking the market back to major resistance at the 200-day moving average.  It has been a good two-month rally.  So good, in fact, many people are now changing their minds about what is ahead.

The market seems to sense that the Federal Reserve now sees progress on the inflation front.  The consensus view is that while perhaps two smaller hikes are ahead, the FED will soon pause, and then pivot back towards lower rates.  Hence the market is rallying ahead of expected interest rate cuts.  Expectations are the FED will pull off the “soft landing” for the economy.

While this view seems to have the market’s attention, we would suggest that the rally we have seen is likely simply a rally within an ongoing bear market that is not yet complete.  Students of market cycles suggest that bear market rallies are normal and that rallies should not be mistaken for a new bull trend.

If we are correct, there is a strong historical tendency for the market to be strong between Thanksgiving and Christmas, and after that period, early next year, the market will most likely resume its downward trend.

Here are some of the reasons this is likely:

Interest rates are already inducing a housing recession and homes are the single largest source of wealth for most consumers.

The savings rate is plummeting, suggesting all the Covid cash is running out.

The yield curve is inverted, that is short-term rates are above longer-term rates.  While no indicator is perfect, “the inverted yield curve” has been the most reliable indicator of a coming recession.

Stocks are not yet priced in the cheap range, and not yet priced for what is likely a poor earnings season stemming from recessionary conditions.

The Leading Economic Indicators have been down for now 8 months in a row.

The election results were enough to move the country to political gridlock but did not allow for Republicans to repeal the worst aspects of Biden’s economic policy.  The coming months will be full of investigations and partisan bickering but Democrats control the executive branch and the bureaucracy.  The Republicans have a very narrow margin in the House, and the Senate is deadlocked.

All it takes is just a few weak-kneed Republicans to keep Democrat policies in power.  History suggests there are plenty of such Republicans.

History shows that by the time the FED is willing to cut rates, it was prompted by severe economic weakness, and that weakness is not good for stocks. History shows that AFTER the FED starts to cut rates, the bear market goes into another downward phase.

A recession is likely in both Europe and China.

A slowdown means less revenue, and when that occurs in a condition of massive overindebtedness, it means credit default problems. There has been a wild use of debt and leverage in the previous business cycle by both government and the private sector, and a slowdown will reveal that many entities will not be able to service their bloated debt.  The fantastic break in cryptocurrencies, SPACS,  and NFTs, are likely just the tip of a credit mess iceberg.  The Chinese real estate bust and the problems with international financial institutions like Credit Suisse are also signs of a coming credit crisis.

Bottom line, what does this mean for our readers?

It suggests taking advantage of the current strong rally to sell into the strength, getting the portfolio less exposed to stocks, and more exposed to cash, and hence preparing for another leg down in markets next year.

Modest positions in long-dated bonds could be a decent trade to exploit interest rate cuts next spring.

Some gold could prove helpful if debt defaults become serious and widespread.  Gold likely will do well if the FED gets cold feet and pivots back to easy money policies too soon to strangle inflation.

Extra cash is always helpful and helps stabilize the portfolio.

When the time comes to purchase stocks, you won’t want to.  We need much greater pessimism than we presently have, to build a durable bottom.

We don’t like bringing you this sober news but protecting our readership from financial harm requires us to humbly offer these opinions.

These are, of course, general macro-market views.  Your own particular situation is unique.  Be sure to consult soon with your financial advisor.




The Most Splendid Housing Bubbles in America

Estimated Reading Time: < 1 minute

Deflating Everywhere, Fastest in San Francisco & Seattle. Phoenix & Dallas Roll Over Too

In several markets, prices plunged even faster than they’d spiked.


From the peak in May, house prices in the San Francisco Bay Area dropped by 11.6%, in the metros of Seattle by 11.3%, San Diego by 7.9%, Los Angeles by 6.0%, Denver by 5.7%; in the Dallas metro, prices dropped by 4.3% from the peak in June, according to the S&P CoreLogic Case-Shiller Home Price Index for “September,” released today, which consists of the three-month average of closed home sales that were entered into public records in July, August, and September, of deals that were made sometime around June through August – that’s the time frame we’re looking at here.

This is the second month in this downturn that the index, which lags reality on the ground by 4-6 months, is showing month-to-month house price declines in all 20 metros in the index.

The biggest month-to-month drops occurred in:

  • Seattle: -2.9%
  • San Francisco: -2.9%
  • Las Vegas: -2.4%
  • Phoenix: -2.2%
  • Dallas: -2.1%
  • San Diego: -2.1
  • Denver: -2.0%

Month-to-month drops of 2% or more in the Case-Shiller Index (a three-month moving average that smoothens month-to-month volatility) occurred only during Housing Bust 1 and in the current downturn.

Phoenix metro:

  • Month over month: -2.2%.
  • From the peak in June: -4.4%.
  • Year over year: +12.6%
  • +15 points in three months since peak, -20 points in last three months of spike…..


Continue reading this article at Wolf Street.

A Slow Bloat to China

Estimated Reading Time: 3 minutes

Since the US birthed the entrance of China into the World Trade Organization in 1998 under Bill Clinton, the two nations have formed an unstable alliance of sorts.  The thinking of Western elites has been that if China did well, they would become more like the West.  They would become integrated into the global economy, and start becoming more democratic and less of a military threat to the US.

In hindsight, the whole project looks like a tragic and dangerous mistake.

For the US, our industrial elites found a source of ultra-cheap labor and an environment of minimal regulation.  Factory after factory, and job after job, was shipped to China.  As a result, US shelves were filled with less expensive Chinese goods, which helped keep US inflation down.

Politicians have loved this relationship on several levels.  The increase in the supply of inexpensive goods helped masked the inflation caused by deficits and easy money policies pursued by the Federal Reserves.  We wound up with asset price inflation, which the elites love since most of their money is in tradable securities, but subdued goods inflation.

Secondly, many American political leaders forged a close association with China and the huge money to be made.  A good example is the Bush Family. Neil Bush, the lesser-known son of the Bush Family, runs a think tank exclusively based on Chinese relations.  But Mitch McConnell, and certainly the Biden Family, are also deeply involved.  Many US political leaders are known to be knee-deep in Chinese investment and are subject to Chinese influence.

Major corporations that own media assets such as Disney (ABC News) and Bloomberg are invested heavily in China.  From the NBA to Nike shoes, many of the most “woke” corporations made their economic bed with the Communist Party of China.

What China got was economic growth necessary to support its vast population and growing military power.  The deal basically with the Chinese people was this: give up all that talk about freedom and religious expression, and we will pull you out of poverty.  Just work hard and support the Communist Party and things will keep improving, the Chinese people were told.

We have covered previously for you the bear market in China, the real estate bust, and the related banking crises.

What happens in China will be felt here.  Not only is China a huge buyer of US Treasury Bonds (although they have been big sellers of late), they are an integral part of our supply chain in critical areas such as pharmaceuticals, auto parts, plumbing supplies, and semiconductors.

Without cheap Chinese manufacturing, US inflation will likely be higher than it has been, and without recirculating the Chinese surplus in the balance of trade back into Treasury bonds, our interest rate structure will likely be higher now for years to come.

Social and economic issues, coupled with draconian Covid lockdown policies, are destabilizing the country.  Chairman Xi is more infatuated with becoming the second coming of Mao, and is more intent on gaining and maintaining power than he is on reforming the dictatorship of the party. The bargain of “give up your freedom for economic security” may fall apart if China cannot deliver the standard of living expected.

We are not suggesting that China will topple anytime soon as the government there can and will use repression.  US elites have so much at stake they will avert their eyes until conditions cannot be ignored. No use talking about human rights when the NBA needs Chinese TV viewers, right?

Although Chinese economic statistics are notoriously unreliable, economic growth is slowing significantly in China and the financial crises keep re-surfacing.

Like the US, elites in China have built a bubble economy, which is a program of government “investment” fueled by cheap credit and debt.  Like here, when things slow down, the credit pyramid becomes unstable.  It is a top-down, centralized economic policy that only gives lip service to market forces. Central planning has never worked, and it won’t work in China as well.

With debt to GDP levels already at 300% of GDP, swilling the elixir of cheap money and debt, will likely not do the job now.  The patient is already in withdrawal from an over-indulgence in credit expansion.

However, it is clear though, that China is increasingly becoming unstable and that as a supplier, they are not reliable.  Further, they are rapidly becoming a military threat.

Below are two videos that will brief you on the demographic, economic, political, and social issues now gripping China.

To some of you, this may seem like a problem that is far away and of little consequence to the US.  If you think that, you are sadly mistaken.  We are far too deep in this relationship at almost every level and the same can be said for our allies in Asia.

Kevin O’Leary on Inflation: You Printed $7 Trillion in 30 Months. What Did You Think Would Happen?

Estimated Reading Time: 4 minutes

Americans are facing 40-year high inflation and there’s been no shortage of discussion on the topic. It’s the number one issue on the mind of Americans heading into [ the recent] midterms, and every day on TV and in newspapers pundits are debating how long it will last and deciding who is to blame.

What’s most astonishing amid the flurry of news is just how badly the commentary misses. While there is broad agreement that the US is experiencing dangerously high inflation, partisanship and ideology have polluted basic economics.

Progressive politicians like Robert Reich and Sen. Elizabeth Warren tweet incessantly that “corporate greed” is to blame, an idea even Democratic economists have summarily dismissed. President Joe Biden, meanwhile, has blamed Vladmir Putin. Republicans, on the other hand, have consistently made the case that Joe Biden is the inflation culprit.

All of these explanations are entirely or mostly wrong.

While it’s true that Putin and Biden deserve some blame—particularly in terms of high energy prices—there seems to be an unspoken bipartisan consensus to ignore the elephant in the room: the Federal Reserve’s unprecedented money printing.

One person not playing the game is Kevin O’Leary, the Canadian entrepreneur and investor who regularly appears on ABC’s Shark TankWhile speaking to journalist Daniela Cambone, O’Leary bluntly explained why Americans are experiencing the highest inflation in generations.

The printing presses have gone insane,” O’Leary said. “That’s why we have inflation in the first place.”

By printing presses, O’Leary is talking about the Federal Reserve. The central bank has been expanding the supply of money for decades, and the clip has picked up in recent years. Nothing, however, has compared to the monetary expansion that occurred during the pandemic, something Fed Chairman Jerome Powell recently admitted in a 60 Minutes interview with Scott Pelley.

“You flooded the system with money,” the CBS journalist said.

“Yes, we did,” Powell responded.

This is what O’Leary is getting at. “Flooding the system with money” is what drove inflation to historic highs, and the result was always an obvious one.

“For all the talk of inflation, you print $6.72 trillion in thirty months, what the hell did you think was going to happen?” O’Leary says. “Of course there’s going to be inflation.”

O’Leary’s figures are not wrong. Federal Reserve data show that in August 2019 there was $14.9 trillion total in circulation. By January 2022, there was $21.6 trillion.

In other words, more than 30 percent of dollars in circulation in January 2022 had been created in the previous 30 months.

What Is Inflation?

Money creation is the obvious driver of price inflation, a concept that most Americans have at least a vague understanding of because we see it all around us today. Prices are up for almost everything, and up a lot.

But are higher prices alone evidence of inflation? Prices are always changing, after all. Sometimes they go up and sometimes they fall; oftentimes it has nothing to do with money printing, but is simply a reflection of changes in supply and demand.

This is what makes inflation challenging to define, and in fact there are two definitions for it.

For centuries, inflation was defined essentially as an increase in the money supply. Basic economics holds that if you expand the money supply without expanding goods and services, prices will rise. So that was the definition of inflation: an increase in the supply of money.

Economists in the twentieth century added a second definition, however, calling inflation “a general and sustained increase in prices.” We can see from this definition that what separates inflation from simple price increases is that they are broad and sustained.

Some economists prefer the older definition of inflation, and Henry Hazlitt, author of Economics in One Lesson, can help us see why.

“Inflation is an increase in the quantity of money and credit. Its chief consequence is soaring prices,” Hazlitt explained. “Therefore inflation—if we misuse the term to mean the rising prices themselves—is caused solely by printing more money. For this the government’s monetary policies are entirely responsible.”

Hazlitt argues that rising prices are the consequence of inflation, which is an increase in the money supply. This is why some economists don’t like the new definition of inflation.

“I prefer the older definition,” Pace University economist Joseph Salerno explained in a lecture on hyperinflation. “I think it’s more useful.”

It’s not difficult to see why some economists see the traditional definition of inflation as superior. It gets right to the cause of price increases (an expansion of the money supply), while the new definition focuses on a symptom of inflation (“a general and sustained increase in prices”).

This second definition is far less clear, which might be precisely why some people like it.

Nobody wants to be blamed for inflation, after all, and under the first definition blame will always return to one spot: the people who control the money supply, and to a lesser extent the politicians, big banks, and bureaucrats who support the Fed and directly benefit from its largesse.

That’s a lot of pressure for central bankers and politicians. It’s far easier to say Vladmir Putin is primarily responsible for high prices, or the ”greedy corporations,” or Joe Biden’s Build Back Better policies.

Inflation: A Silent Killer

Now, some will tell you that if you’re under 60 this is probably the first time you’ve experienced inflation, but this is not true. Usually inflation is just small enough that people don’t notice it as much.

For example, government data show a dollar printed in 1990 had already lost 50 percent of its purchasing power by 2021. This is why inflation is often called a “silent killer.”

Yet history shows inflation often does not remain silent. It persists and grows, and over time it becomes a destroyer of civilizations.

“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments,” the Nobel Prize-winning economist F.A. Hayek once observed.

This is why Hayek believed the only way to have sound money was to take control of it out of the hands of central bankers and planners.

“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government,” Hayek said.

This is precisely why there has been such enthusiasm around decentralized currencies like Bitcoin and Ethereum.

Whether cryptocurrencies can supplant the dollar remains to be seen, but one thing is clear: the primary cause of inflation is not a boogeyman. It’s not a Russian dictator, corporate greed, or bad legislation.

The primary cause of inflation is the printing presses, exactly like Kevin O’Leary says.

This article was published by FEE,the Foundation for Economic Education and is reproduced with permission.

It’s Not Kooky to Say Anti-Capitalists Are Using Climate Change as a Pretext for a Planned Economy When They Come Out and Say It

Estimated Reading Time: 3 minutes

World leaders met in Egypt recently to discuss climate change. This time, the focus was on the demands of poor countries that want money from rich countries because of climate change. After more than 50 years of experience with development aid, one can already predict where this money will end up—with corrupt governments in countries in Africa and other poor countries.

Many so-called climate change activists are not really concerned about the climate and the environment. No, for them, these are merely instruments in the fight against capitalism.

For the last three years, Greta Thunberg has said that her life’s purpose was to save the world from climate change. Now she told an audience in London that climate activists must overthrow “the whole capitalist system,” which she says is responsible for “imperialism, oppression, genocide… racist, oppressive extractionism.” The “activists” of the doomsday cult “Last Generation” say quite openly that their goal is the abolition of capitalism.

Examine the standard work of anti-capitalist climate change activists, and you will quickly see what I mean. Naomi Klein, the popular critic of capitalism and globalization, admits she initially had no particular interest in the issues surrounding and related to climate change. Then, in 2014, she wrote a hefty 500-page tome called This Changes Everything: Capitalism vs. The Climate.

Why did she suddenly become so interested in climate change? Well, prior to writing this 2014 book, Klein’s main interest was the fight against free trade and globalization.

She admits in her writing: “I was propelled into a deeper engagement with [the topic of climate change] partly because I realized it could be a catalyst for forms of social and economic justice in which I already believed.” And she hopes for “a new kind of climate movement to take up the fight against so-called free trade.” She strictly rejects highly efficient solutions, such as climate-friendly nuclear energy, because she is not at all interested in solutions within the framework of capitalism.

Klein writes that she recognizes that climate change presents a chance to “collectively use the crisis to leap somewhere that seems, frankly, better than where we are right now” and “that climate change could become a catalyzing force for positive change … it could be the best argument progressives have ever had … to reclaim our democracies from corrosive corporate influence; to block harmful new free trade deals … to open borders to migrants.” The climate crisis could “form the basis of a powerful mass movement,” and this movement should set itself the following objectives:

  • to “radically expand the commons” (i.e., state-owned property and resources)
  • to introduce a “carefully planned economy”
  • to “change pretty much everything about our economy”
  • to introduce “new taxes, new public works programs”
  • “reversals of privatizations”
  • “extinction for the richest and most powerful industry the world has ever known—the oil and gas industry”
  • government guidelines on “how often we drive, how often we fly, whether our food has to be flown to get to us, whether the goods we buy are built to last … how large our homes are”
  • “a fundamental reordering of the component parts of Gross Domestic Product”
  • “less private investment in producing for excessive consumption”
  • “increased government spending”
  • “a great deal more redistribution”

Klein embraces a suggestion that the well-off 20 percent in a population take the largest cuts in order to create a fairer society. She argues that “our economic system and our planetary system are now at war,” and the only suitable response is “revolutionary change to the political and economic hegemony.”

I think these quotes, which are representative of many more such statements in Klein’s book, confirm that anti-capitalists such as Klein are only superficially concerned about the environment and climate change. Their real goal is to eliminate capitalism and establish a state-run, planned economy. That is why they consistently reject a whole range of measures that would protect the environment and mitigate the risks of climate change—because they would be compatible with the prevailing economic system: capitalism.

Every year, the Heritage Foundation ranks countries around the world on their economic freedom. It’s a kind of capitalism index. But analysis shows the most economically “free” countries also register the highest scores on Yale University’s EPI environmental index, averaging 76.1, while “mostly free” countries averaged 70.2. These two groups have a significant lead over the “moderately free” countries, which received much lower ratings (59.6 points) for their environmental performance. The countries rated by the Heritage Foundation as either “mostly unfree” or “repressed” received by far the worst Environmental Performance Index scores (46.7 and 50.3, respectively).

The thesis that many climate activists and supporters of a Green New Deal are less concerned with the environment than with exploiting this issue to abolish capitalism and introduce a planned economy is by no means a malicious insinuation.

Rather, the climate activists themselves admit it. You just have to read what they write and listen to what “activists” like Greta Thunberg are saying.

This article was published by FEE and is reproduced with permission.

Goodbye Ms. Pelosi

Estimated Reading Time: 3 minutes

As soon as the news broke, a cavalcade of plaudits started coming in from left-of-center politicians and journalists lauding the accomplishments of Nancy Pelosi as Speaker of the House and leader of her party.  Ms. Pelosi had two four-year stints as Speaker. Let’s look at her years as leader of the House and second in line to the Presidency.

Ms. Pelosi is being heralded by her cronies and the Left-wing press as the most consequential Speaker in history.  A large part of that is because of legislation passed during her terms. They seem to have forgotten Democrat Sam Rayburn who served for seventeen years between 1940 and 1961.  He was the Speaker during two major wars and engineered the first civil rights legislation since Reconstruction.  He worked with President Eisenhower with funding for and building the national highway system. Unlike Speaker Pelosi, he worked with the opposition party and President.  But Ms. Pelosi is the current darling. 

Probably her most significant act of recent was traveling to Taiwan in the face of relentless pressure from the Chinese overlords. It was truly a shining moment, but we all get some things right. Probably her greatest skill was managing to get Blue Dog Democrats who pretended to be moderate to vote against their constituencies and their own self-interests which led to their ousting in the 2010 Democrat midterm bloodbath.

She expanded the regulatory state by promulgating lengthy and nearly incomprehensible legislation.  As a person who spent almost her entire career in Congress, she did as much as anyone in history to debase the power of Congress, passing it off to the regulatory state.  You didn’t hear her complain when President Obama said, “I have a pen and a phone.”  She did nothing to stop President Biden from issuing 60 executive orders in his first 100 days.  It could easily be said she encouraged the Presidency and the Supreme Court to take power from Congress to write legislation despite the Constitution giving that power to Congress and particularly the House of Representatives.

Then there is corruption.  To their credit, some members of her caucus have wanted to put a stop to members of the House trading stocks.  I am often fascinated by this.  As a financial professional I have had a managed account for about 20 years.  I could not tell you specifically what is in my portfolio.  Yet members of Congress have the time to make multiple trades of specific stocks that they apparently have researched on their own, on their own time, and then invested in those stocks with no regulatory oversight of those transactions. It is blatant corruption, and she knows it.  Yet she stopped any reform because somehow her husband, Paul, has made many genius investments and sales without the benefit of any information flowing his way from his powerful wife.

Ms. Pelosi should be principally remembered for destroying the Congress she oversaw.  The committee system which had run the Congress throughout its history by generating bills through debate and discussion ended during her reign.  Pelosi generated massive “backroom” bills with her staff and cronies and then presented them to Congress as a fait accompli.  She told the members they had just two days to brush up on these behemoths because the vote was imminent.  Ms. Pelosi will also be remembered as the person to make “CR” a famous acronym (aka Continuing Resolution).  Before her and even in between her two reigns the budget went through various committees and was voted on by the members.  Continuing Resolution became the rule of the day, making our country look like a banana republic because we could not properly run our finances and were always on the brink of disaster. 

There is another unique aspect of her Speakership.  She was the first Speaker to ban members of the opposition party from participating on Congressional committees. Incoming Speaker McCarthy has vowed to respond in kind.  This was so utterly unnecessary and destroys the idea of elections as all these representatives were duly seated by people in their districts.

In my mind, Pelosi will be remembered for two acts as Speaker.  First, the most astounding statement by a leader in our history while speaking of the Affordable Care Act weighing in at stupefying 2,700 pages that promulgated 20,000 regulations.  She stated, “We have to pass the bill to find out what is in it.”  An amazingly stupid and dangerous comment coming from a backbencher, but it was delivered by the Speaker.  The second was the most graceless act in the history of our government.  In front of the entire nation after the president had delivered the State of the Union Address, she ripped up her printed copy in a petulant act.  Both are black marks on our democracy.

Ms. Pelosi will be touted by the Left as the first woman Speaker.  That is not a definition of what she did; that is a definition of how she was born.  What she did was very harmful and mean-spirited destruction of the People’s house.

Report: 41% of Small Businesses Can’t Pay Rent this Month

Estimated Reading Time: < 1 minute

More than 40% of U.S. small business owners say they couldn’t pay rent on time or in full for the month of November, the highest this year.

The small business network group Alignable released the survey, which found that the hardship varies by industry. A notable 57% of beauty salons said they couldn’t make rent as well as 45% of gyms, 44% of retail and 44% of restaurants.

“Making matters worse, this occurred during a quarter when more money should be coming in and rent delinquency rates should be decreasing,” Alignable said. “But so far this quarter, the opposite has been true.”
This latest report continues a steady increase in businesses that can’t pay rent this year.

“Last month, rent delinquency rates increased seven percentage points from 30% in September to 37% in October,” Alignable said. “And now, in November, that rate is another four percentage points higher, reaching a new high across a variety of industries.”

Business owners cite a range of reasons for the difficulty making rent, including higher rent costs and lower revenue. But 60% cite inflation.

“One indicator of the toll inflation is taking on businesses is a steep drop in the percentage of small businesses that are fully recovered, earning as much if not more than they did monthly prior to COVID,” Alignable said. “The percentage was 24% in October, but dropped to 14% in November — an all-time low.”

Michigan had the highest percentage of small business owners unable to make rent at 51% with New York in second at 49% and Massachusetts third highest at 45%.

The survey queried 6,326 small business owners in November.

This article was published by The Center Square and is reproduced with permission.

ESG Is A Non-Starter That We Are Being Pushed Into

Estimated Reading Time: 3 minutes

The world of finance is turning bullish on ESG, an investment strategy directing funds to corporations with woke environmental, social, and governance policies. Trillions of dollars have already flowed into ESG funds, projected to hit $50 trillion in two years.

ESG boosters claim the funds enable investors to do well by doing good. You can make good money while simultaneously bettering the world.

Wish it were so. In fact, ESG funds do neither.

Investing goals that compete with shareholder profitability have predictable results. A recent NYU study compared investment results created by firms with high versus low ESG scores, which are generated by professional rating agencies. Over the past five years, high ESG funds have returned 6.3% compared with 8.9% for others. Over time, that’s a chunk of change.

Thus, Kentucky AG Daniel Cameron warned his state’s pension fund managers to avoid funds that “put ancillary interests before investment returns” which would “violate statutory and contractual fiduciary duties” to the pensioners depending on them. Seniors deserve better than to have their retirements hijacked by an ideology they might not share.

The basic tenants of ESG are radical environmental policy, primarily the elimination of fossil fuels woke social policies promoted by the company, and corporate governance that replaces merit with preferences based on race or gender.

The driving forces behind the growth of ESG are three very powerful financial firms. BlackRock, Vanguard, and State Street are among them the largest shareholders in 80% of the companies in the S&P 500. Their financial heft gives them the ability to force companies to implement ESG, making them in effect upstream controllers of these companies.

ESG is based on the foundational principle of progressivism – the notion that the most beneficial governance comes from giving experts, the best and the brightest, control over our lives. Personal freedoms and democratic processes must yield to a governing elite that knows best.

No goal is pursued more tenaciously than the elimination of carbon-based fuels.  Consumers must be pushed into using renewables, principally by regulating fossil fuels into being scarce and expensive.

Green New Dealers may be thrilled to have the backing of the ESG behemoths, but the problem is that Europe is already experiencing a full-blown energy crisis, with America not far behind. For a year now, a post-Covid demand surge, combined with nuclear plant closures worldwide, long-standing over-investment in impractical renewables, and a global drop of over 50% in oil and gas investment since 2014 have combined put serious pressure on economies worldwide.

Aluminum smelters, glass factories, and other EU manufacturers have had to shutter plants for lack of affordable energy. In the UK, the number of people behind on their energy bills ballooned from 3 million to 11 million earlier this year. Even in relatively secure Germany, there is deep concern over looming shortages of heating oil this winter after being shut off by Russia.

The hard fact is that, in our current state of technology, fossil fuels are the mainstay economic resource, whether we like it or not. We need more oil, natural gas, and nuclear energy, not less.

The hard-core environmental left, now join by ESG interests, has worked itself into a lather insisting we can only avoid global catastrophe by achieving zero carbon emissions by 2050. Environmental alarmists achieve about the same accuracy with their predictions as the apocalyptic preachers of yesteryear. But even in the early stages of the project, it’s becoming obvious that it’s simply can’t be done.

Even if eliminating all emissions of carbon would significantly reduce atmospheric temperatures, even if humans are the main villains of global warming and even if we could somehow convince China and India to not sabotage the effort, it doesn’t matter. It’s neither economically nor politically possible to deprive humankind of the benefits of carbon fuels.

The financial titans pushing ESG are blowing an opportunity to do some real good. We need respected leaders who can stand up to the hysteria and exaggerations to propose practical, feasible solutions that would protect humanity from the worst effects of atmospheric warming.

Instead, the self-appointed experts are using other peoples’ trillions to push us down the road to dystopian government and perpetual poverty.

The Joys of Being a Californian

Estimated Reading Time: 4 minutes

Our California governor Gallivanting Gavin has his eyes on running for President, assuming the octogenarian in the White House bows out.  Gavin will be telling America what a wonderful job he has done here in California to deserve being promoted to ruling over all fifty states.  We should review the sparkling aspects these days of being a Californian.

California ranks first in many ways. For example, we have the highest gas prices in the country.  We unfortunately have fallen behind Hawaii and come in at number two for having the highest energy prices in the country. Again, we are falling behind in another key area. We come in at #3 for the highest cost of living, falling behind Hawaii and New York. We are really slumping when it comes to overall tax rates ranking just #3. That is despite ranking first for individual tax rates.  We are all confident that in his second term as governor, Gallivanting Gavin will strive to get us back to being number one in all these categories.

And then there is our poverty rate.  Mississippi comes in at the top with the highest. That is before you adjust for the cost of living.  California ranks 26th when you just look at the poverty figures.  When adjusted for the cost of living, we then climb back to first place. Paying for all that expensive stuff really hurts the people at the lower end of the economic ladder.

These are all things we can be proud of as Californians. That is why our elected officials are so willing to pay for others with our tax dollars. Here Gallivanting Gavin is leading the way.

You never hear about California shipping illegal aliens to other states. We welcome all of them.  We provide them with every benefit as if they were here legally and paying taxes. We give them driver’s licenses to keep us safe on the roads.  But we are thoughtful by not requiring them to have insurance if they are driving like other Californians because that would be too much to ask of these people who are facing inordinate challenges.

But we are not without our challenges. They are kind of minor: water and power.  We are tough Californians, and we are willing to sacrifice for the environment. And for others.

As you may know, we just asked residents to significantly cut back their personal water usage.  After all, the residents use 10% of all the water in California – that is 38.5 million of us.  40% of the water is used for commercial and farming purposes.  We would not want to cut back on that. That is what pays for all of what our government provides. The remaining 50% goes out to sea but protects the fish. It would be totally unreasonable to have a cut there because you know the snail darters need their water. 

Gallivanting Gavin promised that he would build more reservoirs, but for the past forty years, we have done nothing while our population soared by 14 million (not counting all the illegals).  Gavin even endorsed the building of desalination plants. Forget the fact that the California Coastal Commission voted 7-0 to kill one days later; Gavin is on the job.

How about that power stuff? Gavin is leading us. He is leading us by eliminating any devices that use that nasty natural gas. We are properly ignoring that natural gas replacing coal has cut our national output of CO2 by 30% even while the economy grew 28%.  We in California only need windmills and solar power. And thankfully we have a deal with our neighboring states to buy power from them — if they do not need it themselves.  He did have us avoid a blackout during a recent heatwave except for limited areas.  That is because we all raised our thermostats to 78 degrees. Someone did ask why Arizona and Texas had similar heatwaves and were fine.  Gavin answered them with billboards about abortion.

Our glorious Governor Gavin vetoed 169 bills sent to him by the California Legislature.  What a brave leader he is.  We are just left to figure out what laws we are breaking with the 997 bills he signed.  What is a Californian to do?

Considering all this, we Californians are generous people. We welcome all illegal aliens. We also welcome all homeless people; or, as Gavin calls them – “unhoused.” We properly disregard that roughly 50% of them come to California from elsewhere not because of “the weather,” but because of the benefits, we provide them. Who else would build them living units costing $500,000 each to help them make their transition back to a normal life? We do not care if they came here from Nebraska; they are all Californians now.

Because of our generosity, our Governor has instituted two new things we will pay for to help people from other states or nations. Women (yes, women) who want to get an abortion will be paid to come to California and have the service provided by the residents of Californian. We approved unfettered abortion up to the day of birth for any woman wanting an abortion for any reason. Fifteen weeks is not good enough and forget those nasty pictures of those things in the womb. We have broad shoulders and can carry the load.

Gallivanting Gavin wants to add even more new humane services. That is the right of anyone of any age to receive transgender medical services. Ten-year-olds need to be protected from parents who have no clue what their child is going through with their sexual identity. When our doctors are not busy doing triage for gunshot wounds in emergency rooms, they can work on gender transformation surgery.

A recent report from the Hoover Institute cited that 352 companies moved their headquarters from California between 2018 and 2021.  They cited the following challenges:  burdensome overtime work rules, litigation risk, high costs for labor and worker’s compensation insurance, oppressive taxes, surging electricity rates, a permitting morass, diminishing quality of life, lousy public schools, and exorbitant housing costs.

And there are our elections.  You get to vote for a month and find out a month later who won.  Someone who relocated to another state was asked a real question – “Since you were paying premium prices for government in California did you get premium services.”  I am not sure whether he answered with an emphatic no or just a belly laugh.  Try calling a tax agency in another state and you will hear a friendly voice.  In California, after waiting for hours after calling multiple times, you will get someone who speaks broken English.

Who would question Gallivanting Gavin telling Governors of other states how to do things? Of course, he should run for president if Biden does not.  Why would he not when he can bring California values and policies to everyone? And remember we have really nice weather.




It Sure Looks Like Schumer Just Confirmed a ‘Far Right Conspiracy Theory’

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Conservatives blasted Senate Majority Leader Chuck Schumer on Wednesday for comments he made supporting a path to citizenship for the nation’s illegal immigrant population.

The pro-abortion Democrat lamented the shortage of workers in the U.S. and pointed out the U.S. population is “not reproducing on its own with the same level that it used to.”

He argued the “only way we’re going to have a great future in America is if we welcome and embrace immigrants, the DREAMers and all of them, because our ultimate goal is to help the DREAMers, but get a path to citizenship for all 11 million or however many undocumented there are here.”

In addition to pointing out the 11 million number is severely outdated, conservatives reminded Schumer that the U.S. may not have this problem if Democrats didn’t push abortion so ardently.

But there’s another major problem with Schumer’s comments. He appears to confirm the Great Replacement Theory, or the idea that there’s a deliberate attempt to replace Americans with immigrants. The notion is denounced as a conspiracy, but only when conservatives talk about it.

“You were labeled a crazy person if you suggested that there were Democrats who in fact are seeking to change the demographic of the electorate to promote particular purposes,” Ben Shapiro noted. “Chuck Schumer…just said it out loud yesterday. It’s kind of amazing.”…..


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