All Facts Matter

Russia is once again targeting Ukraine’s energy grid as winter approaches, using missiles and a massive drone barrage. ***** The nearly three-year war has seen a sharp escalation in recent days, with Moscow pummelling Ukraine's energy infrastructure ahead of the winter. Friday's drone barrage came a day after Russia launched around 90 missiles on the war-torn country, cutting power to over a million people. Moscow fired 132 drones overnight, of which "88 drones were shot down" and "41 were lost, presumably due to defence countermeasures", Ukraine's air force said. ***** https://lnkd.in/geGcin9n These missile and drone attacks illustrate why Russia’s use of an intermediate range ballistic missile on Kyiv was far less of an escalation than it might appear. Russia is already able to inflict significant damage on Ukraine’s infrastructure without needing to deploy their latest IRBM. Given the relative cheapness of Shahed “kamikaze” drones, it is even likely that the use of an IRBM is more expensive (and therefore less effective). Just as Biden’s authorization for ATACMS use against targets inside Russia used the appearance of North Korean soldiers as justification, Russia played the ATACMS authorization as justification for deploying IRBMs against Ukraine. However, both moves were inevitable and necessary geopolitical theater intended to keep the war of attrition going. We see from these latest missile and drone attacks that neither ATACMS nor IRBMs have changed much about the nature of the war in Ukraine. It is still a meatgrinder of attritional warfare, and still is predicated on seeing how much damage can be inflicted while sustaining a level of damage. This is the carnage which President Trump mentioned repeatedly on the campaign trail when talking about ending the war in Ukraine. People are dying and the only way that is going to end is for the war to end.

AOC is a grifter just like every other politician in Congress, it seems. ***** Ocasio-Cortez’s account description on X states that the congresswoman is “people-funded” and “takes no lobbyist [cash],” using a money bag emoji in place of the word “cash.” Despite her claim to the contrary, the representative has taken thousands of dollars in contributions from lobbyists since assuming office, according to federal records. The congresswoman has an extensive record decrying the influence of money on politics. In 2018, shortly after winning office for the first time, Ocasio-Cortez criticized her party’s “refusal to reject [corporate] lobbyist money.” Since then, she has called to ban members of Congress from working as lobbyists after leaving office, rebuked fellow Democrats for their close ties to lobbyists, and accused lobbyists of working to kill legislation that would benefit the public. ***** https://lnkd.in/g2qYa33F There might not be anything illegal about accepting campaign contributions from lobbying firms, but there’s something seriously hypocritical about taking the cash while publicly claiming you don’t. My thought: Congressmen and Senators should only meet with individuals while physically in their district or state. Lobbyists should not have preferential access to politicians because they have the cash and are hanging out in Washington. Let the lobbyists sit in a grubby field office in AOC’s congressional district next to her ordinary consituents. Wouldn’t end lobbying but it would definitely level the playing field. https://lnkd.in/gJfVQB6i

Trump is upsetting Canada’s government by including them in his border security rhetoric. ***** Trump has threatened to impose tariffs on products from Canada and Mexico if the countries don’t stop what he called the flow of drugs and migrants across southern and northern borders. He said he would impose a 25% tax on all products entering the U.S. from Canada and Mexico as one of his first executive orders. ***** https://archive.ph/oUfhU However, what gets overlooked is that while human trafficking and drug trafficking across the southern border is small relative to the volume of both along the southern border, it is increasing. 2024 saw new levels of drug seizures along the northern border. https://lnkd.in/eTj_kKAB Not only the number of events but also the quantities of marijuana and methamphetamine have been on the rise. Additionally, CBP encounters at the northern border have been rising every year. https://lnkd.in/g29MPew3 Single adults are the most common encounters, but females and unaccomopanied minors are on the rise as well. All of which is to say that human trafficking and drug trafficking from Canada to the United States is demonstrably on the rise. Donald Trump’s rhetoric is unambiguous in one dimension: he wants it all stopped, and he wants it all stopped immediately. Isn’t this what we call a “sense of urgency”, and isn’t that supposed to be a good thing?

It would appear Russia has a few forex reasons to give thanks today. After going into to near freefall against the yuan, the ruble seems to finally have found a new floor. https://lnkd.in/ghQr_dTF While the ruble has still drop over 16% against the yuan in the past year, that is still better than the 20%+ decline it had notched by earlier in the week, with the rebound literally coming in the past day or so. https://lnkd.in/gDDmtPZy The ruble has stabilized against the dollar as well, indicating that Russia’s forex liquidity concerns have been resolved at least for the moment. https://lnkd.in/gns6rY46 The stabilization comes even as the yuan has experienced some volatility against the dollar, which indicates that at least some of this is the ruble strengthening and not the yuan weakening. https://lnkd.in/gca7Sfr8 The ruble is still in a parlous state as a currency, and the steep drop is not something which is going to instill confidence in Russia’s economic outlook among the country’s few international supporters. However, at least for the moment, the situation is not getting any worse. Still, the single best thing Putin could do for the ruble would be to make peace and end the war in Ukraine.

Joe Biden wants the war in Ukraine to continue to the very last Ukrainian. ***** A senior Biden administration official, who spoke on the condition of anonymity to discuss the private consultations, said Wednesday that the outgoing Democratic administration wants Ukraine to lower the mobilization age to 18 from the current age of 25 to expand the pool of fighting-age men available to help a badly outnumbered Ukraine in its nearly three-year-old war with Russia. ***** https://lnkd.in/gTsa89m2 Hundreds of thousands of Ukrainians and hundreds of thousands of Russians have been killed and wounded fighting each other in this war. Biden pressures Israel to strike ceasefire deals with Hamas and Hezbollah, but pressures Ukraine to keep fighting. If there is any place where peace is an immediate and urgent need it is Ukraine. That war has been a human meatgrinder, producing death tolls not seen anywhere since WW2. Yet Biden’s concern is that there be more war, more killing, more death. At some point thoughts must turn towards peace. At some point the killing must end and the rebuilding must begin.

GDP and Personal Incomes: Still Not Good News The weakness in private investment within the GDP estimate carries a certain symmetry with the continued divergence and distortion between goods prices and services prices, a complete reversal of a long-standing historical norm. Neither trend augurs well for the economy. Manufacturing jobs are routinely the highest paying jobs, and they are the jobs that are involved in actual wealth creation—physical assets that stick around. As a rule, the economy is going to be in rude health if we are making goodly amounts of “things”, and to be making goodly amounts of things we want to be buying goodly amounts of “things”. Instead, we have in this country a trend where we are making fewer things, and where we are buying fewer things.

We have to come to terms with a basic and unalterable economic reality: there is no such thing as "free trade" between nations. It does not happen. In the modern world, it cannot happen. So long as government stands in the middle -- and trade agreements are merely a guarantee that government will never not be in the middle -- free and unfettered trade cannot happen. Accordingly, tariffs are an inevitable means of equalizing the distortions to markets caused by incessant government meddling. Tariffs are made necessary because the moment one market actor anywhere gains a measure of economic and political power, that actor will distort the market. Not "may", not "could", but WILL. Every time. Free trade is a utopian fantasy. The best we can achieve is "fair" trade, which is subjective and is fundamentally whatever is the most advantageous trade relationship any one nation can secure for itself.

The October Personal Income and Outlays Report confirms the inflation trends presented by the Consumer Price Index Summary earlier. https://lnkd.in/eWRUp_26 The short version: inflation is rising, which anyone in the real world has known for quite some time. https://lnkd.in/g--YA8bG Inflation is rising, and we should not expect any relief in November

Not good news for China. Huawei is being pushed out as a telecom supplier to Deutsche Telekom, being replaced by Nokia. ***** The deal, which includes Fujitsu, opens new tab, covers a mass rollout of ORAN-compliant technology with commercial deployment already underway in the Neubrandenburg area of Northern Germany. After the companies did a trial run last year, Nokia will replace equipment from the incumbent, China's Huawei. Both Nokia and Ericsson have been looking to sell equipment with ORAN technology that promises deep cost cuts by using cloud-based software and equipment from many suppliers instead of relying on just one. ***** https://lnkd.in/gJDpEbNa The decoupling from China is continuing, and is continuing worldwide. China can’t revive its export engine if other countries stop buying Chinese goods.

The second GDP estimate for Third Quarter is out—and it says the same thing as the advance estimate. ***** The increase in real GDP primarily reflected increases in consumer spending, exports, federal government spending, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2). Compared to the second quarter, the deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment. These movements were partly offset by accelerations in exports, consumer spending, and federal government spending. Imports accelerated. ***** https://lnkd.in/gWP6CgGW This summation of Third Quarter GDP results is literally an almost verbatime restatement of the advance estimate. Quite simply, nothing much has changed. Which is not exactly good news. As I discussed when the advance estimate was released, there is plenty of bad news in that advance estimate, and that bad news remains in the estimate now. https://lnkd.in/gW_svmge That nothing much has changed in the GDP estimate means nothing has gotten demonstrably worse. Unfortunately, it also means nothing has gotten any better, either.