Drug addiction

Does kneeling lead to healing?

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Does kneeling lead to healing?

Around the world, we have seen images of law enforcement officers kneeling to protest police brutality in the wake of the inexcusable murder of George Floyd. It begs the question if the UK police officers in the picture above don’t practice brutality themselves, why are they kneeling for the actions of a small band of police officers in a different country? The same goes for the majority of honest cops in America who put their lives in harms way to protect and serve us.

At what point in society do we acknowledge such vacuous virtue signalling as anything other than an act of cowardice and an insult to the very people they claim to be apologizing to?

A bigger question might be why weren’t these British cops kneeling when police across the country were outed over the deliberate and documented 20-year cover-up of child grooming gangs on the grounds they didn’t want to be seen as racist by targeting the overwhelming majority of the known perpetrators – Asian (Pakistani) men?

We summarised the outcome of the Rotherham Inquiry here. It is shocking beyond belief and 19,000 of these identified white girls will never recover from the psychological scars. Their skin colour shouldn’t matter. It is what happens when identity politics clouds common sense. How could anyone condone arresting the fathers who were trying to break their underage girls out of rape dens? Because that is what happened. Minors were doused with gasoline and threatened with being set alight by their captors if they told anyone about what had happened.

Where were these same BLM-in-name-only protestors in the UK calling for justice for these poor girls when it became public knowledge? Are demonstrations merely determined by the most fashionable social justice issue du jour? Is systematic rape based on ethnicity on one’s own doorstep deemed less contentious than systematic racism in America?

Kneeling is nothing short of submitting to mob rule. Pure and simple. Furthermore, how does getting on one’s knees heal racial divide and conquer police brutality? We’ll get to that.

We were struck by a video of a Trump rally several years ago where the organizer invited the President of BLM New York up on stage to allow him to talk to those assembled. The outcome was not what the prevailing sentiment would have guessed before viewing the clip.

The problem with BLM is the way it seems to convey mixed messaging. BLM remains silent when so many blacks are dying in Chicago from gun violence not at the hands of police? When a 77yo former African American police captain in Louisville was shot and killed by rioters over a TV last week, BLM said nothing. It was too busy lashing out at white liberals abusing the #BlackLivesMatter Twitter hashtag to advertise their wokeness by putting black squares on the social media avatars.

And if cops truly felt so disgusted about George Floyd’s demise wouldn’t they have been better to strip off their blues, resign on the spot and trample on their badges to show how much the cause means to them?  It is hard to see the kneeling as anything more than a hollow gesture to rack up social woke points.

Why are they apologizing for things they haven’t done? If they have been privy to witnessing police brutality, did they speak up? Or were they ignored by politically-aligned police chiefs bent on seeking their next promotion by suppressing negative behavior under their watch to please city mayors?

That is not to say police officers don’t have a right to express themselves as private citizens but as public servants on the job they should not be succumbing to acts of appeasement.  They should be reprimanded for such displays of weakness. How can they keep public order by such acts of surrender? What message do they send to crowds?

Throughout history, kneeling has been a token of submission. The height of self-debasement. The term “die standing or live on your knees” derives from that.

Earlier in the week, we wrote of a YouTuber Smooth Sanchez who was claiming to represent Black Lives Matter (BLM). He was asking white women to get on their knees to admit their white privilege, apologize and pay reparations. Some complied. Some refused, only be taunted with vile abuse in the form of “racist“, “bigot” or “Neo-Nazi.

What is it with the idea that ordinary law-abiding citizens who happen to be white must atone for the sins of people they are not related to and weren’t alive at the time much of the oppression was committed? How will self-loathing whites kneeling and asking for forgiveness help black people in reality, especially if they haven’t done a thing? How do we stop racism if we constantly seek to define everything by it? Surely by making skin colour the basis by which we function as a society, then racism can’t be effectively stamped out.

In 2017 we wrote about four Ann Arbor councillors taking a knee during the national anthem ahead of session. Given these people were in a position to influence policy why didn’t they head down to the Ann Arbor Police Department and study the data about police brutality, the extent of the problem (if any) and what steps were put in place to mitigate it?

Ann Arbor is a city of 360,000. Crime versus the national average of cities it’s size revealed that burglary and motor vehicle theft were at rates at half the national average. Murder 1/5th. Robbery at less than half. Assault in line. Rape, marginally above.

Taken in isolation, Ann Arbor PD killed one African-American woman who attacked them with a knife in 2014. Since then a clean slate. If new measures to weed out bad apples were put in place, shouldn’t those councillors have promoted the successful program that they implemented instead of joining a chorus which threw its own law enforcement it sets the guidelines for under the bus?

Wouldn’t it be better to have city mayors incentivise police chiefs to proactively manage their officers in ways which would lead to the types of outcomes the public wants? We doubt the wimpy response of Ann Arbor politicians is an isolated event. That is the problem. Making a public statement to appear virtuos but fail to follow up with meaningful policy achieved what exactly? Their actions were as useless as draping one’s social media avatar with whatever cause is fashionable to show one is against the bleeding obvious.

The fish rots at the head. No amount of kneeling will fix problems unless the raw data is openly discussed and the brutal truth examined. The Minneapolis PD was subject to a federal review of procedures in 2015. The statistics revealed that few officers were fired or suspended for claims made against them. The majority were either reprimanded or given extra coaching. Yet MPD still continued to see complaints pile up. This appears to be a senior management issue.

Bad (insert profession) deserve to be weeded out of any organisation, especially where public order is at stake.

Pointing the finger at the majority of law-abiding citizens who aren’t racist will do absolutely nothing to solve this crisis. As Mark D Robinson said, the majority is “the first ones taxed, the last ones considered and the first ones punished.

Having whites declare their white privilege on their knees will solve nothing. It is actually an insult to blacks for whites to think that apologizing for things they haven’t done just to feel better about themselves rather than seek to find solutions through constructive free speech which acknowledges history. It is the same mentality as pushing gender politics. Do these same people think telling capable, educated, intelligent and ambitious women that they need special treatment?

Having whites kneel will not lift one single black person out of the oppression so many Democrat lawmakers highlight when it is decades of their policies that have perpetuated the problems in the first place. It is actually racist to push this kind of tribalism, as many of our narrative busing videos of everyday African Americans attests to. 

In closing, if we want to take stupidity to the next level, Los Angeles Mayor Eric Garcetti publicly said he wants to drastically cut the police budget in coming years. One can only assume that stifling the one body that can keep communities safe will only enforce the very stereotypes that the death of George Floyd was supposed to stop. 

Kneeling does not lead to healing. Lets not pretend that it does. Bold leadership that avoids political correctness and identity politics is required.

Trillion Dollar Baby?

What will it take to wake the media up to the fact that the way our government is spending it won’t be long before we are a $1 trillion net debt baby?.

Our current federal liabilities (p.121) stand at $1.002 trillion (which is pre COVID19). Have the media bothered to look at the state of the budget accounts? Or are they too busy lavishing praise on rescue packages which have a finite lifespan.

We pointed out yesterday that the “revenue” line could be decimated by the disruption – huge cuts should be anticipated in the collection of GST, income, company and excise taxes. Not to mention huge rebates to be paid to now unemployed workers. On an annualized basis the revenue line could get thumped 30-40% if this continues for 6 months.

So on the back of an envelope, it is not very hard to work out that with a current $511 billion revenue line looking to fall towards the early to mid $300 billion mark against a projected expense bill of $503 billion a deficit of $150bn will open up. Throw on c$150bn of COVID19 stimuli arriving by June 30th and we get a $300 billion budget deficit. Our net financial worth would grow from minus $518 billion to negative $818 billion.

Rolling into next year, it is ludicrous to think that hibernated businesses will have resumed as normal. This means that the following year’s tax revenue line will look as sick as the previous period. The government will be torn shredding the expense line as unemployment shoots higher so assuming minimal budget cuts, it could face another $200 billion deficit taking it north of $1 trillion net liabilities in a jiffy.

Let’s not forget what the states may face. Severely lower handouts from the federal government via GST receipts which will balloon deficits, a trend we’re already seeing.

The states currently rely on around 37-62% of their revenue from the federal government by way of grants. The balance comes through land/property taxes, motor vehicle registration, gambling and betting fees as well as insurance and environmental levies.

All of those revenues lines can dry up pretty quickly. 40% of state budgets are usually spent on staff. Take a look at these eye watering numbers.

NSW spends $34 billion on salaries across 327,000 employees.

Victoria spends $27 billion across 239,000 public servants.

Queensland uses 224,000 staff which costs $25 billion per annum.

WA’s state workforce is 143,000, costing $12.6 billion.

SA has 90,000 FT employees costing $8.5 billion.

Tasmania 27,000 setting taxpayers back $2.7 billion.

Just the states alone employ over 1.05 million people at a cost of $110 billion pa!! The territories will be relative rounding errors.

A lot of the states have healthy asset lines which are usually full of schools, hospitals, roads and land). These are highly illiquid.

Unfortunately, one of the golden rules often forgotten in accounting is that liabilities often remain immovable objects when asset values get crucified in economic downturns. When markets become illiquid, the value of government assets won’t come at prices marked in the books.

How well will flogging a few public hospitals go down politically to financially stressed constituents?? This is why gross debt is important.

The states have a combined $202 billion outstanding gross debt including leases.

Throw on another $150 billion for unfunded superannuation liabilities. Good luck hitting the “zero by 2035” targets some state have amidst imploding asset markets. It simply won’t happen. If only these liabilities were marked to market rather than suppressed by actuarial accounting. The WA budget paper (p.42) notes the 0.4% bump to the discount rate to lower the pension deficit figure. To be fair, they are far less outrageous than US state pension deficits.

How must the State Gov’t of Queensland be praying that Adani keeps plowing ahead? How Greyhound must regret terminating a contract to ferry construction workers to the mine? We doubt the incumbent government will have a climate change bent in the upcoming Oct 31 state election. See ya.

The trillion dollar federal debt ceiling seems like a formality especially as the chain reaction created by the states puts on more pressure for the federal government to inject rescue packages to prop up their reversal of fortune budgets. It is that trillion with a T headline that will get people’s attention.

In short, we ain’t seen nothing yet.

Let shareholders burn

We buy shares because we expect to gain a return. We all know there are risks attached. As we wrote yesterday on Boeing, it has embarked on reckless buybacks which have compromised the balance sheet. The company has drawn down all of its $13.8bn in credit lines from banks overnight. It is panic stations. It was completely avoidable.

How ironic that companies which are among those that splurged $4.5 trillion on share buybacks just to chase short term management incentives will be the first lining up for taxpayer support to save them from negligent governance.

We say shareholders should suffer the downside of that investment choice. They had the power to remove officers from the companies they entrusted management to. If a company goes belly up, let other players in the market pick up the spoils for fire sale prices.

The Wolf Street correctly noted,

The Trump administration is putting together a rumored $850-billion stimulus package that will include taxpayer funded bailouts of Corporate America, according to leaks cited widely by the media. Trump in the press conference today singled out $50 billion in bailout funds for US airlines alone. A bailout of this type is designed to bail out shareholders and unsecured creditors. That’s all it is. The alternative would be a US chapter 11 bankruptcy procedure which would allow the company to operate, while it is being handed to the creditors, with shareholders getting wiped out.”

All this Trump package will do is encourage the same bad behaviour. We think this is nothing more than trebling down on the problems that hit us in 2008. But hey, it’s an election year!! Reckless.

As usual, the SEC has been asleep at the wheel. Same as in the lead up to 2008. This is what happens when regulators hire clueless lawyers who don’t have a clue about how markets operate. Therefore they miss crucial events.

As for shareholders – you earned it.

The only upside to this market volatility is that no one has talked about climate change for weeks! Probably because when people are about to lose their livelihoods, all of a sudden virtue signaling is worthless. That goes for diversity and inclusion too. Every cloud has a silver lining.

Trebling down on failed central bank policy. RBA will copy and start QE soon

So the US Fed has slashed rates 1% just now to 0-0.25%. $700bn in asset purchases has been allowed. Jolts like this have far more short term optical impact than mere drip feed cuts. However the two takeaways are:

1) economic impacts are unsurprisingly crippling the economy, hence the need to cut so hard. While the size of the cut is shock and awe, markets can still panic as to why such bold action was necessary. $700bn in asset purchases will try to contain that. Forget Fed tapering, QE is on its way. This is but the beginning of asset purchases. Congress needs to approve the purchase of equities but that may well come. Has worked wonders for the Bank of Japan – not.

2) cutting interest rates don’t necessarily end up doing much because people/companies invest because they see a cycle and the one ahead looks highly uncertain. So refinancing existing debt or easing the monthly burden will not lead to a powered up plan to consume especially if people are being told to self isolate.

There is little option (because of the poor policies to date) left but to double down again like a drunk at a casino table. Gold is one of the few safe havens left. Silver (poor man’s gold) will play catch up. We own both.

And for those that want to lash out at the failures of capitalism for its evils, note this is not anything remotely representing it. When the government and monetary authorities are blatantly interfering and preventing free and open trade to set market clearing prices, that is what creates the distortions and misallocation of capital that leads to economic disasters.

Take advantage of any pops to reduce exposures. We ain’t seen nothing yet. GFC2 will make the crash of 1929 look like a picnic. It won’t be long before the RBA starts to follow suit with zero rates and the journey of QE.

Stanford whackademic suffers chronic TDS

One would think dropping US$70,000pa on an education at Stanford University would provide ample opportunities to be taught by the best of the best.

Sadly, Stanford law Professor Pamela Karlan suffers from acute Trump Derangement Syndrome (TDS). She used the impeachment hearings to make a glib joke about President Trump’s son, Barron. She said, “The Constitution says there can be no titles of nobility, so while the president can name his son Barron, he can’t make him a baron.” She later apologized.

She also mentioned that she was so repulsed by Trump that she had to cross the road when walking past his hotel. One would hope she could act her age.

Yet the Democrats think Karlan represents the best-in-class to be a key witness to testify against Trump?

CM has no issue with her donating to the party of her choice (DNC) but her partisan bias is so blinding that she only undermined her own credibility to act in such a juvenile way.

When Democrat Party presidential nominees talk of wiping out student debt CM now sees the method in the madness. If Karlan is thought of as a top drawer university professor, she only proved how worthless getting a tertiary education is. CM would also ask for his money back. Whackademia at its finest.

Presumably…

…misandristic slogans will be OK in the People’s Democratic Republic of Victoria.

The bigger question is who will be the arbiter of what is deemed inappropriate or not? We can absolutely bet the farm that the people selected to enforce this being the least qualified in being able to administer it fairly.

No one should have an issue with holding appropriate standards for slogans on vehicles (e.g. no profanity/nudity) but is there a pressing need to have apparatchiks pushing agendas on what they deem appropriate for the rest of us? How many vehicles fall foul of these crimes?

One can be certain that if a car is adorned with slogans that crudely vilify white heterosexual Christian males it won’t be deregistered. Perhaps Victoria should change its number plate slogan to “Victoria – the re-education state.

Perhaps Victorian Premier Dan Andrews should spend more time reflecting on his injecting room policy where the CEO of the centre has been stood down after some staffers were caught dealing drugs to the addicts that use the facilities. Who’d a thunk?

Utterly clueless

Zion Lights, a spokesperson for Extinction Rebellion (XR), is shown up by Andrew Neil for what the movement is – completely devoid of any sensible and rational knowledge of the subject they purport to know back to front.

Even the most extreme alarmist claims are treated with a level of high confidence and certainty. Lights doesn’t even accept the premise that the idea of billions dying is that far fetched. She simply deferred to the delusions of the lunatic scientists (highly questionable) who clearly made up such bogus claims as if it was a mathematical guarantee. She even thought banning aviation for a 0.03 degree temp change would be worth it.

When Neil suggested that most homes in Britain are heated by gas and/or use it for cooking, the idea that the UK be carbon neutral by 2025 was a long shot. Lights replied, “we put a man on the moon before we had mobile phones and the internet.” Sadly, it took the US more than 6 years to achieve that. Never mind, XR will demand billions are poured into research that will have no impact on the planet.

With that level of logic, we should definitely accelerate the idea of letting XR run our government with citizen’s assemblies. Utterly clueless, just like those councils and governments calling climate emergencies.