The Washington Post citing Western intelligence experts says that the Russian military will soon exhaust its combat capabilities and be forced to bring its offensive in Ukraine’s eastern Donbas region to a grinding halt.
There will come a time when the tiny advances Russia is making become unsustainable in light of the costs and they will need a significant pause to regenerate capability,” said a senior Western official, speaking on the condition of anonymity to discuss a sensitive issue.
Russia’s slow advances are dependent almost entirely on the expenditure of vast quantities of ammunition, notably artillery shells, which are being fired at a rate almost no military in the world would be able to sustain for long, said the senior Western official.
Russia, meanwhile, is continuing to suffer heavy losses of equipment and men, calling into question how much longer it can remain on the attack, the official said.
British intelligence assessments indicated that Russia would be able to continue to fight on only for the “next few months.” After that, Russia could come to a point when there is no longer any forward momentum because it has exhausted its resources.
At the same time, Ukraine should be able to deploy more military assets received from the United States, Great Britain and France.
Some sort of late summer stalemate seems inevitable, with both Russia and Ukraine depleted of resources to maintain military operations.
What happens after that is conjecture.
The New York Times is digging rabbit holes for its progressive readers to shiver in. The editors of the Times and some of its writers say that constitutional rights regarding sexual orientation, same sex marriage and sexual privacy are at risk because of the abortion decision. That is not true. Only Justice Thomas opined about such issues. Other justices specifically stated that other constitutional rights were not at issue as a consequence of the abortion decision.
The New York Times is misrepresenting the truth in order to sway opinion as the mid terms approach. The New York Times condemns and would censor right wing populists for misrepresentations made over social media.
The hypocrisy of the Times corrodes the foundations of society.
Markets and Stocks
The economy is slowing. Though jobless claims remain low, job postings have rolled over.
A shallow recession is probably inevitable. To bring inflation down toward the two percent target, unemployment must increase. When unemployment rises, aggregate income stagnates or falls, a recession follows. But I believe that any recession will be short and shallow. First, households have $17 trillion in liquid assets. Second, for the top three quintiles of income distribution, balance sheets are in great shape. Third, the corporate sector is not over leveraged. Fourth, the largest banks have fortress balance sheets. And Fifth, as the economy slows, demand for gasoline will fall, which in turn will drive gas prices lower. Falling gasoline prices will buffer households against the effects of a slowing economy.
Importantly, in a short shallow recession, earnings for the constituents of the S&P 500 should continue to grow, albeit at a mid single digit rate. Inflation is a tailwind for corporate earnings. S&P 500 earnings are not inflation adjusted.
By Q2, the Fed should begin a rate cutting cycle. By Q4 of this year, the market will anticipate rate cuts and a new powerful up market should unfold.
Today, I want to highlight the big banks which are selling at steep discounts to the market. Many are selling at tangible book value. Typically, the best banks sell at 1.5 times book value.
Loan demand is increasing for the big banks. More loans mean higher earnings.
I see 50 percent upside for GS, BAC, WFC and MS sometime over the next 12 months. For patient investors, C can double by 2025.
Government spending on net interest costs in the fiscal year that began last October totaled about $311 billion through May, a nearly 30% increase from the same period a year earlier, according to Treasury Department data. Mankiw and others warn that an increase in the federal government’s borrowing costs will crowd out private investment as well as government spending for other priorities.
Nothing is free.
In NBER working paper 30190, economists find that less restrictive gun laws lead to a higher incidence of gun violence.
We analyze a sample of 47 major US cities to illuminate the mechanisms that lead Right-to-Carry concealed handgun laws to increase crime. The altered behavior of permit holders, career criminals, and the police combine to generate 29 and 32 percent increases in firearm violent crime and firearm robbery respectively.
The increasing firearm violence is facilitated by a massive 35 percent increase in gun theft (p=0.06), with further crime stimulus flowing from diminished police effectiveness, as reflected in a 13 percent decline in violent crime clearance rates (p=0.03).
Any crime-inhibiting benefits from increased gun carrying are swamped by the crime-stimulating impacts.
The largest corporations have economic power and from that power flows political power. But the largest corporations are accountable to consumers. If corporations abuse their power, economic or political, consumers punish those companies by changing their consumption patterns. A corporation which is punished immediately responds by amending disfavored policies.
By contrast, the federal government has vast economic and political power, but it is only slowly accountable to the public.
For example, the public supports green policies that do not impose high economic costs. But the federal government with all its vast power cannot find the political courage to streamline the permitting process for low cost green energy programs. Clean hydro power emanating in Canada is stranded in Canada because a handful of gadflies want wilderness and not affordable green energy. See New York Times.
Other examples of federal government incompetence include the infant formula fiasco, and the Biden administration’s never ending flip flops on energy policy.
Voters only get to register their disgust every two or four years. In the meantime, politicians and agencies of the federal government laugh at public frustration.
Capitalism is democratic. The federal government is unaccountable and often despotic.
August 22, 2014. I had been at Calhoun prison for almost two weeks. I had 104 weeks to go. On August 22, I wrote:
When we arrived at Lake Butler reception center all the guys on the bus had a cursory medical check up. It was an assembly line: weight, blood pressure, and temperature. Then we were asked some silly psychological questions such as “how is your mental state? Do you know where you are?” Seriously each of us had to answer such questions. Of course, I told them what they wanted to hear; rather than how I truly felt, still, they were just doing their jobs.
The mail service is reasonably efficient here, for letters, but not for books. We receive mail Monday through Friday and mail from us is collected each evening at about 9 PM save for Saturday night, mail is not collected on Saturday, it is collected on Sunday night.
5:45 AM Saturday, August 23 lights came on at 4:05 we walked to breakfast -oatmeal and coffee cake - at 5:25 we were back in the dorm. Meals are served like an assembly line, we have about three minutes to eat.
Still, the early dawn sky was beautiful, cloud free, dark blue and low on the horizon, a triangle of white light at the bottom, closest to the horizon, Venus, and about 10° to the right, Jupiter and to the right of Jupiter and down about 5° from Jupiter a sliver of the moon, gorgeous.
To the best of my ability I focus on the beauty of nature and I shut my mind to where I am. I constantly remind myself of Janice’s words “it’s all a state of mind.”
It is now about 7:30 AM. A count is underway. I have to go to the bathroom, but until the count is over I must wait. It is one of the small indignities of the system. But I have learned to let all the pettiness pass over my head. (I had not. I had a long way to go. I could not let it go. The shame of incarceration remains today. Prison is trauma.)
Poem from August 23:
Behind the bars, the fence, the wire
I ponder what is freedom,
Am I, a man, free?
As I ponder, I watch, the finch,
The tiny finch, he and his brothers and sisters, my companions of the yard
The finch, he flies he sings,
Throughout the day
The bars, the fence, the wire do not bind the finch
Is the finch conscious, does he truly choose to sing, to fly to cavort all day
Or does the finch only react to the TikTok of his internal atomic clock
So I ask again, am I, a man, free
Yes, the bars, the fence, the wire they all bind me
But unlike the finch, there is no tick tock
The atomic clock defines my body, it is bound
my mind is not
My mind, my soul, my heart are free, to fly the sky, to roam the universe
My mind, my soul, my heart, my being soar south
In my mind I fly to the center of my universe, I smile
10:30 AM Saturday, August 23 morning. I just finished a 90 minute rec session I walked just under 5 miles it is very hot and humid. I have hand washed my chest, arms, face and head; now we are beginning a count.
To give you a sense of what this place is like, one of the unpleasant individuals is walking around the dorm speaking in a loud voice. He is saying over and over “don’t touch my shit. Don’t touch my shit.“ He reserves a seat in the TV room. He puts a book and a brush on the aisle seat of the bench. My first evening here, not knowing the system, I sat there and moved his stuff. When he came, he told me I was in his seat. He is a large young punk, a gang banger. I decided discretion was called for. I moved. I avoid him. I think he is missing some marbles. This is a sad and dangerous place. I have 104 weeks to go.