As Bloomberg’s Garfield Reynolds writes in the aftermath of last night’s unexpected Chinese rate cut, while the nation’s economic struggles were (finally) severe enough for the authorities to respond with their biggest interest-rate cut since the pandemic, it will be nowhere near powerful enough to help spark a turnaround.

For a start, Reynolds writes, that scope “is rather less impressive when you realize the reduction in the rate on one-year PBOC loans — or medium-term lending facility — was all of 15 basis points. Most central banks faced with the sort of slowdown China is facing might well decide to cut by three times as much or more.”

The real difficulty for China is that previous reductions haven’t done all that much to galvanize lending in order to stimulate activity; after all as we have discussed previously, one can’t fix a lack of demand problem with more supply (one can , however, create asset bubbles).

Furthermore, as we observed on Sunday, China’s new loans tumbled in July to the lowest since 2009…

…. and the PBOC’s ever-increasing interest-rate benchmarks were all at multi-year lows even before this month’s reduction.

Part of the reason for the lack of demand is the ongoing woes in the key property sector, though the situation also underscores concerns that China is tipping into a balance-sheet recession in which companies avoid fresh borrowings in order to service and pay down their existing debt.

As China slides into a Japan-style balance sheet recession and the resulting deflation – as recently discussed by Richard Ku – it is facing even bigger problems than just a garden-variety property and/or debt crisis.

Indeed, as Rabobank’s Michael Every cites the Economic Observer, a subsidiary of Xinhua News Agency, which published a newsletter titled “Finance Bureau Chiefs in the Past Half Year”, and which concluded that local government finances and the national economy are reportedly “on the verge of collapse, and the thunder will explode at any time.” To be sure, recent events ensure the coming collapse:

• Country Garden just defaulted;
• Zhongzhi Enterprise Group missed payments on high-yield investment products;
• recent bank loan data were terrible;
• and today saw industrial production 3.7% y-o-y (4.3% expected),
• retail sales 2.5% y-o-y (vs. 4.0%),
• fixed asset investment 3.4% y-o-y year-to-date (vs. 3.7%),
• property sales -8.5% y-o-y year-to-date (vs. -8.1%),
• and unemployment 5.3% vs. 5.2% (not to mention that youth unemployment which just hit all time highs, will no longer be reported for obvious reasons).

Summing it up, China “has fallen into a psycho-political funk,” says the FT, as its youth tell Soviet jokes again or say ‘let it rot’, and a high-earning Beijing worker is quoted as saving as much as he can to prepare for a property crash or a move against Taiwan.

新華社下屬經濟觀察報11日發表通訊“財政局長這半年”，報導了三個地方財政局長今年以來的工作情況，在網上引發熱載，新浪APP用一張圖片為這三個財政局長的工作做了10條歸納,最後總結為:節流很難開源更難,地方財政和國民經濟處於崩潰邊緣,隨時會爆雷. pic.twitter.com/dJgwrXJ33P

— 高瑜 (@gaoyu200812) August 13, 2023

So is there anything that could actually stop the bleeding in China from an economic or market perspective?  Well, as Nomura’s Charlie McElligott writes – and agrees with our assessment – the biggest reason why China is imploding in slow-motion is that that, as opposed to rest of world, Chinese authorities never responded with Fiscal transfer into pockets of individuals and businesses who were bled dry during the covid crisis.

Hence, the one thing that could truly “shock and awe” markets would be outright “helicopter drops” of money direct to households and businesses in order to stimulate DOA Chinese consumption.

Impossible you say, after all China has nearly 300% debt/gdp… only the terminal economic basket case that is Japan is higher.

Or maybe not: as Bloomberg writes today (see “PBOC Adviser Says China Urgently Needs to Boost Consumption”) Cai Fang, a member of the monetary policy committee at the PBoC, i.e. one of China’s top central bankers, warned that the top priority for policymakers is to stimulate household consumption:

Cai added in the article posted late Monday on a social media account of the China Finance 40 Forum, one of the nation’s top economic think tanks, that continued unemployment in the wake of the pandemic is crimping household spending and that consumer confidence is expected to weaken without new policies.

“The most urgent goal now is to stimulate household consumption, and it is necessary to use all reasonable, legally compliant and economic channels to put money in residents’ pockets,” said Cai, 66, one of the most well-known economists in China to focus on demography and labor economics.

The former vice president of the Chinese Academy of Social Sciences, a state think tank, joined the PBOC’s policy advisory body in early 2021, and has helped the government map five-year plans for economic and social development. In July, Cai called on officials to reform the household registration system to unleash the consumption potential of the nation’s large pool of migrant workers.

One can almost see why just hours later Beijing halted the publication of China’s youth unemployment data.

More importantly, however, Cai called for the inevitable helicopter drops to boost household consumption and aid the economic recovery:

He is among a group of economists who have called for providing direct stimulus to consumers to boost spending, a path that Beijing has so far been unwilling to follow. Earlier this year, Cai said direct stimulus of 4 trillion yuan ($551 billion) paid directly to Chinese households is an option to spur a recovery in consumer spending that has been slowed by weak wage growth during the pandemic.

And while China can probably pretend it can avoid what’s coming for a few more months, it is now just a matter of time before China joins the rest of the “developed” world in what Michael Hartnett recently called the “era of fiscal excess.”

After all, there is probably a reason why former PBOC governor, Yi Gang, who called for “economic prudence” and was against against massive stimulus, was recently “retired.”

See Cai’s full post from the China Finance 40 Forum here.

Blackstone Inc.’s $68 billion real estate trust has been bombarded with nine months of heavy redemption requests while storm clouds gather over commercial real estate markets. The latest sign of bad news from Blackstone Real Estate Income Trust (BREIT) is an announcement from the company that its president will go on nine months of leave. 

BREIT filed an 8-K filing on Tuesday morning, announcing president A.J. Agarwal “will be taking a continuing education sabbatical beginning September 15, 2023 for nine months, and is stepping down from his role as President and Board member effective August 14, 2023.” 

Agarwal will be replaced by “Robert Harper, BREIT’s current Head of Asset Management and Head of Blackstone Real Estate Asset Management Americas,” the filing said.

The management change comes as BREIT has been working through redemption requests since last November. Wealthy investors have panicked out of the fund but have only been met with redemption restrictions to prevent massive outflows. 

Remember when BREIT received a $4 billion bailout cash infusion from the University of California earlier this year?

• Blackstone’s BREIT Gets $4 Billion ‘Buffett-Style’ Bailout From University Of California

Late January, Blackstone President Jonathan Gray told Financial Times that BREIT was experiencing a “backlog” of redemption requests. 

• Blackstone President Says BREIT Still Has “Backlog” Of Redemption Requests

Redemption requests surged in Spring:

• Blackstone BREIT Redemption Requests Surge To $4.5 Billion, Only $666 Million Granted
• Blackstone’s BREIT Suffers Sixth Consecutive Month Of Withdraws As CRE Deteriorates

And continued this summer:

• BREIT Hit By Ninth Consecutive Month Of Redemptions; Plans Pivot To AI Data-Centers

BREIT’s troubles stem from shifts in real estate demand and rising interest rates that have caused rumbles in CRE markets. 

Taking a “continuing education sabbatical” is a new one… Typically, executives resign citing ‘health reasons’.

Authored by Bruce Thompson via RealClearMarkets.com,

President Biden has been traveling the country, touting the benefits of Bidenomics, claiming his tax and spending policies have been an economic success.

The President says his approach is a better alternative to Reaganomics, which he constantly refers to as trickle down economics, or tax cuts for the rich.

He argues that the Reagan approach has never worked, and that his tax and spend policies will produce stronger economic growth.

But history shows that free market policies of low tax rates and limited spending have consistently led to stronger economic growth.

In the early 1980s, with the economy facing double digit inflation and a recession, President Reagan’s economic recovery program was enacted by Congress with bipartisan support. The Reagan tax cuts were not tax cuts for the rich.

His tax cuts reduced tax rates across the board in every tax bracket. Every taxpayer received tax relief, and everyone benefited from the subsequent higher economic growth.

According to the Joint Tax Committee, two-thirds of the tax cuts went to middle-income taxpayers. Only six percent went to the top income level.

More importantly, the Reagan tax cuts worked, producing the longest peacetime economic expansion since World War II. The tax cuts ignited an economic boom, with real GDP increasing 7.9% in 1983 and more than 8% in the first half of 1984. All told, economic growth averaged nearly 5% a year through 1988.

By comparison, real GDP has averaged only 2% a year since 2007, and an anemic 1.3% over the last year and a half. CBO is projecting the economy to grow at only 1.7% a year for the next decade.

Under Reagan, inflation dropped from double digit levels to 4%. The unemployment rate was cut in half, and 20 million new jobs were created. Business investment soared, and real income grew at every level.  By the  end of Reagan’s second term, the U.S. economy was one-third larger than when he took office.

Biden used to appreciate the benefits of pro-growth economic policies.

Then-Senator Biden voted for the Reagan tax cuts, saying in a Senate speech that he has “long advocated a reduction in the tax burden for individuals and businesses,” and that the tax cuts would “give a boost to the sluggish economy and encourage businesses to invest to achieve greater productivity.”

That is exactly what happened. Thanks to the corporate tax cuts, manufacturing productivity grew at an average annual rate of more than 4%, nearly 50% faster than during the period 1948-1973, leading to higher wages, better jobs, and greater growth.

Biden was right then, and he is wrong now.

We need to move away from Bidenomics and put in place the Reagan pro-growth policies of low tax rates and spending restraint to unleash stronger economic growth.

Remember when San Francisco officials and the media denied that retailers were leaving metro areas?  Then they claimed that the businesses leaving were not leaving because of rising crime?  Remember when the government tried to institute a law which would allow them to continue taxing people and businesses up to ten years after they moved out of the state?  Remember when CNN reporters did a story on the crime epidemic in San Francisco and they got robbed in the process?  It’s hard to hide the economic consequences of bad policies and ignorant ideology – Eventually, the effects become undeniable.

San Francisco looks dead. The city will completely die without tourism https://t.co/d3ffhORWDr

— Clown World ™ 🤡 (@ClownWorld_) August 14, 2023

The establishment media continues to suggest the pandemic is the primary cause of the decay, but residents of San Francisco disagree.  The majority of people mention crime and widespread drug use in the streets as the threat destroying the once vibrant retail environment.  It’s over for San Francisco – And as the saying goes, if you’re looking for someone to blame, the fish rots from the head down.  

Authored by Frank Miele via RealClearPolitics.com,

Here’s what I dream of Donald Trump saying when he stands trial on bogus charges proffered by his political opponents: “I do not recognize this court’s right to try me … I do not recognize my action as a crime.”

Those are the fighting words of industrialist Hank Rearden when he was put on trial for ignoring an unjust law in Ayn Rand’s novel “Atlas Shrugged.” Although the circumstances of the cases differ, Rearden is a perfect avatar of Donald Trump, as both larger-than-life men are persecuted by the justice system for seeking to pursue their own self-interest and for refusing to surrender to government oppression.

Self-interest is central to the Objectivist philosophy of Rand, who grew up in Russia and witnessed first-hand the oppression of free thought and free enterprise following the 1917 Communist revolution. Her masterpiece, “Atlas Shrugged,” is the ultimate roadmap to how American democracy can be subverted by leftist bureaucrats and a corrupt media to destroy some individuals and intimidate the rest.

In the novel, Rearden has created a unique metallic alloy that carries his own name. Rearden Metal is far superior to steel and was in high demand by contractors, but tyrannical government regulations prohibited Rearden from selling to customers of his own choice. He ignored the government’s warnings and sold to one of the few honest businessmen left in the country. That meant he had broken the law, and because of his stature and reputation for excellence, the government prosecuted him as a warning to others that they dare not pursue their own self-interest, too.

Rearden epitomizes the essence of individualism, striving to achieve his goals despite societal pressure. As an industrialist, he prioritizes his innovation and accomplishments, unapologetically pursuing personal success. His trial underscores the struggle between individual rights and the perceived interests of society, reflecting Rand’s championing of individualism.

Similarly, Trump’s refusal to accept the election results turns on his deep sense of individualistic ambition, his willingness to challenge societal norms, and his determination not to surrender his principles, even at the expense of public ridicule, political persecution, and now potentially years in prison. But you can’t view the 2020 election in a vacuum. Trump was no different than Rearden in fighting what he knows is a rigged system. For the preceding five years, Trump had been the victim of a series of vicious attacks by the Deep State and the  media who never really accepted him as president. So Trump had no reason to accept the election results parroted by the same actors who had already tried to destroy him multiple times.

And now, two and a half years after the 2020 election, as Trump has a fighting chance of returning to the White House in the greatest political comeback in history, his enemies have come for him again, with three separate indictments and soon to be a fourth.

The four-count indictment most recently brought against Trump by Special Counsel Jack Smith is intended to make a victory in 2024 nearly impossible. The Deep State in this case represents the entrenched bureaucracy of the federal government as well as the individual states’ election officials. This is the same Deep State that gathered up 51 national security officials to sign a statement prior to the 2020 election that falsely claimed that Hunter Biden’s laptop “has all the classic earmarks of Russian disinformation.” It had none of them. No wonder Trump was disinclined to accept their conclusions that the election was secure and fair. Trump sought to prove his concerns about the legitimacy of the 2020 election by pursuing a vigorous legal strategy as was guaranteed to him under the First Amendment’s right “to petition the government for a redress of grievances.”

Biden’s weaponized Department of Justice is determined to deny that right to Donald Trump, and by extension to the rest of us. You either agree with the government’s interpretation of election results or else you risk going to jail. The indictment brought against Trump acknowledges that everyone has a First Amendment right to speak their minds and even to “formally challenge the results of the election through lawful and appropriate means,” but it then avers that Trump’s right to believe he won the election is abrogated by a string of court losses and equally pessimistic assessments from so-called experts.

Here’s where it gets interesting, and where the Department of Justice has overstepped. The four counts in the indictment are based on what prosecutor Jack Smith calls three conspiracies: “A conspiracy to defraud the United States” by seeking to stop the counting of electoral votes on Jan. 6, 2021; “a conspiracy to corruptly obstruct and impede the Jan. 6 congressional proceeding at which the collected results of the presidential election are counted and certified; and “a conspiracy against the right to vote and to have one’s vote counted.”

All of these alleged conspiracies and the resulting four charges are directly related to the joint congressional session on Jan. 6, when the Electoral College votes were opened and debated to determine whether they should be counted. Moreover, when Jack Smith announced the indictment, he suggested that Trump was responsible for the riot that occurred at the U.S. Capitol on that day, yet none of the charges hold Trump responsible for the violence. Every charge in this dubious indictment could have been brought even if the protesters had marched “peacefully and patriotically” to the Capitol as Trump had requested. The charges in the indictment have nothing to do with the violence; they only relate to Trump’s insistence that he won the election, and that he would do whatever it takes to prove it.

In other words, these are not real crimes like insurrection or sedition; they are thought crimes. Smith’s “conspiracy” charges simply reflect that Trump consulted his lawyers to develop a legal strategy on how to right the wrong that he perceived. In its substance, from paragraphs 8 to 123, the indictment merely alleges over and over again that Trump refused to accept the conclusions of others that the election of Biden was legitimate, and that he had help from like-minded attorneys. How infuriating that must be to prosecutor Smith, who believes with all his heart that no one could doubt the veracity of what government officials (like him!) tell us.

But millions of us did doubt the official story of a Biden victory. In the weeks after the Nov. 3, 2020 election, I wrote about problems with the election on Nov. 6, Nov. 13, Nov. 23, Nov. 30, and Dec. 7. If I had been able to ensure that Trump had read those columns at RealClearPolitics, I might be under indictment for conspiracy now, too. Then on Jan. 2, 2021, I wrote a column called “Our Electoral Crisis: The Call of Conscience on Jan. 6.”

In that preview of the challenge of electoral votes from disputed states, I wrote, “There is no reason to expect that the Jan. 6 session of Congress will result in certification of President Trump as the victor of the 2020 election. Despite the extensive evidence of fraud that has been amassed, this vote will be an exercise in raw political power, not an expression of blind justice. Probably the best that Trump supporters can hope for is a fair hearing before the American people regarding the reason why doubts exist as to the legitimacy of Biden’s apparent victory.”

Because of the riot at the Capitol, even that small hope was dashed, as most of the congressional debate about fraudulent activity in swing states was canceled when the joint session resumed late in the evening. It is important to note that Trump was the political victim of Jan. 6, not its beneficiary. Because of the violence, he lost his last opportunity to have a public debate on the voting irregularities that made millions of us believe the election returns were compromised. Yet Jack Smith would have you believe that it was Trump’s plan all along to shut down the electoral count that day as part of a plan to overturn the results. It’s just a fairy tale told to Trump-hating liberals to make them feel better.

MSNBC commentator Mike Barnicle summed up Smith’s theory of the case in a segment on “Morning Joe” the day after the indictment was unsealed. “It’s one thing to have beliefs. We all have beliefs,” Barnicle said. “Donald Trump had the belief that he won, and he can articulate it as long as he wants, but he does not have the right to transform that belief into illegal conduct.”

What that means is that we all have First Amendment rights to be wrong, but we do not have a right to persuade others that we are right. And that, ladies and gentlemen, is the first step toward totalitarianism. What we are seeing in Jack Smith’s indictment is the attempt to criminalize what I would call “other thought,” the insistence that you will make up your own mind and pursue your own truth regardless of what the government tells you. This is an attempt to codify the suppression of ideas that we saw the Deep State impose on Facebook, Twitter, and other social media platforms in 2020. You have the right to think whatever you want, but as soon as you share thoughts that dispute the official narrative, you can be silenced, and in Trump’s case locked up in a federal penitentiary.

Well, he wouldn’t be the first person to be jailed for “other thought,” and you don’t have to turn to Russia or China for examples. How about Henry David Thoreau, who spent a brief time in jail in 1846 for protesting the Mexican-American War and wrote about his beliefs in “Civil Disobedience”?

“Any man more right than his neighbors, constitutes a majority of one already,” Thoreau told us. “Under a government which imprisons any unjustly, the true place for a just man is also a prison.”

That certainly will be true should the unthinkable happen and Jack Smith achieve his goal of imprisoning Trump. In a very real sense, the indictment is less an accusation against one man than a ham-handed attempt to enforce group-think on any Americans who resist the imperial decrees from Washington, D.C. Consider this passage from “Atlas Shrugged” in light of the hundreds of Jan. 6 convictions that turned ordinary Americans into felons:

“Did you really think we want those laws observed?” said Dr. Ferris. “We want them to be broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against … We’re after power and we mean it … There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt. Now that’s the system, Mr. Rearden, that’s the game, and once you understand it, you’ll be much easier to deal with.”

One of the most striking parallels between the Trump and Rearden cases is the complicity of the mass media in promoting hatred for the defendants. The legacy press has been trying to destroy Trump for seven years now, starting with the Russia hoax, the Ukrainian impeachment hoax, the Trump taxes hoax, and the classified documents hoax. It didn’t matter what topic came up; the media turned it into another reason to hate Trump. Most recently, they have drummed up the “fake electors” narrative as proof that Trump intentionally tried to steal the election.

That is essentially the linchpin of Smith’s case. When Trump’s team put forward alternate electors on Dec. 14, 2020, they were following the entirely legal precedent that Democrat John F. Kennedy used successfully in the 1960 election, when Hawaii’s result was in doubt until after Dec. 14. The reason that date is so important is because the U.S. Constitution mandates that all electors must give their votes on the same day. If Trump’s lawyers were able to prove fraud after Dec. 14, but his electors had not voted on that day, then their votes would be lost forever.

Trump is an obstacle to the Deep State that seeks power over people, just as Hank Rearden was an obstacle to the economic tyranny of “Atlas Shrugged.” Rearden was not a person of quite the stature of Trump, but more of an Elon Musk – a self-made man of unthinkable wealth who didn’t follow anyone’s rules but his own. But that last quality is shared by all three men, and perhaps that more than anything is what has made them all targets.

Here’s how Rand described the media’s assault against Rearden as his trial began, and how their campaign to marginalize him had failed because the regular people oddly identified with the millionaire industrialist just as Trump gains popular strength with each new indictment thrown his way:

The crowd knew from the newspapers that he represented the evil of ruthless wealth; and … so they came to see him; evil, at least, did not have the stale hopelessness of a bromide which none believed and none dared to challenge. They looked at him without admiration – admiration was a feeling they had lost the capacity to experience, long ago; they looked with curiosity and with a dim sense of defiance against those who had told them that it was their duty to hate him.

That’s how the trial started, but by the time Rearden spoke in his own defense – or rather spoke to demolish the prosecution’s false claims – the crowd was in full support of Rearden in his battle against the nameless, faceless bureaucrats who had regulated the country into despair. When he turned to the crowd in the courtroom:

He saw faces that laughed in violent excitement, and faces that pleaded for help; he saw their silent despair breaking out into the open; he saw the same anger and indignation as his own, finding release in the wild defiance of their cheering; he saw the looks of admiration and the looks of hope.

As the crowd surged around him, he smiled in answer to their smiles, to the frantic tragic eagerness of their faces; there was a touch of sadness in his smile. “God bless you, Mr. Rearden!” said an old woman with a ragged shawl over her head. “Can’t you save us, Mr. Rearden? They’re eating us alive, and it’s no use fooling anybody about how it’s the rich that they’re after…”

It is just that same magical connection which happens between Trump and his supporters at a MAGA rally, and that is why Jack Smith, Attorney General Merrick Garland, and President Joe Biden want to put Trump behind bars. He gives people hope, and hope is dangerous when you have a plan to subjugate them. To succeed, tyranny needs willing victims, and Trump – like any Ayn Rand hero or heroine –  fights back. That’s the true reason his enemies hate him.

“We fight like hell,” Trump said on Jan. 6, not in regard to violence but in regard to protecting our country from the thugs who would transform it into a dictatorship. “And if you don’t fight like hell, you’re not going to have a country anymore.”

That’s the fighting spirit which makes me know my dream of Trump rejecting the court’s authority, like Hank Rearden did, will never come to fruition. While it would have a hint of poetic justice, that’s not what Trump is after. He wants real justice, political justice, freedom for all, and that means he has to stand up, stand tall, stand firm. When he says that the government is coming through him to get to you, he’s not joking. And millions of us are on his side, with one desperate question on our lips: “Can you save us, Mr. Trump?”

Five people have been declared dead and one person is in critical condition after a house exploded in Plum, Pennsylvania, a suburb of the Pittsburgh metro area.  The explosion rocked a Plum neighborhood, destroying three homes and damaging twelve others; witnesses reported hearing the blast from over 10 miles away.

🚨#WATCH: As Surveillance Footage Captures Devastating House Explosion Resulting in Multiple Fatalities

📌#Plum | #Pennsylvania

Witness surveillance footage captured on a ring doorbell shows the devastating house explosion that occurred on a Saturday afternoon in Plum,… pic.twitter.com/99BPR1geRy

— R A W S A L E R T S (@rawsalerts) August 13, 2023

Two municipal officials, Plum Borough Manager Michael Thomas and Community Development Director Heather Oravitz, were among the five people killed on Saturday, according to Mayor Harry Schlegel.  

NOW: House explosion reported with multiple houses on fire in Plum, Pennsylvania; reports of multiple victims.pic.twitter.com/2Uikb9NKxl

— Dredre babb (@DredreBabb) August 12, 2023

The Allegheny County Fire Marshal’s office is continuing to investigate the cause of the explosion.  In a statement issued Monday night, the office confirmed it is aware that the homeowners at 141 Rustic Ridge, the Oravitz home, were having issues with their hot water tank, located in the basement.  However, gas crews checked for leakages following the explosion and determined the gas system had been “operating as designed.”  Officials indicated that due to the time it would take to conduct forensic and other testing, the investigation could last “months, if not years.”

Authored by Jill McLaughlin via The Epoch Times (emphasis ours),

A second daytime “flash-mob” burglary in Los Angeles County over the weekend that cost a luxury department $300,000 may be related to a similar burglary four days earlier in Glendale, according to the Los Angeles Police Department.

At about 4 p.m. Aug. 12, more than 30 suspects wearing hoodies and ski masks, some carrying knives, swarmed the Nordstrom department store located in the Westfield Topanga Mall in Canoga Park, and stole about $300,000 worth of merchandise before running out of the store and entering several vehicles, according to police.

The incident is similar to another flash-mob theft that occurred Aug. 8 at a Glendale shopping center about 45 minutes away.

“We’re working with law enforcement partners throughout the county, to assist each other,” Los Angeles Police Department spokesman Sgt. Bruce Borihanh told The Epoch Times. “Maybe they’re the same [suspects] or maybe they’re not.”

A viral video of the Nordstrom burglary shows members of the group running around the store grabbing clothing, handbags, and other items. Investigators are looking at surveillance video to see if they can identify license plates on the cars, Borihanh said.

The incident lasted about two minutes, according to Mr. Borihanh.

“They targeted handbags and high-end stuff they know they can sell,” he said.

One of the store’s security guards was sprayed with bear spray—which is similar to pepper spray—during the burglary. He was treated at the scene and recovered, according to police.

An LAPD officer was deployed at the mall Monday, but an increased presence is not planned.

Instead, LAPD is collaborating with retailers, security, and other law enforcement to prevent future incidents, according to Mr. Borihanh.

“The LAPD doesn’t have the manpower to patrol the mall,” he said.

Los Angeles Mayor Karen Bass called the incident “unacceptable,” in a statement released Saturday.

“Those who committed these acts and acts like it in the neighboring areas must be held accountable. The Los Angeles Police Department will continue to work to not only find those responsible for this incident but to prevent these attacks on retailers from happening in the future,” she said.

‘I’m Helpless’: Mall Security Guard

Mall security guard Kevin Johnson was working at the time of the burglary and saw the aftermath of what happened, he said.

“They’re hooligans,” Mr. Johnson told The Epoch Times.

Theft regularly occurs at the mall, and he said he expects it to happen again.

Mr. Johnson does not carry a firearm and said he is not allowed to confront suspected thieves.

“If I see you stealing. I can’t even do anything. I can’t touch you. I can’t try to stop you. I’m helpless,” he said.

This was the second time the Nordstrom location was targeted by organized crime in the past two years. In 2021, the store was burglarized the day before Thanksgiving by five people. The thieves stole several expensive handbags before fleeing in a car. Similar to last week’s event, the security guard was also sprayed with a chemical by the suspects, according to news reports.

The LAPD is working with the Glendale Police Department to see if the same suspects were involved in the burglary in that city four days earlier.

The Glendale theft also occurred during daylight hours—just before 5 p.m.—when at least 30 suspects entered a Yves Saint Laurent store at The Americana at Brand shopping center.

The suspects stole clothing and other merchandise before fleeing on foot and in numerous cars. The estimated loss was also about $300,000, according to the Glendale Police Department.

The owner of the shopping center, Rick Caruso—who ran for Los Angeles mayor in 2022 and lost—has offered a reward of $50,000 for information leading to the arrest and conviction of the suspects, according to a Glendale Police Department press release.

“This type of criminal activity will not be tolerated in Glendale,” Glendale Police Chief Manny Cid said in the release. “Expect an elevated police presence in and around the downtown Glendale corridor.”

Further south in Irvine, California, police are looking for three suspects who were seen on store video walking into the Jewels by Alan store near Jamboree Road and Michelson Drive at 12:20 p.m. July 31. The thieves smashed several display cases before walking out with about $900,000 worth of jewelry.

No suspects have been arrested in that incident, Irvine Police Department spokeswoman Karie Davies told The Epoch Times.

California Crime Policy in Spotlight

The recent incidents were caught on video and have been widely circulated on social media, attracting nationwide attention.

Florida Attorney General Ashley Moody blamed California’s crime policies for the thefts.

“A mob of thieves brazenly stole up to $100K from a California Nordstrom in a smash-and-grab rampage. These criminals are emboldened by the state’s lax criminal justice policies,” Moody posted on X, formerly Twitter. “In Florida, organized retail theft is NOT tolerated – we’re fighting back with FORCE, … combating organized retail theft rings.”

The increase in flash mob-style retail crime comes on the heels of Los Angeles County’s reinstatement of a zero-cash bail system. In May, as a result of a lawsuit, a judge ordered the county to return to its policy of requiring no bail for suspects charged with most non-violent felonies or misdemeanors.

Although the county and city are awaiting a final ruling in the case, the judge’s temporary halt of the cash-bail system has already caused property crime to increase, according to local law enforcement.

LAPD Chief Michel Moore and Los Angeles County Sheriff Robert Luna testified in the lawsuit Aug. 7 about how the zero-cash bail was affecting their departments.

“I do believe that bail acts as a general deterrence,” Chief Moore testified. “It creates consequences. You face a risk of being incarcerated as a punishment.”

He said he did not agree, as the plaintiffs in the case have argued, that cash bail creates a “two-tier system.”

Chief Moore told reporters after the court hearing that 76 people released on the zero-bail system since May have been arrested again for another crime, and the city had since seen a 4-percent rise in car theft.

Criminals who offend again and again need to be held accountable, the sheriff also told the judge.

“We’re not saying that zero bail is completely out,” Sheriff Luna said. “We’re saying if you have a repeat offender, someone who is a habitual criminal, they have to be held accountable—even for a stack of lower-level crimes.”

According to the sheriff, in the past 10 weeks since the county’s zero-cash bail was reinstated by the court, his department had arrested 1,573 people, 226 of whom were released and then arrested again for a different crime—a 14.3-percent recidivism rate.

In other action statewide, California lawmakers are close to prohibiting businesses from asking employees to confront shoplifters or active shooters. Senate Bill 553 has already passed the state Senate and has sailed through two committees in the Assembly on its way to a final vote.

At a time when gasoline prices – on average – should be falling, US pump prices are soaring (up seven weeks in a row – the longest streak since June 2022)…

Source: Bloomberg

And while drivers benefited from the relative cheap prices as the summer driving season began, they are now facing pressures as the national average price in within pennies of its highest in a year (and given the surge in WTI Crude and wholesale gasoline prices – which tend to lead retail prices by one-to-two weeks – things are about to get a whole lot more painful again…

Source: Bloomberg

All of which is a major problem for ‘inflation’ as CPI’s gasoline component is set to explode next month…

Source: Bloomberg

“While July CPI [Consumer Price Index] data looked pretty good with energy prices well below their year-ago level, August data isn’t going to look nearly as friendly,” warned Patrick De Haan, head of petroleum analysis at GasBuddy.

What will Joe do? Return to draining the SPR again? Complain to the Saudis (and be ignored)? Blame “Big Oil” again?

We wonder what ’emergency’ he will blame this release on?

Authored by Jeff Thomas via InternationalMan.com,

“Do not encroach against others or their property.”

The above principle is a simple one, yet it’s the basis for all criminal law. In turn, criminal law is the basis for Common Law, the legal system for English-speaking peoples and much of the rest of the world.

The idea is a simple one: If party A aggresses against party B, party B is entitled under the law to restitution or compensation to be paid by party A to party B.

Well, that seems straightforward enough. But at some point along the way, two fundamental changes have been made that don’t reflect the original principle.

First, convicted offenders started to be ordered by the court to pay the court as punishment. Of course, the offense was not against the court, but the government of the day wanted to get in on the action. Surely, if a crime against a given party had been committed, the state was entitled to dip its beak, so to speak.

Over time, fines payable to the state became the norm. And for those who couldn’t pay the state, jail time.

Along the way, another extension to the concept came into use: victimless crimes. Increasingly, laws were passed by governments to make actions unlawful when there was no harm to an individual or his property.

To wit: Recently, the State of Michigan passed law HB4474, against “hate crime” – any perceived slight against another person, verbal or otherwise. The law recognizes such disparate slurs as those critical of gender identity, religion, race, sexual orientation, ethnicity, age, or even affiliation with a group. Incredibly, the law extends as far as the outlawing of unacceptable pronouns.

The punishment is imprisonment of up to two years, a fine of $5,000, or both.

Clearly, this is a victimless crime, since no physical damage has taken place. And, to exacerbate the lack of logic, the fine is to be paid to the state, not the “injured party.”

Of course, any sensible person would be shaking his head in wonder at such a development. When added to so many other changes in law that appear to be both ludicrous and often contrary to morality, he might understandably comment, “They’ve gone mad.”

But when governments that are already habitually overreaching appear to be going mad, it’s a good idea to step back and calmly examine whether there might not be a method in the madness.

On the surface, quite a few governments – most notably First World governments – have been passing a plethora of laws for which there is no victim but for which the government is the recipient of damages.

As if coincidentally, these same governments have been going in precisely the opposite direction with regard to crimes in which there most definitely is a victim.

Let’s have a look at a few of those.

• Looting of stores and other places of business
  Under the claim that the prisons are too full, governments have been determining that theft or looting that amounts to less than a given dollar amount is not prosecutable, essentially legalizing the crime of looting.

• Destruction of property due to rioting
  Rioters are habitually arrested, only to be released without being charged. Owners of the property that the rioters have burned or otherwise destroyed are no longer entitled to restitution or compensation as they once would have been.

• Decriminalisation of people taking up residence on public property
  Tents may be pitched on sidewalks and in front of stores, discouraging residents from frequenting stores and destroying businesses. Concurrently, the homeless are assisted by the State in drug dependency.

• Loss of bodily rights
  Laws that call for forced vaccinations are blanket laws that allow a government the authority to control whatever goes into the body, whether medical or nutritional.

• Systematic elimination of parental rights
  Parental rights are being removed from parents to allow school authorities and medical professionals to dictate what they wish to physically do to children, free from prosecution. In addition, pedophilia is in the process of becoming decriminalised.

• Civil Asset Forfeiture
  Police and other authorities have, since 2008, been legally allowed to stop people on foot or in a vehicle, or to conduct warrantless raids on homes. If evidence is found that suggests the possibility of a crime, the authorities may seize any and all assets that they find, regardless of whether or not the assets may be connected to the possible crime. The authorities are not obligated to ever bring charges against the individual, making it impossible for him to be granted a hearing. This allows the authorities to permanently hold the assets taken or to dispose of them, the proceeds to be absorbed by the authority in question.

The above is only a sampling. The reader will have others to add to the list.

So, if we assume that the changes that are taking place are not madness, nor a collection of random but illogical changes in how the law is applied, what we begin to see here is, indeed, a method in what appears on the surface to be madness.

What we’re seeing is that the original concept of law – that of protecting the individual from encroachment against himself or his property – is being eliminated.

On the other hand, laws that are victimless and laws that provide punishment by the state and call for penalties to be awarded to the state are very much on the rise.

What we have here is a growing trend; if we follow it to its logical conclusion, that will result in laws that benefit the state being the only laws.

Let’s put that another way: The individual has no rights. Only the state has rights. In the future, the only crimes will be crimes against the state.

Let that last sentence sink in for a bit.

Historically, freedom is lost when a nation becomes complacent enough to give it up willingly. Much of the First World is precisely at that tipping point now. The question is whether those people who once enjoyed liberty will now push their heads in the sand and pretend that the most basic freedoms are not now being lost.

“Dictatorship naturally arises out of democracy, and the most aggravated form of tyranny and slavery out of the most extreme liberty.” – Socrates

*  *  *

Unfortunately, most people have no idea what really happens when a government goes out of control, let alone how to prepare… The coming economic and political collapse is going to be much worse, much longer, and very different than what we’ve seen in the past. That’s exactly why New York Times best-selling author Doug Casey and his team just released an urgent guide that will show you exactly how to prepare. Click here to download the PDF now.

Authored by James Rickards via DailyReckoning.com,

Analyzing today’s economic conditions is a challenge.

If the world is in good economic health, you can describe the policy reasons behind that condition and identify specific stocks and sectors that will outperform the market.

You’d point to trends such as low inflation, positive real interest rates (a sign of strong growth resulting from a healthy competition for funds) and stable exchange rates (indicating that investment decisions are made on the basis of fundamentals rather than speculation).

If the world is in poor economic health, the analytic process is much the same but with very different inputs and forecasts.

You’d expect to see widespread inflation (or deflation), high unemployment, declining GDP growth (or negative growth), declining world trade and a host of poor public policy choices including high tax rates, tariffs, export subsidies, overregulation and counterproductive policies based on climate alarmism.

In either the good scenario or the bad scenario, the analyst knows how to approach policy recommendations or investment allocations.

Without being glib, if you’re in a good place, keep it going. If you’re heading in the wrong direction, turn around.

Well, what if we had both dynamics at once?

That’s a pretty good description of where the world is today. The U.S. is a good place to draw the contrast between good and bad news.

The U.S. has some of the lowest unemployment rate readings since the 1960s. Real wages have finally begun to grow slightly after years of negative readings.

Inflation is still too high (and the damage from past inflation will be with us permanently), but the dip has been undeniable. From 9.1% in June 2022 to 3.0% in June 2023, inflation (measured as CPI, year-over-year) has come far toward the Federal Reserve’s goal of 2.0%.

Of course, the stock market has been on a tear and some major indexes are inching toward new all-time highs or already there. No wonder that Joe Biden has decided to base his campaign on “Bidenomics.”

Still, the negative side of the picture is in plain sight.

U.S. industrial production has been declining for over a year. Some economists claim that manufacturing is a shrinking part of U.S. GDP and that services dominate economic growth.

That’s true as a first approximation, but it ignores the fact that much demand for services comes from those who work in factories, mines and assembly lines.

If the factory is closed, no one laid off will be buying tickets to the Taylor Swift concert.

Also, bank lending is contracting, and credit conditions are being tightened. This doesn’t mean a full-scale credit crunch is upon us or that the economy is falling off a cliff.

It does mean that a trend toward reduced liquidity is in place and will likely grow worse until it leads to business failures and bad debts.

What about the world beyond U.S. shores?

The EU is already in recession and Japan and the U.K. are close to zero growth and heading toward recession fast. Within the EU, individual recessions have hit in Germany and Ireland, with Italy and France showing growth barely above zero.

The idea of a real recession in China may seem incomprehensible, but we may be witnessing one.

The “reopening” narrative following the end of the ridiculous Zero COVID policy was always a myth (and I said so last year) but Wall Street bought into it until the data made its failure undeniable.

Today, China is not only underperforming the narrative, it’s slipping close to contraction.

The point is with the EU, China, Japan, the U.K. and others in recession or close to it, how can the U.S. expect to remain afloat?

Globalization may be on the decline, but it’s still the dominant path to global production. Aggregate world trade may be shrinking, but it’s still a large part of global GDP on a country-by-country basis.

How can the world shrink while the U.S. grows?

That won’t happen unless U.S. growth is so strong it pulls the world out of a collective rut. There’s no evidence for that. So there’s the dilemma.

Ample signs of growth are surrounded by large and growing signs of an economic stall. The U.S. is showing relatively strong growth, while the rest of the world coasts to a halt.

How do we reconcile the data? Where do we go from here?

Read on for the answers…

Time Will Catch up to the U.S.

Why does the U.S. economy look so strong in comparison with the rest of the world? The answer is timing.

The economy does not go from growth to recession like throwing a switch. It takes time.

The positive signs are real but they’re fading. The negative signs are real and they’re growing. Some data lead the economy; other data follow with a lag. It’s the analyst’s job to know which is which, and to focus on trends, not snapshots.

First off, low unemployment may not be a source of comfort because employment trends tend to lag the economy. The latest unemployment report (July’s) showed an unemployment rate of 3.5%, among the lowest since the 1960s.

That’s a healthy report on its face but there are two serious characteristics that need to be taken into account. The first involves what’s known as the labor force participation rate (LFPR).

This counts all of the working-age population of the U.S. who do not have jobs as a percentage of the total working-age population. That’s different from the unemployment rate because to be counted as “unemployed” you must be looking for a job.

There are tens of millions of working-age Americans who do not have jobs but are not looking for one. They are not counted as unemployed, but they do show up in the LFPR calculations.

Right now, the LFPR is 62.6%. That’s the same level the U.S. first reached in November 1977 when women were entering the workforce in large numbers. It’s significantly below the 67.2% level reached in January 2001, when baby boomers were in the prime of their careers. Essentially, 6.7 million workers have simply dropped out of seeking work relative to 2001.

If those 6.7 million workers were added to the number of unemployed today, the national unemployment rate would be 7.6%, a rate more closely associated with a recession. In effect, the low participation rate is hiding a large unemployed cohort not being counted by the government in the official employment report.

The second and even more critical defect in using employment statistics in economic forecasting is that employment reports are lagging indicators, not leading indicators. When the economy begins to slow down, businesses will do everything except lay off workers to keep the doors open.

They’ll cut inventories, lower prices, seek rent reductions, cut administrative costs and a lot else before they fire valuable workers. All of those strategies are clear signs of a failing economy, but they don’t show up in the employment reports.

By the time employers get around to firing workers, it’s too late for the economy. So you can’t rely on low unemployment rates to conclude all is well. The opposite could easily be true.

Still, there are powerful indicators suggesting the U.S. economy is in or near a severe recession in addition to better-known measures such as the unemployment rate. The first of these is an inverted yield curve.

I’m not going to get too technical here, but it’s important to understand the basics and their implications. A yield curve shows interest rates on securities of different maturities from one issuer or it can show interest rates on a single instrument at different points in the future.

In either case, the curve is normally upward sloping (longer maturities or later settlement dates have higher interest rates). That makes sense. If you’re lending money for longer or betting on rates further into the future, you want a higher interest rate to compensate you for the added risk from such events as inflation, credit downgrades, bankruptcy and more.

Yield curves in U.S. Treasury securities are steeply inverted today. So are yield curves in SOFR (formerly Eurodollar) futures contracts. Again, don’t worry about the technical details. Just understand that these are important warning signals. The last time both yield curves were this steeply inverted was prior to the global financial crisis of 2008.

If you’re not factoring this signal into your forecast, you’re missing a five-alarm fire. The system is flashing red.

There are many other such warning signs such as negative swap spreads. Without getting into the technical details, it’s enough to understand that negative swap spreads mean that bank balance sheets are contracting. Balance sheet capacity is strained. That’s another early warning of a credit crunch that presages a recession.

There are other warning signs and, again, I’m not going to get into the technical details here. It’s enough to say that all of the technical signs are unusual and all point in the direction of a recession. They all have good track records of predicting recessions going back to the 1970s and earlier depending on the time series.

So in the U.S., the fundamentals (industrial output, global trade, inventory accumulation, credit, commercial real estate) are negative. The technicals (yield curves, swap spreads, bank equity) are negative. The only positives are unemployment (a lagging indicator) and the stock market (a cap-weighted bubble). Unfortunately for investors, stocks and jobs are the only things the financial TV talking heads talk about. Don’t fall for it.

Investors who look abroad for rescue by former highfliers such as China, Japan and Germany will also be disappointed. China is slowing dramatically; the reopening narrative was always a myth.

Meanwhile, Japan is hanging by a thread partly because of its close economic alignment with China. Germany is already in recession and that will get worse as the Ukraine war drags on and one whom the Russians call General Winter appears by November.

It’s becoming increasingly apparent that we’re looking at a global recession, if not a global financial crisis. These are highly unusual. It’s often the case that one or more major economies are in recession while others display growth and help pull the weak performers out of the ditch.

But today, we’re facing a case where, one after the other, all of the major economies are falling into the ditch. Now, that doesn’t mean investors should just throw their hands up in the air and run for the hills.

But they should lighten up on equities, increase allocations to cash (paying good 5% yields these days), allocate about 10% of investable assets to gold and silver and take a close look at sectors such as energy, agriculture, mining and natural resources that will stand the test of time.

You don’t have to follow everyone else off a cliff.