Archive for October 2018
South Korea Leads The World In Robo-Workers

South Korea Leads The World In Robo-Workers

The rise of the machines has well and truly started.

Data from the International Federation of Robotics reveals that the pace of industrial automation is accelerating across much of the developed world with 66 installed industrial robots per 10,000 employees globally in 2015. A year later, as Statista's Niall McCarthy notes, that increased to 74. Europe has a robot density of 99 units per 10,000 workers and that number is 84 and 63 in the Americas and Asia respectively.

China is one of the countries recording the highest growth levels in industrial automation but nowhere has a robot density like South Korea.

Infographic: The Countries With The Highest Density Of Robot Workers | Statista

You will find more infographics at Statista

In 2016, South Korea had 631 installed industrial robots per 10,000 employees. That is mainly due to the continued installation of high volume robots in the electronics and manufacturing sectors.

90 percent of Singapore's industrial robots are installed in its electronics industry and it comes second with a density of 488 per 10,000 employees. Germany and Japan are renowned for their automotive industries and they have density levels of just over 300 per 10,000 workers. Interestingly, Japan is one of the main players in industrial robotics, accounting for 52 percent of global supply.

In the United States, the pace of automation is slower with a density rate of 189. China is eager to expand its level of automation in the coming years, targeting a place in the world's top-10 nations for robot density by 2020. It had a density rate of 25 units in 2013 and that grew to 68 by 2016. India is still lagging behind other countries in automation and it has only three industrial robots per 10,000 workers in 2016.

A Rules-Based Global Order Or Rule-less US Global 'Order'?

A Rules-Based Global Order Or Rule-less US Global 'Order'?

Authored by Alastair Crooke via The Strategic Culture Foundation,

“It has taken the US military/security complex 31 years to get rid of President Reagan’s last nuclear disarmament achievement – the INF Treaty, that President Reagan and Soviet President Gorbachev achieved in 1987”, writes Reagan’s former Assistant Treasury Secretary:

“Behind the scenes, I had some role in this, and as I remember, what the treaty achieved was to make Europe safe from nuclear attack by Soviet short and intermediate range missiles [the SS20s], and to make the Soviet Union safe from US [Pershing missiles deployed in Europe]. By restricting nuclear weapons to ICBMs, which allowed some warning time, thus guaranteeing retaliation and non-use of nuclear weapons, the INF Treaty was regarded as reducing the risk of an American first-strike on Russia and a [Soviet] first-strike on Europe … Reagan, unlike the crazed neoconservatives, who he fired and prosecuted, saw no point in nuclear war that would destroy all life on earth. The INF Treaty was the beginning, in Reagan’s mind, of the elimination of nuclear weapons from military arsenals. The INF Treaty was chosen as the first start, because it did not substantially threaten the budget of the US military/security complex”.

The Trump Administration however now wants to unilaterally exit the INF. Speaking to reporters in Nevada, Trump said:

“Russia has violated the agreement. They’ve been violating it for many years and I don’t know why President Obama didn’t negotiate or pull out … We’re going to pull out … We’re not going to let them violate a nuclear agreement and do weapons, and we’re not allowed to”.

Asked to clarify, the President said: “Unless Russia comes to us and China comes to us and they all come to us, and they say, ‘Let’s all of us get smart and let’s none of us develop those weapons,’ but if Russia’s doing it and if China’s doing it and we’re adhering to the agreement, that’s unacceptable. So we have a tremendous amount of money to play with our military.”

The tell-tale markers are plain: Russia and China are ‘doing’ new weapons (and the US is behind the curve); China’s ‘doing it’ (and is not party to the INF treaty), and ‘we’ have a tremendous amount of money to play with our military (we can win an arms race and the military-industrial complex will be ecstatic).

A (US) diplomat has told the Washington Post that, “the planning [for the withdrawal] is the brainchild of Trump’s hawkish national security adviser, John Bolton, [a career opponent of all arms control treaties on the principle that they potentially might limit America’s options to take unilateral action], has told US allies he believes the INF puts Washington in an “excessively weak position” against Russia “and more importantly China”.

Trump is not a strategist by nature. He prides himself rather, as a negotiator, who knows how to go after, and to seize, US leverage. A wily Bolton has played here into Trump’s obsession with leveraging US strength to do two things: To return the US to having potentially a first strike capability over Russia (i.e. more leverage), through being able to install intermediate missiles (such as Aegis) in Europe, over and up against Russia’s frontiers. And, secondly, because were some military conflict between the US and China to become inevitable, as tensions escalate, the US has concluded that it needs medium range missiles to strike at China’s mainland. And it’s not China only. As Eric Sayers, a CSIS expert, put it: “Deploying conventionally-armed ground-launched intermediate-range missiles may be key to reasserting US military superiority in East Asia.” (i.e. leverage again).

Indeed, last year’s US Nuclear Posture Review already noted that “China likely already has the largest medium and intermediate-range missile force in Asia, and probably the world.” And the US is in the process of encircling China with intermediate missiles initially with Japan’s decision to buy the Aegis system, with Taiwan possibly next. (Bolton is known to support stationing US troops on Taiwanese soil, as further leverage over China).

President Putin sees this plainly:

“The Americans keep on indulging in these games as the actual goal of such games is not to catch Russia in violations, and compel it to abide by the treaty; but to invent a pretext to ruin that treaty – part of its belligerent imperial strategy”.

Or, in short, to impose a ‘rule-less, US, global order’.

What is happening is that Bolton and Pompeo seem to be precisely taking Trump back to the old 1992 Defence Policy Guidance document, authored by Paul Wolfowitz, which established the doctrine that the US would not allow any competition to its hegemony to emerge. Indeed, Assistant Secretary of State, Wess Mitchell, made this return to Bush era policy, absolutely clear, when in a statement to the US Senate he said:

The starting point of the National Security Strategy is the recognition that America has entered a period of big-power competition, and that past US policies have neither sufficiently grasped the scope of this emerging trend nor adequately equipped our nation to succeed in it. Contrary to the hopeful assumptions of previous administrations, Russia and China are serious competitors that are building up the material and ideological wherewithal to contest US primacy and leadership in the 21st Century. It continues to be among the foremost national security interests of the United States to prevent the domination of the Eurasian landmass by hostile powers.

And at the Atlantic Council on 18 October, the Secretary made it very plain that Europe will be whipped into line on this neo-Wolfowitz doctrine:

“European and American officials have allowed the growing Russian and Chinese influence in that region to “sneak up on us.” “Western Europeans cannot continue to deepen energy dependence on the same Russia that America defends it against. Or enrich themselves from the same Iran that is building ballistic missiles that threaten Europe,” the assistant secretary emphasized. Adding, “It is not acceptable for US allies in central Europe to support projects like Turkstream 2 and maintain cozy energy deals that make the region more vulnerable to the very Russia that these states joined NATO to protect themselves against.”

Also addressing the Atlantic Council’s October 18 conference, US Special Representative for Ukraine, Kurt Volker, revealed that Washington plans to stiffen the sanctions regime against Moscow “every month or two” to make it ‘more amenable over Ukraine’.

Plainly, Europe will be expected too, to welcome America’s missiles deployed back into Europe. Some states may welcome this (Poland and the Baltic States), but Europe as a whole will not. It will serve as another powerful reason to rethink European relations with Washington.

The influence of Bolton poses the question of what is Trump’s foreign policy now. Is it still about getting a good deal for America on a case-by-case basis, or is it a Bolton-style make-over for the Middle East (regime change in Iran), and a long cold war fought against Russia and China? US markets have until now thought it is about trade deals and jobs, but perhaps it no longer is.

We have written before about the incremental neocon-isation of Trump’s foreign policy. That is not new. But, the principal difficulty with a neo-Wolfowitzian imperialism, lashed to Trump’s radical, transactional, leveraging of the dollar jurisdiction, of US energy and of the US hold on technology standards and norms, is that by its very nature, it precludes any ‘grand strategic bargain’ from emerging – except in the unlikely event of a wholesale capitulation to the US. And as the US bludgeons non-compliant states, one-by-one, they do react collectively, and asymmetrically, to counter these pressures. The counter current presently is advancing rapidly.

Bolton may have sold Trump on the advantages of exiting the INF as giving him bargaining leverage over Russia and China, but did he also warn him of the dangers? Probably not. Bolton has always perceived treaty limitations to US action simply to be disadvantageous. Yet President Putin has warned that Russia will use its nuclear weapons – if its existence is threatened – and even if it is threatened through conventionally armed missiles. The dangers are clear.

As for an arms race, this is not the Reagan era (of low Federal debt to GDP). As one commentator notes, “no entity on earth (not currently engaged in QE), has as much government debt vulnerable to short-term interest shifts, than the US government. The US Federal Reserves’ "5 more [interest rate] hikes by end 2019", roughly translates into: "The Fed [interest payments due on US debt may become so large, as to] impose cuts on the US military in 2019".

Trump loves the leverage Bolton seems to magic out of his NSC ‘black box’, but does the US President appreciate how ephemeral leverage can be? How quickly it can invert? He cannot – Canute like – simply stand on the sea-shore and command the rising tide of US bond interest rates to recede like the tide, or the US stock market, just to levitate, in order to multiply his leverage over China.

The $80 Trillion World Economy In One Chart

The $80 Trillion World Economy In One Chart

The latest estimate from the World Bank puts global GDP at roughly $80 trillion in nominal terms for 2017.

As Visual Capitalist's Jeff Desjardins notes, today’s chart from HowMuch.net uses this data to show all major economies in a visualization called a Voronoi diagram – let’s dive into the stats to learn more.


Courtesy of: Visual Capitalist


Here are the world’s top 10 economies, which together combine for a whopping two-thirds of global GDP.

In nominal terms, the U.S. still has the largest GDP at $19.4 trillion, making up 24.4% of the world economy.

While China’s economy is far behind in nominal terms at $12.2 trillion, you may recall that the Chinese economy has been the world’s largest when adjusted for purchasing power parity (PPP) since 2016.

The next two largest economies are Japan ($4.9 trillion) and Germany ($4.6 trillion) – and when added to the U.S. and China, the top four economies combined account for over 50% of the world economy.


Over recent years, the list of top economies hasn’t changed much – and in a similar visualization we posted 18 months ago, the four aforementioned top economies all fell in the exact same order.

However, look outside of these incumbents, and you’ll see that the major forces shaping the future of the global economy are in full swing, especially when it comes to emerging markets.

Here are some of the most important movements:

India has now passed France in nominal terms with a $2.6 trillion economy, which is about 3.3% of the global total. In the most recent quarter, Indian GDP growth saw its highest growth rate in two years at about 8.2%.

Brazil, despite its very recent economic woes, surpassed Italy in GDP rankings to take the #8 spot overall.

Turkey has surpassed The Netherlands to become the world’s 17th largest economy, and Saudi Arabia has jumped past Switzerland to claim the 19th spot.

DARPA Seeks FAA Approval For Military Drones Over American Cities

Authored by Nicholas West via ActivistPost.com,

Just a little over 10 years after drone surveillance inside U.S. borders was declared a conspiracy theory, it is now an indisputable fact of life. So, too, are military grade drones along the “border,” which in reality constitutes a 100-mile-wide swath that encircles the continental United States and 2/3 of its population.

According to a new report from Defense One, this level of access is still seen as a restriction by the DARPA-directed military apparatus. As new forms of autonomous aircraft take to the skies such as the latest Blackhawk helicopter drones that could be ready by 2019, DARPA and aircraft developers want permission to fly over large cities as needed. Utilizing a new artificial intelligence system that is literally called MATRIX, developers see an opportunity for more flexibility in potential use. Of course, surveillance isn’t mentioned among those uses:

After that, similar to Predator drone maker General Atomics, they have their eyes on FAA certification to fly large, unmanned aircraft within the continental United States, to help ferry people and supplies from the mainland to offshore oil rigs, among other potential jobs. Today, large drones likes Predators are forbidden to fly over the U.S. except in a handful of largely unpopulated areas along the U.S.Mexico border.

The FAA is now figuring out how to change guidelines to allow unmanned planes and helicopters to fly over big cities. “We are working with the FAA on that. Our stated goal is 2030. It very much depends on rule making. We are certainly hoping for sooner, for the mid-2020s, to field it,” he said.

In that linked article sourced above, the long-range plans of converting military aircraft to dronesand incorporating them anywhere and everywhere inside America is also detailed and expanded upon as a potential replacement for the already controversial use of police drones.

By 2025, enormous military-style drones – close relatives of the sort made famous by counterterrorism strikes in Afghanistan and Iraq – will be visible 2,000 feet above U.S. cities, streaming high-resolution video to police departments below. That is the bet that multiple defense contractors are placing, anyway, as they race to build unmanned aircraft that can pass evolving airworthiness certifications and replace police helicopters. And if that bet pays off, it will radically transform the way cities, citizens, and law enforcement interact.

We are now seeing various trends beginning to dovetail into what could become the ultimate in military presence over the United States. As I recently reported, new A.I. algorithms are being devised that look for emotional indicators in an attempt to predict crime and social unrest. The “Eye in the Sky” system, developed by Cambridge University, seeks to use small Parrot drones to identify “violent poses” in crowds. The system will be powered by biometric recognition and artificial intelligence, as seen in the video below:

Imagine a system like this being applied to the far more sophisticated military systems that already exist, then connecting all of it to the growing federal biometrics database.

I suspect that if the FAA does grant access to larger military aircraft over U.S. cities, it will be with the “strict guidelines” that no forms of surveillance or weaponry will be permitted onboard. Of course, once granted even the slightest access, all it will take is one catastrophic event to remove any restrictions at all.

"Unlike many new industries, which grow unfettered until emerging problems prompt regulation, unmanned flight needs relief from existing restrictions in order to blossom, Scassero said. Once that happens, the market for large unmanned planes could be enormous."

For reference, here is what I wrote in 2013 regarding the long-term plans and eventuality that was also hinted at in the mainstream media at the time in an Associated Press article entitled, “Drones With Facial Recognition Technology Will End Anonymity, Everywhere.”

AP certainly offers a correct summary of how the databases that already exist (where we thought our personal information was protected) will be opened and utilized any time necessary.

“From seeing just the image of a face, computers will find its match in a database of millions of driver’s license portraits and photos on social media sites. From there, the computer will link to the person’s name and details such as their Social Security number, preferences, hobbies, family and friends.

Adding that capability to drones that can fly into spaces where planes cannot — machines that can track a person moving about and can stay aloft for days — means that people will give up privacy as well as the concept of anonymity.”

Naturally, the AP peddles this softly as it recounts these “new” developments in a tale of researchers with Carnegie Mellon University’s CyLab Biometrics Center attempting to assist in sharpening FBI images of Boston bombing suspects, the Tsarnaev brothers. This is reminiscent of the above-mentioned Chris Dorner manhunt where we heard calls for how nice it would have been to have a drone at the ready for quicker identification and possible assassination.

“In a real-time experiment, the scientists digitally mapped the face of “Suspect 2,” turned it toward the camera and enhanced it so it could be matched against a database. The researchers did not know how well they had done until authorities identified the suspect as Dzhokhar Tsarnaev, the younger, surviving brother and a student at University of Massachusetts Dartmouth.

‘I was like, ‘Holy shish kabobs!’ ‘ Marios Savvides, director of the CMU Cylab, told the Tribune-Review. ‘It’s not exactly him, but it’s also not a random face. It does fit him.'”

This astonishment is somewhat absurd considering that drones have already been developed that are equipped with camera systems like DARPA’s Autonomous Real-time Ground Ubiquitous Surveillance Imaging System (ARGUS). This sensor system can instantly see an area roughly the “size of a small city” with an “all-seeing” eye according to retired Lieutenant, David A. Deptula. The next generation of surveillance tech sees the landscape through a 1.8 billion pixels camera, the highest resolution yet created.

Using a touchscreen interface that can produce up to 65 windows for analysis, military observers can see down to the individual object level to track the movements of vehicles and people. Beyond the real-time surveillance, the system can store everything for future review right down to the minutes and seconds.

The only thing truly new about this Associated Press story is the announcement that what most people thought to be limited to overseas theaters of war will now definitely be used across Battlefield USA.

It would be wise to contact the FAA now with concerns about permitting military-grade aircraft flying over the United States for any reason in order to stave off the imminent arrival of “Battlefield USA.”

First, Secure The Borders

Authored by Jeff Thomas via InternationalMan.com,

As Ludwig von Mises correctly stated, in a free state, no one is forced to remain within the state. Anyone who seeks to emigrate is free to do so. This is, in fact, one of the primary tenets of liberty – if you don’t like it, you can leave.

And so, it follows that, if the right to exit is curtailed in any way, the state has ceased to be free.

There are those, including myself, who feel that, once this line has been crossed by a state, it’s time to skedaddle. Don’t wait for conditions to “get better.” They won’t. History shows us that, in every case where migration has become curtailed, the state never reverses to a more open policy; in fact, it becomes decidedly more restrictive.

We’re presently living in a period in which most of the countries that were formerly the most free, half a century ago, have declined considerably and many are approaching a state of totalitarianism.

Readers of this publication will be familiar with my forecasts that the principle countries that are at the forefront of this decline will be steadily increasing both their capital controls and their migration controls. With regard to the latter concern, the emphasis will not be on keeping non-productive people out, it will be on keeping productive people in.

Please read that last line again, as it’s very telling.

As the reader will be aware, the EU and US are rife with problems regarding large numbers of people immigrating from other countries. The respective governments do all that they can to encourage this immigration, including providing immigrants with rights and benefits that are not accorded to the tax-paying citizens of those jurisdictions.

All the more reason, then, that an eyebrow should be raised when these jurisdictions make it more difficult for their own citizens to travel within or exit the jurisdiction.

The US, for example, now has a 100 mile zone along all its borders, where checkpoints are set up to control the movements of those who pass through them. Citizens are routinely asked intrusive questions that they are not lawfully obligated to answer, yet, if they don’t, they may have their car windows smashed, be tased, apprehended and subjected to search and detainment. As can be seen in this video, the policies set nine years or more ago for the patrols bear a striking resemblance to those of the Nazi Brownshirts of the late 1930’s and early 1940’s.

Of course, it’s quite true that Americans are presently able to fly out of the country, as long as they have a valid passport and submit to a search, so, does this not suggest that it’s paranoia to think that the ever-expanding number of “border” inspections occurring 100 miles within US boundaries has any purpose other than to detain illegals?

Well, there is that niggling problem that the US government goes way out of its way to allow illegals to enter, then provides them with welfare, education, housing, healthcare and other encouragements. In addition, an illegal is far more likely to be released than an American citizen if he commits a crime, even if that crime is murder.

Clearly, the segment of the population that’s being indoctrinated to believe that they no longer have the right to move freely are American citizens themselves.

But the question remains, why?

Well, a simple answer is that, historically, whenever a state has created an economic and/or political time bomb that’s set to go off in the not-too-distant future, that state has instituted migration controls to assure that its most productive members do not leave.

This can be seen throughout history and is presently most visible in Venezuela, whose porous borders have allowed over 2.3 million people to escape to neighbouring Colombia, Brazil and Ecuador in recent years.

The state has ramped up its border controls in order to stem this flow, but has found that merely guarding the border is not sufficient. A buffer zone is additionally necessary – one where anyone travelling is suspected of attempting to exit.

And, again, this is nothing new. Buffer zones and “no man’s lands” have existed throughout history. At present, the US practice of shaking down those in vehicles is merely a nuisance – the removal of the “inalienable right” to liberty on a temporary basis.

However, it does not bode well for the future. If the only reasonable explanation for these inland checkpoints – some of which are placed in small towns where everybody knows each other – is to get citizens accustomed to the concept that they do not have the right to liberty, it’s a necessary step to achieve, if the intent exists to one day curtail migration by US citizens.

Such zones would then be quite effective, not just in discouraging anyone living in the 100-mile zone, but in discouraging any American citizen. If, for example, someone living in Nebraska decided to exit a deteriorating US, he’d know that he’d be unlikely to penetrate a 100-mile zone that included innumerable checkpoints.

That would leave airports as the only alternative. And, in actual fact, for those government agencies that perceive a future problem of thousands and perhaps millions of productive people exiting, creating limits at airports is easy. That system of identification and search is already in place. All that’s needed is for the agent at the desk to say, “I’m sorry, sir, but the computer tells me that permission for you to board this flight has been denied.”

Those who use airports to travel in and out of the US are already familiar with the fact that they are not to refuse authorities in any way whatsoever. Those few who create a fuss are often escorted to the back room. Their fate, whether it be good or bad, is never learned by other travelers, but the message is clear – comply with everything.

Returning to Mises, in a free state, no one is forced to remain within the state. Anyone who seeks to emigrate is free to do so.

For those who recognize that the US is no longer a free country, as it once was, the question arises: Do I accept that my liberty has been removed by my government? Do I wait, in the vain hope that a state that’s moving headlong into totalitarianism will somehow magically reverse itself and reinstate my liberty?

Or do I choose to make an exit now, while the window of opportunity still exists and migrate to one of the countries where liberty is still very much alive?

But, again looking at history, the latter decision has been uncommon in the extreme. From Rome in the fourth century, to Nazi Germany in the 20th century, history shows that very few people take action while there’s still time. The great majority wait until the migration restrictions have been implemented, then attempt to leave, usually unsuccessfully.

In the ramping-up of any totalitarian police state, one of the warnings that conditions are going to become more draconian in the near future is that the state first secures the borders. That warning is as invaluable as it is prophetic.

*  *  *

New York Times best-selling author Doug Casey and his International Man team put together a free report on the best international diversification strategies. Click here to download the PDF now. And please, feel free to forward this to anyone you think might be interested in this valuable information.

San Diego Home Sales Collapse To Lowest Level In 11 Years 

San Diego Home Sales Collapse To Lowest Level In 11 Years 

A combination of rapid mortgage rate increases and decreased affordability, San Diego County home sales collapsed 17.5% to the lowest level in 11 years last month, in the first meaningful sign that one of the country's hottest real estate markets could be at a turning point, real estate tracker CoreLogic reported Tuesday.

In September, 2,942 homes were sold in the county, down from 3,568 sales last year. This was the lowest number of sales for the month since the start of the financial crisis when 2,152 sold in September 2007.

CoreLogic said median home prices dropped in the region to $575,000, the first decline since January, after hitting a record high of $583,000 in August.

Some experts blamed the slowdown on rising mortgage rates, which have drastically increased the per month debt servicing payments for potential new homebuyers.

"The double whammy of higher prices and rising mortgage rates has priced out some would-be buyers and prompted others to take a wait-and-see stance," said Andrew LePage, a CoreLogic analyst, in the release. "There was one caveat to last month's sharp annual sales decline — this September had one less business day for recording transactions. Adjusting for that, the year-over-year decline would be about 13 percent, still the largest in four years."

On a monthly basis, sales declined 22% in September compared with August. Cyclically, sales tend to drop 10% from August to September, but this time, it seems that industry is experiencing late cycle stress.

The report also said sales of newly built homes are suffering more than sales of existing homes because homebuilder production remains below the historical mean. New home constructions come at a premium. Sales of newly built homes were 47% below the September average dating back to 1988, while sales of existing homes were 22% below their long-term average.

The S&P CoreLogic Case-Shiller San Diego Home Price NSA Index (data via Reuters Eikon) shows a potential double top with 2005 high. Lifetime high occurred in July 2018 of 259.69, with the index now fading into the Fall period.

Additional S&P CoreLogic Case-Shiller San Diego Home Price data 

"Price growth is moderating amid slower sales and more listings in many markets," LePage said. "This is welcome news for potential homebuyers, but many still face a daunting hurdle – the monthly mortgage payment, which has been pushed up sharply by rising mortgage rates."

Last month, Bank of America Called It: "The Peak In Home Sales Has Been Reached; Housing No Longer A Tailwind." It seems that the San Diego real estate market woes are more evidence that storm clouds are gathering over the broader U.S real estate market. 

Bond Bear Bull

Bond Bear Bull

Some lessons for bond bears from the land of the rising sun...

Authored by Jeffrey Snider via Alhambra Investment Partners,

On February 12, 1999, the Bank of Japan announced that it was going full zero. Japan’s central bank would from that day forward push the overnight uncollateralized lending (interbank) rate to the zero lower bound. Further, it pledged to keep it there until Japan’s economy recovered.

The economic slump in the nineties had been by 1999 almost a decade in length. As the Japanese economy ground to a halt, unmovable and completely resistant to being restarted by any of the orthodox techniques tried up to that point, there came to be an institutional bid for government paper. It was the perfect illustration of Milton Friedman’s interest rate fallacy – low interest rates signal tight money in the real economy. The bid was pure liquidity risk, having nothing to do with the “fundamentals” of bonds.

ZIRP was intended to try and change that condition. The mere rumors about it all the way back in 1998 had kicked off a BOND ROUT!!! From September 1998 through February 1999, it seemed as if the so-called bond bull market had finally been broken. Central bankers would ride to the economy’s rescue with non-standard “accommodation.”

The bond market for a brief time operated in the same misconception as Japanese central bankers. We are taught from Economics 101 that central banks are central; that when confronted with stubborn economic circumstances they need only use the tools they have available.

In nineties Japan, then, what was missing was the will to deploy all of the various methods at the disposal of uninhibited central bankers. The world’s first zero interest rate policy seemed like a change in at least official mindset. The bull market would be history.

Except, there is no such thing as a bond bull. It just doesn’t happen, at least not that way. The term has been conjured by bond shorts as a way to make it seem there is no value, therefore no justification, for interest rates staying ridiculously low.

We can all agree on at least that idea; interest rates should never, ever be low for a prolonged period. But the bond bears are dead wrong about why they get there and more so why they stay there. Economic and liquidity risks are ultimately what this is all about. Bull or bear, those are fundamental terms inappropriate to the full range of government bond uses.

The bond “bull market” is simply the investors in that market, almost always the very banks themselves, expressing often deep skepticism over these ridiculous monetary schemes. This disbelief, however, is variable. There are times, like late ’98, early ’99 when markets might bet differently; that what might seem like a zero percent chance of success in late ’98 could be turned into a slightly positive chance by the actual implementation of ZIRP in early ’99.

Even as late as the middle of 2000, the “bond bull market” still seemed precarious. In August of that year, the Bank of Japan ended ZIRP based on its forecast of a recovering Japanese economy. Embarrassingly, just months afterward the central bank would be cutting back to ZIRP all over again; the first of many forecast errors on the part of monetary officials who always model their efforts favorably.

By the middle of 2003, though the nineties “bull” trendline had stayed steadfastly broken it didn’t matter in the slightest. Interest rates were lower by then than they had been at the lowest point during the prior decade. Like the term, these multi-year lines are ultimately arbitrary and not meaningful.

What matters is perception and ultimately correct views on where things are heading. It sometimes can take years for that to become fully apparent. The “bull market” was back in effect for a further three years until 2003, and then it was broken again for an additional four years beyond.

By July 2006, three years after BoJ had turned “hawkish” in June 2003, it would attempt a second “rate hike” regime. JGB’s had already smashed another even longer long-term trendline long before then; the 10-year yield in July 2006 was the highest since that spike into ZIRP in February 1999. Much was made of the highest yields in seven years. Showmanship, not honest analysis.

BoJ central bankers would actually get to a second rate hike in February 2007. They expected as did most Economists it was just the beginning of policy, therefore interest rate, therefore economic normalization. With every “bull” trend broken, the central bank clearly hawkish, the Japanese market was set up for the mother-of-all-BOND ROUTs!!!!!!!!!! 

It didn’t happen. Instead, as per usual, yet another forecast error. Central bankers were raising their policy rate and ending QE based on actually the same faulty premises. Japan’s economy hadn’t really changed.

It had gotten a bit better in the middle 2000’s, but it was increasingly clear to anyone outside the Bank of Japan’s offices that this wasn’t the same as actual economic growth and recovery. The Japanese economy had hit a sort of low ceiling that kept the actual upside very minimal, and therefore the same defects that had come to plague the system after 1989 were still present even more than a decade after the initial crash.

We know all-too-well how this story ends – or at least progresses up to the current day. Interest rates in Japan would go on to set new lows, negative yields almost all the way down the curve; even the 30-year bond would get almost to zero during the worst of the last “rising dollar” downturn in 2016.

There is no such thing as a bond bull market, which means that it can’t really end at least not on those terms. There is only the bond market deciding upon the right degree of skepticism as to whether the underlying economic condition, meaning money tightness, has meaningfully changed. A categorical shift in baseline direction. 

Even if doesn’t, there can be times when market participants bet as if there is a chance it might. This is the usefulness of reviewing the JGB’s history. These periods of reflation can last years and break some new ground. But, in the end, the highest rate in years may not really mean what you think.

Variable degrees of skepticism just isn’t as shocking and spicy as shouting about the end of the bond bull market. What matters is not where interest rates are, it’s whether or not we are really out. Over time, that’s where prices and interest rates will develop. Given what’s going on now, I wouldn’t be at all surprised if over the next multi-year period UST rates not only register new lows less than 2016 but follow Japan’s under zero for a large part of the curve. It may take some time, there will be resistance from the short end with central banks the last to figure out what’s really happening.


Because nothing has changed. Eleven years of “accommodations”, ZIRP’s, and global QE’s and we are still staring at another downturn. The (non-linear) contraction remains in place – worldwide.

Mostly Suicidal Group Of Trauma Victims Kick PTSD With Help Of MDMA: Study

Mostly Suicidal Group Of Trauma Victims Kick PTSD With Help Of MDMA: Study

A new study has reached a promising conclusion in an experiment that measured the effects of MDMA, (a.k.a. Ecstasy) on mental well-being among suffers of PTSD. While the experiment was limited by no control group and just 28 participants - over 95% of whom had considered suicide at least once - 76% of participants fell below the criteria for PTSD within one year after "MDMA-assisted psychotherapy." 

Twenty-eight people with chronic posttraumatic stress disorder were randomized in a double-blind dose response comparison of two active doses (100 and 125 mg) with a low dose (40 mg) of MDMA administered during eight-hour psychotherapy sessions. -Journal of Psychopharmacology

The study, sponsored by the Multidisciplinary Association for Psychedelic Studies (MAPS) and conducted by licensed professional counselor Marcele Ot'alora in Boulder, Colorado, found that the mean PTSD scores (CAPS) for each test group fell by up to 28%. 

The subjects who received the low dose in the first two sessions were later given an opportunity to take active doses, after which their mean CAPS score fell by another 47 percent. All three groups of subjects showed continued improvement at the one-year followup, when the average CAPS score was 31, down from 92 at baseline. That's a drop of 66 percent. The highest possible CAPS score is 136, and the cutoff for a PTSD diagnosis is 50. By the end of the study, 19 of the 25 subjects (76 percent) were below that threshold. -Reason.com

While study does not separate the effects of the psychotherapy from the benefits of the MDMA - a 2005 meta-analysis of PTSD sufferers reveals that 62% of those who have undergone psychotherapy alone fell below diagnostic thresholds for the condition. In short, MDMA may be an effective method of maximizing the impact of psychotherapy for PTSD sufferers. 

The theory behind MDMA-assisted psychotherapy

"(MDMA)-assisted psychotherapy is a novel approach that combines psychotherapy with limited administration of MDMA in a controlled setting to enable people suffering from PTSD to process trauma more effectively," reads the study. "MDMA’s unique subjective and therapeutic effects induce an optimal state that complements the process of working through traumatic memories while reducing the fear response.  Trauma theorists have asserted that emotional engagement is necessary for processing traumatic experiences and, under the influence of MDMA, people are able to remain emotionally connected while working with difficult traumatic material."

Of those in the experiment who had moderate to severe PTSD, three treatments of psilocybin brought them below the medically defined threshold for the disorder, while those initially suffering from lower levels of PTSD required just two treatments.

To understand if three experimental sessions were more beneficial than two sessions, outcomes were evaluated again two months after the third (last) MDMA session. After the third experimental session, both the 100 mg and 125 mg groups showed further reductions in CAPS-IV scores, providing evidence that an additional session significantly improved PTSD outcomes. On the other hand, after the 40 mg group crossed over, a large treatment response resulted after two open-label sessions with little change after the third. -Journal of Psychopharmacology

Read the study below:

Luxury Home Prices In Singapore Soar 13% As Vancouver Prices Crash 11%

Luxury Home Prices In Singapore Soar 13% As Vancouver Prices Crash 11%

Singapore has now overtaken Hong Kong as the top city for luxury home price gains in Q3.

Luxury home prices in Singapore were up 13% in the third quarter from the year prior, according to Knight Frank LLP’s Prime Global Cities Index. The rising prices were partly the result of limited supply of higher end properties.

Hong Kong instead fell to 14th place, with just a 5.5% year-over-year gain during the third quarter.

And the rise in Singapore does little to offer a picture of what the luxury property market looks like globally. Worldwide, luxury properties rose by just 2.7% on average across the 43 cities that make up the index - this is the weakest performance in annual terms in almost 6 years.

Cities like Edinburgh and Madrid found themselves in the top five, while London wound up moving into negative territory, watching prices fall 2.9% as a result of the continuing uncertainty around Brexit. Cities like Paris and Berlin posted steady gains of 5.6% and 5.4%, respectively.

Also among the decliners was Dubai, where prices fell 3.8% resulting in the middle eastern city being the fifth worst on the list. Stockholm, Istanbul and Taipei all registered 6.3% year-over-year declines, tying them all for second worst place.

Finally, pulling up the rear is Vancouver, where we have spent time documenting a collapsing real estate bubble over the last couple of months. Vancouver saw its luxury home prices down 11% as more affluent pockets of the city, like West Vancouver, saw a pronounced slowdown in sales.

At the beginning of October, we asked readers what happens when prices rise so high that a chasm forms between bids and asks in Vancouver? The market grinds to a halt.

That's what happened in September, when according to the Real Estate Board of Vancouver (REBGV), residential property sales tumbled by 17.3% from August 2018, and a whopping 43.5% from one year ago. In fact, a total of only 1,595 transactions took place as both buyers and sellers continue to sit on their hands amid confusion whether the recent torrid price gains will continue or whether the housing bubble has burst.

Sales of detached properties in July was just 508, a decrease of 40.4% from the 852 recorded in September 2017, and the 812 apartments sold was a 44% drop compared to the 1,451 sales in September 2017.

And no, it's not seasonal: last month’s sales were a whopping 36.1% below the 10-year September sales average.

Facebook Approves Political Ads From 100 Out Of 100 Fake Senators

Facebook approved political ads by journalists pretending to be political candidates 100 out of 100 times, according to a report by VICE

One of Facebook’s major efforts to add transparency to political advertisements is a required “Paid for by” disclosure at the top of each ad supposedly telling users who is paying for political ads that show up in their news feeds.

But on the eve of the 2018 midterm elections, a VICE News investigation found the “Paid for by” feature is easily manipulated and appears to allow anyone to lie about who is paying for a political ad, or to pose as someone paying for the ad. -VICE

To test Facebook's system, VICE News applied to run ads on behalf of all 100 sitting US senators, "including ads "Paid for by" Mitch McConnell and Chuck Schumer." Each and every one was approved, suggesting that anyone can buy a political ad and pretend to be a major US politician

While VICE didn't actually buy any advertising, Facebook granted permission for the fake senators to share ads from fake political groups such as "Cookies for Political Transparency," and "Ninja Turtles PAC." 

Last week, VICE conducted a test in which they sought and received approval to run political ads pretending to be Mike Pence, DNC Chairman Tom Perez and the Islamic State Group. An attempt to place an ad posing as Hillary Clinton was not approved

But these tests show that compliance with the feature is entirely voluntary, meaning a tool that Facebook introduced to increase trust in advertising can also be used as a vector for misinformation, and another way bad actors can game Facebook’s platform. -VICE

"If Facebook is going to claim to verify who’s paying for political ads, they need to actually do the work," said Oregon Senator Ron Wyden (D), who added "Clearly it needs to do far more to combat fraudulent and false content, both in paid advertisements and viral posts."

Facebook confirmed their approval of the 100 "Paid for by" disclosures by fake Senators, adding that they never should have been approved. Hilariously, they argued that the feature has brought a new level of transparency to political advertisements, suggesting that we should focus on the big picture. 

"We know we can’t do this alone, and by housing these ads for up to seven years, people, regulators, third parties and watchdog groups can hold these groups more accountable," said Rob Leathern, Facebook's Director of Product Management. 

Facebook rolled out the “Paid for by” tool in May “to help prevent abuse, especially during elections.” Leathern underscored its importance. “This will help ensure that you can see who is paying for the ad,” he wrote at the time. “Which is especially important when the Page name doesn’t match the name of the company or person funding the ad.”

His colleague echoed that a few days ago. “When it comes to advertising on Facebook, people should be able to tell who the advertiser is and see the ads they’re running, especially for political ads,” Facebook Vice President of Ads Rob Goldman wrote on Oct. 27. -VICE

Facebook acknowledged that their new tools to combat foreign influence may not be entirely foolproof.

"These changes will not prevent abuse entirely. We’re up against smart, creative and well-funded adversaries who change their tactics as we spot abuse," Leathern wrote, adding. "But we believe that they will help prevent future interference in elections on Facebook. And it is why they are so important."

That said, as VICE notes: "Posing as 100 senators didn't require being smart, creative, or even particularly well-funded," and typically took only a few minutes each. The news outlet used 10 fake Facebook pages with zero content and changed the "paid for" disclosure after each senator was approved. 

In order to run a “Paid for by” disclosure on Facebook, you must first submit the name to the company for approval, along with an image of a valid driver’s license and the last four digits of your Social Security number.

Facebook has embarked on an aggressive advertising campaign to show off its new political transparency tools, including “Paid for by” disclosures. -VICE

VICE was denied on one other name aside from Hillary Clinton; Mark Zuckerberg

Western Media Make One Death A Tragedy, Millions A Statistic

Western Media Make One Death A Tragedy, Millions A Statistic

Authored by Finian Cunningham, via The Strategic Culture Foundation,

The Western media coverage devoted to the murdered Saudi journalist Jamal Khashoggi proves the cynical adage that one person’s death is a tragedy, while millions of deaths are a mere statistic.

During the past four weeks since Khashoggi went missing at the Saudi consulate in Istanbul, the case has been constantly in the news cycle. Contrast that with the sparse coverage in Western news media of the horrific Saudi war in Yemen during the past four years.

The United Nations has again recently warned that 16 million in Yemen were facing death from starvation as a result of the war waged on that country by Saudi Arabia and its Gulf Arab partners, with the crucial military support of the US, Britain and France. That imminent death toll hardly registered a response from Western media or governments.

Last week, some 21 Yemeni workers at a vegetable packing plant near the Red Sea port of Hodeida were killed after US-backed Saudi warplanes launched air strikes. Again, hardly any condemnation was registered by Western governments and media pundits.

Admittedly, some politicians in the US and Europe are lately expressing disdain over the Saudi-led war and the possible culpability of Western governments in crimes against humanity.

Nevertheless, in proportion to the public concern devoted to the killing of Jamal Khashoggi there is a staggering indifference in relation to Yemen. How is possible that the fate of one man can provoke so much emotion and angst, while millions of children in Yemen appear to be shrugged off as “collateral damage”.

Partly, the circumstances of Khashoggi’s murder by a Saudi death squad are more easily visualized. His connections as a journalist working for the Washington Post also ensures ample interest from other media outlets. Photos of the 59-year-old Saudi dissident and his personal story of going to the consulate in Istanbul to obtain official papers for an upcoming wedding to his Turkish fiancée also provided a human identity, which then garners public empathy.

Another factor is the macabre plot to trap him, torture and dismember his body by a Saudi hit team who appear to have been acting on orders from senior Saudi regime officials. Khashoggi’s bodily remains have yet to be recovered which adds to the interest in the grisly story.

Regrettably, these human dimensions are all-too often missing in the massive suffering inflicted on Yemen. Thousands of children killed in air strikes and millions perishing from disease and starvation have an abstract reality.

When Western media do carry rare reports on children being killed, as in the Saudi air strike on a school bus on August 9, which massacred over 50, the public is still relatively insensate. We are not told the victims’ names nor shown photographs of happy children before their heinous fate.

However, the contrast between one man’s death and millions of abstract deaths – all the more salient because the culprits are the same in both cases – is not due simply to human callousness. It is due to the way Western media have desensitized the Western public from their appalling lack of coverage on Yemen.

The Western media have an urgent obligation because their governments are directly involved in the suffering of Yemen. If the Western media gave appropriately more coverage with human details of victims then it is fair to assume that there would be much greater public outrage over Yemen and an outcry for justice – at least in the form of halting arms sales to Saudi Arabia. Such calls are being made over the Khashoggi case. Surely, the same calls for economic and diplomatic sanctions should therefore be made with regard to Yemen – indeed orders of magnitude greater given the much greater scale of human suffering.

The Western news media have been shamefully derelict in reporting on Yemen’s horror over the past four years. One of the most despicable headlines was from the BBC which described it as a “forgotten war”. The conflict is only “forgotten” because the BBC and other Western news outlets have chosen to routinely drop it from their coverage. That omission is without doubt a “political” decision taken in order to not discomfit Washington, London or Paris in their lucrative arms trade with the Saudi regime.

Another way at looking at the paradox of “one death a tragedy, a million a statistic” and the Western media’s nefarious role in creating that paradox is to consider the fate of individuals facing death sentences in Saudi Arabia.

Take the case of female pro-democracy protester 29-year-old Israa al Ghomgham. Israa was arrested three years ago because she participated in peaceful protests against the Saudi monarchy. She and her husband Moussa al Hashem are facing execution any day by decapitation. Their only “crime” was to participate in non-violent street demonstrations in Saudi’s eastern provincial city of Qatif, calling for democratic rights for the Sunni kingdom’s oppressed Shia minority.

Another case is that of Mujtaba al Sweikat. He also is facing death by beheading, again because he was involved in pro-democracy protests against the absolute Saudi rulers. What makes his case even more deplorable is that he was arrested in 2012 at the age of 17 – legally a minor – when he was leaving the country to take up studies at Western Michigan University in the United States.

It is not clear if these individuals – and there are many more such cases on Saudi death row – will be spared by the Saudi monarchy in the light of the international condemnations over the Khashoggi killing. Any day, they could be hauled to a public square and their heads hacked off with a sword.

If we try to explain the disconnect in Western public reaction to the Khashoggi case, on one hand, and on the other, the massive misery of Yemen, one might invoke the cynical adage about a single death versus millions. But then how does that explain the apparent lack of public concern over the imminent death of individuals such as Israa al Ghomgham, her husband Moussa, or the student Mujtaba al Sweitat?

The tragedy of desensitized abstraction is not due to overwhelming numbers. It is primarily due to the willful omission – and worse, misinformation – by Western media on the barbarity of the Saudi regime and the crucially enabling support given to this regime by Western politics and economics.

The apparent disconnect is due to systematic Western media distortion. That’s not just a flaw. It is criminal complicity.

Chinese Yuan Tumbles To New Cycle Low Amid Signs Of Capital Outflows

Chinese Yuan Tumbles To New Cycle Low Amid Signs Of Capital Outflows

 As Chinese markets began to wake, yuan just broke below 6.98/USD for the first time in this downswing, despite PBOC liquidity withdrawals sending money market rates spiking (to squeeze yuan shorts).

This has the distinct smell of capital outflows...

It has been a one way street since Golden Week...


And if former UBS Chief Economist George Magnus is right, any hopes for the G20 meeting between Trump and Xi should be extinguished. In a series of tweets, Magnus warned...

Trump and Xi are supposed to meet at the G20 in Buenos Aires at end month. Will they talk trade? They need to cos Trump has already threatened to subject the other of 50% of imports from China to punitive tariffs. This is how he prepares the ground, telling Fox News:

“I think that we will make a great deal with China and it has to be great, because they’ve drained our country,”.

Designed to turn XJP frostier, be even less inclined to bring something to the table, and more anxious not to be seen to be succumbing to foreign pressure.

So I think, barring something going on in the background, these talks are set up to fail, assuming they happen. The 10% tariff rate is due to go to 25% on 200bn $ of goods on 1 Jan anyway, and we shd probably expect WHY to go for the remaining 250bn $ of imports in new year...

2019 big year for China. centenary of founding of CCP. and rivals Soviet CP's 72 years in power. Xi's Chinese Dream of Rejuvenation of Chinese Ppl isn't just a slogan. Being seen to succumb to Trump's WH is just not on. Expect both sides to dig in further

Begs question as what China will do next. Xant tit for tat any more, as they have run out of room. @davidjlynch in @washingtonpost reminds us that tourism cd be a target. Targeting US firms also could be cranked up. Yuan depreciation also poss tho v risky at home too ...

Much longer discussion and background written up in Red Flags, just out in the US this month....the details change with the news and announcements, but the substance is sadly all too clear.

For now, 7.00 looms heavy on the horizon... and everyone knows the target is there to test PBOC.

6.9895 is the historical low for offshore yuan (Jan 2017)...

Over 50% Of College Students Afraid To Disagree With Peers, Professors

Over 50% Of College Students Afraid To Disagree With Peers, Professors

As more and more college professors express their social and political views in classrooms, students across the country are feeling increasingly afraid to disagree according to a survey of 800 full-time undergraduate college students, reported by the Wall Street Journal's James Freeman. 

When students were asked if they’ve had “any professors or course instructors that have used class time to express their own social or political beliefs that are completely unrelated to the subject of the course,” 52% of respondents said that this occurs “often,” while 47% responded, “not often.”

A majority—53%—also reported that they often “felt intimidated” in sharing their ideas, opinions or beliefs in class because they were different from those of the professors. -WSJ

What's more, 54% of students say they are intimidated expressing themselves when their views conflict with those of their classmates. 

The survey, conducted by McLaughlin & Associates on behalf of Yale's William F. Buckley, Jr. Program (which counts Freeman among its directors), was undertaken between October 8th and 18th, and included students at both public and private four-year universities across the country. 

This is a problem, suggests Freeman - as unbiased teachers who formerly filled universities have been replaced by activists who "unfortunately appear to be just as political and overbearing as one would expect," and that "perhaps the actual parents who write checks can someday find some way to encourage more responsible behavior.

Read the rest below via the Wall Street Journal 


As for the students, there’s at least a mixed message in the latest survey results. On the downside, the fact that so many students are afraid of disagreeing with their peers does not suggest a healthy intellectual atmosphere even outside the classroom. There’s more disappointing news in the answers to other survey questions. For example, 59% of respondents agreed with this statement:

My college or university should forbid people from speaking on campus who have a history of engaging in hate speech. 

This column does not favor hatred, nor the subjective definition of “hate speech” by college administrators seeking to regulate it. In perhaps the most disturbing finding in the poll results, 33% of U.S. college students participating in the survey agreed with this statement:

If someone is using hate speech or making racially charged comments, physical violence can be justified to prevent this person from espousing their hateful views.

An optimist desperately searching for a silver lining would perhaps note that 60% of respondents did not agree that physical violence is justified to silence people speaking what someone has defined as “hate speech” or “racially charged” comments. But the fact that a third of college students at least theoretically endorse violence as a response to offensive speech underlines the threat to free expression on American campuses.

Perhaps more encouraging are the responses to this question:

Generally speaking, do you think the First Amendment, which deals with freedom of speech, is an outdated amendment that can no longer be applied in today’s society and should be changed or an important amendment that still needs to be followed and respected in today’s society?

A full 79% of respondents opted for respecting the First Amendment, while 17% backed a rewrite.

On a more specific question, free speech isn’t winning by the same landslide. When asked if they would favor or oppose their schools having speech codes to regulate speech for students and faculty, 54% of U.S. college kids opposed such codes while 38% were in favor.

The free exchange of ideas is in danger on American campuses. And given the unprofessional behavior of American faculty suggested by this survey, education reformers should perhaps focus on encouraging free-speech advocates within the student body while adopting a campus slogan from an earlier era: Don’t trust anyone over 30.

Why Is Social Media So Toxic?

Why Is Social Media So Toxic?

Authored by Charles Hugh Smith via OfTwoMinds blog,

The desire to improve our social standing is natural. What's unnatural is the toxicity of doing so through social media.

It seems self-evident that the divisiveness that characterizes this juncture of American history is manifesting profound social and economic disorders that have little to do with politics. In this context, social media isn't the source of the fire, it's more like the gasoline that's being tossed on top of the dry timber.

My thinking on social media's toxic nature has been heavily influenced by long conversations with my friend GFB, who persuaded me that my initial dismissal of Facebook's influence was misplaced.

Our views of all media, traditional, alternative and social, is of course heavily influenced by our own participation / consumption of each type of media.Those who watch very little corporate-media broadcast "news" find the entire phenomenon very bizarre and easily mocked, and the same holds true for those who do not have any social media accounts: the whole phenomenon seems bizarre and easy to mock.

As for alternative media, many people accustomed to traditional media have never visited a single blog or listened to a single podcast.

Part of my job, as it were, is to monitor all three basic flavors of mass media, and do so as objectively as I can, which is to say, seek out representative narratives and commentaries across the full political and social spectra of each media.

So why is social media so toxic to healthy dialog and tolerance, and to those who live much of their lives via social media? I think we can discern several dynamics that direct the entire social media space.

1. The feedback loops within each "tribe" strengthen the most divisive, toxic narratives and opinions.

In the anti-Trump tribe, for example, those calling most vociferously for Trump's head on a stake are "rewarded" by praise from other members of the tribe via "likes" and positive comments on the "bravery" of their extreme language.

Others note this feedback and are naturally drawn into trying to top the extreme language: I want Trump's head on a stake, and then let's set it on fire, etc.

In the real world, expressing such extreme views soon draws negative or moderating feedback from those outside the social media's claustrophobic "tribe." More reasonable people will politely suggest that such extremism isn't very helpful, or they will start shunning the frothing-at-the-mouth firebrand.

But in the social media world, there are no moderating feedbacks. Anyone who dares question the extremism being reinforced by the "tribe" is quickly attacked or ejected from the tribe. Attacking moderate voices increases the potential "rewards" / likes from tribal members.

2. All human social interactions have a potential impact on the perceived relative status level of the participants, and jockeying for higher status is embedded in social animals such as humans. So naturally we're drawn to organizing our participation in social media around the implicit task of improving our status / upward mobility.

In the real world, it's relatively arduous to increase one's social status,especially as the widening wealth/income gap effectively disenfranchises an increasing percentage of the populace.

In the real world, increasing one's social status depends on one's class, i.e. who we hope to impress. Raising one's status usually requires some expenditure: a trip abroad to an exotic locale that few other social climbers have visited; a new fully loaded pickup truck, another graduate degree, a trip to Las Vegas, etc.

In the social media world, increasing one's perceived place in the pecking order of "likes" (or views), number of "friends", etc., depends less on conspicuous consumption / bragging (without appearing to brag, of course) and more on pleasing the tribe in ways that garner more "likes" and "friends."

In the real world, to raise one's status, we need to flash the diamond ring, show off the new luxury car/truck, flash photos of the exotic locale, display the graduate diploma, etc. But online, there's very little in the way of verification: we are who we present ourselves to be.

As opportunities to upward social/financial mobility fade and downward mobility becomes the norm for a great many individuals and "tribes," the appeal of a cost-free way to increase one's status increases proportionately.

3. The expansion of the number of "tribes" one can belong to in social media. In the real world, jockeying for higher status is limited to one's immediate circle of family, friends and colleagues, and to a lesser degree, wider circles in membership organizations such as alumni groups, trade associations, etc. It's hard to impress the wider world because very few of us have any access or exposure in traditional media.

But in social media, we can become "known" and "liked" in Instagram, Facebook, Twitter, etc. or within specific online communities within the social media world. In other words, if we can't "be somebody" in the wider world or the real world, we can still "become somebody" in a smaller (but still very real and important to its participants) group online.

The desire to improve our social standing is natural. What's unnatural is the toxicity of doing so through social media.

If we put these three dynamics together, it's little wonder so many people are drawn to living a major part of their lives online, and modifying their behaviors and views to increase their social standing / visibility online by whatever attracts more view, "likes" and "friends."

These dynamics help us understand why social media is intrinsically toxic to civil society: being civil doesn't raise one's status, while reaching for new extremes is rewarded by the "likes" and "friends" all humans crave as manifestations of our social status.

*  *  *

My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.