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“The Debate Is Over”: Morgan Stanley Unloads On The Dismal State Of The US Consumer

"The Debate Is Over": Morgan Stanley Unloads On The Dismal State Of The US Consumer

Yesterday, we reported that in Morgan Stanley’s Sunday…

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"The Debate Is Over": Morgan Stanley Unloads On The Dismal State Of The US Consumer

Yesterday, we reported that in Morgan Stanley's Sunday Start note, the bank's chief US equity strategist Michael Wilson Equity wrote that while valuations have corrected a lot this year, this was all due to higher inflation and a more hawkish Fed. At the same time, the Equity Risk Premium (ERP) still does not reflect the risks to growth which are increasing due to margin pressure and weaker demand as the consumer decides to hunker down. The reason for this is that in contrast to rates, the ERP is a reflection of growth expectations. When growth is accelerating/decelerating, the ERP tends to be lower/higher; at year end, the ERP was 315bps, well below the average of the past 15 years. It was also below our estimate for the ERP of 335bps at the time. In short, the ERP was not reflecting the rising risks to growth in 2022 that Wilson expected coming into this year. Fast forward to today, and the ERP is even lower at just 295bps. Given the rising risk of slowing growth and earnings, "this part of the P/E seems more mis-priced today than 6 months ago" according to the MS strategist.

So given the further deterioration in leading growth signals and greater risk of recession (as Wilson discusses further in his observations on consumer confidence, see below), one could - or should, according to Wilson - argue the ERP should be at least 500bps until earnings are cut. Of course, a recession would also bring lower 10-year yields which would buffer some of the rise in the ERP.

Bottom line, according to Morgan Stanley, the final answer depends on all three variables:

  • 10-year yields (lower),
  • ERP (higher)
  • forward 12-month EPS forecasts (lower).

As such, if the US avoids a recession over the next 12 months (which is still Morgan Stanley's base case), Wilson sticks to his Street-low view of  3,400 for the S&P 500 is "a more reliable level of support" that takes into account:

  • The view for 3-5% lower earnings than consensus forecasts,
  • A 3% 10-year yield, and
  • An ERP of 370bps.

This all translates to approximately 15x $230 in EPS. It's also where technical support lies--200 week moving average, the pre COVID highs and the break out point from the announcement of the vaccines

Of course, if we do have a recession, all bets are off and even Goldman is openly cautioning that 3,150 on the S&P may be the best we get...

... in line with what the bank disclosed in its recently published "recession manual."

So much for markets, which today are clearly taking Wilson's warning to heart and at 3,750 are already almost half way to his 3,400 target, after trading at 4,100 just last Thursday. What about the economy?

Here things are even uglier, because when it comes to the consumer, the debate "should be over now" according to Wilson, who echoes what we have been saying for months, and especially after every time we show the monthly explosion in credit card usage. But one doesn't even have to look at credit card usage: consumer sentiment - or lack thereof - will suffice.

According to Wilson, consumer sentiment in the US hit an all-time low in May due to higher prices and growing concerns inflation is here to stay. This is an argument both Wilson and we have been making since late last year. But while we can write whatever we want, Wilson complains that he continually hears from many clients that the consumer is in such great shape due to the excess savings still available in checking accounts, something we have shown repeatedly is a glaring lie.

And indeed, this view does not take into account savings in stocks, bonds, crypto and other assets which have been hammered this year. Furthermore, while many consumers may have more cash on hand than pre-COVID, that cash just isn't going as far as it used to - thank Bidenflation - and that is likely to restrain discretionary spending by the consumer. Finally, it's important to point out that this latest reading is the lowest on record and 45% lower than during the last time the Fed embarked on such an aggressive tightening campaign and was able to orchestrate a soft landing. In other words, Wilson notes, "the consumer was in much better shape back then which probably helped the Fed land the plan softly"; he also urges readers to also keep in mind that "inflation was dormant in 1994 relative to today and allowed the Fed to pause, a luxury they clearly do not have now given Friday's red hot CPI release."

Interestingly, the collapse in consumer sentiment has also been present among higher end households, indicating the pervasive reach of rising inflation.

As the next chart shows, goods purchasing intentions continue to plummet alongside the fall in overall household confidence (even if actual retail spending remains strong, suggesting consumer confidence surveys aren't really worth the inflated paper they are printed on). Wilson warns that this dynamic has negative implications for goods consumption as the exhibit shows: "The drop in sentiment not only poses a risk to the economy and market from a demand standpoint, but it also, coupled with Friday's CPI  print, keeps the Fed on a hawkish path to fight inflation—"Fire" AND "Ice"."

Shifting away from the recessionary state of the consumer, Wilson next pivots to commentary from Morgan Stanley analysts during the latest monthly meeting which focused around inventory and the health of the consumer. As Wilson explains, "everyone agreed the low income consumer is already facing challenges." This lines up with the latest results from the bank's Alphawise Consumer Pulse Survey which shows consumers are particularly concerned about inflation, and they are expecting to reduce spending over the next 6 months as a result of high prices. Analysts across different industries also commented that supply chains are loosening and inventory is building: "This build is currently most challenging for retailers, but we expect this to broaden out over the coming months."

Summarizing The next shoe to drop is a discounting cycle—a key risk to margins, particularly for Consumer Discretionary goods. In other words, precisely what we said in "Bullwhip Effect Ends With A Bang: Why Prices Are About To Fall Off A Cliff."

Below are the key highlights from various Morgan Stanley analysts:

On Technology, Media, & Telecom Companies

  • For Telecom companies, there has been a slight uptick in low income consumer churn but nothing too out of the ordinary. Store traffic still looks good. People are braced that there could be some softness. The team is getting investor questions on enterprise spending but the data centers are still doing well from a demand perspective (could be related to supply chain with people trying to lock in space).
  • Semiconductor inventories are rising across the board and we are getting more supply. There are still idiosyncratic shortages all over the place. You have seen demand weakness in PCs/phones but we are still not past the shortages. If we don’t have any more disruptions supply should be better in 3 months. Prices are rising meaningfully. China’s Covid zero policy has been disruptive but it has disrupted both the supply and demand sides.
  • Apple is the only Tech Hardware company to noticeably bring down balance sheet inventory. A handful of covered companies still have elevated levels of finished goods inventory (some of which is in transit) but you are also seeing a build of components in case there are shortages in the future. Component and labor cost inflation (as well as FX) is pressuring margins for the majority of coverage YTD. From an estimate cut perspective, you have seen more cuts on the enterprise side versus the consumer side but there have been more negative data points around the consumer side. Most of the demand pull forward around the pandemic is thought to be consumer driven but MS checks show enterprise hardware demand has also been pulled forward, to a degree, to get ahead of long lead times and avoid potential shortages in the future.
  • Enterprise software demand has remained solid. We have seen some revisions but that is largely from taking out the 1-2% of business that comes from Russia/Ukraine and adjusting for FX. Larger enterprise demand has held up. The more strategic the project the more likely growth is sustained. We are hearing about more layoffs taking place among VC funded software companies. There is a message going out from VCs to companies that they need to get on a faster track to being profitable. The expected compensation rate for engineers and sales people is likely to come down. The inflationary part of compensation has been coming from the stock component of compensation. MSFT upped the level of cash raises in response to an employee survey. They are also upping the highest level of targeted performance payout. Mid-sized companies are trying to up compensation for key performers but they are not planning to make everyone whole in response to their stocks falling.

On Consumer Companies:

  • Free money is going down but spending is still high so people are borrowing money to fill the gap. The high end consumer isn’t feeling the effects as much but the low end is getting squeezed. Delinquencies for subprime auto ABS are above pre-Covid levels for consumers with a FICO score of 550 and below - that is deep subprime. Regular subprime and above is showing no signs of stress and we would need a big labor cycle to get that. Delinquencies today are losses 6 months from now but they are coming in lower than we are baking in.
  • Within hardlines/broadlines/food retail most companies are making sales; they are not beating but they are at least making sales. There have been some trade downs. Home furnishings and electronics have seen some weakness. Gas prices could be the catalyst to really disrupt demand.
  • Generally consumables have been holding up well and WMT/TGT have said that publicly. The experience (away from home) side of the business is still strong, with beauty and away from home beverage demand recovering as consumers are returning more to normal summer behavior. Private label has picked up a bit which shows signs of low income consumer stress and there have been modest signs of trade down so far. Cost pressures continue to be severe.
  • There is a lot of low end exposure in restaurants and we are seeing some modest cracks. MCD and WEN have talked about a negative mix shift (ordering more value menu items). There is very little discounting in the space right now.
  • YTD we are seeing some nice bounce back in retail in-store traffic but ecommerce has softened a bit. Store volumes for most retailers are running 10-20% below 2019 levels so we are not seeing a full in-store recovery but it is improving. The big story here is that sales growth was at the low end of plan in 1Q and we are seeing signs of stress for retailers that cater to low income consumers. We could see a soft patch of retail revenue growth over the next few quarters as sales comparisons become more challenging in 2Q & 3Q. Inventory has really backed up; inventory across the sector is up about 30% YOY and sales growth is up about 0% YOY translating to approximately 30% YOY of excess inventory. Markdown/margin pressure did not hit in 1Q and should hit June/July. Store checks show that aggressive discounting has already started as of the Memorial Day holiday weekend. Discounting pressure could accelerate through July. Since more retailers are now discounting, companies are having to offer even bigger discounts to compel consumers to buy, and it is a race to the bottom in margins in order to clear through inventory (see Gap (GPS), Urban Outfitters (URBN), & American Eagle.  It will be some time before retailers can cut back on forward inventory orders. Companies are no longer in a position to order 6 months in advance because of delays in the supply chain. They are currently working with about an 8 month lead time. This means decisions today to cut forward orders could begin to eliminate the inventory problem in 1Q23, but not likely before then. As a result, we are likely to see a tidal wave of discounts that carry us through December because 2022 inventory orders have already been placed.

Bottom line: While the margin pressure and waning low end consumer demand dynamics have been largely understood by the market, Wilson is worried that the excess inventory element (largely in consumer goods up to this point) which we described here, and the associated risk to pricing is less understood and is just now beginning to be reflected in stock prices. This has been a growing risk for the past several months as the economic data has reflected this development; it's also a key reason why Morgan Stanley remained Underweight the consumer discretionary sector despite already meaningful underperformance this year. Exhibit 8 shows that real (i.e., this is not just price related) inventory levels for durable goods + apparel are now well above trend after surging in recent months. Wilson attributes much of this to the likely loosening of supply chains that took place in 1Q.

There is more in the full Morgan Stanley note available to pro subscribers in the usual place.

Tyler Durden Mon, 06/13/2022 - 13:53

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Government

Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Government

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Spread & Containment

The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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