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What Really Divides America

What Really Divides America

Authored by Joel Kotkin via UnHerd.com,

The Midterms aren’t a battle between good and evil…

Reading the…

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What Really Divides America

Authored by Joel Kotkin via UnHerd.com,

The Midterms aren't a battle between good and evil...

Reading the mainstream media, one would be forgiven for believing that the upcoming midterms are part of a Manichaean struggle for the soul of democracy, pitting righteous progressives against the authoritarian “ultra-MAGA” hordes. The truth is nothing of the sort. Even today, the vast majority of Americans are moderate and pragmatic, with fewer than 20% combined for those identifying as either “very conservative” or “very liberal”. The apocalyptic ideological struggle envisioned by the country’s elites has little to do with how most Americans actually live and think. For most people, it is not ideology but the powerful forces of class, race, and geography that determine their political allegiances — and how they will vote come November.

Of course, it is the business of both party elites — and their media allies — to make the country seem more divided than it is. To avoid talking about the lousy economy, Democrats have sought to make the election about abortion and the alleged “threat to democracy” posed by “extremist” Republicans. But recent polls suggest that voters are still more concerned with economic issues than abortion. The warnings about extremism, meanwhile, are tough to take seriously, given that Democrats spent some $53 million to boost far-Right candidates in Republican primaries.

Republicans are contributing to the problem in their own way, too. Rather than offering any substantive governing vision of their own, they assume that voters will be repelled by unpopular progressive policies such as defunding the police, encouraging nearly unlimited illegal immigration, and promoting sexual and gender “fluidity” to schoolchildren. They ignore, of course, the fact that their own embrace of fundamentalist morality on abortion is also widely rejected by the populace. And even Right-leaning voters may doubt the sanity of some of the GOP’s eccentric candidates this November.

In short, both major parties stoke polarisation, the primary beneficiaries of which are those parties’ own political machines. But most Americans broadly want the same things: safety, economic security, a post-pandemic return to normalcy, and an end to dependence on China. Their divisions are based not so much on ideology but on the real circumstances of their everyday life.

The most critical, yet least appreciated, of these circumstances is class. America has long been celebrated as the “land of opportunity”, yet for working and middle-class people in particular, opportunity is increasingly to come by. With inflation elevated and a recession seemingly on the horizon, pocketbook issues are likely to become even more important in the coming months. According to a NBC News poll, for instance, nearly two-thirds of Americans say their pay check is falling behind the cost of living, and the Republicans hold a 19-point advantage over the Democrats on the economy.

A downturn could also benefit the Left eventually. As the American Prospect points out, proletarianised members of the middle class are increasingly shopping at the dollar stores that formerly served working and welfare populations. Labour, a critical component of the Democratic coalition, could be on the verge of a generational surge, with unionisation spreading to fast food retailers, Amazon warehouses, and Starbucks.

To take advantage of a resurgent labour movement, however, Democrats will have to move away from what Democratic strategist James Carville scathingly calls  “faculty lounge politics”: namely, their obsession with gender, race, and especially climate. For instance, by demanding “net zero” emissions on a tight deadline, without developing the natural gas and nuclear production needed to meet the country’s energy needs, progressives run the risk of inadvertently undermining the American economy. Ill-advised green policies will be particularly devastating for the once heavily Democratic workers involved in material production sectors like energy, agriculture, manufacturing, warehousing, and logistics.

To win in the coming election and beyond, Democrats need to focus instead on basic economic concerns such as higher wages, affordable housing, and improved education. They also need to address the roughly half of all small businesses reporting that inflation could force them into bankruptcy. Some progressives believe that climate change will doom the Republicans, but this is wishful thinking. According to Gallup, barely 3% of voters name environmental issues as their top concern.

Racial divides are also important — though not in the way that media hysterics about “white supremacy” would lead you to believe. Florida Governor Ron DeSantis’s decision to fly undocumented immigrants to Martha’s Vineyard was undoubtedly a political stunt, and one arguably in poor taste. But it succeeded in its main goal: highlighting the enormous divide between the border states affected by illegal immigration and the bastions of white progressivism who tend to favour it.

Under Biden, the Democrats have essentially embraced “open borders” — illegal crossings are at record levels, and few of the migrants who make it across the border are ever required to leave. This policy reflects a deep-seated belief among elite Democrats that a more diverse, less white population works to their political favour. Whether they are right to think so, however, is far from clear. Black people still overwhelmingly back the Democrats, but Asians (the fastest-growing minority) and Latinos (the largest) are more evenly divided, and have been drifting toward the Republicans in recent years.

Here, too, class is a key factor. Many middle and upper-class minorities are on board with the Democrats’ anti-racist agenda. But many working-class Hispanics and Asians have more basic concerns. After all,  notes former Democratic Strategist Ruy Teixiera, these are the people most affected by inflation, rising crime, poor schools, and threats to their livelihoods posed by draconian green policies.

Culture too plays a role. Immigrants, according to one recent survey, are twice as conservative in their social views than the general public and much more so than second generation populations of their own ethnicity. Like most Americans, they largely reject the identity politics central to the current Democratic belief system. Immigrants and other minorities also tend to be both more religious than whites; new sex education standards have provoked opposition from the Latino, Asian, African American and Muslim communities.

The final dividing line is geography, always a critical factor in American politics. For decades, the country seemed to become dominated by the great metropolitan areas of the coasts, with their tech and finance-led economies. But even before the pandemic, the coastal centres were losing their demographic and economic momentum and seeing their political influence fade. In 1960, for example, New York boasted more electoral votes than Texas and Florida combined. Today, both have more electoral votes than the Empire State. Last year, New York, California, and Illinois lost more people to outmigration than any other states. The greatest gains were in Florida, Texas, Arizona, and North Carolina. These states are high-growth, fertile, and lean toward the GOP.Likewise, regional trends suggest that elections will be decided in lower density areas; suburbs alone are  home to at least 40% of all House seats. Some of these voters may be refugees from blue areas who still favour the Democrats. But lower-density areas, which also tend to have the highest fertility rates, tend to be dominated by family concerns like inflation, public education and safety, issues that for now favour Republicans.

Put the battle between Good and Evil to one side. It is these three factors — class, race, geography — that will shape the outcome of the midterms, whatever the media says. The endless kabuki theatre pitting Trump and his minions against Democrats may delight and enrage America’s elites — but for the American people, it is still material concerns that matter.

Tyler Durden Thu, 10/06/2022 - 21:40

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International

New findings on hair loss in men

A receding hairline, a total loss of hair from the crown, and ultimately, the classical horseshoe-shaped pattern of baldness: Previous research into male…

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A receding hairline, a total loss of hair from the crown, and ultimately, the classical horseshoe-shaped pattern of baldness: Previous research into male pattern hair loss, also termed androgenetic alopecia, has implicated multiple common genetic variants. Human geneticists from the University Hospital of Bonn (UKB) and by the Transdisciplinary Research Unit “Life & Health” of the University of Bonn have now performed a systematic investigation of the extent to which rare genetic variants may also contribute to this disorder. For this purpose, they analyzed the genetic sequences of 72,469 male participants from the UK Biobank project. The analyses identified five significantly associated genes, and further corroborated genes implicated in previous research. The results have now been published in the prestigious scientific journal Nature Communications.

Credit: University Hospital Bonn / Katharina Wislsperger

A receding hairline, a total loss of hair from the crown, and ultimately, the classical horseshoe-shaped pattern of baldness: Previous research into male pattern hair loss, also termed androgenetic alopecia, has implicated multiple common genetic variants. Human geneticists from the University Hospital of Bonn (UKB) and by the Transdisciplinary Research Unit “Life & Health” of the University of Bonn have now performed a systematic investigation of the extent to which rare genetic variants may also contribute to this disorder. For this purpose, they analyzed the genetic sequences of 72,469 male participants from the UK Biobank project. The analyses identified five significantly associated genes, and further corroborated genes implicated in previous research. The results have now been published in the prestigious scientific journal Nature Communications.

Male-pattern hair loss is the most common form of hair loss in men, and is largely attributable to hereditary factors. Current treatment options and risk prediction are suboptimal, thus necessitating research into the genetic underpinnings of the condition. To date, studies worldwide have focused primarily on common genetic variants, and have implicated more than 350 genetic loci, in particular the androgen receptor gene, which is located on the maternally inherited X chromosome. In contrast, the contribution to this common condition of rare genetic variants has traditionally been assumed to be low. However, systematic analyses of rare variants have been lacking. “Such analyses are more challenging as they require large cohorts, and the genetic sequences must be captured base by base, e.g., through genome or exome sequencing of affected individuals,” explained first author Sabrina Henne, who is a doctoral student at the Institute of Human Genetics at the UKB and the University of Bonn. The statistical challenge lies in the fact that these rare genetic variants may be carried by very few, or even single, individuals. “That is why we apply gene-based analyses that first collapse variants on the basis of the genes in which they are located,” explained corresponding author PD Dr. Stefanie Heilmann-Heimbach, who is a research group leader at the Institute of Human Genetics at the UKB at the University of Bonn. Among other methods, the Bonn researchers used a type of sequence kernel association test (SKAT), which is a popular method for detecting associations with rare variants, as well as GenRisk, which is a method developed at the Institute of Genomic Statistics and Bioinformatics (IGSB) at the UKB and the University of Bonn.

Possible relevance of rare variants in male-pattern hair loss

The research involved the analysis of genetic sequences from 72,469 male UK Biobank participants. Within this extensive data set, Bonn geneticists, together with researchers from the IGSB and the Center for Human Genetics at the University Hospital Marburg, examined rare gene variants that occur in less than one percent of the population. Using modern bioinformatic and statistical methods, they found associations between male-pattern hair loss and rare genetic variants in the following five genes: EDA2R, WNT10A, HEPH, CEPT1, and EIF3F.

Prior to the analyses, EDA2R and WNT10A were already considered candidate genes, as based on previous analyses of common variants. “Our study provides further evidence that these two genes play a role, and that this occurs through both common and rare variants,” explained Dr. Stefanie Heilmann-Heimbach. Similarly, HEPH is located in a genetic region that has already been implicated by common variants, namely the EDA2R/Androgen receptor, which is a region that has consistently shown the strongest association with male-pattern hair loss in past association studies. “However, HEPH itself has never been considered as a candidate gene. Our study suggests that it may also play a role,” explained Sabrina Henne. “The genes CEPT1 and EIF3F are located in genetic regions that have not yet been associated with male-pattern hair loss. They are thus entirely new candidate genes, and we hypothesize that rare variants within these genes contribute to the genetic predisposition. HEPH, CEPT1, and EIF3F represent highly plausible new candidate genes, given their previously described role in hair development and growth.” Furthermore, the results of the study suggest that genes that are known to cause rare inherited diseases affecting both skin and hair (such as the ectodermal dysplasias) may also play a role in the development of male-pattern hair loss. The researchers hope that the puzzle pieces they have discovered will improve understanding of the causes of hair loss, and thus facilitate reliable risk prediction and improved treatment strategies.

The research was supported by funding from the Medical Faculty of the University of Bonn. Prof. Dr. Markus Nöthen, Director of the Institute of Human Genetics at UKB and co-author of the study, is a member of the Transdisciplinary Research Area (TRA) “Life and Health” at the University of Bonn. The publication costs in open access format were funded by the DEAL project of the University of Bonn.


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Canadian dollar edges higher as retail sales rebound

Canada retail sales climb 2% The Canadian dollar has posted losses on Friday. In the European session, USD/CAD is trading at 1.3446, down 0.28%. Canada’s…

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  • Canada retail sales climb 2%

The Canadian dollar has posted losses on Friday. In the European session, USD/CAD is trading at 1.3446, down 0.28%.

Canada’s retail sales jump

Canada’s retail sales rebounded in impressive fashion on Friday. Retail sales in July jumped 2% y/y, following a -0.6% reading in June and beating the 0.5% consensus estimate. On a monthly basis, retail sales rose 0.3%, up from 0.1% in June but shy of the consensus estimate of 0.4%. The good news was tempered by the August estimate, which stands at -0.3% m/m and would be the first decline since March. The Canadian dollar showed little reaction to the retail sales release.

The Bank of Canada doesn’t meet again until October 25th and policy makers will have plenty of data to monitor in the meantime. The BoC has been walking a tightrope that will be familiar to most central banks, that of trying to balance the risks of over and under-tightening. The difficulty in finding the right balance was highlighted in the BoC summary of deliberations of the policy meeting earlier this month.

The BoC decided to hold the benchmark rate at 5.0% after concluding that earlier rate hikes were having an effect and slowing economic growth. The summary indicated that policy makers were concerned that a pause might send the wrong message that rate cuts might be on the way. With inflation still above the BOC’s target, the central bank is not looking at rate cuts and stressed at the September meeting that rate hikes were still on the table and that inflation remained too high.

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USD/CAD Technical

  • USD/CAD is testing resistance at 1.3468. The next resistance line is 1.3553
  • 1.3408 and 1.3323 are the next support lines

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International

Quantitative Tightening Is Not Biggest Threat To Global Yields

Quantitative Tightening Is Not Biggest Threat To Global Yields

Authored by Simon White, Bloomberg macro strategist,

The Bank of England’s…

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Quantitative Tightening Is Not Biggest Threat To Global Yields

Authored by Simon White, Bloomberg macro strategist,

The Bank of England’s quantitative tightening program shows that unwinding central-bank bond portfolios, even with outright sales, need not be disruptive for markets. The greater risk for US and global yields comes from positive stock-bond correlations driving risk premia wider.

The BOE has been a pioneer and a thought leader in QT. While the Fed and ECB have only allowed bonds to run off naturally to help achieve their balance-sheet contraction goals, the BOE has sold gilts outright in addition to allowing bonds to mature.

So far, it has not led to any significant market disruption. This enabled the BOE Thursday to increase the pace of reduction in the Asset Purchase Facility (APF) from £80 billion last year to £100 billion over the coming 12 months from October (while holding Bank Rate steady). As colleague Ven Ram also noted, the schedule of maturing bonds next year allowed the bank to keep gilts sales unchanged from last year while increasing the total amount of the APF’s decrease.

The QT watchwords from the bank are “gradual and predictable.” If gilt sales are conducted in such a way, then market disruption should be minimized. The chart below shows the BOE’s own assessment of the impact of bond sales on the market.

The BOE estimates that of the ~40 bps of term-premium increase since the MPC voted to begin QT in February 2022, about 10-15 bps comes from QT specifically – small in comparison to the overall rise in yields since that time.

QT or bond sales, though, are not the most critical risk facing bond prices in the current cycle. Rising and now positive stock-bond correlations threaten to lead to a structural rise in bond risk premium, and lower prices. The correlation is now positive in the US, Japan, and the UK.

In a positive stock-bond correlation world, bonds lose their portfolio-hedge and recession-hedge capabilities, and thus become less sought after. The penny has not fully dropped yet, but the negative term premium for bonds is increasing, and is prone to rising much higher as they become less desirable.

Yields of developed market countries are biased structurally higher, but QT is unlikely to be the culprit. Instead, it allows central banks to reload their capacity for a future time when they may need to restart quantitative easing, in order to stabilize the market from sharply rising term premia.

Tyler Durden Fri, 09/22/2023 - 09:10

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