from Tom Luongo's Market Report for August 7, 2024.  

Tom's remarks about Mark Walz, Kamala Harris' new VP pick, were extremely interesting. 

33:36. And as Alexander Mercouris pointed out ages ago, he said "But then that effect of this has been to hold everything in this band and hold everything and Innovation behind the curve technology then the lack of competitive then the lack of competitiveness of German industry is exposed badly, especially with the rise of China.  So now Germany is ultimately the target.  Now you can kill the ECB, and you can kill the EU.  If you were a bunch of predatory Fed and New York and Tokyo bankers and you like more open Capital markets than the Europeans do, well then you're going to not argue; you're not going to be down there.  That's why they hate Trump who put Powell in place and they replaced Libor with Sofr.  This is the story I've been telling for 3 years.

from Luongo's Gold, Goats, and Guns:

What is SOFR? The Secured Overnight Funding Rate. It is the U.S. domestic replacement for LIBOR. SOFR is market-driven and arrived at through actual transactions in the U.S. money markets with the daily quote arrived at by real data from real US banks.

LIBOR, on the other hand, is a rate set by 17 foreign banks and 1 U.S. bank (JP Morgan Chase’s London Division). It’s still not market-driven but arrived at by consensus. Regardless of that, it represents the activity within London’s and Europe’s banking system, not the U.S.’s.

Ad therein lies the rub.

For all intents and purposes for decades, LIBOR was the mechanism by which the City of London and Europe controlled the flow of dollars into and out of their banking system. No wonder the Fed had no real control.

Broadly speaking, when the Fed raises rates and it causes a drain on the eurodollar system, it puts upward pressure on LIBOR. If Europe’s banks are more exposed to a rise in the cost of dollars then LIBOR should blow out faster than the Fed raises rates.

In past cycles, before SOFR, all US debt was indexed to LIBOR. So, it didn’t matter if the Fed raised rates domestically, our mortgages, lease rates, and credit lines blew out with LIBOR even if there was no underlying stress in these domestic markets.

Ukraine didn't pick this fight.  They're not a sovereign actor.  It's never been a sovereign nation because of the ways the great powers have carved up the world. 

Someone desperately wants WWIII.  They absolutely, desperately want WWIII.  Now that we know that, and accept that, no, this is about the big collapse of the West and how to sell it to their own people.  That's what this is about, and who is going to come out on top after the war is over.  But make no mistake, the whole phrase, "Build Back Better," well, build back better after what?  Certainly wasn't COVID.  Certainly wasn't COVID.  It was a collapse of the Western financial system, the post-WWII, Bretton Woods institutions, and post-Bretton Woods governments rolled up into the post-Bretton Woods transnational institutions.  That's what they're prepping for, and they know that the only way to get through that is to send everybody to war, because what does war do?  Does war create?  No.  War destroys.  It destroys economies, it diverts capital to destructive capacities.  Oh, yeah, the GDP numbers look great, but all you're doing is aggregating spending.  So we go into deficits,  and we spend a lot of money building bombs to destroy each other.  You can play accounting tricks and bamboozle people with statistics,  

4:10  Why did Xi Jinping organize a call with Zelenskyy? It's the same reason why he's been organizing calls with everybody, which is to stop WWIII.  Because China and Russia both understand that the path to winning, not having a world war, is to draw this thing out as long as possible where they don't have to be drawn into it directly any further than they already are.  Because that's what the Russians have been doing.  This is part of the reason why the Russians have left an open area in Bakmut to allow more stuff to come in to destroy.  How do we grind up NATO's assets and give them the appearance that they have a chance at ousting us from the center of Ukraine?  Well, very simple: you make it look like you're incompetent.  Because that's the way it's been sold to the neocons.  I look at American media, and I look at American foreign policy wonks, and they all under a particular impression and that is that Russia doesn't know how to wage war in Ukraine.  Now, this is ahistorical, moronic on the face of it, then again this is what they're trying to sell to everyone.  Then there's the discord league or the new Pentagon Papers, and it's very clear what the biggest embarrassment was there.  Again, all of this is downstream from those leaks.  What did those leaks tell the world?  That the Dept. of Defense, the Pentagon, and the State Department were feeding the Foreign Policy decision-makers in the United States poorly sourced, open-sourced intelligence about the war in Ukraine.  And taking verbatim as gospel truth, handed down from the mount himself, God himself, the Ukrainian Ministry of Defense.  And they're writing policy based on this, and they don't actually need or care about the truth.  They just have a policy that they're on autopilot.  What have I been saying for the last 3 years?  These people have a policy and they're on autopilot since the opening of COVID.  So why are we surprised by this?  It's a good thing that Zelenskyy actually took the call from Xi Jinping.  Because what it also signifies, last point, is that Zelenskyy is comfortable enough now in his own skin, that he can have that call and not be lynched.  Because remember, he did go through a big purge of a lot of people a few months ago.  So, yes, I think the Pentagon leaks were also --they weren't talking to us, meaning the U.S.--they were talking to the Russians and the Chinese.  The Pentagon is like "We don't want to do this.  Get in there and stop this thing." That's the big message I took away from what was leaked because 90% of it we already knew.  So, now, what does it signify?  Who is it speaking to in the game of realpolitik and, of course, across the communications gap?  

7:40, CryptoRich I wonder if some of the antiwar forces in the U.S. establishment also made it easier for Zelenskyy to have that call with China.

8:00, Krainer.  I think presumably we would have to be guessing here.  In one of Ray McGovern's interviews with Judge Andrew Napolitano, he said, "I think this is coming straight from [JCS Chairman] Mark Milley, or somebody very, very close to him."  And there was another general who was second in command at the Pentagon, unfortunately, I forget his name now, who in pretty strong terms reiterated that we don't want this to end up in a nuclear war.  Now, why is a faction of people in the West so desperate to continue down this road that is hopeless.  No one dreams any more than that they can prevail in Ukraine.  Why are they persisting?  And I think that the answer is that they are literally in the fight for their lives.  So, I always go back to what George Soros said at last year's Davos gathering when he said that this is a conflict between two government systems.  Soros said that it's between open societies versus closed societies, but it's actually the empire versus the rest of society.  And by empire, it's the imperial governance system, which is basically economic colonialism that wants to engulf the whole world.  And then you have essentially two economic-military-political powers that are capable of saying no and pushing back, which are Russia and China.  And for the empire, this could be sunset.  This could be the end of the road because they no longer have a new host.  And if China and Russia manage to maintain their alliance, then there's no way for the Western empire to prevail here.  And I believe that the alliance will preserve here because if you look at the way . . . I think Tom here was very right in saying that Ukraine didn't pick this fight.  And we mentioned Mentriarish, after the coup,