Sunday Roundup; Econ, War And More, 7/6/25

The thing about the internet is that one thing leads to another. That’s what happened to me today and that’s why I’m off to such a late start.

I’ll digress just a bit here at the start. Many readers will have heard about the amazingly positive jobs report that has the Trump people touting the “hot” economy and demanding low interest rates. Here’s some reality:

David Rosenberg @EconguyRosie

Jul 3

A June jobs report that is consistent with negative prints for real wages and industrial production is deemed by the masses and the markets to be solid. Adjust for the decline in the workweek and the Birth-Death model skew, and guess what? Private sector payrolls sank -400k last month. Let’s hope the Fed finds the time to scratch the surface, just a little. This was a weak report, my friends!

Edward Dowd @DowdEdward

Jul 3

US disabilities from Bureau of Labor Statistics broke out to another new high in June adding 138k onto May’s 739k. This is a monthly survey and is not tied to claims.

Danielle DiMartino Booth @DiMartinoBooth

Jul 3

Sometimes it’s what’s in parentheses that’s most important. In this case, the ONLY reason the endless string of downward revisions was arrested was due to upward revisions to government jobs.

The PRIVATE sector, aka the real economy, saw a downward revision of -16k in April & May

For a big picture view of America’s economy:

"We've Already Defaulted!": On Inflation, Deficits, Broken Markets, & The Fiscal Illusion

This weekend, I made an appearance on the Zero Hedge Podcast—a platform I’ve long loved to read and have been a friend of. The full video is below.

At the outset, I explained why I’ve mostly stepped back from doing my own podcast. “I feel like I don’t have anything of dire importance to say anymore,” I said. “Whatever I do have to say, I shoot out on my [Substack] and that’s about it. I’ve kind of done a cease and desist on my podcast.”

I feel like the truth is, a lot of what needs to be said has already been said—repeatedly.

Government overspending, monetary manipulation, and systemic fragility aren’t new topics. They just keep getting worse. And the commentary starts to feel futile when the cycle never changes.

“You have control over nothing,” I said on the podcast. “At some point it becomes fruitless.”

But here’s a straightforward explanation how we got to this point:

To Make America Great Again, Start Here

Authored by Charles Hugh Smith via OfTwoMinds blog,

Our status quo is so thoroughly corrupt that it's no longer even seen as corruption, it's just BAU--business as usual.

It's a big ask, but let's depoliticize the phrase "make America great again" and consider what this would actually entail, not as a lobbyists' grab-bag of tax breaks for the wealthy and arcane giveaways in 500-page Congressional bills, but as a restoration of the fundamental foundations of greatness.

…

The problem with all this kind of thinking is it's superficial and banal, for it ignores the real source of America's decline: the moral rot that has eroded every institution and every nook and cranny of our society. Whenever I mention this moral rot, I get immediate push-back of this sort: corruption has always been around, so today is no different from previous eras.

While it's self-evident that self-interest and greed manifest as corruption, it's not true that the systemic corruption of the present is no different from previous eras--it's worse, much worse because it's now normalized, and so we accept the most outrageous forms of corruption as "normal."

So private equity buys a company, loads it with debt, transfers all the borrowed cash to the private equity "owners," and then leaves the company a sinking hulk that soon declares bankruptcy. Or when private equity snaps up hospitals and healthcare clinics and prices rise not for better service but to "reward the owners," this plundering of "healthcare" is just good solid MBA-school maximization of shareholder value.

This is the corruption of American corporate law: maximization of shareholder is the legal responsibility of corporate management. This is the result of America’s default libertarian public ideology. It’s the water we fish swim in—for most people it’s impossible to conceive of any other way of thinking. But it’s moral corruption—enshrined in law, as Smith goes on to make clear.

What few seem to notice is the barriers that limited the pillage and plundering of the private and public-sectors have all eroded or been hollowed out. The legal framework is now a mirror-image of the financial sector, a series of facades that mask the pillage and plundering: of course it's profitable, but it's also legal.

The social barriers have also been dismantled. There are no taboos left, as "anything goes" is the modern zeitgeist. The notion that corporations have a social responsibility to the community they're embedded in is now a quaint whiff of nostalgia, along with the notion that corporations have an implicit responsibility to serve the larger national interests as well as "shareholder value."

Every institution has been hollowed out by self-service. Is it any wonder than younger generations have near-zero trust in institutions, given that their PR veneer of "public service" is just a cover for milking the system for private gain?

If you read histories of capitalism--for example, Fernand Braudel's three-volume Civilization and Capitalism, 15th-18th Century ( Volume 1, Volume 2, Volume 3) you discover that "capitalism" only functions as advertised if it is embedded in a moral order, something Adam Smith understood.

In early European capitalism, Christianity (Catholic and Protestant) provided this moral order. In China, Confucianism provided the moral foundation of the society and the economic - political structures.

Consider Xi Jinping's campaign to unify Confucianism and Marxism. This is not an anachronism, it reflects Xi's understanding that Marxism does not provide the moral foundation needed to limit the corruption undermining China. Only restoring a Confucian moral order can do that.

Note that, from a philosophical genealogical standpoint Marxism is simply Left Liberalism, just as Libertarianism can be viewed as Right Liberalism in the big picture. Forget about Left and Right in American politics—think about the Uniparty.

I explored this in some depth in this essay Pieces of the China Puzzle (April 27, 2024).

Here is an excerpt:

As the author noted, "his attempted synthesis of Marx and Confucius has prompted bafflement, even mockery, among observers outside and inside China."

To me, there is nothing baffling in this synthesis; it not only makes perfect sense, it can be understood as essential in the broader context of China's history and culture.

If we truly want to make America great again, as opposed to using the slogan as cover for more grift and graft, then we have to start by recognizing the moral sinkhole we're in. Institutions, the government and corporations have all lost our trust because they're all cesspools of self-serving corruption.

I’ll end this with some humor:

Jaguar Sales Plummet By 97.5% After Awful They/Them Rebrand

Jaguar sold just just 49 cars in April 2025 compared to almost 2,000 in April 2024.

Whatever happened to maximizing shareholder value?

OK! War!

Danny Davis had a brief update today—just 20 minutes—in which he maintains that Russia is on the verge of a major breakthrough near Pokrovsk, which is the hinge of Ukraine’s Eastern Front. The Russians appear to be close to forming a cauldron that could enclose not less than 20K troops in the Pokrovsk area:

Pokrovsk in Danger: Eastern front could collapse if Russia Takes it /Lt Col Daniel Davis

This is the result of the Russian tactic of applying alternating pressure at various areas of the front, to keep the Ukrainians busy switching troops to plug holes, while minimizing Russian casualties. In this game of military musical chairs the 20K Ukrainian troops near Pokrovsk could end up odd man out. And a disaster of this magnitude, argues Davis, could collapse the entire Ukrainian front. Russia is reported to have 111K reserves massed near Pokrovsk. Davis then goes on to argue that Trump should do all he can to force a Ukrainian surrender to Russia, as the only way to preserve something approximating pre-war Ukraine.

There are, in my view, at least two major reasons why I believe Russia will seek to keep this war going—remember, Russia has already set a high bar for the beginning of ceasefire talks, amounting to unconditional surrender.

• Russia may have come to the conclusion that the only way to ensure Russia’s security is to reabsorb all of Ukraine—or virtually all.

• Russia has a strong interest in divesting Western corporations—like Blackrock, Monsanto, and others—of their holdings in Ukraine. This is as much an economic war with the Anglo-Zionists as it is a military war.

Davis says 10 days could tell the story. We shall see.

Will Schryver has a short but thought provoking substack out:

US/Israel Versus Iran - Round One

As you can tell from the title, he sees a Round Two as all but inevitable. And yet, for reasons that I have also advanced, that Round Two may lead to another disastrous defeat. Briefly, I have argued (and Schryver raises some of these points, as well) that:

• Israel cannot afford to sustain the even greater level of damage that it would sustain in Round Two, as a result of Iran using its more advanced missiles the next time.

• That means that, before a Round Two can begin, some solution must be found to the unstoppable Iranian ballistic missile attacks.

• There’s always the nuclear option, but that would only trigger Iran to go for all out wipe-out. And nobody knows for sure where all those Iranian missiles are located.

• There’s also Russia and China. Not only will they be helping Iran beef up its air defenses and possibly foreclose Israeli use of Caspian air space, but more direct involvement could follow.

• Next time is unlikely to be a surprise, nor can preemption be ruled out. Further, the relatively successful sabotage attacks inside Iran will probably not be repeatable on anything like the same scale.

Now, in the substack Schryver maintains that Iran did, in fact, use at least some relatively small number of its most advanced missiles. I will repeat what Scott Ritter has said. Ritter maintained strongly that, while Iran did use a limited number of more advanced missiles, those were not in the category of its most advanced missiles. More than that I cannot say.

Before I provide an excerpt from Schryver’se substack, here’s some new data to indicate how seriously USrael’s air defense was depleted, citing an Israeli source:

Megatron @Megatron_ron

8h

NEW:

 Israeli publication Haaretz reported that the US military used 93 THAAD interceptors in 11 days to defend Israel, revising previous cost estimates from $800 million to about $1.2 billion.

With an annual production rate of about 36-48 THAAD interceptors, the US used up nearly two years' worth of the missiles during the war.

Here’s a deep dive on a broader scale:

US Support For Israel Comes At A Staggering, Multifaceted Price

And here’s Schryver:

… the IDF claims the Iranians fired over 200 ballistic missiles on 14 June. I think that is probably an exaggeration. But, in any case, the overwhelming majority were older Iranian missile stock and purpose-built decoys.

My sense is that no more than about three dozen strikes in the 14 June attack were carried out by later generation Iranian ballistic missile models. Most, if not all, got through unscathed.

Note the characterization of “later” rather than “latest.” It matters.

Over the next week (15-21 June), in addition to continuing drone strikes, Iran fired, on average, ~25 ballistic missiles per day (again, according to the IDF).

By this time, reports began swirling in Israeli and western analytical circles that US/Israel air defenses had been severely attrited and were proving to be far less effective than advertised.

US land-based THAAD, SM-3 and SM-6 from US ships in the eastern Mediterranean, and Israeli Arrow anti-ballistic missile interceptors were being consumed at a prodigious rate, but achieving few, if any, interceptions of the few dozens of upper-tier ballistic missiles fired from Iran.

On 22 June, a large Iranian counterstrike took place, including ~100 ballistic missiles.

By this stage of the battle, the Iron Dome had been significantly depleted, and even the slow-flying Iranian drones were defeating it in many instances. THAAD had more or less disappeared, and the Israeli Arrow systems were attesting multiple “malfunctions” and what (based on OSINT video evidence) appeared to be almost frantic firing patterns against single-digit salvos of Iranian hypersonic missiles.

A half-dozen or more Israeli missiles were being fired without success against individual incoming Iranian missiles, which blew right through them, their plasma envelope glowing brightly in the night sky as they streaked down to their targets.

By the time a ceasefire was agreed on 24 June, Israeli and American air defense capability in the theater of battle had reached near-exhaustion, even as the Iranians had begun to employ modest but increasing numbers of impressively capable higher-end strike missiles.

There is no doubt the Iranians welcomed a break in the fighting in order to catch their breath and reorganize their own defenses. But it was the Israelis who were, by far, most desperate to stem the tide of events.

For the reasons given above it seems difficult to believe that Round Two can happen quickly—short of a total US involvement that doesn’t appear imminent.

Lastly, the Houthis endure:

Megatron @Megatron_ron

BREAKING:

 The Houthis sank another ship in the Red See [sic]

The bulk carrier MAGIC SEAS is sinking in the Red Sea right now after the crew had an intense battle with armed Yemeni speedboats today, the U.K. Maritime Trade Organization confirmed.

The crew is reportedly preparing to evacuate and abandon the vessel.

1:20 PM · Jul 6, 2025