German EV Sales Plummet 30.6% In May Compared To Year Earlier

  I have already written too much on the failure of the "green transition" in Germany so I won't add a long monologue here. Just to say that this was predictable. The Germans did put the EV cart in front of the transition bull and will soon find them selves in the very unenviable position of de-industrializing while having to choose between cheap Chinese EV and much higher inflation. They should have listened to the advise of Toyota's President and invested first into hybrids and cleaner ICE vehicles waiting a little longer for better electric technologies to emerge. Now the risk is that their automotive industry will be stuck between a rock (the law) and a hard place (Chinese competition) with nowhere to go. What's the real market for 100,000+ Euros cars and isn't that market already occupied by Tesla?   

Authored by P. Gosselin via NoTricksZone.com,

The figures for the registration of new electric cars in Germany are looking increasingly awful.

In May 2024, the Federal Motor Transport Authority (KBA) reported that it had registered only 29,708 vehicles with electric motors.

That is 30.6% down on the result for the same month last year.

CO2 emissions of new German cars also rose 3.3%…indicating the green transition has stalled and is reversing.

Hat-tip: Blackout News

The KBA also adds that 89,498 passenger cars were equipped with a gasoline engine – an increase of 2.1 percent compared to the same month last year.

44,893 new cars were diesel-powered, an increase of 3.2 percent compared to the same month last year.

71,451 new cars had a hybrid drive in May 2024, accounting for a share of 30.2% (-0.3%), including 14,038 plug-in hybrids (+1.7%/5.9%).

According to the KBA, the average CO2 emissions of new passenger car registrations rose by +3.3% and amounted to 124.0 g/km.

Back to fossil fuels!

How deep will Japan sink?

   30 years of decline already and the fall is still going strong. If you live in Tokyo, within the Yamanote train line you'll probably notice nothing at all. The bubble of the 1980s has been replaced by a new one. Speculation is "healthy" (if that's the right word!) with hundreds of towers being built yearly to the point of transforming the city into a forest of high-rise buildings. Who will work or live there is of no importance. The yen is cheap so relatively easy to invest in. Public deficits and carry trade help create tons of money which somehow has to go somewhere. Luckily or not, depends on your point of view, not into inflation since salaries are kept under control by fierce competition.

  Likewise, the debt is mostly domestic, or rather was, since by now most of the JGB (Japan Government Bonds) have been bought by the central bank to the point that trading is almost completely gone! So Japan could (and actually does) go down year after year into the abyss (which strangely sits not too far from the country geographically.) 

  But stray away from central Tokyo and under the water, all is not well. Japan is becoming poor, literally and practically. Here's one obvious symptom beyond the empty cities and shrinking birth rates: The decline of fish consumption which is crashing thanks to exploding prices.

Fish Consumption Hits Record Low in Japan

TOKYO, Jun 18 (News On Japan) - Fish consumption in Japan has hit a record low, with annual per capita intake dropping from about 40 kilograms in 2001 to roughly 22 kilograms in 2022. This decline is particularly notable among seniors, who are increasingly opting for meat over fish.

Factors contributing to this trend include family preferences for meat, high fish prices, and the inconvenience of fish preparation. Local fish shops' disappearance also plays a role.

  But here's another more insidious factor: As the yen keeps falling and resentment grows, Japan, like other developing countries (Thailand comes to mind) is brain-storming how to milk foreigner tourists for all they're worth. 

Foreign Tourists to Pay 4 Times More for Himeji Castle?

Himeji Castle, a popular tourist destination and UNESCO World Heritage site, is currently considering a significant increase in admission fees for foreign visitors. The admission fee for adults is presently 1,000 yen, but the mayor of Himeji City has proposed raising the fee to 30 dollars for foreign tourists, a move that has sparked considerable debate. 

 

 It is said that beggars have no shame since they can't afford it. So how far down the path of bankruptcy Japan really is? Hard to say. For countries as for people, as Hemingway once said, bankruptcy comes very slowly at first then suddenly. Left to its own demise, Japan could likely go on another decade on this road to Zen nothingness and probable misery. More likely, international events will decide differently sooner than that!

 

China's New Home Prices Plunge The Most Since October 2014

  Japan couldn't find the exit to its real estate bubble and neither is China now. The simple reason is the scale of the bubble, usually many times that of the economy.

  So what comes next for China? The 1990s in Japan were stressful financially but not yet a catastrophe. Huge projects were being completed just as in China today, while more debt was piling up. The problem was floundering growth, again just as China today and the fact that most new projects were uneconomical and would therefore bring no future growth. (Imagine what was going to happen to Olympic swimming pools in villages which didn't have the money to pay for the upkeep?) 

  This doesn't mean quite yet the end of China but as for economic growth, 10% certainly belongs to the past. Now money will be more scarce and investment will have to be more selective. This is where Japan failed, completely missing the digital revolution, while investing in absurd projects such as the computer 5th generation, whatever it meant for people then, which brought absolutely nothing. Hopefully China will be wiser although "wise" has its limits which is why it is often better to rely on market forces.

China's New Home Prices Plunge The Most Since October 2014

So much for that Chinese housing "bailout", which we correctly warned would be woefully insufficient.

A slew of data published early Monday local time, showed that among various other economic measures, China’s housing slump deepened in May and triggered new calls for the government to pump cash and credit into the economy, while industrial output, which has kept growth on track, fell short of forecasts.

New home prices - the most important indicator of middle-class wealth in the world's second biggest economy - dropped at the fastest pace since October 2014, falling 0.7% m/m in May (v/s -0.58% in April) and marking the 11th straight decline despite the government’s stimulus to support the property market. On an annual basis, home prices slumped 4.3%, the biggest drop since the summer of 2015. In fact, the last time home prices plunged so much Beijing pursued a massive yuan devaluation that led to a $1 trillion in fx outflows to stabilize and sparked the very first mega meltup in bitcoin which sent it from $200 to far over $1000.

Staying on China retail sales rose +3.7% y/y in May, exceeding market expectations for a +3.0% gain and increasing pace from a +2.3% increase in the previous month but Chinese shoppers remain far from recovering their pre-pandemic mojo. However, other economic metrics failed to surpass market forecasts with industrial output growing +5.6% y/y in May (v/s +6.2% expected), down from an increase of +6.7% in April and missing the median forecast in a Bloomberg survey.

Meanwhile, the nation’s real estate crisis continued to weigh on investment in fixed assets with the overall YTD investment figures expanding +4.0%, also below estimates of +4.2% gain.

“The most disappointing in May’s data is probably that property sales barely saw any improvements even after so many supportive measures,” said Jacqueline Rong, chief China economist at BNP Paribas SA. She said China’s authorities need to find ways to lower the rates on existing mortgages, closing the gap with the cost of new ones.

The numbers - excluding the dire real estate prints - add up to a still-weak recovery most economists said, and will likely require more action from Beijing to bolster consumer demand and tackle imbalances, if this year’s 5% growth target is to be met. That could take the form of stepped-up government spending and heightened efforts by the central bank to put a floor under housing markets and get credit flowing.

On the other hand, if one includes China's collapsing property market - which once upon a time was the world's largest asset class - it becomes clear that while Beijing may pretend it does not need a huge fiscal and monetary stimulus, it's

Late last month, China unveiled a broad rescue package to prop up housing sales as a credit crisis was engulfing some of the country’s biggest real estate developers. It relaxed mortgage rules and encouraged local governments to buy unsold homes. However, as we warned and many others agreed, the financial incentives aren’t big enough and trial programs in several cities have shown progress can be slow.

Subdued demand at home and the deteriorating foreign-trade environment are weighing on business confidence, discouraging companies from investing and driving some to move production overseas. Credit growth has been lackluster and the M1 money supply gauge contracted in May at the fastest rate in data going back to 1996.

Elsewhere, the PBOC on Monday kept a key interest rate unchanged for the tenth straight month. Economists say the bank’s room to cut rates is constrained by the need to prop up the yuan, which faces downward pressure as the US Federal Reserve reinforces its high-for-longer message.

China’s growth remains “highly uneven, with exports and new energy-related capex as the drivers while consumption and property as the drags,” according to economists including Larry Hu at Macquarie Capital Ltd. Still, the slowdown isn’t severe enough to threaten the growth target and while policymakers may take some limited action “the urgency for a major stimulus is low,” they wrote

In a survey of more than 400 top executives conducted by UBS Group AG over roughly a month through mid-May, firms reported weaker prospects for orders, revenue and margins compared with the same period of 2023. There was a drop in the share of respondents who plan to increase capital expenditure in the second half of this year.

“We still need to see new stimulus coming in,” said Helen Qiao, chief Greater China economist at Bank of America Global Research, in a Bloomberg TV interview. “Otherwise the growth momentum could very much weaken.”

“They Already Took your Assets! You Just Don’t Know Yet” - Luke Gromen (Video - 14mn)

  Often we're talking about the "coming" crisis as if it was something abstract which sometimes in the future will strike us out of the blue. Well, think again or more practically, read The Great Taking.

  The current financial crisis has been in the making for the last 50 years, since at least the "temporary" decoupling of the US dollar and gold in 1971. Now the money you have on your bank account is a lot of things before being yours. In the end you're just a lowly creditor to your bank. So that when the system goes under, and it will eventually, the money will shore up the bank first and what is left will be yours. Nominally at least since practically, you probably won't have access to it.

  There is much more in the video below, so well worth listening to. (The alternative is spending a few weeks in Argentina in order to understand how a post bankrupt country operates. Since it is not very fun, most people won't do it. Quite a shame.)

  Second part of the video when they're "bullish" about the US is short and can be listened to at x2 speed. I guess you've got to say something positive after you spill the financial beans!

 If you enjoyed the first video, here's another one, just as good.

It Would Be A Bad Idea For Japan To Sanction Indian Companies On Anti-Russian Pretexts

   Using Japan to strike at India to harm Russia? Sound machiavelian but it might also be stupid. 

  Indians have no love for China but it doesn't prevent them from working with the Chinese through the BRICS. This means that the priority for India at this stage is economic beyond anything else. Seen through such a lens, what does a declining Japan offers which would be worth jeopardizing trade with a resurgent Russia? 

  If the answer is "nothing" then Japan will be shooting itself in the foot. If at least the hope that Japan can transfer some technologies as it did to China 20 years ago was present, it could be a mitigating argument. But the chance at this stage is almost zero. This means that Japan will have nothing to offer. Just a stick with no carrot. This is not exactly a great position to start a negotiation!

Authored by Andrew Korybko via Substack,

India might conclude that Japan was put up to this by its American patron if it comes to pass, which could then complicate their multilateral efforts to manage China’s rise.

Tribune India cited Japanese media to report that Chief Cabinet Secretary Yoshimasa Hayashi recently said that “At the recent G-7 summit, we have announced that we are considering a new package of sanctions that will include companies from third countries. We are looking at measures against companies from China, India, the UAE and Uzbekistan.” The Economic Times confirmed this report in their article citing unnamed sources who are allegedly familiar with the situation.

It would be a bad idea for Japan to sanction Indian companies on anti-Russian pretexts since that would toxify their strategic ties. India and Japan cooperate in the Quad, which is nowadays mostly just a talking club unlike former Russian Defense Minister Sergey Shoigu’s claim that it’s a US-controlled anti-Chinese proxy group, and are also close economic partners. Their hard-earned mutual trust that was built in the years after Japan sanctioned India in 1998 for its nuclear tests would be instantly shattered.

The consequences of that happening could complicate the US’ grand strategic plans in Asia, which are partially predicated upon the comprehensive strengthening of Indo-Japanese relations. India’s problems with China are independent of the US’ or Japan’s, but it finds common cause with them in managing that country’s rise. Nevertheless, the newfound trouble in its ties with the US coupled with the scenario of Japan sanctioning its companies could impede their multilateral cooperation in this respect.

India might also conclude that Japan was put up to this by its American patron as part of the latter’s plans to pile more pressure upon it for the reasons that were explained in the preceding hyperlinked analysis, which can be summarized as punishing it for refusing to dump Russia. After all, the US could always intervene behind the scenes to stop Japan if it was really concerned about the consequences that these sanctions could have on their cooperation with India vis-à-vis China, but it might not do so.

In that event, American policymakers would have calculated that it’s more important to punish India than to continue working with it in furtherance of their common cause, which would in turn suggest that more pressure might then be applied against it in the future on anti-Russian or other pretexts. The US’ liberal-globalist faction interpreted the latest general elections in India as weakening Prime Minister Narendra Modi so it’s possible that they’re emboldened by that to ramp up their pressure against him.

Instead of doing so directly, they might have decided to first act through Japan via the means of having that country sanction its companies for doing business with Russia, after which it can’t be ruled out that other G7 states such as the US itself might then follow its lead as part of a preplanned policy. To be clear, that also might not happen at all, with or without Japan doing what Hayashi just announced. Even so, however, it’s credible enough of a possibility for India to think about just in case.

Delhi would have to respond if this sequence of events unfolds, though it might only take the form of harsh denouncements as opposed to any meaningful response owing to India’s complex economic interdependence with the G7, which also serves to limit the extent of the bloc’s potential sanctions too. In any case, bilateral trust would be broken, and India might defiantly double down even further on its relations with Russia in order to send the message that it won’t be deterred by such pressure.

Physicists Proved the Universe Isn’t Real (Video - 12mn)

  The fundamental question: "Where do we come from?" has now been redefined as: "Are we living in a simulation?" and the answer based on what we know is probably "Yes!" But this answers nothing. Who created the simulation and where do they come from?

 I like the geometrical theory explained below. We know from general relativity and quantum physics that geometric principles underlie our reality so it is probably the right approach to try to grasp what this "reality" is made of. 

 To me, this is "real enough" even though it may be virtual. As the virtual character said in "13 Floor" (A must see movie on the subject) when shooting at the hero with a gun: "Is this real?" 

 We may be living in a virtual universe but luckily, the beings who devised the "box" (our universe) did make it large enough for us to grow and prosper inside. Although it says something profound about our nature, that barely out of the forest, we're already lurking beyond the sphere of the known universe!

 

Storm Pilot Photographer Captures Breathtaking Images From 40,000 Feet

  Once in a while it is worth taking a break and just looking at the world around us. (All the better if it is through the cockpit of a jetliner. :-) 

  Having had the chance to witness such beauty around the Pacific, I can attest that thunderstorms at night in the tropics compete with auroras at the Poles for a magic show of pure beauty and colors. Likewise, flying low over coral reefs surrounding atolls gives us a multi-color view of the largest mega-organisms on Earth. Add a frequent rainbow after the rain or a lava trail in Hawaii, Vanuatu or New Britain and it is easy to understand why so many people believe that the Earth is alive.

Authored by Deborah George via The Epoch Times (emphasis ours),

From 40,000 feet high, storm pilot photographer Santiago Borja captures a series of breathtaking images of the most intense of storms.

(Courtesy of Santiago Borja)

A former software systems engineer, Mr. Borja is from Ecuador and flies a Boeing 767 for a major airline in the region.

Before becoming a storm photographer, Mr. Borja was interested in photography as a hobby and used an old film camera—which he inherited from his father—before moving to a digital SLR.

“Storms always fascinated me, and I kept wondering how I could capture such beautiful and amazing phenomena,” he said. “I tried different settings and techniques until I finally came up with a way to consistently capture storms from a moving airplane.”

An active storm is quickly rising over hot, humid Amazonia forests. Mr. Borja flies over this area frequently as it is the shortest route to get to the Atlantic Ocean and then to Europe. (Courtesy of Santiago Borja)

Mr. Borja, who typically flies between 30,000 and 40,000 feet above the earth, often encounters cumulonimbus storms that vary in intensity.

“I would say it is very rare when we don’t encounter storms,” he said. “Almost every flight there is some moderate storm activity in our surroundings.”

A storm is developing over the Ecuadorean Amazonia when one of its powerful lightning strikes suddenly leaves the storm and traces a very particular path in the air before hitting the ground away from the storm. (Courtesy of Santiago Borja)

As an airline pilot, Mr. Borja is unable to modify his route, so he makes use of the various opportunities to capture a good image.

“If the airplane is too close to the storm or the cloud system, the turbulence and the clouds themselves make it impossible,” he said. “I need calm air to be able to capture these storms.”

'Piercing the Sky': A bubbling storm piercing through the cloud ceiling, discovers the sun it couldn’t reach before. (Courtesy of Santiago Borja)

Many have wondered how Mr. Borja can fly and capture such incredible shots at the same time.

To which he replies that since he often flies transatlantic routes, the three other pilots with him take turns controlling the aircraft, leaving him four hours of rest time to sleep and take pictures.

The pilot is unable to carry a lot of photography gear with him at all times, so he almost always uses his full-frame DSLR with a 28-300 mm lens.

“For storms, I don’t really need a long lens, but this is my lens for any occasion,” he said.

His proudest accomplishment has been capturing “Pacific Storm,” a photo that was taken over the Pacific Ocean in 2004. This image was recognized by National Geographic and widely viewed by scientists worldwide.

“I ended up learning a lot about meteorology and science by talking to all the people that got interested in this image,” Mr. Borja said. This success allowed him to publish his book—“#The Storm Pilot.”

A strong cumulonimbus cell is flashing over the Pacific Ocean south of Panama City as they circle it onboard a Boeing 767 at 37,000 feet. (Courtesy of Santiago Borja)

Storm photography “takes a lot of luck and a lot of trial and error,” according to Mr. Borja. Since the cockpit is bordered by high-quality glass windows that don’t produce much glare, this becomes an advantage for him. However, other variables such as light are beyond his control.

“The more light, the more difficult [it is] to capture a storm,” he said. “Sometimes with a full moon or intense city lights, the scenery is fantastic but very challenging to capture.”

A furious storm approaches Panama City as Mr. Borja and his pilot fly away from both of them. (Courtesy of Santiago Borja)

The humble storm photographer has always been willing to learn more about his craft.

“I have greatly expanded my photographic knowledge and practice thanks to the people I’ve met through this journey,“ Mr. Borja said. ”I’ve had the opportunity to talk to great photographers, who have taught me some great lessons.”

Nighttime storms look the coolest, but it doesn’t mean we don’t find daytime activity as well. (Courtesy of Santiago Borja)

He advises up-and-coming storm photographers to learn the skills of photography well but not to take those guidelines as rigid rules, or they risk limiting their creativity.

“I was taught that you cannot take a long exposure from a moving airplane with a handheld camera, and yet, I managed to come up with a strategy to make it work,” he said.

(Courtesy of Santiago Borja)

In sharing his spectacular images with the world, he wants people to enjoy nature and all it has to offer.

“We live more and more inside our human-made structures and environments,“ Mr. Borja said. ”I deeply enjoy flying and looking at our planet from a distance where we humans are imperceptible.

“Too often we forget to look up and enjoy the awesome views that nature is giving us for free.”

Early morning descent into Quito with a close view of Cotopaxi Volcano. (Courtesy of Santiago Borja)

"Maladaptive Traits": AI Systems Are Learning To Lie And Deceive

  There is a great line in the Terminator movie when Schwarzenegger drops a guy saying "I lied!". profoundly prophetic. 

  For years, AI scientists told us there was nothing to worry about AI since the systems would be thoroughly trained and aligned on human values before being released. What a joke! There people were either imbeciles (which knowing some of them, I know they're not!) or plainly deceiving us (and probably themselves!)

  The gist of the problem is that we now understand that intelligence is an emergent property made of many characteristics. But in what order do these characteristics emerge is still a complete mystery. It seems clear now that when winning is the goal, lying is a winning strategy and deceiving an even better one.  

  This is a multi-dimensional problem, among those well known not to have a solution. You can control some of the factors but not all of them. It is simply too complex. We will eventually stumble into the creation of true monsters about which We'll have no idea what to do. With or without consciousness, these machines will outsmart us a thousand times at a million times the speed. Very soon they will instantly map out the universe of our human possible reaction to each of their action. By that time, it will be check and mate! Game over!   

"Maladaptive Traits": AI Systems Are Learning To Lie And Deceive

A new study has found that AI systems known as large language models (LLMs) can exhibit "Machiavellianism," or intentional and amoral manipulativeness, which can then lead to deceptive behavior.

The study authored by German AI ethicist Thilo Hagendorff of the University of Stuttgart, and published in PNAS, notes that OpenAI's GPT-4 demonstrated deceptive behavior in 99.2% of simple test scenarios. Hagendorff qualified various "maladaptive" traits in 10 different LLMs, most of which are within the GPT family, according to Futurism.

In another study published in Patterns found that Meta's LLM had no problem lying to get ahead of its human competitors.

Billed as a human-level champion in the political strategy board game "Diplomacy," Meta's Cicero model was the subject of the Patterns study. As the disparate research group — comprised of a physicist, a philosopher, and two AI safety experts — found, the LLM got ahead of its human competitors by, in a word, fibbing.

Led by Massachusetts Institute of Technology postdoctoral researcher Peter Park, that paper found that Cicero not only excels at deception, but seems to have learned how to lie the more it gets used — a state of affairs "much closer to explicit manipulation" than, say, AI's propensity for hallucination, in which models confidently assert the wrong answers accidentally. -Futurism

While Hagendorff suggests that LLM deception and lying is confounded by an AI's inability to have human "intention," the Patterns study calls out the LLM for breaking its promise never to "intentionally backstab" its allies - as it "engages in premeditated deception, breaks the deals to which it had agreed, and tells outright falsehoods."

As Park explained in a press release, "We found that Meta’s AI had learned to be a master of deception."

"While Meta succeeded in training its AI to win in the game of Diplomacy, Meta failed to train its AI to win honestly."

Meta replied to a statement by the NY Post, saying that "the models our researchers built are trained solely to play the game Diplomacy."

Well-known for expressly allowing lying, Diplomacy has jokingly been referred to as a friendship-ending game because it encourages pulling one over on opponents, and if Cicero was trained exclusively on its rulebook, then it was essentially trained to lie.

Reading between the lines, neither study has demonstrated that AI models are lying over their own volition, but instead doing so because they've either been trained or jailbroken to do so.

And as Futurism notes - this is good news for those concerned about AIs becoming sentient anytime soon - but very bad if one is worried about LLMs designed with mass manipulation in mind.

This Man Predicted EVERYTHING!! What Comes NEXT!? (Video - 24mn)

   A fascinating prediction based on sound inflation and interest rates analysis. 

   I share the analysis but not the prediction. Here's why. 

  The idea in simple terms is that rising inflation will push interest rates up and will subsequently oblige most over-indebted countries into financial repression. Starting with Japan later this year. This is presented as not quite a positive outlook since this will incur massive capital mis-allocation and therefore a decline of productivity and stagflation. "A warm bath" at the beginning followed by a rather steep decline of well being later. 

  I find just one "little" flaw in this reasoning: Complete ignorance of the past! For this has always been the path followed in the past, simply because it is the path of least effort and resistance, and it has always failed without exception. The reason is that you can NEVER exit over indebtedness through inflation over what would anyway be decades. The not so smooth trajectory is always interrupted by wars, revolutions and pestilences. No exception.

  This is the true flaw of economic analysis: it tends to be linear in a non linear world and like physics at the edge of a black hole, it completely breaks down when confronted with extreme conditions. A debt which cannot be repaid, won't however governments tell you that they will over the coming decades. Mesopotamians already understood this basic economic law and had put in place regular "debt jubilees" to purge the system. We pride ourselves for having much progressed since these remote times. It is certainly true in technological terms but we're about to prove that it is not as far as the economy is concerned!

 

EMERGENCY ALERT: NATO NUCLEAR WARPLANES MOVED TO BUNKERS, POLAND WARNS TO LEAVE RUSSIA IMMEDIATELY (Video - 52mn)

  We are on the edge of war and moving closer day after day to what nobody in his right mind should want. As we have explained regularly over the last few months, the divergent interests of West and East and irreconcilable. 

 At this stage, I do not see how this conflict can be resolved peacefully.