Fiat Keynesian Fiesta!
"Wealth inequality is a product of many years of policy, but in particular, this QE policy."
"An unclenching of tension"
- Mike “Boom Boom” Santoli, describing the markets this week.
First some obligatory Elon Musk bashing:
Tesla is now trying to build relationships with auto-industry publications and influencers on platforms such as Weibo and WeChat, for example by inviting them on factory tours, and conducting group “discussion sessions” with policymakers, consumers, and media outlets. According to people familiar with the matter, it’s also complained to the government over what it sees as unwarranted attacks on social media, and asked Beijing to use its censorship powers to block some of the posts.
Google Co-Founder, Other Billionaires Are Issued Subpoenas in Lawsuit Over JPMorgan’s Ties to Jeffrey Epstein
One fallout from Musk’s ban is that I’ve written extensively on these and other guys ties to Epstein over the years, and now you can’t read it. I still have all those posts and links though.
Melody Wright talks with Michael Farris, about the MSM disregard for the spiking cost of living, her road trips to the housing landscapes of Phoenix and Vegas (and Nashville), and about the state of the nation in general (here’s an earlier introductory podcast for background).
“A lot of people don’t actually see what’s happening unless you get off the highway, and start driving around.”
Very good discussion. I saw that she was being bashed by some goofballs on Reddit (and there are a lot of goofballs on Reddit, mostly moderators) who probably were in diapers back in 2006.
Back in 2006 well into 2008 anyone who suggested that housing was nuts was also attacked, and actually laughed at, by people like Larry Kudlow, Mike Norman, Don Luskin, Diane Swonk, Art Laffer, Ben Stein, Bob Pisani, and many others, including this guy with a Reagan tattoo on his ankle:
One thing with this podcast is that people living in Phoenix or Las Vegas or Nashville may be offended, but don’t be. I make fun of the Kafkaesque state I live in all the time. In case you missed it, the People’s Republic of Kalifornia is run by the worst people on Earth (voted in by the dumbest voters, apparently.) But the weather’s nice (though not so much this winter. I’ve had to wear long pants.)
I’ve spent a little time in Phoenix in the summer. As for Vegas, been there dozens and dozens of times over the years, and now don’t really care if I ever go again. It’s been all downhill ever since the corporations took over from the mob (although there’s a lot of overlap.) Never been to Nashville.
The weather expert that Melody couldn’t remember the name of is Shawn Hackett
The documentary they discuss towards the end is excellent: The Age of Easy Money.
I got a shout out at the very end:
“For those of you who follow Rudy Havenstein…”
“Whatever happened to him?”
“He got banned.”
“Again?”
Comedy. This is the post she mentioned.
Nothing new about governmental gaslighting on inflation. CPI is not cost of living.
MANY EXPERTS believe that the consumer price index overstates inflation, which rose 13.3 percent in 1979, but many average consumers disagree. This finding is from the latest quarterly consumer opinion survey conducted for the U. S. Chamber Survey Center by the Gallup Organization. On the basis of their own experience in their own communities, 40 percent of consumers believe the government's estimate of consumer price increases understates inflation. Thirty-eight percent feel the government estimate of inflation is about right, and nine percent say it overstates inflation. Fourteen percent were undecided.
The $300,000 starter home is going extinct: ‘A renter society not because of choice but because of force’
Side Effects of Soaring Real Estate Prices: June 2021
"Fiat Keynesian Fiesta...the capital class figured out how to use debt and their printing presses, and they slowly squeeze the middle class every single way they can in a search for yield, and it causes all these imbalances." - Tyler Neville
(Quotes are from Nick Halaris unless noted)
"We're seeing things manifest in my world in the real estate world, which are a direct consequence of the low interest rate environment and the pressure that's being put on these pensions to produce returns...It's very crazy."
"There was this really high profile transaction in Houston where - I think it was Blackstone - went in and paid like 50% more than what these houses would have traded for if they sold to first time home buyers"
“One of the things you said...was people don't get the QE mechanism. Everyone thinks it's just an asset swap, but you're sitting front and center in an asset class, which is housing and in commercial real estate that you think is the number one beneficiary" - Tyler Neville
"All those homes...quickly got gobbled up by these institutions...who are doing this buy to rent strategy....all of a sudden Blackstone & Colony raised these funds. And they literally bought everything. Every foreclosure that was at the auction, they bought them all."
"At the end of the day, it's too expensive: $600,000 - the median home in America is $330,000, yet here in LA, we can't build homeless housing for $600,000 a unit. It's insane."
This paywalled Nick Halaris interview on Realvision in April 2021 is excellent:
Hidden Inflation Rears Its Head in Housing.
I posted some quotes at the time:
"There was a sense in which the Fed in particular was deliberately trying to ignore the reality of inflation of housing costs or just hoping that people wouldn't notice, because it went against the general narrative of what their policy was attempting to achieve."
"We were at the time investing in value-add multifamily properties in Atlanta, and we were buying properties where the rent would be $500, for example, for one bedroom, and by the time we sold it, it would be like $1000. This was happening in just a number of years."
"I started noticing that there was this disconnect between the popular narratives in the market, which is that quantitative easing is relatively benign when it comes to inflation, and what I was seeing in real estate, which was like massive inflationary forces."
“I was seeing real life inflation in the cost of living, like 100%. Meanwhile, we were getting CPI prints that look below 2% and we're talking about this permanently low inflation problem that we were having."
"I think now, it's getting to a point where it's hard to ignore when the median house is up 15% or 20% year-on-year, up to $340,000 from where before it was in the two hundreds. They're starting to lose control of this narrative."
"One of the fascinating things I found was that in the CPI calculation methodology, they have this concept called owners' equivalent rent."
"𝙄 𝙧𝙚𝙖𝙡𝙡𝙮 𝙨𝙩𝙖𝙧𝙩𝙚𝙙 𝙩𝙝𝙞𝙣𝙠𝙞𝙣𝙜 𝙖𝙗𝙤𝙪𝙩 𝙩𝙝𝙚 𝙞𝙣𝙩𝙚𝙜𝙧𝙞𝙩𝙮 𝙤𝙛 𝙩𝙝𝙚 𝙙𝙖𝙩𝙖."
"I'm not a believer in conspiracy theories [𝘐 𝘢𝘮 - 𝘙𝘏] but I do think that the runaway inflation, what I consider to be runaway inflation in housing is something that the Fed in particular and the government in general was trying to avoid because it's a serious problem"
"...you start to think about life, okay, so if your house is up 100%, the cost of education is up 100%, healthcare, I don't know how the CPI could be registering under 2%. It makes no sense, really."
"As I started to think about the whole issue, it brought me back to QE and it brought me back to the original intent of the program. I think that that's where the secret lies in this whole thing."
"Wealth inequality is a product of many years of policy, but in particular, this QE policy. The intent of it was...this trickledown effect on the economy."
“Real estate is such a huge piece of the spending...it's so dangerous from an inflationary standpoint. If you take a big city where people are spending...50% of income on housing, and you put some inflation into that, it gets really dangerous for standard of living very quickly."
This is from James Stack:
Back on the ground in China: 8 anecdotes from our first post-Covid visit
From a comment on the article:
I visited the same general area (Guangdong province) a few weeks ago and couldn’t believe the amount of EVs on the road. BYD is absolutely crushing it there...In the past you could still survive as a tourist using a credit card in China. Now everything is paid for via WeChat pay (Tencent) or Alipay (Alibaba). Even to enter the country I needed WeChat to fill out government health declaration forms. These tech firms are dominant in the way Visa/MC are in the US, except it feels like an even stronger grip on the market.
Hamilton 68 was a high-level hoax perpetrated against the American people
[In 2017] a new outfit called Hamilton 68 claimed to have discovered hundreds of Russian-affiliated accounts that had infiltrated Twitter to sow chaos and help Donald Trump win the election. Russia stood accused of hacking social media platforms, the new centers of power, and using them to covertly direct events inside the United States.
None of it was true. After reviewing Hamilton 68’s secret list, Twitter’s safety officer, Yoel Roth, privately admitted that his company was allowing “real people” to be “unilaterally labeled Russian stooges without evidence or recourse.”
The Hamilton 68 episode played out as a nearly shot-for-shot remake of the McCarthy affair, with one important difference: McCarthy faced some resistance from leading journalists as well as from the U.S. intelligence agencies and his fellow members of Congress. In our time, those same groups lined up to support the new secret lists and attack anyone who questioned them.
When proof emerged earlier this year that Hamilton 68 was a high-level hoax perpetrated against the American people, it was met with a great wall of silence in the national press. The disinterest was so profound, it suggested a matter of principle rather than convenience for the standard-bearers of American liberalism who had lost faith in the promise of freedom and embraced a new ideal.
Twitter’s algorithms turned the Russian-influence-exposing “dashboard” into a major news story. Behind the scenes, Twitter executives quickly figured out that it was a scam. When Twitter reverse-engineered the secret list, it found, according to the journalist Matt Taibbi, that “instead of tracking how Russia influenced American attitudes, Hamilton 68 simply collected a handful of mostly real, mostly American accounts and described their organic conversations as Russian scheming.” The discovery prompted Twitter’s head of trust and safety, Yoel Roth, to suggest in an October 2017 email that the company take action to expose the hoax and “call this out on the bullshit it is.” [Roth is anything but a free-speech advocate by the way - rh]
In the end, neither Roth nor anyone else said a word. Instead, they let a purveyor of industrial-grade bullshit—the old-fashioned term for disinformation—continue dumping its contents directly into the news stream.
Clint Watts, who headed up the Hamilton 68 initiative, and Michael Hayden, the former Air Force general, CIA chief, and NSA director who championed Watts, are both veterans of the U.S. counterterrorism establishment.
Michael Hayden “has lied so brazenly and so often, anything he says must be treated with instant suspicion.”
Twitter had the chance to stop the Hamilton 68 hoax before it got out of hand, yet chose not to. Why? The answer can be seen in the emails sent by a Twitter executive named Emily Horne, who advised against calling out the scam. Twitter had a smoking gun showing that the Alliance for Securing Democracy, the neoliberal think tank behind the Hamilton 68 initiative, was guilty of exactly the charge it made against others: peddling disinformation that inflamed domestic political divisions and undermined the legitimacy of democratic institutions. But that had to be weighed against other factors, Horne suggested, such as the need to stay on the good side of a powerful organization. “We have to be careful in how much we push back on ASD publicly,” she wrote in February 2018.
Note that in Emily Horne’s Twitter account, she still mentions that she was the Spokesperson for the White House National Security Council (that WHNSC Twitter account has now disappeared.)
Just look at the powerful positions this ridiculous person has held. Nauseating.
The Biden administration is using Big Tech as its private censorship arm, and that violates what the Supreme Court, in Norwood v. Harrison (1973), called an “axiomatic” principle: The government “may not induce, encourage or promote private persons to accomplish what it is constitutionally forbidden to accomplish.”
This is a First Amendment issue.
I can't believe the quality of your work, how do you produce so much excellent work? Its unbelievable to me and your 100% correct about Reddit
I *know* there are people under the age of 50 who realize how fucked up things really are, but I don’t think anyone under that age can really appreciate the chasm between the way life was in the 70’s and 80’s, and where we find ourselves today.
I make it a practice to watch films made in that era just to go to a place where I remember not being terrified of what will happen 6-months from now; an era when I wasn’t aware that there was an entire class of humans who wanted me dead for no other reason than that I fucking exist. I often cry with nostalgia.