I’ve noticed that since around 2020, the MSM has taken to judging the statements of politicians with qualifications like “Senator so-and-so falsely claimed that …”. I am eagerly awaiting such qualified judgment the next time Joe Biden or Janet Yellen claim that the SVB and Signature bailouts were not bailouts. The FDIC is eating $20 billion on SVB alone. That’ll be passed on to all other banks in higher deposit insurance premiums and will impact their shareholders, employees, customers, and ultimately the real economy. That $20 billion is a direct transfer to large depositors of SVB who should have taken a haircut but those depositors just happened to be politically favored. If SVB’s uninsured depositors were coal companies or E&P companies, they would never have been bailed out.
Even when I agree that the person being reported on is a liar, I can’t stand seeing that type of verbiage in what’s supposed to be hard news coverage. This was unheard of even five years ago.
(Maybe unheard of is too strong… “news analysis” articles in The NY Times have always expressed opinions — editorials posing as news — but this type of thing has clearly gone to a new level…)
If I could publicly pick your brain - if you were trying to tell 20-somethings about the GFC and could use a 60-90 second clip from The Big Short, is there an obvious choice? I know they should see the whole thing anyway.
You’re a great consolation, Rudy, in this the Age of Greed. As muckraker Jessica Mitford said “"You may not be able to change the world, but at least you can embarrass the guilty."
So the banks become casinos, and when they lose, the governments print money. So inflation rises, increasing financial stress on average Joe and Joanne, they default on their mortgages, so MBS go to zero like 2008 again. Governments print more money to bailout MBS holders, causing more inflation? Yearly inflation in US for '07 was 2.85%, '08 was 3.84%, '09 was -0.36%. Is there a major lag effect here or did '08's GFC not really impact inflation as much as COVID stimulus packages did? What am I missing? (https://www.in2013dollars.com/inflation-rate-in-2008#:~:text=The%20inflation%20rate%20in%202007,consumer%20price%20index%20(CPI).)
Well, I've claimed and tried to show for years that the CPI understates the cost of living. Their solution to GFC was to intentionally try to force savers into risky behavior, spiking housing prices and stock prices (and 10% of Americans own 90% of stocks). There's lots of inflation, it's just not generally measured in a way a normal person would measure it. The covid package did send cash to a lot of people not used to having spare cash (remember, even the Fed said half of Americans couldn't come up with $400 in an emergency). That certainly caused a lot of people to waste money on a lot of things (or simply eat and live with a roof), but no productive investment. This spiked certain measures of inflation, but a lot of disinflationary forces over the past 40 years (e.g. globalization) have slowed or stopped. Their "transitory" inflation has been over 2% for 2 years now, even using their bogus CPI numbers. (Their legal mandate is not 2%, by the way - they made that up. It's "stable prices.") I know one thing for certain. A dollar will buy me a lot less in 5 years than today, regardless of what voodoo math they may create to make it look better. And high inflation is actually what these guys secretly WANT.
Yes, CPI is not the best measure of currency debasement, as people purchase things outside of that pre-selected basket of goods. Surely there's a better metric for everyone to do mental gymnastics over. Inflation suits the richest 1% through appreciation of asset prices, resulting in no confidence in USD or any other printable currency to maintain purchasing power. Stocks, bonds and real estate are all grossly overvalued by an orgy of money printing passed through government checks and balances by an aging and wealthy baby boomer population who can't take their assets with them to the next life. Commodities cost too much to store for long times and are ephemeral. We aren't going back to a gold standard, it's too expensive to securely store and transfer gold as a medium of exchange, it's too bothersome as a unit of account (how many gold flakes for my coffee again?), isn't outpacing inflation as a store of value, is unauditable, is largely driven by paper trades and derivatives and who knows when we could just double the gold supply from a newly found mine or that big asteroid flying nearby that NASA/SpaceX captured. Barter allows for localised arbitrage opportunities and the tiktok obsessed population with nanosecond attention spans probably don't want to haggle a few extra apples or carrots, or even grow anything in general. What logical options are left? Bitcoin? Riddled with scams, a toxic community, most people don't want to receive tips with it and its soon to be made illegal in most countries?
I am not a Bitcoin or crypto guy, though I emphasize with them. I still accept US dollars. The dollar remains the healthiest horse in the glue factory, for the time being.
Seems like a lot of talentless hacks and parasites were simply riding a tsunami of horrible monetary policy.
Who is worth less - A sell side analyst or a bank panel valuer?
Sorry Hulk, it's not going to work. Better to smash than to sleep.
I’ve noticed that since around 2020, the MSM has taken to judging the statements of politicians with qualifications like “Senator so-and-so falsely claimed that …”. I am eagerly awaiting such qualified judgment the next time Joe Biden or Janet Yellen claim that the SVB and Signature bailouts were not bailouts. The FDIC is eating $20 billion on SVB alone. That’ll be passed on to all other banks in higher deposit insurance premiums and will impact their shareholders, employees, customers, and ultimately the real economy. That $20 billion is a direct transfer to large depositors of SVB who should have taken a haircut but those depositors just happened to be politically favored. If SVB’s uninsured depositors were coal companies or E&P companies, they would never have been bailed out.
I'm sure you've noticed that those 'qualifications' are 99% one-sided. No wonder people hate the MSM. It's op-ed pretending to be news.
Even when I agree that the person being reported on is a liar, I can’t stand seeing that type of verbiage in what’s supposed to be hard news coverage. This was unheard of even five years ago.
(Maybe unheard of is too strong… “news analysis” articles in The NY Times have always expressed opinions — editorials posing as news — but this type of thing has clearly gone to a new level…)
Way too far. Even the local news is too far gone. I could add "qualifications" to just about every public figure. I don't want editorialized news.
If I could publicly pick your brain - if you were trying to tell 20-somethings about the GFC and could use a 60-90 second clip from The Big Short, is there an obvious choice? I know they should see the whole thing anyway.
So many great scenes. This one came to mind - it shows that why you should never trust anything anyone on Wall Street says.
https://www.youtube.com/watch?v=A25EUhZGBws
Perfect thanks much 👍🏼
You’re a great consolation, Rudy, in this the Age of Greed. As muckraker Jessica Mitford said “"You may not be able to change the world, but at least you can embarrass the guilty."
Great quote! I will use that.
So the banks become casinos, and when they lose, the governments print money. So inflation rises, increasing financial stress on average Joe and Joanne, they default on their mortgages, so MBS go to zero like 2008 again. Governments print more money to bailout MBS holders, causing more inflation? Yearly inflation in US for '07 was 2.85%, '08 was 3.84%, '09 was -0.36%. Is there a major lag effect here or did '08's GFC not really impact inflation as much as COVID stimulus packages did? What am I missing? (https://www.in2013dollars.com/inflation-rate-in-2008#:~:text=The%20inflation%20rate%20in%202007,consumer%20price%20index%20(CPI).)
Well, I've claimed and tried to show for years that the CPI understates the cost of living. Their solution to GFC was to intentionally try to force savers into risky behavior, spiking housing prices and stock prices (and 10% of Americans own 90% of stocks). There's lots of inflation, it's just not generally measured in a way a normal person would measure it. The covid package did send cash to a lot of people not used to having spare cash (remember, even the Fed said half of Americans couldn't come up with $400 in an emergency). That certainly caused a lot of people to waste money on a lot of things (or simply eat and live with a roof), but no productive investment. This spiked certain measures of inflation, but a lot of disinflationary forces over the past 40 years (e.g. globalization) have slowed or stopped. Their "transitory" inflation has been over 2% for 2 years now, even using their bogus CPI numbers. (Their legal mandate is not 2%, by the way - they made that up. It's "stable prices.") I know one thing for certain. A dollar will buy me a lot less in 5 years than today, regardless of what voodoo math they may create to make it look better. And high inflation is actually what these guys secretly WANT.
Yes, CPI is not the best measure of currency debasement, as people purchase things outside of that pre-selected basket of goods. Surely there's a better metric for everyone to do mental gymnastics over. Inflation suits the richest 1% through appreciation of asset prices, resulting in no confidence in USD or any other printable currency to maintain purchasing power. Stocks, bonds and real estate are all grossly overvalued by an orgy of money printing passed through government checks and balances by an aging and wealthy baby boomer population who can't take their assets with them to the next life. Commodities cost too much to store for long times and are ephemeral. We aren't going back to a gold standard, it's too expensive to securely store and transfer gold as a medium of exchange, it's too bothersome as a unit of account (how many gold flakes for my coffee again?), isn't outpacing inflation as a store of value, is unauditable, is largely driven by paper trades and derivatives and who knows when we could just double the gold supply from a newly found mine or that big asteroid flying nearby that NASA/SpaceX captured. Barter allows for localised arbitrage opportunities and the tiktok obsessed population with nanosecond attention spans probably don't want to haggle a few extra apples or carrots, or even grow anything in general. What logical options are left? Bitcoin? Riddled with scams, a toxic community, most people don't want to receive tips with it and its soon to be made illegal in most countries?
I am not a Bitcoin or crypto guy, though I emphasize with them. I still accept US dollars. The dollar remains the healthiest horse in the glue factory, for the time being.