Special Cinco de Mayo edición!
“They don't want to do a gold audit for a reason.”
Figured I’d put this out today, because there’s plenty of fun stuff I’ve put to paper (so to speak) over the last few days. Sláinte!
This is from Andrew Napolitano, who’s not a left-wing judicial activist:
“We are witnessing an unprecedented assault on the separation of powers and the concept of federalism by a White House impatient with the constitutional process and largely indifferent to the role and function of the judiciary.
The role of the judiciary is to be anti-democratic — to protect lives, liberties and properties from the other two branches.
If the feds succeed in intimidating judges and bending them to the presidential will, our liberties will have no protection.”
“A legacy of misconduct”
UBS Will Pay $511 Million to End Credit Suisse Tax Probe in U.S.
So was it the shareholders of UBS, or Credit Suisse, who did the tax evasion?
Again, a slap on the wrist, and no criminal prosecution of the individuals involved. Too big to jail.
UBS Group AG agreed to pay $511 million to settle a US investigation into how Credit Suisse Group, the Swiss bank it bought, helped rich Americans evade taxes even after pledging to stop the practice a decade ago.
A Credit Suisse unit pleaded guilty to conspiring to help its customers file false US tax returns and agreed to pay $372 million, UBS said in a statement Monday. The unit will pay an additional $139 million penalty as part of a related settlement.
The resolution ends a legacy of misconduct(!) by Credit Suisse, which used Swiss bank secrecy laws to help Americans hide money from the Internal Revenue Service for decades. But the bank failed to fully comply with a 2014 deal to uncover and disclose US accounts, and several criminal cases showed its clients continued to cheat the IRS.
“The S&P 500 notched its ninth straight days of gains this week, its longest winning streak since November 2004.”
Ended today.
Gee, I hope taxpayers don’t stop funding NPR. We might lose content like this:
This book was published in 1968.
I suppose the U.S. dollar Rickenbacker wrote about did die in 1971, but the current doomsayers may still be premature.
"I'm bullish on America. Never made any money betting on the end of the world."
John Johnston
“We have been in a state of incredible imbalance. Huge, crazy plutocracy.”
This excerpt below could’ve come from my interview with Maggie Lake:
“Quoting Scott Bessent, 10% of the population own 88% of the stocks. I'll say it again. 10% of the population own 88% of the stocks. So there's always specious statistics that people throw around and everything like that, but this one kind of rings true to me. The other 12% is owned by the next 40% of the population. Half the population - that's half, 150 million people in America - don't have anything. They don't have 200 bucks. They have debt. They rent their homes. They owe money on their cars, trillions in student loans. That part of America is negative.”
Good piece by Tim Price, who I’ll be talking to this week: Preparing for the Turning Point
Wildfires dent Berkshire's profit; cash soars to $347.7 billion This is how big that number is: it’s 88 days worth of Fed QE.
August 10, 2018: Steve Bannon on How 2008 Planted the Seed for the Trump Presidency There is very little that I disagree with in this interview.
“It's hard to reconcile $3,300 gold and $57 crude right now. Just doing the math in my head, it's like somewhere around 55 or 58 barrels of crude for a single ounce of gold. That's just never happened. Cheap energy like that, and very expensive gold means somebody's got to be wrong here These two things will not coexist for a long long time.”
Overlooking the Covid aberration - when crude briefly went negative - the only other time (since 1990) the ratio has been almost this high was early 2016, when gold was ending a 5-year bear market, bottoming at just about $1,045 an ounce, and at the same time oil had plunged from $105 to $26! Hard to wrap my head around what drops this ratio.
“I don't think gold's really started yet I really don't” - jj
The other night a friend - a very successful, well-off guy - was talking about how he had taken various pieces of old jewelry and sold them for $10k. I still don’t think most Americans have any interest in buying gold (at least half don’t have the money to do so anyway.)
Gold/Silver Ratio
“The idea that we have a reserve of gold is useless until its integrity has been thoroughly verified.”
“They don't want to do it [a gold audit] for a reason.”
People forget that Bob Pisani audited all the gold over a dozen years ago…
Apparently "there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities."
“We have gone from what was a really bizarre vision of the future, of a single globalist brave new world - which just turned into a corrupt gang of grifters stealing money and making themselves rich - to a big wakeup call” - j. johnston
Job Openings: Total Nonfarm/Unemployment Level
“You guys realize we are in recession, right?”
“At McDonald’s, even $5 value meals have struggled to tempt customers into the stores. The fast-food giant reported a 3.6 per cent drop in US same-store sales for the quarter that ended in March. That is the biggest year-on-year quarterly fall since Covid.”
“The Buffett Indicator”
Retail’s been buyin’, pros have been cryin’
Are there any truly safe assets anymore?
by Satyajit Das, whose analysis I remember being quite prescient in the runup to 2008.
U.S. banks have around $500 billion in unrealized losses, representing 50% of their Common Equity Tier One capital, according to one study. Global losses are perhaps three to four times that. Central banks are also sitting on large losses. Liquidation of these holdings would increase rates.
Investors are ignoring the risk of sovereign debt restructuring. The Miran plan, under consideration by the U.S. administration, entails a forced exchange of certain U.S. Treasury securities for low or zero coupon long-dated (100-year) bonds. It would trigger divestment from U.S. government securities and the dollar with consequential large losses…
The use of government bonds and high-quality bonds as safe haven assets is complicated by their use as collateral for loans or derivative exposures. In a crisis, defaults would force selling as holders sought to reduce exposure. There might be simultaneous liquidation by investors facing markdowns on their portfolios. Under conditions of stress, you typically sell what is liquid and what has the lowest losses. These actions would push up rates, causing losses. Price falls may be exaggerated because of illiquid bond markets due to the reduction in market makers because of industry consolidation and high capital charges on dealer inventory. Many of these factors were evident in the 2008 global financial crisis, memories of which have faded…
A newer option is cryptocurrencies like Bitcoin. But they do not represent claims on real assets or cash flows, cannot be consumed and have no alternative use. They are difficult to trade and not readily convertible into goods and services. The exaggerated volatility of prices makes them unreliable stores of purchasing power. For the moment, they are only speculative objects worth whatever people ascribe to them or "consensual hallucinations."
Recent shifts in money markets mean there are no longer any truly risk-free assets -- everything is likely to be repriced in this crisis. As Martha and The Vandellas sang: There may be nowhere to run to, nowhere to hide!
“Generally, when there is a disaster in the world, there are four people you always find at the zone of the disaster looking crippled and deeply injured, and they start with the German Landesbanks, the Japanese banks; and usually, you find Citigroup and Merrill Lynch somewhere nearby.”
Merrill Lynch is now part of Bank of America.
Lacy Hunt
”I think that the dual mandate of the Federal Reserve has served them very poorly. There should only be one mandate, and that's the inflation rate, and the inflation rate over time, not month to month or quarter to quarter or even year to year. You have to look at it from a long-term perspective, and the Federal Reserve is misfocused.”
Clearly the Fed is also terrible at bank regulation, another of their supposed jobs.
Here’s Bill Black's excellent description of the abysmal failed bank regulation by the Federal Reserve, in this case under Alan Greenspan and Ben Bernanke (April 2010):
“One of the key things that they think is that monetary policy works is through something called forward guidance, and my view is that the forward guidance has resulted in a shift of of investable funds from the real economy to the financial economy by giving too much weight to the stock market, so whenever the equity markets begin to waffle, they come in and support it, and they've created this impression that financial investments in equities are higher returning, more liquid and safer assets than investment in plants and equipment. It has caused a reallocation from the hard assets that raise the standard of living, into financial assets which serve us very poorly.
The debt's been a factor here. Debt's been going up, which is adversarial to growth through diminishing returns. Forward guidance has has encouraged investment in financial rather than real assets, and between the two, in the last 20 years, our real per capita growth rate uh has dropped to 1.2% from 2.3%. That's a 40% decline. Part part of the blame is fiscal policy, but the Federal Reserve has contributed to this negative impact, there's no question in my mind, and yet they go ahead talking about all these short-run movements, and relying on data series that are revised and are of very little of value in the long run. That's the policy outcome that we get. I'm afraid monetary policy is very misplaced in terms of the way it's conducting itself.”
As bad as our situation is, the condition in Europe is far worse
“As bad as our situation is, the condition in Europe is far worse, because the unfunded liabilities and their social service programs are far greater than ours, and so it's not like this is just a U.S. problem, it's a global problem as well. The debt overhang is is one of the reasons why not only the US economy is underperforming, but the rest of the world is underperforming.”
“Much of the post-Covid economy has been wrapped up in actual fraud or indirect fraud and now we're seeing some of these loose practices unwind…There was a lot of B.S. that was propping up this economy that was not sustainable…” - Jon Winick
Don’t miss this clip.
Apollo, Sumitomo Mitsui, Carlyle Group, Ares - this is like a who's-who of the first guys Jay Powell is going to bail out next time:
“Apollo Global Management Inc. and other investors have bought the first known bonds that offload risk from bank loans extended to private credit funds known as business development companies.
Japan’s Sumitomo Mitsui Banking Corp. sold securities known as significant risk transfers earlier this year to shed risk from at least $3 billion of credit lines it had provided to BDCs, a popular fund structure among direct lenders, according to people with knowledge of the transaction.
Carlyle Group Inc. and Ares Management Corp. also bought slices of the first-of-its-kind $375 million security, said the people, who asked not to be identified because they’re not authorized to speak publicly.
The deal marries two of Wall Street’s hottest markets: The amount of loans globally underlying SRTs is expected to jump as much as 15% this year to $320 billion, according to estimates from Bloomberg Intelligence, as banks deploy so-called capital relief trades in an effort to offload some of their exposure and free up resources for additional lending or investor payouts.
Private credit, meanwhile, has ballooned into a $1.6 trillion industry, with BDCs raising a record $24 billion from the US bond market last year to help fund deal financings.”
I don’t know what’s really going on here, but this just seems so…sleazy, at best.
At a crypto conference in the United Arab Emirates, Eric Trump and Zach Witkoff announced that the Trump family's stablecoin - World Liberty Financial's USD1 - will be the vehicle for the state-backed Emirati investment firm MGX to invest $2 billion into Binance, the world's largest crypto exchange.
The announcement comes weeks after Binance founder and former CEO Changpeng Zhao claimed he had "no discussions of a Binance US deal with … well, anyone."
"A publicly-traded logistics firm has struck a $20 million deal with an institutional investor to purchase Official Trump memecoins…Freight Technologies (FRGT) CEO Javier Selgas pitched the move as part of an effort to grow U.S.-Mexico commerce—though how a memecoin fits into supply chains remains unclear. The investment also comes as the U.S. Office of Government Ethics examines whether President Donald Trump violates federal ethics rules by offering exclusive access to his coin’s top investors.”
The chart is bizarre:
“I'm incredibly bullish…supply chains win wars. Supply chains drive economies, and the United States has outsourced its entire supply chain to China effectively, and what is happening right now that we're being forced to reckon with that, and it's not fun, and it's not easy…”
Inside Disco Corp “For over a decade, a $20bn manufacturer has been conducting a radical experiment. No one has a boss or takes orders. Their decisions are guided by one thing, an internal currency system called Will”
I am still amused that the ‘UAP’ photo on the left was actually shared at a "UAP Disclosure Fund panel" by “Lue” Elizondo.
“The images shared by Luis Elizondo at the congressional briefing, initially presented as a new UFO sighting, were quickly matched by internet users-most notably on Reddit-to a circular agricultural field in Colorado, visible on satellite imagery at coordinates 38.810833, -103.945833. This suggests that the "UFO" in the photo is almost certainly just a circular field, not an unidentified aerial phenomenon, and the resemblance is so precise that it leaves little doubt about the match. This isn't the first time a supposed UFO image presented by Elizondo has been debunked; in the past, other photos have turned out to be mundane objects like light fixtures reflected in glass.”
“The past is never dead. It’s not even past.”
“I give the CIA total credit for sponsoring and initiating the entire consciousness movement counter-culture events of the 1960s. The CIA funded, supported & encouraged hundreds of young psychiatrists to experiment with this drug."
I came across the Leary quote because it was mentioned in a fascinating article (part 1 of 2) by Mark Goodwin: "Scientology, The CIA, and MK-ULTRA"
Re Merrill-BofA. Note that Salomon essentially taking over Citibank was the first and even worse step. Please bring back Glass Steagall soon, very soon. Hoping Bannon was right…
It was Barzini all along :) https://www.epsilontheory.com/our-true-enemy-has-yet-to-reveal-himself/