Apr 14, 2023·edited Apr 14, 2023Liked by Rudy Havenstein
I finished my annual deep dive into family finances last night. It's hard to compare costs year-to-year because of lifestyle changes, but inflation on the staples of family life - food, clothes, etc. (we're incredibly lucky our housing costs are fixed) - must be up 15% from last year. Just thousands and thousands and thousands of more dollars needed per year to keep everyone clothed and fed and happy. We're fortunate that we can deal with the bleeding, for now... but sooooo many people in America must be crashing into destitution. Every day.
I think East Palestine paints a grim picture of the help we can expect from the government.
"I just wish everyone wasn’t so insecure." If somehow we could rectify this I honestly believe we would make so much progress. But, instead, we pump our chests or cry victim instead of doing the hard work.
UWM is going to crash and burn....and after I get through doing the 500 other things I've promised people I plan to spend significant time figuring out how it will happen.
And, now everyone is disputing where the "booked" CRE leverage is (https://www.axios.com/2023/04/12/commercial-real-estate-regional-banks-loans-maturing)....don't fool yourselves people, we have NO IDEA where the REAL re-hypothecated leverage is. We had a business at ResCap called CapRE (re-insurance) that I saw wiped to 0. These derivatives are air. And, we can see from what is happening in the Treasury markets that there is real distress. I just wish everyone would stop arguing about stupid details and get to the work of figuring out how we reasonably get out of this mess.
“A business in which huge amounts of compensation flow from assumed numbers is obviously fraught with danger.” Better not show this to Secretary Yellen.
“While the official CPI rate of change may be at lowest level since May 2021, consumer prices will never return to May 2021 levels.”
If the CPI was to *fall* for even a couple of months, the Fed would consider it a national catastrophe/emergency. The MSM does a terrible job of explaining the difference between deflation and disinflation. As far as I know, no one at the Fed has proposed that CPI should run at under the magic 2% level in the future to make up for overshooting their target over the past two years. It’s a totally asymmetric situation.
My view is that a capitalist system requires all parties to honour the code of practise; the fact that it’s a free system is where the inherent vulnerability lies - institutions, people (through greed and ignorance) are capable of destroying the system from within. Bad decisions are as much a part of capitalism as good ones - we’ve just had too many bad ones.
Unparalleled! Aside from thinking you are friendly w/ Adderall ref your productivity, train of thought & ability to make a point, you must just be another genius🤷🏻Keep kicking arsch Hombre! 🏅🙏
I finished my annual deep dive into family finances last night. It's hard to compare costs year-to-year because of lifestyle changes, but inflation on the staples of family life - food, clothes, etc. (we're incredibly lucky our housing costs are fixed) - must be up 15% from last year. Just thousands and thousands and thousands of more dollars needed per year to keep everyone clothed and fed and happy. We're fortunate that we can deal with the bleeding, for now... but sooooo many people in America must be crashing into destitution. Every day.
I think East Palestine paints a grim picture of the help we can expect from the government.
A guy I play poker with texted me today that playing cards are up 40% year over year.
"I just wish everyone wasn’t so insecure." If somehow we could rectify this I honestly believe we would make so much progress. But, instead, we pump our chests or cry victim instead of doing the hard work.
UWM is going to crash and burn....and after I get through doing the 500 other things I've promised people I plan to spend significant time figuring out how it will happen.
And, now everyone is disputing where the "booked" CRE leverage is (https://www.axios.com/2023/04/12/commercial-real-estate-regional-banks-loans-maturing)....don't fool yourselves people, we have NO IDEA where the REAL re-hypothecated leverage is. We had a business at ResCap called CapRE (re-insurance) that I saw wiped to 0. These derivatives are air. And, we can see from what is happening in the Treasury markets that there is real distress. I just wish everyone would stop arguing about stupid details and get to the work of figuring out how we reasonably get out of this mess.
Buffett's words in 2005 are very sobering.
"their potential to explode could not be measured'
Exactly....
And can you imagine today's crop of newbies unwinding derivatives compared to Buffett's crew handling the Gen Re book years ago? Tragicomedy.
This is a lot of what I'm been thinking about....it took us 7 years to unwind ourselves to BK....with real money guys who knew this stuff...and that liquidating trust is still around. Johnny Ray moved to the FTX BK, but ResCap keeps on trucking. https://www.prnewswire.com/news-releases/rescap-liquidating-trust-announces-fourteenth-distribution-to-unitholders-301780091.html. Long road ahead.
And p.s. - thank you so much for linking the Spaces.
Paleoconservative here; anti war is anti profit; it makes them very sad.
Here in the Free State of Florida (TM) (except for pregnant women who must bear dead fetuses to term), Amscot charges 288% interest a year. https://www.amscot.com/cash-advance.aspx. Pawn shops charge 25% a month. High interest kills the hedge funds owners. Chamath told Wapner let the hedge fund managers get wiped out; so what, they can't spend the summer in the Hamptons? https://www.commondreams.org/news/2020/04/10/who-cares-let-em-get-wiped-out-stunning-cnbc-anchor-venture-capitalist-says-let Too bad losses are socialized, gains are privatized. Eat the rich.
Why buy derivatives where the counter party can go bust? Just find a different long trade.
Awesome data in this post - BUT https://twitter.com/InvResDynamics/status/1646909862855467009
Why don't financial prognosticators always add "unless the Fed intervenes" when making predictions?...
When have they not intervened? :)
1912
“A business in which huge amounts of compensation flow from assumed numbers is obviously fraught with danger.” Better not show this to Secretary Yellen.
“While the official CPI rate of change may be at lowest level since May 2021, consumer prices will never return to May 2021 levels.”
If the CPI was to *fall* for even a couple of months, the Fed would consider it a national catastrophe/emergency. The MSM does a terrible job of explaining the difference between deflation and disinflation. As far as I know, no one at the Fed has proposed that CPI should run at under the magic 2% level in the future to make up for overshooting their target over the past two years. It’s a totally asymmetric situation.
Watching capitalism destroy itself takes a long time. Are we there yet?
Money printing is not capitalism.
My view is that a capitalist system requires all parties to honour the code of practise; the fact that it’s a free system is where the inherent vulnerability lies - institutions, people (through greed and ignorance) are capable of destroying the system from within. Bad decisions are as much a part of capitalism as good ones - we’ve just had too many bad ones.
Unparalleled! Aside from thinking you are friendly w/ Adderall ref your productivity, train of thought & ability to make a point, you must just be another genius🤷🏻Keep kicking arsch Hombre! 🏅🙏