Thank you so much Rudy. Got to ask Steve a couple of questions on George Noble’s spaces last night. Was a little wild because I always felt like Mark Baum was my spirit animal. What became clear is that he is very removed from today’s market.
To anyone tempted to judge Ayn Rand and her writings by the commentary of second-hand sources like Rudy Havenstein or James Tucille, I will repeat the same advice I have always offered: Read and judge Ayn Rand's work independently. Read her novels, her essays, her philosophy. Judge for yourself. Do not accept the judgment of others.
Why does everyone blame the FED? From what I can tell Powell tries to behave like the only adult in the room of drug addicts with a cocaine fountain, finally limiting the fountain … the previous 2 chairs would have been on QE4 and QE5 within a blink after being called to the White House.
Imagine what US debt would be if the congress wouldn‘t need to have the budget conversations, if there was not someone independent of them with an (at this point in time) hopefully conflicting agenda.
If anyone wanted to solve the problem, the first thing they would have to do is finally do something about the blattant corruption in Washington and NY … But who would want to start that and turn off their money fountain and the possibility of future overpaid gigs to sell network access?
I think the biggest tradegy here is that the 2% was ever accepted as a measure of ‚price stability‘ - anything that is higher tomorrow than today is not stable and only incentivices tinkering with the numbers to claim to have achieved the goal. Taken to the extreme you get PhD ideas like hedonic adjustments instead of actually actually looking at things.
Correct me if I understood this incorrectly please:
I think winds under the financial hubris are at least changing. In addition to the FED reducing their MBSs, there seem to considerations to have the state sell its stake in Freddy Mac and Fanny May. That removal of the state guarantee would put a serious damper into ‚free money for big players in housing‘, if its finally the banks again that pay for insolvencies of estate owners after they granted mortages at unsustainable conditions and impossible valuations. As it is right now, there is no real incentive to act like adults if it is ultimately the tax payer covering the bill, why reduce your income
As for the Fannie/Freddie thing, a guy like Chris Whalen is knowledgeable on the topic. I believe he doesn't think they'll sell them because he believes it'd cause mortgage rates to rise, but who knows when Washington is desperate for money.
When Powell came in, with his non-econ cult background, I figured he might be a breath of fresh air after Bernanke and Yellen, so I was shocked when he turned on the printing press well before Covid, bailing out hedge funds in 2019, and then going insane (in my view) with the ZIRP and QE and especially MBS monetization (which they haven't reduced much. They owned ZERO in 2008). Powell put Bernanke and Yellen to shame. Now, he had Covid to blame, but he also made ridiculous statements like "we need high inflation for an extended period." Even Bernanke said over 2% was too high. Then Powell says, "People hate inflation" and "poor people suffer the most under inflation." He's 72 years old! Did he just learn this? I do think Powell's replacement will likely be far worse though, unless it's Warsh, and Trump doesn't want Warsh. Trump wants 2020 Jerome Powell.
Jim Grant’s comment about the SNB is only half true: the Swiss have gold as collateral, so they’re really buying US stocks with a gold-backed currency. At the end of the day, productive people who accumulate wealth (incl. China) can buy shit with that wealth. In the US, by contrast, the wealth created by outsourcing production abroad only benefitted the new slave owners
Sadly true. Though the SNB still has a lot of gold in the vault combined with acting like a Sovereign Wealth fund … I think the SNB is the biggest hedge fund after the national norwegian fund, holding stocks valued around 200k USD per swiss citizen on top of the gold in the vault. That on its own I think is already impressive (as it does not come from selling natural resources) but they do that on top of the fact that Switzerland had a positive budget balance for ages excluding the COVID years where the FED would do the exact opposite normally. This has enabled them to be proactive and strategic instead of reactive and short sighted.
The price for that is: being a swiss investors is hard, because currency exchange is a major driver in everything …
Plus, consider that Swiss debt to GDP is about 17% (vs US 130%?) and their gold reserves in oz are 11-12% of GDP (vs US 2-3%), on balance sheet alone there would enough room to lever up in private markets
It does seem that the SNB remains a "safe-haven" currency for the world, especially if one wants to avoid U.S. dollars (which I still accept!) And I've posted before - I think the SNB has a great gig going - they are buying real, productive assets (e.g. shares of major companies) for, well, some paper. I've joked(?) that the SNB should buy ALL of, say, Apple and take it private.
My understanding of Rand's ethic from Atlas Shrugged is that love of neighbor happens by transitive property - - via love of one's self. Love your neighbor as yourself could also be seen as transitive. Love of self as the given. Extrapolate from that given to the other person. The selfish people in Atlas Shrugged create the most good in that novel's world. The goodness is a byproduct of their selfishness. Her selfishness isn't love yourself and hate your neighbor. It's love yourself and by doing so you're in a position to be good to your neighbor.
A weakness that I think goes under-noticed in aiming at altruism is neglect of self. Trying to be generous without first putting on your own oxygen mask is a recipe for all kinds of gnarly things, resentment, etc.
Admittedly it's a hard balance.
Wallace seems Leave it to Beaver nervous from having to chew on the new language of Rand's different paradigm and complicated world.
Thank you so much Rudy. Got to ask Steve a couple of questions on George Noble’s spaces last night. Was a little wild because I always felt like Mark Baum was my spirit animal. What became clear is that he is very removed from today’s market.
I hear ya. https://x.com/RudyHavenstein/status/1778152205251448880
To anyone tempted to judge Ayn Rand and her writings by the commentary of second-hand sources like Rudy Havenstein or James Tucille, I will repeat the same advice I have always offered: Read and judge Ayn Rand's work independently. Read her novels, her essays, her philosophy. Judge for yourself. Do not accept the judgment of others.
Fair point and good advice. I just quote what I quote, and people can take it or leave it. I have smart friends who consider Rand a moral guide.
Why does everyone blame the FED? From what I can tell Powell tries to behave like the only adult in the room of drug addicts with a cocaine fountain, finally limiting the fountain … the previous 2 chairs would have been on QE4 and QE5 within a blink after being called to the White House.
Imagine what US debt would be if the congress wouldn‘t need to have the budget conversations, if there was not someone independent of them with an (at this point in time) hopefully conflicting agenda.
If anyone wanted to solve the problem, the first thing they would have to do is finally do something about the blattant corruption in Washington and NY … But who would want to start that and turn off their money fountain and the possibility of future overpaid gigs to sell network access?
I think the biggest tradegy here is that the 2% was ever accepted as a measure of ‚price stability‘ - anything that is higher tomorrow than today is not stable and only incentivices tinkering with the numbers to claim to have achieved the goal. Taken to the extreme you get PhD ideas like hedonic adjustments instead of actually actually looking at things.
Correct me if I understood this incorrectly please:
I think winds under the financial hubris are at least changing. In addition to the FED reducing their MBSs, there seem to considerations to have the state sell its stake in Freddy Mac and Fanny May. That removal of the state guarantee would put a serious damper into ‚free money for big players in housing‘, if its finally the banks again that pay for insolvencies of estate owners after they granted mortages at unsustainable conditions and impossible valuations. As it is right now, there is no real incentive to act like adults if it is ultimately the tax payer covering the bill, why reduce your income
As for the Fannie/Freddie thing, a guy like Chris Whalen is knowledgeable on the topic. I believe he doesn't think they'll sell them because he believes it'd cause mortgage rates to rise, but who knows when Washington is desperate for money.
When Powell came in, with his non-econ cult background, I figured he might be a breath of fresh air after Bernanke and Yellen, so I was shocked when he turned on the printing press well before Covid, bailing out hedge funds in 2019, and then going insane (in my view) with the ZIRP and QE and especially MBS monetization (which they haven't reduced much. They owned ZERO in 2008). Powell put Bernanke and Yellen to shame. Now, he had Covid to blame, but he also made ridiculous statements like "we need high inflation for an extended period." Even Bernanke said over 2% was too high. Then Powell says, "People hate inflation" and "poor people suffer the most under inflation." He's 72 years old! Did he just learn this? I do think Powell's replacement will likely be far worse though, unless it's Warsh, and Trump doesn't want Warsh. Trump wants 2020 Jerome Powell.
Jim Grant’s comment about the SNB is only half true: the Swiss have gold as collateral, so they’re really buying US stocks with a gold-backed currency. At the end of the day, productive people who accumulate wealth (incl. China) can buy shit with that wealth. In the US, by contrast, the wealth created by outsourcing production abroad only benefitted the new slave owners
Ths Swiss Franc since 2000 is no more gold-backed than the U.S. dollar (the U.S. has a lot of gold too, at least they say they do).
Sadly true. Though the SNB still has a lot of gold in the vault combined with acting like a Sovereign Wealth fund … I think the SNB is the biggest hedge fund after the national norwegian fund, holding stocks valued around 200k USD per swiss citizen on top of the gold in the vault. That on its own I think is already impressive (as it does not come from selling natural resources) but they do that on top of the fact that Switzerland had a positive budget balance for ages excluding the COVID years where the FED would do the exact opposite normally. This has enabled them to be proactive and strategic instead of reactive and short sighted.
The price for that is: being a swiss investors is hard, because currency exchange is a major driver in everything …
100%
Plus, consider that Swiss debt to GDP is about 17% (vs US 130%?) and their gold reserves in oz are 11-12% of GDP (vs US 2-3%), on balance sheet alone there would enough room to lever up in private markets
Thanks. Clearly I'm not a currency expert :)
It does seem that the SNB remains a "safe-haven" currency for the world, especially if one wants to avoid U.S. dollars (which I still accept!) And I've posted before - I think the SNB has a great gig going - they are buying real, productive assets (e.g. shares of major companies) for, well, some paper. I've joked(?) that the SNB should buy ALL of, say, Apple and take it private.
*slow clap*
Interesting stuff about Crowley and Rand.
My understanding of Rand's ethic from Atlas Shrugged is that love of neighbor happens by transitive property - - via love of one's self. Love your neighbor as yourself could also be seen as transitive. Love of self as the given. Extrapolate from that given to the other person. The selfish people in Atlas Shrugged create the most good in that novel's world. The goodness is a byproduct of their selfishness. Her selfishness isn't love yourself and hate your neighbor. It's love yourself and by doing so you're in a position to be good to your neighbor.
A weakness that I think goes under-noticed in aiming at altruism is neglect of self. Trying to be generous without first putting on your own oxygen mask is a recipe for all kinds of gnarly things, resentment, etc.
Admittedly it's a hard balance.
Wallace seems Leave it to Beaver nervous from having to chew on the new language of Rand's different paradigm and complicated world.
I'm just uncomfortable with how close Rand's philosophy fits in with Crowley and LaVey.
Your financial disclaimer was the funniest thing I've read all week. Definitely not sad! :-)
I think I wrote a really long one a while back as a joke. Years ago I like QuothTheRaven’s profane and hilarious disclaimers.
“ If Bin Laden had just stayed hidden in Pakistan for another 14 years, he might today be meeting the President, wearing a suit”
This is why I pay you!
https://convex-strategies.com/2025/05/14/risk-update-april-2025-triggered/
https://www.ft.com/content/df22b05f-2139-44ce-8077-68097df896f3