The Great Silver Mine of Art Kashin
It will all make sense in the morning
"As somebody who has helped plan coups d'etat - not here but you know (in) other places - it takes a lot of work.” - John ‘Ramsey’ Bolton
"Bolton is the embodiment of everything wrong with hawkish Republican foreign policy, and his role in the administration has been without question a purely destructive one."
(CEO of Center for Employment Justice LLC, 2020 Dem Cong. Nominee, ex-Navy JAG, litigator & expert on workplace law. BC Law Grad.)
Bread for $10 Is the New $5 Gas
I read and hear about the “copper/gold ratio” fairly often, so here’s a busy chart of it all, since 1990. It seems like there’s a relationship to rates, except when it seems like there isn’t.
One possible future. From your point of view. I don't know tech stuff…
"It’s too late to sell at the top.” (Housing). (I’m reminded of the realtor who told me recently, “Better to sell a year too early than a day too late.”)
Some comments on the above article:
Atlanta Fed: Home Ownership Affordability Declines by Record Levels I’ve noted many times that is no group with less apparent self-awareness than the Federal Reserve and their economist acolytes.
Rising Rents Chip Away at Tampa’s Affordability Draw “People can’t afford to live in Tampa Bay”
Bill “Hell is Coming” Ackman Presentation: Monetary Policy in a Stagflationary Environment
Ackman’s report is actually worth perusing. One thing I noticed as he tried to differentiate between CPI and PCE is this table:
While “Shelter” has a 33% weighting in the CPI, and a 16% weighting in the PCE, what is never mentioned is that the way the BLS figures shelter inflation itself is made-up, via their goofy OER nonsense, which right now they have at 5.5% YOY, well below real-world rents and housing prices.
Just like they do with health insurance or the price of new vehicles, CPI is a model made up by math geeks, and has little to do with anyone’s real-world experience.
Apparently there’s a "property crisis” in China
China is censoring crowd-sourced documents tallying the number of mortgage boycotts spreading across the country, potentially hampering a key source of data for global investors and researchers tracking the property crisis…the spike in incidents is fueling concerns that the property troubles…will engulf big banks and China’s middle class, who have an estimated 70% of wealth stored in real estate. “This is a political protest…It’s not going to be a banking crisis, they are not there. But it a crisis potentially of confidence and one that the Chinese Communist Party fears tremendously.”
This stuck in my craw: Mortgage Rates Are Going Up, but You Still Shouldn't Buy a Home in Cash. Here's Why
A rate of 5% isn't too bad when looking at the big picture -- and especially when comparing it to the returns you could earn elsewhere. The S&P 500, for example, is one of the safest investments out there for patient long-term investors. It tracks a financial index made up of 500 large U.S. companies so it enables you to invest in big business in America. Historically, it has produced average annual returns of about 10%. If you pay cash for a house, the return on investment (ROI) you get is the interest you save on the loan it would’ve taken to buy the same property. If you have a choice of a 5% rate of return or a 10% rate of return, why would you choose to pay cash for a home and accept the fact your money will earn half of what it could?
OK, super - I get it, I get it. Except that’s not how human nature works. (Also, further down the “article” is a mortgage lender ad, seemingly part of the article itself.)
Here’s one of the best examples I’ve seen over the years of what happens to most investors (not the people on CNBC or Fintwit though, who are smart):
Best Stock Fund of the Decade: CGM Focus (Dec. 2009)
Meet the decade's best-performing U.S. diversified stock mutual fund: Ken Heebner's $3.7 billion CGM Focus Fund, which rose more than 18% annually and outpaced its closest rival by more than three percentage points.
Awesome!
So 10 years ago smart investors put $10,000 into CGM Focus Fund and that $10k became worth something well over $50k, right? Right?
The typical CGM Focus shareholder lost 11% annually in the 10 years ending Nov. 30, according to investment research firm Morningstar Inc.
That’s right, sports fans.
These investor returns, also known as dollar-weighted returns, incorporate the effect of cash flowing in and out of the fund as shareholders buy and sell. Investor returns can be lower than mutual-fund total returns because shareholders often buy a fund after it has had a strong run and sell as it hits bottom.
Oh, that’s right, human nature.
Also the line “If you have a choice of a 5% rate of return or a 10% rate of return…” is nonsense. There’s not guarantee that stocks will return 10% over your remaining lifetime. There were long periods where stocks went nowhere nominally (e.g., 1929 to the 1950’s) and were crushed in real terms (e.g., mid-1960’s to early 1980’s.)
A lot of people seem to think stocks are an FDIC-insured CD that pays 10% annually or something (in a bad year.)
Vivite et discete (I think this means “buy the dip” in Latin).
I heard someone mention “TTF Gas Futures” the other day (Marko Papic, as a short), so I looked ‘em up. The TTF is “a virtual trading point for natural gas in the Netherlands.” (I’m pretty much a boring plain vanilla stock guy.)
Here’s the Dec. 2022 contract, up from 23.175 a year ago to 166.5 today, or 7.18x higher:
“‘Experts’ broke the world. But they’re rapidly losing power…” Good Simon Black stream-of-consciousness rant.
Harry Melandri and Shawn Hackett on the Art of Trading Agricultural Commodities
Russell Clark: I see that people are keen to buy bonds even though bonds yields are still very low. In other words, people have become conditioned to a deflation mentality, even though the 4Ms say inflation is here to stay.
Alex Berenson, who you may remember was banned “permanently” from Twitter for saying something truthful about the vaccines, sued the bastards, and is now back, and has a not-encouraging new post (I was Pfizered by the way).
She Spent a Decade Writing Fake Russian History I think the American MSM just did that too.
This is so unsurprisingly corrupt - the Fed’s inspector general, who just exonerated Powell and Clarida for insider trading, is appointed by, and can be fired, by the, um, the Fed: “On Thursday, the FED’s IG, Mark Bialek, finally released findings from his “comprehensive review” of Clarida and Powell securities trading, more than half a year after the senior FED staff trading violations came to light. It’s a three-and-a-half-page public relations fluff job that undertakes basically zero substantive analysis.”
If you want the best investigative reporting on the Federal Reserve around, you must read Wall Street On Parade.
Actually, we must be pretty stupid to keep allowing this.
The New Kremlinology: Reading the New York Times With censorship soaring and real reporting all but taboo, the major dailies have just one important function left: being a political signaling system
I really like Matt Taibbi’s writing style. He was excellent on the last financial asset bubble and crisis, and continues to put out some of the best journalism I see.
I love his description of the New York Times Et al.:
Along with companion outlets like the Washington Post and The Atlantic (as pure a reflection of establishment thought as exists in America), the paper in this sense fulfills the same function that Izvestia once served in the Soviet Union, telling us little or even less than nothing about breaking news events (“Can NATO Long Exist?” was among Pravda’s final questions in 1991) but giving us comprehensive, if often coded, portraits of the thinking of the leadership class.
“The secret of life is to appreciate the pleasure of being terribly, terribly deceived.” - Oscar Wilde, A Woman of No Importance
Bolton really said the quiet part out loud, didn’t he?
Reminds me of this
https://twitter.com/woj_pawelczyk/status/1275106168692670464?s=21&t=oX9QevJLHRQayHKFhKRbyA