The Ouroboros
Moving from spending like a banana republic to inflating like one.
Do you have any last words you'd like to share with the audience?
“Be careful. Be very very careful.”
Case-Shiller: National House Price Index Up 3.4% year-over-year in March
FHFA House Price Index Down 0.1% in March LOL
Sorry kids!
Good real estate podcast with Todd Sachs: Why Haven't Foreclosures Spiked, Are Taxpayers Footing the Bill?
"The four years of Joe Biden in housing were the most bizarre I've ever seen in my professional career. We were surrounded by incompetence.”
May 2020
What a remarkable period of insanity we’ve gone through (with more to come!)
“Dude, if you pay attention to Japan, JGB [40 year] yields are up over 3% now. It's checkmate. They're insolvent. This is the trade that Kyle Bass was trying to put on in 2008 when he was buying CDS on Japan, and it just didn't work for like 15 years. Now it's finally starting to work.”
“These politicians - it’s like they’re in a perpetual job interview…I hate the idea that we have representatives that are in office, and their main objective is setting up their future roles in employment, and not their constituents and the community that they’re supposed to represent.”
I currently am annoyingly sick with the crud, so I think this one’s ready to rip. Some good stuff below for the good people. Charles Calomiris, Greg Weldon, Jim Bianco, Chris Whalen, Zbigniew Brzezinski and more.
If you want a very bullish view of financial markets, check out Mel Mattison on Julia La Roche’s show: “This is all central bank, fiat scam B.S. - but it's going to continue.”
But see, there is joy and revelry,
slaughtering of cattle and killing of sheep,
eating of meat and drinking of wine!
“Let us eat and drink,” you say,
“for tomorrow we die!”
Isaiah 22:13The True Rate of Unemployment
“Using data compiled by the federal government’s Bureau of Labor Statistics, the True Rate of Unemployment tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $25,000 annually before taxes.”
Interesting, and historically low.
“We've got this President who seems to want - and certainly a Congress - who seems to want to spend money like it's gone out of fashion, right? Like the proverbial drunken sailor.”
Charles Calomiris
With Grant Williams and Demetri Kofinas
“…as the nation moves from spending like a banana republic to inflating like one.”
“We know that defense spending is going to go up. We know that we’ve increased Medicaid and, despite some of the conservatives wanting to bring it back to a lower level of spending, the political will isn’t there to do it, so these are the big items. Medicaid’s not as big as defense, which is not as big as social security, which is not as big as Medicare in terms of the size of the challenges.
And what did we do instead? We created this DOGE distraction. Look at that as a political choice. Why did we create this DOGE distraction? It was a brilliant thing for the administration to do, because it allowed them to grab the label of fiscal conservative when in fact it was chairs moving on the deck of the Titanic. If DOGE had gotten everything it wanted, it would’ve probably produced something like 200 or 250, maybe 300 billion in savings a year, when to even have a chance of succeeding, the number has to be more like one and a half trillion. And even that’s probably not enough anymore. Every year it gets worse.”
”We live in a democracy. We’re only as good as the people. And the people, especially the old people, are very much behaving in a selfish way. You could say, well, they’re not conscious of how destructive their behavior is. I don’t buy it. I think they’re quite conscious of it.
There’s a moral degradation of our society, a lack of willingness to do something for your country and be willing to make some sacrifices…
We have to make politicians willing to be defeated in elections, willing to lose their jobs, as you said, that’s not very likely.”
“We would have to have a 40% rate of inflation roughly to pay the real bills, the real costs of our deficits…[requiring] that banks keep, say, 20% of their deposits as zero interest reserves at the Fed, the inflation tax then will be in large part a tax on the banking system. If they did that, they could probably get the inflation rate to fall to something like 10%, 12%”
(Check out my posts on Felix Somary’s views on these choices.)
“Donald Trump is a really good PR guy, and he makes people feel good, and people want to believe what he’s saying, so when he says, DOGE and tariffs are going to fix our fiscal problem…and he makes up these great sounding things.
I don’t know why people don’t probe more deeply and ask some questions and pull out their calculator and see whether any of this adds up. I don’t know why they don’t, but part of the answer is cognitive dissonance. They like going to his rallies, they like cheering this sort of thing. And so of course this is nonsense. And by the way, I’ll just reveal. I am a Republican.
By the way, I voted for Donald Trump. Why? Because my choices were so horrible. I don’t blame people for voting for Trump. I’m a Trump supporter. But of course with friends like me, he doesn’t need any enemies. We’re kind of stuck. The Democrat Party is even less popular than the Republican Party and for good reason. We’re really in a tough situation. People aren’t being very thoughtful. Of course, tariffs aren’t going to solve the fiscal problem.”
- Charles Calomiris
“It seems very difficult to believe that anything is going to be a choice that’s made. The car has to hit the wall for something to happen because we can talk all we like about it, and you could give them three years runway. You could give them five years runway. The answer is the car’s going to hit the wall in three years or five years, or probably sooner.”
"A severe inflation is the worst kind of revolution...only the most powerful, the most resourceful and unscrupulous, the hyenas of economic life, can come through unscathed."
Thomas Mann, 1942
To quote Chris Whalen:
“The reality is is that the federal government controls Fannie Mae and Freddie Mac, and they can only function with sovereign support,” so wouldn’t privatizing them under this condition just be more socializing losses and privatizing profits?
“The stock for Fannie Mae is up 643% over the last 12 months, right? It's the best performing mortgage stock, best performing financial stock in the United States, simply because John Paulson and Bill Ackman are pumping the equity. It's a penny stock.”
Whalen’s view of housing over the next few years:
Check out my Black and Barofsky post if you haven’t read it.
“Anyone who looked only at the index of prices, would see no reason to suspect any material degree of inflation; whilst anyone who looked only at the total volume of bank credit and the prices of common stocks would have been convinced of the presence of an inflation actual or impending.”
John Maynard Keynes, A Treatise on Money, Volume II: The Applied Theory of Money
Greg Weldon
Link. Recommended.
“If you really think about it, what is the T-bond? It's an IOU from a country that's insolvent, can't control their spending, is spending twice as much as they earn - many, many months out of the year - to the degree where now debt is $36 trillion, where household debt is $18 trillion - all told it's $54 trillion. It's almost double GDP. You can't come back from that. It takes more debt to create growth. You need the growth to support the debt. It's that simple.
And when you're in that situation, do you want to buy a bond and get paid in another piece of paper? That's another IOU. That's the dollar. Now an IOU, just like a bond - it's all the same - is a promise to pay you back. And what's interesting in that currency that they're going to pay you back in, of course, they're depreciating and debasing and devaluing the purchasing power of that currency every single day.
So why not Bitcoin?”
So now we’re getting into why I’m not a billionaire - I own a little, but I always thought if Bitcoin became too big - a threat to the U.S. dollar - the U.S. government would crush it - at least for U.S. citizens. We’ve gone to wars over less.
I’m no expert obviously but it seems as if the Trump Administration is trying to co-opt stablecoins as some sort of government funding mechanism to buy U.S. debt. Plus, all of the sleaziest well-connected snakes of finance are now huge Bitcoin and stablecoin boosters. Seems suspicious. I clearly don’t know the future.
Well, sometimes I do know the future:
There’s a companion video here from Greg which includes this gem:
”QE started this”
And this:
“…You're looking between ten and twenty trillion dollars will need to be the next QE” - Weldon
Yet there will be no accountability - ever - for Bernanke, Powell and Yellen. They will all remain fabulously wealthy, despite destroying America’s financial system - in order to save it, of course. In the end, they mostly just saved themselves and their past and future employers.
“You can march people on TV, that have a vested interest in the stock market going up in perpetuity, all day long, okay? And they can tell me the consumer is healthy, the consumer is strong. I heard one person use the word robust. It's not anything like that.”
“The bottom line is, in the next five years, almost $17 trillion dollars in US debt matures. That'll all be done at higher interest rates. It's going to be a nightmare…they're going to pay you back in a currency that they're debasing the purchasing power of - through inflation - because they have to have inflation to be able to pay you back.”
A chart Weldon mentioned - dollar index/gold:
Jim Bianco
“We completely underestimate how devastating inflation is, especially to the bottom half of income that doesn't own a home, doesn't own a portfolio…”
“Zero interest rates, negative interest rates, money printing - that was a new thing we invented between 2010 and 2022. Negative interest rates with money printing and the like - not to be repeated again, and the problem we have is everybody thinks that was normal, not recognizing that was one of the most - especially in Europe with negative interest rates in Japan with negative interest rates - abnormal periods in the 5,000 year history of interest rates. We keep wondering when is the Fed going to cut to zero, and start money printing. When are we going to see negative interest rates?
…that's why everybody's still bullish on interest rates because they think that that period was normal not that that was the abnormal period in the recent history that the current period is actually fairly close to normal.”
Someone told me, “Bianco is wrong about rising rates.” If so, that means Weldon might be right about $20T in new QE.
These are rookie numbers
Dainese is owned by the Carlyle Group, so Jerome may have to bail them out.
A terrifying story from Zbigniew Brzezinski
Charles Gati: Who made an impression on you? I know you were close to the late Bill Odom. Would you talk about your relationship, and perhaps also relate that phone call he made to you at 3 a.m. on Nov. 19, 1979?
Zbigniew Brzezinski: Bill Odom was a military guy. After he had come back from a stint in Vietnam, we first met at Columbia University. We stayed in touch. By the time I went to the White House, he had become a colonel. I decided to have him as my military aide, and we worked very closely together.
And I also remember him for waking me up one night. It was, as you say, on Nov. 19, 1979. He was my military assistant, but he was also my crisis officer. My job was to coordinate the president’s decision in response to a nuclear attack on the United States.
Odom woke me up at 3 a.m. When I picked up the phone, I could hear him say: “Sorry, sir. We are under nuclear attack.” That kind of wakes you up. I said, “Yes? Tell me,” and he says, “Thirty seconds ago, 200 Soviet missiles have been fired at the United States.”
According to the rules, I had two more minutes to verify this information and then an additional four minutes to wake up the president, go over the options in the so-called football, get the president’s decision and then initiate the response. So, I said to him, “Call me back when you have the information verified,” and I remember sitting there.
It was a strange feeling because I’m not some gung-ho hero, physically. When I would fly into turbulence, for example, I’d be very nervous. This time I was totally calm.
Somehow or another, I knew everybody would be dead in 28 minutes—my wife, my kids, everybody else. If that was the case, I was going to make sure we had lots of company.
So, I said to him, “Make sure the Strategic Air Command proceeds to take off.” Then I waited for confirmations. With one minute left, we waited for one more confirmation.
Bill called back and said, “Canceled. Wrong tapes. It never took place.” I remember saying to him, “Make sure the Strategic Air Command is called back.”
This was a fairly no-nonsense discussion of things that, of course, exist: Unidentified Objects! The guest often says, “I don’t know.”
”Meet The Startup Summoning UFOs: Skywatcher” Interview with James Fowler
“There's really three three categories of people when you talk about U.A.P.’s:
You have one category which is religious. In the religious category…they tend on this topic to assign a religious filter to the lens they're looking at it through…you're going to get somebody saying, "well, you're talking to angels and demons…”
The other group is the group that thinks everything's man-made, made in China, made in Russia, made in the U.S. That group also has a lens, and they look at through a national security lens, so they they think Skywatcher is revealing national secrets, sharing too much detail here, and subverting the national defense…
The third category of people are people who are truly open-minded who can put aside pre-conditions, pre-beliefs or things maybe from their upbringing or personal beliefs, and just study science and let let the observations and observables tell them what it is.”
On the New Jersey drone swarms:
“I think one of our adversaries has the ability to fly with impunity and operate in our airspace, and we are helpless to stop it…It was probably China.” - Fowler
John Keel "sees—as does [Jacques] Vallee and many others—the UFO experience as analogous (if not identical) to the experience of demons, fairies, and other monsters from other times...filtered through a modern consciousness and more “scientific” sensitivity."
Peter Levenda, Sinister Forces Book III
Podcast from 2022 I found interesting: San Francisco Homicide Inspector 5 Henry 7: My Inside Story of the Night Stalker Case, City Hall Murders, Zebra Killings
The government is like your broke brother in law…..you think he’s finally going down, and then, voila!, another credit card shows up in the mail.
I wonder what the Investor-owned statistics would look like if adjusted for all the liars who checked “owner occupied” in order to secure a lower rate. How about it Tish?