They're not confessing, they're bragging.
Endeavor to Persevere.
Today’s CNBS drinking phrase is “generational buying opportunity,” no joke.
More gaslighting: Time for strong medicine: How central banks got tough on inflation It took 4 (four) FT writers to come up with this nonsense.
One of the best things about the Twitter before I was exiled was that I was able to interact with some of my financial heroes, like the gang from The Big Short, or my 1990’s mentor Bill Fleckenstein, and many other famous and brilliant investors, many of who actually followed me. It was a rewarding and surreal experience. Anyway, here’s Danny Moses, Vincent Daniel and Porter Collins on the latest On The Tape podcast.
I'm gonna say it again: I believe strongly that - among the many villains of the 21st century - central bankers are going to be at the top of the list. People like Bernanke get put on magazine covers, "He saved the world" - I think that's complete horseshit. - Guy Adami
(If you have not read The Big Short, you should stop what you are doing, and find it, and read it. While the movie is much better than I thought they’d allow it to be, it’s not the book.)
Evergreen commentary on CNBC, from The Big Short:
In the spring of 2007, the subprime mortgage bond market, incredibly, had strengthened a bit. "The impact on the broader economy and the financial markets of the problems in the subprime markets seems likely to be contained," U.S. Federal Reserve chairman Ben Bernanke was quoted as saying in the newspapers on March 7. "Credit quality always gets better in March and April," said Eisman. "And the reason it always gets better in March and April is that people get their tax refunds. You would think people in the securitization world would know this. And they sort of did. But they let the credit spreads tighten. We just thought that was moronic. What are you, fucking stupid?" Amazingly, the stock market continued to soar, and the television over the FrontPoint trading desks emitted a ceaselessly bullish signal. "We turned off CNBC," said Danny Moses. "It became very frustrating that they weren't in touch with reality anymore. If something negative happened, they'd spin it positive. If something positive happened, they'd blow it out of proportion. It alters your mind. You can't be clouded with shit like that."
Sean Brodrick asks the $64 trillion question…
What should the real value of the market be? Is what we think of as ‘the market’ at current recent prices because the Fed has been pumping free money into it for years? Is the actual real level of where stock prices should be much lower?
Jenny Harrington on CNBS guaranteed that we are closer to a bottom now than in “January/February.” She made it clear this was a certainty. (I wonder if she meant in points or percentages.) Maybe she’s right, but certainty?
Doubt is not a pleasant condition, but certainty is an absurd one. (Le doute n'est pas une état bien agréable, mais l'assurance est un état ridicule.) - Voltaire,1770
So on the S&P 500, we are at this second down 1,161 points from the all-time high, or 24%.
The S&P 500 index fell 57% from 2007-2009, and 50% from 2000-2002. Keep in mind that the Nasdaq 100 fell about 83% after the DotCom bubble, and 50% during the start of Great Depression II (also known as the “GFC”). I don’t know how she can guarantee anything.
Check this out from Barron’s, December 17, 2007
To many strategists, stocks now discount an economic slowdown. Ian Scott, Lehman Brothers' London-based global equity strategist, says profits conceivably could fall as much as 45% if the U.S. slips into recession. But the stock market likely would fall no more than 10% to 15% from current levels even in this worst-case scenario. Citi's Levkovich says prices already anticipate earnings growth that is 20% to 25% below the 20-year average. He calls stocks "screamingly cheap relative to bonds."
As I wrote in March 2017, I like a Lehman Brothers guy in 2007 talking about the "worst-case scenario" being a "10% to 15%" market drop. Remember that Lehman Brothers, founded in 1850, reported record earnings in 2006 and 2007, before going bankrupt in 2008.
This is from the excellent book, The Monster
As Countrywide and other institutions struggled, senior officials at Lehman Brothers pronounced their company safe and healthy. They said Lehman hadn’t made the kinds of bad choices that had sunk other financial firms. After posting another record year in 2006, pulling in $4 billion, it eclipsed its own record in 2007, reporting nearly $4.2 billion in profits. “We believe we have done a good job in managing our risks,” a top Lehman executive said. One analyst noted that, “for many investors, it is not necessarily about beating expectations but the lack of skeletons in the closet…. Lehman seems to have fewer skeletons.” When a Lehman competitor, Bear Stearns, imploded in March 2008, Bear was saved via a takeover by JPMorgan Chase. The Federal Reserve made the deal possible by providing a $29 billion loan. Again Lehman officials assured investors and shareholders that their firm was in good shape.
I think Lehman actually did make some bad choices, right Ben Hunt?
Repo 105 was a multiyear scheme by Lehman to defraud the government and its own investors by falsifying the actual amount of loans it had on the books, making Lehman look safer than it actually was.
You must listen here to Bill Black talking about Lehman (and the Federal Reserve’s abysmal lack of oversight.) Some things never change.
Maybe Belski meant 4800 on the Dow?
For what it’s worth, I was talking with the owner of an audio business yesterday. He’s been in business over 40 years, and said he’s absolutely seen a big drop in business, and even a drop in traffic (unrelated to his business) on the highway in front of his business. He’s seen this movie before, and this particularly reminds him of the early 80’s. He thinks the recession started in December 2021.
Argentina Raises Its Key Interest Rate to 52% as Inflation Spikes Since Argentina’s statistics agency says inflation there “is running at a 30-year high of 61%,” the Argentine central bank is about as behind the curve as the Federal Reserve.
Friend of the show Diego Parilla:
Time will tell how much Central Banks will be able to hike nominal Rates, but in our view 1) will not hike as much as it is currently priced in 2) there is a non-negligible probability Central Banks will be forced to reverse course and unwind some of the hikes (similar to what happened in 2018, when the Fed was in "auto-pilot” hiking rates but had to reverse the hikes to contain the hostile markets of 4Q18), and 3) there is a non-negligible probability that we may see zero nominal rates, QE, and even Yield Curve Control “YCC” in response to distressed global markets. Faced with systemic risk and inflation, they will always choose inflation.
Paging Felix Somary…
Investors seize record share of home purchases Yes We Can.
This is what Bill Barr would call a “suicide”
A prisoner in Ms. Maxwell’s housing unit told at least three other inmates that she had been offered money to murder Ms. Maxwell and that she planned to strangle Ms. Maxwell in her sleep
Sure, why not…
…Big Tech companies could be sued as “state actors” for violating users’ First Amendment speech rights when they censor content at the behest of government officials.
Sure. I’ll just get my legal team to sue Twitter all the way to the Supreme Court.
Crypto Winter! I do not have a tweet for this. Also - no question mark?
Oh come on…
The troubles at Three Arrows ricocheted to Finblox, a platform that offers traders 90 per cent annualised yields to lend out their crypto.
Vincent Daniel from The Big Short:
“How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans."
"You know how when you walk into a post office you realize there is such a difference between a government employee and other people. The ratings agency people were all like government employees."
"Don't take this the wrong way. But I'm just trying to figure out how you're going to fuck me."
"There were more morons than crooks, but the crooks were higher up."
My proprietary Bitcoin/Corn Chart
The UK's Decision to Extradite Assange Shows Why The US/UK's Freedom Lectures Are a Farce
Have a nice weekend, amigos.
We're trying hard to keep your presence going on Twitter. Anyone reading this, we encourage folks to continue to tag @RudyHavenstein often. We also try to repost some Rudy content and do #FugaziFridays in your honor. We must continue to remind people of the dystopian expungement of one of the greatest collected works of central bankster critique in existence.
Rudy, you are a legend. You will back soon, now that Elon has to go through with this deal. He has to, right ? RIGHT ?