"That's why crazy people are so dangerous.
You think they're nice until they're chaining you up in the garage."
- Michael Buckley
So, we rise from the rubble...
StatCounter
Friday, June 25, 2021
"Narrative Soup"
"Narrative Soup"
by Jim Kunstler
"A major premise of my 2005 book, "The Long Emergency", was that government at the highest level would become increasingly ineffectual and impotent as the melodrama of national collapse plays out. So, there was no small irony that the floundering political elites would settle on the pathetic figure of “Joe Biden” to symbolically head a foundering government. They picked the very embodiment of collapse to usher in collapse, and that is why “Joe Biden” appears to be nothing more than an usher, somebody whose only duty, say, at a funeral, is to show the more important attendees to their places before the ominous casket.
Nobody believes that he is in charge of the executive branch, or even in charge of himself, as he shuffles stiffly out to the podium with eyes gone all slitty to do the one thing his minders have trained him to do: read a teleprompter. Surely the leaders over in Europe were uncomfortably bemused by his recent appearance among them, as if the USA sent a ghost from the bygone 20th century to spook our allies into mindfulness of self-preservation — message: the great power that rescued you in two world wars is gone, and you are on your own now.
The collapse is universal, though, playing out globally in different flavors of culture and economy, but well underway, for Europe, too, and eventually even China. It’s a collapse of modernity and the techno-industrial horse it rode in on. The extreme political narcissists of the day, intoxicated with messianic fantasies, would like to retail a Great Reset in a desperate effort to prevent modernity from becoming yesterday’s tomorrow. But it only seems to amount to an obsessive-compulsive wish to push everybody around and herd populations into controllable corrals that, some suspect, are just a prelude to a not-far-off global Auschwitz. “You will own nothing and you will be happy” is about as reassuring as “work will make you free.”
The USA, with its more anarchic ethos, can only offer laughable rationales for its failures on the disorderly way to bankruptcy and breakdown. Naturally, the folks in-charge are terrified of any challenge to their unconvincing rule. The election audit underway in Arizona is driving them up a tree. The latest desperate gambit is the New York State court system’s move to suspend Rudy Giuliani’s law license as a sort of warning to anyone else who would try to cast doubt on the ironclad rectitude of the recent election.
The New York court’s Attorney Grievance Committee states: "...there is uncontroverted evidence that the respondent [Giuliani] communicated demonstrably false and misleading statements to the courts, lawmakers, and the public at large in his capacity as a lawyer for former president Donald J. Trump and the Trump campaign in connection with Trump’s failed effort at reelection in 2020. These false statements were made to improperly bolster respondent’s narrative that, due to widespread voter fraud, victory in the 2020 presidential election was stolen from his client.”
Notice the assertion that contesting the vote is necessarily proscribed, and that any argument to that end is in the service of a false “narrative,” which is necessarily inadmissible. Since when is it against the rules to have a point-of-view? Especially a legal point-of-view about legal matters, in courts of law and in the public arena? Now, it happens that a number of state courts dismissed cases brought by Mr. Giuliani, without bothering to entertain any evidence, most particularly affidavits Mr. Giuliani proffered detailing voting irregularities. The courts didn’t want to hear it. If that is proof of anything, it may only be of corruption in the state courts. Has anyone noticed that the grievance committee is manufacturing a narrative of its own, very possibly a false one?
In fact, there is one legal review of the 2020 balloting currently underway in Arizona, at the order of the Arizona State Senate, as it should be because, according to the US constitution, elections are a prerogative of the fifty states’ legislatures. It’s not “a narrative.” It’s as official as can be, and they have every right to do it, and there’s a fair chance that it will uncover both ballot fraud and voting machine fraud. I suppose all that seems “baseless” if you refuse to look. Also, this week a judge in Georgia approved a process to unseal roughly 145,000 mail-in ballots in Fulton County (the Atlanta metro region) to inspect them for fraud. The ruling stems from a lawsuit against the county that alleges evidence of fraudulent ballots and improper counting. “Joe Biden” won the state by a mere 12,000 votes.
Other states, notably Pennsylvania, are taking action toward their own 2020 vote audits, and through the proper legislative channels. The “incontrovertible evidence” of a fair and honest election is the fraud at issue. There are only assertions that it would be wrong to even look for it, and it’s hard to imagine a weaker argument. So, the politburo behind “Joe Biden” is running scared. The New York court’s action against Mr. Giuliani is just a peevish act of political desperation aimed at disabling a legal adversary. That and Attorney General Merrick Garland’s threat to shut down the Arizona audit on specious “civil rights” grounds are just attempts to create distractions for a regime that begins to apprehend it is whirling around the drain.
As “Joe Biden” fades altogether from the scene, the country will have to grapple with the real problems it faces, not hobgoblins of racism, misogyny, white supremacy but how to cope with a dwindling energy supply and a falling standard of living, and how to remain civilized. We’re doing a good job of destroying the institutions that make civilization possible, especially law and the courts."
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"For Nothing Is Fixed..."
"For nothing is fixed, forever and forever and forever, it is not fixed; the earth is always shifting, the light is always changing, the sea does not cease to grind down rock. Generations do not cease to be born, and we are responsible to them because we are the only witnesses they have. The sea rises, the light fails, lovers cling to each other, and children cling to us. The moment we cease to hold each other, the sea engulfs us and the light goes out."
- James Baldwin
"Blah… Blah… Quack… Quack"
"Blah… Blah… Quack… Quack"
by Bill Bonner
"To fight this recession, the Fed needs more than a snapback. It needs soaring household spending to offset moribund business investment. And to do that, [Federal Reserve chief] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
– New York Times columnist, Paul Krugman, 2002
YOUGHAL, IRELAND – "Many silly and regrettable things are said every week. It would be exhausting to try to pick out the worst of them. Still… some – like bad visits to the dentist – are naturally memorable. We’ll begin with a comment from U.S. Treasury Secretary Janet Yellen this week. Business Insider reports: "Treasury Secretary Janet Yellen urged Congress on Wednesday to extend a July 31 deadline to pay down a portion of the federal government’s $28 trillion in debt to investors and foreign governments.
Without the extension, she warned of an “absolutely catastrophic” default that would imperil the nation’s economic recovery from the pandemic. “I think defaulting on the national debt should be regarded as unthinkable,” she told the Senate Appropriations Committee, calling it “utterly unprecedented in American history for the US government to default on its legal obligations.”
Unprecedented? Hardly.The U.S. effectively reneged on its obligations in 1971. That’s when the Nixon Administration cut the U.S. dollar’s link to gold. Thereafter, creditors would have to take whatever the U.S. chose to give them. Secretary of the Treasury at the time, John Connally, put it to them straight: “The dollar is our currency, but it’s your problem.” Since then, tracked by the gold price, foreign U.S. dollar-holders have lost 98% of their money.
Fess Up: Would it be unthinkable to finally fess up? Not at all. We’re thinking about it right now. And what we think is that it wouldn’t be catastrophic at all. Suppose, instead of printing up more fake dollars so as to pretend to honor its commitments, the U.S. simply admitted that it can’t pay?
Bondholders would finally see what the full faith and credit of the U.S. government was really worth. They could surely find better uses for their money anyway – lending it to the U.S. government guarantees that it will be frittered away. And suddenly, the whole world would have to face the music. The current monetary system is a fraud. It robs the ordinary citizen in order to reward the rich. It slows real growth. It confuses and misleads investors, businesses, and households. It creates bubbles and blow-ups. It finances zombie companies and pays for Washington’s boondoggles. Putting it behind us would be a big improvement.
Intellectually or Morally Deficient: But despite the towering blockheadedness of Ms. Yellen’s comment, it only comes in second in this week’s log of bogus, numbskull, or insipid remarks. New York Times columnist Paul Krugman gets the top spot. On Monday, he argued that the inflation “panic” was over. Here’s what he wrote in The New York Times: "Seriously, both recent data and recent statements from the Federal Reserve have, well, deflated the case for a sustained outbreak of inflation. For that case has always depended on asserting that the Fed is either intellectually or morally deficient (or both). That is, to panic over inflation, you had to believe either that the Fed’s model of how inflation works is all wrong or that the Fed would lack the political courage to cool off the economy if it were to become dangerously overheated."
[…]
To buy into this story, you have to claim […] that the Fed, which is fully capable of reining in a runaway boom, will stand idly by while inflation gets out of hand. Yes, you would have to think the Fed cannot, or will not, control inflation… which is just what we do think. You might also think that the Fed is intellectually deficient. But in today’s world, you might take that for granted.
Influential and Important: But first, let us put Mr. Krugman’s pensée in perspective. Because of his influence, he is regarded by some as the “most important” columnist in America. And The Economist described this Nobel Laureate as “the most celebrated economist of his generation.” As we discussed yesterday, his influence is considerable… and lamentable.
As we saw in the quote at the top of today’s Diary entry, Krugman urged the Fed to create the housing bubble of 2005-2007. And his economic quackery is part of the reason that America’s elite has lost its intellectual authority. Then, when the housing bubble blew up, he came forward with more bad advice. Here he is in October 2008: "It’s politically fashionable to rant against government spending and demand fiscal responsibility. But right now, increased government spending is just what the doctor ordered, and concerns about the U.S. budget deficit should be put on hold."
Again, the feds followed his advice. From 2008 to 2020, federal debt increased from $10 trillion to $28 trillion… and the Fed’s balance sheet went up almost 800% (while the economy grew just 50%).
Theoretical Solution: And now that Mr. Krugman has influenced the U.S. into a total debt burden over $80 trillion… and influenced the economy to rely on fake, below-zero (inflation-adjusted) interest rates… and influenced Americans to expect bailouts and stimmy checks… is the Fed really able to stop its money-printing?
In theory, the Fed could “pull a Volcker” and stop inflation cold. But then, the economy, the stock market, and the feds themselves would slide into Hell. Stocks would crash. Unemployment would soar. And Mr. Krugman would howl to high Heaven… calling for more money. And the Fed, so ready to go along with every cockamamie spend-a-palooza so far this century, would suddenly find itself endowed with the courage to resist the whole of America’s Elite Establishment? Not likely.
Krugman’s Solution: Instead, the inflation numbers – under duress from the Bureau of Labor Statistics – will tell a confusing tale. The feds will continue spending. The Fed will continue printing. And inevitably… though not predictably – neither by us nor by Mr. Krugman – a new crisis will arise. Perhaps the Fed “taps the brakes” and causes a crash on Wall Street… Or maybe a spike in consumer prices causes a panic. Either way, it will be “no time to worry about the budget.” Or about deficits. Or about inflation itself.
No… The Fed will not stand idly by as the inflation fire gets out of hand. It will listen to the Great Influencer… Paul Krugman… and come running with a bucket of gasoline!"
Mornings LALATE, AM 6/25/21: "Finally! Multiple Fourth Stimulus Check Updates"
Mornings LALATE, AM 6/25/21:
"Finally! Multiple Fourth Stimulus Check Updates"
"The Zombies are Delusional - People Don’t See The Impending Collapse"
Full screen recommended.
Dan, IAllegedly,
"The Zombies are Delusional -
People Don’t See The Impending Collapse"
Thursday, June 24, 2021
"They Are Gaslighting Us! Crazy Inflation Is Here But The Fed Is Denying That It Even Exists"
Full screen recommended.
"They Are Gaslighting Us! Crazy Inflation Is Here
But The Fed Is Denying That It Even Exists"
by Epic Economist, PM 6/24/21
"Our leaders are trying to convince us that the things we can see happening right in front of our eyes are not actually real. But the truth is that ever since the health crisis started, our politicians in Washington have engaged on the wildest spending binge in U.S. history, and the Federal Reserve has conveniently introduced monetary policies that helped to create the most splendid financial bubble of all time by injecting trillions upon trillions of freshly printed dollars into the financial markets. And the result of all that couldn't be different from very painful inflation for millions of American workers. Prices are dramatically rising all across the economy. But Federal Reserve Chair Jerome Powell and many other politicians in Washington are insisting that even though they pumped all of this money into the system, the overall inflation rate has been hardly affected by it. They are “gaslighting” us, and it is just so outraging.
Just look at the housing market. Home prices skyrocketed over the past twelve months, and although everyone needs a place to live, not everyone can afford to have a roof above their heads anymore. Did you know that over the past year home prices have risen a staggering 23.6 percent? According to an updated report released by NAR, in May, the median existing-home price rose to $350,300, an absolute record high. The report highlighted that "the annual price appreciation was the strongest in data going back to 1999. Median sales prices have climbed sharply since rising above $300,000 for the first time last July".
But even in face of all this, the Fed keeps insisting that it is is perfectly capable of maintaining low inflation rates. John Williams of shadowstats.com disclosed in recent days that if the official rate of inflation reported honest numbers it would already be well into double digits. At least 11 percent, he estimated. In some categories, we can even see triple-digit inflation. For example, despite having decreased this month, lumber prices are still 252% higher than they were a year ago, which is also making projects that involve kitchen cabinets, hardwood floors, and additions that require framing significantly more expensive as well. A year ago, lumber prices were at $400 per thousand board feet. Since then, they shot up to $1,600. That's not normal at all, but even so, Powell just told Congress that he is not alarmed by any of this.
But how are we supposed to believe nothing out of the ordinary is going on if even the price of basic food items is skyrocketing? A year ago, the wholesale price of chicken wings was as low as 98 cents per pound. Today, it’s at $3.22, having more than tripled. It’s a meaningful difference, however, it seems that our leaders dismiss the severity of the inflation crisis because they ultimately want us to get used to the absurdities of the "new normal". Another crazy example of how inflation is affecting the economy can be observed in what is happening to used car prices. Some of them are now selling for prices that used to be seen in brand new vehicles. The average used vehicle cost rose to $26,457 this month, according to car market tracker Edmunds.com.
In the past 12 months, used vehicle prices on average have jumped 30%. As a consequence, many weird situations where high-demand vehicles are selling for more than they did when they were new are occurring all over the nation, as explained by Alex Yurchenko, the company's senior vice president of data science. At the moment, consumers who need to replace a vehicle don't have much of a choice. "Unfortunately, if you need a vehicle, you'll need to pay the price," Yurchenko said. And the same situation is happening across all segments of the economy. When it comes to food prices, that it's even more worrying because it means that if you cannot keep up with rising prices, you won't be able to afford enough food for you and your family.
We have never seen inflation rates spiraling out of control like this before. But government officials will continue to tell us that everything is okay over the coming months even as economic conditions continue to deteriorate, our purchasing power continues to collapse and our living standards keep being downgraded. Several experts have been warning that if nothing changes, we're about to see an epic inflationary collapse similar to what happened in Germany during the Weimar Republic. If our leaders continue to flood the system with money in a desperate attempt “to save the economy”, they will end up drowning an entire nation. They may try to spin the truth for as long as they want, but the clock is ticking, and time is not on their side."
“You Will End Up Poor And Jobless; Evictions; Risk is Skyrocketing; Investors Are Delusional”
Jeremiah Babe, PM 6/24/21:
“You Will End Up Poor And Jobless; Evictions;
Risk is Skyrocketing; Investors Are Delusional”
Musical Interlude: Josh Groban, "Remember When It Rained"
Full screen recommended.
Josh Groban, "Remember When It Rained"
"A Look to the Heavens"
Also known as the Cigar Galaxy for its elongated visual appearance, M82 is a starburst galaxy with a superwind. In fact, through ensuing supernova explosions and powerful winds from massive stars, the burst of star formation in M82 is driving the prodigious outflow of material. Evidence for the superwind from the galaxy’s central regions is clear in this sharp composite image, based on data from small telescopes on planet Earth.
The composite highlights emission from filaments of atomic hydrogen gas in reddish hues. The filaments extend for over 10,000 light-years. Some of the gas in the superwind, enriched in heavy elements forged in the massive stars, will eventually escape into intergalactic space. Triggered by a close encounter with nearby large galaxy M81, the furious burst of star formation in M82 should last about 100 million years or so. M82 is 12 million light-years distant, near the northern boundary of Ursa Major.”
"Here's A Question..."
“Here’s a question every angry man and woman needs to consider: How long are you going to allow people you don’t even like – people who are no longer in your life, maybe even people who aren’t even alive anymore – to control your life? How long?”
- Andy Stanley
“That goes for old wounds, too, you know. I really wish we’d had the chance to talk before this,” he says, cracking the window so the smoke can escape. “There’s a Longfellow quote I have stuck on my bulletin board at the church office – ‘There is no grief like the grief that does not speak’ – and it’s true. I’ve found that keeping pain inside doesn’t give it a chance to heal, but bringing it out into the light, holding it right there in your hands and trusting that you’re strong enough to make it through, not hating the pain, not loving it, just seeing it for what it really is can change how you go on from there. Time alone doesn’t heal emotional wounds, and you don’t want to live the rest of your life bottled up with anger and guilt and bitterness. That’s how people self-destruct.”
- Laura Wiess
Gerald Celente, PM 6/24/21: "Markets Stay High For Now, Inflation Will Bring It Down"
Gerald Celente, PM 6/24/21:
"Markets Stay High For Now, Inflation Will Bring It Down"
Gregory Mannarino, PM 6/24/21: "MELTDOWN: Waiting For A Stock Market Crash? WATCH FOR A DEBT MARKET IMPLOSION"
Gregory Mannarino, PM 6/24/21:
"MELTDOWN: Waiting For A Stock Market Crash?
WATCH FOR A DEBT MARKET IMPLOSION"
"They Are Gaslighting Us! Nightmarish Inflation Is Already Here But The Fed Is Denying That It Even Exists"
"They Are Gaslighting Us! Nightmarish Inflation Is
Already Here But The Fed Is Denying That It Even Exists"
by Michael Snyder
They would like us to believe that what we can see happening right in front of our eyes is not actually real. Over the past year, our politicians in Washington have gone on the largest spending binge in U.S. history by a very wide margin, and the Federal Reserve has created the most enormous financial bubble of all time by pumping trillions upon trillions of fresh dollars into the financial markets. Of course this was going to cause very painful inflation, and prices are rising very aggressively all around us. But Federal Reserve Chair Jerome Powell and other leaders in Washington are trying to convince us that even though they added all of this money to the system it has hardly affected the overall rate of inflation at all. They are “gaslighting” us, and it is absolutely infuriating.
If you are not familiar with the term “gaslighting”, the following is how Wikipedia defines it… "Gaslighting is a form of psychological manipulation in which a person or a group covertly sows seeds of doubt in a targeted individual or group, making them question their own memory, perception, or judgement."
This is precisely what they are trying to do to all of us. Everyone can see that nightmarish inflation is already here, but they are trying to manipulate us into thinking that it is not.
Just look at home prices. Everyone needs a place to live, and existing home prices have risen 23.6 percent over the past year… "The median existing-home price rose 23.6% in May from a year earlier to $350,300, a record high, NAR said. The annual price appreciation was the strongest in data going back to 1999. Median sales prices have climbed sharply since rising above $300,000 for the first time last July."
At this point, homes are absolutely flying off the market. In fact, the average time that a home stays on the market has hit a record low… "Homes are selling quickly. The typical home that sold in May spent 17 days on the market, matching the record low reached in April, NAR said. Buyers with limited cash for down payments are struggling the most to compete. Half of existing-home buyers in April who used mortgages put at least 20% down, according to a NAR survey."
But Federal Reserve Chair Jerome Powell insists that everything is just fine and that the Fed is perfectly capable of keeping inflation around 2 percent… “When Congress spends trillions of dollars and the Fed prints money, something’s got to give,” Rep. Mark Green (R., Tenn.) said. He asked Mr. Powell whether the price increases seen in recent months are “the start of something that could be as bad as the ‘70s,” when inflation reached double digits. Mr. Powell said such a scenario is “very, very unlikely,” in part because the central bank “is strongly prepared to use its tools to keep us around 2% inflation.”
What an insane thing to say. How can you claim that you are going to “keep us around 2% inflation” when inflation is already out of control? As John Williams of shadowstats.com has documented, if honest numbers were being used the official rate of inflation would already be well into double digits.
Of course for certain categories we are now seeing triple digit inflation. For instance, at one point in May the price of lumber was four times higher than it was at the same time last year…"The price of lumber, which shot up to $1,600 per thousand board feet in May from $400 early last year, is making renovations more expensive – especially projects that involve kitchens cabinets, hardwood floors and additions that require framing."
But Powell just told Congress that he is not troubled by any of this… “If you look behind the headline and look at the categories where these prices are really going up, you’ll see that it tends to be areas that are directly affected by the reopening,” Mr. Powell said in a hearing before a House subcommittee. “That’s something that we’ll go through over a period. It will then be over. And it should not leave much of a mark on the ongoing inflation process.”
These days, Powell is definitely starting to sound a lot like Frank Drebin. We are supposed to believe that nothing out of the ordinary is happening, but meanwhile the wholesale price of chicken wings has more than tripled… “The [wholesale] price of wings a year ago was as low as 98 cents,” per pound, Charlie Morrison, Chairman and CEO of Wingstop Restaurants Inc., told CNN Business. “Today, it’s at $3.22. So it’s a meaningful difference.”
Our leaders insist that this is perfectly normal. Nothing to see here. Please move along. To me, one of the craziest examples of inflation in our economy is what is happening to used car prices. At this point, some used vehicles are now selling for more than they sold for when they were brand new… "When it was new, the window sticker price on a typical 2019 Toyota Tacoma SR double cab pickup was just under $29,000. Two years later, dealers are paying almost $1,000 more than that to buy the same vehicle, even though it’s used. Then they’re selling it to consumers for more than $33,000."
Welcome to the wacky world of U.S. car and truck sales, where the pandemic and a global shortage of computer chips have pushed prices to record levels. I was absolutely floored when I first read that. We have never seen anything happen like this before in all of U.S. history. But Fed officials are going to continue to tell you that everything is just fine in the months ahead even as economic conditions continue to go haywire all around us.
I warned that extremely painful inflation was coming in my last book, and I will be warning about it again in the new book that I will soon be releasing. Our leaders consciously made the decision to flood the system with new money in a desperate attempt “to save the economy”, and they should just be honest with us about the consequences of that decision. But instead, they are just going to keep trying to spin the truth for as long as they can. Unfortunately for them, the clock is ticking, and time is not on their side."
"When the Roof Fell In"
"When the Roof Fell In"
by Bill Bonner
YOUGHAL, IRELAND – "In the news yesterday was a report about a major real estate purchase. Blackstone Group bought Home Partners of America and thus acquired its 17,000 rental units. We don’t know the particulars of the deal. But the average monthly rent for a three-bedroom apartment, for example, is about $1,200. That gives a gross rental income of about $14,000 annually, per unit. So Blackstone could expect about $250 million in annual rental income from the 17,000 units owned by Home Partners of America.
Shrewd real estate investors look for properties they can buy for about eight times gross rental income. So, if the units rent for average amounts… Blackstone’s purchase price – $6 billion – is far too much. The grey-haired real estate veteran must shake his head. How is this going to work out, he must wonder? How can Blackstone afford to pay three times the going rate? What does it know that we don’t know?
Ka-Boom! Buying real estate is a classic way to prepare for an inflationary storm. Especially if it is built of brick and block and won’t blow away in the howling winds. In an inflation, the dollar goes down, effectively lowering the real cost of fixed, low-interest rate payments. Construction costs go up, making existing buildings more valuable. Rents can be raised to keep up with rising costs. Improvements can be put off. And as more and more people try to protect their capital by moving into real estate… prices tend to rise.
Our colleague Dan Denning has an update: "The median existing home price in America is now $350,000, according to the National Association of Realtors. It’s the first time it’s ever hit that level. Even more impressive (or alarming) is that median home prices have grown by nearly 24% in the last twelve months – the fastest pace on record. Boom! Boom. Boom. Ka-Boom!"
ATM in the Bedroom: If another big real estate whirlwind is approaching, perhaps we should spare a moment to look at the last one. The author of the current property price increases, as well as those of the last bubble, can be found in the Eccles Building, home of the Federal Reserve.
In the first financial crisis of the 21st century, the monetary savants at the Fed cut interest rates in order to buck up the financial system after the collapse of the Nasdaq. New York Times columnist Paul Krugman outlined the plan in 2002: "To fight this recession, the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, [Fed chief] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
We’ll come back to Mr. Krugman tomorrow. Today, our scorn is reserved for the Fed. Alan Greenspan, then chair of the Fed, did as Mr. Krugman bid him do. He lowered interest rates. Financial assets went up. So did real estate. By 2005, the real estate market was in such bubble territory that houses practically lifted off of their foundations.
Legend has it that people with no visible means of support were able to buy $1 million houses – without providing lenders any proof of income (no-doc mortgages). Then, they got “cash back” at closing that left them with money in hand… as well as a new house. Then, as house prices rose, they were able to go to the ATM machine in their bedrooms and “take out” even more cash. “Equity,” they called it.
The Roof Fell In: Here at the Diary, we laughed at the bubble… mocked the buyers… applauded the sellers… and, to the annoyance of our dear readers, looked down at the whole affair with a lofty and disapproving air. But we weren’t making $33 million a year. Angelo Mozilo, CEO of Countrywide Financial, was. His company wreaked havoc – with its EZ mortgage terms – all over the nation… and got rich doing it. “Real estate never goes down,” said one and all.
But it wasn’t long before the typical home buyer owed too much money on the typical house, on which the lenders had lent too much… and which the next typical buyer couldn’t afford to buy. Then, the roof fell in. Real estate did go down, after all. From April 2006 to October 2010, the median new house price fell from $257,000 to $204,200. Mozilo retired. And four million families lost their homes.
Crashed and Burned: Dear readers will find in this parable many of the themes we have been describing in these pages of late. The Fed’s fake interest rates misled lenders and borrowers alike. It made the assets of the rich – stocks and bonds – pricier, thus making their owners richer. But while it made houses pricier, it made most people (excepting those who had bought years ago and were ready to cash out of the housing market in order to die or go live on Mars) poorer.
Investors could volley their stocks back and forth at whatever prices they wanted. The trouble was that, for ordinary people, houses were a big part of the real world. Not just financial assets, they were places to live and part of their cost of living. And they had to pay for their houses out of their incomes. As prices rose, incomes failed to keep up. Finally, the average family could no longer afford the average family house. Prices fell. The lenders’ collateral disappeared… and the whole financial hullabaloo came to an end.
Thereafter, the Fed repeated its Krugmanian mischief… cutting interest rates and hiking up asset prices again. This time, 2009-2020, stocks and bonds responded quickly, while real estate prices moved more slowly. Once burned, buyers were shy about touching overpriced houses.
Bubble Territory: But in the COVID-19 crisis – the third big financial blow-up of the 21st century – the feds followed Krugman’s advice even more aggressively. Dan has the figures Just under two years ago, the Fed’s balance sheet was at $3.7 trillion and steadily declining. Since then, the U.S. central bank has printed $4.3 trillion to buy mortgage-backed securities and government bonds at the pace of $120 billion per month. Its balance sheet is now over $8 trillion and climbing. And now, real estate prices are entering bubble territory again.
But are the super-sophisticated analysts at Blackstone making a mistake? Or are they on to the Fed’s tricks… anticipating higher real estate prices, higher mortgage rates, and more inflation? We’ll see. And Paul Krugman? He’s urging the Fed to ignore the early warning signs. Inflation? Nah… don’t worry about it. He won a Nobel Prize. Surely, he’s not the dope he appears. Or is he? Tune in tomorrow…"
Gregory Mannarino, AM 6/24/21: "Must Watch! The US Economy Is Collapsing FASTER"
Gregory Mannarino, AM 6/24/21:
"Must Watch! The US Economy Is Collapsing FASTER"
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Related:
Wednesday, June 23, 2021
"The Economy is like a Bad Magic Trick - Full of Smoke and Mirrors"
Full screen recommended.
Dan, IAllegedly, PM 6/23/21:
"The Economy is like a Bad Magic Trick -
Full of Smoke and Mirrors"
Musical Interlude: Tron Syversen, “Moonlight Reflections”
Full screen recommended.
Tron Syversen, “Moonlight Reflections”
"A Look to the Heavens"
“Follow the handle of the Big Dipper away from the dipper's bowl, until you get to the handle's last bright star. Then, just slide your telescope a little south and west and you might find this stunning pair of interacting galaxies, the 51st entry in Charles Messier's famous catalog.
Perhaps the original spiral nebula, the large galaxy with well defined spiral structure is also cataloged as NGC 5194. Its spiral arms and dust lanes clearly sweep in front of its companion galaxy (left), NGC 5195. The pair are about 31 million light-years distant and officially lie within the angular boundaries of the small constellation Canes Venatici. Though M51 looks faint and fuzzy to the human eye, the above long-exposure, deep-field image taken earlier this year shows much of the faint complexity that actually surrounds the smaller galaxy. Thousands of the faint dots in background of the featured image are actually galaxies far across the universe.”
"Economic Market Snapshot PM 6/23/21"
"Economic Market Snapshot PM 6/23/21"
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"Capitalism is the astounding belief that the most wickedest of men will
do the most wickedest of things for the greatest good of everyone."
- John Maynard Keynes
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"Down the rabbit hole of psychopathic greed and insanity...
Only the consequences are real - to you!
Your guide:
Gregory Mannarino, PM 6/23/21:
"Alert! The Fed. Admits Inflation Will Persist!
And Another Airline Bailout"
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"The more I see of the monied classes,
the better I understand the guillotine."
- George Bernard Shaw
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MarketWatch Market Summary, Live Updates
CNN Market Data:
CNN Fear And Greed Index:
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A comprehensive, essential daily read.
June 23rd to 24th, Updated Daily
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Financial Stress Index
"The OFR Financial Stress Index (OFR FSI) is a daily market-based snapshot of stress in global financial markets. It is constructed from 33 financial market variables, such as yield spreads, valuation measures, and interest rates. The OFR FSI is positive when stress levels are above average, and negative when stress levels are below average. The OFR FSI incorporates five categories of indicators: credit, equity valuation, funding, safe assets and volatility. The FSI shows stress contributions by three regions: United States, other advanced economies, and emerging markets."
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Daily Job Cuts
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Commentary, highly recommended:
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And now, the End Game...
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Oh yeah...
"Never More Frightening..."
"Human beings are perhaps never more frightening than
when they are convinced beyond doubt that they are right."
~ Laurens van der Post
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"In 'The Republic', Plato imagines human beings chained for the duration of their lives in an underground cave, knowing nothing but darkness. Their gaze is confined to the cave wall, upon which shadows of the world are thrown. They believe these flickering shadows are reality. If, Plato writes, one of these prisoners is freed and brought into the sunlight, he will suffer great pain. Blinded by the glare, he is unable to seeing anything and longs for the familiar darkness. But eventually his eyes adjust to the light. The illusion of the tiny shadows is obliterated. He confronts the immensity, chaos, and confusion of reality. The world is no longer drawn in simple silhouettes. But he is despised when he returns to the cave. He is unable to see in the dark as he used to. Those who never left the cave ridicule him and swear never to go into the light lest they be blinded as well."
- Chris Hedges
"Life..."
"Life is not what you see, but what you've projected.
It's not what you've felt, but what you've decided.
It's not what you've experienced, but how you've remembered it.
It's not what you've forged, but what you've allowed.
And it's not who's appeared, but who you've summoned.
And this should serve you well until you find what you already have."
- The Universe
Greg Hunter, "Fed Kills the Economy – Michael Pento"
"Fed Kills the Economy – Michael Pento"
by Greg Hunter’s USAWatchdog.com
"Money manager and economist Michael Pento warns to keep your eyes on the Fed. It will be responsible for the next market crash coming this year or next. Just look what happened after the most recent Fed meeting last week. Pento says, “After the June FOMC meeting, the Fed talking about tapering sent stock prices skidding. When they actually announce they are tapering, and when they actually announce a date for tapering that, I believe, will be in August at Jackson Hole, the market will sell off absolutely.”
The Fed has been propping up the markets with massive amounts of printed money since the financial meltdown of 2008. Something has changed, and Pento points out, “Now, the inflation has become such a problem that even the Fed can no longer ignore it. Now, the calculation goes like this: Either the economy will slow significantly on its own to slow the rate of inflation, which will cause the earnings per share to collapse and the stock market will collapse, or the Fed is going to kill it for you. There has been an epiphany, a watershed moment at the Fed, they are all starting to notice the inflation. Even the core rate of inflation has gotten out of hand, and they have to address it. They can’t ignore it, and this is the big watershed change. I cannot stress this enough. The big change is the success of creating 2% inflation, which is now well over double what the Fed wants it to be.” They wanted 2%, and it’s now over 5%. The Fed is going to kill the economy or the economy is going to roll over on its own. I think it’s going to be both.”
What’s coming next? Pento warns, “I think the Fed is going to taper asset purchases just as the monetary cliff kicks in. In that case, watch out. They are losing control of the monetary system. They are losing control of inflation. They are losing control of asset prices. They are losing control of the fiat currency system. They are losing control of everything.”
In closing, Pento says, “We are going to go through iterations of inflation and then rapid and devastating deflation. And with each iteration, the bubble gets bigger and the amount of debt grows exponentially. Do we have one more left or two more left? I don’t know, but I am calling for a rapid and violent deflationary bust of asset prices probably early in 2022. At some point, bond market yields spike out of control. That is not happening yet. After that, you are going to see a problem with helicopter money like we have never seen before and inflation like we have never seen before.”
Pento also says he’s long term bullish on gold and short term bullish on the dollar, too. He explains in detail in the 55 minute interview."
"Join Greg Hunter on Rumble as he goes One-on-One with economist and
money manager Michael Pento, founder of Pento Portfolio Strategies."
"How to Remember You're Alive"
"How to Remember You're Alive"
by David Cain
"One way to appreciate virtually any moment of your life is to pretend that the whole thing is already over. Your life came and went a long time ago, but for some reason you’ve just been sent back to this random moment, here in this office chair, or in line at Home Depot.
It isn’t clear why you’ve been sent back. Maybe it was a cosmic accounting error, or a boon from a playful God. All you know is that you’re here again, walking the earth, having been inexplicably returned to the temporary and mysterious state of Being Alive.
Any moment will do for this experiment. In fact, the more mundane the moment, the more profound the effect. You might find yourself, in this instance, pushing a cart through the frozen foods aisle. Or maybe you’re seated in front of a bowl of cereal at the speckled Formica breakfast table you bought on Craigslist. Or you’re carrying a bag of recycling down the back stairwell on a muggy night. It’s definitely your life though, and at least for now, you get to be alive again.
When you view life as something you’re returning to — rather than something that has never not been happening — it feels like the gift it perhaps always should. It’s just so damn interesting to be alive and experiencing things, and choosing what to do during those experiences.
Seeing life as the curious and rare condition it is gives even ordinary events the character of a brilliant film. An oblong rectangle of sunlight on the table flutters with the shadows of leaves. While you fold laundry, your phone lights up: a friend texting you a cheesy pun she knows you will appreciate. A short-lived party of bubbles appears and disappears when you fill a glass of water from the tap. A thin mist pours from the open freezer display onto your sandaled feet. It’s all spectacular, just because it’s happening, and once it’s over you would greatly miss it if you could. So why not miss it now? Or at least understand why you would.
The state of Being Alive also comes with a rich and distinct sense of possibility. You can make any number of interesting things happen by sheer will. You can scrawl sentences on a scrap of paper that will trigger certain thoughts later, for you or someone else. You can touch a few buttons on your phone and be speaking to any of a hundred people you know, and whatever is said would change each other’s day, or life, in some way. You could clean the house this afternoon, or leave it messy, and each option would give a different shape to the evening.
Can you believe that this condition – of being in the world, of feeling stuff and doing stuff - was once happening all the time? Remember being able to open windows and pet dogs and wash your hands in warm water? What an amazing time that was. No matter what happened, whether life was decidedly going “well” or not, it was always so eventful, and you got to decide what to do in each moment of it.
It’s all over, of course, which is too bad. You didn’t realize at the time how small a window it was, and you can’t believe you spent a lot of it complaining. However, for right now at least, for some reason, you’re back. You have at least this moment to enjoy being alive. There may be more coming afterward, but you can’t count on that. Not this time anyway.
Except in moments of extreme emotional tilt, this exercise always seems to work. I can almost always, when I think of it, choose to see the current moment as a certain kind of an unexpected gift - a long-awaited return to the most interesting thing ever, which is being alive.
It works because if it were true - you really had just been sent back to the realm of the living - chances are you really would think it’s unutterably great to be here, even if you didn’t the first time. By mentally jumping out of life and then back in, it becomes clear that the experience of being alive really is a profoundly interesting thing, and we can live with an ongoing awareness of that. That few seconds of contemplation reframes virtually any moment as the best thing that can happen: you, enjoying a rich pocket of Being Alive Right Now, amidst a vast universe that is almost entirely not that.
At least, it becomes interesting when you’re aware that there’s no reason any of this should necessarily be the case. There will not always be things happening. You will not always have the ability to experience the world and respond how you please. But - by the grace of whoever - you do right now. Whatever the metaphysics of it really is, the point is that the window is small, and if you’re in it right now, that should probably be regarded as a profoundly lucky thing, whether it’s your first time here or you’ve been sent back for another tour.
However, because the window is open continuously until it’s closed for good, it’s hard to feel the luckiness of being alive while life is still happening. This is one way to contact that sense of good fortune reliably - see the moment as an inexplicable return to the wild and spectacular condition of Being Alive, which was once so abundant you forgot to appreciate it. This experience you’re having right now, of being here in a body, experiencing the world and choosing how to respond - is gone, and by the Law of Joni Mitchell, you only now know what you had. But by some unbelievable stroke of luck, here it is again."
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