Sam Zell On "Class Warfare Crap", QE3 Unreality, And Why Everything Is Mispriced Due To The Fed

Tyler Durden's picture

"QE-whatever has created artificial numbers that the underlying won't support" is how Sam Zell sums up his view of the Fed's actions, adding that the Dow should be more like 9000, not 14000. The typically optimistic bottom-feeding real-estate magnate says he is not buying here, is gravely concerned about liquidity needs, and in his assessment "everything is massively too expensive." This epic CNBC interview-fest, where the less-than-cheer-leading Zell was allowed to speak, includes his views on a pending recession (as he sees capex planned projects being delayed) and while trying not to play the political card too strongly, he asks that we "stop this class warfare crap" and that the animal spirits are unleashed - as the game is being stacked against him. "We're kicking the can down the road... and with QE, there is now too much capital chasing too few opportunities - even when nobody has confidence in the future!"

Clip 1

  • How does QE3 help?
  • We're seeing too much capital chasing too few opportunities and consequently i think number one the effect of qe3 is nothing more than pushing up the stock market and yet the stock market is being pushed up at record levels of limited trading. we have low volumes and the market goes up, which is manipulation but it's a function of the fact, what's anybody going to do with money and nobody has any confidence in the future,
  • We're on the cusp of going back in a recession
  • How many years have we been kicking the khan down the road. that's a wake-up call for rip van winkle,
    have you ever solved a problem without going to the edge?




Clip 2

  • Unleash the animal spirits, unleash people like me - the game is being stacked against me.
  • Stop this class warfare crap
  • We're watching liquidity like a hawk because there's great sense tomorrow morning it could go the other way, in effect you don't invest as much, you don't take as much risk.
  • Show me any country in the world that has progressed successfully without engaging the animal spirits of their people, and without creating opportunity for their people to excel and push the envelope
  • There are always structural issues...



Clip 3

  • Delays in capex spending is usually a sign we are headed into recession
  • Not optimistic about consumer spending into the end of the year
  • I am normally an optimist - buying when everything has dropped - but my assessment is that "Everything is massively too expensive"
  • Stock market should 9000 not 14000
  • QE is creating artificial numbers that I dont think the underlying will support


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slaughterer's picture

Why doesn't CNBC just put David "ballz to the wallz" Tepper on?   He lives almost right next door to their studios.  

GetZeeGold's picture



Just be patient.....I'm sure they'll think of it soon.


BaBaBouy's picture

"Everything is massively too expensive"

Stop Bitchin... It Will only get MORE EXPENSIVE...

Paper Fiat Is Going To Toast.
They Have No Choice But To PRINT and PRINT...

Protect Yourselves, GOLD $50K ...

Bitchezzz ...

101 years and counting's picture

you buying gold?  or tungsten?  just sayin....

if you do actually own gold, better hide it somewhere good.  .gov will be confiscating it soon enough.

SafelyGraze's picture

am buying mortgage-backed securities

like everyone else

the fed is going to bid up MBS values, so don't-fight-the-fed


SafelyGraze's picture

"operation twist" for MBS

in the OT headfake, the fed buys up all the long-term debt, forcing everybody else to fight over short-term, equities, real estate. fed doesn't particulary care about long-term debt or return. just wants to drive the herd elsewhere. then let the herd take the loss.

if you don't care about return, which MBS do you buy? why not buy up all the low-risk tranches. drive the herd into holding more of the crap securities. the Nank asserts privilege to buy what he wants to and not disclose the details. hence: twist for MBS.

are you listening, pension funds?

Dr. Richard Head's picture

The funny thing is that the sheeple believe Benny is buying up the mortgages, when in reality he is buying up banks' deriviative positions on mortgages.  Gotta keep the shadow banking world solvent. 

Baritt Obomny for President -

Dalago's picture

It was the Senate, then the Kings and now the Bankers/Corporations.  Who will fill the power vacuum when its over?  Hopefully The People, again.

Dr. Richard Head's picture

Hope is dangerous.  Watching stalwart Republicans excuse Romney's liberal stance and voting record and actually hoping he will do things other than tinkering on the edge of the tax code, makes me realize there is much pain to come. 

malikai's picture

It blows my mind how much partisan chumps wilfully ignore when it is "their" team.

Bicycle Repairman's picture

Sam's business model is not working.  Very unhappy.

aerojet's picture

Such peurile nonsense.  They don't have to confiscate it to make it worthless.  They could roll out a new currency, one that you need to use to buy things, and then screw you on the exchange rate.  I've been going back and forth on this whole precious metals things--I run right up to the point at which I say I'm going to buy, only to talk myself right back out of it.  The metals play is just too obvious. And anything that is too obvious is a tar pit trapping the saber toothed suckers.  Stackers are going to get skullfucked somehow, it will happen.

Temporalist's picture

Metals too obvious?  That is a joke right?  The propaganda against them is so massive that there is nothing else even to compare it to except the propaganda for anything paper related (equities, debt, bonds, mortgages, etc.).


Perhaps you don't realize that less than 2% of the investing population have PMs.  The central banks are just starting to buy gold again (after decades of selling).  And these "stackers" that you call them, how many people do you know in your own personal life that even discuss PMs?  Do you know a single "stacker"?


I think people like you have a conceptual problem thinking of going all into PMs as a single investment but if you consider PMs insurance and buy them on a scheduled plan, weekly, monthly, annually then you would have been buying some to protect yourself. 


What is more peurile than degrading something you know nothing to little about and acting as if you have a clue?  You aren't even invested in them yet want to deride the whole idea of them.  I know other children that hate rollercoasters because they're stupid...yet have never been on one.  You sound like someone who thinks "well I missed the boat so that boat will probably sink cause I'm not on it."

Diggintunnels's picture

Think of it like this.  The people who are prepared to be self sufficient in the event of a collapse believe in gold.  Thus, they will trade needed goods which they have stocked for gold.  I think i should have some gold, just in case.  Fairly simple plan.

tsx500's picture

how about many hundreds of years of history .... is that also "too obvious"  ??

Temporalist's picture

I was starving but eating was too obvious.

donsluck's picture

Try thousands of years.

Raymond Reason's picture

You are playing the victim of mental rape.   You cower like a child that has been repeatedly raped by someone who never gets caught and sees that person as omnipotent.  This is how you see government, by design.    But you are not a child, and you haven't been raped, and the government is not omnipotent.  Take heart, man.   It's a paper tiger, and its tail is on fire. 

donsluck's picture

You are making a classic mistake regarding fear. Our logical mind is not good at making decisions, but it is good at taking things apart and analyzing them. It is the emotional mind that is best at making decisions (I know that's against most investment advice). The way to harness them both is to withhold judgement and use the logical mind to read articles (pro and con) and do research. At some point your emotional mind perks up and makes a decision. Go for it quickly because your rational mind will try to talk your way out of it. That is just fear. I have been in PMs for 12 years now, when my emotional mind says BALE I will. No fear.

bigdumbnugly's picture

ever since my youth i wondered how the ez wider guy would age...

never figured he'd show up on cnbc tho


Hippocratic Oaf's picture

He's right. I'm in fixed income and everything is over-priced and risk-on til after election. Im a seller

slaughterer's picture

CNBC needs a good bulltard on TV to get the "animal spirits" out now that Barton Biggs is no longer doing interviews.  Get Tepper, or Tilson, or Biryani on.  

Temporalist's picture

They were supposed to have Buffett and Munger on but the witchdoctor was busy animating other corpses.

Renewable Life's picture

First dumbfuck Woody Johnson blows his wad yesterday, now Zell is lining up, these fucking "kings" are starting to panic a little I think!!

Its common knowledge (to anyone with a little history education), that Kings (Corporations) hate to pay taxes, they never have thought taxes where for "them"! The fucking King doesn't pay taxes, this is how the world has been for 5000 years, you peasants in America have gotten way out of line!!  Kings hate Freedom, Liberty, democracy, individual rights, and any other thing that challenges their power! Taxes are for the peasants and the serfs! 

The kings are getting nervous!!! If you start to hear shit about "class warfare", you know they are starting to panic!

francis_sawyer's picture

When are they gonna put Kernen out to pasture?

azzhatter's picture

No shit. Most annoying talking head on TV. Always interrupts with his smartass bullshit

Zer0head's picture

Kernen is a chucklehead, but at least he knows it.  Those aholes over on Bloomberg and I am thinking of Tom Keene et. al. are pseudo econoexperts who tow mayor Mikes globalist agenda and in this politics season spend their entire show cheerleading for Obama.  I'll take Keren and Becky anyday over  Sara dildo Eisen  (taken down from youtube but still available here)  (we would luv William to immortalize this scene)

and that bozo with the bow tie.

And what's the deal between her and Mckee - they were shacked up at one point but I think her new anchor job with Keene has her aiming higher, who knows maybe Gracie Mansion

donsluck's picture

And of course these videos seem to think Romney will save the economy. He and his ilk are the ones who trashed it.

GetZeeGold's picture



When are they gonna put Kernen out to pasture?


He can come live with us......he loves us!

Big Slick's picture

Seriously???!!  You want to replace Kernen with whom?  Another ideological hack like the 1st grader in there?

dirtbagger's picture

A poster on naked capitalism said his wife is a producer on Squawk Box.  That would explain a lot.

YouAreBliss's picture

No Way  - Neutron Jack loves him.

He's going to host a new segment of "Chairs".

He gets to rant at an empty chair for 20 minutes every morning - like old Clinty.

Great TV!!!

Ruffcut's picture

HE doesn't want to go to pasture, the zombies will eat him.

Filled with taco bell's mystery meat and ready for din din.

azzhatter's picture

They brought out that smarmy little punk Ackman. It was pretty funny when Zell told Ackman "that's tooth fairy" stuff talking about General Growth. Ackman is a first class asshole

Abraxas's picture

Who the hell is Sam Zell now? Where are these people coming from?

Lost Wages's picture

Check out the Sam Zell "Controversies" section on Wikipedia. Just another Laizzez-Faire Bootstraps Libertarian who thinks the weak and poor should be used to pave the streets. Too bad fiscal responsibility is so much associated with the heartless.

sessinpo's picture

"Just another Laizzez-Faire Bootstraps Libertarian who thinks the weak and poor should be used to pave the streets."


Many have paved the streets and many more will. And as long as those people are paid wages that are acceptable to them, that is the way it should be. Part of the middle class of the last century participated and built the infrastructure the politicians now says needs rebuilt. And those middle class workers had fairly good lives, but they also worked hard for it and we aren't talking all engineers.


I'm not supporting Sam Zell. I didn't click your link. I'm just responding logically to the ideology. Yes, some people get screwed. People get screwed all the time and life isn't fair. Some even died. You have to take everything in context.



jstrack's picture

Is that really your analysis and your conclusion after reading something from some annonymous person.  It may because it fits your already preconcieved notions.  By the way, the article is wrong...its not a mobile home park...its a freaking manufactured housing community...LOL lol lol...

Cognitive Dissonance's picture

Yes.........because as we all know it is the flow and not the stock that matters.

DaveyJones's picture

and things are getting harder to digest

Cognitive Dissonance's picture

As the world stomach turns churns.

DaveyJones's picture

followed by The Young and the Restless

Ruffcut's picture

Really the old and the ruthless.

Temporalist's picture

One thing Becky isn't quick about is shutting her mouth.

WhiteNight123129's picture

Fry real estate with long bond yield rising and rising and frying up capital owners (bonds and equities) with monied capital converted into circulation.



I come from farming family. Ben Bernanke is my hero. We agree there is too much monied capital to circulation, the solution is to sell your financial assets and spend. There is no more room for trying to extract anything from circulation into financial assets, time for financial assets to be spent (bonds) into circulation. Game over PIMCO, FUCK YOU SAM ZELL, THE FED IS POINTING THE GUN ON YOUR IDLE LARGE MONIED CAPITAL, BEN BERNANKE IS POINTING ITS GUN ON YOUR LARGE DOLLAR BANK ACCOUNT. Spend and pronto, the Fed will fuck you. You will forced to release your dear currency units in the circulation and that will fall in the pocket of the consumer, and the consumer who was leveraging up to prop you up old farts (PIMCO and ZELL) is now going to receive a lot more nominal confettis and will pay easily back his mortgages....

Super Ben Bernanke is there to burn the bondholders to a crisp and real estate and force those guys to spend... Evil fucking great genious, Ben is the man. BERNANKE! BERNANKE! Bond traders, fuck you, fuck you, and fuck you (unless you are short the 30 years, which then you command my respect for having vision and guts.)






MachoMan's picture

This would be a neat theory but for the fact that there is no present mechanism for our monetary nor fiscal policies to actually reach J6P.  Wages are stagnant to declining...  and, inflation adjusted, are getting hammered.  I agree our present monetary policy is waging a war on currency (hint: find alternative forms of wealth storage), which tends to impact large capital holders...  but, it's a pretty large stretch to think that J6P will see any benefit from the prolifigacy...  house notes will not be easier to pay off in our present stagflationary scenario.