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Jackie DeAngelis Blows
I was originally going to title this post "Jackie DeAngelis Must Die", but I thought she might take it the wrong way.
Anyway, earlier this week, Ms. DeAngelis "interviewed" famed short-seller Bill Fleckenstein on (gack, choke) CNBC, every permabull's favorite network. Right out of the gate, she attacked him:
You can watch the interview at the bottom of this page if you want, but I can save you the time by simply stating Mr. Fleckenstein was ambushed by a trio of CNBC permabulls, deriding him for missing out on the past five years of market rally.
I think it's repulsive for a network to take a guest's time and use it to berate him (why Bob 
Prechter shows up on CNBC baffles me, since they just laugh at him). DeAngelis' entire demeanor toward the Fleck was condescending, smug, arrogant, and mean-spirited. I can easily picture her at cheerleader practice, chastising a girl for being cut from the squad for gaining a few pounds. "I guess that cheeseburger mattered more to you than the Spirit Squad, huh, Becky?"
Ya know, if we had been in a government-rigged bear market for the past five years, CNBC wouldn't even exist anymore. Bear markets tend to be over all too quickly, but I distinctly remember at the depths of the 2008/2009 bear market that Jim Cramer distinctly said without any qualification that he would tell anyone he cared about to stay out of equities for - - and I'm not making this up - - "the next five years."
I'm weary of the female business "journalists" being hired for their pretty faces and bra sizes. I'd much rather have a woman that looked like Marlon Brando ask insightful, probing, and thought-provoking questions. They don't have to pander to their guests, but surely there are ways one can draw meaningful ideas from smart people besides bullying them.
Oh, and if there's one thing I wish I could have shorted, it's CNBC viewership. Even with this phony bull market, CNBC is in a free-fall. Once the next bear market begins, I imagine CNBC will simply close up shop completely. Then any questions of the existence of a munificent God can finally be settled.
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Cause he's right and what's being done is very wrong.....................anyone with any foresight should be very concerned, we don't all want to suck at the FED's teet.
Who's your Mommy?
At what point does Fleckenstein admit that he's misled all of his investors? How long can he be wrong and still have CNBC or anybody else care about his opinion? He only goes on these shows to avoid disappearing entirely from view. He's like Marc Faber with hair.
You know.....looking at that chart......viewership goes down when times (for Wall Street anyway) are good. In other words, viewership is more or less inversely proportional to the size of the bubble.
Viewership went up as the Tech Bubble began to burst.....same for the Housing Bubble. Viewership went down and stayed down as long as the Bubble was inflating.
Looks like.....using this data to front run a bit and looking at the past trend.....seems to me the World Wide QEternity Bubble is just about to reach Peak and the Bust is about to happen.
You'll know when CNBS viewership starts to rise....and rise dramatically.
Just like in 2008 - watching them shart themselves is fun. Next fall when the wheels come off is going to be cathartic for those who prepared.
Bendromeda- I used to tune in occasionally back in 2008 on the hard down days, those shills were nearly in tears on a bad day. Right now I have CNBS blocked with the parental controls. Nobody should listen to that drivel. When TSHTF, I'll maybe tune in again.
Bendromeda Strain ( and +1000 for such a clever use of one of my favorite novels and movies ) I agree with 100%.
So....when it happens.....Free Jiffy Pop popcorn and beer for all, over at my place !
Cause he's right and what's being done is very wrong.....................anyone with any foresight should be very concerned, we don't all want to suck at the FED's teet.
Who's your Mommy?
I think the main thing a lot of bears were missing is that bearish the real US economy does not mean one should short stocks. Printing fiat means it should take more fiat to buy equity stake in companies. And there are still good companies out there, particularly those with international exposure to markets where people save. Or of course the big companies benefit from .govt transfer programs like WMT getting EBT, as fascism is encroaching more and more here, as regulations supposed to rein in the 'evil corporations' wind up giving us a less robust economy as SMEs get hosed and can't deal with compliance costs, and so this is a moat for TBTF entrenched crony companies who get more market share and .govt granted monopolies. I'm against the EPA no matter what, but just pointing out an unintended consequence of regulations, which is that the big companies can handle the costs, whereas competitors can't.
And of course the rate rigging means easy stock buybacks and goosing EPS.
So bottom line is, shorting stocks outright is dicey, because stocks should go up if they are printing. It is not genuine growth; it is simply taking more dollars to buy stocks. Gold will end this cyclical bear and resume its secular bull and this rally's nominal nature will be exposed as Dow/gold goes back in gold's favor.
all true............well said
This is the end game for this whole Keynesian regime. They are literally printing fiat to buy bonds, which are nothing but future cash flows of said fiat, to give the illusion of a perpetual, strong bid under bonds (and keep rates low as nat'l debt soars let alone off balance sheet things that make total liabilities 1/5 of a $quadrillion). This is like if I were to sell something on ebay and use a different account and bid up the price of all the things I'm selling, to induce the illusion of 'demand' and 'value'. It is no different whatsoever.
Low rates they need to have. Ultimately the market and supply/demand forces and scarcity, etc. will overcome this like phyzz/paper divergence in the metals markets. Higher rates will not mean moar growth. It will mean creditors demand higher interest for risk of holding US fiat. It's like in Europe how rates going higher means bad stuff is going on, like Spain with Catalan people wanting to secede (and I mean 'bad' as in how market perceives it; not bad at all is secession).
So higher rates will not mean a stronger dollar. It would liquidate the malinvestment and get the debt instrument haircuts rolling, and take the pain now, but they want to avoid that and are printing to put off the inevitable. In doing so they are guaranteeing a greater conflagration.
This may be the end game, but in the meantime, what do you do with your money? The Fed is ending QE, but the Japanese, the Chinese, and Europe are going full bore. What that means, inevitably, is that the dollar rises and commodities go down. The dollar is rising and commodities, including precious metals, are dropping like rocks. So you need your investments in dollar denominated assets that are not commodities. Stocks, bonds or real estate, but bonds are near the end of a 30 year bull market, and real estate is still recovering from a major shakeout, with few people who are credit-eligible to buy it.
"This may be the end game, but in the meantime, what do you do with your money?"
I don't know...GO ENJOY IT. Do you really have to spend your life breathlessly bending over to scoop up every last penny on the sidewalk? Hmmm...maybe you do... In any case, I would absolutely prefer to lose money if I knew the day was coming when the oh-so-wise and oh-so-ruthless powers-that-be were going to be forced onto trains at gunpoint and sent off to be gassed. THAT would be a good investment...
+1 Vooter!! These unusual conditions call for an anti-saving anti-working mindset. If you have savings, like me, and all investments have negative return or are too risky, stop saving. For me that means basically stop working entirely. And I have. My remaining years have a time value. Since real interest rates (the time value of money) is negative, logic dictates I stop accumulating it.
You do what adults do; you wait patiently for the sure thing. People who think they have to be in the market, or any market, all the time; are adolescents; reality is going to teach them some very bitter lessons before their education is complete.
Let risk/reward come to you. Let the puck come to you. Be willing to wait it out and let the thesis play out or make it prove you wrong. Commodities getting crushed offer great opportunities, as they always have value. Last I checked people still eat.
SAT 800 I know you are bearish but don't you think stocks could keep going up, along with precious metals? I honestly wouldn't be shocked to see ES to 3500 but gold to 2k+ in a few years? Most important is to get out of the dollar. Stocks that have exposure abroad offer a decent alternative especially if they have dividends.
Forget ES - if you want to go to historical norms and real value snapback, look at the Dow and gold at parity.
Get into strong companies with international exposure and ones that make quality things that people with savings and emergent middle classes desire, and get into commodities that are way beaten down (at least start scaling). Huge value in everything from grains to sugar to metals. And precious metals offer a great at least long scaling in trade right now if one can manage risk/amount of margin if at all to use along with of course the usual savings function of buying physical and forgetting about it/not worrying about fluctuations as an ounce is an ounce is an ounce.
Get income streams from solid dividend companies and through other means like buying real estate to rent out, and in general don't go all in on any one thing of course. Only so many things one can do to hedge, because preservation of capital/standard of living IMO soon enough will be seen for its value, despite this chase for yield status quo.
"They are literally printing fiat to buy bonds, which are nothing but future cash flows of said fiat"
I completely disagree with this assertion concerning the nature of Bonds.
These Treasury Bonds are NOT debt. Debt is designed to be paid off -not rolled perpetually.
I do not know a single person that believes the 'National "Debt"' is ever going to be paid down -let alone paid off.
Treasury Bonds are Perpetual Income Streams disguised as 'debt'. The future productivity of People, NOT fiat, is what is being sold.
Treasury Bonds are securitizations of future Tax proceeds: the future production of People.
Treasury Bonds/Bills are receipts for slaves: Tax Slaves are being privatized.
This counterfeited Fiat is merely the vehicle for accomplishing this at an accelerated rate within the context of the bastardized Treasury Complex. This is an engineered crisis with and it was engineered with the intent of accelerating the securitization, sale, and accumulation of future tax receipts into private hands.
Oligarchs are re-establishing a slave trade in the Americas via a captured United States government.
Feudalism is being reinstated. Period.
Go ahead, try and tell Me that You honestly believe that the 'National "debt"' is going to be paid off.
Go ahead and tell Me when that is actually going to happen and with what.
It is going to be paid off when the first dick head pushes the button. For the life of me I can see no way out except, the button. May God have mercy on our souls.
"The future productivity of People, NOT fiat, is what is being sold."
The first principle of counterfeit is that it steals from the present. That is its purpose and fundamental nature. So, the key concept is not that the debt funded by counterfeit represents "future productivity" that is being sold but instead the purpose of the debt is to steal from present productivity. It is always about the present because this is where we always are and thieves must sustain themselves now. The future never arrives and is just a ruse of tyranny to distract from what the counterfeit does today. This concept is missed by FreeMktFisherMN too in that the analogy of EBAY should also state that while all the cronies are bidding up the product, the exchange of counterfeit into the economy of productive work as facilitated by the debt also removes, immediately, warehouses full of products from the market.
That the debt funded by counterfeit today steals from productive work today grows exponentially relative to days of yore is the explanation as to why megaphone-mouths for tyranny cannot state this fact as the reason why each successive "recovery" is weaker than the previous one and why what a simple adjustment to the short term interest rates used to "achieve" now requires the complexity of QE, IOER, and ON RRPs.
And don't forget that there is no such thing as counterfeited fiat. Fiat must be counterfeit or the the decree would not be necessary. The representation of productive work, money in the form of precious metals, is gone and no longer a component of tyranny's mechanisms; therefore, there is a "decree" that everyone should just shut-up and pretend that there is no counterfeiting.
Agreed. You are getting into the nuances a lot more than I was. I'm talking about how to keep the CONfidence game going, they are buying bonds (future cash flows of dollars) with...dollars. Hence the 'don't fight the Fed' and 'dance while the music is playing' pervasive mentalities.
Occam's Razor here is simply that they are extracting wealth via inflation, which is much stealthier than taxes but just as pernicious if not more so in terms of the malinvestment it induces. They are backstopping their system with real value created by the actual Galts out there, because they could make SPX go to 5k and it wouldn't matter if there wasn't actual purchasing power out there. And this will, in fact, be exposed, soon enough, as SPX to 3500 will go along with gold to 2500+ and silver towards 100.
It is no coincidence that the FRN is 'legal tender' and there are CGT and 'collectible' tax rates (even higher; 28%, no?) on PMs to defend that with theft and coercion and the IRS (which is redundant).
Who told you that debt is designed to be paid off? I've been in debt my whole life and with luck, I'll die owing lots of money. I wish my creditors luck trying to bleed a corpse.
They are trying to repudiate the debt with inflation. Debt is a huge drag on economic growth, and it is good that velocity is low as at least some people aren't falling for the idea that 'you better lock in these low rates while they last'. Because locking in low rates also means the present value of the mortgage is higher, and it takes longer to amortize the loan, no? It's like low rates on a house. Low rates means more 'demand' as more people can get in on the action, so prices go up, so you might have lower monthly minimums, but you'll be paying longer and on a higher total present value, whereas higher rates lowers price but you're amortizing more quickly with higher payments.
TANSTAAFL, in simple.
Debt is a means to extract wealth. The Fed is a usurious system. I know the truth about Lincoln and how he was a crony for the protectionists against Southern competition and don't buy the mainstream about he was this amazing leader, but I think that that he dared to print greenbacks without interest was why he was taken out. Inflation is inflation, but the inbred elites know that the key to their system is usury which yields control; extracting wealth via inflation with the fiat system that has a monopoly on legal tender, and keeping people in perpetual debt (and the people themselves have huge culptability here; nobody forced them to sign on dotted line).
"Because locking in low rates also means the present value of the mortgage is higher, and it takes longer to amortize the loan, no?"
If the loan amount and payment are the same - a higher interest rate will cause the term to also be longer.
Fisher is mixing his messages. Low interest rates do increase the market value of RE due to affordability, which may make an overall "nut" larger. Increasing rates decreases affordability, which brings valuations and prices down. There is a point where price and rate will shake hands in dollar cost terms, but you are correct that a fixed mortgage that is intended to be paid benefits from the lower rate as long as the purchase price wasn't bubble inflated. If you try to sell into an increasing rate market it could be sobering to any prospect of profit via appreciation.
Sorry for convoluted post i just made about this particular topic of rates/amortization of loan.
Would appreciate an explanation of how this works, with examples. Maybe some of this stuff isn't hard and fast, as you seem to be saying. I think it gets into capital appreciation, too, vs. getting higher rates. It's like buying corporate bonds; you like the higher rates, but too high and worrisome the quality of the company. Whereas in a ZIRP environment, the only reason to buy debt that is not yielding high rates is if you think rates will go lower, so you get capital appreciation. So rates is not inducing demand, but rather the greater fool theory so to speak of unloading at a lower rate and thus higher price to someone else.
Can you explain this in more detail? My basic understanding is that the low rates enable a lot of people to get in on the action, as they can meet the meager monthly minimums. It's like college loans. But with the low rates, that creates a lot of artificial demand, so prices go up. Same with housing. If rates were higher, I would think that prices go down, as lending standards have tightened, and so while a monthly payment goes up due to the higher rate required, it is on a lesser priced house to amortize now.
Low rates tell me that people are looking to just get by; not interested/capable of actual outright ownership.
I'm sure things are much more distorted now with the govt intervention, but I'm just talking about how there isn't a free lunch. You get a low rate, your overall to be paid down goes up. Like student loans. It used to be not be ubiquitous people going to school, and lending was tighter, but people could easily work off the loans. Nowadays the low rates are what the idea that it is 'affordable' is predicated but 'affordable' means being able to go, not the difficulty of actually paying off everything and moving on.
Cars, too. Lower rates means margins decrease for the car dealerships, so they rely on volume. Higher rates and no subprime lessen the pool of eligible customers, but they are getting higher payments out of them, too. I know a lot of it all fluctuates, but I'm somewhat confused if you're saying low rates means paying off the whole mortgage is more doable. It's like refi, too. Yes one gets a lower rate, but the length of the whole mortgage goes up, too, as you're paying less but for longer.
Your thinking is mostly correct at the macro level but at the individual loan you have it backwards.
Principal (loan) amount, term (number of payments), payment amount and interest rate are the 4 things - give me any 3 of them and the 4TH can be calculated. It is simple math.
If you increase the interest rate then either your payment must go UP - your term muct be longer or your loan amount amount go down.
In a sound economy where rates are based on real risk assessments this wouldn't be so confusing. I do understand, though. The other factor is up front payments, as obviously the accountants are focused on cash flows and present value. With tighter lending standards up front payment is higher, so less principal left to pay down.
When rates are rigged as they are, and of course neare zero, the PV stays a lot higher on future cash flows, as there is minimal discounting with the denominator minimized on DCFs. Just another consequence of the Federal Reserve. Nobody properly discounts the future, as low rates means 20 years from now value supposedly isn't much different than today, whereas even a more normalized 5% rate on borrowing means significant discounting going on.
I've always been somewhat confused as to how people interpret PV versus the nominal actual value paid out. Nobody counts their wealth that way really, but obviously need to discount the future, although, again, the status quo is that there is minimal discounting.
You are making it a lot harder than it needs to be - maybe over thinking it -
I think I understand what you are saying - if you borrow $250K to buy a house when rates are 4% - and then rates jump up to 8% - good chance the value of your house just took a hit -
But would you have been any better off if you had paid cash instead of taking out a 4% mortgage?
I would say NO - the hit to the home price is not driven by your loan -
The simple way - Present value is present value
- if you borrow $100K today then that is the present value - the rate - term and payment amount are what they are - but the present value is just that.
If you want to think even harder - then factor in the impact of future market rate changes on your decision to borrow today.
If rates fall - then refi it - if the go up then you still have the benefit of a locked in lower rate.
I get it. If you are not a 'good' risk you pay a higher rate commensurate with that, and you end up paying in total more dollars when all is said and done, than somebody with good credit. It's like corporations that issue debt securities. Those more risky will have to pay higher rates for a given investment by somebody, and they'll end up having to pay more dollars overall when all is said and done.
I think with refis I get it, too. I guess I think in terms of the old fashioned 'have to be merited to get lower rates' way. Obviously an anachronism (though reality will reassert itself eventuall) in this ZIRP and .govt housing policy environment.
Going into the house buying decision, it is the case that either you can get lower rates if that is the case, but it is on a higher valued house, or it is a more subdued housing market and getting the lower rates is tougher but at least the price of the home to pay off isn't so high. It's like student loans, again. Obviously down payments nowadays are so different than what it was 30 years ago, same with rates.
I don't understand what you are saying. I agree with your points and I myself will never buy a government bond, because it implicilty means buying a stake in slavery (I am an anarchocapitalist). All I said was that bonds are just future payments in dollars. I agree they are counting on being able to roll the debt, and just meet the bare minimum interest. Obviously the reality of scarcity and supply/demand/markets will win out as it won't matter how well things look 'nominally', but who knows how long all that takes. The Chinese have their corrupt leaders, too, and they will not allow their money to appreciate so their people could enjoy the fruits of their own production (as the Chinese want to print and do mercantilism).
My ebay example is what I meant. They are basically putting up bonds for auction, and then bidding for them to create the illusion of demand. It is a shell game, and fraud.
That is correct; it is a shell game and a fraud. It's a make believe finance.
As usual all one can do is stack PMs and prep with food, guns, etc, and in speculating, use margin prudently, and wait for risk/reward to come in line and take chances. I think return of capital will be much more important than return on capital. More specifically, return of 'standard of living', or preservation of standard of living, will be the key. When this whole ponzi unwinds look out. The trajectory is not just one of financial bankruptcy, but also moral and intellectual bankruptcy.
“the main thing a lot of bears were missing”
..was the fact that the financial market was overtly commandeered by the elite in banking and government with unlimited monopoly money and they will continue to choke this chicken until something beyond their vision and control occurs..
And Tim, considering all that you contend, I suppose she could be a fun girl if you included a ball-gag in the equation.
Looks like we need a 2X for this one.
+1
She is an acolyte of the Church of Debt.
A deluded cult member.
I think I remember seeing her portrait hanging behind the dart board in the downtown Misogenyst Club.
I could be wrong, but I think I'm right.