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The Big Short's Michael Burry Warns "The Little Guy Will Pay" For The Next Crisis
We are sure, just as many of the so-called "smartest men in the room" ignored him last time, so every status-quo-maintaining, asset-gathering, commission-taker will be quick to dissonantly shrug off Michael Burry's (the economic soothsayer from Michael Lewis' book "The Big Short") warnings this time.
As NYMag.com reports, in an email, which readers of the book will recognize as his preferred method of communication, the real-life head of Scion Asset Management answered some of questions about the state of the financial system, his ominous-sounding water trade, and what, if anything, we can feel hopeful about...
The movie portrays all of you as kind of swashbuckling heroes in some ways, but McKay suggested to me that you were very troubled by what happened. Is that the case?
I felt I was watching a plane crash. I actually had that dream again and again. I knew what was happening, but there was nothing I, or anyone else, could do to stop it. The last day of 2007, I couldn’t come home. I was in the office till late at night, I couldn’t calm down. I wrote my wife an email and just said, "I can’t come home; it’s just too upsetting what’s happening, and I didn’t want to come home to my kids like this." As for punishment of those responsible, borrowers were punished for their overindulgences — they lost homes and lives. Let’s not forget that. But the executives at the lenders simply got rich.
Were you surprised no one went to jail?
I am shocked that executives at some of the worst lenders were not punished for what they did. But this is the nature of these things. The ones running the machine did not get punished after the dot-com bubble either — all those VCs and dot-com executives still live in their mansions lining the 280 corridor on the San Francisco peninsula. The little guy will pay for it — the small investor, the borrower. Which is why the little guy needs to be warned to be more diligent and to be more suspicious of society’s sanctioned suits offering free money. It will always be seductive, but that’s the devil that wants your soul.
When I spoke to some of the other real-life characters from The Big Short, I was surprised to hear that they thought that financial reform was pretty effective and that the system was much safer. Michael Lewis disagreed. In your opinion, did the crash result in any positive changes?
Unfortunately, not many that I can see. The biggest hope I had was that we would enter a new era of personal responsibility. Instead, we doubled down on blaming others, and this is long-term tragic. Too, the crisis, incredibly, made the biggest banks bigger. And it made the Federal Reserve, an unelected body, even more powerful and therefore more relevant. The major reform legislation, Dodd-Frank, was named after two guys bought and sold by special interests, and one of them should be shouldering a good amount of blame for the crisis. Banks were forced, by the government, to save some of the worst lenders in the housing bubble, then the government turned around and pilloried the banks for the crimes of the companies they were forced to acquire. The zero interest-rate policy broke the social contract for generations of hardworking Americans who saved for retirement, only to find their savings are not nearly enough. And the interest the Federal Reserve pays on the excess reserves of lending institutions broke the money multiplier and handcuffed lending to small and midsized enterprises, where the majority of job creation and upward mobility in wages occurs. Government policies and regulations in the postcrisis era have aided the hollowing-out of middle America far more than anything the private sector has done. These changes even expanded the wealth gap by making asset owners richer at the expense of renters. Maybe there are some positive changes in there, but it seems I fail to see beyond the absurdity.
How do you think all of this affected people's perception of the System, in general?
The postcrisis perception, at least in the media, appears to be one of Americans being held down by Wall Street, by big companies in the private sector, and by the wealthy. Capitalism is on trial. I see it a little differently. If a lender offers me free money, I do not have to take it. And if I take it, I better understand all the terms, because there is no such thing as free money. That is just basic personal responsibility and common sense. The enablers for this crisis were varied, and it starts not with the bank but with decisions by individuals to borrow to finance a better life, and that is one very loaded decision. This crisis was such a bona fide 100-year flood that the entire world is still trying to dig out of the mud seven years later. Yet so few took responsibility for having any part in it, and the reason is simple: All these people found others to blame, and to that extent, an unhelpful narrative was created. Whether it’s the one percent or hedge funds or Wall Street, I do not think society is well served by failing to encourage every last American to look within. This crisis truly took a village, and most of the villagers themselves are not without some personal responsibility for the circumstances in which they found themselves. We should be teaching our kids to be better citizens through personal responsibility, not by the example of blame.
Where do we stand now, economically?
Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook.
What makes you most nervous about the future?
Debt. The idea that growth will remedy our debts is so addictive for politicians, but the citizens end up paying the price. The public sector has really stepped up as a consumer of debt. The Federal Reserve’s balance sheet is leveraged 77:1. Like I said, the absurdity, it just befuddles me.
The last line of the movie, printed on a placard, is “Michael Burry is focusing all of his trading on one commodity: Water.” It sounds very ominous. Can you describe this position to me?
Fundamentally, I started looking at investments in water about 15 years ago. Fresh, clean water cannot be taken for granted. And it is not — water is political, and litigious. Transporting water is impractical for both political and physical reasons, so buying up water rights did not make a lot of sense to me, unless I was pursuing a greater fool theory of investment — which was not my intention. What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas. This is the method for redistributing water that is least contentious, and ultimately it can be profitable, which will ensure that this redistribution is sustainable. A bottle of wine takes over 400 bottles of water to produce — the water embedded in food is what I found interesting.
What, if anything, makes you hopeful about the future?
Innovation, especially in America, is continuing at a breakneck pace, even in areas facing substantial political or regulatory headwinds. The advances in health care in particular are breathtaking — so many selfless souls are working to advance science, and this is heartening. Long-term, this is good for humans in general. Americans have so much natural entrepreneurial drive. The caveat is that it is technology that should be a tool making lives better in the real world, and in line with the American spirit of getting better and better at something, whether it’s curing cancer or creating a better taxi service. I am less impressed with the market values assigned to technology that enhances distraction. We don’t want Orwell’s world, but we don’t want Huxley’s world either.
* * *
His prescient warning from many years ago remains just as crucial (perhaps even more so)...
"In this age of infinite distraction... when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable."
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the "little guy" gonna get schlonged !!
by a schlong nose. Those are the kind that really hurt!
Growth is all about greater flow, not stock. Said otherwise, growth in consumption and GDP generally happens via population growth, wage growth, and/or credit growth...the greatest being population growth. So, in that context, the below probably matters (a lot).
In 2008, the US Census Bureau projected strong population gains through 2050 helping to drive growing consumption and US economic growth. The projected population growth was generally balanced across age segments primarily driven by gains in young Hispanics due to higher birth rates and immigration. But in 2012, in a story here the Census acknowledged that these were bad assumptions as these trends were not continuing, as had been expected. In December of 2014, again here, the US Census affirmed and further downgraded it's population projections from 2012. The Census now anticipates a 32% reduction from it's previous 2008 projections for US population growth from 2015 to 2050 (or about 36 million fewer Americans).
The reductions in population growth across the age segments, and as mentioned above, the 0-24yr/old population growth was slashed by 76% or 24 million fewer youth and 40% fewer 25-44yr/olds. That this isn't front page news is, I suppose, a sign of the times. GDP and potential economic growth estimates weren't ratcheted back to match the huge slowdown in young vs. continuing growth among older populations.
http://econimica.blogspot.com/2015/12/the-greater-depression-will-be.html
What is to come only gets worse.
Nope. It comes from America and is therefore per definition predatory, cannot be trusted and should be rejected.
<< But the executives at the lenders simply got rich. >>
It's very instructive about our culture, gubmint and legal system to see people like Corzine and Mozillo walking around free or living in their McMansions.
Synopsis: Burry - "DO NOT TAKE THE 'FREE' MONEY"
This is a very large component of "starve the beast"
If you need a roof you need to deeply consider the ramifications of buying vs renting right now. There is no reason to believe real estate is going to rise in the future considering shadow inventory and current UN-naturally low rates.
If you need a car you need to deeply consider buying something you can afford instead of an 72 or 84 month new car purchase.
STARVE THE BEAST IN 2016
JRobby, good point.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=30FZ
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=30G1
Generally, national real estate prices track the aggregate of the growth rates of labor force/employment and wages, the average of which has decelerated from ~5-6% since the 1960s-80s to 3.1% since 2000 and 2.5% since 2007.
While few would concede it, US Housing Bubble II occurred in 2012-14 at the same bubbly level and rate above wages and employment as during the 2000s bubble, 1987-88, and the mid- and late 1970s. The deceleration of the rate of price increase is deflating to similar average rates at the onset of the housing busts in 2006-07, 1990, and the 1970s.
The implication of the housing (Kuznets) cycle is for at least another 20% real price decline in the next 3-5 years, and 30-40% in the bubbliest areas, especially for high-end, buy-up houses this time around.
Historically, the housing bubble in the 2000s was similar to the one in the 1920s, and this time around the housing, equity, and debt market declines will be global, the first of its kind since the late 19th century.
Therefore, houses bought with 20% down or less since 2000-06 and 2012 to date will have no little or no equity or be underwater in the next 5 years or longer, requiring yet another round of printing by the Fed to buy MBS for a bailout of Freddie, Fannie, and Ginnie, if not some local/regional banks, notably in the states that boomed during the shale oil bubble and the bubbliest areas on the coasts.
... Because the little guy wasn't already getting screwed? Yeah... 5-year cd 1.00 does the job.
The Fed failed!
Hardly... they succeeded in their obvious objective to transfer society's wealth into the pockets of the tribe.
Same as it ever was.
There will never be another crash in our lifetime.
Mark Haines "generationion low"! The he got whacked for spilling the beans.
Such bull shit. The "little guy (sucker)" always pays. What we need to do is make the banksters pay - with their lives.
The fundamental issue is that "growth" is unsustainable. Based on the exponential model, we will not have infinite growth. It's not possible Of course, no one wants to hear this. Mike Rupert, we hardly knew ya
http://www.bizjournals.com/houston/news/2015/11/11/houston-home-sales-de...
Legacy from the most admired man in america, mofos!
"Do not take the free money" reminds me of the old saying "there's always free cheese in the mouse trap". Saw where Dr. Burry has bought quite a bit of farmland. Actual physical farmland, not farmland etfs.
Exactly.... I've had the same thought for 15 years now... if I didn't have a 9 year old son, 'it' would have already happened by my own personal doing and I am not bullshiting anyone...
Synopsis: Burry - "DO NOT TAKE THE 'FREE' MONEY"
For the same reason you don't take the free candy from the stranger in the white van?
TSA was created to STOP us from flying so much. They harass us until we just give up flying.
The oil is GONE!
After all, the system is the definition of rentier-parasitism and predator-prey, winner-take-all rules and outcomes. The predators are the top 0.001-1% and everyone else is prey, that is, until there's no blood left from the peasants' stone cold carcasses.
The predators have no competition and are not accountable to anyone but themselves. They say it's evolution, but they make the rules, enforce them, and increasingly disproportionately benefit.
Then again, who's to say that sociopathy is not the advanced state of human ape evolution, especially in a world of human ape population overshoot?
I suspect that is what we are witnessing, which implies that the evolutionarily advanced human ape sociopaths won't hesitate if the need arises to exterminate as many of us evolutionary dead-ends as required.
But consider that prior to the onset of the Oil Age and Second Industrial Revolution in the late 19th century and the advent of public sanitation and vaccinations, the typical male's lifespan was age 45-50. That was sufficiently long enough to sexually mature, be productive and self-supporting, couple, reproduce, and likely live long enough to see one's children come of age, couple, and reproduce, after which one's body progressively deteriorated and self-support become difficult to impossible.
That's all Nature/evolution ACTUALLY requires per its design for human apes. We've only lived beyond age 50-55 for the average lifespan in the West for about a century, i.e., two of those previous average lifetimes.
Moreover, 50-70% of males worldwide (mostly in SE Asia, Africa, Central Asia, and parts of the Middle East) have an average lifespan of age 57-59, so a large majority of men today are living the 19th-century conditions for lifespan, and likely so will their children and grandchildren.
The point is that pre-industrial or pre-Oil Age human apes are born, live, and die as humans have for most of our existence spanning tens to hundreds of thousands of years, and millions of years before for our predecessors.
But affluent westerners have lifespans of 70-80+ years, but not necessarily lives of enviably high quality, security, and contentment, as aging and dying is becoming prohibitively costly to individuals, households, and society as a whole.
So, for the readers in their 50s or older (99% male, no doubt), you're living as long or longer than 99.99999999% of all human apes have lived for our existence as a species, but Nature's evolutionary design does not need you (us) to persist in any significant share of the human ape population. In fact, you (we) are more valuable to Nature as dust for plants to feed younger human apes than we are breathing and consuming scarce resources.
For readers younger than age 50, enjoy life while you can because evolution's clock is ticking down on you toward your appointment with dust.
:-D
your appointment with dust
We all have it coming
STARVE THE BEAST IN 2016!!
The outcome of the "war on the 99%" by the 1% will be a general lessening of productivity increases that America is generally known for.
Why work hard when you are just going to get fucked over?
Just Go Gault. Fuck the rentiers of WS.
Newnornal - Good comment. We're at the end of evoution for man. Dont expect us to act anything else as squirrels for the winter to the very end. Since we are so close I plead to finish but only a percentage agrees. Fortunately enough but expect pain as always to awaken the majority.
John Mauldin and others are so upbeat about the progress in medical discoveries and the possibility that we may make it possible to live to be 125 or even 150. Who is paying for this research? The people as a whole, R&D surcharges on drugs and procedures, government funding for science. Who will benefit? Maybe Mauldin will and his elite buddies but none of this will be available to joe sixpack and it would be disasterous if it were. The productive aged people will soon be struggling to support those who live to be 80. I think we should stop funding this kind of medical research.
I know, Corzine should have went to prison it was clear cut what he did and they didn't go after him. Because he was the main financial bundler for Obama on Wallstreet.
Reject away.
The Internet comes from America as well. We'll miss you.
+!
"The advances in the cost of healthcare in particular are breathtaking ... " There, fixed it for ya'
It really doesn't make any difference if new technologies come along if they're controlled or surpressed by a select few. Ask the all the widows of the recently offed cancer research doctors how well "innovation" and discovery worked out for them.
No worry, Ham Bone. We will import millions from Syria and the Middle East. Problem solved!
Hey, it's time we got some new cuisines around here.
Parboiled goat on flatbread with a side order of camel's eyes sounds like it might hit the spot just right.
Thats not an eyeball, although male camels do have two of them as well.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2Qoq
Right, Ham-bone. US real potential GDP per capita is no more than 0.5%/year vs. the long-term 2.1% and 2.6% during the 1980s to early 2000s.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2Ta6
The aggregate of wages and PPI finished goods at the record low for labor share of GDP implies reported CPI around 0%.
The change rate of bank lending (less interbank loans) to GDP implies trend money supply growth of no more than 2.5%, which is the post-2007 trend rate for nominal GDP (less than 2% per capita) and working-class wages.
So, the "new normal" of "secular stagnation" is 0.5% real GDP per capita, sub-2% nominal GDP per capita, 2% wage and money supply growth, and ~0% reported CPI.
That's as good as it gets, and demographic drag effects, debilitating dis-ease care costs, and fiscal constraints will further weigh on the rate of growth herefter.
But we've been here before: Japan since the late 1990s; 1930s-40s; 1890s; and 1830s-40s. We emerged from the previous deflationary eras via debt-deflationary wipeouts that cleared the decks and/or by war (WW II, Spanish-American War, Boer War, Russo-Japanese War, Mexican War, etc.).
So, this time is likely to be no exception. We will have a debt- and asset-deflationary wipeout that persists, a HUGELY disruptive (and inflationary) regional or world war, or a combination of the two; otherwise, the world follows further the experience of Japan since the early 2000s.
Financialization, debt/GDP, BIG gov't to GDP, and neo-Keynesianism implies the latter indefinitely with wars, mass migration, failed states, and increasing destabilization at the outer core and periphery.
But it's all good . . .
The only growth that ultimately matters is sustainable growth. Which can only occur with growth in savings, as it is the basis for growth in sustainable demand.
Then again, without the parasitic monetary system, continual growth wouldn't even be necessary. At the moment, all we're doing is to try and replace blood at a rate faster than the vampires suck it out of us.
Indeed! Harry Dent has been on about this for a long time too..
The underlying population dynamics cited have been well known by honest observers since the 70s. It doesn't surprise me that the wishful thinkers in .guv are the last to figure it out.
http://www.statista.com/statistics/241494/median-age-of-the-us-population/
Harry Dent for example, was so far ahead of the curve, that the putzes still think he's wrong. The second and third derivatives below levels of replacement aren't just national either, they're global.
When the average age tends toward life expectancy, the population goes extinct. It doesn't explode for example, as does a "bomb". Remember that one?
Whadduya mean "we", Kimosabee?
"The biggest hope I had was that we would enter a new era of personal responsibility. Instead, we doubled down on blaming others, and this is long-term tragic."
Blame, for lack of a better word, is good. Blame WORKS.
ZH needs to hold its own vote on The Most Admired Man and Woman of the Year.
Michael Burry might be near the top along with Schiff, Trump and Deez Nutts.
.
Greed & blame works until it doesn't, Mr. Gecco.
The little guy always loses....nothing new there!
One occurring theme joins this story together with so many others....can you guess what that is?
http://beforeitsnews.com/global-unrest/2015/12/gangs-in-london-can-you-g...
And, apparently the banksters were just...just...just forced! Backed up into a corner by the heartless hands of Frank and Dodd! Whoa be the poor abused banksters.
Whoa, so sad for the poor... - Oh, wait, wasn't there a little thing about securitization... where they needed more and more mortgages to slice and dice to make that delicious CDOsquared souffle ? Were not the mortgageEs simply fulfilling the law of supply and demand as advertised?
Okay. I am being too harsh. BoA should not be punished for ML's, Countrywide's, etc., problems. But it surely must be punished for its own!
They could have broken up the underwater, failing banks and then given the accounts to the remaining banks, just like the FDIC does on its Friday visits.
Why did they not do that?
Derivatives, not mortgages outstanding.
So any bozo that blabs about the banks being forced to buy bad banks is an idiot:
"banks were forced, by the government, to save some of the worst lenders in the housing bubble, then the government turned around and pilloried the banks for the crimes of the companies they were forced to acquire."
should be:
"favored banks were allowed, by the government, to get larger by accumulating some of the least favored lenders in the housing bubble, then the government turned around and pilloried levied miniscule fines on the banks for the crimes of the companies they were forced allowed to acquire for pennies on the dollar."
Didn't the little guy pay for the last crisis too?
the "little guy" gonna get schlonged !!
The correct word is shtupped.
What the fuck is he talking about? The little guy pays for every crisis.
Schlonged with a great big Red, White and Blue DICK
The "little guy" always gets screwed; it's the nature of the system.
I thought the little guy was still paying for the last crisis?
How disconnected are these fed retards worrying about deflation? Every time I go to the grocery store the prices on staples are stunning.
...and the sizes or volume of product is shrinking.
The New Campbell's soup and bean cans are 11.5 oz instead of the normal 16 oz size:
http://www.amazon.com/Campbells-Bean-Bacon-Soup-Ounce/dp/B0014EOVHE
A lot of stuff is fake too. I thought I was buying ice cream a while ago, When I got home my wife noticed it said "frozen dairy dessert" where it was really hard to see.
funny you say that Chunga, I agree; a few weeks ago, I too noticed the Ice Cream I purchased, sort of tasted like fluff, or marsh mellow / full of air pockets, there was no taste to it... and I too noticed the "frozen dairy desert" label ..... they are watering it down with other shit (deflation).
cellulose
same as taco bell
are you processing it into toothpicks?
;D
you'll also find aluminum "starch" in lotion
A gallon of anti-freeze costs about $10-$12 and it is a 50% mix of ethylene glycol and water. Used to pay $3-4 dollars for a gallon of pure anti-freeze. Seems like > 100% inflation to me
Yep, now Cheese Analogue passes for Mozzarella and Meat Emulsion for burgers or pizza topping.
Hiding food inflation by ever reducing packaging has not only been going on for while, it's getting worse
His water discussion was interesting but it left a few things out: "A bottle of wine takes over 400 bottles of water to produce — the water embedded in food is what I found interesting"
Water control has always been a pwer game and it will get a lot worse. Just like oil, "modern" agriculture does waste ridiculous amounts of energy and water mostly because most of the energy and water is devoted to ignoring how nature works and trying to grow a few monsanto monster crops instead of mimicking nature. Permaculuture methods, ground cover and massive native plant diversity are more efficient than any idiotic system in place. In other words taking a lesson from nature instead of ignoring and destroying it
The next 5 or 6 generations of the little guy will still be paying for the last crisis. And the next, and the next...
https://www.youtube.com/watch?v=FZUrl5sn7jc
hA HA HA
Kornifornia no less!
ha ha ha!
That's no hack but still totally awesome. Somebody just pulled over and knew how to reprogram it. Now the signs that tell you traffic conditions that are permanent are networked and do get hacked from time to time. How would Christie feel if the New Jersey Turn pike signs all said vote Trump. It would be funny at least. I hope Anonymous isn't reading this.
sick part is, the "little guy" PAID during the last crisis, has PAID for the 7 years in-between the last crisis, and is NOT GETTING PAID as the fed raised rates 25 bps, EVERY BANK upped prime 25 bps about 35 seconds after the fed raised 25 bps, and ONLY LARGE CUSTOMERS will be getting an extra-vig on their deposits.
simply can't make this shit up.
oh, and if this isn't a sign of a market top, there simply is not 1 in existance:
Pay $400 to party at Olive Garden on New Year's Eve
http://money.cnn.com/2015/12/29/news/companies/olive-garden-new-years-ev...
Want to know what an insurance company does with a brand-new bailout check of $150 billion in taxpayer money? Throw a big party, of course! AIG execs only had one rule for their big shindig in Phoenix this week — don’t mention the name AIG:
http://hotair.com/archives/2008/11/11/aig-still-throwing-lavish-parties-...
My neighbor's son dropped out of med school after he read this and other related news and went into the insuracne business. he is now much wealthier then the docs in his neighborhood.
That's a real deal compared Bubbagump shrimp co. at $800 a pop. Who the fuck are these Cretins that spend $400 to go to an olive garden on NYE. I don't care where its located. Then again McDonald's could probably get $200 a person because of its location.
$400 to spend amateur night at a shity chain restaurant and no bread stick? Money has become truly worthless
Pretty soon Taco Bell will win the franchise wars and we'll all have to eat there
Shit. You'd have to pay me $400 to party at an Olive Garden on New Years Eve...
It's true. The next crisis will be a dollar crisis. The cost of living will increase drastically, not only because of dollar devaluation but because all assets will be affected. It will cost more to live and do business. Only the uber wealthy - those with owned land and means (ie gold) - will be able to afford the cost increase.
Thats right as long as the USD dominates the world and is accepted as means of payment, US will do great - living on easy money and slave labour. But if it loses its status it´s game over - then life will become very difficult.
TPTB will attack and vilify him mercilessly. What a pity. Clearly a very smart, very caring individual. I have a lot of respect for him.
He has already been attacked and lived through it. Check out his commencement address at 14 minutes into the vid:
https://www.youtube.com/watch?v=1CLhqjOzoyE
Yes, I've seen before. Thanks for re-posting though. It should be mandatory viewing for every senior in HS.
Yeah, I watched that before too ... But nevertheless, as indicated, at about the 14 minute mark, it clearly makes the point that the established systems will ATTACK anyone who points out the FACTS in any publicly significant ways.
The Triffin Dilemma and the cold war between Iran and Saudi Arabia are huge tail risks for 2016. Brazil is collapsing. Next, will be Venezuala and Iraq. Global institutions can't handle the externalities of any more failed States.
My relative is in the energy field and says oil may drop to $20 plus or minus and stay there for 12-18 months...but when it rebounds it will be catastrophically high and SA is behind it and they will benefit the most.
Makes sense.
News Flash: We already paid for the last crisis. And the one before that. And, the one before that.... rinse and repeat. Why should this time be different? Where do they find these clowns?
Yeah, I'd like to know who exactly he thinks paid for the last one...
Silly talk... the last crisis is not paid for, it is simply put on Uncle Sam's magic credit card. US debt was $10 trillion when Bush left office, and it will be about $20 trillion when Obama is done. The bottom line is you have not even started to pay down debt yet. Most Americans have no clue just how bad it is.
http://i.imgur.com/VZHIL.jpg
http://www.usdebtclock.org/
Exactly. We haven't paid for the last bailout/crisis, but it is on our pending tab. Gonna be painful at some point.
the folks gotta get over their aversion to blood. that's all.
At least we finally got the Satan, um I mean Santa Rally we’ve all been craving!
Political extremism?? You mean Trump right?
Average Americans are sick and tired of career politicians and the status quo.
We want the illegals gone, and we want our jobs back from overseas!!
Trump/Cruz 2016 !!
time to move into block chain peer to peer financing and leave the Titanic.
It is not a freaking mistake, there are those that are oblivious and there are those that wave the banner of idiocy or ignorance.
The language of "free and easy money" does not confront the realities of the vicious spirals of political funding enforcing frauds.
The language that is used regarding "loans" or "borrowing" deliberately ignores the underlying realities that such "free and easy money" is made out of nothing as debts, when that loan is agreed to by its borrower. Since the vast majority of people cannot legally counterfeit the public "money" supply out of nothing, by typing digits through the privileged computers that are authorized to make that money out of nothing as debts, the vast majority of people appear to not be able to understand, but rather, feel like they do not want to understand, that the entire political economy has become based on public governments enforcing frauds by private banks, which have developed through vicious spirals of the funding of politics.
Meanwhile, to me, the most interesting statement in that article above was:
To understand that "absurdity" requires thinking through how and why civilization operates according to the principles and methods of organized crime, while the degrees of social successfulness achieved through those means are directly proportional to degrees to which the majority of people do not understand, and moreover, do not want to understand, how the taxation and monetary systems operate as governments enforcing frauds by banks.
As HopefulCynic wrote:
In my view, the basic problem is that people are still too hopeful, and are not becoming cynical enough. THEY WANT TO CONTINUE THINKING USING FALSE FUNDAMENTAL DICHOTOMIES, AND THEREFORE, BELIEVING IN BOGUS "SOLUTIONS" BASED UPON IMPOSSIBLE IDEALS.
Meanwhile, the apparent ANOMALIES become more and more blatant, as indicated by "The Federal Reserve’s balance sheet is leveraged 77:1."
HOWEVER, instead of those accumulating ANOMALIES driving through profound paradigm shifts in the ways that we perceive politics in general, and the political economy in particular, the few who DO recognize those social facts tend to still respond like Michael Burry using euphemistic language about "free and easy money" resulting in situations which become absurdities that befuddle.
The vast majority of Americans, as well as the rest of the world, especially in NATO countries, do not understand, because they do not want to understand, that "their" governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals, which are currently bankster controlled governments, that ENFORCE FRAUDS, due to the long history of the vicious spirals of POLITICAL FUNDING capturing control over the taxation and monetary systems.
Meanwhile, the few who do somewhat understand basically continue to still be hopeful cynics, in the sense that they continue to think using false fundamental dichotomies, and therefore, continue to promote bogus "solutions" based upon impossible ideals somehow being realized through changes which reformed the monetary and taxation systems. It was "not a freaking mistake" that the excessive successfulness of controlling civilization through applying the principles of organized crime has resulted in that "there are those that are oblivious and there are those that wave the banner of idiocy or ignorance."
However, that goes WAY DEEPER, as was recently outlined in this article by Cognitive Dissonance, along with my comments under that article:
http://www.zerohedge.com/news/2015-12-27/c-section-awakenings
C-Section Awakenings
We are ALL living inside increasingly Wonderland Matrix Bizarro Worlds, which are multiplying Orwell and Huxley times each other! Hence, in my view, it is an old-fashioned irrelevance, nothing better than nostalgic nonsense, to WISH:
* * *
Indeed, "so many selfless souls are working to advance science, and this is heartening. Long-term, this is good for humans in general." However, that is not being done in the realms of political science, due to how that would require series of intellectual scientific revolutions, and profound paradigm shifts that integrated and surpassed those already achieved in physical science. The history of previous scientific revolutions has been demonstrated to be that ANOMALIES accumulate, to the degree that those become harder and harder to continue to simply ignore or overlook. Eventually, those ANOMALIES drive profound paradigm shifts in the frame of reference being used to think about things.
In the case of the political economy, those ANOMALIES are more and more blatantly obvious social facts that governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals, which is therefore how and why the apparently "free and easy money" actually is based on the vicious spirals of POLITICAL FUNDING ENFORCING FRAUDS.
While those ANOMALIES are becoming more and more blatantly obvious to those few who bother to pay attention to those social facts, by and large there has NOT been enough paradigm shifting in the basic ways that even those people think about the problems manifesting throughout the political economy. Even those like Michael Burry still state that they are befuddled by those absurdities, rather than change their language enough in order to think sufficiently differently about everything being based upon governments ENFORCING FRAUDS by banks.
Indeed, it is extremely common for the content on Zero Hedge to be written by various sorts of hopeful cynics, who are aware of the degree to which the banksters are the best organized gangsters, which have captured control over the powers of governments, BUT, do not become nearly cynical enough! Rather, there continues to be promoted various old-fashioned bogus "solutions" to those problems, that use the same false fundamental dichotomies and related impossible ideals which originally enabled the best available professional hypocrites to create the language that enables public governments to ENFORCE FRAUDS by private banks, in ways that the vast majority of people do not understand, because they feel like they do not want to understand.
Becoming cynical enough requires going through profound paradigm shifts, which mostly amount to STOP USING DUALITIES, AND START USING UNITARY MECHANISMS. Citizens are necessarily members of an organized crime gang, that they call their country. The degree to which they do do not want to understand that is the degree to which they act like incompetent political idiots, and therefore, become "The Little Guys who Will Pay For The Next Crisis."
OF COURSE, "Fed Policy Is Toxic" because it is the manifestation of the excessive successfulness of ENFORCING FRAUDS, which yet never stops those frauds from still being false. INDEED, the degree to which "Fed Policy Is Toxic" has become so extreme that it will be the whole civilization that will pay for The Next Crisis, not merely The Little Guys at the bottom of the social pyramid systems based upon being able to ENFORCE FRAUDS.
More effectively responding to the increasing ANOMALIES DRIVEN BY THE ENFORCEMENT OF FRAUDS can not be based upon merely hopeful cynicism that somehow impossible ideals that always actually make things worse, will somehow still enable some reforms that will make things better. The social pyramid systems of Neolithic Civilization were always based upon being able to back up lies with violence, and those have recently and rapidly become electronic frauds backed by the threat of force from atomic bombs. That those technologies have become trillions of times more capable and powerful than anything that previously existed in human history is how and why ENFORCING FRAUDS has been able to achieve levels of leverage that appear to be absurd.
Theoretically speaking, those political problems ought to drive us to start thinking in radically different ways, which integrate and surpass the profound paradigm shifts that already happened in the physical science that enabled the rapid, recent, development of electronic frauds, backed by the force of atomic weapons. THE CENTRAL THEMES OF THE PARADIGM SHIFTS IN PHYSICAL SCIENCE WERE TO USE UNITARY MECHANISMS, RATHER THAN DUALITIES, IN ORDER TO BETTER UNDERSTAND THINGS. Similarly, those radically different ways of thinking about political economy are what are necessary to hopefully become cynical enough.
Mr. Burry, the Fed's housing bubble made you rich, now you complain that we are gonna screw some folks..
That's what we do.
I think we need to send the FBI back in to rifle through your files, and run-up your legal defense bills again.
Innovation, especially in America, is continuing at a breakneck pace, even in areas facing substantial political or regulatory headwinds. The advances in health care in particular are breathtaking —
Hmmm! Is he talking about American drug companies. The ones who now refuse to invest in life saving cures in favor of profit making long term treatments? Or is he speaking of Americans in their 90's getting knees, hips implanted at tax payer expense for dubious quality of life.
I have a close friend who works in a Rehab facility. This is where patients go when hospitals kick them out, or nursing homes can't handle the complex care needed. I keep telling him "Write a book for christ's sake". The lid he could blow off of the American sick care system is mind blowing. Medicare and Medicaid are being looted by everyone. The entire system is one big exercise in looting.
As for miracle cures by American health care. He should name them and then cost them. When he does that I will listen to him. But tha tblanket statement of his sounds more like an investor well placed in health care stocks. Talking his book.
Everyone can write a book on corruption in this country.
The old people have been destroying the country and now in their old age think the youth will figure out and harm them.
So they will go to hell for the great work of nonsense they completed for their 19 trillion dollar free shit army.
Old people. The OG free shit army.
U dumb.
You'll have a job picking up their bodies and burying them and the bankers will be laughing at you as you cuss the dead old people who had nothing to do with the banker's monetary abuse. The smell of death won't leave you
.
I think, but I'm not sure, that he would say that the science he likes can be sold on the free market, not jacked up by regulatory attachments that inflate prices through middleman payoffs to federal and state government officials, insurance companies and banks.
For instance, if a product with biological molecular sensors is considered a consumeer product, it does not need to be regulated, and may be sold according to it's own free market price. Products that test for gluten, nuts, lactore etc.. would be an example.
Geithner Ponzified [I'm coining the word, Z/H] TBTF which, I might add, is the structural, and architectural, weakness inherent in this failing system of Narco Ponzi Casino Crony Capitalism. Geithner realized his only opportunity was to prop TBTF up systemically so that he could buy time for the Treasury Secretary & those that worship in the Synagogue of Satan. The time Geithner purchased was at the cost of the entirety of society, and the World banking oligopoly. Geithner's idea did indeed buy them time, but now the time has run out for his strategy, and there are no avenues of escape for the masses, or the TBTF banks, or the worshipers in the Synagogue of Satan.
Bottom line here is that everything will now CRASH into the footprint of Geithner's TBTF edifice of ignorance that was constructed on a substrate of shifting sand. Furthermore, the long term plan of the members of the Synagogue of Satan is to bug out when the shtf because the masses will be forced to live, and die, in a worsening state of economic devastation that the members of the Synagogue of Satan have spent the last eight years preparing for at our collective expense. In brief, Geithner, Paulson, and Bernanke, all knew that their strategy would blow up at some point down the road from the 2008 Chapter 11 of Lehman Bros.
From this juncture we are all at risk due to FED incompetence, and a lack of understanding of basic finance/economic fundamentals that Geithner should have understood before he utilized that strategy to imperil the entire World so he, and his cronies, could plan their collective escape to New Zealand, or an island in the Pacific Ocean.
the little guy cant afford the next crisis, all the worlds bills are now being payed by white people and a few Chinese. shouldn`t that be called racism?
The ones running the machine did not get punished after the dot-com bubble either — all those VCs and dot-com executives still live in their mansions lining the 280 corridor...
The dot-com executives and VCs were exploiting the current central bank policy at the time.
"The "Reverse Plaza Accord" was an important factor in creating the late nineties boom. By that agreement, the big three powers (the U.S., Japan, and Germany) bailed out a Japanese manufacturing economy that was slowing to a halt under the pressure of the record-breaking ascent of the yen. They did so by engineering a striking reversal of the steep decline of the exchange rate of the dollar that had taken place over the previous decade."
"Driving the dollar up against foreign currencies would allow the U.S. government to maintain a stance of monetary ease without raising the CPI, since the artificially lowered price of imported goods would tend to counter the price-raising effect of the increased liquidity. But liquidity has to go somewhere. One place it went was into the U.S. stock market."
https://wiki.mises.org/wiki/Dot-com_bubble
https://wiki.mises.org/wiki/Reverse_Plaza_Accord
The little guy paid for the last crisis. He is still paying for it 7 years later.
i blame bush or cruz or some damn repub bcuz obama "the putz" told me
"I am less impressed with the market values assigned to technology that enhances distraction."
Hmmm... A lot contained within that short sentence... Like perhaps, 'FANG', maybe...?
Michael Lewis is clearly not informed when it comes to 'health care'. Obamacare is quickly destroying the people and institutions that would deliver the advances in health care. The fact is that there is nothing new at all in health care. The wiz bang advances are expensive, high tech procedures that will make little difference in the mortality rate in an unhealthy and aging population. The only real hope are individuals that use their own research to use inexpensive and low tech approaches to save their own asses. If you think .gov and Corp America are on your side, you are really misinformed. Now, go to YouTube and your favorite search engine and teach yourself how to be healthy!
Is that you, Chris M?
Didn't they pay for the last one?
Rinse and repeat.
With Wall Street and the Fed it's always socialize losses and privatize profits.
Don't know how many more of these bankster rapes the little guy can take.
I love the kicker. There's money to be made off of people who are starving and dying of thirst. Capitalism at it's finest.
burry is caught up in the matrix, just like most of us.
if you want to get out of the matrix, then https://www.youtube.com/watch?v=zu6ft1GlPBw&list=PLWn8QRqY8ySxTAdJiwUQ8Y...
Personal responsibility? If you were prudent and did not accumulate debt from 1991 through to the present to buy real estate or stocks you are a loser. Overall, so long as they left themselves a liquidity cushion, people have been rewarded handsomely for levering up as much as possible to take advantage of ever-rising asset prices for the past 25 years.
You can't blame people for wanting some of that easy speculative money. The better thing is to make speculation not so attractive by reining in the pace of monetary pollution and arresting asset price appreciation. People won't learn and take responsibility until it makes sense to do so. So long as borrowing and levering up is the way to riches, people will want to travel that road.
Hey sheep (e.g. 'follower'); what road does the reverse of what you lay such praise on lead to?
So how is that different than last time.
two minutes of truth from margin call: https://www.youtube.com/watch?v=2f2kGHcdJYU
"fuck normal people"
I ' couldn't come home . . . ' as my dick was jammed between my secretary's DD's. How Titillating!
Be as broke as possible.
It's the only way.
the monopolistic and fascist central banking,
'money', system and its political facades are crumbling.
people will see right through it in 2016.
More Than Eva Braun
https://www.youtube.com/watch?v=NfX5yHjKAU4
.
time to come out of the bunker,
no moar war.
The REAL mandate of the Federal Reserve System is enriching the obscenely rich—the Wall Street, Banking and Financial, Crony Corporate Executives and Oligarch criminals—by stealing from the American People. That's just fine with the political class so long as they receive their regular bribes to "look the other way" while the Federal Reserve Bank plunders America.
your basic tinkle down system in a nut shell,
right.
"...a rising tide lifts all boats..." lol...except for those with no boats, or boats with holes in them
or can you dig this: boats with anchors?
ah, if the anchor is secure, it sinks.
it all comes down to rope and lengths.
Yea. FUCK that CRONY Capitalist COMMIE, Larry Kudlow. What a tool...
The little guy pays for every crises!
Mike, that's the same guy who paid in the last crisis!
I had the priviledge of speaking with Dr Burry in recent years when Scion oboarded to do some futures business with the FCM I was with at the time.
I recall him dabbling and putting on one Comex Gold position. He traded out for a sizeable gain a few weeks later. Dont think he traded futures again.
Listen to this dude.
-chomu
In other words Das Kapital updated.
Mr. Burry makes perfect sense to me... Matter of factly. I think he's holding back.
It's no secret I've been shorting the[corporate] bond market for months. It's no secret I've been shorting gold for 1-1 1/2 months.
I think some heads are going to get ripped off {in/over} the next couple of months, as the $usd continues to strengthen, and the bond curve flattens further. Toss in some geo-political turmoil, and micro management by central banks.
The commodity markets are so heavily levered, and have such massive excess capacity issues, driven from hidden inflation, that the margin calls are coming on the" finites"... No more Unicorns~~~ 2016 is going to see a "wind down" on finite assets.[ Tangible asset selling] to cover al the margined casino bets.
That being said, I think we see some additional $usd strength in q-1 '16 as the pain grows. Then the Fed. will capitulate, and asset prices, along with inflation will rise more, in the middle of the curve. Unfortunately, it won't matter, as demand was killed off back in 2007. That's when you'll see the $usd really being sold, and gold prices going parabolic.
Water wars is the next biggie with GW the looming 900lb gorilla in the back room. Burry's right about the H20 bit for sure.
I have a hard time stomaching the fact that he doesn't want to lay blame at the feet of top financial and governmental leaders, for the real estate mortgage crisis. He's quite lucky the trade turned out for him as it did, and that he had enough of other people's money (investors) to play the trade to begin with. If things had turned out differently for him, which they almost did, I am sure he would be blaming someone else while he worked at the 7-11 to pay off the lawsuit damages he would have incurred. Meanwhile, the little guys who lost their homes are supposed to "look inward" because they made the mistake of following advise that was crammed down their throats about real estate by those with greater market knowledge. Fuck that shit!
"We Schlonged some folks."
"The Big Short's Michael Burry Warns "The Little Guy Will Pay" For The Next Crisis
Wanna bet? I'll take the other side of that trade...Ha, ha. Heads will be rolling----literally.
Hold your horses, RELAX, RELAX, RELAX!!!
Mother nature has just given the USA a huge reprieve, two years I reckon. The hurricanes, floods, and storms will unleash truckloads of insurance money for repairs and rebuilding.
The politicians will of course say 'see, our economic policies are working, America's recovery is sound.' It is a temporary windfall (paid by my insurance also, damned) but there is no telling if mother nature won't provide another windfall soon.
However, if there's too many windfalls the insurances all over the world will go pop - and then we have the perfect storm when the horses cannot be held.
Trump live in 5 minutes...Here's the link...http://rsbn.tv/watch-live-donald-trump-holds-rally-in-council-bluffs-ia-...
I fail to accept his logic that the American public can hold their own against marketiers and WS'ers pushing money to them from every angle.
The American public barely have the intelligence to stop at a stop sign.
They cannot balance a checkbook.
They were, are, and always be fodder for WS.
Plus when you never punish WS, there is no incentive for WS to do anything but rape and pillage, which is what they will continue to do.
Should the public do more?
Of course, but to say that some guy who just lost his 100K house because he kept removing money from it to buy a new flat screen and a used car is going to be able to hold his own against some guys making millions a year, is frankly just stupid.
Who owns an $100k house? Those two meatballs that live in a "crawlspace" in San Francisco.
raise your standards.
The world is larger than san francisco.
You should make yours larger too.
I love your sarcasm... ;-)
Summer Shack on Lake Erie, Buffalo, New York?
Race to the bottom? I'll have fun with you.
You want some logic? Do you even know, outside of your text books, what logic is?
You have ZERO understanding of the bond markets, and definitely aren't "well traveled".
Nope you're just a 30something 'landlocked' mouth [that thinks he knows] the markets.
You're probably wearing your P/J's or an towel right now.
Who in their "right mind" knowing the competitive nature of trading, would use an handle, that defines loss?
nope, just here in my underwear with a beer in each hand. hee hee
They have hats now for that.
The little guy is already prolapsed. I have to wonder what the corelation is with the big gun control push.
Everybody knows what the next crises will be, and WHO will be responsible for it.
Evil is evil and evil is always predictable, so come on isreal, we know it's coming any day now.
When and Where Will the Next ISRAELI FALSE FLAG HIT?
Muppets will pay the "next time"???
Was this an attempt at humor? Who does he think paid the last time?
the fed hoped that the money would flow thru wallstreet and into the peoples pockets but wallstreet had another idea.
Being the crooks that they were trained to be they simply stole it, lock stock and barrel.
Middle class blue collar working man didn't stand a chance against the college financial degree wanna be kiss asses and rich daddys good buddies.
They want it and they want it all and nobody will stand in the way of their addiction. Especially not some peasant dirty filthy worker.
im six two and 255 lbs so it wont effect me
I'm 5'4 and weight 500lbs, so hell I can outlast you all. lmao
Golden country your face is so red
With all of your money your poor can be fed
You strut around and you flirt with disaster
Never really carin' just what comes after
Well your blacks are dyin' but your back is still turned
And your freaks are cryin' but your back is still turned
You better stop your hidin' or your country will burn
And the time has come for you my friend
To all this ugliness we must put an end
Before we leave we must make a stand, oh
Mortgage people, you crawl to your homes
Your security lies in your bed of white foam
You act concerned but then why turn away
When a lady was raped on your doorstep today
Well your blacks are cryin' but your back is still turned
And your freaks are dyin' but your back is still turned
You better stop your hidin' or your country will burn
And the time has come for you my friend
image: http://static.urx.io/units/web/urx-unit-loader.gif
To all this ugliness we must put an end
And before we leave we must make a stand, oh yeah
Golden country your face is so red
With all of your money your poor can be fed
You strut around and you flirt with disaster
Never really carin' just what comes after
Well your blacks are dyin' but your back is still turned
And your freaks are cryin' but your back is still turned
You better stop your hidin or your country will burn
The time has come for you my friend
To all this ugliness we must put an end
Before we leave we must make a stand, oh yeah
And the time has come for you my friend
To all this ugliness we must put an end
And before we leave we must make a stand
We must, we must make a stand, oh yeah
https://www.youtube.com/watch?v=w3VqY9dp8SE
I'm curious? ...Does anyone want to race Me to the Bottom?
The bottom of 2's and 5's. The bottom of $18.75 Trillion of stated debt?
How about the fact that traders are so petrified, and that after "operation twist", debt is being moved from the long end of the curve?
I will race you to somewhere in Montana or Idaho It is is a 1900 mile run from here. We will have to come back and get the rest of the guns, ammunition, the Harleys and the tools.
Can you hear me running?
https://www.youtube.com/watch?v=ep7W89I_V_g
I can hear you.
Debt collectors are getting scared. They have their portfolios financed. I'm seeing some consolidations.
You are a good man Yen. You do your finance a bit different than I do but that is OK. I know you have some money and you know I do as well. This is a fucked up world.
Every lunatic wannabe tough guy "survivalist" freak seems to be aiming for these places. It will be very crowded, very dangerous and very, very smelly from all the corpses who died killing the studly hero next door who thought he was going to have it all his way. Others will be starved or frozen to death (short growing seasons) or died from diseases of overpopulation, (like water pollution). STAY THE FUCK OUT OF MY HOME! YOU ARE NOT WELCOME! There are too damned many Californians now with their fenced 5 acre "perimeters" and pushy seasonal occupancy.
I hear you. You are not wrong. I saw that too in certian areas. It is not a tough guy thing. I grew up in the woods. I know what it is. Do you really think I grew up in New York or LA? I am not a city boy. There is no joke on here. I have more guns then you do. Period. I have more gold then you do. Period. I have more silver than you do. Period. I have more ammunition than you do. Period.
Are you figuring it out yet? I have guns, I have ammo and I have metal. Plenty of other ZHer's know for sure that I am telling the truth because they have seen it. The only thing I need to know about you is if you can shoot straight. Well, can you shoot straight?
When you run your mouth like you just did against me then you will get called. Can you shoot a fucking rifle? I am not here to fuck around with fantansy land. I have guns and plenty of them. What about you?
Listen up. I am real. I have what I say I have and then some.
I will let it go because you think you are fucking with a kid. You are not fucking with a kid.
Got it? Good.
Yes. don't play blame games like pussies. The predators are not out of preys, they are only scared of cannabilism within their ranks.