Santelli And Kaminsky On Broken Rules, Unpredictability, and Deleveraging

Tyler Durden's picture

In one of the best clips we can remember, Rick Santelli and Gary Kaminsky show just what happens when the kool-aid-drinkers are allowed to speak frankly about our predicament. Instead of constant silver-lining-seeking or trotting out failed truism after failed truism, the two men (who notably have been actual market participants as opposed to mere observers) take on the uncertainty and unpredictability that weighs heavy on our global economies as governments break the rules time and time again - and took advantage of crisis "getting away with anything". Focusing back on what could happen if the market were allowed to think for itself, Kamintelli deface the edifice of central banker largesse and blame it for the actual demise we face  - noting that it is now clear that whether it is QE or actual rate easing, using jobs as the argument for excessive intervention is a failed concept. On a Friday that seems to have devolved into a low volume sideways nudge in equities, this is six minutes well spent as they ask and answer the question: "Have rates been too low for too long?" and how those who played by the 'rules' continue to be the ones who are penalized. There is hope for recovery if the market is allowed to find its own level - "it will get better, but the deleveraging pain still has to be taken all over the world."


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DormRoom's picture

The market is schizo.


S1 state: sell oil. buy gold > wait for QE


S2: sell gold. buy oil > wait for stagflation/depression

stagflation/depression: go to S1


Middle class gets squeezed in both states, while bankers & 0.01% continue to get richer, since capital flow generates more capital.  But an American Dream (Productive-Labour) doesn't have the potential to bloom in this macro environment.



Robert-Paulson's picture

contrary to your tin foil hat, we aren't on the precipice of some post apocalyptic reality staring Mel Gibson.

It'll take no fancy trick. I'll continue to work. I'll continue to save. I'll continue to spend. And I'll continue to play.

The quality of my life has done nothing but improve over the years. From 2004 to 2008? Improvement. From 2008 until now? More improvement. Same for almost all of my friends and family.

And, I'd bet good money that 4 years from now, my quality of life will continue on the same path that it has since I graduated from college in 2003.

And, my guess? My story is similar to 80 percent of the people on this board. My story is the average...not some sort of exception.

Actually, hold on. I did, in fact, feel the effects of what was going on in 2008. That's when I bought my house. But, for me the economy was great...since it allowed me to purchase that home for approximately 70 percent of its tax value.

Tortuga's picture

Great!! So then, what's it feel like to be a 1%'er (made all the right decisions in a world gone mad) or is your real name Reggie?

janus's picture

well, every dog has his/her day...and the same is true of parasites (is it not, robert-paulson?).  so, what bloated corpse have you been sucking from, r-p?  let me know if you're still well nourished when the decay starts to ferment thereupon.  your anecdotal romp through masterbatory self-congradulation notwithstanding, you've said nothing of any substance. 

you'll rarely hear ole jauns quoting ayn rand, but in this case it's called for:

(paraphrased) ''ll never starve nor will you flourish, you feed on scabs.'

i fucking dare you to reply -- as I WILL crack that lil ego of yours all over the ZH shop floor.  clear enough?

go fuck yourself, you goddam twerp.



Hulk's picture

Most great rant...

Nage42's picture

>your anecdotal romp through masterbatory self-congradulation notwithstanding, you've said nothing of any substance.


Now _that's_ a keeper... hope you don't mind me using that at work, got lots of people in Operations that over-shoot disaster claims, but once every 18 months are right and just about break their wrists patting themselves on the back for their "incredible foresight"


I might have to whip out your zinger!


Cheers mate.

azzhatter's picture

anecdotal, arrogant, pompous all come to mind.

Dien Bien Poo's picture

in short, hes probably English.

redpill's picture

I was going to say Alex Hope, but the 2003 college graduation didn't fit.

jez's picture

How dare you!

My honour (note the spelling) is impugned. Handbags at dawn, on Hampstead Heath. Name your second.

malek's picture

You have omitted one very important fact:

Did you and your friends and family improve their "quality of life" by going into debt? (Negative amortization)
Or have you been spending all you make, saving nothing? (Zero amortization)

In both those cases you have been enjoying life hoping that others do the preparation for worse times, just like the overwhelming majority.

TWSceptic's picture

I'm not sure in what world you live, but it isn't in reality.

jez's picture

. . . my quality of life will continue on the same path that it has since I graduated from college in 2003.


Another kid who has it all figured out.

Did you ever talk to your granpa about the Great Depression, son?

GubbermintWorker's picture

And, I'd bet good money that 4 years from now, my quality of life will continue on the same path that it has since I graduated from college in 2003.


Ok, so you've been on the right side of the trade. You've done it by being a fucking leech and have not produced anything of value. There are a lot of people out there in some real pain and you have to be blind not to see that. Hope you've set enough aside to take care of your family, if you have one.

economicmorphine's picture

Paulson, since your history goes back to 2004, I'm guessing you're like 28.  Just wait, my friend.  Life has a funny way of fucking with you.  Just because the plane is still airborne and the fuselage is intact doesn't mean it will remain so after you hit the mountain you don't see behind the cute little puffy cloud straight ahead.  I wish you nothing but the best, my friend. Karma is a bitch, as you will eventually learn.

slewie the pi-rat's picture

hey, d0_0m!

markets? you mean the interventions in the casino games?

  • this is precisely the dynamic i was addressing earlier this week when i advised N0T to advocate running the EU banks outa red stamps b/c
  • TPTB would use just such a "crisis" to their advantage and
  • We were better off trying to keep angela on the hot seat about her
  • thumbsUp/Down to greece, which would then
  • determine that nation's political alliances and direction
  • >make angela play her hand!
  • >>don't make this too easy for the squididity here!
vast-dom's picture

transacting bonds today is essentially transacting central planning. i am fed up! WTF is ZIRP and twist etc. How can you invest like this? It's ILLEGAL for the FED to do this!

Buck Johnson's picture

Your exactly right, I have been saying since 2009 that we may see stagflation (really hyperstagflation) in this country and possibly in the world.  All that QE stuff did was to prop up banks and central banks and the stock market, but didn't do anything for the real economy just saved the bankers some time.  Now we are seeing that the real world is seeping into the mark to make believe world and they can't do anything about it.  This is a political year and Obama doesn't want to put his signature on a QE 3.  In fact he doesn't want to go to congress and the senate for the QE3 and have to fight and give away everything (including his presidency) for this QE3. 

Because he knows that they will do everything they can to make him look bad and show that he cares more about the bankers and the EU than working class americans.  In fact the republicans will use all the democrats arguments against them in order to bring Obama down.

Cognitive Dissonance's picture

"There is hope for recovery if the market is allowed to find its own level - "it will get better, but the deleveraging pain still has to be taken all over the world."

Sadly not as long as the fiat crack candy men (Bernanke and various other henchmen) are on the job. No way in hell are they not going to print.

But eventually we will all be in agony.

carbonmutant's picture

Hey, it's an election year and the public is demanding candy... lol

azzhatter's picture

That's when a real leader steps up, not a pantywaist politician

JeffB's picture

It doesn't appear that we elect real leaders, and the politicians certainly won't appoint them.


CrashisOptimistic's picture

It will be a while yet before it is understood that oil scarcity is the cause of all this and financial gobbledygook is the patter of charlatons.

You can't grow population to 7 billion and expect it all to work when oil extraction rate is flat.

slewie the pi-rat's picture


so, crash: 

  • in a world of lies and bullshit propaganda the oil production numbers are reliable?
  • reserves are accurately reported b/c the owners of the in-ground stuff want to make sure the banksters and goobermints and investment advisors and invertors know everything transparently? 
  • tha accounting is accurate?
  • and fairly reflected in the prices of the producers and explorers, too?
  • andUR a total freaking f00l, dude?
JeffB's picture

Oil probably does play a significant part in things, but it's not "the" cause for this. The easy money, artificially low interest rates of the Fed and other central banks around the world blew bubbles as those policies always have in the past, and then the economies crashed, like they always do.

Unfortunately, the idiots in charge still haven't learned their lesson and are digging the hole ever deeper in panic stricken fashion.

They're making things worse, just as they did in The Great Depression.


world_debt_slave's picture

Reminds me of reading about the French Revolution and that even the most respected, prudent and noblist man could not resist printing money as a cure all.

JeffB's picture

That's a good point, but wouldn't that analogy require that we have respected, prudent and noble men and women in positions of leadership today?

Supposedly that's why Our Lord was born 2,000+ years ago, He couldn't find three wise men today.


Tortuga's picture

Santelli for VP!!!!!!! or Sec of Treasury or Care taker of dissolution of UN on Americas soil or bankster FRAUD prosecuter.

Nothing To See Here's picture

This is not the hope you are looking for.

bdc63's picture

S&P has taken out its 200DMA and crossed into correction territory.  1202 is the next major trend line that I see ...

eclectic syncretist's picture

And that's still another 7% down from here.  That trendline is very important too, because it goes all the way back to the March 09 lows.  That would be an interesting point for the FedGov to start jawboning, but all they can do is create credit, which is what got us into this mess in the first place.  It's a very sad situation for all the true patriots out there.

jayman21's picture

black swan:  I own your rules.

Santelli:  I did not see that comming.

black swan:  That is why it is called a black swan.  BTW, nice narrative.  It sounds like it could be true.

Dien Bien Poo's picture

you are listening to a floor bookie for your economic advice? you deseve everything that happens to you next. I wouldnt trust that sign language monkey with my pizza delivery. 

5880's picture

come on

you can't afford delivery!

Dien Bien Poo's picture

good point. i cant afford anything with deferred toilet paper payouts.

5880's picture

I'm guessing a CA resident?

ouch, sorry

Dien Bien Poo's picture

if only. CT. where the men are white and the sheep are nervous.

Liquid Courage's picture

You slap simplistic labels on people and are incapable of judging what they say on its own merits. Good luck with that.

Dien Bien Poo's picture

so he makes an interesting point. big deal. shall i catalogue all the bullshit he has spouted over the years? if youre relying on him to decrease the intellectual fog that is presently the market, either your employer on wall st should fire you for non original thinking or you are completely bonkers. chances are both. but then again, you are probably a broker too and have no concept of anything beyong margin and hardly care if you are right or wrong so long as your suckers trade thru you. good luck with that.and mines a vodka soda.

Excursionist's picture

Dude, first off - lay off the blow on this fine Friday afternoon, and notch it down a level or two.  Second, I doubt anyone is taking Santelli's point about rules and extrapolating from it to manage their books.  Third, if you look at the data, your personal circumstances are at odds with those of the median U.S. household, which has experienced stagnant wages (declining on a real basis) and myriad other issues.  But no one gives a shit about your specific situation.  The pushback you're hearing has to do with your assertion that you're representative of the norm.  You ain't, bro.

Dien Bien Poo's picture

amazing how many clueless brokers are voting these posts. You shouldnt be reading, you should be cold calling your next victims. The writing is on the wall for you. Youre going to be Goldman Sached by technology. you are the arseholes of the system. you are the excrement of the beast. You will be shit out first. 

Temporalist's picture

Here is a link to the John Taylor Op-Ed in WSJ (via google link):


"reformers should pay close attention to what the great economist and philosopher Friedrich A. Hayek wrote in the middle years of the last century.

Hayek argued that the case for rules-based policy goes beyond economics and should appeal to all those concerned about assaults on freedom. He wrote in his classic 1944 book, "The Road to Serfdom," that "nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law."

Hayek added, "Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one's individual affairs on the basis of this knowledge.""

slewie the pi-rat's picture

hey, T-oralist!

seen this about L-A-W?

Obama At Large

anything about the Consitutional requirement that money = gold&silver coinage in the nyt stuff?

does it go intoL the LAW to protectWeThePeeps from tyrrany and banksterism and financial and political OPPRESSION?

the actual law as it is written and now stands respected ONLY in the breach and not some fuking abstraction?

hello?  hello?  anybody there?  anybody?

Temporalist's picture

Thanks for sharing the article

Silver Bug's picture

Nothing is predictable in this day and age.


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