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2024-02-07 07:00 by Karl Denninger
in Interviews , 214 references Ignore this thread
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Yet another interview with Dennis; here's the excerpt from their comments:

"Karl Denninger, a writer and analyst, joins your host, Dennis Tubbergen, this week on Retirement Lifestyle Advocates radio to discuss the current state of the stock market and the potential for a recession. He questions the belief that the Federal Reserve will cut interest rates, pointing out that there is no official statement from the Fed indicating such a move. Denninger also highlights signs of economic softness, declining prices in trade and transportation, and the potential for further decline in an already faltering EV market."

The two segments start about 10 minutes in, but there are good comments that Dennis has to offer up in the lead-in, particularly if you have tax-deferred investments and, as his show focus is, are nearing or in retirement.

A nice podcast-length piece if you didn't catch it on the original syndicated radio show.

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Flappingeagle 5k posts, incept 2011-04-14
2024-02-07 08:18:02

I'm listening to Dennis and typing in his points as he makes them. A poorly done stream of consciousness.

Currency creation will continue in some form.
Every time currency creation has been tried to solve problems it has failed miserably.
When are you going to pay the taxes on your tax-deferred retirement plans? He has a free(?) strategy you can download.
Karl joins.
Election year crashes starts the party.
Discussion of "The FED will cut rates." The FED has not really said that.
Where is the actual data that inflation pressures have truly eased.
The FED seems to cut rates headed into a recession.
The December household labor data was poor. Usually bad data does not appear until January.
What does this mean for stocks? Portfolios may look good at the end of the year but longer term is questionable. Value can drop suddenly.
Karl does a great comparison of using Treasury Direct versus paying 15 basis points to have some firm essentially do that for you. (I have a firm doing it for me with 90-day CD's.)
Do treasuries become a safe-haven again?
Cheap money has driven a lot of the expansion over the last 20 years. We are now in the phase where the easy-money borrowing is going to cause pain.
Will there be more stimulus and goodie-bags for the electorate in an attempt to influence the election? There is a small but growing body in congress that realize the deficit spending cannot go on indefinitely.
Inflation is having an effect. In election years everyone votes their wallet.
Karl segment 2.
Electric Vehicles. Karl:EV scam. CAFE standard. (Personal point here: I like big trucks and I will not lie.) CAFE standard for EVs is jacked by a factor of 6.67. Tesla sells credits to Ford, GM, Dodge for off-setting poor truck MPG. (Personal question: is this why Ford and GM wanted to go bigger into EVs? Generate their own credits?) Turns out to not be legal.
You cannot charge EVs in negative (below 32F?) temps. Not so practical in actuality.
A lot of transition to green energy does not work out mathematically. Take cost shifting out of EVs versus gasoline vehicles. The forced transition is driving prices up while people would prefer prices to go down.
May have a few bumps this year as there are still pressures throughout the system. May see firings and layoffs.

My apology for not always using the exact same words Dennis and Karl used. I give no guarantee that what I typed is actually what they said or meant to say. I'm new to this.


2024. One of Trump or Biden will not be on the ballot in November.
A housing crash will occur.
Interest rates will NOT be lowered more than 1% in total unless a housing crash occurs.
Iou 1k posts, incept 2009-03-16
2024-02-07 09:34:38

I've been wondering every time I hear the words "The Fed will cut rates". I know Karl has pointed out many times that the Fed follows the market and doesn't set rates. Are those market rates different then what everyone keeps expecting the Fed to cut? What rates does the Fed actually control?
Thanks in advance for any clarification on this.

"When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies
Mike77079 102 posts, incept 2010-06-21
2024-02-07 09:34:48

Thanks for turning us on to RLA. His content has gotten more interesting as I've gotten older. Funny how that works.
Tickerguy 202k posts, incept 2007-06-26
2024-02-07 09:35:07

Well, yes, again -- the NAME of the show.... smiley

"Perhaps you can keep things together and advance playing DIE games.
Or perhaps the truth is that white men w/IQs >= 115 or so built all of it and without us it will collapse."
Cmoledor 3k posts, incept 2021-04-13
2024-02-07 11:40:09

I swear to God almighty it's all a scam. And it sucks to think that because it's depressing as **** and I'd love to find one thing that is not. Outside of my family and here of course. Anyhoo. I always dig the interviews.

The whole world is one big ****ing scam
Its a big club and we aint in it. But we damn sure pay the dues. Rangeishot
God will NOT help anyone. Prayer is only worthwhile as a boost to
Mannfm11 9k posts, incept 2009-02-28
2024-02-07 12:23:38

The debt is one thing. In a sense, it's our money, which is how absurd the whole game is, spending what you owe. I look at government as spending per job. When you remove government jobs, there is a base of 120-130 million people. The private sector pays all the taxes of government workers, the net result being a rebate to the government. Business gets its money from people who work for a living. The owners get the bulk of their income from consumers. US government spending is around $50K per private job, if you use $6 trillion. Receipts are over $35K. Throw in State and local, there isn't much we spend that isn't already taxes. It appears to me they have run out of things to tax.

There are a lot of things Doug Noland talks about. One is they produce their own money on Wall Street during meltups like we have seen. Of course this isn't real money, but it plays the same, until it doesn't. Then it becomes a contest of who can get their fake money out first and cover their tab. These mechanisms allow them to dream and wake up to reality later. The prime players generally see it coming and sell out. It is why you see big tops. The fake money goes back where it came from and the inflation necessary to push the markets no longer exists.

The problem with this picture is though CPI inflation might be moderating, asset inflation is massive and will spill over. The Fed then has another problem, popping the bubble or worse, supporting a bigger bubble that will eventually implode on its own. We would not be witnessing the current run up, if the Fed was too tight. If Bonds stay in the range of where they are now, mortgage rates should settle in the high 5%'s and we could see the bubble expand. Real estate transactions produce real money, in that they produce equity extraction through loans on long term hard assets. You don't get a margin call on a mortgage, even if you are under water.

If I were to make a case for lower rates, it would be in a meltdown situation or a sizable decline in demand. Neither would be good for the market. What we have seen is a reflex reaction to a long term moral hazard. It is system wide. Government is going to spend and the CB's are going to provide free credit. People with access to near zero money can operate at near free costs. Leveraging a short position in bills at 1% ten to 1 and investing at 4% produces 30% returns, as long as everything maintains. You only need look to Japan to borrow. How big is that carry?

I suspect everything is going to follow China, which is at the end of a 30 year boom. One that has been overextended a decade or more. China has a problem, in that they need to reignite expansion and wish to support their currency at the same time. One or the other has to give. People like to down the dollar, but no country should dare run out of them. The story that China would sell their treasuries and collapse the dollar is pushed by people who don't understand the international scene or assets. Who wants assets in a country that can and most likely seize them back, once they don't need you. A real crunch in China will be a worldwide event.

The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Raven 17k posts, incept 2017-06-27
2024-02-07 14:34:23

Harry S. Dent mentions something in today's email newsletter:

"Mentions of soft landings are now around 1,250, higher than coming into late 2007 when they got to around 1,000. They are still lower than before the first tech wreck crash from 2000 to 2002, but this surge likely has not peaked yet."

Selling hope to investors is ALWAYS a bad sign.
Mjeff87 4k posts, incept 2021-11-22
2024-02-07 18:45:05

I misread that. I thought you said Arthur Dent.

I've got my toothbrush and my towel. I'm good.


Si Vis Pacem, para Bellum

You'll get less than you desire, but more than you deserve
Baltgayveteran 334 posts, incept 2021-09-16
2024-02-08 11:54:13

@Mannfm11: "...Who wants assets in a country that can and most likely seize them back, once they don't need you...."

The U.S. and EU seized Russian government assets. You think other countries didn't notice that and are now minimizing their exposure?
Raven 17k posts, incept 2017-06-27
2024-02-10 17:18:00

This is an interesting video. It is a different subject matter, however it shows the financial games played with unlimited leverage. Like the railroad bonds as cause of the Long Depression this is the exact same type of construct, merely in a different industry, in our time, and no different than the situation where monopoly companies such as social media behemoths and other monopolist concerns buy up so much stuff using leverage and essentially make large scale failures which cannot be unwound in short time. Karl recently did a podcast discussing this topic.

Watch the insightful report and note how this effect determines a market and consumer expectations and drives an industry to do uneconomic things. It cannot be unwound easily which is why it should never have been allowed to happen in the first place.

Cheap money is the most destructive weapon as it is insidious and causes uneconomic things which seem like normal business for far too long. Even big businesses get caught up in it and later forced to be a part.

Innovation suffers, because there is no independence as all of the players can only be players if they are owned.

There are a lot of abandoned railroad lines all through the USA as reminders that they were not economic.

You Won't Believe Who ACTUALLY Owns Las Vegas💰... [DOCUMENTARY]

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