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2021-05-25 11:13 by Karl Denninger
in Interviews , 119 references Ignore this thread
Heh, Come Back For The Second Part!
[Comments enabled]

Come and get it!

Second part of the interview I did a few days back has posted where everyone can get it.

More talking about money, the markets and various forms of stupidity with Max.....

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Purplefang
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I will waste a reply because I am too pissed off to type anything coherent.
Asimov
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I've been listening to some newbie traders. All excited by AMC and dogecoin and other insanities. It's like my own personal shoeshine boys. It's insane.

There's a major dump coming sometime soon to clean all these people out of the market. It's going to be REALLY painful to many of them too, because straight-up-all-the-time traders are going to "diamond hand" their accounts into oblivion.

It's SAD.

Only listened to the first couple minutes of the episode, but it reminded me so much of my experience today that I just had to share.

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Winesorbet
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What???? No UFOs??? You're such a buzz kill man smiley

Seriously though, if these things are real, regardless of origin, holy CRAP!

Reason: I meant holy, not wholly... duh
Mrmojorisin515
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You guys might enjoy this, different angle

https://grossmanite.medium.com/why-capit....
Tickerguy
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@Mrmojorisin515 - That's rather, well..... wrong.

It ignores productivity, which is the outcome of technological improvement. It's why you have all these things you have.

It is the deliberate offshoring and lack of Rule of Law that is the problem; see my second half interview with Max for a bit of an explanation of it.

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Mrmojorisin515
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Karl i won't split hairs on what is or what isn't capitalism ( i don't think capitalism ever had a provision to bailout companies and so forth) but it does explain many trends that have been in place since at least the 70's. And if you were in your prime in the late 1880's thru the early 1900's i'm sure you weren't a fan of robber baron "capitalism". What i've noticed in my short life time is that the system seems to protect those that have already accumulated much from their own mistakes and punishes those who are not connected or able to buy someone off.
Tickerguy
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@Mrmojorisin515 - I am not defending what is going on now or what did in the 1890s. I am simply saying that the author of that piece has claimed that it is capitalism that is at fault, arguing that it is inevitable that a capitalist society will do this sort of thing and thus they're now trying to kill or enslave people because there is only so much resource and the profit return is too small to sustain otherwise.

Bull****.

Again, go listen to the back half of my interview with Max. The problem isn't capitalism. It's a refusal to honor the Rule of Law, and, when dishonored, a refusal of the government to either stop it or have the people rise up and stop THEM.

It is not my place to tell you that you cannot WILLINGLY submit to being screwed up the ass.

The only difference between sex and******is consent.

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Mrmojorisin515
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Understood and thank you for even reading the link i posted, most wouldn't. I knew capitalism in the US didn't exist as soon as 2008 happened. If the debt had cleared the system it seemed to me that most of the overly large corporations that have come to dominate the economy would have gone under. Working for a family business at the time made me think it would be a great opportunity for us (seeing as we had no debt). The bailout were really a slap in the face and i haven't believed anything i've been told since.
Tickerguy
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Almost-nobody got jailed in 2000 either and I was in the middle of that making money the old-fashioned way -- I actually earned it, without leverage.

90% of the IPOs in the 1990s were outright and transparent frauds yet NOBODY got nailed for that. MCI's Ebbers did (I met that snake too; we did some business with Worldcom) but he died before he wound up in jail. Oh well.

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Mrmojorisin515
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I wasn't even out of high school in the year 2000. What frightens me most is that all the websites i go to seem to be populated by people my fathers age. Most young people simply do not care to research what is going on for themselves. Most of what i've learned about business is from my father, and his history of the automotive aftermarket and how it went from locally owned distributors and family owned jobbers in the 70's and 80's to large corporate owned companies in the 90's really does seem to at least give credence to some of that gentleman's complaints with regards to capitalism. I think what really put the stake in the heart to regional/locally owned business (that isn't a very niche market) was unlimited credit creation by the federal reserve once the link to gold was cut in the 70's. It's been all downhill since and we are seeing the culmination of that trend right now. Soon you'll own nothing and you'll be happy ;).
Tickerguy
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@Mrmojorisin515 -
Quote:
I think what really put the stake in the heart to regional/locally owned business (that isn't a very niche market) was unlimited credit creation by the federal reserve once the link to gold was cut in the 70's.

Sorry, not one dollar of credit is created by The Fed.

Not one.

Every single dollar of credit created in terms of what The Fed does is in fact created by Congress.

Every.
Last.
Dollar.

Which means, when you get down to it, we the people are the actual problem.

But that doesn't sound so good, does it?

Another thing I pointed out in the second-half interview with Max.... my father, a CPA and fully-aware of what he had done, had me bend him over the table and **** him up the ass when he tried to run that crap on me in the 1990s, while, at the time, his grand-daughter (who he had screwed with his political and voting advocacy) was crawling on his living room carpet.

We got into the car, drove home, and I didn't speak to him for half a decade after that.

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Capcomp
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@Mrmojorisin515 - Consolidation has been going on across most businesses. Driven by the large corps (Amazon, Walmart, etc.).

As our host has written repeatedly. This isn't a failure of Capitalism. It is a failure of the Government to enforce 100 year old anti-trust law.
Abelardlindsey
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Quote:
90% of the IPOs in the 1990s were outright and transparent frauds yet NOBODY got nailed for that. MCI's Ebbers did (I met that snake too; we did some business with Worldcom) but he died before he wound up in jail. Oh well.


My friends and I were talking about this some years ago. The start-up in the 80's was real. A company did not do an IPO until it was profitable for some years before hand. The whole process was assumed to take 5-7 years with no guarantee of success. It was the Netscape IPO that broke the pattern as this was the first time a start-up did an IPO without attaining profitability first. I believe this event kicked off the whole dot-com thing. It was also the start of IPO's being intended to loot investors instead of building solidly profitable companies.

1995 was also the year the FED began blowing bubbles. Greenspan pushed the redefining of the CPI to understate inflation on the basis of 1) indexing, 2) substitution effects, and 3) hedonic factors. All three of these criteria are fraudulent. This is where the loose monetary policy came from that has allowed all of the well-connected to enrich themselves as the expense of the rest of us.
Tickerguy
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Sorry, The Fed did none of that. It cannot emit a single dollar of credit without Congress (and thus Treasury) acting first. Further, literally anything it does can be STOPPED in one day by Congress, should it so choose.

I know you don't want deal with that @Abelardlindsey; nobody does. But it's true, like it or not.

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Abelardlindsey
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Quote:
I think what really put the stake in the heart to regional/locally owned business (that isn't a very niche market) was unlimited credit creation by the federal reserve once the link to gold was cut in the 70's.


YES! YES! And a thousand times yes!

It started in the 70's. But as long as the FED was prudent, things were largely OK. We had the stagflation of the 70's, But things improved once Volcker became the FED chairman in '79. The problems really started in the mid 90's.

I have been saying this since the mid 90's when the bubble inflation game really got going. The cheap money goes preferentially to the banks (which are also largely cartelized this days) and large corporations. Why? Because they supposedly have the best credit ratings but also have the best access to that money through their connections.

Tickerguy
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@Abelardlindsey - Why do you think Volcker did what he did?

Because Burns was literally shoved up against the wall by Nixon (assaulted -- for real) and, at his behest, did what HE wanted.

Greenspan didn't decide to do anything. He was TOLD to do it by both the Executive and Congress, and given that they write the checks and hold the pink slip he did what they told him to do.

Which means YOU told him to do it because neither you or anyone else organized a few trucks with wood, nails and rope and made Congress STOP IT.

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Abelardlindsey
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Quote:
Sorry, The Fed did none of that. It cannot emit a single dollar of credit without Congress (and thus Treasury) acting first. Further, literally anything it does can be STOPPED in one day by Congress, should it so choose.


I thought the FED was a quasi-independent entity comprised of the 9 regional banks. Is this not the case? I know that the FED sets the prime lending rate, which is used to increase or decrease the supply of money. I know that congress has SOME influence over the FED in that they have mandated that they take employment into account rather than focus exclusively on price stability. What am I missing here?
Mrmojorisin515
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Well if the fed was "truly" independent they would have resisted. Being the stewards of the currency and all (and yes i know it states that only congress can regulate money). What seems to be apparent is that Large .Gov and Large corporations can not exist without either a growing economy (50's thru the late 70's) or large credit creation (80's thru today).
Abelardlindsey
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Yes, I know that the president appoints the FED chairman. I believe its for a 7 year term. But I thought the FED was independent of the government operationally speaking.
Abelardlindsey
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Quote:
Greenspan didn't decide to do anything. He was TOLD to do it by both the Executive and Congress, and given that they write the checks and hold the pink slip he did what they told him to do.


Since the damage started in the mid-90's, that would have been Clinton.
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@Abelardlindsey - Every dollar of credit emitted by The Fed must be exchanged for a Federal Government guaranteed security.

The ONLY lawful exception is what are called "RAN"s from the states (Revenue Anticipation Notes), which are short-duration debt issued in expectation of tax deposits by state businesses and citizens.

Not ONE DOLLAR of Fed credit can be emitted any other way and any that is without that is illegal. ALL of the MBS they bought, other than Ginnies (which are backed by the government) were done so illegally. Congress could have slammed the Fed's dick in the door for doing it and forced immediate disgorgement; they did not. I wrote on this when it happened; every single one of those MBS from Fan and Fred are illegally held.

Every single "Twist" or "QE"d dollar emitted was emitted ONLY because Congress FIRST emitted a Treasury bill, note or bond which means they spent money they did not first obtain by taxing it.

If The Fed acts contrary to law (it has) Congress has the right and THE DUTY to enforce the law.

If Congress wishes to PROHIBIT The Fed from emitting credit against its deficit spending it can. It can also NOT DEFICIT SPEND, which cuts off the supply.

Congress holds The Fed's pink slip and can tear it up or change it any time it wants.

When the crash happened I CAUGHT The Fed yanking liquidity while TESTIFYING it was adding it. I sent proof of this by fax to all 535 members of Congress. NOT ONE asked Ben to reconcile their claims with the FACTS, and in fact Ron Paul's office CALLED ME and told me to stop faxing them.

Yes, that's right -- Ron Paul is a FLAT OUT FRAUD and ALWAYS has been.

Every bit of this was documeted right here, on this site, WHEN IT HAPPENED.

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Tickerguy
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OK folks, out of this thread with it. I'm moving this to under Max's interview.

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Abelardlindsey
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Quote:
Every single "Twist" or "QE"d dollar emitted was emitted ONLY because Congress FIRST emitted a Treasury bill, note or bond which means they spent money they did not first obtain by taxing it.


So all of these "quantitive easing" and zero-interest rate money was actually generated by Treasury bills emitted by congress. Is this correct?

What about the MBS's the FED hoovered up from Freddie and Fannie? Where these also based on T-bills issued by congress? What about the bailout money for all those corporations (that rightfully should have sunk)?
Abelardlindsey
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I'm going to have to buy and read your book.
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