The (Real) Big Short

Steve Eisman tells the story of the GFC and how he made a lot of money out of it.

Crash 2026?

We are due for a correction and there are a lot of overvalued stocks. AI is a bust, face it, it is often wrong. SpaceX doesn't make a profit, and may never make a profit but it is meant to be highly desirable. We've seen this before: the 1987 stock market crash and then the industrial property crash of the early 90's, the dotcom crash of the late 90's and early 2000's, then the GFC 2008, and now, 2026.

My issue is with the thinking that some companies are too big to fail. Constantly rescuing failed enterprises is a fool's errand. After 2008, all that happened was governments bailed out the chosen few and doubled down. We are living in a bubble. 

Elon Musk isn't a genius: according to some, he's an illegal migrant who should be deported to South Africa. His predictions turn out to be nonsense, and he's never invented anything. Mark Zuckerberg and Bill Gates are university dropouts we are expected to listen to. How did these individuals get to be super rich? My explanation is they're all the beneficiaries of taxpayer largesse, one way or the other. 

What I am describing is a situation where we're living on a leaky boat, and the people expected to keep us afloat are only interested in making the holes in the boat larger so it can sink faster. The politicians are owned by these same people, so they'll ignore the leaky boat. When the boat looks to be sinking and going under, they'll blame us. 

Steve Bannon Explains Why We're Cooked

I've been saying what Steve Bannon is saying here, since the GFC:

GFC 2.0

Three banks have gone bust in the last few days; the collapses started with Silvergate, followed by Silicon Valley Bank which became the USA's second largest bank failure in history, and now on Sunday, New York based Signature bank has had regulators take control. 

Clearly this is serious and yet more banks will fail. I predicted this would happen. Back with GFC 1.0 there was little financial rigour put in place, goalposts were moved and institutions were rescued. The term 'too big to fail' became a thing. I complained loudly, saying where were my bargains? Governments propped up failure. That never leads anywhere and only causes more harm. And here we are.

Word is that SVB spent more time on trendy causes than actually paying attention to risk management. I can believe it. The other rumour is that Prince Harry and his wife have a lot of money deposited with SVB. We'll see, but don't be surprised if you see the pair suddenly head back to England and for King Charles to bail his son out. If this does happen, watch the reaction from the British subjects, the Coronation could end up being booed. 

As the saying goes, we live in interesting times.

https://www.coindesk.com/policy/2023/03/12/crypto-friendly-signature-bank-shut-down-by-state-regulators-fed/

The Problem is Worldwide

Elon Musk has accurately outlined the problem. In a leaked internal email to staff, he said he had a 'super bad feeling' about the economy:

https://www.entrepreneur.com/article/428840

Then, on Twitter he has previously stated:

https://www.entrepreneur.com/article/428451

"It has been raining money on fools for too long. Some bankruptcies need to happen," ..... "Also, all the Covid stay-at-home stuff has tricked people into thinking that you don't actually need to work hard. Rude awakening inbound!"

I agree with Musk on both counts. I have frequently said the bailouts due to the GFC have entrenched incompetence. Businesses should not be too big to fail. If they fail, let the bargain hunters devour them, and out of the change grow stronger. Yes, this disrupts lives, but look at where we are at right now. Things are going to be worse.

We've been living in a huge government-led Ponzi scheme, created using the taxpayers money. This couldn't be sustained so they manufactured a pandemic, or scamdemic as I like to call it. The response was planned to crash the world economy. They, and by 'they' I'm talking about the 'powers-that-be' for want of a better term, didn't care about how many people were killed, all they cared about was saving their own scrawny necks and the corrupt companies underneath them.

The 'Great Reset' is an arse covering exercise. 

But it didn't work well enough as people didn't 'drink the tea'. Turns out the people are not that stupid. Well, except silly countries like Australia and New Zealand, they're very silly. What to do then? Need for war. So, NATO prods the bear - Russia. Now, famine looms in countries relying on Russian and Ukrainian food, while energy prices soar. Will profits from high oil prices be returned to the people for better healthcare and education? That was me kidding you, you can stop laughing as we know that will never happen.

Basically, what I'm outlining is a massive stitch-up. The only way to correct this is to remove those in power. We need new governments with new ideas. The current crop are trying to destroy you and ultimately kill you if they can. Don't let them.

Financial Reset Imminent

Interesting watch this, why are governments coming after our children for the Covid jab? That's because the new financial system governments have devised, requires everyone. The jab feeds into the vax passport which is really a digital ID. Then comes your social credit score and ultimately complete control of your money. 

For businesses this is a very bad thing. If you own a business you may think you have to obey these laws. But if you do, you will end up out of business. Take vax certificates to gain entry as an example. They expire after 6 months, what if a sizeable proportion of the population do not get their booster. Then what? Well, you'll have no customers, you'll lose your business. And if the government want to ruin you, they'll just switch you off, or make all digital ID's in your area go red overnight. You'll never be free.

(Note that this video didn't stay on YouTube all that long; are they over the target?)

Farmers - Wake Up

With the car tax, err, I mean support for EV's now upon us, time to remind New Zealand farmers how stupid they are. They constantly vote CCP National. This means the other parties don't give a flying fu** about farmers. And CCP National don't care either as they can count on farmers no matter what.

And then Ardern could, possibly, maybe, wink wink, steal or transfer their party votes whichever way she likes, just so Hollywood and the movie makes her look good. Muslims one minute, farmers the next and saving the planet. Everyone must play their part in her rise to superstardom and total wonderfulness.

Here's a suggestion farmers. Get off China's teat and stop thinking the CCP National Party of Wokeland Aotearoa will some day save your sorry arses. They won't, even if they win an election some time this millennium, they'll just give you your money back in order to take it away again in some other way.

No, what you've got to do is create uncertainty. Or join the Greens and use the democratic process to take them over. When I suggested that on Twitter last year, the Greens just about had brain aneurisms they were that apoplectic with rage. But really do it. If farmers got off their fat Hilux-riding arses and behaved strategically, they could shut down the Greens and have an honest debate about the direction of the country. Cosying up to the traitors that are the CCP National Dimwits is not the answer.

COVID-19 and the Third World War

I've been a student of history all my life and I've been a teacher of history as well. Does anyone else see the parallel with what's happening now and the run-up to the Second World War? I certainly do, we have the War on Terror, which is a form of colonial expansion rather like The Great Game between the British and Russian empires. Heck, this war involves Afghanistan just as it did during The Great Game of the nineteenth century.

Then we have the EU pushing its weight around, rather like Italy's unification under Garibaldi and Germany under Bismarck, then later Spain under Franco. Europe has emerged as a super state since the 1990's. Then we have 9/11, which is WWI, and then the GFC which equates to the stock market crash of 1929. This has been followed by the Great Stagnation involving quantitative easing, another version of the Great Depression, except this time it is worse as we now have a global pandemic to conclude things, which is a bit out of sequence, it has come at the end of the Great Stagnation instead of the end of 9/11. For those not aware, the Spanish flu came at the end of First World War not at the outbreak of the Second.

Time scales are a bit off, but what's a decade or two when talking evolutionary scale - hmm? If this is obvious to me, it must be obvious to others, so who is manipulating events? The Third World War cannot be far away.

Coronavirus Recession

I'm calling 2020's biggest event, caused by the Coronavirus COVID-19, the Coronavirus Recession. This is a supply-side recession, not a demand-side one, for many that'll be a challenge. For old heads not so much, we remember the oil shocks of the 1970's. The effect will be much the same, you simply won't be able to get some things, learn to live without.

Not every measure will be done for health related reasons. I see the US President's suspending flights from Europe to America as more a political move. Is it punishing European countries for not putting in their fair share of defence spending? Personally, I think this must have something to do with it. After all, Donald Trump exempted the UK, which is in Europe. The UK puts in their full share and they left the EU. The US has sent a message loud and clear right there.

This means airlines will go bust. Airports too, along with hotel chains, restaurants; but not so much fast foods, people will eat at home.

Someone was wondering if this was the biggest single event since the Second World War. No, not yet anyway, the GFC is still ongoing and has had a greater effect, as did the Cold War itself. But this is very serious, no doubt about it. I mean, the NBA season has been suspended. What am I going to do with my free time now?

Coronavirus and the Recession

Recession, that's what the world is now facing and we need to take this seriously. Ignore advice from financial planners and the like, they have a vested interest in saying it is all temporary, the outlook is good, just invest in their particular schemes. Oh right, invest in their proposals. Actually how about not taking that advice.

Now there will be opportunities, bargain buys. If governments have any sense they will allow this to happen, with capitalism you have the freedom to go bust. Back during the GFC, governments rescued certain industries and companies, effectively denying investors those bargains. What that did was prop up ineffective and failing businesses that were poorly managed. They kept going and they're still around and that's bad. The advantage of capitalism - it's by no means a perfect system but it does do some things - is it does weed out the weak.

Then after weeding out the weak, we need to have a serious think about the way forward and away from relying so heavily on countries like China. What this virus exposes is the stupidity of relying on key goods coming from far away. The whole economy is held to ransom because of a shutdown in that far away country. That can't be allowed to continue.

The USA will be fine, they'll address the matter. Their tariffs on goods from China began the process of addressing this vulnerability, but now it will gather pace backed by the resolve to continue. In countries such as Australia and New Zealand, it is highly likely they'll continue to lie to themselves and be less independent, akin to seaworthy vessels adrift on the high seas without a rudder.

John Key Success or Failure?

I believe history will not be that kind to John Key, New Zealand's now retired Prime Minister. When he came into office he had a lot of potential, the previous nine years had been competently led by Helen Clark but her Labour party reign had been typified by Nanny state trying to control Kiwis everyday lives.

John Key promised to reverse that and give Kiwis their lives back. He failed to do it. About the only thing I can recall him doing to stop this creeping intrusiveness was his National party let us have our incandescent light bulbs back. That's about it.

National promised a lot but delivered very little. They were going to get all school children into sport, this was a top priority they said. What happened to that idea? It sank.

Soon after taking office, Key made speeches up and down the country about unleashing NZ's mining potential. They surveyed the country for rare earth elements, it was all go. Then the Pike River mine disaster happened and Key became jumpy, he was like a possum caught in the headlights. So mining was now off the agenda.

Then we had the GFC. He's credited with doing something for NZ there but the reality is the GFC did not impact Kiwiland all that much. So on that score, Key gets a free pass.

Then the earthquakes happened, starting in September 2010. All of a sudden real leadership was needed and Key did not seem to warm to the task. The mayor of Christchurch stood up, as did Gerry Brownlee Minister for earthquake recovery and Roger Sutton, most importantly Roger Sutton who headed CERA, the Canterbury Earthquake Recovery Authority. When it suited the government, they unceremoniously dumped Sutton in what can only be described as an appalling act of betrayal.

Don't forget Key has blood on his hands over Allan Hubbard, the highly reputable, honest businessman, and tireless benefactor who was put into statutory administration by Key's toady, Bill English. Hubbard was an old man forced to defend himself and he died in a car crash while returning to Timaru after seeing his lawyer in Dunedin. The only way to describe this shameful matter is he was treated shabbily. Scales Corp was one of his companies and it is now listed on the NZX in some nightmare scenario.

Then just to confirm how selfish John Key is he's doing a runner before the hard work on rebuilding Kaikoura and the main trunk rail line and State Highway 1 begins. Key is all about window dressing, he can't face Kaikoura as he must be running out of mugs to do his work for him.

Under John Key, New Zealand continued to drift and it's worse off now than when he took over. He's running away, and that has to be considered failure.

GFC: Why We Are Screwed

I have implied in posts on here, an opinion of where I think things are headed. However, until explaining to one of my children what I am actually on about, I realised I hadn't blogged about my views in full.

Okay, so the GFC, aka the Global Financial Crisis. This started happening straight after the dotcom bubble burst. Things were getting out of hand, banks were lending irresponsibly, blah de blah, you know the rest.

In 2008 things got very bad and the property market crashed, everything came tumbling down. Small businesses were screwed, they had their overdrafts called in, banks could no longer trust one another, the system was broken.

In stepped big mother governments the world over. They ruled that some were too big to fail and bailed those precious few out. Then they started quantitative easing to avoid further collapse. Retired folks saw their incomes plummet. The oldies and small businesses were the biggest casualties globally.

What were the alternatives? Well, a short sharp shock would have worked fine.

What happened is governments rewarded the ineffective, incompetent, stupid and weak. These governments are run by venal and malfeasant cowards who buckled and bailed out their old-school mates. What has resulted from that lame decision-making, has been eight years of bumping along the bottom.

I'll explain this another way. Imagine you break your leg and you are delivered to the hospital by an ambulance that is pedal powered. At the hospital the doctors take a look and decide to not properly knit your bones back together, instead finding it cheaper to have your leg grow back crooked and keep you on painkillers for a few years as their mates own the drug manufacturers and pharmacies.

Get the idea?

Or would it be better for the doctor to say, 'this is going to hurt,' AHHHH, fix your leg properly and have you walking again free of pain in three months?

Hmm? Well the crooked leg and painkiller example is what we got.

What does all this mean? It means we are royally screwed. Governments throughout the Western world are telling us they avoided another Great Depression (they say). How about, what they actually did was put us on a path to extinction. That's what I think.

I've had people tell me that technology cannot be lost. Oh yeah? Tell that to the people living through the Dark Ages, just after the end of the Roman empire. That's where we're headed. I won't live to see this happen, and neither will you, but I think it is inevitable. Crazed loons like ISIL are going to be running the world and they'll destroy everything. This will happen because we promoted stupid and dishonest people and gave up being vigilant and prepared to protect our hard fought freedoms.

What we have now is not capitalism. In a capitalist system you have the absolute right to go bust. No-one is too big to fail. If you promote stupid and dishonest people and entrench them in power, you end up with complete devastation.

George Soros On Current Collapse

I was waiting for the current market correction all 2015, looks like I was out by a month or so (don't worry, I don't try to predict the market, I just get on with things and have this idea in the back of my head). The current problem is just 2008 revisited, read about George Soros and what he thinks...

>>Click Here<<

Speaking at an economic forum in Sri Lanka's capital, Colombo, he told an audience that China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world, according to media. He added that a return to rising interest rates was proving difficult for the developing world.

The current environment reminded him of the "crisis we had in 2008," The Sunday Times in Sri Lanka reported on Thursday morning. "China has a major adjustment problem," he added, according to Bloomberg. "I would say it amounts to a crisis."

China is going to fall apart. It's a case of when not if. For the rest of the world that's a real problem as China makes so much of the shit we now consume. But the problems don't end there, government has propped up failing industries and prevented bargain hunters from picking over the spoils.

What we now have, throughout the OECD, is a form of state capitalism much like the USSR form of socialism. Yes, you heard that right. Big government decides who succeeds, some are too big to fail (General Motors) and main street small business gets screwed.

2016 is going to be the year of the stock picker. To succeed as an investor, it's going to be necessary to pick the companies that will do well, and my pick is only the most boring and old-fashioned are any good. Businesses that are relatively cheap, ignored for the most part, not considered at all 'sexy.' Anything even remotely speculative or fly-by-night will be duds.

The Last Time Oil Price Collapsed

That's right, the last time we found ourselves in this position was late 2008 and the start of the Global Financial Crisis. Michael Snyder provides the following analysis, read it and weep;

Guess What Happened The Last Time The Price Of Oil Crashed Like This

Now let's be careful, I'm NOT saying the oil price drop is causing anything, what I'm saying is it's indicative, a symptom of a wider malaise, a general lack of demand for anything. Why do people need more stuff ? We've got enough already.

Less demand, lower production, less employment, lower incomes; recession.

https://www.linkedin.com/pulse/last-time-oil-price-collapsed-ken-horlor?trk=prof-post