Evergrande: Companies like Evergrande. Junk companies borrowing USDs at 20%+ comprising ~35 “significant” companies representing 12.5% of the current market cap of the Red Ponzi property sector has already lost some $500 billion to date. These companies develop and sell the 85% of homes bought as investment property – speculators – facing to be a seriousContinue reading “Peak Ponzi: Domino Theory”
Category Archives: Asset Bubble
Niall Fergusan and Evergrande’s Lehman Moment
Bloomberg: https://www.bloomberg.com/opinion/articles/2021-09-26/niall-ferguson-evergrande-is-a-victim-of-xi-jinping-s-china-crisis?sref=ZMFHsM5Z Evergrande’s Fall Shows How Xi Has Created a China Crisis The developer’s collapse isn’t leading to global contagion, but China’s looming economic disaster might. A major mistake of the Cold War was the tendency of Western observers to overestimate the Soviet Union. I have often wondered if the same mistake is being repeated withContinue reading “Niall Fergusan and Evergrande’s Lehman Moment”
Evergrande Implosion
How do you say “too big to fail?” How big? Well, we can see just how big real soon as China slides into deflation. Here’s IICS: http://investinginchinesestocks.blogspot.com/2021/09/china-land-sales-collapse.html China Land Sales Collapse, Deflation Cometh I outlined China’s credit trouble here: The Quick and Dirty Summary of China’s Credit Bubble yesterday. It’s a quick overview touching some of theContinue reading “Evergrande Implosion”
“It is amazing how complete is the delusion that beauty is goodness.” – Leo Tolstoy
I enjoy reading Matt Taibbi because he writes so well. But he continues to suffer from delusion. Here is Matt working his way to reality. Even if you know better, Matt’s voyage of discovery is instructive. Even if you drank the Kool Aid, you can still figure it out. Even Matt. https://taibbi.substack.com/p/the-vanishing-legacy-of-barack-obama The Vanishing LegacyContinue reading ““It is amazing how complete is the delusion that beauty is goodness.” – Leo Tolstoy”
Reverse Repo Madness
Is this the work of a serious artist? And here’s Tyler showing you what’s ahead: https://www.zerohedge.com/markets/25-trillion-reverse-repo-year-end RRP volume is quickly approaching $1 trillion a day, with today’s reverse repo usage hitting the second highest on record at $987.3 billion and just shy of $1 trillion. And with QE still running at $120 billion a month,Continue reading “Reverse Repo Madness”
Where Fools Rule: Takin’ What They’re Givin’ ‘Cause I’m Workin’ for a Livin’
“Way back in the day,” as they say, I pulled a couple of Cold War deployments as a nuclear engineering officer aboard a nuclear-powered guided missile cruiser. There was also that submarine experience which was interesting, but the extended nuclear cruiser deployments were richer. My cruiser was USS Long Beach (CGN-65). We “rode shotgun” forContinue reading “Where Fools Rule: Takin’ What They’re Givin’ ‘Cause I’m Workin’ for a Livin’”
First Real Estate, Then Oil, Next is Food
The quantity of USDs in circulation has been growing at an accelerating rate since the JFK/LBJ Guns and Butter program. The bill came due when Nixon came along. One option was to cut spending and raise taxes to pay off the debt. Nixon took the other option and closed the gold window giving rise toContinue reading “First Real Estate, Then Oil, Next is Food”
The First Shall Be First, the Last Shall Be Last
OK, that title was not exactly the Sermon on the Mount. But it is Matthew – seriously. As much as the Sermon on the Mount, Matthew is also known for the “Matthew Effect” The Matthew Effect of Accumulated Advantage is sometimes summarized by the adage “the rich get richer and the poor get poorer“. The concept is applicableContinue reading “The First Shall Be First, the Last Shall Be Last”
Peak Population – Sow the Wind, Reap the Whirlwind
Chris Hamilton of Econimica shared two graphs reproduced above that summarize all we need to know about macro trends (see https://econimica.blogspot.com/2021/04/ever-fewer-people-need-ever-more.html). You don’t need the usual “talking head” on Squawk Box, or “insights” from some economist to explain the role of “economic slack”. It’s simple physics: wage-generating population (and, households), and money stock. All thereContinue reading “Peak Population – Sow the Wind, Reap the Whirlwind”
Weimar 2.0 Update: March 13, 2021
As of February 1, 2021, the US money supply (“M2”) was $19,432.4 million – call it $19.4 trillion. That’s up ~$4 trillion YoY or ~26% YoY. Remember that mark – a 26% YoY increase in the money supply against a GDP that declined ~1% YoY. And while you’re remembering consider, daily Federal spending closed outContinue reading “Weimar 2.0 Update: March 13, 2021”
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