Regarding Putin, it is nice to see someone recognize that he is a moderate. I doubt he's seriously ill simply because the media claiming that are notorious for projecting what they want to believe is reality. Their credibility is rather pathetic.

That doesn't mean the man won't retire. The Merkle revelations are an embarrassment for Putin. Plus there is no point in any diplomacy with the West now. So what value can a great diplomat have?

Think of Robert Duvall's character in The Godfather(Tom Hagen). A lawyer who was great in peacetime but when the families go to war, he's not a wartime leader. Therefore he's out.

Putin has reached this point in his career. As Russia has mobilized for a war with NATO(not Ukraine) it may be time for a wartime leader to take over. I hope not. We owe Putin a great debt for keeping the lid from blowing off this for 8 years. Still, Russia has spent those years preparing for WW3. The US military has spent the same time becoming more corrupt.

Speaking of stupid DIE policies, I am just learning about a thing called SCOPE reports that would require businesses to track all of their direct and indirect emissions. That is going to be a lot of work for someone or a group of people that have nothing to do with the business and in fact will only drain resources.

https://www.cio.com/article/416691/scope....

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Winding it down

@Eoinw Putin is out there doing plenty of diplomacy, we and our "allies" just aren't on the guest list.

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Welcome to TF: The "T" stands for "Thoughtcrime"

@Rangeishot

Good point. While the western media endlessly lie, with no one outside its echo chamber listening to it, the Russians are winning the rest of the world. India is finally turning away from America. Even the Saudis are looking to the Chinese.

Somebody probably mentioned it, but I think you mean to say Trump's political future is over as opposed to the typo of no being over. I agree. He's done.

DEI is a malignancy within the entire corporate world, and a certain gargantuan online retailer is going all in with it. The push to retain and promote employees that check a DEI box is a true tragedy and is crushing morale across the company. It has gotten to the point where an entire mentor program has been put in place with every black employee at a certain job level has been enrolled in it, whether they wanted to be or not. The reason? To retain these employees over all others, regardless of how they are performing or if they are a good fit. Melanin content is all that matters. This mentor program was supposed to include native Americans and Latinos as well, but they were skipped over for the time being so the company could focus on black employees.

As far as DEI initiative employees go, they are the worst of the worst. Most that crab walk into that space are ineffectual at best and downright destructive when fully operational. They exist to create escalations to HR over any and every perceived slight. Not a joke - I had to fend off HR wanting to fire one of my best employees because he stated on a zoom call that he likes his coffee black. A black female employee took this as a microaggression because she felt he was sexually objectifying her because he likes black coffee. She said she could feel him 'leering' at her through the call. I spent at least 30 hours of time with that nonsense, and it's never ending. Then there are the overpaid and under worked SDEs - a request for an updated CTA button has been languishing for months and has 4 full time SDEs assigned to it...each SDE with an average salary of 180k and Indian. I have nothing against any SDEs, Indian or otherwise, when they can code off basic requirements for a common function like a CTA...but these cats are awful, just awful. I serve and volley emails and trouble tickets with them daily.

I read reports that some companies are scaling back on DEI initiatives - not at this online retailer. Yeah, ongoing and upcoming layoffs have targeted HR, it's only in the recruiting space so far with some targeting 'people experience' teams. DEI is safe and spreading like a wild fire with stage 4 cancer at this company and it will continue to degrade service internally and externally.

It is hard to argue with predictions, and those presented here by Karl make sense. As for the past predictions and hit and misses, either way they are an exploration of facts valid in and of themselves and for learning. So, i want to contribute a few of mine. The latter with which i might do something.

Here goes.

Within the next three years we are going to see home-country terrorism committed by average Americans. There are a lot of people in lower level positions of authority who effectively forced people to "do" things which harmed them and their loved ones. We have an aging population of parents who might get old enough to not care much more if one of their children were harmed and those who are in their last days of illness, unbearable, who want to settle the score. We are speaking about even simple corporate managers who terminated people over the vexxine turning the key to their cars one day and ...

Regarding the above people are going to target the loved ones of the big names. The desired target might not be easily accessible (although many truly are), however their families and descendants often live very normal and mundane lives.

School principals, doctors, nurses, this will not be in general but rather where a target was the proximate cause of a vexxine injury and used an authority position to enforce mandate. Administration of institutions will also be targeted as well as retired local and regional public officials in person and as described above.

I do not advocate for this, however am seeing the signs that this is a reasonable possibility. A quiet lone actor cannot be stopped, and due to the nature of the offenses there are too many potential vectors to police.

Next is what i call the great hold-out.

These are two groups, the desperate and the deluded opportunistic.

This is also closely related to my final prediction.

People in a variety of situations: holders of assets, accustomed to expecting cyclical bubbles, assumption of return of ridiculously low interest rates, those who have sustained massive investment losses, those accustomed to debt as a method of financial bailout, members of the rentier economy, those in ruined retirement or near it, those depending upon cash out of assets to retire, make horizontal moves, fund lifestyle or simply survive, those who cannot face reality, etc. I think that i have said enough and please include *******s of all of these kinds who have an assumptive attitude and think that things are owed them.

Do not go further until you completely read and reread the above list and get a feel for the stories of people. Here are two potential examples, perhaps three if my fingers hurt less.

Case one: a 65 year old who cannot liquidate a property for enough to fund lower level living for expected remaining lifespan, has lost significant financial asset base to fund later life and has ongoing medical expenses of moderate type not limiting functionality. Let's add in that primary residence requires capital investments due to age and deferred maintenance, COL is rising in said area and the person(s if spouse present) would like to do certain things in retirement. This describes a huge actual existing population thereabouts this age.

My advice to the above person would be to turn everything to cash NOW, find a lower cost area which is a good retirement option (COL, age-in-place, climate) and find some reasonable work where 10-20% savings is possible. They 65 yr old example instead figures that he or they can hang on for three to five years when things change, not a good plan but human nature. Experience has shown that people will hold out for fear of losing a potential gain. Now apply this to many age ranges who also depend upon a cyclic bubble cycle to bail them out or yield profits.

Remember that people are accustomed to this and feel that they have mutual political pressure to get their way.

Here is another example.

Property owners with a poorly executed capitalization plan. This means that the numbers really never worked as good planners would advise. The properties run on fumes, translation: near zero maintenance, upgrades and repairs and not capital set aside for said, they have or have not debt with the former being a not good situation obviously, they rely upon an overpriced rental market. You get the idea.

How many of these folks are going to want to give up gains in equity or market value? Even if they can get out breaking even, get out of a bad situation, move on in life to real business and work, the same factor as above holds them back.

They feel that they merely need to ride out X period of time for the next cyclic bubble. The more desperate their situation, the tighter they will hold. This is especially true if a low interest rate environment allowed opportunistic *******s to acquire that which they never would have otherwise, mix in a sense of entitlement and not wanting to be in the worker category of life.

It will take five years of sustained high interest rates and the example that no matter how bad the economy, low interest rates cannot and will not be used to jump start it. In addition, closely related to the last point, they must come to the realization the low interest rates are seen as not viable and banned from returning. Think that this education is going to come easily or quickly? Already last month my contacts in the RE Industry and many new friends local to me have said that there has been an explosion in seller financing where the seller grants a lower rate. How many different kinds of stupid is this on both sides? All just to hold onto something not real and pretend a future which cannot thus will not be.

This last example will be both sides playing a game of chicken or do not blink, whatever. There will be mistakes in both groups along the way as well as political pressure. Aside: ten percent money is really a good point to start this debate along with proper lending regulation and enforcement.

The politics of the above are going to harsh too, keeping the holdouts holding out. In times very unlike these i have seen asset holders sit on terrible situations, amazing losses, in the hope that money will fall from the sky. A person with no other options palatable to him will ride the only hope that he has in his mind. I coined a term "Loser Lord" a long time ago along with a few others.

Remember, they have been bailed out so many times that others never in the business kick themselves for not getting in on the gain. Now the side which has been at their mercy is going to hold back outside of those who have made some terrible decisions. Aside advice to any outside of property ownership and reasonable tenancy costs: BE MOBILE AND UNINVESTED IN ANY COMMUNITY. Go on a moment's notice. And, a big part of this dynamic and the above discussion of improperly setup capitalization plans: DO NOT maintain, improve and fix your landlord's property other than cleanliness and basic dignity. If they left you a barren rubble-strewn rear yard, you better like it that way. If the bathrooms are falling apart, even needing simple re-caulking, don't fix a thing other than washing them. Walk on plastic if you must. Same with every other system and do not ever sign a lease requiring said fixing and improvements. Don't even paint. I know hard. Wash the walls once and don't **** them up. Let the place get dingy, but be super clean. Window treatments in the lease are shot, don't replace, hang a sheet, get creative.

Why the *******ry above in the context of being a great and reliable and responsible tenant. Let the Landlord see that the place is getting older, they are not going to get better rent and selling YOUR upgrades and maintenance is not possible. Let them see a tired property. There is a lot to this game, too much for here. It is used to highlight how landlords actually think and their assumptions regarding easily acquired assets when the world was going their way. See how much you have to do to fight it? Shows how entrenched the mentality.

Ok, that is enough. I'll get to the third prediction later in a subsequent posting.

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Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris

Holding onto a deteriorating position is something all traders do at least once, and if they've got a brain it imparts a serious lesson.

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Whereas i agree with you Karl, there are too many entrenched interests, and the situation formed both an ecosystem and its own atmosphere like giant wildfire.

People are accustomed to so much that they will ignore the early and often lessons.

Related to this, i think that it even affects people who should know better unless they are catering to people's psychology for profit, truly disgusting.

One of which is Harry S. Dent, who was one of the best years ago. He is stating that the dollar will get stronger over the next five years and then decline severely as we get passed by ... wait for it ... Asia. Is he ****ing nuts? I already know the answer.

Also, there is the assumption based in his logic that after a serious cleaning-out we will go back to the old games, like insanely low interest rates and the associated monetary policies. What will this do?

Everyone will want to buy during the downtimes, driving up asset prices or preventing normalization to reality, in the hopes that the next spin-up of a bubble is their gain and/or rentier position. Even if barely possible his readers and by extension a segment of the public want this. If people want it, they start to think that it will happen.

Personally, i think that we are ****ed for much longer which could encourage more bad policy which will not work other than to make other things much worse. This is my third prediction which i will post later.

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Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris

Yep.

My base case is at least five years of suck and the odds of a Depression level suck (10ish years) is rising fast.

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Curious Karl as to why anyone could justify a declining dollar after five years.

Deflation always produces a strong currency. It is like he is assuming that we can wash or export inflation again to the developing world. We cannot in the future which makes our dollar strong locally absent any near ZIRP games.

Here is Dent's anti-logic:

"The history is that the dollar will rise in a crisis like this one, as it did in 2008. I see that happening, and then the dollar will fall longer term and Asia will become more dominant. I know its popular to believe that the dollar will lose its value suddenly in a crisis, but 2008 proved otherwise. Its best to invest in the 30-year U.S. Treasury bond, which locks in higher rates before they fall and which is based in the U.S. It is not that the U.S. is in good shape, its just the best house in a bad neighborhood. Note that well see the fall you are talking about over time from around 2025 forward."

"Frankly, I don't think the public is that sophisticated. It doesn't really matter what the Fed's balance sheet is, as it is an artificial entity that creates money out of thin air. We have to work to create GDP. What matters is the Feds impact, and that has been to keep a slowing economy growing for 13 years by printing massive amounts of money that created a massive financial asset bubbleand not CPI inflation as feared, until recently after the overreaction to *****. Many were worried about inflation from such money printing. But the inflation came mostly in financial assets. It is the collapse of that bubble that the Fed largely created by overstimulating our economy for 13 years, especially after *****, that will kill the Fed and all central banks, along with their credibility.

The first bubble was more natural, with strong demographic and technology trends boosting spending and productivity. This second bubble, meant to head off the next Great Depression, was 100% artificial, and it will have a bigger collapse than 20002002 or 20072009 in a now demographically weaker economy. The economy will go through a shorter but more-brutal depression as this bubble bursts. Two hundred and fifty trillion dollars to $300 trillion will disappear from a $600-trillion global financial asset bubble that was led by China and the U.S. but occurred everywhere and that included even more money printing by the EU and Japan relative to their economies. China did something worse: They printed condos instead of pure money; now, 22%+ sit empty. That's a deflation crisis all on its own.

When the crash happens and half of the $600 trillion in financial assets suddenly disappears, it will create both deflation and deeper bank failures than a normal recession. Debt and mortgages in particular are how we create the most money out of thin air. The artificial Fed and central bank injections and interest rate reductions encourage and make it easier for such asset bubbles to inflate.

Banks largely lend against financial assets and their cash flow. When both collapse, loans fail, and banks only have about 10% or so reserves for that. That creates major bank failures in addition to high unemployment and business failures. As in 19291933, these financial asset collapses are called depressions (instead of recessions) because of deflation throughout the whole system and because huge amounts of financial assets and future spending power disappear from the system for a long time. While the whole system deflates, the largest impact is when financial assets come back down to fair value. That takes a lot of money out of the system and causes lower spending by consumers and businesses near term, and longer term to a lesser degree. Would you spend less if your net worth suddenly dropped by half or more?

This crash will be global, and it will be the worst since 19291932, but the U.S. will come out as the best house in a very bad neighborhood compared with our biggest competitors: Europe, China, and Japan. Southeast Asia and India will be the biggest winners after the crash, as they have the least debt exposure and will grow the most demographically in the future in Asia, which will be the most-dominant growth area in the next boom and for decades to come. The U.S. will have one last fling of growth with the Millennials into 2037, and then will start looking like Europe and East Asia now do, with much slower long-term growth. Increasingly, the future belongs to the emerging world, most especially the southeastern and southern (India and Pakistan) parts of Asia. North America, Northern Europe, and Australia/New Zealand will be the strongest parts of the developed world in the next global boom from 2025 to 2037. Only "Oz" will continue to grow after that, and only because it will get high levels of immigration from Asia... "

Your thoughts? Thank you.

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Je souhaite

Quod tu es, ego fui, quod ego sum, tu eris

So.... yes and no.

What he misses and I did too originally is trade sequestration. It's what made the last 20 years happen and possible, but that's gone.

That, ultimately, is what prevents The Fed from trying to blow another bubble as there's no means to sequester the inflationary impact which was done over the last 20 years; as the economy grew and offshoring increased the simple expansion of volume (NOT "hoarding" of dollars or "reserve" anything) kept the inflationary impact muted and thus the inflation went mostly into asset prices -- which a lot of people REALLY like.

The Ukraine thing destroyed that and its not coming back, as now RISK in accepting dollars is known and unacceptable. Ergo, it won't happen anymore because on a risk-adjusted basis taking dollars no longer makes sense.

So NOW deficit spending causes inflation in the US economy. No escaping it. And there are huge parts of the federal side that are unfunded; CMS being the one that really matters. It is both where you MUST fix it AND a political third rail, which is going to make for some verrrrry interesting times.

This trade preference will ALSO force production back into the US, but of course not all at once. Nonetheless that's a good thing but during the interim things are going to suck in a lot of places.

The highest "at-risk" areas of the economy are health care and so-called "green" energy (and its use, such as EVs.) They were the biggest beneficiaries and they thus got the bubble blown the largest, so the air that will come is greater in volume.

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@Tickerguy -- just want to add my thanks for all you do, especially over the past 3 years of (worsening) insanity.

Tickerguy wrote..

My base case is at least five years of suck and the odds of a Depression level suck (10ish years) is rising fast.

@Tickerguy -- I have no real timeline guesstimate to offer, but I am of the opinion that we will see major missteps, at the government, and corporate levels; missteps along the lines of the Depression where one of the big policymakers of the time, afterwards, said that all their policies deepened and/or prolonged the Depression. It really depends on the speed at which those in leadership/authority positions unlearn what's been "normal" for certainly 20 years, but arguably 40.

This is why I'm rather pessimistic on the first round of "Oh, no we've got to cut DEI/ESG!": the management has been so trained to myopically look at the short-term that I think they've lost the ability to even consider medium-term, much less long-term. -- A LOT of employers have, likewise, been trained (by the job-market and impacts of government policy) to undervalue employees: just look at the "unskilled workers"/trades & illegals or the tech-sector and H1Bs... the point is, things have been very unbalanced in favor of the employer for so long that the prospect of employees "doing the job, but not volunteering for more" (i.e. "Quiet Quitting") is enough to prompt outrage. -- The system must be just, balance must be restored, or else the machine will tear itself apart from the stresses.

The biggest thing standing in the way of correcting all of this will be pride and arrogance: how hard is it going to be for admins and leaders to say "I was wrong."? -- Given the lack of introspection, the myopic immediate-term thinking, and the amount of bad-decisions they haven't been held to account for, this is likely going to be a long and hard lesson.

Oh those three words politicians NEVER utter.

Which is why more often than you'd like these situations lead to extreme levels of violence.

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Quote:

China did something worse: They printed condos instead of pure money; now, 22%+ sit empty.

Why is this worse than printing money? Condos have a utility value; you can live in one. (Though houses, or nuclear power plants, would have been better.)

One of my long term desires is 99.99995% across-the-board price DEflation (whilest I hold on to a single dollar).

(The important thing about a pile of money is how much stuff it can buy.)

We are entering a very dangerous time, where there will be a LOT of pressure on so-called "leaders".

It is easy (or at least is should be) to make good decisions during good times. But the real test of character comes when under pressure.

During the "high stress" periods of the last two decades, US leadership has made increasingly bad decisions with all of the following high-pressure events:

9/11
2008 crash
*****

And US leadership is far worse today than during those times.

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Quote:

Why is this worse than printing money? Condos have a utility value; you can live in one.

One would think. The problem with China is a lot of those high rise towers were shoddily built and have uncertain lifetimes.

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Its all in the mitochondria

Looks like concrete.
Is actually trash with a bit of concrete around the outside.

5th floor eh? Or worse.... 4 floors above you!

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I lived in one when I lived in Kaohsiung, Taiwan. The Taiwan construction is better. But they also have earthquakes as well. All of the residential towers are rebar concrete, not steel frame. The problem with concrete is that it spalls over time and does not have tensile strength to begin with. Then it pancakes. This has never happened in Taiwan. They did have a condo tower fall over on its side, just like a toy building, while remaining largely intact. This means at least the buildings in Taiwan have less pancake risk. But mainland China is unbelievably corrupt with construction being the worse of it. It is rumored those super-talls (100+ stories) in Pudong part of Shanghai were built with foundation concrete made from sea sand. I would not feel comfortable in one of those.

Another issue with Dent's projections is his disregard for human capital as well as cultural diversity in his assumption that South Asia (India) and Southeast Asia will be the major growth region of the world following the coming correction. They will have SOME growth. But they will be no equivalent to China or the rest of East Asia in terms of human capital and productivity. It should be noted that 2/3's of Indian state have fertility rates around 1.3, comparable to Japan and most of South East Asia is following a China-like slow depopulation. Anyone who has spent time in Malaysia is well aware of the human capital and productivity differences between the Chinese and Malays.

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Its all in the mitochondria

Quote:

And US leadership is far worse today than during those times.

That's quite an understatement.

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Its all in the mitochondria

Dimngleberry: "barring a severe economic recession, companies still need colorized hood ornaments to show how "diverse" they are. And keep them out of EO lawsuits."

Did you miss that we are well on our way INTO a severe recession -- and the companies will be firing anyone who CANNOT produce! (And EO lawsuits? Really? When the judges, the bailiffs and recorders have all died or gone disabled from the poison-vaxx?!) Are you still thinking there is a some "normal" ahead?!

Quote:

RISK in accepting dollars is known and unacceptable. Ergo, it won't happen anymore because on a risk-adjusted basis taking dollars no longer makes sense.

What happens with all the dollars the migrant workers send out of the US to keep their families going? We've seen billions leave each year.

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Village Idiot

Quote:

I'll make a prediction. The Architectural Billings Index drops every quarter through 2023 and Arch and Engineering firms start to have the first no bull**** layoffs since the 2008-09 recession.

Abso-****ing-lutely. Already seeing it.

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Stay out of the blast radius.

Are we stupid for thinking treasuries is a safe haven? Have been moving cash from bank CDs to treasuries assuming banks are going to fail and FDIC is a joke unless they get to use the unlimited .gov credit card. I suppose the argument is that when .gov defaults on it's debt then we have bigger problems to worry about than how many pieces of worthless paper you get when your 5% treasury matures.