Meanwhile, at Clown World Central Command

 

It's a beautiful building.  Too bad so many terrible plans have been hatched there.

Truthfully, I do not envy the Fed's position at this point.  No matter what they do, someone is going to shit the bed.  They came out with a quarter point cut today.  In the commentary, they mentioned that there should be no expectations of many more further cuts.   The stock market had the typical hissy fit over that statement and many share prices dumped.  (my opinion: they were over valued in the first place and should dump no matter what the Fed did)

In the meanwhile, inflation is back.  I think that all of these "Masters of the Universe" should step back and remind themselves that a large number of their fellow Great Americans are not connected to the stock market in any meaningful way.  They do not have 401k's.  They do not own a Vanguard account.  They do not know what "Blackrock" is and they do not have a Fidelity fund.  

They do repair your toilets, cut your grass, mop your floors, stock your shelves, babysit your children, etc. usually for nominal wages.  My prediction is that they are at some point going to tire of living in the Clown World created for them by the market manipulators and interest rate setters and the go-getters and the jet-setters.  Who knows what they're capable of once they figure out who's been exploiting them just so that a small number of beautiful people can buy a second private jet or a beachfront compound in the Hamptons.

For your old Uncle Kenny, watching paint dry (a.k.a. Treasury yields) was a lot of fun today.  The long bonds are showing signs of life and the yield curve is steepening nicely.  Keep up the great work Fed and good luck with all of that "transitory" inflation.  Bwahahahahaha!

A Default Laden Recession is Baked Into the Cake

 

Bankruptcy filings are on the rise and terms for credit are tighter.

Mass Expulsion - Good for Illegal Aliens and Good for Worthless Washington D.C. Bootlickers

 

Yield - It's The Yield Stupid

Noun

The amount of something that is produced, such as the profit made from an investment. For example, "The yield of the recipe was twelve brownies"

Where it comes to T-Notes and Bonds, it is all about the yield on the bond which is dictated by the price you are willing to buy the debt for in the first place.  Pay a lot for that I.O.U. and the yield is small.  Pay a little less for the same I.O.U. and the yield is larger.  

Uncle Sam is finding "true price discovery" of the value of his debt.

That little toad over at Treasury is finding out what the free market really thinks a T-Note or Bond is truly worth.  

She can't count on the Federal Reserve to ride to the rescue and buy up the debt at Mount Everest Nosebleed prices and subsequently drive down the yield by artificial means.  At the moment, she is dependent upon the free market to make up its mind about what her pieces of paper are truly worth.

Sure, anything could happen.  The Federal Reserve could say "fuck it" and turn the spigots back on and buy up Treasury paper at nearly full face value.  That would mean telling 70% of the country to suck it up and prepare to take a wheelbarrow brimming with dollars to Wal-Mart every week to buy Great Value Mac-N-Cheese, off brand soup, Red White & Blue six packs, etc.

The Fed and our wonderful leadership of the past four years managed to put its collective tit in a wringer and now it has few palatable options where it comes to removing said tit from said wringer.  All because they just could not stand another four years of the Deplorable Orange Man as President.  So fucking stupid.

James Carville is your grandfather's Democrat - someone who doesn't have his head up his ass and a person you could have a real conversation with - sad to see it is now the party completely overwhelmed with hustlers and short sighted idiots.

When "Savings" Are Artificial

"Great Americans" were flush with savings for a brief and shining moment thanks to Uncle Sam and The Federal Reserve.  It was the best of times, it was the worst of times.  Everyone was King (or Queen) of Turd Mountain.

They leveraged those "stimmy checks", PPP loans and mortgage payments / student loan payments that were not required to be paid due to "Covid moratoriums" up to the moon.  They told their landlords to "go pound sand" and used their would be housing funds to make a down payment on a Hellcat thanks to a clueless and feckless government dictate that clearly contradicted contract law.  

Our government is a spendthrift harpy and her spouse (The Federal Reserve) is an effeminate cuck who knows no boundaries and has no balls.

Well, your Old Uncle Kenny is here to piss on your parade.  The juice is gone - embrace the suck and cough up the interest payments.

So Perplexing

 

Cares Act, PPP loans, "Stimmies", American Inflation Reduction Act, etc. all would have been bad enough for creating inflation.  When you artificially inflate the supply of money available in an economy, the price of goods goes up and stays up.  Sometimes for a very long time.

It would be bad enough if this was an honest country.  Our reality is that our society is flush with grifters, cheats, illegals, frauds, "influencers", bullshit artists, etc.  Our society is so full of ass clowns that all of those "Covid 19 bullshit feel good programs" became leveraged.  How many of the idiot class took their forgiven PPP loan proceeds or "Stimmy Checks" and used it as a down payment for a loan to buy a second house or an expensive boat, car or R.V.?  A loan that they are now having difficulty in repaying.

We are truly a stupid and corrupt country.  We do not deserve to have the reserve currency of the world.  The bond market is calling bullshit (as it should).

We should be asking ourselves how we can go about restoring the faith in our currency and not just "throwing temper tantrums" and making threats when countries dare to seek out an alternative (a.k.a. B.R.I.C.S.).

"Bloomberg) -- The US debt interest-cost burden climbed to the highest since the 1990s in the financial year that’s just ended, escalating the risk that fiscal worries limit the policy options for the next administration in Washington."

When Is a Housing Market Like P. Diddy?

 

"Fraud is generally a key component of a bubble. As mania kicks in, people's concerns over fraud lessen as the perceived risk diminishes. Over time, bad actors crowd out those foolish enough to follow the rules and the market becomes dominated by fraud. This was the case with the 2000s subprime bubble and the 1980s savings and loan bubble. It's the case now, too."

P. Diddy, Puff Daddy, Sean Combs, Puff Adder etc. wasn't quite what he purported to be and Katt's prediction is proving to be spot on - Diddy was surrounded with various enablers and "playa's" and our presently busting housing bubble is also full of "bad actors". Can't wait to see who is involved in both clusterfucks.

If you are a "bubble denier", you are either in a market that hasn't as yet been affected or you are a low IQ real estate "professional" or both.

Post Debate Headlines

 

So, first let's make this statement:  I did NOT watch the Trump Harris Debate.  Not interested - watched House of the Dragon episodes with the family instead.  Our minds are made up - we are not voting for a FOURTH Obama term because voting for Kamala Harris is just that - a vote for a fourth term for the Magical Kenyan of Chicago and his crew.  He was a joke back then and he's a joke now - an articulate and clean (Joe Biden's description of then candidate Obama) joke who can give an eloquent speech but nothing more.

I was mostly interested in reading headlines the day after.  Most media outlets imply or simply state that Trump is washed up - lost the debate by a wide margin, no sense going out and voting for the loser, might as well just stay at home or capitulate and go along with the enormous number of Pro-Kamala voters who are destined to win the upcoming election...nothing to see there, just Vote Harris and the "D" ticket and allow the "Joy" to kick into high gear.

This nation's media is an absolute joke.  Exactly how much more bullshit can they heap on the public?  I know that Americans are pretty dumb but you would have to be Joe Biden brain dead to not know that your circumstances today are MUCH worse than they were in 2019.

Inflation That The Fed Once Claimed to be "Transitory" Is Now "Tamed" - My Response "Pffffffttt"

 

But, to be fair to the Federal Reserve, Congress is part of the problem.  It tasks the Fed with an impossible "dual mandate" of currency stability AND maintaining low unemployment.  So, Congress is part of the problem and since Congress is a representative body of the voting public, a large portion of the public is part of the problem.

I've written this several times over the course of several years - after observing the actions and habits of "Great Americans", the U.S.A. does not deserve the privilege of having the world's reserve currency and our rivals (China, Russia, Brazil, etc.) throughout the world agree.  The dollar will not disappear but its privilege of being recognized as the world's reserve currency is on life support (and deservedly so).

2 Year vs 10 Year Inversion - July 6, 2022 to August 28, 2024

That inversion that I've been prattling on and on and on about for what I'm sure feels like an eternity has finally ended.  

R.I.P. Covid-19 Treasury Yield Inversion.

...but don't get too comfortable just yet.  Those inversions have a bad habit of climbing out of their graves.

Quite Possibly Worse Than 2008

 

I blame the "Yellowstone Effect" - every hayseed and bumpkin with a few acres surrounding their home now thinks of it as "a ranch".

Yesterday, I had a "conversation" via text with a friend who lives in Waller County, Texas.  It is a far flung suburb of Houston with small acreage homes and some tract suburban homes with "better than Houston school districts" (like that is saying much - sort of like an average, normal kid getting into the special Olympics and beating the hell out of all of the retarded children or a biological man getting into the boxing ring and beating the shit out of a bunch of biological women).

My Waller County friend is convinced that her very modest home (manufactured double wide that is in need of either serious repair or replacement...like 10 years ago) which sits upon 20 acres of open cow pasture is somehow worth roughly 16 million dollars.  Her rationale is that at some point, someone paid $40,000 per acre for Waller County dirt and her cow pasture is worth millions.

I am new to Texas so, what do I know???  Maybe it's different here?  Maybe it's different this time?  Maybe it's different here this time?

I have a phrase for this - Texas booms big and it also busts big.  Everything is big in Texas, right?

Just for grins and giggles, I "mosey'd" on over to Zillow to check out the number of listings in Waller County, Texas and OMG do they have an absolute cow shit load of listings.  There is a whole haystack of homes with asking prices well over $400,000 that have been on Zillow for well over three months.  There are quite a few with "new price" or "price reduced" in their descriptions as well.

I don't think this ends well for the debtors or the debt holders who are signatories on all of that mortgage paper.

The Burns Bungle Part Two

 

Powell is on the cusp of fucking up (again).  That "transitory inflation" he yapped about a few years ago is proving to be a real boo-ga-loo.

Easy Peasy Lemon Squeezy

The Lower Slobovians of American Society have been feeling the pinch for quite a while now.  Up until now, the latte drinking beautiful people have remained untouched.  But, make no mistake, the squeeze comes for all eventually.

When the Hoi Polloi are out of credit and can no longer buy the "gee-gaws" that the Beautiful People import from their slave labor fed factories in the Far East, even the Beautiful People will know what it is like to run out of juice.

The comical aspect for observers like your old Uncle Kenny is that many of them will blame anyone and everyone (except themselves) for their situation.

A Minor Set Back, I'm Sure

 

I wonder if that got anyone's attention.  It's hard to say in this topsy turvy new world order.  Sometimes, bad news is good news and good news is bad news.  It's Mad Hatter World.

That's a Horse of a Different Color

Old Joe was unceremoniously put out to pasture and you're asked to now place your trust in Kamala.  She managed to put a lot of "butts in seats" at her Atlanta rally by having Megan Thee Stallion give a free performance - great turn out.  For those about to twerk, we salute you.

Kamala now has to reach out to suburban white women... she'll probably do a rally in Boise, Idaho and feature free white wine and a show from Enya or River Dance.

The pandering never ends and general public laps it up.  Pathetic.

U.S.A. Shit Show

The liberal minded, great American voter does not get the "leadership" he or she voted for but does get the "leadership" he or she so richly deserves.

The Tide of Easy Credit is Going Out

Filings are up.  Delinquencies are up.  Gee, what a surprise.  Credit is tighter (translation: those "hope and change loans" are going away for now.  The stupid credit is not available at this time.)

Do you know what economic deflationary force exists that doesn't get much press or thought?  When the loan officer, bank president, credit committee, etc. says "No - your credit request is denied".

Trust me.  A LOT of the loans that are granted and closed during "high tide" are totally stupid.  They are made by stupid people to stupid people.  When "low tide" eventually comes to the beach, credit will still be available but many of the standards are much, much higher as well as the interest rates charged.

Ronald Reagan once said that a recession is when your neighbor loses his job and a depression is when you lose your job.  It could also be said that a recession is when your neighbor files for bankruptcy and depression is when you file for bankruptcy.

Consumer Led Recessions

Yahoo Finance:  "The consumer slowdown is here and its flashing a recession warning for the economy.  Consumers are finally slowing their spending and experts say that's a warning sign of the economy.  Americans have propped up the economy with a powerful spending spree in the last two years."

Let me translate that last sentence into Kenny Bing lingo:  Americans have propped up the economy with a powerful surge of deficit spending thanks to an easy credit environment that is now coming to an end.  Tighter terms, higher interest rates and increasing defaults on consumer loans, credit cards, auto loans and other consumer finance contracts will lead the economy into a consumer led recession.

Fed Statement

 

Thank you to Zero Hedge.  Laughed out loud.

Not Wrong - Just Too Early

This interest rate inversion is very, very long in the tooth.  Make no mistake about it, 10 year treasury yields will become higher than the 2 year treasury yield at some future date.  It is not a matter of "if" but a matter of "when".  The gap between the two has become more and more narrow with short term rates going higher and higher.  When the "ship rights itself", it is going to become even more interesting than it is today.

Moving Day

 Missouri to Texas

Emptying out the storage locker.  I think this will be my last trip to Missouri and the Saint Louis region.  Time for something new.

Long Term Treasury Yields Rise

 

When an inversion eventually rights itself, the party is on (or over, depending upon who you are).

Enjoy the Ride

 So long Missouri, hello Texas.  Fed announcement later today.  The slow motion train wreck continues with a small number of people becoming incredibly wealthy and a large number of people paying more while getting less.  Fascinating.