Gregmal

I’m kind of ok with the idea of guaranteeing deposits. These aren’t speculations and aren’t people taking risk; they’re putting their money somewhere that is federally regulated and should be safe. $250k is a joke for an individual and for a business it’s nothing. People don’t store money under the mattress anymore, that’s how it’s evolved…if they are mismanaged, it’s either fraud, or a government fuck up. Here it’s kinda both. Who in the world didn’t have enough time to see this coming? It’s been orchestrated for 2 damn years. At the same time, if Powell is going to get power drunk and recklessly jack rates with no awareness of anything just cuz he s mad people still have jobs….is that really the fault of Sally running a tech startup or her employees hoping to get their paycheck next week? Even all the cash hoarders…how is your money safe if these things start becoming precedent? I had an investor years ago, one of the wealthiest dudes in Bermuda….was a conservative, old school guy. Had $42M in a Lehman money market fund in 2008…..there need to be lines where people can assume safety and not be held to some super duper high due diligence standard or “shoulda known better” scolding. Putting your money in a bank where you get 0% in return should qualify for that.

I cleaned up on the financials in the GFC aftermath trade but I still have trouble getting excited about them. I may mock all the drama queens and yes, it’s amusing to me how earnings revisions weren’t quite doing enough to get below 4000 SPY so we needed to drum up a banking crisis, but largely, things just aren’t exciting one way or another for the most part. A banking crisis that walloped much of the inflationista playbook at that, imagine? Lol. Even here, banks look like 10-20% annualized returners which is fine, but there’s an awful lot of bagholder risk on the table too. BAM is just a clear no go for me at this point. I keep trying to find reasons to sell Fairfax, but can’t because it’s so damn solid and still not a glam stock, and otherwise am starting to buy MKL and hopefully another crack at Berkshire a little lower. But the range of outcomes on the traditional banks just seems to be gyrating all over. Powell is totally hypnotized on this idea that people having jobs and getting paid more is bad even though we are on the verge of a massive collapse in inflation and possibly even deflation. It’s all just a peculiar situation. So generally after much pontification, I just have been doing nothing but continuing to be long well located shelter and 1%er prosperity.

Added some MANU sub $20. Flirted with the idea of some USB but just couldn’t get excited about it

Does any bank ever really manage risk the way normal people with skin in the game do? The bigger banks all basically just look at the regulations and get as close to them as they can and then look for ways to get around limitations. Banking has become automated even though real people still do most of it. It’s just box checking without a care in the world for context, which generally works, but when there’s an outlier typically everyone has been making the same mistake or using the same workarounds.

Weren’t banks the high rate beneficiaries? Too funny. The hedgies got the puppet to do exactly what they wanted. It’s dangerous chasing something that does exist. But hey, at least jay showed everyone his credibility lol

Yea this would go down as what’s called an asset sale in the finance biz lol or transfer of the assets. Carcass is done

Keep listening to your academic buddies and hedge funds Jay. They’re using you like they used Summers and Co who walked us into GFC. Derivative deregulation is good for the economy! Good to see another solid jobs print though. Can’t help but root for the normal guy against these monsters.

Still can’t really find much to buy. So I bought some MKL

Warren: "In other words, you don't have a plan to stop a runaway train if that occurs," Warren said. "Chair Powell, you are gambling with people's lives. And there's a pile of data showing the price gouging and supply chain kinks and the war in Ukraine are driving up prices. ………… Are people really arguing that those 3, well definitely the latter two, aren’t major contributors….to the backwards looking datapoints everyone is currently looking at and extrapolating out in perpetuity? And if you really wanna argue no price gauging(I hate that word, it’s capitalism) look at homebuilder margins….what % of the “inflation” is influenced by shelter??

5% caused by events of 2021 and early 2022 that are far, far in the rear view mirror to me are a nothing burger. Just like rents going parabolic for 12-18 months around 2021, but still showing up in various datapoints even into 2023…so will the 2021 inflation boom. This chump is sitting here acting like it’s still happening based on weekly datapoints and acting like Heinz charging $6 for ketchup highlights the problem. It’s absurd. If one year from now we are at 5% I’ll totally eat my words. But people are fixated on 5% right now which is preposterous because to come down from the levels we were at last summer you need to roll off the numbers and that’s all there is to it. You go case by case and majority is far from inflationary. People screaming about energy costs are either liars or uninformed. Housing? Peaked a year ago. Hasn’t inflated at all last 12. Grocery? Again depends what you look at. Commodities, not much there either, to the tune of like 30% DOWN year over year for the Dow index…yet people like Powell get to keep talking unchecked. If we think it’s a tax, well we already get hit with those too. They’re part of life as well. Unless in addition to raging about the inflation tax, we re planning to riot at the Capitol over the bigger ones too?

I don’t think there’s many times where I ever agree with Elizabeth Warren but she totally nails the issue here. Who does this jerk off think he is playing with the lives of millions of people on little more than a whim and an academic theory peddled by people with conflicting interests, predicated on short term, largely meaningless weekly datapoints, largely influenced by theoretic stories about all the doom and despair it’s “guaranteed to bring” in the future, if not handled now?

So now the sinisterness of inflation, is that the Ivy leaguers getting paid 6 and 7 figures annually to run the mega corporations, can’t properly budget? I guess I give up. The new ongoing list of reasons this is such a big deal and warrants such persistence in terms of stealing people’s jobs just keeps getting more ludicrous.

Well the point is that theres a lot of screaming about something that just isnt really that big a deal. Did anyone really think that margins wouldnt come down at all from 2021? Of course they would somewhat. There were a lot of unique one offs anchored to the events that occurred during covid that had to normalize. Something like Kraft/Heinz or KO were largely viewed as shitty businesses pre covid. Buffett got a ton of flack especially for KHC. Same point and I agree with you on eggs. OJ too. Its just how this stuff works. Folks need to deal with it. Instead, and again my general point, just like with the "oh energy prices are ridiculous" bs, theyre just grabbing at these datapoints in absolute terms and without context, most people doing it are probably doing it dishonestly and intentionally, in order to manufacture some 1970s style inflation issue that simply doesnt exist. If people wanna pay $6 for a certain specific brand of ketchup they'll either do it or they won't. Supply and demand imbalances stemming from inflation arent the issue. Thats dumb. And thats the inflation narrative being peddled.

https://www.reuters.com/business/retail-consumer/few-signs-us-companies-curbing-profits-after-powell-says-it-could-cool-inflation-2023-03-09/ So like whats the game at this point? The capitalists are lazy, and angry restaurants and trips are expensive, so they want handouts in the form of interest as they root for things to occur that remove a big part of the capitalist element from the market? Theyre probably doubly mad they arent getting vacation homes for pennies like they did last time the system was gamed by Summers and Co. So they demand higher interest until they can get bargain basement prices on equities again? Is that it? Why not just let people keep paying prices they are ok paying until they are no longer willing to do so? That would be sinister of course.

Of course, thats part of this scheme. The people telling us how "instrumental it is to tackle this thing".....ask them, oh how do you benefit from this? Lobbying for more interest, aka freeloading in the form of getting something for absolutely nothing? Are you short, IE you benefit from the actions you are proposing to "solve the problem"...Are you hiring but cheap and pissed off because you dont want to pay market rate for labor?...interesting. All this stuff has lags and ebs and flows. Most things went nowhere for the decade following the GFC. COVID and our government turbo charged the catch up...its here, it occurred in 2021 and 1H 2022...its largely over. Prices rose, theyre not coming back down, deal with it. Shit also costs more now than it did in 1990...thats life. I also think pupil, especially being a RE investor, knows that public company accounting, may not always be accurate in picturing whats going on. Especially if whats occurred is more recent. Market rate rents went parabolic in late Q4 2020 through 2021 and then basically stopped going up. But the reported financials are still bleeding through rent growth. You can see this stuff plain and simple with your eyes...why would you rely on accountants using complex classifications when the info you need is right in front of you? With food, your gap between store brand and premium brand has blown out massively, which isnt inflation. At a certain scale, the inputs, aka the aluminum cans, tomatoes, delivery routes, etc, all cost the producers the same. So why the larger than normal gap?

Cost of tomatoes went up bigly….but only for Heinz lol? A guy I know, his family owns a groups of regional supermarkets. He explained it quite well using canned seltzer water. Look at the entire isle. 90% of it is controlled by 2-3 distributors. Whether it’s soda, juice, poultry, frozen vegetables, fresh produce….2-3 control 90% of shelf space. So as the store brand…you offer a 12 pack of seltzer for $2.99. Your competitors used to be $3.99-4.99. Now they’re selling 8 packs $2/9. Maybe your production cost went up, sure, but so does everyone on the shelf, but if your goal is to be a value prop for the customer, and you’re in the business of making money, you can raise from $2.99 to $3.99 whether it’s warranted or not, because what’s the alternative?

You can call this lots of things, but calling it inflation is bullshit.

Remember all those socially aware corporate benevolents who in 2017-18 pledged to raise their minimum wages from like $15 to $20 an hour by 2022? There were tons. Now they have to deliver and the voices with all the money are the loudest screamers that we have to put an end to it…ironic eh?

It varies for sure. Restaurants and entertainment type stuff, 100%. Stuff that relies largely on low end labor…yup. Blue collar labor is en fuego…and good for them. Those workers got screwed for the last 15 years by corporates and wealth schmucks because they had no leverage. Waiter couldn’t say fuck you I’m out nor could the truck driver. Now they can. Not to get too hung up on snack food, but something doesn’t add up if your margins in 2019 at $2.49 a bag are higher than they are in 2023(largely yet to be factored into reported figures) at $5+….I certainly don’t have the time or care enough to get into the granularity of trying to parse the accounting mechanisms of a company this size…but it doesn’t add up when you look at the inputs for those types of products and also then account for a world class distribution network.

These have largely occurred in the last year, and especially that last 6 months while the input increases largely precedes that. If investing in super duper large blue chip stocks was my thing, I’d probably wager heavily on those margins going up over the next 12-24. Same with something like Lamb Weston.

So really it’s a multifaceted economic evolution that’s taken decades to play out, mainly through consolidation. Companies are raising prices and consumers bitch but they’re ok with it…yet these government schmucks and hedge fund guys just say “inflation” and declare we need to spray nukes until it stops? Won’t the consumer just simply say, no, at some point? Rate hikes haven’t solved much of anything, really. They’ve dropped housing activity, but prices? Not really. Energy? Is fine despite robust consumer activity and travel the past year. At the start of the inflation campaign a year ago a bag of chips was $3.50….nope there. Big victory though on Beyond Burgers…way down in price. And of course Joe and Tom six pack can now get their hands on a 15 year lease in Times Square! But otherwise, as was mentioned from the beginning, the rate increases won’t do much because the issue isn’t rooted in anything rates can solve. But let me guess…the folks who short the market screaming for rate hikes will just claim this is evidence we need more rate hikes lol?

What part of the Cheetos got hit with enough inflation to warrant prices moving from $2.49 to $5.99 a bag? Corn? Vegetable oil? The plastic bag? Manufacturing process is entirely automated. Guess Chester the Cheetah asked for a raise? A lot of the food price increases are simply being done because they can. which end of the day isn’t a bad thing. People shouldn’t be eating that junk anyway.

So much of this continues to shine through as bullshit. For once, it’s great to see these do nothing politicians destroying Powell for his tunnel vision obsession with jobs. Jobs are good you clown! The government shares the blame, but sitting here with such a blindness to the bigger picture is recipe for disaster. This has become a stealth war, waged by big corporations and greedy rich people on the average Americans…pissed off and grumpy that labor is expensive, interest rates for freeloading at zero risk aren’t higher, and that it’s expensive to dine out. Energy is not an issue. Housing is where it should be after a generational event and a decade of under building, and when you look at food, you really see this core issue…government created industry…wage price spiral my ass Cheetos are $5.99 a bag now up from $2.49. Your cost inputs for Fritos didn’t double in the past couple years. You just have 40% of the shelf space and your one or two competitors are like oh cool, more money! Same with anything from a farm…you create industries with oligopoly like features…yup, airlines now too, this is what you get. That’s life. Playing these games with rates in an attempt to part the have nots with what little they have is downright sinister.

Was talking to someone earlier and the subject came up and I couldn’t figure it out, but look at energy prices right now. Compare something like oil, to like the last decade or two. Why are people getting a free pass on just declaring energy prices are too high and part of the dreaded inflation problem…no, they are not. Not even newsworthy or close really lol.

Thirty two hundred! Even if just for a split second so I can say I called it!