Political Posts

[John Hjorth]

On 5/22/2025 at 11:34 AM, John Hjorth said:

 

This weeks KAL cartoon at the Economist [15^th May 2025]:

 

 

This weeks KAL cartoon at the Economist [5^th June 2025]:

 

 

- - - o 0 o - - -

 

I have a suspicion the humor here applied may have quite some appeal to the cranky humor of Jeffs [ @DooDiligences ].  

[Loss Horizon]

3 hours ago, Blake Hampton said:

I just fear that our system is badly broken in a way that is creating deep generational divides and wealth disparity. Of course, the people who will inherit all of this wealth are probably over the moon.

 

I believe the biggest part of the problem is the past decade of ZIRP. When interest rate goes below 1%, asset prices tend to aim for a 100x multiple. Home is a financial asset, so home prices moved towards 100 years of yearly rent.

 

Success of ZIRP would make home ownership physically impossible unless inherited. In reality the prices didn't reach 100x, but what we got is already practically unaffordable.

 

At the same time old home owners enjoyed massive appreciation in price without doing anything.

 

If central banks come to their senses, the prices for homes will go down again to valuation balance against average salary, according to the rate. But if the rate is not above 10% again, we'll never see real estate affordability of 70-s and 80-s.

 

I'm personally hit very badly by the rate policies, but I'm optimistic that the valuation balance will recover in the next years. At least current 10-years rates don't threaten with near-zero any more.

Edited June 7, 2025 by Loss Horizon

[Gregmal]

For most, buying your first home is going to feel super risky, and highly irresponsible. It's going to make you squirm, and the timing likely won't be perfect. Often learning to deal with and manage these feelings, and overcome them when it makes sense, is the key to getting ahead in life. If you want to be like everyone else, you'll get what everyone else gets. If you separate yourself, or take risks others won't, you'll have a chance to succeed. 

[DooDiligence]

22 minutes ago, John Hjorth said:

 

This weeks KAL cartoon at the Economist [5^th June 2025]:

 

 

- - - o 0 o - - -

 

I have a suspicion the humor here applied may have quite some appeal to the cranky humor of Jeffs [ @DooDiligences ].  

 

Works for me   way funnier than jokes about respected forum members sleeping with their wives friends in exchange for financial advice.

[Spekulatius]

3 hours ago, gfp said:

Yes we have a bad situation with increasing wealth disparity but some of that is just the age of the people and the long lives they have had to compound their savings.  It's no surprise that old people have all of the money.  Use that kind of Munger-like inversion to reverse engineer how to become them when you are old.

I think this is a a good way to think about wealth creation. Most people that came to money owned some sort of business and didn’t live a flashy lifestyle. A know quite few families in MA and CA that got there owning  a business and real state very long term through generations and kept compounding. It’s helped that in these states real estate has done very well. The same approach might not have gone anywhere in the mid west. 
 

Most business only last a few decades and may not survive the first generation as they are very operator depended. If next generation screws it up, the wealth probably will be lost.

[changegonnacome]

1 hour ago, Loss Horizon said:

If central banks come to their senses, the prices for homes will go down again to valuation balance against average salary, according to the rate. But if the rate is not above 10% again, we'll never see real estate affordability of 70-s and 80-s.

The more likely path (one Buffet is priming BRK for) is the Fed bails out the fiscal via yield curve control…..inflation up, yields down/suppressed , dollar down….fiscal dominance I think is the nomenclature. In that world you’d want to be owning hard assets financed to the hilt. I can’t think of a scenario (outside insane Japanese level property bubbles) where well located property financed conservatively that you can live isn’t a good idea for 99% of peeps….the US Gov is shorting the dollar….you should be to!

[Spekulatius]

I think home appreciation will slow household formation boom from the millennial generation is over. It will also help longer term if interest rates and the mortgage rate remain higher. No quick solution for the housing issue, but perhaps a slow one.

 

Zone low changes would also be big help if they allow for more housing units in desirable areas. It probably requires some executive action to put pressure on states which put pressure on cities etc to get this done. Top down should work better than up ground up, since the latter favors NIMBY policies.

[Blake Hampton]

Add Fink to the list:

 

Edit: I do not agree with everything this man says, but I do think that most of what he says is important. He’s certainly not stupid.

 

Edited June 7, 2025 by Blake Hampton

[Blake Hampton]

^ I recommend listening. It’s pretty good.

[Blake Hampton]

I’ve thought about homes quite a bit, and it’s definitely an interesting subject. I think over the long-term, that real estate is almost always a good bet if bought at modest prices and you know that you can keep making that mortgage payment in a severe downturn. However, I’m not sure whether real estate is necessarily the best place to be right now. The government basically owns 80% of all the outstanding mortgage debt in this country. Screwed up credit markets, combined with lots of job losses, could make for an interesting period.

 

It is not a healthy market.

[Blake Hampton]

“I have no idea what these next seven days are going to be, but the next seven years I’m very confident in.”

- Larry Fink

[Maverick47]

20 hours ago, adventurer said:

Who cares about role models when you have a President that made egg prices drop by 400%! What a beast!

 

 

 

 

 

 

 

 

 

 

 

 

Right?

Let’s suppose that eggs used to cost $10 per dozen under Biden.

 

I think what Trump is trying to say here is that “he alone” is able to make an egg-based money machine.  For every dozen eggs we acquire under his leadership, we will now apparently get paid $30.  All we need to do now is decide how many dozen eggs we need each week to provide us with the wherewithal to live a quality life.  No need to hold a job, invest for retirement, or save for a down payment for a home.  And who cares how high the tariffs are set?  It no longer matters how expensive imports become, since we can just buy more eggs to compensate.
 

For all my international friends, in case the egg  economy doesn’t work exactly this same way in your particular country, just let me know how many dozen eggs you’d like, and I’ll be happy to forward the egg proceeds to you (less the eggs of course…don’t think they’d travel that well, so I guess my family will just have to get used to eating a steady diet of omelets and souffles).

 

His business acumen is simply amazing!

[John Hjorth]

What a way to start my Sunday morning! :

 

Daily Mail - dailymail.co.uk [June 7^th 2025] : Gory details of Elon Musk's 'rugby tackle' of Scott Bessent spill out as White House leaks escalate.

 

- - - o 0 o - - -

 

 

12  - 'The Walrus' - 

 

- - - o 0 o - - -

 

The American entertainment industry might as well close shop and go home, entertainment is now done by the White House! 

[Spekulatius]

@John Hjorth Someone needs to create a soap opera. West Wing - MAGA edition.

[DooDiligence]

7 hours ago, Maverick47 said:

Let’s suppose that eggs used to cost $10 per dozen under Biden.

 

I think what Trump is trying to say here is that “he alone” is able to make an egg-based money machine.  For every dozen eggs we acquire under his leadership, we will now apparently get paid $30.  All we need to do now is decide how many dozen eggs we need each week to provide us with the wherewithal to live a quality life.  No need to hold a job, invest for retirement, or save for a down payment for a home.  And who cares how high the tariffs are set?  It no longer matters how expensive imports become, since we can just buy more eggs to compensate.
 

For all my international friends, in case the egg  economy doesn’t work exactly this same way in your particular country, just let me know how many dozen eggs you’d like, and I’ll be happy to forward the egg proceeds to you (less the eggs of course…don’t think they’d travel that well, so I guess my family will just have to get used to eating a steady diet of omelets and souffles).

 

His business acumen is simply amazing!

 

Let them suck eggs! I'm starting to think Wharton might not be a good business school.

[73 Reds]

13 hours ago, Blake Hampton said:

I’ve thought about homes quite a bit, and it’s definitely an interesting subject. I think over the long-term, that real estate is almost always a good bet if bought at modest prices and you know that you can keep making that mortgage payment in a severe downturn. However, I’m not sure whether real estate is necessarily the best place to be right now. The government basically owns 80% of all the outstanding mortgage debt in this country. Screwed up credit markets, combined with lots of job losses, could make for an interesting period.

 

It is not a healthy market.

Blake, if you base your otherwise long term investment decisions on whether or not the market is right "now" you will always miss the boat.  

[John Hjorth]

1 hour ago, Spekulatius said:

@John Hjorth Someone needs to create a soap opera. West Wing - MAGA edition.

 

@Spekulatius,

 

Yeah, - brilliant idea! 

[changegonnacome]

13 hours ago, Blake Hampton said:

I think over the long-term, that real estate is almost always a good bet

 

You think?

 

I've got an asset class for you:

 

- that over long periods is almost guaranteed to go up by a minimum of the rate of inflation (the story of inflation is policy makers trying to keep it at 2% but averaged due to spikes (like 2021) out its more like ~3%)

- now that 3% almost guaranteed nominal return can be financed (via FHA loans with only 3% money down)

- that's right you can have a leverage ratio of 33.3 to 1 on an asset returning ~3% p/a with non-callable fixed rate debt that can be refinanced at any time of YOUR choosing into a lower rate/term instrument.

- thats a return on equity of 100% with a financing vehicle deeply skewed in your favor

- the cost to hold this 'trade' cause you have to live somewhere either rented or owned - is the delta between what you would pay in rent vs. this mortgage...in lots of cases its really not that much different....

- then tax system shows up

- the tax system is setup (via mortgage interest relief) to try and squeeze this holding cost 'rent-own' delta down further

- the tax system is setup (via home sales tax exclusion) to ensure any gains on sale from holding an owned principal home aren't taxed

 

As I say to lots of people playing this rent/buy game........what the hell are you waiting for exactly?!

 

 

[John Hjorth]

1 hour ago, Spekulatius said:

@John Hjorth Someone needs to create a soap opera. West Wing - MAGA edition.

 

A bit off topic, yet not, and certainly political :

 

@Spekulatius,

 

Last evening late, I saw episode 5 and 6 together with the Lady of the House of season 1 of a new Danish / German crime and drama series, in Danish called 'Andre folks penge', translates to English from Danish by 'Other People's Money'.

 

It's about the likely largest international tax fraud likely ever uncovered, commited against several European states, including I think primarily, by country size, Germany, France, Denmark, Italy and Belgium, involving Cum/Ex trades in shares in large European companies. We have discussed it before here on CofB&F, I recall.

 

IMDb page in English language,

Wikipedia page in Danish language : Andre folks penge,

Wikipedia page in German language : Die Affäre Cum-Ex.

 

- - - o 0 o - - -

 

I was so exited - and appalled! - last evening after experiencing episode 5 and 6, that I started a search after my usual and daily morning  digital news paper reading to get to episode 1 - 4, too. I found them at a public streaming service related to the public Danish TV channel called DR, a streaming service called DR.tv, which is included in our tv and streaming package.

 

So I have now swallowed all 6 episodes including the two from last night once again.

 

It's just awesome, and appear well researched related to what has been going on here in Denmark, and I assume it's the same with repect what has happened in Germany.

 

From reading the German Wikipedia page about the series, I understand that it should be available for you in NC, USA from and on ZDFmediathek [, if you have access to that].

[Milu]

4 hours ago, changegonnacome said:

 

You think?

 

I've got an asset class for you:

 

- that over long periods is almost guaranteed to go up by a minimum of the rate of inflation (the story of inflation is policy makers trying to keep it at 2% but averaged due to spikes (like 2021) out its more like ~3%)

- now that 3% almost guaranteed nominal return can be financed (via FHA loans with only 3% money down)

- that's right you can have a leverage ratio of 33.3 to 1 on an asset returning ~3% p/a with non-callable fixed rate debt that can be refinanced at any time of YOUR choosing into a lower rate/term instrument.

- thats a return on equity of 100% with a financing vehicle deeply skewed in your favor

- the cost to hold this 'trade' cause you have to live somewhere either rented or owned - is the delta between what you would pay in rent vs. this mortgage...in lots of cases its really not that much different....

- then tax system shows up

- the tax system is setup (via mortgage interest relief) to try and squeeze this holding cost 'rent-own' delta down further

- the tax system is setup (via home sales tax exclusion) to ensure any gains on sale from holding an owned principal home aren't taxed

 

As I say to lots of people playing this rent/buy game........what the hell are you waiting for exactly?!

 

 

You make quite the persuasive argument but aren’t all these benefits already factored into the price the market is willing to pay for real residential real estate. No free lunch and all that. 

[Spekulatius]

Mortgages are the cost of capital and those are around  7%. I bet most homes don’t have a 7% cap rate. Thats also reflected in the other key metric, which is housing affordability. So I don’t think SFH are a good deal right now.

 

For SFH purchases, post GFC 2009-2014 and perhaps up to 2017 was a golden opportunity that won’t come along too often.

[Blake Hampton]

Sick burn:

 

"A simultaneous hatred of trade deficits and embrace of government borrowing is utterly contradictory—perfectly normal, in other words, for Trumponomics."

The Economist: Trump thinks Americans consume too much. He has a point

 

Edited June 8, 2025 by Blake Hampton

[Blake Hampton]

"The complexity of markets is dizzying, and in complex situations even the iron laws of physics can produce surprising, unstable results (think of aeroplane turbulence). More important still, finance is ultimately driven by people, not particles, and they do not always respond to similar stimuli in similar ways. They look at what happened last time, try to do better, anticipate what other traders will do and seek to outfox them. The absence of fundamental laws in markets is frustrating, disorientating—and what makes them so interesting."

 

The Economist: Why investors lack a theory of everything

[DooDiligence]

59 minutes ago, Blake Hampton said:

Sick burn:

 

"A simultaneous hatred of trade deficits and embrace of government borrowing is utterly contradictory—perfectly normal, in other words, for Trumponomics."

The Economist: Trump thinks Americans consume too much. He has a point

 

 

a busted clock and all that

 

I just had a garage sale and although I did sell a bunch of junk, you'd be surprised how hard it was to give stuff away for free on a Sunday.

 

Downsizing, minimalism and frugality are catching on partly due to economic concerns but mostly because we're tired of buying stuff.

 

https://medium.com/@madhviddwivedi/exploring-the-popularity-of-minimalist-living-in-2024-e480d07c4b2e

 

https://www.euromonitor.com/article/global-consumer-types-minimalist-seeker

 

===

 

I've had numerous discussions over the past 5 or 6 years with other like minded minimalists. From my time at Pensacola State College, to discussions at the YMCA with classmates / workout partners all the way to random garage sale attendees.

 

Here's a microcosm that I see expanding to other segments of the economy.

 

https://library.oapen.org/handle/20.500.12657/48282

 

https://www.elektronauts.com/t/downsizing-your-hardware/204807

 

https://www.elektronauts.com/t/gas/8820/128

 

===

 

and ironically, there's research to help brand managers target minimalism and frugality in the economy.

 

https://business.columbia.edu/sites/default/files-efs/citation_file_upload/Consumer Minimalism JCR 2021 FINAL.pdf

 

===

 

and finally, my annual recommendation of Frederic Pohl's "Midas World"

 

Do more with less...

Edited June 8, 2025 by DooDiligence

[DooDiligence]

The number of counties across the country that seemingly voted D for every down ticket race but didn't vote D for president (or vote for any president) is concerning. The biggest clue that trump cheated in the 2024 election? He kept saying he was going to cheat in the 2024 election. He also openly asked for Russia's help with hacking in 2016.

 

https://dissentinbloom.substack.com/p/the-machines-were-changed-before

 

Make no mistake. We are under attack.

The calls are coming from inside the house.

 

https://www.cia.gov/readingroom/docs/CIA-RDP73B00296R000200040087-1.pdf

 

edit: attached the document linked above.

CIA-RDP73B00296R000200040087-1.pdf

Edited June 8, 2025 by DooDiligence