Buffett is a bullshitter

I have a long standing prediction in regards to the global debt Ponzi and that is that those who made their names on the back of the inflationary expansion and who were carried on the shoulders of the herd as heroes during the boom will be thrown to the ground in utter disgrace and trampled by the herd during the bust.   These confidence peddlers always traded on insider information but they want to portray that they are just smarter and more insightful than everyone else when in fact they are simply part of the con.  I think Warren Buffett will eventually be exposed for this.

I don't have any evidence for this view.  To most eyes he looks like this gentle, magnanimous old wise man.  But my world view says that those who benefited from the rise of the Global Debt Ponzi know damned well what is happening and why and that they were allowed to have a leadership position if and only if they play a needed role in the Grand Operatic Illusion.

That said, I am starting to see some smoke coming from Buffett and where there is smoke there is fire.  Back in Feb of this year (2019) he sat with Becky Quick for an interview.  Interestingly, Becky was in fact Quick to point out that Buffett was changing his long time focus from his multi-decade historical go-to metric of delta book value (i.e. capital growth) and was now more interested in market value of Berkshires holdings.  Now we all know these interviews are completely scripted.  So what I see is the old maestro of bullshit (the Greenspan of industry) trying to get ahead of the real analysts out there who clearly noticed this same thing since it was called out in his annual letter. 

But as she was asking the question you hear him clearing his throat, which is not something you normally see from him when others are talking.  Even though he knew it was coming, he was nervous about the way to answer it on camera.  In any case, this is an old con man trick.  Sit with a pretty girl who is showing a lot of leg and explain calmly why the elephant in the living room is normal.  Everything he preached for 30 years as being "timeless insight" is now changing, but pay no attention to the man behind the curtain.

Another data point along this same line is that in the past Buffett would always say in his folksy, down-to-earth little way that to evaluate a business you have to go see their operations and talk to their customers.  You have to immerse yourself in their business to understand their business and only by doing that can you evaluate their business.  This is Buffett 101, something he has been saying for as long as I have seen him talk.  But at this offset in the video he apparently belittles analysts who are doing exactly that.  Listen to the condescending tone he uses talking about the complexity of it all and how there are so many moving pieces and maybe it's all just a bit over your pretty little head.  Again the message is the same: pay no attention to that man behind the curtain.

I call complete bullshit on these con man tactics from Buffett.  There are forensic accountants out there that know EXACTLY what they are looking at.  They are the new breed of glassy eyed bankers of the 1950s; number and data oriented people who know bullshit when they hear it.  Buffett can talk down like that to Becky Quick and to her viewing audience but those who he is really trying to convince, the forensic accounting fraud investigators, are not going to be put off by these antics.  More than likely they will double down because Buffett is showing fear with these tactics.

Now again, here I go with this apparent crazy talk.  Yes, roll your eyes if you dare.  But I see the big picture and all things are part of the big picture.  All boats float on the same ocean.  We have a Global Debt Ponzi based on fake money.  Of that I am 10,000% sure.  It is not an emotional "belief".  It is an engineering conclusion of fact based on more hours of study than it would take to receive 2 PhDs (20000+ actual hours by my best reckoning).  And the study was not encumbered by the logistical need to go look up things in paper books in far off libraries, or to physically attend lectures by the smartest minds in academia, etc.  The Internet makes all of this information available to everyone.  Heck, YouTube even lets me skip the video and just read the transcripts.  So I can blow through a 2 hour interview in less than 10 minutes and get all the salient data.  It's a Global Debt Ponzi for sure and for certain.  The collapse will come, not if but when.  And when it comes it will arrive with exponential speed such that childish naive minds are left saying "we never saw it coming".

Like any Ponzi, we have winners in this and we have losers in this.  When someone is winning all the time in the casino, the pit boss starts to look at them with the discerning eye of someone looking for cheaters.  I predicted long ago the coming resurgence of investigative reporting, which of course includes the modern iteration of whistle blowing. 

To remind, it used to be that a whistle blower was an insider who got tired of seeing the corruption and decided to come forward.  But everyone in the system is highly captured by the system.  And so the corruption has grown so huge that it's stench can now be smelled far outside of the boundaries of the system.  And that is bringing in the external sharks in this new version of "whistle blowing".  The SEC is captured and toothless but there are whistle blowing laws on the books that now make forensic accounting a very profitable business for those who really know how to do this work.   VERY profitable.  In fact, external "whistle blowing" is becoming the modern day version of treasure hunting.  And think about how treasure hunting affects people.  Once they see someone else pull up a chest of gold they say, "well that seemed easy; there must be a LOT of treasure out there".  Success begets success and so more and more minds, money and resources are focused on hunting treasure. 
Well, that is the last thing a con man needs.  A Ponzi cannot survive real and actual investigation. 

I will also say that the regulatory walls are closing in on the con men.  Read here in Buffet's annual letter where the supposedly conservative accounting Buffett complains about new reporting requirements:

"Berkshire earned $4.0 billion in 2018 utilizing generally accepted accounting principles (commonly called "GAAP"). The components of that figure are $24.8 billion in operating earnings, a $3.0 billion non-cash loss from an impairment of intangible assets (arising almost entirely from our equity interest in Kraft Heinz), $2.8 billion in realized capital gains from the sale of investment securities and a $20.6 billion loss from a reduction in the amount of unrealized capital gains that existed in our investment holdings.

A new GAAP rule requires us to include that last item in earnings. As I emphasized in the 2017 annual report, neither Berkshire's Vice Chairman, Charlie Munger, nor I believe that rule to be sensible. Rather, both of us have consistently thought that at Berkshire this mark-to-market change would produce what I described as "wild and capricious swings in our bottom line."

The accuracy of that prediction can be suggested by our quarterly results during 2018. In the first and fourth quarters, we reported GAAP losses of $1.1 billion and $25.4 billion respectively. In the second and third quarters, we reported profits of $12 billion and $18.5 billion. In complete contrast to these gyrations, the many businesses that Berkshire owns delivered consistent and satisfactory operating earnings in all quarters."

People who know about markets will understand why Buffett is complaining about this new transparency requirement.  While Buffett wants everyone to believe that Berkshire is some kind of reliable, "sure thing", stable money making machine, the truth is that it only appears that way when you smooth out all the volatility. But volatility is a key indicator of risk.  So Buffett is just complaining that the new rules require Buffett to expose this information to the public so that the public can see that Berkshire is filled with risk for those with eyes to see.

One final thing from Berkshire's annual letter that tells me the Ponzi is long in the tooth: enter the fall guy(s):

"Before moving on, I want to give you some good news -- really good news -- that is not reflected in our financial statements. It concerns the management changes we made in early 2018, when Ajit Jain was put in charge of all insurance activities and Greg Abel was given authority over all other operations.

These moves were overdue. Berkshire is now far better managed than when I alone was supervising operations. Ajit and Greg have rare talents, and Berkshire blood flows through their veins."

Anyone with a brain knows that insurance is very profitable until the "black swan" happens and then it all goes to shit (AIG, anyone?).  Why?  Because by definition insurance is fractionally reserved business.  For a fee you promise to make someone whole from some kind of loss.  But the fees are quite low relative to the promised payouts.  So in order to make money in the short term, you have to make a fuck ton of long term promises and then hope they all don't get called in at the same time.  But they eventually will all get called in at the same time because of rogue waves, black swans, call it what you want.  I call it the collapse of an obvious Ponzi.  And Buffett the con man knows this.  So, after all this time of taking credit for running the insurance con, he has now passed it off into the capable hands of two expendable idiots who have no idea how badly they have been set up.

Watch and see.

Japan, Inc. is dying.

If you have enough risk factors sooner or later there will be an explosion.  There are just too many attack vectors right now on the global economic system.  In other words the Global Debt Ponzi is nearing the collapse phase.  

The signs are all around.  We know about Venezuela and Argentina and also about the housing crisis now playing out in Australia.  We know how overvalued the Canadian housing market is: bug in search of windshield.  We know about yellow shirts in France, massive inflation in Iran and let’s not forget the weekly riots in Hong Kong as well as the US-China trade war and diminishing long term relationship.

But now we are hearing that Japan is swirling the bowl as well.  Not that it comes as a surprise, after all, a Global Debt Ponzi is in fact global.  But you don't hear much about Japan.

https://www.youtube.com/watch?v=GaWg-cuEHVs

 Of all the stuff I have heard, this is among the most scary for for two reasons:

1) you never hear about it and its often the "unknown" threat that gets you.

2) Japan banks know their loans are not going to be repaid and have thrown in the towel on them.  There is always one way to know for sure to see if someone wants to save the system or not: check the reserves set aside for the event.

For example, if a city intends to follow through on its pension obligations it will fund the pension program, essentially setting aside reserves for it.  Banks are supposed to keep reserves for under performing loans.  And Japan banks used to as well.  But lately they have stopped and the nonperforming loan reserves have collapsed.  And it is accelerating.

In addition, laws have been changed so that debtors, who guaranteed their loans with personal property like houses, etc. have been legally released from their collateral obligations.  This release people from their bondage, a sort of debt jubilee.  Sound familiar?  Why the fuck would Chase forgive credit card loans and now Japanese regional banks are setting themselves up to forgive HELOC and other similar loans.

It's like the banks know its game over and are looking past the coming collapse.  Those Japanese banks know that if there is penalty of not paying loans then those who can pay will pay.  But when nobody can pay, what the hell good does it do to repossess everyone's house and car?  How can a bank survive if the entire population is homeless.  If the people are docile, they will starve and certainly not be able to work for the con men who have enslaved them with the trick of fake money debt.  Besides, who are you going to sell these used assets to and at what price?  But if they are angry about being displaced en masse then the oligarchs might die in the riots.  So it makes perfect sense to let them off the hook and then see if they can re-start the Ponzi later on down the road.

Watch 2-3 minutes of this video from the time offset given in that link.

Only a fool thinks this can possibly end well.  The exact timing will always be a question but it’s a matter of months and years, not decades.  The oligarchs and their banking scam is now so over the top that there is no turning back.  And once it becomes noticeable to everyone, the collapse will arrive with exponential speed.

The mind game of liberal "tolerance" is losing control

Liberals love to push their stupid crap in the face of the silent conservative majority and then try  to use words like "tolerance" to control those who they are abusing with their bullshit.  When the liberal spirit is controlling things, they get away with it.  Conservatives (well, most of us) sit there tight lipped trying to put up with the insanity.  But this actual tolerance only emboldens the foolish liberals who really think they are running the show.  They don't see our tolerance for what it is.  And so their antics get more and more crazy until at some point the conservatives come to the consensus that the tolerance has gone too far and is not a workable strategy with rabid liberals.  I mean, after all, even the centrist liberals are getting tired of the trash piles, used needles and condoms and medieval diseases that they have to deal with because of liberal stupidity.

At some point it just becomes time to clean house and take out the trash.  That day has arrived in some countries and I think it is going to spread in the coming years because, let's face it, the ones taking out the trash do not suffer from all the dirt, disease, garbage and crime that the liberals have to put up with as a result of their ignorant and emotionally driven management of things.  And so we now have the early stages of it showing up in places like Asotthalom, Hungary.  Dailymail reports that the mayor has organized vigilante squads to go round up illegal Muslim immigrants like it was some kind of boar hunt.  His goal: show criminal migrant trespassers that there is no tolerance for their attempt to take over Hungary.

Many outsiders will be appalled by the notion of a bunch of semi-slavic rednecks chasing down illegals and then hog tying them for deportation when caught.  But soon enough it will become apparent that Hungary is better off for it.  There will be less problems, less crime, less discontent of the people and they will be more economically productive without the huge distraction of a fast breeding invasive species that refuses to integrate.

At the end of the day, the herd ALWAYS ends up doing what is proven to work and Hungary's strategy is already working.  I have checked a lot of comments on these actions on many boards, and those that live in Hungary are very thankful and proud that their leaders are having none of the fake political correctness mind fuck that the liberals are pushing.  And furthermore, people from surrounding countries are chiming in saying they wish their governments were doing the same thing.  Many people want to move to Hungary from surrounding nations right now because of this.

So to me it's obvious what is coming and the liberals are not going to like it.  When you get too far up in someone's grill they pull out the hammer.  Liberals are not the majority, they are just loud.  This has allowed them to punch above their weight in the news, in politics, etc. but don't expect it to last forever.  The conservatives will begin taking matters into their own hands to put a stop to this bullshit, fake laws and fake morals be damned.  Those control mechanisms have lost their mojo and it should become increasingly apparent here in the US in the coming years.

Age of the whistleblower is upon us.

I predict an exponential rise in what is now being called "whistleblowing".  At the highest level, it is simply insiders who are either tired of putting up with the lies and bullshit OR insiders who were part of it and now want to expose the lies in order to secure their own safety OR outsiders who, for whatever reason, are incentivized to prove that illegal and or stupid shit has been going on which negatively affects the herd.

The breakout in whistleblowing is already being seen in several areas. For example, I consider Judicial Watch such a group, focusing on illegal crony politics.  And then there is the accounting group that just put out a big report accusing none other than GE of purposeful accounting fraud.  Those are examples of the rise of whistleblowers in big government and big finance (and there will be many, many more before this shit show collapses completely).  The other area where liberal fucking liars have been running the show in order to cheat and con and fear monger the herd into giving them more than is deserved by their productive output is big science and academia. So here is today's evidence point which shows, yet again, a person who walked away from money and position simply because they were not liberal enough to keep going along with the liberal status quo.  It comes from Australia (just to show that rabid liberalism is a global phenonima) and concerns a university physicist and oceanographer who called bullshit on the great fearmongering about the loss of Great Barrier Reef and was fired and harassed by The System for calling attention to The Big Lie which is that everything wrong in the world is the fault of human life.

Well folks, the cat is coming out of the bag right now.  These whistleblowers will not be intimidated and pushed around.  They are ignoring the loss of money, position and status, and instead valuing their own morals and personal values over the peer pressure of the herd.  And what we will find is that, as the herd realizes these people are telling the truth, these whistleblowers will begin to get the respect they deserve for doing the right thing for society instead of for their liberal government masters.

And so I repeat, before this is over, Edward Snowden will be pardoned and will receive a hero's welcome as he returns to the US sometime in the next 5-10 years.  Yep, more apparently crazy shit from someone with a pretty good track record for being right about these trends.  And when I am right about Snowden and fist fights on the floor of congress (both things that most people would say can never happen), at some point you have to accept that I know something that most people don't; my world view is somehow wildly different than the consensus, yet in fact better.

It's not rocket science but you do have to know some history.  The spirit of the herd is cyclical. It goes from one extreme to the other over long cycles (Kondratieff level events).

Lebanon economy about to go into freefall

Another marginal player is getting hit now.  Lebanon government just declared a state of economic emergency.

What does this mean?  Well, if you cut through all of the noise, liberal government has been trying to stay in power by providing bread and circus, with the bread paid for using debt.  When you use debt to keep up a standard of living today, it is simply pulling forward consumption from the future.  In other words, the point will come where you simply cannot charge up the credit card anymore.  You would if you could because you know at that point you are trapped, but the credit card company has cut you off.

This is when the freefall begins because you not only have to pay for today's consumption, but also for service on the debt of consumption of years past which you put on the card.  There is no soft landing from this and it does not happen slowly.  No Ponzi collapses slowly.  It won't be different for Lebanon and when the US loses its ability to take on more debt cheaply, it won't be different for us either.

Eventually the size of government will collapse because it is an unsustainable liberal bubble.  Too many useless fucks are sucking at the teat of debt based consumption and this is completely unsustainable.  As you can see, the Lebanon government has conceded this.  Two things will happen:
1) pensions will be defaulted on. No way will the government be able to demand more taxes from the non-government work force in order to support lush retirements for government teat suckers.  The bill for government pensions is coming due and nobody will want to pay, so the government employees, who thought they had some special protected status, will get stiffed.
2) the pension system will be eliminated and government employees will be forced to save for retirement like everyone else. 

The model will be similar everywhere. What cannot be paid will not be paid.  No liberal government worker is going to double my taxes in order for them to get a fat retirement that I myself will not get.

"Hariri added that employment in the public sector will be frozen and work will begin for a new retirement system. He said officials will work on reducing the percentage of the debt through partnership between the public and private sectors."

Weaponized bureaucracy at the IRS

Judicial Watch has arisen as the tip of the sword and is putting a blade through the very heart of the liberal deep state bureaucracy.  All of the things coming out can no longer be ignored as conspiracy theory or political positioning because Judicial Watch is merely providing evidence from the collapsing system itself and showing how it represents illegal activity.  Even the most brainwashed among us will find it difficult to argue, debate or complain.  There is no moral defense for liberal big government breaking its own laws.

I think Judicial Watch probably has at least 6 or 7 very high profile investigations ongoing right now:
- Clinton gun running in Benghazi and then allowing the embassy to be overrun in order to tie off loose ends
- Clinton money laundering and theft through the Clinton Foundation.
- Ihlan Omar's illegal activity regarding citizenship laws.
    - and the list goes on.

Today they are highlighting IRSgate where Lois Lerner's IRS was weaponized by Obama in order to target conservatives.  And the evidence is suggesting that fake conservative John McCain's staff was in on it.

"Judicial Watch today released newly obtained internal IRS documents, including material revealing that Sen. John McCain’s former staff director and chief counsel on the Senate Homeland Security Permanent Subcommittee, Henry Kerner, urged top IRS officials, including then-director of exempt organizations Lois Lerner, to “audit so many that it becomes financially ruinous.

The explosive exchange was contained in notes taken by IRS employees at an April 30, 2013, meeting between Kerner, Lerner, and other high-ranking IRS officials. Just ten days following the meeting, former IRS director of exempt organizations Lois Lerner admitted that the IRS had a policy of improperly and deliberately delaying applications for tax-exempt status from conservative non-profit groups."

Sooner or later they will get the goods on a key player, and that person will realize he/she is going under the bus unless they turn state's evidence and then seek witness protection.

You, know, just like the final days of any other organized crime syndicate.

Airline indicator just tripped: recession is coming

My airline based recession indicator just tripped.  The economy is cycling with ebb and flow having to do with the so called business cycle which is really the credit cycle.  When credit is expanding because of a liberal spirit guiding the herd, people spend money more, well, liberally.  And often times there is a liberal spend of money they don't have.  Debt based consumption works until it doesn't and then boy doesn't it.

When the spending is happening, airlines are one of the best indicators.  Business travel has people continent hopping and trips to the Mouse House are abundant.  But when the spending slows down, airlines are one of the most fragile of industries because most air travel is discretionary.  When companies see the slowdown in sales, they put on travel restrictions (which are often the precursor to layoffs).

When times are good for too long, airlines begin to get arrogant and even abusive to passengers.  After all when you are in that business it must be difficult to deal with so many people every day.  After a while they have to think of transporting people in the same way a farmer moves livestock around - another load of stinking meat to move from point a to point b.  And they show this disdain in their policies.  For example, in lean times the award status is easier to achieve, the award miles have more purchasing power per air mile, etc.  But in good times, they reverse all of that, including things like use it or lose it policies for air miles.

Well just recently I got a snail mail from United telling me that good news was coming: air miles would no longer expire and evaporate from your account if you didn't keep spend-spend-spending with them in order to maintain them.  That is a clear indicators that revenues are down and that they see this as a new trend.  Instead of pissing all over their customers with punishment seats and the ever shrinking leg room, airlines will soon be announcing better seats and more legroom in coach.  No because they want to but because the conservative spirit is cutting into their profitability.  So now they have to actually compete with other airlines and fight for business because the easy money is drying up.

Mark my words, this is coming.  The airline indicator is never wrong.