Looking Backwards …
LB #1
America has decided to allow Ukraine to launch American weapons into Russia and now this week four Russian ships will be in Havana Cuba just 90 miles off our coast. These exercises have happened before and some in the state department are saying this is routine, but I don’t believe in routine, not after what has transpired. This from CNN, “Cuba’s foreign ministry said in a news release that the ships will be in Havana between June 12 and June 17, noting that none of them will carry any nuclear weapons and assuring their presence “does not represent a threat to the region.”
The announcement came a day after U.S. officials said that Washington had been tracking Russian warships and aircraft that were expected to arrive in the Caribbean for a military exercise. They said the exercise would be part of a broader Russian response to the U.S. support for Ukraine.
Those exercises will likely include Russian long-range bombers flying along the U.S. East Coast, according to CBS News national security correspondent David Martin. Russian warships have made port calls in Cuba before, and warplanes have flown along the East Coast in the past as well, but this will be the first time in five years both will happen at the same time, Martin said.”
Now this by itself might be much ado about nothing, but this follows Putin’s disapproval of Biden allowing US weapons to be used on targets inside Russia boundaries. This is what Putin said via ZeroHedge, “If they consider it possible to deliver such weapons to the combat zone to launch strikes on our territory and create problems for us, why don’t we have the right to supply weapons of the same type to some regions of the world where they can be used to launch strikes on sensitive facilities of the countries that do it to Russia?” he said. He then followed ominously with, “We will think about it.”
I didn’t plan on speaking about this, the Middle East, and the Taiwan situation nearly as much as I have been doing lately. However, I think this is underreported. No one in recent memory understands that war can come to your door. For years, those in London dealt with bombings, the cities of Germany and especially Japan, pre and post nuclear bombings, were just rubble. Now, we read about this happening in Gaza or Ukraine, but don’t bother to think that it could happen here. The US is provoking countries that aren’t as strong as us one vis one, but that doesn’t mean they can inflict damage as well. We aren’t considering this fact as millions of foreigners roll through our borders. If Harry Stamper taught us anything its that an asteroid must be blown up from the inside and America is acting like an asteroid.
LB#2
Speaking of asteroids, let’s talk about an asteroid that had to testify in front of congress this week. Anthony Fauci the former most expensive salaried individual in the entire federal government had to answer for his sins this week. You might remember that Fauci was the Covid czar that had his fingerprints all over the Wuhan lab. I don’t want to rehash his involvement only examine his incentives. Now that we are aways from it, we can all look back and say that Covid was a particularly virulent and vicious flu. If you have ever held someone’s head under water, you will see that when someone struggles to breathe they get panicky real quick, and when you take away their sense of smell and taste it only intensifies. We were scared, and government seized that opportunity. What made it abhorrent was the government’s response to it. Closing small businesses and letting large ones stay open, usurping constitutional rights and liberties, and the spending, my god the spending was abominable. Call it a test run to see exactly how far they could push their populace and get away with it. Adam Adrzejewski writes for the New York Post this week “During the pandemic, the American people started to feel that Big Government was very cozy with Big Pharma.
Now we know just how close they were.
New data from the National Institutes of Health reveal the agency and its scientists collected $710 million in royalties during the pandemic, from late 2021 through 2023. These are payments made by private companies, like pharmaceuticals, to license medical innovations from government scientists….Almost all that cash — $690 million — went to the National Institute of Allergy and Infectious Diseases, the subagency led by Dr. Anthony Fauci, and 260 of its scientists…Now he’ll also need to account for bombshell emails sent by one of his deputies, which described in-house strategies to circumvent the federal Freedom of Information Act.”
Remember when trust the science was a thing. Isn’t it laughable when the media told us that considering they were bought and paid for by whom, that’s right big pharma as well. I trust the science to get paid and then misinform. If I ever meet a climate scientist whose grant funding or entire financial existence isn’t predicated on returning a global warming verdict or a virologist that doesn’t say this disease could be catastrophic well, I will shake his hand or buy him a Daniel Webster cigar. I will stick with what Charlie Munger used to say, “show me the incentives and I will show you the result.”
LB #3
Last week I wrote about false assumptions and how no one should want to win this presidency. Something has been bothering me for awhile now. Ben and Jerry Joe is an idiot. We can argue if he has always been an idiot, but folks he is not mentally sound now. Now this isn’t really news, but it is when you consider that the Democrats want to have him run for four more years. The man can’t navigate inclined planes and can barely handle flat terrain. His talk is jibberish, but everyone knows this too. That is what is bothering me. There was an article this week in the Wall Street journal about Biden slipping. Bald tires slip on wet asphalt slip, Biden is well beyond that. Annie Linskey and Siobhan Hughes write, “I used to meet with him when he was vice president. I’d go to his house,” former Speaker Kevin McCarthy said in an interview. “He’s not the same person.” The Republicans are mostly saying that and the Democrats are defending his mental clarity. Believe what you will, this bothers me but not as much as something else.
If you are the Democratic party and you have Joe Biden who is going downhill faster than a Tesla in a self driving video and you want to have a long term political win then here is the playbook. You keep the economy good by lying until the election. The statistics coming out of Washington are beyond belief. They are completely fabricated. We have discussed the inaccurate nature of the CPI, how the birth death model is skewing the jobs reports, the revisions always down to the jobs reports, but the economy is hanging in there. The Dems need to let Trump win just as I mentioned last week. You make him Herbert Hoover and the Dems win for 20 years. You make him look like the worst president in years, politicians will gloat and say that’s why you need us elected professionals, and specifically that’s why you need us Democratic elected officials. We will swoop in and save you from capitalists. That is scary, devious, and very smart politics.
I think Republicans are underestimating their political opponents just as they did in 2020. They lost in 2020 because everyone with a pulse signed a vote, and mailed it in fake or otherwise. When the mail was counted Trump lost. This time I think they are trying to lose by running Biden. ZeroHedge wrote this on Friday about how the White House could suspend all the rules to get to Noember just like student loan forgiveness, “Then again, with an election on the horizon – one which ensures that any credit-card fueled spending must be encouraged – don’t be surprised if the White House instructs banks to just ignore soaring delinquency and charge-off rates… … as discussed previously…only for the hammer to fall on the first day of Trump’s new presidency.”
If Trump wins and he implements his tariff regime some analysts are saying that it could add 5% to inflation. Ball and game. That might be why the Republicans are exploring candidate options if he gets jailed during his sentencing. If he somehow isn’t able to accept the nomination, I would not be surprised to see the Dems pull Joe from the race as well.
Looking Forwards…
LF#1
I don’t know why I am jumping all over Barry Sternilcht again, but he is just making it seem so easy. We have recently covered about how much trouble his commercial real estate investment trust is in. Starwood Reit has changed the rules again. This from Yun Li and CNBC, “In a letter to shareholders on May 23, Starwood introduced new restrictions that cap monthly withdrawals at 0.33% of net asset value, compared with the previous 2% limit. Meanwhile, the firm also decided to waive 20% of its management fee.
Sternlicht said he decided to implement the cap to protect loyal clients who never redeemed, which represents 80% of his investors.
The firm said the real estate trust, one of the largest in the world, maintained $752 million of immediate liquidity as of the end of April.
Sternlicht called the Fed’s monetary policy “unbelievably ineffective,” but he believes interest rates will come down soon.”
He is now reducing redemptions sixfold. This is unbelievable and I again ask, how is this possible? He wants to move the goal posts mid game, and that is because he has to. We identified his trouble brewing by simply pointing out how he made so much money being leveraged in real estate and when that leverage works against you it is just as powerful a force. He has gone from billionaire Barry to begging that people stop asking for their money back. Usually, these vehicles are 2% fees and 20% of the profits. He waived bye bye to the profit side of the compensation because he knows there is a doughnut’s chance at fat camp of getting 20% of profits. He is trying to survive. He must have said, I’ve decided that if I allow you to take your money out I will probably go bankrupt so I won’t let you do so because if I lose my money no one will cry for me the billionaire, but if my investors start losing money there are far more people to beg for a bail out. It is insidious to use your investors as meat shields, but that’s what is happening. It is so easy to root against these pompous asses…
LF#2
We have been watching while the restaurant industry continues to flounder under these financial policies and it seems to be accelerating. Here are some stats from ZeroHedge, “Applebee’s is to close another 35 further locations this year, after shutting 46 in 2023…And I am very saddened by what has happened to Boston Market. At one time they had almost 1,000 locations all over the United States, but now the entire chain is about to go belly up…Jessica Dunker, the president and CEO of the Iowa Restaurant Association, said the reason restaurants are shuttering is because the cost of goods is up 30 percent and they are having to shell out higher wages to keep staff on…In 2023, visits to sit-down restaurants dropped by about five percent compared to 2022…”
The bad news continues to come in. People like to go out to eat, but now they can’t afford it. This is why savings are so important. If you don’t save, it will be forced upon you. That is what is happening to lots of Americans. Their fast food lifestyle is getting taken away, the morning coffee is too expensive, the only people that will be ordering from these places are the uber-wealthy that can have it delivered because they aren’t peasants that stand in line to order. This kind of aristocrat and peasant society doesn’t last long. That’s why I have been expecting the next shoe to drop is asset prices. The poor people can’t afford McDonald’s, short of being homeless what else can they lose, but the rich. Ohh, they are the next group to be preyed upon. The higher taxes which will be uber popular with the poor folks, the housing price drops, and the stock market crash will logically follow. If McDonald’s can’t sell burgers then they can’t advertise on google and the Facebook. If they can’t sell McNuggets then they can’t invest in AI drive throughs, and if they can’t sell a McFlurry then the markets will head south in a hurry.
LF#3
It isn’t just I that are forecasting a potential danger lurking ahead. Aaron Back writes for the Wall Street Journal, “In the latest shocker, the Labor Department reported on Friday that the U.S. added 272,000 jobs in May, up from 165,000 in April and much higher than economists’ expectations. The strong reading is especially perplexing because it comes on the heels of a string of weak economic reports in recent weeks, including soft income and spending data for the month of April and a lower-than-expected reading on manufacturing sentiment in May. It isn’t just government reports: Companies have been warning in recent weeks that consumers are pulling back. To cite one example among many, Campbell Soup, owner of Pepperidge Farm and other snack brands, just days ago lowered its sales forecast because it said shoppers are increasingly economizing on snack purchases and switching to private label alternatives.”
You see this is where I draw the line in the sand. If you know anything about Pepperidge Farms they make a cookie called the mint Milano that is heavenly and by heavenly they are waiting on a tray after you enter the pearly gates. There is no mint Milano at a private label. When the Milano is threatened it leaves a hole that no Keebler elf can fill. Back continues, “Stepping back, this makes a certain amount of sense. The upper cohort in the U.S. mostly own their homes, and the lion’s share are likely sitting pretty with ultralow mortgage rates taken out or refinanced during the pandemic. They are also benefiting from an effervescent stock market, including downright euphoric valuations for anything associated with the promise of artificial intelligence. They also aren’t struggling with high rates on credit card or auto loans. Instead, high interest rates are actually supplying them with record levels of investment income, as The Wall Street Journal recently reported.
It is this cohort, whether by splurging on vacations or further bidding up Nvidia shares, that is making it harder for the Federal Reserve to get comfortable cutting rates.”
Speaking of Nvidia, CEO Jensen Huang has been elevated to rock star level of fame. This from Liza Lin, Joyu Wang, and Yang Jie in the Wall Street Journal, “During his two-week stay in Taiwan, Huang received wall-to-wall news coverage, dominating the discourse on social media and on the streets where one could easily hear Huang’s Chinese name mentioned. His dining choices, from beef noodles to pork knuckles, got curated into viral lists online. Even Huang’s wife and adult children got mobbed for fan photos and interviews.
In Taipei, a young woman squeezed through the crowd, first asking Huang to sign her mobile phone. Then, she pulled aside her white cardigan to reveal a low-cut top and requested an autograph on the chest area of her shirt, according to video of the exchange that aired on local media.
“Is that a good idea?” Huang asked, turning to someone standing nearby, before obliging.”
Nvidia passed Apple to become the second largest company after Microsoft. You have toiled for decades to become a rock star Jensen, you have moved from making video game chips to AI chips at just the right time. I have my thoughts on what your customers are going to do with their chips, but I salute you for selling to willing buyers at the current fair market price. So you go ahead and sign those boobies Jensen. Your company is providing supply to meet demand and getting paid handsomely for it. For now…
Sincerely Yours,
C Thomas Printer
The Dow Jones finished trading at …..at 38,799.
The 10-year Treasury bond is at …a 4.434%
The price of Brent Crude is … at $79.62 per barrel.
The price of gold is … at $2,311/oz.
The price of silver is … at a $29.27 /oz.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.