And every time there's a good financial number that comes out that scares the markets
into thinking that maybe interest rates are going to keep cooing up, which they
are, you know. And it's what appened today was we had to blow
out jobs number, like you said, and interest rates went up in the
US. You're listening to Carrie Letts's Financial Survival Network where you get valuable information
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ever, And welcome. You are listening to watching the Financial Survival Network.
I'm your host, Kerrie Letts. Well, blowout jobs report? What does
that do? It breaks the markets because bad news is good news and good
news is bad news. And I'll leave it to John Rabe you find him
at Rabeto dot substack dot com to figure out which is which because I don't
know anything anymore. John. So is the job report a good sign or
is it a bad sign? Hey? Jerry, Well, you know,
normally rising employment is a good thing, and it would be in the normal
world, but this isn't the normal world, and end up, especially with
the financial markets. They they got so full by the FED pausing in its
interest rates increases last month, m into thinking that this was it, that
we were done and we were going to go back to easy money. But
it turns out that's not the case. And every time there's a good financial
number that comes out, that scares the markets into thinking that maybe interest rates
are going to keep coming up, which they are, you know. And
so it's what happened today was we had to blowout jobs number, like you
said, and interest rates went up in the US. The ten year treasury
no yield is now back up over four percent in the US, and mortgages
are backup over seven percent. So those numbers are extremely bad for financial asset
prices because, for instance, stocks compete with bombs, and when the yield
on a bond or on a money market fund or a short term piece of
treasury paper or whatever the rises way above the dividend yield and the average stock
then people see no reason to take the risk of stocks when they can get
twice the yield by buying fixed income paper, and so that's bad for the
stock market. Also, rising interest rates lead to recessions, which is also
bad for stock crisis. So now stocks it starts, are down hard today
as interest rates are out and the reason for that is that now everybody's starting
to think, oh my god, maybe interest rates are going to go up
and that's going to break the market and cause of recession? And what kind
of a recession will it be? Will it be really deep and dark like
two thousand and eight, two thousand and nine, will it be even worse
than that, like the the gloom and doom set And soon you've got stocks
tanking now And in any event, this market is so overdone. You know,
this is the worst market breath that the US hayson P five hundred has
ever seen. There are only five stocks now recounting for almost half the increase
in the SMP five hundred in the last year, and that can't be sustained.
So you know, we're at at the point where interest rates are still
going up, and that they're at they're at a level that can break the
market. Eden stocks are starting to fall and the Fed has no choice but
to raise from here and definitely not tightened from here. So this is a
really it's really a normal historical setup or a nasty equities bear market. So
let's see if it plays out that way. But this is how it went
in nineteen ninety nine and two thousand when the tech stock bubble burst, and
in two thousand and seven two thousand and eight when the housing bubble burst,
interest rates went up along with stocks until rates were high enough to break the
market. We're kind of back there again right now. So let's see if
it plays out the same way, which means, let's see if we get
a nasty equities bear market from all of it. Hey, and it threw
in on that. On top of all that, the Supreme Court saying that
the President doesn't have the authority to negate student loan debt, which is supposed
to cost to student loan borrows, and now fifteen point one billion per month,
and you you got the makings of an interesting economic meltdown. One thing
I would like to point out I've pointed out on other shows John the top
publicly traded homes builders last week, so other stocks hit a five year high,
and with interest rates going up, is is completely counterintuitive. And and
we also saw a new home sales rebound. Was it either last week or
the week before. So maybe all this is just the subterfuge and the money's
really going to start pouring out even more soon. I'm not sure what to
think. I have the home builders as short candidates on my substack portfolio,
and the reason for that is that, as you said, rising mortgage rates
tending to hurt the housing industry and the home builders in particular, because they're
you know, they're like the leverage play. You know, they've got hey
roles and they've got inventory and everything, so they need a steady flow of
new houses and they fat rise up. Then their business model just crashes and
burns and their stocks tank at all. That has happened in the past,
so we'll see if it happens again. But they're down hard today at least
where you're right. Yeah, everything's down pretty hard today, and the home
builders are among the stocks that are getting act along with all the commodity complex
and you know, gold and silver. Everybody's down. I have a big
long portfolio on the subtack and literally one stock out of maybe thirty is up
today. And that's something I'm junior miner that has some specific thing happening today.
It's really good. Otherwise everything is getting smashed us to struck plutonium in
the Ukraine or something like. Yeah, I should have looked at see why
it was up, you know, because there might be a reason. Well
I know what it is. I'm sorry, and I do know what it
is. They fired their CEO a couple of days ago. Well that's bullet
and well you know, the stock tanked. So now it's rebounding from being
down like twelve percent a couple of days ago when most of the miners were
up. So I don't know everything. Effectively, everything is down now,
okay, So, as you like to call it, the big toy indicators
flashing RV sales and ROLLIC sales are down bigly. We've been sounding the alarm
about rolex Is for a good three or four months, but normally you'll get
a blip on that indicator and then they'll go higher. It just tells me
that things in China are way worse than anybody any of you out there think.
It's even in really weird times. There's a lot of billionaires out there
buying the most expensive thing in whatever category, right, so there's always a
market or high end stuff, which means when when high end things roll over
that means you've got trouble in a sector of the economy that doesn't normally display
trouble. And rolexes are a good time event. So so rbs, I
mean, our RV's a one step down. They're not the rolex population.
They are the you just say eat a bellomn RVs are for suburban guys.
Well, actually there are two categories of RB buyers. One is the people
in the RB subculture where they drive around and they park at different places,
meet their friends and have a great time. That's fine, that's that's a
subculture that does its phone thing, and that they aren't really a sign of
anything. But the part of the RV market that is a sign of something
is the suburban male. It's always the husband, okay, who has the
boat and the motorcycle and a big house and he's looking around for the next
toy, and he says, why don't I buy a house on wheels pop
one hundred and fifty thousand dollars and drive it somewhere once every three months?
You know, That's basically how it works. So at the peak of the
cycle, when when guys like that are at their most confident, is when
RV sales boom, and then at the bottom of the cycle, when everybody's
having to go through their toy inventorI and sell them all. Um, that's
when RB prices crash. So we're starting to see that market rollover rbs.
RBY prices are down, RBY sails are down, but he's still wearing your
overall. You know. I looked up what it costs to borrow money to
buy an RV, and the potential interest rate is crazy. Like at the
low end it's just eight or nine percent, so it's not much more than
a house, but the range can go up into the twenties and thirties percentage
wise, which means if you don't have great credit you try to buy an
RV, they believe you dry and so there's probably people out there doing that
too. So at higher rates really impact everything bought US sales, home sales,
RV sales. I don't know how many people buy rolex Is on credit,
but there's probably a number out there that dode if you have to borrow
to buy a Rolex. Yeah you're not a legit rich guy, you know,
but you're a pretender. Yeah you're opposer, but credit. Look,
credit runs the economy. So the question is when things really start blowing up,
John, how long is it going to take the FED to go into
full scale panic mode and say, uh, we didn't really mean it.
We're going to support economic growth and inflations under control. We're not worrying about
that. So everything is great. By the way, a July fourth cookout
was up, but twenty nine percent this year from last year. So I
mean, yeah, especially if you're cooking steak, then it's up even more.
It's like double hot dogs. Well, whatever they throw in there,
hot dogs are the ultimate proof that the substitute effect is alive and will right,
because if they can't get whatever they throw in there, they can always
find something cheaper to put into a hot dog. Right. Um. Yeah,
that's like the old saying is you don't never want to see how your
laws and your sausages get made. Odd dogs are then example of that case.
You know, you go to a hot dog factory and never eat hot
dogs again. That actually happened to my sister. She went out a tour
of a hot dog factory. This is like forty years ago, and she
never ate meat after that. She not only stopped eating hot dogs, she
became a vegetarian. Is though the same thing happened with Milton Burrel. His
friend took him on a tour of a slaughterhouse, and this was back in
the forties, and for the rest of the guy's life sixty some odd years,
he never eat another piece of meat. So this is a case where
ignorance truly is bliss. Well, you know what I think that we should
ask Robert F. Kennedy Junior to do when he becomes president is put on
amcourt, not cam qurters what you know, killibras, Yeah, body jams
like the car what webcams, that's the word. I was thinking of webcams
in all the slaughter house so that there would be channels where we could go
online to see what's happening in you know, sniffield farms, um slaughter houses,
and then we would see where our food comes from. And I think
that would be very useful information. You know, I've talked about this with
other people who said, no, now we you know, nobody would eat
meat anymore. We can't do that. Well, you know, if that
would be the price of knowing the truth, so be it. But you
know, I think we should know all of this stuff, all these things
where we we only do things because we don't know the truth of it.
We should really know the truth of it, and slaughter houses are definitely one
of those things. Maybe then they can put some cams up in the cricket
farms, since that's what the World Economic Form is trying to get us to
eat, to insect protein because it's good for you, right, yeah,
yeah. You know. The thing is, I don't necessarily have anything against
the concept of eating bugs, because eating you know, when you think about
eating meat, that's pretty gross too, and I totally do that, But
if it comes from the World Economic Forum, I'm automatically against it now.
So it doesn't even you know, seventeen minutes cities or whatever, fifteen minutes
cities, you name it. There. Every one of their ideas is horrible
or at least easy to spin in a horrible way. So, you know,
the only optimistic thing that I get from the World Economic Forum and George
Soros and people like that that they're all incredibly old. You know, Bill
Gates is a he's seventy something years old. Klaus Schwab is looking like Joe
Biden, and George Soros just retired, So it could be that that whole
generation of would be dictators is going to leave the stage before they succeed in
taking over. The next generation who comes in won't be nearly as crazy as
the current generation. We'll see. That would be a nice thing to hope
for. Paris's son seems to be as crazy as him, like when it
comes to putting in prosecutors who just let criminals walk, and well, you
know, we don't have to get into all that, but yeah, what's
bad for the World Economic Forum is generally good for humanity. But if you
watch what's happening in France, I mean, this is like the George Foy
Floyd riots on steroids. They've called out forty thousand cops. If it continues
all much longer, they'll be there'll be a shoot to kill or shoot to
injure. Well, that is the that is the inevitable result of open borders.
If you if you let so many people come in that um it's impossible
to integrate and assimilate them into a society in an orderly way. M Then
you get stuff like this because you basically create a second cl as citizen read
that is so big that it can't be managed, and that's what happened with
Europe in general, in France in particular, and uh, you know,
what's what is their choice now? Um, they could round up the last
five years worth of immigrants and ship them to Algeria or someplace, or they
could try to assimilate them, um in ways that it would be incredibly uncomfortable
for the you know, the native French population. And I don't know what
other solution there is. You know, you only have those two solutions because
um, either you you know, you change your culture in ways that make
it possible for everybody to get along, or you slice off a big chunk
of the culture and ship it somewhere else. And neither of those is a
workable solution. So I don't know what they're They're prognosis is it doesn't look
good. No, well, you know, they kind of have these things
that happened regularly, Like New Year's they burn hundreds of cars throughout the country.
They burned down the public library in Marseille. Now, like what library
wasn't doing any harm? Where they're going to put their homeless people. If
it's like the United States, we house a lot of homeless people during the
day at libraries, public libraries throughout the country. So which is really where
not where you should put awnless people. You know, any plans we're putting
our kids, we should not simultaneously put homelest people. But um, yeah,
you know we're we're seeing the early version of what France is going through
because the quality of life in our big cities is already just plunging. Oh
and that's not that's not largely an immigration thing. That's more of a drug
and mental illness thing, you know, where we're just not managing those populations
the way you have to. You know, there are places that have done
it well. Switzerland confronted the whole drug thing and solved it, and a
lot of cities that don't have homeless people. You know, they figure it
out and made it work. You need they see the solutions cross political lines.
That's the problem. You need some stuff that conservatives are appalled by,
and you need some stuff that liberals just won't do under any circumstances unless there's
the gun to their head in order to make us to work. Apparently based
on the places where it has worked, So we need some really painful compromise
on these issues or other or else it's just going to keep getting worse,
you know, And we need to obviously close down the southern border for ten
years while we try to sort out all the people that have come in and
in the last few years. And then we need to institute policies it tongue,
you know, make it illegal to camp in downtown San Francisco, stuff
like that. Yeah, and not just there, it's Austin. It's the
only cities where homelessness isn't really a huge huge problem are the cities that really
crack down on public drug use. And they arrest these people and they say,
you can go to jail, or you can go to drug treatment,
but you're not going back, and they keep doing it until finally, hopefully
these people come to terms. But you know, if PJ. Or Rourke
said that, I think it was him that said a liberal is just a
Republican who hasn't been mugged yet. Well, yeah, maybe we should change
that to a liberal is a conservative who hasn't stepped in human excrement yet in
one of our major metropolitan areas across the country. Yeah. Yeah, you
know, in this given time, if we don't have a societal collapse because
of our finances and we don't have a nuclear war. We won't work this
stuff out because these problems are solvable, immigration and homelessness and drug use,
that this is all stuff that can be fixed by a healthy society willing to
think outside the box. My beer, especially for my kids who are going
to have to live there a dull lodge in the world that we're creating,
is that we're not going to be the kind of healthy society that's able to
fix these basic problems because we're screwing up on such a fundamental level. Otherwise,
we're on the verge of World War three twice with Russia and China,
and we're we're heading off a financial cliff that is just going to be so
brutal when the time comes. But yeah, but all of that is a
little bit further down the road, and right now we've got a garden variety
or recession coming, garden variety, equities, bear market, that kind of
stuff. And so that's a lot to talk about for us in an ongoing
way. But we still got these big looming things out there. But I
think are the really scary part of the picture today. Let's not forget that
our generation, the baby boomers are also retiring, drawing down on Social Security
and Medicare and Medicaid too, because if you don't have enough money for a
nursing home, you go on Medicaid in most states, and they pay for
it. So intractable, intractable problems by any stretch, How do you You
can't say to you and me, Look, we understand you paid into Social
Security and Medicare your whole lives, but there just isn't enough to go around,
So take half. You know that is not a recipe to get reelected
in the modern America, is it No? But mathematically it has to happen
one way or an of it. Here's what baby boomers did when seen through
the eyes of younger generations. Here we the boomers brand forty or fifty years
of extremely easy money policies which made our stocks go way up and our houses
go way up. So we have massive paper wealth right now, and younger
generations are closed out of easy stock market profits and of homeownership at all.
Right, So now a lot of us are healthy. You know, we're
going to live a really long time, and so these guys are you know,
they're hoping to inherit pretty well. But we're not going to die.
You know, Boomers are just sto going to kill over and let those guys
inherit all this stuff that we accumulated. We're gonna keep it for a really
long time. So, you know Gen X millennials, they they've got a
difficult twenty or thirty years ahead of them watching us enjoy our retirements while they
can't even buy a starter house. Um. So politically, um, they're
gonna lean towards massive cuts and Social Security and Medicare, but they're not going
to be able to get it through because we're still such a politically powerful generation
that we will protect our benefits. So um, you know we're gonna We're
gonna go to the grave as a completely self interested generation. They've dominated the
world for the from you know, beginning to end. It's historians will not
be kind to Baby boomers. Right. So we got some big court rulings.
But the first one is in Supreme Court. It's a federal District court
judge in Louisiana who've banned a number of government officials from contacting social media with
the intent of a suppressing speech. Now it doesn't apply to crime. FBI
can still talk to them if there's somebody's committing a crime, it doesn't apply
toal security. But I think the fruxt of it is they're trying to get
the government out of the disinformation determination business. Basically the Secretary of State can't
contact them, Homeland Security cannot contact them, whole list of government officials.
I mean, this could really be a major victory for the people. Huh.
Oh, this is huge. It has the authoritarian left absolutely treaked out.
There are some details that have to be understood with this which make it,
you know, less likely to stick, but also way more interesting.
But this was a couple of Republican states going to court in the court of
a Trump nominated judge. Okay, and see he came out and said what
you just said? He said, yeah, yeah, you can't the FBI
can't get involved with private character of companies telling them to censor people who are
saying, oh, I don't think kids should be vaccinated, or you know,
having basic difference of opinion with government policy. So it's possible that because
of the people involved right now, that this gets overturned on appeal. But
it's also possible that the appeals go all the way to the Supreme Court who
will be really sympathetic to this idea. So it could be that this goes
back and forth for a year and some the Supreme Court who just locks it
down, you know, who makes it the law of the land wherever,
and that that would be I think it would be very cool, you know,
if if we ratified the First Amendment by making it, you know,
explicitly unconstitutional for governments to get involved in public speech, which that's the way
it always should have been. You know, it was only lately that these
novel concept Yeah. Yeah, and if we lock that down, then then
you will have to say that Trump was an incredibly consequential president, right because
it's basically his judicial system and making all this happens. Yeah, you know,
he he is locking or well, if this goes all the way to
the Supreme Court and is upheld by the Supreme Court, Trump will have locked
down some very important freedoms for a generation, if not more. In fact,
we are going to put a link to the decision. I'm getting it
off a politico, but it doesn't matter, you know. My personal opinion
is that this is pretty much bulletproof. He issued it on July fourth,
of his ear which is like, all right, I just don't see any
court having the cahonies to overturn this. Maybe they'll dump it on a procedural
basis. So it's only a seven page decision. I encourage all of you
out there to read it. I just think it's bulletproof. I don't think
doesn't mean they won't find a way around it, okay, because hey,
that's what lawyers do. But and hey, what about the fact that the
New York Times has outraged over this that the government can no longer control disinformation
or what they determined to be disinformation. You know, one man's propaganda is
another man's truth. John, this could be the most important case from the
courts. I mean, there's a few of them out there, but the
courts have basically failed us during the pandemic. They failed us. You know,
in so many instances the court has failed us. Will this be the
one example where they actually come through and protect the constitution and what the country
stands for. I think that going again, this decision going to be very
very difficult, no matter who nominated you as judge. That's going to be
fun to watch when when the appeal layouts in like a DC court or something
like that so much some very liberal set of judges have to hear it and
they have to publicly agonize over what to do about it. That's going to
be fun, you know, And knowing that the Supreme Court is there as
a backstop makes it something we can just enjoy instead of worrying about. Because
even if the liberal court of the liberal appeals court decides to overturn that decision,
there's still another step. It still goes to the Supreme Court. So
so we'll see. But yeah, I think I think there's a lot of
theater that's going to be fun to watch between here and the end of this
process. You know, it might be a couple of years really before of
where this is completely settled. How do you justify how do you justify it?
Though as the government free speech blah blah blah, you know, how
do you justify censorship? You know, I don't think there is a justification
for it, especially when the censorship is so inconsistent where it's really aimed at
one aspect of the political spectrum. You know, it's generally people on the
right who are getting censored. People on the left can say and do whatever
they please. Maybe this is all a result of Musk's takeover of Twitter.
The meantime, we had three other big rulings there. One an affirmative action
where basically the court said, you can't use it to consider who goes who's
admitted to a college, web design bakeries, compelled speech where they can't be
forced to do work, or gays or any other people that they don't agree
with, especially on religious grounds. Seems to be some merit there. And
then finally student debt, where the court pretty much said, it's a great
idea, but the President does not possess the powers to forgive or to basically
declare a college debt jubilee for a portion of college debtors, or as we
like to think of them, John A's college student loan debt slaves, right,
So it's kind of like we could be going to a civil war over
this. Could be like the dread Scott case of student loan debt, which
causes the young overindebted up to their eyeballs. Students with student loan debt dropouts
whatever, it's mainly dropouts, so have the problem people who actually complete their
degree most of them are. But maybe it'll cause a rebellion among college you
know, student loan debtors. All right, that goes back to the baby
boomer thing. You know, we got through college when it was super cheap,
right, and to the extent we took on loans at all, the
stock market went up so much that we paid those loans off with no trouble.
And so we're free, most of us. But the generations that followed
have you know, two hundred and twenty seven thousand dollars to get a second
tier law degree, stuff like that that they'll never get out from under.
And our student loans, the loans where you can't even declare bankruptcy or get
up. Yeah, okay, so in bankruptcy you literally can never get out
from under them. Hotel California, Yeah yeah, the ivy like but she
could never leave. So anyhow, that's a very big that that actually that
that court case was a separation of powers. Bright whether Congress makes a law
that spends money on something, what the presidents allowed to come back and say,
oh, no, okay, we're just going to cancel that whole you
know, the spending program and everything, and it serves out he can't.
According to the Supreme Court, Congress has to manage a spending program, which
is what the student loan plan is. The other one that's really interesting was
about a web designer who didn't want to make a website for a gay wedding
or something like that, which that's been a debate that's been going on for
a long time, like if you're a bakery, do you do you have
to make cakes for people who your religion says you shouldn't participate with and everything,
And then that's always been a fascinating argument because both sides kind of have
a point, right, But in this case, they made it a freedom
of speech issue, where by participating in you know, by making a wedding
cake or by setting up a website or something like that, you're you're participating
in public speech and you're being compelled to speak in a way that you disagree
with. And that's what the Supreme Courts had was that you cannot compel speech
in this way. So so, okay, it sounds like that settles all
those different cases out there that have been pending for a long time, I
think, and I think so. And we've got a link to the decision.
This one's directly the Supreme Court, so you can read it there long,
long winding road. Like the Beatles said, I mean this is this
is one of those ones that the lawyers will fight over for years. But
the concept is Congress has power of the purse and it's up to them to,
you know, to basically pull the plug on student loan debt. But
you know what it's going to happen. We talked about basically debt. JU
believes they're having one in China now. Millions and millions of people have stopped
paying their mortgage payments because they were paying mortgages on hollow shells and buildings that
would never be built because the developer abandoned them. The money all got stolen.
They took the deposits. That's a little lightning and thunder going on it
in Florida here for a change, they took they took all the money and
they used it to finance other projects, payoff CCP officials, and now there's
no money left to finish them and the buyers are left holding the bag.
Point is, it's not just a unique situation here in the US, it's
a global situation. John. The only thing that's gonna be able to treat
the problem here, to save the patient is a complete debt jubilee. Believe
that for the past, since I got in, since I started doing these
podcasts, I think that's what it's going to be now. Well, Kirie
in flay is a form of debt jubilee in that it makes your debt,
you know, five percent or ten percent less onerous every year, so in
the same way that it's a tax increase, right, So that's a secret
way to do this stuff. You just inflate away the currency. A full
on debt jubilee would run into a lot of the same problems as a you
know, student loan forgiveness or something like that, because you would need an
actual law that passes Congress and the Senate and is signed by the President.
So you need all those different groups going along with it. And that's a
pretty hard sell, as we see right as we are, it's a it's
a very hard sell. But in the end, there is no solution other
solution because as you've said, and I've said many times on the show,
the debt is unsustainable. The increase in the rate of debt is unsustainable.
And now with interest rates going up, the ability to service the debt it's
becoming harder by the day. Arry, you know, you know what there
apparently is something that they can do, which is stimmy checks. They did
that already and got away with it. What are Congress. Yeah, well,
and but giving constituents free money is something that kind of sells pretty well,
at least in stressful times. So it's possible that you pass something like
that, only make the check bigger. Make it fifty thousand dollars stimmy check
for everybody. Of course, you destroy your currency, but you get reelected.
Well, fifty thousand dollars stimmy check if you don't have any student loan
debt, and keep it. If you do, you got to use that
check to pay down your student loan debt. Any halfway measure, it's just
not going to work. You know, there's going to be an ah home
aha moment where everyone on the planet realizes can't pay it back and we're gonna
have to start. This goes back to the Bible. You know, every
seven years a mini jubilee, in every forty nine years, a major debt
jubilee. I don't see any other way, but hey, we'll see to
what they come up with the Biden administration to try to counteract this the meantime,
I think I'm going to lose my power here. We're having a massive
thunderstorm. Maybe we'll get a tornado. Who knows. Make sure you go
over to John's substack. It's Robino dot substack dot com. We're always at
Financial Survival Network dot com. Leave your comments below please, and John we'll
catch up with you in a couple of weeks. All right, Cheris,
see you go run around in the rain a little bit. That sounds like
fun. Thanks for listening to carry Lens's Financial Survival Network, your solution to
today's trying times. For the latest, go to Financial Survival Network dot com.
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