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Understanding We Are All Connected

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COMMENT #1:  Re Institutionalizing of Real Estate Market
Hi Marty
Thank you for this post, I see your point that it is better that hedge funds buy real assets then plunge the world into a financial crisis with a pump and dump scam based on securitizing mortgages into packages calling them A rated when they were not… but it is very very very
bad for the american people.
In my lifetime corporations have taken over many areas where small businesses flourished –
mom and pop cafes are now Starbucks, small neighborhood hardware stores and general stores
are now Home Depot and Walmart…
We cannot let hedge funds strip americans of home ownership.
In italy, I looked at purchasing a property in Rome many years ago as I have family there.
I thought perhaps I could rent it out most of the time and use it occasionally.
Nope. The Italian government requires foreign buyers to rent out their properties for 8 years.
They have put in to place laws to dissuade foreigners and large monied interests from purchasing
homes out from under italian families and thereby kept the housing market away from Vancouver
like phenomenas or like what is happening in Florida right now.
I am sorry but I disagree that it is good hedge funds are buying homes, the middle class is taking one
more knife in their backs on this trend.
Please look out for the little guy, we need laws in place that restrict the monopolization of residential housing by financial titans.
Thanks for the blog

COMMENT #2: You may not admit who you advise, but it is clear that despite your low key, you are the only one big-money listens to. You say jump and they jump. Even China said they are using capital flow analysis and that was invented by you. All we have to do is read you and it’s easy to see what comes next. You were the only one saying this shift from government bonds to real estate and stocks. As you said, Barron’s did not believe you in 2010. Big-money did. The press may not cover you, and that is what big-money likes – exclusivity.


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REPLY: I am not arguing that hedge funds buying homes is a good thing. It is better than the way they pulled it off in 2007-2010 and it is “institutionalizing” real estate that means it will provide more stability to the entire housing market while also shrinking the availability until they need money.

The real issue boils down to the fact that those in government are simply TOTALLY INCOMPETENT when it comes to anything to do with manipulating the economy. They look at a single issue and have no understanding that everything is connected. When they lowered interest rates to negative at the ECB, there was a conflict with other CBs. I warned that if they followed the ECB, they would destroy the bonds market. Europe has done so and we now see that pushing that domino only sets off a string of events.

The reason they are buying real estate is simply that they cannot earn income from government bonds anymore. I am so tired of trying to help with talking to politicians because they ONLY act in their own self-interest. I can tell you that Mario Draghi, which is responsible for this debt crisis the world has been hurled into, would sit in trading rooms to try to understand the markets.  He had NO experience as a trader for if he did, he would understand you cannot move rates negative for there is no way out. I know traders who would see him sitting in the corner of the room quietly observing.

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As far as advice, there is a choice. I have opened up Socrates to the world. Big and small get to use it. Do not confuse the fact that I have a 40-year track record and the press will not cover me because they are only interested in opinions – not real analysis. The implication of the forecasts goes beyond merely the next trade. They reveal how the world really works. I managed money. I even ran a hedge fund for Deutsche Bank. Unless you do actual global trading, you will not see the connections. I had the lowest drawdowns and caught all the major moves since 1980.

You can claim to have made one great call. You can claim to have created a flawless model. But governments and big-money will NEVER commit to a hypothetical model. For it fails, and those who recommended it lose their jobs. That is reality. So, yes I have the longest track record. That counts for everything. I am trying to open the eyes of the world to see reality and to stop these types of shallow decisions that set in motion a sequence of events that they never anticipated.