-We love David Rubenstein. David Rubenstein  is an “American financier and philanthropist best known as the co-founder and co-executive chairman of The Carlyle Group!” We have followed his great career as well as his great interviews on Bloomberg. Mr. Rubenstein had an interview with Jay Powell today at some Economics Club. The back and forth was something we wanted to watch and to hear. We thought he asked some substantive questions and some important questions but sorry, for us, it was too cutesy. Cutesy is not good. We believe Mr. Rubenstein had a missed opportunity.-
-We do not think there is anything cute about $22 trillion of debt. We do not think there is anything cute about $trillion yearly deficits. We do believe it has been the fed who has enabled a lot of this and has done nothing to change the trajectory of all this. So in the interest of fairness, here is what we would have asked Jay Powell.-
-1) What do you tell all the savers that were screwed by the Fed by keeping rates at 0% on their risk-less income investments for 8 years…and handing that money they would have been earning over to the banks and lenders that caused the financial problem in the first place?-
-2) Why since 09, every time the markets get in trouble, the Fed either talks easier money or enacts easier money? (We would show Mr. Powell a chart going back to 09 including what markets have done leading up to his changed his stance right at the recent lows.)-
-3) Why do you keep calling it the Fed’s balance sheet? A balance sheet is supposed to contain real assets. Your “supposed” assets is nothing but the fed printing money out of thin air.-
-4) You just said you fought to have the debt ceiling raised. Many years ago, it was a sin to raise the debt ceiling. Politicians fought against raising more debt but now, you, economists, politicians and ratings service have conned everyone by saying that if we DON’T raise more debt, we would be in trouble. What happened to economics 101 that says more debt, out of control debt, is bad?-
-5) Depending on which abacus you use, there is $15-20 trillion of central bank-printed money around the globe. Europe is still printing and has negative rates. Japan is still printing and has negative rates. China is easing markedly it seems every week. Are we to the point where what central banks have done has made markets addicted to your steroids and there is no way out of this web?-
-6) And to that point. We are starting to see recessionary-like numbers from places like Japan and Germany. What ammo could they possible have left if this is true?-
-7) Where would the markets be and where would economies be around the globe if all central banks just normalized?-
-8) Will we ever be normalized?-
-9) There is now more than $250 trillion of government debt around the globe, record corporate debt around the globe, record junk debt around the globe with many saying enabled by the ridiculously low rates brought on by the central banks. What happens if economics 101 finally come into play and the markets stop reacting to everything central banks say or do?-
-10) You do know that economics 101 states that the more debt there is, the higher the rates should be? But Bernanke et al artificially kept rates down that enabled all this debt.  So what if rates finally give the middle finger to central banks that have rigged rates lower for years with the conjured up money that you say are assets but are not really assets and rates skyrocket? What is your next move if let’s say the 10 year yield goes to 5% regardless of your futile attempts to print more money to take them down?-
-11) Do you think this economics 101 scenario can play out? Is the magic number $260 trillion? 300 trillion? Higher?-
-12) Did you know that in the coming year, because of all the debt, the first $500 billion of precious taxpayer dollars is going towards interest on the debt that was created by government? That’s $500 billion not going towards the poor, the indigent, the children, the elderly, the roads, bridges and all the infrastructure promised. $500 billion to nothing. Did you know this and how do you feel about this?-
-13) If the  DOW dropped 2,000 points in the next two weeks, what would be your reaction? How about 5,000 DOW points over the next 2 months? Should it continue to be the Fed’s place to react to these market moves?-
-Mr. Powell.Thank you for your time. We know that we asked some tough questions but numbers do not lie. We are very worried. It seems many of the same people who put us in this position are still running the show and simply showing they do not give a crap about doing anything about all of this. We are now starting to see you go into your friend’s playbook that many call the “Bernanke put!” Instead of letting markets be free, it seems you are now measuring yourself based on market moves and worry this will do more harm longer-term than good shorter-term. After all, markets were supposed to be free and not move based on the whims of a few people running central banks around the globe.-
-We would have loved to ask you about your bicycle riding or your guitar playing or your salary but we think there is much bigger fish to fry going forward. We wish you well. Ladies and gentlemen, that concludes this interview. Have a great lunch and drive home carefully!-
3 replies
  1. Avatar
    John A says:

    RE: Powell’s Interview

    Herbert Stein’s Law: “If something cannot go on forever, it will stop.”
    Jean-Claude Juncker: “When it becomes serious, you have to lie.”

    “Cutesy” is the only format Powell can accept. He will not participate in a hard hitting drill down interview. He can’t. Powell understands “Steins Law.” He knows it has to end badly. Like the other Fed chairmen, he will kick the can down the road and pray to God the inevitable doesn’t happen on his watch.

    He will take Jean-Claude Juncker’s position on telling the truth and avoid putting himself in a situation where he might be forced to tell the truth. That would violate the Fed’s unwritten third mandate – keep the markets propped up.

  2. Avatar
    Richard Miller says:

    All the things that have been in your mantra for years – Gary – Why don’t you contact your network friends – FOX, Bloomberg? perhaps – and submit these very important questions – Yahoo Finance is a possible streaming venue now… You have important financial issues and questions that do need to be addressed and also made aware to average investors out there. The big firms have quants and speed trading at their fingertips Alogo’s, CLO’s, Derivitives,Dark Pools etc. and average investor is in a wave pool.
    Do not forget that not only is there total manipulation of central banks but now we have a President that is attempting manipulation by social media as well. The very thought of Normalization of anything at this stage is seemingly impossible. When times are good the sound school of thought is to pay down debt – all the political capital as well as the depletion of the GOP went into the tax cut for the so called middle class – we shall see how many refunds actually result and the marginal tax revenue increase. I submit that we should have a National Debt Reduction Force instead of a Space Force at least for now until the games of Space Invaders and Asteroids become Art imitating Life.

  3. Avatar
    anti semite says:

    For all intents and purposes, Yoda’s indicators are telling him, .. that the market, .. is at the 50d- moving average, and very slightly more bullish, than bearish.
    That said,
    Yoda still calls for a market pullback.
    After the pull back, we shall see….
    Yoda the all knowing,
    Yoda the all wise.

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