Rick Rieder bullish, sees "epic" cash on the sidelines

I’ve never seen so much money sitting in cash.

~ Rick Rieder, BlackRock's chief investment officer of global fixed income, "BlackRock’s Rick Rieder sees ‘epic’ cash on sidelines as he takes lead role on new ETF," MarketWatch.com, May 23, 2023

Hans-Hermann Hoppe on the state

The state is an institution run by gangs of murderers, plunderers and thieves, surrounded by willing executioners, propagandists, sychophants, crooks, liars, clowns, charlatans, dupes and useful idiots - an institution that dirties and taints everything it touches.

~ Hans-Hermann Hoppe

Ryan McMaken on recent contraction in the money supply

The fact that the money supply is shrinking at all is so remarkable because the money supply almost never gets smaller.  The money supply has now fallen by $2.2 trillion (or 10.2 percent) since the peak in April 2022.  Proportionally, the drop in money supply since 2022 is the largest fall we've seen since the Depression.  (Rothbard estimates that in the lead up to the Great Depression, the money supply fell by 12 percent from its peak of $73 billion in mid-1929 to $64 billion at the end of 1932.)

~ Ryan McMaken, "The Money Supply Has Plummeted in the Biggest Drop Since the Great Depression," Mises Wire, May 11, 2023

Michael Milken on what landed banks in trouble

You shouldn't have borrowed short and lent long.  Finance 101.  How many times, how many decades are we going to learn this lesson of borrowing overnight and lending long?  Whether it was 1970s, the 1980s, the '90s and again here.  The banks have enough credit.  They had enough equity.  The had enough ability to absorb credit losses that are coming.  

However, what they did was doubled, tripled, quadrupled their size by borrowing overnight at artificially low rates and buying intermediate securities.  There's $30 trillion of them out there and let's say they're worth 85 cents on the dollar.  Who has an unrealized loss of  three trillion dollars?  What we know, number one, is the Fed has the largest share of that loss, $800 billion or $900 billion, but they can print money so that isn't an issue...  What we saw here is organizations - great companies - like Silicon Valley Bank, like First Republic, what they turned themselves into was adding to income by borrowing short and lending long.  In the case of Silicon Valley, really government agencies, municipals, in the case of First Republic, fixed-rate mortgages with floating rate liabilities.

So this is Finance 101.  People are so focused on credit risk, etc., but one of the great risks is interest rate risk. 

~ Michael Milken, CNBC interview, 1:15 mark, May 2, 2023

Michael Kantrowitz on the coming recession

The conditions of every recession since 1960 - there's been eight - there's three preconditions: the Fed hikes, we have an inflation problem and we have tighter lending standards for banks.  We have all three of those conditions today.

~ Michael Kantrowitz, Piper Sandler chief investment strategist, CNBC interview, 3:00 mark, May 11, 2023

Jamie on the regional banks: "they're quite strong"

The regional banks, who I've been speaking to every day for the last week, they're quite strong.  They're quite worried about the run on deposits, but their financial results are good, their financial results are going to be ok next quarter, they're earning money, they've got a very good clientele, very diversified.  And they're quite strong.

~ Jamie Dimon, Bloomberg Television interview, 1:00 mark, May 11, 2023

Charlie Munger and Warren Buffett on the keys to success

Munger: It's so simple: You spend less than you earn and invest shrewdly and avoid toxic people and toxic activities and try and keep learning all your life, etc., etc.  And do a lot of deferred gratification because you prefer life that way.  And if you do all those things, you are almost certain to succeed.  And if you don't, you're going to need a lot of luck, a lot of luck.  And you don't want to need a lot of luck; you want to go into a game where you're very likely to win without having any unusual luck.

Buffett: I'd add one more thought, though: You need to know how people can manipulate other people and you need to resist the temptation to do it yourself.

Munger: Oh yes!  The toxic people who are trying to fool you or lie to you, who aren't reliable in meeting their commitments, the great lesson of life is get them the hell out of your life.

Buffett: Yep.

Munger: And do it fast!

~ Charlie Munger and Warren Buffett, 2023 Berkshire Hathaway annual meeting, May 6, 2023

(video posted by Vitaliy Katsenelson, see here)