2019 Year in Review Pt. 2 - Dave Collum Show Notes

2019 Year in Review Pt. 2 - Dave Collum Show Notes

At the end of your year in review, you said we are stuck in 1984, and that everybody else seems to be partying like it’s 1999. The stock markets higher, best economy ever, trade deal. But it doesn’t seem like anything getting is getting any better.

It seems like something is wrong; it is in the air.  It is all connected with social change.  This is something I have been trying to wrap my head around. I think there are two themes that will exist in 2020 over the next decade and one of them is this growing social change brought on by the huge monetary changes that the Federal Reserve has been pushing down our throats, not just the Federal Reserve but essentially every central bank around the world. And the second theme in 2020 is the emergence of surveillance capitalism and its regulation as the primary theme and pushback in the next decade. One of the things the growing lack of any privacy rights with FAANGS And other technology companies and the interdependence these companies have with the US Government over tracking/surveillance of their own citizens.

When I write this survey, first of all, I rather explicitly started with my Number 1 topic and my Number 2 and then wrote it. I worked my way through the list. In part because every year I have more than I can write about. I then write the conclusion at the end because it is the act of writing this document that tells me what the conclusion is. I don’t think a lot of people think that way.

“If you don’t change your mind multiple times while writing a book, you are doing it wrong.” ~ Johan Goldberg

It is the act of writing it and making it coherent; that process helps the idea migrate from your head to your gut. What the conclusion became is an extrapolation of social change.  What is the implications of these changes?  I had all sorts of information on it.

On the surveillance side, there is so much hidden away.  There is another way too, that is new: the crowdsourcing that social media offers is extraordinary.  Chlorine attacks in Syria were debunked and used as an excuse for us not to pull out of Syria.  The whole chlorine gas attack story was full of holes. The shooting down of the Iran airline by Iranian government is another example.  Denial is your first defence. I thought they handled it well by saying we did it.

Iran is going to be one of the bigger stories in 2020, and it wasn’t even in 2019.  I had never heard of the guy in Iran before we fired a missile at him.  Dead bodies in the Middle East are not rare.  The media is partisan and useless now but getting to the truth would be better.  I worry more about Brennan than I do Putin.  I hate Bolton.  He’s not Iranian so he must be a good guy. They let ex-intelligence people come on the news and bang the war drums on the news.

There are a number of pre-Snowdon types out there. One thing he has not invaded any countries yet unlike all our other presidents.  He does look like he’s trying to get out of the Middle East. I am willing to let them have it out with themselves and take care of itself.  Let the Saudi’s be the policeman.  If there was a country worry of being a sheet of glass, it’s Saudi Arabia.  The Saudi’s do have a lot of power in the region.

I did not write about finance this year at all. Although it looks like a powder keg, no one has lit it yet. I am waiting for someone to kick off the football. I wrote about the repo market; it is a huge underlying stress in the system.  It will be a bloodbath when it happens. The victors do not laugh; the vanquished weep. I can’t celebrate people’s pain.  S&P is still at all-time highs and corporate debt is 80% junk.  There is a massive housing boom in 2009/2010; where did all those houses go? Private equity bought up all the properties.  The screw part takes over; people pay higher rental rates as a result.  RealVision told a different story – There are millions of houses with people living in them that are still not paying their mortgages and nothing is getting foreclosed. No one wants to record the loss. This has been going on for a decade now since 2010. The interest is being added onto the principal and no one is collecting it. Some financial institutions are carrying completely and utterly worthless debt and claiming its valid. How can they roll forward the debt? Low-interest rates. To carry this debt, what are you paying? This is the repo market, which is why it is going through this cardiac arrest right now. Something has gone wrong. But the idea that there are millions of people living mortgage payment free was news to me.

How long did it take you to realise how the repo market works?  I got a call from a guy who used to work at Citibank… he called and tutored me on the repo market. Every morning, the major financial institutions decide how much they need to lend to the leveraged speculators. This is basically the wild west of money flying around the globe. Then at the end of the day, they close their positions and collect their money. And that is the overnight lending rate which is low risk. This process takes place around 830am in the morning. It’s not done by computers but between actual people. Then what happened is that banks stopped lending. The primary dealers like JP Morgan and Goldman Sachs decided not to lend back into the market. Now for the leveraged speculators, they can’t roll over their loans so all of a sudden you have this seizing up of the credit market at the end of Q3 2018.  The idea behind the Federal Reserve was to even out the cash flow; this is why they were set up in regions.

When the equity markets started falling in the Autumn, what most people didn’t know is that the credit markets had frozen up. I didn’t know it easier.  Powell early January – we are back to the races, QE starts again.  End of 2018, there was a lack of liquidity; now in 2019, the market is awash with liquidity as they keep pumping it into the system. Is the Fed dumping money in and out at the beginning and end of every day? This is Federal reserve putting US$100 billion dollar putting it into the market and take it out every day.

REPO madness – the idea was by no means original.  Boy, I think the internet is letting us down. We are up 976 points up today and 42% up since last year in the S&P and the NASDAQ is up even more. The Fed has our back… the money has to go somewhere.  It’s unbelievable.  Apple stock is up £142 dollars since last year. That is the speculative mania.

Let me rephrase Chanos (the guy who brought down Enron): Just because the Bond Market is in the biggest bubble in recorded history, doesn’t mean that the equity markets should be there too, right?  This relativism is a fundamental problem. That is a Fed talking point, and eventually, even smart people start repeating these talking points.

We are super valuations, and the economy is doing fine because it is on steroids.  The market does euphoria before it crashes.  On some fateful Tuesday at 2.03pm the market will reach maximum optimism as reflected by maximum price. That will be moment where the justification for that optimism is Zero. It is insane to me that they can create these recurring bubbles.  The 2000 bubble, the real estate bubble (you could see it in 2002) and then when it burst, we did see it coming.  Then we blamed the bank.  I think people are going to be mad and it is going to mean and people on the streets.  Look at the French protests, in my conclusion; I said violence is trending.

The means of protest are evolving. Today this is completely leaderless. It is what occupy wall street started. Flash mobs where people could organise in a brainless way; this is where it started.  The organisational quality of the digital world is amazing.  In China, they limit the number of people who can join a chat group to 500.  I think there is bigger push back in the US than in China. Over-surveillance will not come to the US as people are scared by the US government using these methods like China.  They are not private companies, and the authorities were on the ground floor of every company in Silicon Valley.  There is a Mossad and CIA venture funds in the valley.  Did you mention this in the review? The reaction of googlers to the fact that the US government was working with them on certain projects.

The section on Epstein is about a much bigger web of people that has been going on for over a hundred years, that ties into Mossad Agents. The Epstein affair risked exposure for this web of people, so they haven’t successfully done it. We are not arguing about who killed Epstein. Where are these people?  Why is Bill Clinton not in prison having rode the Lolita express 26 times?  No one is going to talk about it.   The most recent rumour is that she is in a safe house in Israel. I don’t think Epstein is dead. I think it is the biggest scandal in US History. They are furiously trying to put it away. There is no one in a position of power that is not going to let the scandal unravel.  It involves 1000 of people and decades of time. Therefore no one will ever let it get out of control if they can help it. What about the victims? Kevin Stacey’s victims got whacked off.  They get whacked off if they step up.  I don’t think they could kill him because he had too much dirt on everyone.

Look at Pentagon Papers.  If every one of his residences has videotapes of famous people, it is all there. With the Epstein case, the case can just be shelved since he died. All that information should not be publicised.  Everyone is linked to him. They all want to be the Elite so they all agree it cannot fall apart.

How hard was it to pry the mob open? It took decades. The differences is that the mob and the defence department were on different sides. There is no one to go after the bad guys because they are all on the same side.  This case will be left like the end of Raiders of the Lost Ark. All the information just gets buried and never gets released to the public.  There are so many people who should be going to prison for so many things.  It has to be very bad.  It means he pissed someone off.

I was hired by the Kennedy’s to defend Oswald.  Kennedy was offed by a conspiracy.  When Clinton pardoned Mark Rich; this is because he was an Israeli asset. He issued over 1100 pardons.  They were all drugs and bank fraud. He was going for the money.  The whole thing is theatre. The former prime minister of Israel is all over Silicon Valley. Same with the Saudis. Mainstream media does not touch this.

Roy Cone was a kingmaker and Epstein is linked to him. There is a picture of Reagan, Roy Cone and Epstein in the oval office. Trump was the first guy not to have the kingmakers behind him. But have they assimilated him or not? What do you think? To a point, they have assimilated him.

Trump is unpredictable; they are trying to get in front of the story. I think their goal was to see if they could destroy him out of the gate. But they failed. I have an evolving view of Trump. I have been Trump tolerant so far.   I think the message to the parties is that we will choose someone you don’t like.  Every time they go after him, and they fail; he gets stronger. Trump doesn’t care – that is who he is. Trump is paradoxically a narcissist who wants to do big things. It is driven by Ego.  

Subscribe to our podcast on iTunes