The horizon is not so far as we can see, but as far as we can imagine

Author: Sean Paul Kelley Page 3 of 12

'89-'93 BA History, Houston
'95-'07 Morgan Stanley, Associate Vice President
'99-'02 MS International Relations and Economic Development, Saint Mary's University
'07-'13 International Software Sales Manager, Singapore
'13-'16 MA, History, Thesis on Ancient Silk Road City of Merv, UTSA
Kelley lives in San Antonio, Texas.

In Memoriam: John Timothy Ater April 10, 1953-January 20, 2026

Outside my Mother and Father, few people had a more profound, wide-reaching and persistent impact on my life than John Ater.

I met John when I was 16. I was a deeply troubled youth. Still wickedly angry at my parents, their divorce and how they used me (and my little sister) as a weapon to hurt each other. I was on probation–convicted of juvenile delinquency–and still engaging in bouts of mayhem. Add to that far too much experience hoping chemistry might improve life, plus a penchant for late night theft and I was a handful. I’m not ashamed to tell y’all John was my therapist. I hated him the first time I met him. I hated him a good long while. He had one rule for me. He said, “I will treat you like an adult so long as you act like one. If you don’t I’ll treat you like a child.” For some reason, something unrecognizable compelled me to return week after week. I wasn’t aware of it yet, but I wanted change. I yearned for it from a place I didn’t recognize. But that soon changed.

His undivided attention to me while in therapy was profound. Without doubt, I was never an afterthought by my parents, but John’s ability to listen to me and cut right to the matter at hand was attention from an adult on a whole new level for me. For the first time in my life I was seen by an adult willing to see me as I was, not as a parent would have me. While I wasn’t mature enough to recongize this as liberating, I felt heard and I felt a growing sense of nurture. (Although I only saw this in the clairvoyance of hindsight.)

My dislike of him soon grew into genuine fondness. So, I stuck with him for eight years, from 16 to 24, years old I saw him weekly until I graduated university. By then I had grown to love him. After that we were friends. He was my confidant, a sounding board and a shoulder to cry on. He never asked for anything in return. He gave of himself, that he might receive from others.

He was fond of telling me, “Sean Paul, I am here to comfort the disturbed and disturb the comforted.” And that is what he did.

San Francisco, May 2010

When I was up and full of myself–which happened a lot in my late 20s and early 30s, he called me on my bullshit. When I was down he lifted me up. I would not have survived two major depressive episodes in my life were it not for his patience and love.

He was also fond of saying, “when you point the finger at someone, do realize you’re pointing three back at yourself.”

My personal favorite was, “evolution gave you two ears and one mouth, use them in their proper proportion.”

They say a mother teaches her son what is expected of a man. And a father teaches his son how to live up to his expectations.

But John taught me something entirely different. He taught me how to be an adult. He taught me how to be kind. How not to hold grudges. How not to second guess myself. He taught me that it was much more difficult to admit when I was wrong or had made a mistake than to deny or ignore it, but that I had a moral obligation to do so, regardless of how I felt. He taught me the difference between morals and ethics. He taught me how to walk into a room and read it, painful introvert that I was. “The people in the room want your attention just as much as you want theirs. Go, ask questions of them, open-ended questions and you’ll make more friends than you know what to do with.” He was right.

John drilled into me that color, creed and sexual orientation–he was openly gay–meant not absolute zippo in the grand scheme of things, that we were all divine children of the Cosmos. And he taught me how to stand firm when my principles or integrity were questioned. To never start a fight, but be damn sure to finish it. Another crucial lesson John imparted upon me was the necessity of asking for help when in over my head, or even when I just didn’t know something. And he always added, “just because someone said no, does not let you off the hook. You can’t stop asking for help.”

He was also fond of saying, “the universe answers prayers in three ways only, ‘yes, no and not yet.’

More than anything John ever taught me, it was the immense amounts of time he sat listening to me at coffee shops and then on the phone when he moved to San Francisco. He never asked for anything in return. All he said was, “be as good as you can to others, at all times.”

I spoke to John a few weeks before he died. He said it would be the last time we spoke. I told him how much I loved him and how responsible he was for me becoming the human being that I am.”Imperfect,” he said, “but fundamentally decent.” These were his penultimate words to me.

John died on January 25, 2026. It was not unexpected, but it hurts like hell. He was 73.

The Cosmos broke the mold when John was created. And I am diminshed by his loss.

John is survived by two sons.

His last Facebook post epitomizes John:

Every Credit Cycle Is Different, Just Like This One

~by Sean Paul Kelley

Every credit cycle is different: they don’t repeat, but they do rhyme at the end.

Phase One: the Expansion

The credit cycle begins when intense speculation drives asset prices into bubble territory. This time around AI is the prime mover.  AI stocks have clearly inflated, irrationally, and dangerously market averages. Nvidia’s market cap ($4.9 trillion) is larger than India’s annual GDP ($4.5 trillion).

As Barton Biggs, a mentor-of-sorts when I was at Morgan Stanley, said about the dot-com bubble, “things that cannot go on forever, don’t.”

That rule applies to the 10 Horsemen of the AI-pocalypse.

The bubble will deflate, jus not the way you think.

It won’t go “boom” and pop all of a sudden. As Kathleen Tyson, a commenter as qualified as any to opine on this market, notes, “credit bubbles collapse from the periphery toward the centre [just as empires do]. Always. Overextension creates a vulnerable, unstable margin at the extremes.”

The bubble is here and it’s collapsing from the outside, just like a balloon does. Wrap your hands around an imaginary balloon and feel it lose gas. You can see it now, yeah?

So what does this mean? Well, it means we’ve reached the end of the beginning of the first part of this credit cycle. Part two is up next and it’ll be a like a rodeo-clown getting gored by a ten-tonne bull.

Phase Two: The Big Unwind

Phase two of the credit cycle is the credit unwind, read credit destruction, linked to insolvency concerns, similar to what FSK KKR is undergoing:

“FSK’s portfolio was hit by large markdowns in the fourth quarter on debt extended to software companies. The fund’s holdings in debt tied to janitorial services groups, and so-called roll-ups of dental clinics, veterinarians groups and defence contractors also saw markdowns.” 

Other private credit shops that have taken some heavy markdowns and/or halted redemptions, as I disucss below. But seriously, if you know the private-equity model, you should be appalled their taking over janitorial serivices, dental clinics and veterinarians. Mom and pop shops par excellence. And they are now having the profitable assets stripped and the rest is larder with tons of debt and left out in the world to go bankrupt. I have a cousin in private equity and I’ve lost all respect for him. It’s probably mutual. I’m no role model.

But I digress . . .

The real kicker is our Bearn Stearns moment: an analog to the precise moment the 2008 Financial Crisis became inevitable. Recall summer 2007 when two Bear Stearns hedge funds met the guillotine. Blue Owl and it’s recent woes are this crisis’ first canary in the coal mine. Blue Owl, essentially an SPE/SPV for AI-hyperscalers to offload debt from their balance sheet, is ground zero for Oracle’s recent woes. SPE/SPVs, for those of you who don’t remember, are what killed Enron and destroyed AIG. Blue Owl vis-a-vis Oracle signals the end of the inflating bubble and beginning of the credit unwind.

“So who’s unwinding and why, you ask?”

The first-comer was Blue Owl. They got a rude wake up call when investors demanded $1.4 bn in redemptions, which forced Blue Owl to sell assets to meet redemption needs, in essence a fire sale. Every trader on the street worth his salt knew who was selling and what. It was brutal, as I’ve heard it told from some old Wall Street pals of mine.

Then Blackstone gets hammered with $1.7bln in redemptions and halts all redemptions. Blue Owl is a shadow lending facility for corporations, not individuals. But the next examples affect the money of individuals, billionaires that is.

So here comes Blackrock, sideswiped by $1.2bn in redemption requests, of which they honored only half of them. Resulting in a bunch of high net worth investors got sucker punched.

This ongoing and accelerating unwind in private credit is canary number two of our next credit crunch/crisis all the while the Fed is, unsuccessfully trying to backstop the slippery-slide of private credit into insolvent credit: on February 17th they injected $17.8bn into the debt markets via overnight repos.

So a lot of credit destruction has to happen—and will—before we get to the third and final phase.

We are a closing in, accelerating for sure. In fact, the appraoching crisis, because the mass fuckery of private credit does not have to legally disclose holdings, will make 2008 look like a Roman Holiday. No candles included.

Added at 9:30 AM Central Time: Teachers’ Pension Reportedly Loses $7 Billion in Private Equity Bets in 2025

“Ontario Teachers’ Posts First Private Equity Loss Since 2009”

If you run a pension fund and you invest the funds money with private equity you are shit. You are giving money to the very people that are strip mining this country’s middle class businesses. Regardless, the contagion is on. This thing is getting perilously close to becoming uncontainable. Remember that catchphrase form 2007-08? “It’s contained!”

Phase Three: the grand finalé.

Where credit cycles rhyme, as I said above, are how they end: on the last two syllables. Can you say it with me: Ponzi? In the end the ponzi finance bubble always collapses.

I suspect Crypto will be the first big Ponzi unwind. And it will take a lot of suckers with it. Plus, a damn lot of fools who worked for investment, commercial banks and private credit/equity shops. Crypto is bullshit, wrapped in dead fish skin that’s been perfumed by Chanel. No matter how good it smells, it’s rotten to the core. Crypto is to this financial crisis as CDOs and synthetic CDOs were to 2008.

The AI-hyperscalers will suffer as well, during the Ponzi unwind.

Why?

They are in essence engaging in a similar sort of vendor financing like CISCO and Juniper Networks did in the dot-com bubble. Nvidia is giving chips to AI-hyperscalers as collateral for loans. Never mind the chips will depreciate long before the earnings are solid enough for the AI-hyperscalers to payback the “loans.”

Once the AI driving stock bubble bursts, all hell breaks loose. One or two investment banks will go bust this time around. Maybe Morgan Stanley? Maybe Goldman? (I doubt Goldman goes bust, they’re too politically well connected.)

Note, as I and Ian have both said, this will be the final financial crisis the Fed is willing to backstop. Broad political support for a bailout hasn’t eroded completely.

But the next one? It’ll be unstoppable. Not only will the political will have evaporated, but so will have the resources to do so.

As we say down here in Texas, cowboy up, ride’s about to get real.

Nota bene: Phase Two of this credit cycle is accelerating: JPMorgan Restricts Private Credit Lending After Loan Markdowns. (Hey, Dimon can be a putz, but he’s a careful, shrewd banker.)

Key takeaway from my post at X: “JPMorgan Chase & Co. is restricting some lending to private credit funds after marking down the value of certain loans in their portfolios, according to a person familiar with the matter, in the latest sign of stress in the $1.8 trillion industry.” Morgan took a $22 billion haircut. 

And this: “L&G’s solvency ratio — a measure of its ability to meet long-term financial obligations — declined to 203 per cent for 2025, down from 232 per cent in the previous year and below a Visible Alpha consensus of 217 per cent.” h/t for both stories go to Ventzu.

That’s some special fuckery there, folks.

Nota bene, bene: Good Morning from Germany, where today’s 10y govt bond auction technically failed.

Nota benissima: Well fuck, Cliffwater is the next domino to fall. First, huge redemption demands-to the tune of $33bn–at Cliffwater, LLC, force the private equity shop into a firesale a lá Blue Owl. So Cliffwater, LLC is a twofer!

And JPMorgan is dealing with some collateral stress issues. Whatever the fuck that means. When banksters make up words, be careful, you’re about to get screwed.

Even PIMCO piles on saying that they see “a crisis in bad underwriting in private credit.” Christian Stracke, president of PIMCO reiterated the headline news, “[this news] is the result of years of sloppy underwriting standards in lending.” Basically calling out the private credit/shadow credit industry for engaging in the 2007 equivalent NINJA–No income, no job–loans to any company that want cash. He also added, “there is a reckoning going on right now. . . . It’s not just a crisis of confidence, it’s a crisis of really bad underwriting.” Makes one wonder just how many cockroaches are going to come out of the dark, dank Wall Street kitchen this time around once the lights come on?

Phase Two of the credit crisis has arrived, and it came heavy.

Saturday Morning Grab Bag Of Baddies and Goodies

~by Sean Paul Kelley

I’ll begin, as usual, with the economy. JP Morgan lays odds for a global recession at 60% now. Causes? According to JPMorgan it’s threefold: the conflict in Iran, the tariffs and AI. But JP Morgan is forgetting another huge variable, the private credit/shadow credit unwind happening in real time. Blackrock halted redemptions from its flagship debt fund to the tune of $1.2bn. Blackrock to investors: fuck off. Blackrock’s fuckery marks the third private credit shop in the last three months to shut investor redemptions down: first Blue Owl, then Blackstone and now Blackrock. 

As Dario intones ruefully, “Mark my words, the damage to the financial system the private credit space will cause will be greater by many orders of magnitude than the one subprime caused in 2008.” I’m pretty well convinced he’s right. That said, the political will to backstop another financial crisis has not eroded totally, so the emerging credit crunch will be the last one backstopped by the Fed and/or Congress. 

Another variable JP Morgan doesn’t address is the most recent (un)employment numbers. If the first reported, non-revised numbers of a -92,000 jobs is any indication, once the numbers are revised, February’s numbers are likely to resemble a catastrophe. 

On the ugly, catastrophe side of things, Dubai has only ten days of fresh food remaining if the Straits remain closed. I suppose they can eat dates, no? 

Also of note, The Reptile, aka Peter Thiel (yes, it’s a real anagram, google it if you donnae believe me!), dumped 2 million shares of Palantir. It’s a bright flashing red light, a semaphore both unmistakable and of serious consequence, when top execs dump shares of the corps they run. They are cashing out, leaving the equity collapse in the hands of suckers, ermm, retail investors, widows and orphans-like. 

If you want a fuller understanding of the logic logic behind Iran’s attacks on the region’s infrastructure, read here. Speaking of oil, one can’t fix stupid. Shorting oil in this kind of risk environment is nucking futs.

Maintaining our focus on petroleum for a bit longer, I have to note, if oil breaks bad to the north, past say $120, the resulting global recession will have deleterious effects on commodities, especially gold and silver. But more gold than silver, as the silver supply-demand equation has been so structurally out of whack for so long, the recession would have to be almost depression-like to impose enough demand destruction for the price to sink below the mid $70s.

Sticking with petrol it appears the Euros might come a begging to Czar Pootie-poot for gas and oil the longer the Straits remain inaccesible. Apparently Czar Vladimir has already hinted the Euros can, in Russian, “пошел нахуй.” I’m sure you can suss the meaning out of that one. If true, this volte face by the Euros is staggering in its hyprocrisy and implications. But it is far from surprising. Anyone with a halfway decent brain on their head could have seen this ugly denouement coming a mile away. Wait, a kilometer and some change. Yeah, ‘Muricans can do metric!

In genuinely good news, Indonesia has enacted a total and complete ban on the riding of elephants. When I traveled in South East Asia I refused to ride any elephants, they are too sensitive emotionally and very much deserving of my respect. As I note on X: 

This is supremely welcome humane news. The limbic system in elephants is so extensive and well developed it creates “profound emotional intelligence, long-term memory, and social bonds [in elephants.] [Their] brain structure allows for intense empathy, mourning, [and] social cohesion,” making them closer to humans in social development than any other class of animals than primates and ceteceans.

Check out the photo of an elephant getting frisky with me. Suprised me to no end, you can see it in my face. This news makes me smile and happy. Somewhere somebody is doing something right. Faith in humanity remains unrestored, but a credit has been added to the depleted account of faith, nonetheless. One of my finest memories is seeing a herd of wild elephants emerging out of the bush about sixty miles south of Mysore, India in 2009. Wild effing elephants. How cool is that? Portions of my life have been truly charmed and I’m grateful.

Speaking of memories, I was only five years old when Nadia Comaneci stuck 7 perfecf tens at the 1976 Summer Olympics in Montreal, but even then I knew I was witnessing something very special. My view hasn’t changed in 50 years. And her performance is as elegant and perfect as it was then.

How about some music on this fine March Saturday morning? I’ll note in brief the quiet but powerful resurgence of political and human vitality to American music. As I post regarding Tyler Childers:

Tyler Childers’ song, “White House Road”, written in 2017, paints a generalized portrait of American misfortune and hardship, but uses the patois of the Appalachian South in particular to stoke the emotions of the listener. And it’s why Childer’s imagery works no matter where you live in the US-hell, it’s almost Dickensian and could be anywhere. The tune’s poignance is just that brutally authentic and powerfully magnetic.

Don’t, for a second, confuse this with C&W. It ain’t that. This is threadbare roots Americana. If this doesn’t stir your heart, you don’t have one. 

The raw explosive emotion of Childer’s lyricism propels a simple 3-chord song (E-D-A) across the ragged, tragic and increasingly impoverished tableau of a decomposing America. Childers tells an old rural story, but ‘makes it new’ as Ezra Pound frequently exhorted young writers and poets. Indeed, there is a touch of Chris Whitley’s muse to this song.
 
Childers voice is a beacon of distress, masquerading as joy, “a damn good feeling to run these roads.” He sings.”Get me drinkin’ that moonshine/Get me higher than the grocery bill/Take my troubles to the highwall/Throw’em in the river and get your fill.”

His distress is amplified by his vocal register; and his range acts like the kinetic tension in an unsprung faucet, Schrodinger-like: at once blowing in a soft mountain drawl, only to tornado-up into a raspy hard emotional sucker punch landing on your solar-plexus and leaving you breathless. 
 
Tyler is proof that there are only two types of music: good music and bad music.
 
I dare you to listen and not stomp your feet.

More to the point, Jack White has single-handedly reinvented and fused Delta blues, Chicago blues and rock music right back into political and cultural relevance. One example is the global adoption of his anthemic Seven Nation Army.

His appearance on SNL in 2020 is another solid proof of concept.

Honorable mention goes to the Stone Foxes and their fantastic and criminally underrated retelling of the death of Delta Blues legend Robert Johnson, “I killed Robert Johnson.” The song is 15 years old. So what, it’s aged well.

While you’re at it, this lovely morning, check out this music here and rock out to this and this. The last two are representitive of a new breed of American rock bands. You won’t hear ’em on the radio, but rock is alive. And that’s a good thing, like this cover of Dancing in the Street, by the Struts.

Who ever talks about modern dance, or takes an interest in it ought give this video a solid once over: the choreogrpahy on display is a stuning blend of traditonal renaissance era galliard or volta, early Appalachian line dancing and urban American break dance, yeah, break dancing, for a tune straight out of my Scotch-Irish heritage

While you’re at it, check out this Ryan Adams cover of the Iron Maiden classic, Wasted Years.

Last one, I promise, this Band of Heathens song, “Hanging Tree,” eeriely echoes old-timey Protestant hymns sung by a choir, except it’s about infideltiy and damn near a murder ballad. It’s about 15 years old, as well, but it has aged like a fine Irish whiskey. Lastly, I have rarely in life coveted anything. And I use the word ‘covet’ purposefully. But that Dobro he’s playing in the video: me want one something fierce. But I’m left handed and those cost upwards of $1500. Ouch!

More if it happens. Maybe.

Nota bene: Apparently Kuwait Oil has declared force majeure on oil sales. That’s not confirmed, but plausible and bad news if true. As one commenter in the X thread linked wryly noted, “You know shit has hit the fan when you have to start using French terms.”

LMFAO.

There Is Stupid and Then There Is Superhuman Stupid

~by Sean Paul Kelley

How about we review Cipollla’s Five Rules of Human Stupidity? 

One: Everyone always and inevitably underestimates the number of stupid people in circulation.

Two: The probability that a person is stupid is independent of any other characteristic of that person.

Three: A stupid person is a person who causes losses to another person or group of people when he or she does not benefit and may even suffer losses.

Four: Non-stupid people always underestimate the destructive power of stupid individuals.

Five: A stupid person is the most dangerous type of person.

Rumors persist on Wall Street for a second day, natch, for a day and a bit cause it’s early yet. But the rumors are several institutional investors, read hedge funds or investment banks like Morgan or Goldman, are desperate to unload large naked shorts on oil futures.

WTI has risen from $58 to $77 in less than 30 days. Brent has spiked in a similar fashion. Urals Crude is trading between $57-$65, higher than just a few weeks ago when it traded between $45-$50.

Today is the day I cease underestimating just how stupid, stupid can get. It’s like “killing the chicken to scare the monkeys” levels of stupid have taken over. 

 

The Doom Spiral Of Executive Decision Making

~by Sean Paul Kelley

A tweet I encountered last night and obsessed over as I followed its logic all the way to the bottom terrified me in its potential implications. The poster links to another poster highlighting a few Euro press releases lambasting Iran for such a disproportionate response to our unprovoked attack and ends with this question:

“I want to know what they think is a “proportionate” response when invaders assassinate your head of state and civilian leaders in an explicit campaign to destroy your government?”

So, follow my logic here. I replied to their posts with the following:

This is exactly what terrifies me about Operation Epstein Fury: Trump cannot abide defeat in any way. It’s seen as a personal rebuke to his idand his constant self-aggrandizement. Moreover, the more the US is percieved to lose–the US embodied by Trump’s idand what it loses in reality, is blamed on Iran and its evil.

No introspection from the Empire of Chaos.

No acknowledgement that we started this war.

As American losses mount and Trump’s prestige fades, the doom spiral of executive decision making begins.

As my father has always said, “there is nothing more dangerous than a coward,” which is what Trump is.

And a coward in a doom spiral with his finger on the button terrifies me to the core.

As it should terrify us all.”

Yup, I’m talking about Trump’s id. He’s a walking manifestation of the human id. He’s the epitome of Freud’s id.

The possibility of him driving humanity off a cliff is NON-ZERO. Slight, yes, but what could a man such as he do in a state of desperation?

Short Take on Iran, Russia and the Ukraine: Cui Bono?

~by Sean Paul Kelley

Cui bono? (From the Latin, who stands to gain?) Who benefits from our war on Iran, internationally speaking? And who loses?

First, the Ukraine loses bad the longer the attack on Iran continues, as all the oxygen is sucked into a vortext surrounding the Persian Gulf. All the weapon systems the Ukraine desperately needs are being consumed rapidly over the skies of Iran and the Gulf States. This will undoubtedly hasten the Ukrainian Armed Forces collapse as a meaningful battlefield foe. Score one for Russia.

Second, energy prices will rise, and if the Straits of Hormuz get shut the Europeans will have to re-evaluate their energy supplies vis-a-vis Russia. Score two for Russia. Also, score one for Texas oilmen, who have watched WTI rise from $58 a barrel a month ago to $73.78. Royalty checks be getting phat!

Third, diplomatic pressure will decrease on Pootie-poot and Lavrov due to European energy desperation and all the diplo-oxygen being sucked out of the UN and other multi-lateral forumns, as if a thermobaric bomb went off. This widens Putin’s and Lavrov’s room to manuever even more. It also increases the chance Russia delivers a devastating denouement to the ‘Rules Based Order’ with an unmistakable battlefield victory. As my teachers said about school-yard fights when I was growing up (I went to an all boys school most of my life): you get your ass whooped, you probably deserved it. Score three for Russia.

Fourth, with the US murder/assassination of Iran’s Surpreme leader the precedent has been set, nay, locked the fuck in, for Russia to lob an Oreshnik or two Zelensky’s way and damn the consequences. The US could hardly protest. Not with a straight face. Score four for the Russkis.

Not to beat a frog at the bottom of a well, as the Chinese proverb goes, but the Ukraine is the biggest loser thus far and Russia the biggest winner as of today. The Euros are losing as well, but seem determined to snatch fantasy from the maw of reality. Israel is also on the losing end. Have you seen some of the explosions in Tel Aviv? This Iranian strike is positively surreal. Looks like that Israeli Iron Dome has turned into an Iranian Golden Shower.

Then again, if Bibi pops off a nuke or two, all bets are off.

Friday Morning Highlights and Lowlifes

~by Sean Paul Kelley

Couple of random notes this Friday morning, mostly economics related, some silver news and my personal reaction to portions of the discusssion in Ian’s “Is Virtue An Advantage Or Disadvantage For Societies?” post.

First, econonomics. It looks more and more like we are heading into a 2008-style credit crisis/crunch.

Don’t believe me? Well, the FED flooded the US banking system with $18.5 billion to ease liquidity concerns during the week of Feb. 17 because cockroaches be busting out of just about every private equity/credit shop present. And we all know, if you just don’t turn on the lights, you don’t see roaches.

These kind of economic events don’t do what you think they are going to do. Many people assume any economic crisis in the US will lead to a rapid dollar hegemony collapse. But as I explain, the dollar will actually get stronger:

“[W]hen the credit crunch gets a full head of steam it won’t lead to reserve status collapse of the dollar. It will, counter-intuitively, but inexorably pump the dollar higher and stronger as NYC becomes a 2008-like Black Hole for cash allocated dollars world wide desperate to fill potential insolvency holes in banks and shadow-banks/private equity credit boutiques . . . . “

That’s what happened in 2008. As I conclude, “Dollar reserve collpase will be a result of national insolvency, not a global credit-crisis/crunch.”

Basically what End Game Macro is saying in this post is the following: the economy grew little to naught post-COVID to present. It basically did what equity markets sometimes do: trade sideways for years, decades even. For example, after the 2008 Financial Crisis the S&P 500 traded sideways for four years until it broke out in late 2012, early 2013. That’w what the US economy has done since 2020: move sideways, although Biden-inspired over-immigration skewed the growth numbers, as End Game Macro notes:

From 2021 to 2024 the U.S. saw over 11 million arrivals, more than 3 million in 2023, and net migration around 2.4 million per year in 2021 to 2023. That can lift GDP and payrolls while masking weaker per capita momentum. As the surge cools, the masking fades.”

I’m not being anti-immigrant here, I’m just stating the facts. As Trump dug his heels in and unleashed his ICE goons, the econ surge faded, and fast. End Game Macro also notes, a lá 2008 that system-wide credit stress is popping up whack-a-mole like in almost every category:

“As of February 2026 serious delinquency is flashing late cycle strain. Auto loans 5.2 percent, credit cards 12.7 percent, student loans 9.6 percent 90+ days past due with estimates as high as 16.3 percent turning delinquent late 2025, and FHA delinquency 11.52 percent. Job quality also reflects strain.”

And I’m not even going to touch on the downward revisions to US employment except to say we’ve not gained a single job, but actually lost millions. The BLS hints at the size of the disaster in jobs “recovery.”

Last econ note: big move in India just confirms my thesis/argument/assertion that the combined wealth of the West is undergoing a multi-decade transfer back to the East:

For decades, the price of silver in India—the “diamond hands” of the silver world—was dictated by a small group in London and USA. Indian ETFs used the London Bullion Market Association (LBMA) prices, which often had nothing to do with the actual physical demand on the ground in India.

The Move:

On February 26, 2026, SEBI officially announced that starting April 1, 2026, Indian mutual funds and ETFs will no longer rely solely on London’s “AM fixing” prices. Instead, valuation will be based on polled spot prices from recognized domestic exchanges like the MCX.”

That’s one serious high hard one to the Comex and LBMA! This is a big fucking deal.

Next up: war in the Ukraine.

I’ve repeatedly argued that the Ukraine has lost all any and all possibility of regaining strategic initiative, and this reinforces it, way wickedly:

As I have noted ad nauseam for months now: the #Ukraine has lost any chance to sieze the initiative on the battlefield. All the #AFU can do is ineffectively counter-attack like a punch-drunk boxer. Trading lives for time will not work out for #Zelensky in the end and the end is coming sooner than he thinks.

On that note, the Red Cross confirms the Ukrainian to Russian KIA ratio. And it is bloody awful: 34/1. People often tell me that my belief in realism in foreign affairs is deeply immoral. Fuck that shit. International liberal hegemony is 100% at fault for all the deaths in the Ukraine. All. Of. Them. The denizens of Davos are uttely complicit.

In another grim note: Russia is in the initial stages of attacking The Big Banana. For the first time artillery shells are falling down with impunity on the city of Kramatorsk, like rain does on an average Portland Wednesday.

In regards to the conversation on Virtue and especially regarding the 800,000,000 number of Chinese lifted out of poverty. Well, Ian is correct. I did the numbers here back in September.

As regards Chinese leaders being better or worse than those in the West, especially the US: Ian, again is correct. The best way to view the argument is by winnowing it down to two prepositions. The Western view of liberty has its origins in peasant upward mobility in the aftermath of the Black Death and the clash of classes. Ergo: in the West we have the freedom “of” speech, assembly, bear arms, etc. . The Chinese view of liberty derives its origins from a long exigetical tradition of the origins and limits of dignity. In essences, the Chinese see liberty as freedom “from” poverty, warlordism, chaos, illness, crime, rapine, etc. . .  Both views are valid. Both views are limited. But at present the Chinese view of liberty is more effective in increasing the common good than that of the West.

On the posssible, now looking more probable, war with Iran, the US has ordered the evacuation of its embassy in Israel. I don’t know what could make it more obvious, you?

More as it happens.

And more happens. This comment by Ray Dalio reminds me when I was a young broker I read Robert Rubin’s memoirs, In an Uncertain World, and took to heart many of his investment rules, going so far as to write many down on old fashioned white catalog cards–this was before the internet, btw! and memorize what I wrote down. Don’t judge me. I was young and dumb.

Love Rubin or hate him, like James Carville said, when I get resurrected I want to come back as thet bond market. Rubin knew how to invest and make consistent returns. So did Barton Biggs, long time chief investment strategist at my alma mater, Morgan Stanley. Those two men shaped my view of economics, markets and political economy more than anyone or anything else. And yes, I read Jesse Livermore’s memoirs. They did little for me precisely because at his heart Livemore was un-disciplined. And discipline is key to making money.

If you take your own advice you’ll do well. If you’re like me and stayed retarded longer than markets remained illogical, well, you’re fucked. If I’d taken my own advice I’d have a small fortune like a handful of former clients do to this day.

One of my key rules: if you want to get rich, speculate in the stock market, but if you want to be truly wealthy, invest in bonds. In other words, the real wealth, massive cash-flow comes from debt service. That’s just an ugly reality humanity has yet to escape.

Another rule to live by: if an investment goes more than 15% against you, cash out. You can recover from a 15% loss, but a 25% or 30% or even 50%? Not a chance in hell. Ever.

Last rule: if you double your money in an investment, sell half of your gain and let the rest ride. I guarantee you’ll never lose a dime on that investment if you follow that rule.

One last comment on Rubin: he was a ‘careful contrarian’ and being a contrarian has served me very, very well. It’s a painful and lonely place to occupy at times so be prepared to man up. In the end recognize when you feel the least amount of risk is the precise moment of the most risk, the instant before you lose your ass.

Maybe more, maybe not. Time dictates all.

So the muse is a fickle-bitch. This analysis of the transcripts of the Trump-Xi phone calls is brutally and hysterically accurate:

This time it’s particularly funny because the Chinese transcript (fmprc.gov.cn/eng/xw/zyxw/20) has Xi telling Trump: “It is always right to do a good thing, however small, and always wrong to do a bad thing, however small.” This proverb might not sound like much but it’s actually extremely meaningful when you understand the reference.

The reference comes from the Romance of the Three Kingdoms, China’s Illiad and Odyssey plus the Aeneid and a smattering of Dante’s Inferno for good measure. It’s indicative of how urbane and historically literate the Chinese are. And a clear notice that China is what historians, anthropologists and others of such ilk refer to as a “high context” culture: 

China is a High Context culture, a communicated message has different layers of meaning, While America as majority of the West is Low Context. The other culture/language that is High Context is Arabic. To understand the spoken words one need to be deeply rooted in its culture, its history and religious tradition.

Spoken like a true scholar and humble student.

I want the last word. Heh! But seriously, silver trading at the Comex closes the day sharply higher, firmly walking through a wall of resistance at $92, ending the day at $93.06, up 7%. A very bullish closing price for silver. Silver bugs should sleep happy tonight.

 

 

 

Short Take On Possible/Probable War On Iran

~by Sean Paul Kelley

I don’t know if we’re going to bomb Iran or not. I hope we don’t but hope is not a policy. All I’m left with is my personal experience in Iran and how I go about analyzing foreign affairs.

As many of you know, I’m a realist. Once upon a time, my realism was based on the correlation of powers and what the United States could and couldn’t do with its capabilities so long as they were in line with political adjectives that were achievable.

Today I’m a realist, a chastened realist; more a pragmatist who has withnessed war after war after war lost. I’ve witnessed “Western powers often wage wars disconnected from achievable political outcomes (Afghanistan, Iraq, Libya),” instead of aligning the wars with achievable political aims. You know, the exact opposite of Uncle Carl Clausewitz!

Moreoever, my hardcore realism has ameliorated over the years after several long discussions with Ian. Ian’s never been afraid to upbraid me publicly and privately for my quasi imperial impulses. I’m grateful to Ian for helping me see the error of my ways.

But I digress.

I know for certain two things will happen if we attack Iran.

First, based on my experience in Iran, the Iranians will rally around their legitimate government and support it to the end. When I was there the Iranians were warm and engaging. Even the Mullahs at the mosques we visited. But when it came to the subject of US interference in internal Iranian affairs, all were a unified voice: stay out of our government. Seems like a reasonable request, if you ask me.

Take a close look at the photo. A young couple enjoying pizza with my father and I in 2006. This is who we’ll be kiling. They have faces and names.

Second, we will use an enormous amount of ordinance attacking Iran and leave ourselves even more vulnerable than we already are because we have such a shitty military industrial complex that can’t make anything without a long lead time and shit tons of profits. Our defense industry is dominated by general and flag officers on the grift.

Like I said, I don’t know if we’re just posturing or if we’re really gonna attack.

I hope we’re not but I’m afraid we are.

Nota bene: In the comments Nat mentions a depressing X thread worth a read. But if you really want to be depressed check this X thread out where Col. Wilkerson says, “I think Israel will cease to exist unless Netanyahu does turn to a nuclear weapon or two.”

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