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Tuesday Conversation - Brent Johnson of Santiago Capital

CEO, Portfolio Manager
Santiago Capital
112

Following Monday's podcast with Luke Gromen, I thought it would be fun to next visit with our old friend (and fellow Cornhusker), Brent Johnson. For this discussion, Brent and I cover several of the same topics as yesterday while incorporating Brent's unique perspective on the markets.

So for this podcast, Brent and I begin with the same Krugman tweet that Luke and I discussed yesterday:

Repeat after me: debt is money we owe to ourselves. It doesn't make the nation as a whole poorer. https://t.co/yyAkexUV0N

— Paul Krugman (@paulkrugman) May 22, 2020

From there, we discuss:

  • the liquidity-driven necessity of QE∞
  • the impact of an official yuan devaluation
  • global demand for dollars driving its relative value higher
  • whether QE∞ will ultimately be inflationary
  • the possibility of global stagflation
  • and quite a bit in between

Many thanks to Brent for being so generous with his time. I think you'll find this podcast to be extremely interesting and thought-provoking.

TF

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tonym9
Jun 3, 2020 - 10:38am

Jnug 88.54 lod...my timing is

Jnug 88.54 lod...my timing is always perfect. That 98.20 looks damned expensive now. Meh. This is why i avoid headline days. After yesterday's dip i figured odds were 50/50...i picked the wrong color...at least that pesky green 0 hasnt shown up...yet. break 1680 and its green 0 party hats for the house. 1691 lod...

AGXIIKtonym9
Jun 3, 2020 - 10:11am

381 HP in 3.5 tons of metal is quite sufficient Tony

The Toy RTLV (Rural Tank-like Vehicle) is a street sweeper. Most cars are small compared to this 4 wheeled whale. MPG on a good day with a tail wind is 16 average but hwy driving might hit 20. We use a Kroger loyalty card and Carson City Douglas county gas taxes are lighter than Washoe so we've been paying around $1.25 to $1.50 per gallon. So MPG is moot.

In defense of my driving style I do so like old people ****. Slowly, cautiously, with regard to bystanders, always knowing I will have a happy ending if I time myself to destination

Allstate is rebating 15% of our auto policies (3). That pays for half a tank of gas. So it's double 'I don't give an RA' on gas prices. For silent running the gray man car, Subaru Outback excels with 25 MPG, blending in without camo. It's the 'me too' car in our snow belt region. I can't count the number of times I've walked up to our car and was unable to unlock it. It was someone else's gray Subie.

It might be possible to get better MPG but I carry extra equipment.

4 oz I set my Timex to the US Debt Clock. It runs on Trillion time. What time is that? $26 trillion by Wednesday June 10. USG pays my Social Security on June 10. Hope to get paid before USG goes tango uniform. That's one reason I stack. That day of reckoning will come pretty soon

AGXIIKOceanX
Jun 3, 2020 - 9:54am

That's one of the biggest problems with the Dialectic

As rational and thoughtful as we try to be, when it's our ox being gored it's hard to avoid getting emotional. Emotions then cloud judgement and the ability to use critical thinking to see the problem for what it is and see that we are being played.

Played by those who use virus fear with the resulting incredible damage from the shutdown. Rickards thinks it will take at least a decade to work through that crash.

Played by the death of Floyd George and the incredible damage that is being shown from past grievances that not only have not been resolved but are being pursued against minorities. 40 years ago I went to work for the San Diego Urban League. That work involved seeing a way to undo decades of financial damage to and help build up the minority community. It might have been for naught given what the Martens team has discovered

Played by those whose wealth has grown by $500 billion in the last few weeks while the national personal wealth has declined by the trillions and when were pitted against each other at war in the streets.

We are children when it comes to being played by those who would have us destroy each other, all in the name of being on the right side of the struggle because it's the other guy's fault we are where we are.

It far easier to get the people to go to war against themselves by the carefully crafted and strategic use of the Dialectic, fanning flames of grievances, hatred and latent negative emotions that have simmered for centuries and decades. These are turned loose through all the media to see us destroy ourselves, all for the entertainment and wealth producing effects these battles inure to our betters and self styled masters.

As peaceful as our boards are it show up here in spade when we see the effects of this war, pandemic and violence are visited to every corner of the country. I am at a loss as to how to handle it or even predict its eventual outcome. The Fourth Turning seems to be upon us and each of us is going to have to sort out how we are to deal with it.

Turning the other cheek does work at time. At other times it requires fighting what is worth fighting for. Knowing the difference is the key to keeping one's sanity and safety uppermost.

Cheers Ocean X

Ben Stackin
Jun 3, 2020 - 8:59am

It's going to be one of those

"grab your ankles" kind of days. Crap. I thought we might be through with this nonsense.....

4 oz
Jun 3, 2020 - 8:57am

Numbers

Numbers getting crazy-ier by the minute:

https://www.usdebtclock.org/#

AGAU
Jun 3, 2020 - 8:47am

Healthy correction underway?

ex Jordon @ the daily gold

  • Gold and silver stocks put in a bearish reversal Monday and assuming GDX, GDXJ, and SILJ remain below Monday’s highs then the correction that began 9 trading days ago remains in progress. For those who have too much cash, this is a good thing as you can potentially buy at lower prices. I prefer a correction now as it avoids the prospect of the sector overheating and requiring months and months of correction and consolidation.
tonym9
Jun 3, 2020 - 8:45am

Im in JNUG at 98.20 after my

Im in JNUG at 98.20 after my on the road buy yesterday after the drop...Yep i bought long miners, thats why youre down folks.

....but headlines, ugh. ADP down another 2.7 million jobs. PMI at 845, Factory orders and ISM at 9. How does the macro news effect gold silver and miners? I dunno anymore. But the pattern has been smashes around job news as TF has pointed out and it looks like that pattern is holding. My guess is we rise after the ISM numbers.

Made it back to the Uhaul rental return yesterday with 2 minutes to spare. 2 roundtrips with the car hauler and boxes to capacity and it came down to 2 minutes. Im a little slow this morning though, today is a light day. Forgot to do the condition report and its due by 5pm today so am heading back with the entire fam along with the pool table and whatever else I can fit with it...Tundra is getting a workout this week.

AGXIIK: I love my Tundra horsepower. The Sequoia is the same drivetrain. Thirsty beast but not running lean is part of the reason these powerplants run so long. Known problems are water pumps though so watch that. The AIP sensor i mentioned will shut you down when it goes bad, $1000 repair at Toyota...fresh air inlet valves at start up for emissions...if it goes into limp mode you disconnect the battery cable and restart it so you can drive to the stealership...problem is moisture based so you may never see it. The other big problem is frame rust out...stay away from salt. Starter will leave you stranded one day. These are all the known problems. I'll take it in exchange for 400k on the clock. My 2001 F150 didnt make it to 125k before a critical fail...launched a spark plug out of the motor and its a common problem with the 5.4 Triton along with several other Ford engines....oh, and that pesky spontaneously combusting problem...im still driving it after i helicoiled the head for the spark plug, up to 138k.

OCEANX: People in general are not nice in Houston and driving is indeed a full contact sport. I guess its not any different than any big city, but thats part of the reason we like/liked Austin so much. People in Austin are friendly, drive nice, help you out. In Houston its a much different story. Sad actually. I see that Im being greeted by the Gulf already. TS Christobel is churning at 60mph winds and headed north from the Bay of Campeche...great...models show it coming into the Tx/La border...feels like I never left. I was cutoff yesterday by an idiot in Houston who wanted to get to the next stoplight 2 seconds faster than the others around me...he missed my Tundra by a bumper if that...no way I could react with 1000 pounds in the bed and the full Uhaul car transport and Sherrys pontiac on the bumper....time to reinstall my cameras. Ugh...

OceanXAGXIIK
Jun 3, 2020 - 8:10am

guys be careful

try to get the facts! TPTB no how to split a group into factions and pit one against the other...

years ago, I was in a bar in Houston. Standing at the bar drinking a shiner bock. a guy walked up to the bar, next to me. (he may of bought my next beer) anyway, after a few minutes he said, "see that guy over there?"

I look, then he said, "he said, you were an asshole!"

another thing I notice about Houston, if you were backing your car and someone was behind you, they would not 'tap' there horn to let you know. They would just watch you and let you back right into them if you did not see them.

I used to drink with a lot of lawyers in Houston, two words I learned from them: Machiavellian and Draconian

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OceanXH8Fiat
Jun 3, 2020 - 7:57am

Cool

Evidence is starting to emerge that TPTB are using the same old tactics: divide and ...

'wider view' of the protests and riots: https://www.youtube.com/watch?v=yYZopLI0kHw&feature=emb_logo&fbclid=IwAR...

OceanXRickshawETF
Jun 3, 2020 - 7:49am

that's good

to know he is finally catching up! When he realizes he has been using munged data, he will have made a great stride!

I flagged Martenson as "deprecated" a month ago. Sad too, he has done some great work! More recently, I've found them to busy "talking their book" to notice the changes that have take place around them...

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9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
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9/25 8:30 ET Durable Goods
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9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
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9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
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9/1 10:00 ET Construction Spending
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9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
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Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
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8/17 8:30 ET Empire State Manu Idx
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8/19 2:00 pm ET July FOMC minutes
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Key Economic Events Week of 8/10

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