economics

Someone bought 5700 ImmunoGen $21 calls yesterday.

This morning, AbbVie announced that they are buying out of $IMGN.

Whoever that is turned a $500k investment into $3.5 million in less than 24 hours.

This is how insider trading works.

Holy shit. Do you want an example of how the people running our nation don’t know or understand anything about economics? Take a look:

Let me be clear to any corporation that hasn’t brought their prices back down even as inflation has come down: It’s time to stop the price gouging.

Give American consumers a break.

— Joe Biden (@JoeBiden) November 30, 2023

Alright, I know that Biden isn’t the one writing this, but it’s still incredible that they equate “inflation coming down” with a reduction in prices. The left is actually clueless on anything. They are fucking idiots.

Say inflation is 8%. Last year’s $100 item now costs $108.

Inflation drops to 2%. Now that item will cost about $110.

The price can’t “go back” to $100 unless inflation is negative.

That isn’t price gouging, it’s math.

This is why we are doomed. Our nation is being run by idiots.

I have been tracking the cost of breakfast at Denny’s over the past 25 years. Not just any Denny’s. The same location- located right near my old fire station. I used to get food there regularly, so it’s a great way to make a valid comparison.

At that Denny’s: 2 strips of bacon, two link sausages, two eggs, and two pancakes is the breakfast that Denny’s calls the “Original Grand Slam.” That breakfast sold for $1.99 in 1997. By 2021, that same breakfast cost $9.49, which works out to an annual inflation rate of 6.7%. 

In September of 2023 that same breakfast was $11.99, or a 26.3% increase in the past two and a half years. That’s a 10.5% annual increase.

Just two months later, and that Original Grand Slam is up to $12.99. That is an 8.34% increase in just two months. That corresponds to an annual inflation rate of more than 60 percent. If that were to continue, in a year that same breakfast will cost $19.35.

Look at what $136,000 gets you in San Antonio:

Hey Gen Z … are you ready for the future of tiny home ownership?

Or rent if you can afford to buy even this.

🔊

pic.twitter.com/hMQD4GEKTT

— Wall Street Silver (@WallStreetSilv) November 29, 2023

This is what runaway inflation does to us. That works out to more than $226 per square foot.

The FED, as the US central bank, can’t restrict the money in circulation by increasing interest rates as long as the Federal government increases spending by 16% year over year.

Here is the claim being made by the left:

You want to know what I'm thankful for this year?

Having a president who knows just how much lower costs will make a difference for families.pic.twitter.com/wqJCnNaIgL

— Jaime Harrison (@harrisonjaime) November 21, 2023

Now for the facts. Here is what it costs to feed ten people for Thanksgiving for the past 33 years:

The cost may be down from last year, but Thanksgiving is still 30% more expensive than it was for Trump’s last Thanksgiving in office.

The yields on Treasury bills hit a 16 year high, and they aren’t done. Inflation in the US is killing confidence in the dollar. China has been engaged in moving away from holding US treasuries. They have sold off many debt holdings, going from holding $1.3 trillion in US debt to just over $800 billion- a downsizing of about 40%.

All of this is making it more and more expensive for the US to pay the interest on the $33 trillion that it already owes, and will soon begin affecting the strength of the dollar. The US will have to create money out of thin air in order to cover this as well as still keep sending money overseas. Expect more inflation to come as a result.

When you read that the US is now paying more in interest than it spends on national defense, you can rest easy knowing the facts:

“The Federal Reserve owns a lot of government debt,” Braun said. “The Treasury does pay interest payments to the Federal Reserve, but then the Federal Reserve turns around and gives it back to the Treasury — that alleviates some of the issues.”

So we are just paying ourselves? Oh, nothing to worry about, then. We can just borrow another $30 trillion. It will be fine. Take a look at what the milestones the debt has hit over the past year or so:

Date:	Amount of National Debt
October 12	$33.5 Trillion
September 15	$33 Trillion
July 11	$32.5 Trillion
June 15	$32 Trillion
June 2	$31.5 Trillion
Sept 30, 2022	$31 Trillion

This time in 2019, I was posting that the national debt was at $23 trillion. We have borrowed more than $10 trillion in the past 4 years, with a $2 trillion of that being in the last 4 months. The rate of growth in our national debt is exploding.

The debt is growing far faster than the economy. So much for Keynesian economics. We are fast approaching the point where our national debt is 1.5 times the size of GDP. There is no recovering from this. There is no way to pay this off. The only outcome now is economic collapse. The only question is when.

I don’t understand what is going on and why the Feds are on such a spending spree, but what I do know is that this isn’t good. If you look, the US was borrowing about $2 Trillion a year until June of this year. That was scary enough, but there are some serious problems coming up, as this country (with the exception of the pause in the debt ceiling in August) is now borrowing a trillion bucks about every 60 days. This can’t continue, and by definition, anything that can’t continue, won’t.

There is going to be some major inflation coming. Our currency is being devalued like never before. Stock up on the three B’s: Bullets, Beans, Bullion. They are about to become a whole lot more valuable.

A couple of you asked that I talk about the squeezing of the middle class. When the left first began screaming about increasing the minimum wage back in 2013, I explained that employers would respond by compressing pay, because economics forces them to.

Employers can respond to wages that are rising through one of two means. The most obvious way is by increasing prices. The problem with increasing prices is that there is a limit to how much that can happen. Let’s say that the minimum wage is increased to $26 as the left is now requesting, or even the $33 an hour that New York City is looking for. McDonald’s will just increase the price of hamburgers, right? That works, but only to a point before people shop elsewhere for their burgers. Still, the left will argue that, since EVERYONE will get this new wage, all of the restaurants will increase, and people will have no choice. The people who say this forget that McDonald’s isn’t just competing with Burger King and Wendy’s; they are also competing with people simply brown-bagging their lunch to save money. There is a price point where people simply stop eating out. This greatly reduces economic activity and creates things like stagflation. Soon, it is only the upper half of the income scale that can afford to eat out.

The second way that businesses fight rising minimum wages is through pay compression. The business only raises wages for those whom they are legally required to increase. This causes the skilled laborer to make the same money as an unskilled one, thus removing the incentive for skilled labor. This incentive for people to remain unskilled soon squeezes some from the median of the middle class towards the bottom.

So how do we fight this? We can’t keep thinking that we can vote or legislate ourselves out of this. Instead, we need to be ready for the future. How do you prepare for the things that are coming? We aren’t going to see some Mad Max type of nationwide collapse. That just doesn’t happen when a country’s government collapses. What happens is that governments get replaced with something else, and building wealth is usually going to do more for you than wasting your time complaining about how rich white guy boomers are stealing the jobs from you that you weren’t qualified to have in the first place.

You need to recognize the trend. Look at the facts: right around 4 million teens graduate from high school each year, with half of them directly entering the work force. If all you have is a high school diploma, what are you doing to make yourself more employable than they are? What makes you special?

To make that even worse, there are currently about 10,000 illegal immigrants entering the country every day. A good portion of them have skills like construction and landscaping, and let’s be honest, are willing to work for less than minimum wage.

Your labor is a product being sold on the free market, so what makes your application look better than the next guy’s? It’s even harder if you are not one of the special class of people that the FedGov is telling employers that they must favor. That doesn’t mean you need to go to college, it means that you need to have job skills that will make you more employable, and you need to make sure that those jobs skills are in a field that will land you at the median income to start, and will allow you to make more money as time goes on.

In some cases, that means college. Not any college degree will do- you need a degree in something that is actually useful. STEM fields are good choices, so is a degree in human resources, but the field there is crowded, so be careful. Firefighting was a good career for me, but that depends on where you live. You could learn a trade. The Mike Rowe Works Foundation is a great place to start.

Mike Rowe says, and I agree with him, that we in this country have a problem: We have made work the enemy. It takes hard work and self control to become financially successful.

When I was a teacher, I would try to give my students this talk. I would ask them what they wanted to do, and I would get replies like

• video game designer
• Social Media Influencer or Youtuber
• Professional Athlete
• Doctor

I would then ask them how they were going to achieve that:

• Have you designed any simple ones yet? Like perhaps an app?
• How many videos have you made already? How many have gone viral? Do you already have more than 100,000 followers?
• How many hours do you practice your sport each day?
• How are you going to become a doctor if you can’t even manage a grade higher than a C in high school biology?

The answers were predictably disappointing. There was nothing for the game designer except the love of playing video games. The Youtube and social media fans hadn’t made any videos yet, or if they had, those videos had less than 1,000 views. The athletes didn’t practice outside of what the high school required for their sport. Everyone wants to be rich and successful, but far too many people aren’t willing to go the extra 5 miles that it takes to truly get there.

The point here is that you should treat yourself and the labor you produce as a product. Make your labor something that you can sell for a good price. Don’t sit on your ass waiting for someone to knock on your door and offer you big money to play video games and write crappy leftist poetry. There aren’t enough of those jobs for everyone. If you want to make more than average, you and the product you are producing have to be more valuable than average.

I can’t tell you what job you should be doing, or how you should do it. I am just telling you what you have to do- you have to put in the effort, work hard, and be patient. It takes decades to become financially wealthy.

• Your 20s are going to be a struggle. You are learning skills, or should be. Don’t be paying for $2,000 in tattoo work when you could be investing that money in your future. Education, financial investments, and other things that pay off later. Not useless baubles that will not do a thing for you. Most people don’t have an earning problem, they have a spending problem. Control spending and invest.
• Your 30s will be a bit better, but you have to resist the temptation to spend your money and take out loans against your future earnings to buy things that will be gone in a year or two, or in buying useless items like a Rolex or flashy clothes.
• Your 40s is where you really begin to build wealth. You can relax a bit on buying things for yourself, but you still need to keep the useless spending under control.
• The 50’s is where you hit the peak of building wealth. By age 50, less than half of Americans have a net worth of more than $315,000. Try to be one of them.
• The median wealth of a 60 year old in the US is $500,000. The mean net worth of a 60 year old is $1.6 million. You can get there, but it requires that you be smarter, work harder, and avoid useless spending when you are young.

Above all, don’t waste your time bitching about what others have. The fact that others are richer than you isn’t hurting you at all. One man being rich isn’t preventing you from being rich as well. Instead, you should be asking yourself why you aren’t doing better. Are you wasting your time instead of working to make more money? If you have 10 hours a week to play video games or surf the web, perhaps you could put away the child’s toys and take some classes.

Or is it that you are wasting your money on $5 Starbucks coffee, a $400 tattoo, or designer clothing? How is buying things that make you poorer going to help you become financially richer?

Be honest with yourself. Don’t fall into the trap of making excuses for your lack of work and thrift. The only person who will be harmed by those behaviors is you.