American Hypocrisy

The US Ambassador to Hungary can’t help making the US and himself look like idiots. June 10, 2024 [WEBSITE]( | [UNSUBSCRIBE]( American Hypocrisy SEAN RING You won’t believe it without proof, so I’ll give it to you. The US government has scored a major own goal against Hungary in geopolitical soccer. It’s ludicrous that the US Ambassador to Hungary would criticize the country for being dependent on Russian energy when the US still – still! – imports Russian-enriched uranium. But they do. First, let me remind you why the West hates Orbán (not the alleged reasons, either). Then, we’ll discuss how the US still funds Russia’s war effort. Yes, you read that correctly. Viktor Orbán: Hungary’s Defiant Champion Against Globalist Meddling On The Grand Chessboard, few pieces move as boldly as Viktor Orbán, Hungary's Prime Minister. He's a man who refuses to bow to the whims of globalists and stands tall against Western pressure. Orbán’s firm grip on Hungary has ruffled more than a few feathers, especially those of David Pressman, the U.S. Ambassador to Hungary, and the ever-controversial George Soros. While Pressman and Soros see threats in Orbán's maneuvers, many Hungarians see a leader protecting their national sovereignty and cultural identity. Orbán is often tagged as an autocrat by his critics. Why? Because he doesn't play by their rules. Since taking power in 2010, Orbán has restructured Hungary's legal and constitutional framework to strengthen the executive branch. His new constitution, implemented in 2011, has been decried for giving him too much power. Yet, for many Hungarians, this move is necessary to safeguard their country from external meddling and internal chaos. The media landscape in Hungary has shifted significantly under Orbán. Critics piss and moan about a lack of media independence. Still, Orbán’s supporters argue that these changes were essential to counter the overwhelming influence of liberal media, which often undermines national interests. (You can see how the media does it in the US rather easily, can’t you?) By consolidating media power, Orbán ensures that the Hungarian narrative remains Hungarian. Judicial reforms under Orbán have also sparked outrage. The West claims these changes undermine judicial independence – HA! – but Orbán’s approach ensures that the judiciary aligns with national values and priorities, unlike America’s, as shown by Manhattan’s Southern District. For Orbán, a judiciary that resists foreign influence and upholds Hungarian law is crucial for the country's stability. Electoral changes have also been criticized. Yet, Orbán's modifications to the electoral system, including gerrymandering and new campaign finance rules, are seen by his supporters as leveling the playing field against a well-funded and internationally backed opposition. The US is also miles behind on this issue. Non-governmental organizations (NGOs), especially those funded from abroad, have been another battleground. Critics portray Orbán’s laws restricting NGOs as attacks on democracy. However, many Hungarians view these organizations as Trojan horses for foreign influence, undermining Hungary’s sovereignty under the guise of promoting democracy and human rights. [You might have seen how Georgia (the country) has just passed a law requiring media, NGOs, and other nonprofit groups to register as “pursuing the interests of a foreign power”]( if they receive more than 20 percent of their funding from abroad. How great is that? But the real reason [they hate Orbán is for views like this one]( (bolds mine): It must also be made clear that we didn’t join the European Union in order to collectively go to war. Nor did we join the European Union in order to pour 100 billion euros into war. Money’s being poured in by the sackful – money that’s being thrown together from the taxes of individuals and companies, from individual and company taxpayers. And instead of keeping it in the European economy and using it to develop Europe, we’re sending it away and burning it in the war. We’re already at 100 billion, and ever more demands are being made. War is a Moloch, a monster that’s always hungry and needs to be fed. It needs to be fed with money, and I see that the Americans – at least the Democratic administration – and the leaders of the European Union are prepared to feed it. If we’re going to spend all our money in Ukraine, how are we going to restart the European economy? [The AI Chip Powering the New iPhone?]( The first iPhone changed the world, all thanks to this “WiFi” chip. Now, a revolutionary new AI chip is set to do it again. However, Apple did not create this chip. The name of the mysterious supplier company that did is expected to be released on Monday, June 10, at 1 p.m. (ET) during Apple’s Worldwide Developers Conference. If it is, then this tiny AI supplier could potentially grow 10x over the next year…even 100x over the next decade. [Go here for the details on how YOU can invest in this tiny company before it explodes.]( [Click Here To Learn More]( Pressman’s Whining Enter David Pressman, the U.S. Ambassador who has taken it upon himself to lecture Hungary on its foreign policy. Pressman’s main gripe? Hungary’s rather cozy relationship with Russia. While the EU and NATO push for harsher measures against Russia, Orbán has correctly prioritized Hungary's interests. Orbán understands that Hungary’s reliance on Russian energy is non-negotiable. (The Germans are just figuring this out for themselves. [The earthquake in the European Parliament elections yesterday demonstrates this.]( Manny Macron in France just dissolved his National Assembly to call a snap election. This could be a major miscalculation. Stay tuned.) Long-term energy deals with Russia, including the Paks Nuclear Power Plant expansion, are seen as pragmatic moves to secure Hungary’s energy future. Pressman’s tirades against Hungary's stance on Russia echo a broader frustration in Washington. Hungary’s reluctance to toe the Western line on sanctions and diplomatic pressures is seen as a betrayal. Yet, Orbán’s defiance is a testament to his commitment to Hungary's national interests rather than being a lapdog to Western dictates. But Pressman’s latest moan takes the cake. According to [Denes Albert at Remix]( Pressman wrote the following Facebook post: Hungary’s foreign minister makes his 8th trip to Russia since Putin’s invasion of Ukraine. Hungary’s government says it is the ‘party of peace’ while continuing to stand with Putin’s party of war. Hungary’s addiction to Russian energy is dangerous and unnecessary. Minister Szijjártó is right: energy diversification is not a matter of ideology but one of physics. The laws of physics in Hungary are no different than the laws of physics in every single one of Hungary’s EU partners, all of whom have chosen to reduce dependence on Putin. Of course, Albert was having none of it. He wrote (bolds mine): Hungarian news and opinion portal Mandiner pointed out the duplicity of Pressman’s position, pointing out that “David Pressman does not seem to be bothered by the fact that America is also funding the Russian war along the same lines, since the uranium business between the U.S. and Russia is still going on behind the scenes.” The U.S. passed a bill just last month banning the purchase of uranium from Russia despite the war running for over two years, and that bill will only gradually phase out these purchases over the course of years, which means the U.S. will be supporting Russia’s war in Ukraine for years to come. Last year, RIA Novosti, based on data from the U.S. Bureau of Statistics, calculated that in the first half of 2023, the United States bought no less than 416 tons of enriched uranium from Russia during the war, 2.2 times the 188 tons bought in the previous year. You’ve just got to shake your head at this hypocritical nonsense. Wrap Up Viktor Orbán stands as a bulwark against globalist influence, defending Hungary’s sovereignty with a resolve that infuriates his critics. David Pressman, representing the US and globalist pressures, is often seen as a threat to Hungary's autonomy. Orbán's policies aren’t those of an autocrat, but those of a leader who puts his nation’s interests above all else. In a world where international actors and ideologies increasingly threaten national sovereignty, Orbán's Hungary offers a model of resistance and resilience. As the US Ambassador to Hungary, Pressman needs to understand that people can not only find his Facebook posts online but also see the USG’s contracts with Russia. It’s embarrassing. And yet, it’s nothing new for Joke Biden’s administration. Have a great week. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Wobbling Weebles SEAN RING I’m awfully nostalgic lately. Yesterday was my parents’ anniversary. The family ate dinner at one of my favorite restaurants in Asti, Il Cavolo a Merenda. That translates to “Cabbage as a Snack,” but it’s anything but. I wouldn’t make you drool in your morning coffee, so I’ll spare you the gustatory details. Every year, my father loves to quip how appropriate it is that he married my mother on D-Day. I don’t blame him. I still refer to the Raffles Hotel in Singapore – where Pam and I got married – as the “Scene of the Crime.” Last night was the first time in years that we had all gone out for a night on the town. It was lovely, and we fondly reminisced about things that happened a lifetime ago. As I drank a delicious glass of Barolo, I felt that this was both the beginning of something new and the end of something old. Of course, we’re starting a new life together in Italy, but the ways of doing things are changing. I’ll show you how. Let me ask you a question: imagine that a few years ago, I told you that… - Three wars were going on simultaneously (Russia/Ukraine, Israel/Palestine, and maneuvering around Taiwan/China); - The Global South is reforming around BRICS and wants nothing to do with the “Washington Consensus” or its sanctions regimes; - We still have supply chain issues from Covid and the Russia sanctions; - We still have too much stimmy out there from Covid and from ridiculous fiscal spending (which we now call fiscal dominance) to the tune of $1 trillion every 100 days; - …and the Suez Canal was closed to all US/UK/Israeli traffic thanks to a bunch of goatherders using cheap Iranian drones… …at what price do you think an oil barrel would be trading? What do you think you’d answer? $150? $200? My friend, right now, we’re trading in the mid-70s… that is how bad the world economy is… all of that stimulus has given us a whopping oil price of $75 (up 2% yesterday). Chew on that for a second. As I thought about that, an old jingle popped into my head. (My brain has a funny way of alerting me to things. It plays music in my head and demands I consciously interpret the meaning.) Weebles wobble, but they don’t fall down! Weebles! Weebles? Where the f*ck did that come from? I never owned any Weebles. I haven’t thought about Weebles since I last watched cartoons in the 80s. But my brain needed to tell me something, and it played that tune. Then I thought about it for a second. The stock market is the Weeble. It wobbles, but it doesn’t fall down. The problem is that the stock market eventually falls, but only when everything else has gone first. Let’s discuss what’s already happened and what may come later. [Man who Predicted Trump’s Win in 2016 Issues 2024 Prediction]( In 2016, even though surveys were giving Hillary Clinton more than 99% chance of winning right up until election night… Former advisor to the CIA, the Pentagon and the White House Jim Rickards predicted Trump’s win. You won’t believe what he’s predicting now. [Click here to see it because it’s a SHOCKER…]( And it could have huge implications for the financial markets. [Click Here To Learn More]( Treasuries My buddy H is a hedge fund manager in Hong Kong. He sent me this message on WhatsApp yesterday: You're not going to believe me, so check it out yourself. The 5-year beta of TLT is almost the same as TSLA. We certainly live in interesting times. First, beta measures a stock's volatility to the overall market. It’s calculated using linear regression. It tells us how volatile a stock is compared to the market, usually the S&P 500. For example: Stock’s Beta (for example) Simulated Market Return Simulated Stock Return 1.5 Up 10% Up 15% (luxury, tech) 1.0 Up 10% Up 10% (consumer discretionary) 0.7 Up 10% Up 7% (defensive stocks) It’s easy to interpret. If a stock has a beta of 1.5, we can expect it to go up 15% if the market rallies 10%. Luxury stocks and tech stocks exhibit this type of behavior. Market darling Nvidia (NVDA; beta = 1.69) has been dragging its sector for a wild ride. A stock with an average beta of 1.0 moves like the market. Visa (V; beta = 0.97) has an unmatched ubiquity. It is the market. A stock with a beta of less than 1.0 will move less than the overall market on an average day. Defensive stocks like Walmart (WMT; beta = 0.52) exhibit this behavior. Here’s the thing. Historically, TLT has a beta of practically zero. TLT is a bond fund and, therefore, should not correlate with the stock market whatsoever. Alas, it does. But if you do a linear regression of TLT’s monthly returns with the returns of the SPX, you’d find its beta is a whopping 2.17 – extremely volatile. TSLA’s 5-year monthly beta is 2.32, and we know what a roller coaster that’s been. My point is that the foundation of the market, the asset that gives risk-free returns, the US long bond, is as volatile as Elon’s electric car factory and has lost 34.22% over the last four years. Credit: StockCharts.com James Grant, of Grant’s Interest Rate Observer fame, once said that T-bonds offered return-free risk rather than risk-free returns. Now, they’re just a money pit. When market observers point out that BRICS can’t create a currency because they “need” a liquid bond market like the US’s, I wonder why anyone would want to guarantee themselves a big loss. And knock-on effects already hit some banks last year. The Banks From rates, we come immediately to the banks. If you recall, Silicon Valley Bank, First Republic, Here’s what I wrote back in March 2023: First, let’s establish why even Treasury bonds are a risky investment in a rising rate environment. US treasury bonds are default risk-free, not price risk-free. That is, the US Treasury can print whatever money it needs to make its investors whole, so it will never default on its debts. But USTs certainly have price risk! Just look at the ETF known as the TLT, which holds long-dated Treasury bonds: Just eyeballing this chart, you can see the TLT fell from a peak of about $150 to a trough of about $92.50. That’s a 38% loss! Not very risk-free, is it? But that’s what too many investors think. As rates rose, the long bond was crushed. Too many banks were, and still are, packed to the gills with the stuff. They’re colloquially known as “unrealized losses.” But it’s not just Treasuries; it’s mortgage-backed securities. Mortgage-Backed Securities Mortgage-backed securities (MBSs) are another enormous problem. It’s no secret the commercial real estate market continues to struggle. From the May 28th Rude edition: What Just Happened According to [Bloomberg]( For the first time since the financial crisis, investors in top-rated bonds backed by commercial real estate debt are getting hit with losses. Buyers of the AAA portion of a $308 million note backed by the mortgage on the 1740 Broadway building in midtown Manhattan got less than three-quarters of their original investment back earlier this month after the loan was sold at a steep discount. It’s the first such loss of the post-crisis era, according to Barclays Plc. All five groups of lower ranking creditors were wiped out. Market watchers say the fact the pain is reaching all the way up to top-ranked holders, overwhelming safeguards put in place to ensure their full repayment, is a testament to how deeply distressed pockets of the US commercial real estate market have become. Here we go again. My esteemed colleague Jim Rickards said after the March 2023 bank crisis that we were in the eye of the storm and not out of it yet. Once again, he called it correctly. Because of the mess the banks are in, I still think there’s a chance Jay Powell will cut rates next week at the Fed meeting. I’m probably wrong about that, but here’s the latest Zero Hedge headline: Credit: [Zero Hedge]( I’m thrilled to be wrong if the cut happens in July. Gold and silver will pop further once the rate cut happens. As for equities… Equities? We’re in the middle of an old-style Misesian crack-up boom. A crack-up boom is an economic crisis characterized by a recession in the real economy and a collapse of the monetary system due to continual credit expansion, which results in unsustainable, rapid price increases. Austrian economist Ludwig von Mises developed this concept as part of the Austrian business cycle theory (ABCT). The only difference from Mises' theory is that we needed recklessly expansionary fiscal policy (fiscal dominance) from Joke Biden and his idiotic Congress to get the legally counterfeited money into the hands of the people. That’s what created consumer price inflation. And that’s what will, at least temporarily, power equities pricing. So, while there’s big trouble on the horizon, selling now is lunacy. Remember, making new all-time highs isn’t characteristic of a bear market. Wrap Up I had a busy travel schedule this week, so thanks for bearing with me. I must thank Chris Campbell and Byron King for their excellent contributions to the Rude this week. It took a load off. With that said, keep your wits about you. It’s not time to sell yet. But it will be one day. The foundations of the market are wobbling, and now that’s infected the corporate bond market and MBSs. We’re not at equities… yet. What will tell us to get out? It’ll likely be a sharply steepening yield curve and (finally) rising oil prices. But more on that later. For now, enjoy it while it lasts. Have a great weekend! All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. 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