Mortgage and Real Estate News Update!
QT and Sodom and Gomorrah
Quantitative Tightening always reveals fraud, abuses, scams, and dubious ethical behavior by everyone!
Think of QT as the invisible hand that reaches down from the sky and crushes all greed and evildoers in the market.
Do you think if money was cheap and easy that the FTX fraud scandal would surface? Nope, and plenty more fraud and excesses are coming to light as the Fed continues to raise rates and goes to a 5% Fed fund rate. How many more collapses and scandals are coming with the next 200-bps hikes? A lot more. Even the CEO of FTX said in a June interview of Forbes that “There are some third-tier exchanges that are already secretly insolvent,” while his FTX was a tier 1.
Go read the article and tell me this guy isn’t going to rat out the entire industry the moment the FBI shows up at his door.
https://lnkd.in/ecKBDdnj
Think of it as a needed cleaning up of the system. Every decade we need to flip rates and tighten to clean shot. In the early 1980s, we had S&L. early 90s Junk bonds, early 00s we had .com/accounting scandals (where we had to give a general amnesty to hundreds of companies to show the IRS and SEC the real books), and in 08 we had the housing burst due to bad CDO and CDS investments.
Each one had one thing in common aka QT/higher rates. It’s the only way we get the truth about the state of companies and the economy and want to find and publicly shame bad actors.
No one weeds out bad actors when they make investors money. The moment QT/Higher rates hit and their scams stop making money, then everyone gets a backbone and has ethics after suffering losses.
It’s the old tale of Sodom and Gomorrah. Everyone knows they are going around partying and going against God but no one believes God is going to do anything about it while the party is still going on. And then God brings his wrath from above and crushes everyone and cleanses the land. A few years later everyone is partying again because hey that was old Sodom and Gomorrah and this is New Sodom and Gomorrah and this time it’s different!
Debauchery and parties will always happen, it is the nature of man and his greed. The key to surviving Sodoma and Gomorrah is to always remember that nothing good happens after 2 am, so take your winnings, run to the hills, and don’t look back.