NYC Journal

[Calzone]

No injection today, that is scheduled for July 1st. So many doctor’s appointments that both “Maggie” and I thought that today was the day.

My appointment with my urologist was just a check-in. I did learn that any incontenence issues kinda get locked in when radiation treatments begin. Also I was told to expect some bleeding…

Everyone was pleased with my prognoses which is very-very good.

I also the temperature discomfort is my form of “hot-flashes” which is not too bad. Maggie says/reports that some women get it so bad they want to rip their clothes off.

My feeling is that my urologist was pleased and proud. He was surprised that I am getting the max dose of the inhibitor and display so little side effects. Lucky me.

Moving right along…

Seems like Treasury yields are lower, and that triggered a mild red screed, but gold shot up over $50.00. Here is the spin: gold offers no return other than appreciation; and pretty much U.S. Treasury bonds are worth less (two-words).

Pretty much gold is a safer place to park cash than dollars. I would extend this also to dollar assets like U.S. equities (U.S. Stocks). In this case “cash is trash” when it comes to the U.S. dollar. The future is the dollar is worthless (one-word), and then who will buy our debt. That era is disappearing and will be gone, the forced move will be austerity, and not by choice.

The smart thing would be to live in austerity now, meaning living below your means. Pretty much get ready for the future…

Watered the garden. 30 mph winds will encourage evaporation and the drying of soil. Might water again tonight.

“Maggie” thinks it is a good idea to make the front porch a 4-season room. Not hard to do, and it can easily be done in stages. Originally this was my idea and intent, but it is best for it to be Maggie’s idea because of woman-factor.

No building permit required, no higher taxes, and makes the Baby-Victorian more valuable. A “free” extra room.

Cal

 

[Calzone]

The second doctor’s appointment today was for “Maggie.” We stayed in Westchester to se a dentist who specializes in reconstruction. Pretty much he builds bridges and permanent teeth for implants.

The technology has advance to the point where no molds are required, and they scan the area. Don’t know if the replacement tooth is 3-D printed or not. My guess is the wax positive is 3-D printed then the traditional/conventional lost wax process is used.

Next doctor’s appointment is tomorrow for Maggie. A colon pre-screening required before a colonoscopy.

Seems like doctor’s appointments are a part-time job between the both of us.

Cal

 

[Calzone]

With the Moody’s U.S. bond downgrade mortgage rates now are north of 7%. That didn’t take long for the cost of borrowing money to go up.

Home affordability suddenly got worse, and remember when Canada’s credit rating on it’s bond got degraded and they lost their Triple “A” rating, it took them a decade to recover.

Realize that the average mortgage interest rate over the long-term (decades) is actually 7.49%.

We just went through an extended and historical period of UBER low interest rates, so a 7% rate is actually below the long-term average, but seems crazy high today. Realize that rates are just higher than the crazy low rates we experienced.

So the housing shortage continues because of high input costs to build new houses, and a severe shortage of available houses. High interest rates just makes everything worse.

So if housing starts and housing sales decline expect an impact on the economy in a negative way.

My bet is that in a downturn/slowdown that it will not be the average Joe buying a foreclosed house, it will be venture capitalists, and hedge funds again. Of course this makes the housing shortage and affordability worse. I think Lightning will strike twice.

The rollovers required by commercial real estate will be a problem for many commercial real estate owners. Rolling over any loan will be costly and not cheap. Will a crisis happen?

Cal

 

[Calzone]

Been working on the Fat Chance Yo Eddy. Just installed a spare Ti White Industry bottom bracket I had on hand. Well I bought it for the “Maggie’s” Yo Betty, but it never got installed. The Yo Betty with a rigid fork 3x9 XTR and mucho trick retro parts from back in the day only weighs 19 pounds.

This mucho retro bottom bracket has a spindle that allows for chain line adjustment. Kinda useful if you want to switch from a double from a triple, or vice a verser.

The Yo Eddy has some vast potential. The Ti fork legs are long enough to be a suspension corrected length with crown-steerer I’m expecting for a Thursday delivery. I could then easily convert the Yo Eddy between a full rigid and a front suspension bike EZ-PZ.

The Ti fork was a clone of a highly regarded BOI (Big One Inch). This basically is a Fat Chance design, and these vintage forks sell for big money when available.

I bought and stockpiled a Rock Shox SID Race that was freshly overhauled with new seals and wipers for the Ti IBIS, but it is not period correct (1994) so a Rock Shox Judy is a better match for the IBIS.

On the Yo Eddy currently is a Rock Shox SID XC that is fresh enough that it still holds the charge of air since when AJ sold me the bike as a steal deal. Pretty much I have an upgrade/spare.

On hand I have a set of blue anodized Paul’s Components brake levers for V-brakes that I bought for Maggie’s Betty, but she prefers the black versions that are not so loud looking and are stealthy. Oh-well, the Yo Eddy has that classic purple to blue metalic.

I bought some more stainless steel brake cables and shifter cables from AJ. Didn’t want to deplete my stockpile.

I assembled a modular Middleburn 175 mm crankset using a red anodized 4-bolt spider. I love the 4 bolt chain rings by Middleburn because they have these wonderful ramps for quick shifting if you love to jump chainrings on say rolling hills, even under full load.

The wheels will utilize polished Rhyno-Lite rims that are kinda loud looking in a mucho flashy manner. They have a mirror finish.

I bought Maggie’s dinner upstairs so she can eat in bed. Today is the second day I had dinner alone in my kitchen, but when I looked through the kitchen glass door I I see that same rabbit eyeballing me eating my lawn.

You can’t make this stuff up.

The yard is looking like a bit of paradise. Flowers are emerging and budding. The trees wave from strong breezes, and it is hard not to feel refreshed.

The rabbit moved closer to the back corner of the garage to shoo off a Robin that was near another one of his haunts. I believe his/her nest is under my neighbor’s line of white spruces that borders and overhangs our property.

I for one can say an aggressive Prostate Cancer can be very stealthful. Not all Prostate Cancers get indicated by a PSA. I’m very lucky mine was caught in time.

Back to work in the basement…

Cal

 

[Phil_F_NM]

Another gorgeous commute to and from work today.

Phil

 

[DownUnder]

The author Michael Korda wrote an interesting book about his prostate condition, this in the late 1990s or early 2000s.

Have you read it? If so, do you consider the information in itrelevant, or is it now outdated?

I have friends interested in reading this book, if and when I can ever find it in my many boxes of stored papers.

Your comments will be of interest to me and, I'm sure, others.

 

[Calzone]

I have not read Korda’s book.

The hot flashes are worse at night. It takes a while to settle down. Disrupts sleep, but overall the side effects are not too bad. Anemia dropped down my energy level, and the hot flashes disrupt my sleep.

I have a boring Cancer…

Cal

 

[Calzone]

Seems like a 2x11 XTR has the biggest gear range and is easy to implement. It also kinda uses the most of what I have on hand.

If I can effectively build out that Ti fork it would add lots of versatility and make the Yo Eddy a modular bike.

Crisp weather, closed windows and a cool sunny day ahead.

Meanwhile in the markets there is a U.S. Dollar sell-off underway. Any borrowing of money will be more costly. The real danger here is that households and the government relied on deficit spending to maintain a standard of living. Pretty much from here that can’t continue without bad consequences, and eventually the public will understand that it is not sustainable.

The future is austerity…

The exclamation point will be the price of gold. Because the U.S. Dollar is worth-less (two-words) and gold is priced in dollars, expect gold prices to increase.

BTW Wall Street is kinda blowing off the Moody’s Bond downgrade as a non-event. Actually it is a very big deal. Borrowing money will be more costly… and for a rather prolonged time…

Cal

 

[Calzone]

A red screen in the futures for the three major indexes. Meanwhile gold is above $3.3K.

The 10 year auction suffered a glitch, and today is a 20 year U.S. Bond auction. The yield on the 10 year is over 4.5%.

Understand that when the price of a bond goes down, the yield goes up.

The era of cheap or “Free” money is clearly over, and borrowing money will cost you dearly.

When money was free or cheap (Zero APR) I financed 4 luxury watches. I also used a convenience check to open a Scottrade margin account, and position and swung traded oil and energy stocks. I bought stuff I still own and use. It was a once in a lifetime event, and surprisingly it lasted a long time.

Point is I didn’t squander opportunity, and I recognized that debt was being encouraged as policy, and it became the culture to live by. Basically it taught many how to live beyond their means.

So here we are at the cusp of expensive money, that is if you are loaded with debt.

The term paycheck-to-paycheck I think is an overused term. They say that 60% of households live P-2-P, but what if you use those that are able to save as a cutoff, then you actually have about 30% or half of the 60% that live with no wiggle room.

Say you fully fund your 401K or 403B or a 529 fund for your kids. Pretty much money is tight, but you are actually saving money. Is this P-2-P?

So in this analysis there is a big difference between the two groups. Mostly income level…

So all this financial engineering, Zero APR, “Free-Money” and stimulus prevented recessions and collapses, but can’t be really used anymore. That era is gone and has passed. DEBT LOADS ARE A PROBLEM, but when will the markets realize that austerity and an extended slowdown lays ahead.

Payback is a bitch…

Cal

 

[Calzone]

When I expand the gold chart out to the 3-month I see two tops around $3420.XX and think that when gold creates a ‘triple-top” that another breakout will happen from there.

One concern though is the “open-interest” is only about half what is needed to push for bidding to new higher highs.

Don’t forget that dollar weakness makes gold attractive to foreign buyers.

Cal

 

[Phil_F_NM]

Rain today and tomorrow. No bike riding for me. Took public transport and almost had to start working early due to a woman experiencing a drug-induced psychotic episode. No shortage of excitement on a daily basis here in the illadelph.
Phil

 

[Calzone]

Did you know that hedge funds are shorting U.S. equities.

A must read is the Barron’s explanation of where we are with the bond yields on the ten-year hovering now above 4.5%.

In a sentence that the return on bonds, a safer bet than equities, effectively has the same return at these present stock valuations.

Pretty much simple math that involves P/E ratio (Price to equity ratio). Why take on more risk with the stock market and it’s volatility for basically the same return.

Anyways the hedge funds are kinda aligned with my thinking, and Barron’s cites a historical example where the S&P 500 gets a 11% haircut to be priced right for the risk/reward at this threshold on bonds.

Also other articles are saying that the FED is unlikely having freedom to drop rates, and that rates likely will remain steady. Now the new normal is the 10 year rate north of 4.5%. Already the 30-year is flirting with 5% and also has exceeded 5%.

Meanwhile the dollar and bonds are being sold off because they are valued less because of the recent tipping point of the Moodie’s U.S. bond credit rating. Lower prices on bonds, means/translates to higher yields, this in turn translates in turn to higher interest rates…

So a spiral begins…

So if you cut off capitol flows, this encourages less business spending, and a spiral begins to a further slowdown.

So another spiral begins…

So you see why hedge funds are shorting U.S. equities?

The Barron’s article is a must read. I suggest reading it two or three times…

Again, “Austerity lays ahead. Anyone loaded with debt will get crushed like ants when the shoe drops.”

Problem is that so many have unsustainable debt loads.

Cal

 

[Calzone]

One way of becoming rich is not wasting money. Basically buy “one and done.” An other way to express this is “buy to keep,” which means don’t be a cheap fXXk. Another way to say this is don’t fill land fills.

Helps if you are not a Walmart shopper of buy things made in China (cheap crap).

“If its free, its for me,” I say because this it can involve being creative, resourceful, inventive, and clever.

“Maggie” just did a private podcast moderating a panel of two for a luxury brand and made a quick 5 figure fee. She was in our tower room of the Baby-Victorian looking out the window and she sees Calvin carrying something down the street and into our yard via the dead-end.

The object was a 25 foot length of bamboo, a gift from Andrew’s property (dead, non living). Probably weighed about 4 pounds.

Would make a great fishing rod. Includes some excess limbs that need to be trimmed, and pretty much I want to fascinate the grandson tomorrow.

Pretty much a ready made flag pole. I could make a garden trellis… Anyways a free supply of raw material…

So with the 1966 C-10, I can see me building it out so the height is about that of a mini-van or a small SUV. Both Andrew and Joan need to sit more upright because of their advanced age. Basically I could lower the C-10 to the perfect ideal height and get Maggie’s approval.

So now my revised spending for the C-10 is about $25K to replace the entire drivetrain with new not rebuilt. So now I have a good reason to spend money to save money, and also I kinda have an investment. Chevy C-10’s built out with a new drivetrain sell for big dollars. I’m talking doubling my money easily.

So integrating and building things is what I did at Grumman and at two National Labs. Mostly construction, but also building out labs and systems, especially prototype electronics. These skills required creativity and problem solving along with great organizational skills that are detail oriented.

So all of the above points to knowing austerity and building from basically nothing. “Saving money is earning money,” I say. Be clever, be resourceful, use what you have on hand, and if it is free, it is for you.

In art the say “Less is more.” I can agree with that. I knew poverty, but I have a richer life than many, and it is not about really money. More about living then spending: people forget about that.

Cal

 

[Calzone]

BTW “Maggie” is looking into an adult booster seat to use in the Audi A4. The low seating bothers and aggravates her hips. One hip has been replaced, and the other has a bruised inflamed joint.

I’m not selling the A4. It is still a great car.

Back in the late 80’s I owned a Checker Limo, like the cab, but about a foot longer, 9 passenger capacity, black vinyl top, opera window… Pretty much was built on a longbed Chevy X-frame truck chassis, with a beefed up steering.

This was a rare vehicle, and perhaps only about 200 were ever made. I did see another one “in the wild” as they say. Certainly a vehicle that would be EZ-PZ keep going for decades.

This limo surely rode nice, was at about the height of a mini-van, and had a long wheelbase like my 1966 C-10. Certainly not to hard to recreate the ride of the Checker Limo in my 1966 C-10.

Cal

 

[Calzone]

The markets are unwinding. DOW down over 800 points.

Debt worries, and ahead sustained higher interest rates. Certainly a game changer. The deficit suddenly is a problem.

In this game of “Musical Chairs” the music has stopped, but really the panic and scramble has been delayed for so long some/many were wearing ear plugs and did not notice yet that the music has stopped. The are looking around and wondering why people have stopped moving in circles…

Cal

 

[Calzone]

A risk to foreclosure is actually home insurance costs. Flood, fire and hurricane risks are rising and so are insurance costs.

Ever make an insurance claim? Even with insurance my experience is that sure I got some money to cover damages, but also I suffered a loss. Never made money or even broke even.

So after say a natural disaster, or severe storm damage, is it tempting for a home owner to take the insurance money and run?
A lot depends, but if you don’t have a lot of equity, perhaps the wise thing is to give the bank the keys.

What if the house is un habitable? What if you don’t have the money to rebuild? Think of the California fires…

I feel relatively safe and secure in the Hudson Valley tucked within yet another valley. We are 70-75 feet above sea level depending on the tide. Yes, 40 miles north of NYC the Hudson River is big enough that the river flows both ways and has a tide, yet I can hear the Metro North diesels when they sound their horns. We are close to the river.

Our home insurance covered $7K of the $7.5K bill to replace the 1912 original clay sewer pipe line from the house to the street. They used the same technology they use on natural gas lines, they somehow line the existing pipe to make it structurally whole again. I have a warrantee for 50 years.

We were lucky…

Cal

 

[Calzone]

I’m thinking of making the steel IBIS a 3x1. I have the wheels, and pretty much the 11-speed freewheeled wheels make it EZ-PZ to just do a wheel change to convert the Ti IBIS from a 2x11 XTR gravel to a 2x11 XTR mountain bike. Add to this that it also is EZ-PZ to convert from a full rigid bike to a bike with a front suspension (Ti IBIS).

Anyways this is way cool. It also conserves resources, and pretty much I could at any time recreate a 1x11 XTR steel IBIS. The Steel IBIS Mountain Trials also like the Ti IBIS has the EZ-PZ full rigid to front suspension conversion.

Another option for the steel IBIS is a full blown trials bike with a 30 inch gear with a perfect chain (no chain tensioner required) along with a trials rock guard. Know that the Middleburn cranks are warrenteed under trials use.

Yet another option is just a perfect 63 gear inch single speed. Unusual for a mountain bike the steel IBIS has horizontal drop-outs like a track bike. Mint!!!

3X1 gearing with a 42/32/22 chain ring cluster with a 16 tooth White Industries freewheel provides a 63-48-33 with a 24 inch rear tire.

BTW the wheels I would call Phil approved: Sun Rhyno Lites, 14 straight gauge spokes, brass nipples. The rear is 32 spoke and the front 36-hole. Calzone factor is that rims, spokes, and hubs are all mucho evil all black. Know that a 24 inch wheel having a smaller diameter is inherently stronger that a larger diameter wheel.

I kinda need a bike that is mucho low maintenance to get to me through the next two years. No need to beat up a costly XTR 1x11 drivetrain. Pretty much I want to keep and save it and the 1x11 capabilities as a technical bike.

Having a trials bike is also great for skill and balance. The Steel IBIS is kinda bomb proof. Set up as a single speed with a 32-16T for 48 inch gear along with a Rock Shox Judy SL sent up with Speed Springs for a suspension it would be a great pump track bike. Quick steering, a stiff steel frame that is stout and overbuilt, and a hyper short 39 1/2 inch wheelbase it would be a very trick bike and mucho fun.

Somehow I have everything on hand and all kitted out. For a shifter for 3x1 I will use a Suntour XC Pro thumb shifter.

I love it…

Know that the color of the Steel IBIS is a much loud fluorescent orange that was powder coated. Over the decades This bike dates back to Shimano 6-speed SIS, perhaps sometime in the late 80’s, and that in places the powder coal has blistered, so now it resembles an original spatter coat paint job the IBIS did/performed back in the day.

I decided to go loud with fluorescent orange because I did not want to get mistaken by a deer hunter by accident. Know we rode in the pine barrens during hunting season. No joke.

Iron Mike mounted a bell on one of his seat rails that would chime figuring a hunter would not shoot a dog.

At times we would see hunters in tree stands, and one time we ran into a DEC Officer wearing his Kevlar vest, but know that a Kevlar vest will not stop an arrow.

Our early morning rides we called “Dawn Patrol.”

Cal

 

[Calzone]

Deficit financing, the need to borrow money to fund government budgets that have become “bloated” is not a problem that is restricted to the U.S.

This bloat that got compounded by 2007-2008 and then the Pandemic resulted in the same play by governments all over the world: borrow money; add mucho stimulus; and avoid financial collapse.

So pretty much everyone played the same game of kick the can further down the road, and here we are…

So around the world what is happening here in the U.S., a economic slowdown, seems to be universally happening all around the world.

Then the U.S. is not the only country that has a deficit problem, and investors are thinking about the risks and why lending money might be a bad investment in also other countries.

So interests rates here are heading higher, and bond yields are going up (higher interest rates to cover higher risks of loosing money or worse default).

Do you see the pattern yet?

An economic slowdown here in the U.S.; then a slowdown in the rest of the world…

Deficit spending in the U.S. leading to higher yields in bonds; then higher yields elsewhere around the world due to risk possible losses and worse default…

The U.S. starts a trade war, then other countries retaliate with tariffs and restrictions: tit for tat…

So in essence the pattern here is that in effect the U.S. has or seems to have exported: tariffs; problems with deficit financing; an economic slowdown; a trade war…

So we exported a lot of problems it seems, but I know the source and the origins.

So what is being assembled right now and is in play is what I have coined “The Greater Depression.” Pretty much the contagion has been released and it is spreading. What is going on in the U.S. has been “exported” and pretty much the rest of the world is presented with the same problems as the U.S.

Is this a surprise? Not really if you believe in “The Greater Depression.”

There is an expression, “When the U.S. sneezes, the world catches a cold.” This seems to be what is happening. What if the rest of the world is as messed up as here in the U.S.?

The “Bond Vigilantes” the buyers of government bonds decidedly are thinking that the problems in the U.S. are well spread throughout the world: a slowdown; deficits; too much debt; inflation…

Hmmm… Lots to obsess about and digest.

There is a “Great Unwinding” happening. In the game of Chess it would be considered a “forced move” at this point.

I can only think of two possible safe havens: gold and real estate. Both are limited in quantity. Debt can be increased, but who will buy it is the question? Interest rates will be like bidding on an auction on EBAY. The highest interest rate gets the debt bought.

So what is defined above is a “debt spiral.” Basically higher and higher interest rates make a debt burden worse. He who has the most debt suffers the most.

Not only people with get “crushed like ants when the shoe drops,” but also countries and entire economies…

Not good…

Cal

 

[Calzone]

Again read that Barron’s article on the relationships between bonds and equities and the spread of risk. The downturn in equities with bonds going down in value and the yields going up translates into lower pricing of equities.

“Look out below,” I say.

Also from my above rant, understand what is happening here in the U.S. has spread to other countries and other economies.

The big sell off is beginning. The tipping point and wake-up call has happened.

Cal

 

[Calzone]

The list is long of developed countries that are having problems with their “deficit financing,” but today we have a mixed screen in the futures market before the open.

Deficit financing has been going on for a long time, but when it started interest rates were at or near record lows. Today we have higher interest rates and the debt burden gets compounded as just the interest payments alone grows.

Rolling over debt is not so easy anymore, and the cost of rolling over debt resembles a credit card payment where more interest is paid and less principle. This is kinda what Ray Dalio calls a “debt spiral,” where interest payments get onerous.

So here we are, and the markets have a mixed screen in the futures markets. Not everyone is awake…

Cal