Michelle Obama fans the flames of racial tensions during commencement speech

It was the best of times, it was the worst of times on radio this morning. Moments after playing the inspiring audio from Denzel Washington, Glenn played another commencement speech. But rather than deliver an uplifting and inspiring message, Michelle Obama fanned the flames of racial tension.

GLENN: Now, the worst of times. Here is -- and I just want to emphasize, the woman who is married to the most powerful man in the world, the First Lady of the United States of America.

MICHELLE: Because while we've come so far, the truth is that those age-old problems are stubborn. And they haven't fully gone away. So there will be times, just like for those airmen, when you feel like folks look right past you. Or they see just a fraction of who you really are. The world won't always see you in those caps and gowns. They won't know how hard you worked and how much you sacrificed to make it to this day.

PAT: Now, she's speaking to an all-black audience. And speaking of black airmen from Tuskegee about them. And, of course, this never happens to white people. White people never get looked beyond. Everybody always knows how hard a white person has worked. Everybody always knows that. Right? Just amazing.

GLENN: Listen to this list, and tell me this doesn't apply to white people as well.

MICHELLE: The countless hours you spent studying to get this diploma. The multiple jobs you worked to pay for school. The times you had to drive home and take care of your grandma. The evenings you gave up to volunteer at a food bank or organize a campus fundraiser. They don't know that part of you. Instead, they will make assumptions about who they think you are, based on their limited notion of the world.

PAT: Jeez. Wow.

MICHELLE: And my husband and I know how frustrating that experience can be.

GLENN: Can I ask you, Mrs. Obama, the First Lady of the United States of America, who is of a race that is 11 percent of the population. So you were clearly not voted in with just your race, white people in droves went out to vote for you, and you were somehow or another invisible so much that you became the president and First Lady of the United States of America.

PAT: Twice.

GLENN: Tell me about the troubles that you have seen. I mean, it's just remarkable to me. Remarkable. Now, I'm not going to play anymore -- you want to play more?

PAT: There's a lot here. We haven't even gotten to the part where she talks about Baltimore.

GLENN: Well, play the Baltimore part. I can't take --

PAT: Yeah.

MICHELLE: We both felt the sting of those daily slights throughout our entire lives.

GLENN: Stop.

PAT: Nobody else has. No white people has felt that sting. Nobody.

GLENN: No Hispanics. No whites. No Indians. Nobody else. And if you want to say that the Native Americans have felt it and the Hispanics have felt it, but the whites have never felt it. I mean, the conservatives have never felt it. The jobs that we -- that we are suddenly bypassed for because we're conservative. Because of our viewpoint. The religious that are mocked on a daily basis and belittled. Yeah, we've never felt that. We don't know what it's like. Okay. All right.

PAT: And, again, First Lady of the United States of America.

GLENN: Yeah. I'm not comparing -- I'm not comparing what anybody has gone through. The same as slavery. Or the same as what Martin Luther King went through. But we're not the country of Martin Luther King's time anymore. We are being dragged back to those days. And the proof is in the pudding when she starts talking about Baltimore.

MICHELLE: -- cross the street in fear of their safety. The clerks who kept a close eye on us in all those department stores. The people at formal events who assumed we were the help. And those who have questioned our intelligence, our honesty, even our love of this country.

GLENN: Oh, my gosh.

PAT: And why do people do that? We've questioned their honesty and integrity over and over again because of their actions.

GLENN: Because they lie.

PAT: Their honesty is in question because they've lied to us over and over again --

GLENN: And I want to make sure it's very, very clear. When we say "their honesty," we're not talking about black people. We're talking about this particular black person and her husband.

PAT: The Obamas. Yes.

GLENN: And we would question them like we do the Bushes. Like we do with the Clintons. Like we do with the Huckabees. Like we do with -- who else has been on our -- on our list of people to really question? Soros.

PAT: Harry Reid.

GLENN: Harry Reid. Lindsey Graham. John McCain.

PAT: They're liars.

GLENN: Liars.

PAT: And we've proven it over and over again. Now, love of country. That's based on your comments. On your actions. On the history of who you are and what you've done your whole lives.

STU: In the middle of the speech where she's essentially boiling her country down to a place that follows black people around in department stores and executes them as they cross the street, of course, we don't think you like this place. Look at the way you talk about it. You describe it as a horror show.

PAT: Right. She's the one who said, we have to change our history. We have to change our culture. We have to change where we are.

GLENN: Her husband said we have to have a fundamental transformation. I've pointed this out before. You don't go to the Mona Lisa and say I want to fundamentally transform this painting. You say, I want to restore it to its original beauty.

PAT: You don't go to the love of your life -- your wife or husband and say, hey, I really love you, but I want to fundamentally transform everything you are.

GLENN: Everything about you. It just doesn't happen.

MICHELLE: I know that these little indignities are obviously nothing compared to what folks across the country are dealing with every single day. Those nagging worries that you're going to get stopped or pulled over for absolutely no reason.

GLENN: Stop. I want -- I just want you to make a note of what she's saying here. What she's saying here is, you as a black person, you're invisible -- think of this, you're invisible when -- when you want a job or you want to do something, nobody will even see you. But because you're black, you're super, super visible when you're in a store or when you're driving. And they're going to stop you for no reason whatsoever. And you have a justified concern of being stopped for no reason whatsoever. Just make note of what she's saying. Because she's about to get to Baltimore.

MICHELLE: Feared that your job application will be overlooked because of the way your name sounds. The agony of --

GLENN: Like Barack Hussein.

STU: When you're trying to lead the world with a name --

GLENN: While we're at war with a guy named Hussein.

STU: And Osama, which is one letter away of his last name.

PAT: How does she get away with this? How does she get away with a speech like this! It's unbelievable.

GLENN: Nobody's willing to say it.

STU: It's laughable. Can we at least put this into context one more time? All of these things, in the middle of all these things, describing the worst country you've ever heard of in your entire life, she complains that people continually think that she doesn't love the country.

PAT: And it's because she's black that they do that.

STU: It's not because you're black. It's because you keep saying this. This is the only way you ever describe the nation you live in. Of course, people think you despise it.

PAT: Every time.

GLENN: But she thinks -- she's saying that it's only because I'm black that they would question.

STU: Right. And it's not that at all. When you're asked to talk about your country, this is what you do.

PAT: Virtually every time.

STU: You point out every horrible thing that's ever happened and you act like it happens all the time.

PAT: Would anybody question if she loves this country if she would get up and say, and leave it at this, look, I know the country has problems. It always has. And it probably always will. But, look, I -- we -- I and my husband are the first couple of the United States of America where we belong to a group that's 12 percent of the population. And we were elected president and first lady of the United States.

GLENN: So don't get discouraged. Don't get down. You can make it.

PAT: Nobody has done that in the history of the world. But we have gotten there.

GLENN: These two people --

PAT: Jeez.

GLENN: I truly believe, in the history of all mankind, they may go down as at least top ten, maybe top five of people who had the biggest opportunity in the world, in all of history to change things for the better.

PAT: Uh-huh.

GLENN: And they decided to go the other way. They could have changed race relations forever. And they took us back to the 1960s. On grudge politics.

STU: If you played this in a documentary from the 1960s, this speech --

PAT: It would be totally appropriate.

STU: You would have no idea that this country elected a black person. You would have no idea that we made any progress at all. This is boilerplate nonsense from the 1960s.

GLENN: Yes, it is.

MICHELLE: Sending your kids to schools that may no longer be separate, but are far from equal. The realization that no matter how far you rise in life, how hard you work to be a good person, a good parent, a good citizen, for some folks, it will never be enough.

PAT: Wow.

MICHELLE: Those feelings are real. They're rooted in decades of structural challenges that have made too many folks feel frustrated and invisible. And those feelings are playing out in communities like Baltimore and Ferguson and so many others across this country.

PAT: Wow. Wow.

GLENN: So she's saying -- she is saying that the reason why Baltimore is on fire is because people are feeling invisible. They feel like they can't -- they're not being heard. They're not being seen. And she's saying, it's not just that those feelings are real. She's saying, in the beginning of this speech, in the beginning of this paragraph, that that is the truth. So it's one thing to say, you know, I know how you feel. But let me tell you the reality. The reality is, things are getting better. You're not invisible. I'm the First Lady and the president of the United States is my husband. You can make it in this country. Look, the struggle is not gone. The struggle is still there. But you can make it. You can make it. And the worst thing to do is riot in the streets. She's saying the opposite. I know what you feel because I felt it, and even I'm the president's wife and I still feel invisible. I feel like we're not being heard. And so it's -- it's not only your feeling. I validate your feeling. I'm here to tell you, it is happening. And that's why people are rioting in the streets. She is encouraging this kind of behavior.

STU: Yeah. And, first of all, taking something that was real in the 1960s and rehashing it now as if it's still the truth. Honestly, wouldn't you ask, why the hell would you love that country? If that country is real in 2015, I don't love it.

PAT: It sounds terrible.

GLENN: I don't want to live -- I wouldn't be proud of the United States of America if we were doing what we did in Selma, Alabama.

STU: No.

GLENN: I would not be proud of that country.

PAT: The most ironic bit of this is it happened in Tuskegee University.

GLENN: Oh, my gosh. Booker T. Washington is spinning in his grave like a lathe. If you've ever read Up from Slavery, that is one of the greatest men to ever live in America.

PAT: It's the opposite of everything he stood for, believed, and advocated.

GLENN: Absolutely. But I doubt they even teach that anymore.

PAT: I bet not.

GLENN: I bet that's so lost. Even now, if you buy Up from Slavery, the copy that I have, I have an original copy. You go back and you read the -- the new versions, the version I have, the preface is from like some Harvard know-it-all that says, we're not even sure that any of this is even real.

PAT: What?

STU: What do you mean?

PAT: Are they saying he didn't write that?

GLENN: We think that this is mostly made up. He wasn't really a slave.

PAT: What! Oh, my gosh.

STU: Trying to discredit him.

GLENN: Yeah. To totally discredit him now.

PAT: Wow.

GLENN: And he is one of the greatest voices. Every child, black, white, brown, doesn't matter, every child should read Booker T. Washington Up from Slavery. Should know who Booker T. Washington is. Should emulate his actions and his life. That guy had more answers in his pinkie than everybody in Washington has today.

STU: This is sort of separate. We say this many times though that the suspicion is, of many, that she's actually more radical than he is.

GLENN: Yes.

STU: Michelle is more radical than President Obama. This is an interesting piece of this. Because he's been criticized by some in the black community for using the word thug to describe Baltimore and some of these other riots. He's been out there actually using that word. Which MSNBC is calling the new N-word. The President of the United States is using that word to describe some of these people. That's not the vibe here. There's an obvious separation -- either he's completely lying when he's using that because he's using it for some political purpose, or they are at odds on this position.

GLENN: I have a feeling that their upstairs talk is very contentious. I have a feeling -- I don't know whether he believes it or what. But she does believe it. And he's probably saying to her, I'm the president. You don't know what I'm dealing with here. And he may actually believe it. But he's trying to walk a more fine line that she doesn't have to walk.

Trouble ahead for the housing market

CHRIS J RATCLIFFE/AFP/Getty Images

Our good friend John Rubino over at DollarCollapse.com just released an analysis titled US Housing Bubble Enters Stage Two: Suddenly Motivated Sellers.

He reminds us that housing bubbles follow a predictable progression:

  • Stage One: Mania -- Prices rise at an accelerating rate as factors like excess central bank liquidity/loose credit/hot foreign money drive a virtuous bidding cycle well above sustainably afforable levels.
  • Stage Two: Peak -- Increasingly jittery owners attempt to sell out before the party ends. Supply jumps as prices stagnate.
  • Stage Three: Bust -- As inventory builds, sellers start having to lower prices. This begins a vicious cycle: buyers go on strike not wanting to catch a falling knife, causing sellers to drop prices further.

Rubino cites recent statistics that may indicate the US national housing market is finally entering Stage Two after a rip-roaring decade of recovery since the bursting of the 2007 housing bubble:

  • the supply of homes for sale during the "all important" spring market rose at 3x last year's rate
  • 30 of America's 100 largest cities now have more inventory than they did a year ago, and
  • mortage applications for new homes dropped 9% YoY

Taken together, these suggest that residential housing supply is increasing as sales slow, exactly what you'd expect to see in the transition from Stage One to Stage Two.

If that's indeed what's happening, Rubino warns the following comes next:

Stage Two’s deluge of supply sets the table for US housing bubble Stage Three by soaking up the remaining demand and changing the tenor of the market. Deals get done at the asking price instead of way above, then at a little below, then a lot below. Instead of being snapped up the day they’re listed, houses begin to languish on the market for weeks, then months. Would-be sellers, who have already mentally cashed their monster peak-bubble-price checks, start to panic. They cut their asking prices preemptively, trying to get ahead of the decline, which causes “comps” to plunge, forcing subsequent sellers to cut even further.
Sales volumes contract, mortgage bankers and realtors get laid off. Then the last year’s (in retrospect) really crappy mortgages start defaulting, the mortgage-backed bonds that contain their paper plunge in price, et voila, we’re back in 2008.

Rubino's article is timely, as we've lately been seeing a proliferation of signs that the global boom in housing is suddenly cooling. I've also recently encountered similar evidence that the housing market in my own pocket of northern California is weakening, and I'm curious to learn if other PeakProsperity.com are seeing the same in their hometowns.

The Global Housing Bubble

Housing, as they accurately say, is local. Conditions differ from region to region, making generalizations of the overall market difficult.

That said, the tsunami of $trillions printed by the world's central banking cartel since 2008 clearly found its way into the housing market.

The world real estate market is HUGE, over $200 trillion. That dwarfs the global debt and equity markets. So it's no surprise the central authorities did all they could to reverse the losses the GFC created for property owners.

As a result, many of the most popular locations to live are now clearly in bubble territory when it comes to home prices:

UBS map of global housing bubbles

The chart above displays the most bubblicious major cities around the world in red. But it's important to note that the merely 'overvalued' markets denoted in yellow, and even some of the green 'fair-valued' ones, are still wildly-unaffordable for the average resident.

For example, in "yellow" San Francisco, where the median home now costs $1.6 million, prices are well-above the excesses seen during the previous housing bubble:

And in 'fair-valued' New York City, the median household must spend 65% of its annual income on housing alone.

Is it any wonder that 70% of millennials who don't yet own a home fear they'll never be able to afford one?

Signs Galore Of Topping Markets

At the end of a speculative bubble, it's the assets that are most overvalued that correct first and correct hardest.

So we would expect that as the highest-priced real estate markets fare from here, the general real estate market will follow.

When we take a closer look at what's currently going on with the red-hot real estate markets noted in the chart above, we indeed see evidence supportive of Rubino's claim that the decade-long Stage One mania may now be ending.

Here's a spate of recent headlines about these cities:

Sure looks like Rubino's predicted Stage Two symptoms of rising supply and stagnating prices.

Local Signs, Too

As mentioned, I live in northern California, quite close to Santa Rosa.

Things here aren't as nuts as they are in San Franscico; but it's still a moderately-affluent region with lots of second homes. It's one of the semi-frothy areas I'd expect to see cooling off in first should there be a downwards turn in macroeconomic conditions.

Located less than an hour north of San Francisco, residential housing prices here have roughly increased 2x over the past six years as the Bay Area has boomed. Supply has been in chronic shortage, exacerbated by the loss of thousands of structures burned during last October's destructive Tubbs fire.

But recently, for the first time in many years, realtors here are beginning to talk of a softening they're seeing in the local housing market.

Median sale prices dropped from May to June, which is counter to previous years. And several towns are seeing year-over-year declines in median price -- something unheard of over the past 7 years.

Meanwhile, the days-on-market ratio for properties is beginning to creep up.

Of the greatest concern to the realtors in my area: bidding wars are no longer happening. Houses are selling either at or below asking prices now. That's a *big* development in a market where houses have routinely sold for $50-100K+ above the listing price.

In a similar vein, I'm hearing evidence of the softening rents down in San Franscico and the East Bay (Oakland/Berkeley). Wolf Richter has done a good job chronicalling the substantial volume of newly-constructed units that have recently hit the market threatening to depress rents, and I've heard from a multi-family unit owner down there how landlords in the area are now finding their rents ~$500 too high for the market to bear.

This is all early and anecdotal data. It's too little at this point to claim definitively that my local housing market has entered Stage Two.

But I'm curious to hear from other PeakProsperity.com readers. What are you observing in your local markets? Are you seeing similar signs of concern?

Please share any insights you have in the Comments section below. Collectively, we may be able to add clarity, in one direction or another, to Rubino's hypothesis.

Prepping For Stage Two

Whatever the timing, Stage Two is an inevitability for today's ridiculously-overpriced real estate markets. It's not a matter of if it (as well as Stage Three) arrives, but when.

Given the data above, I think Rubino is correct in his assessment. Or at least, correct enough that prudent action is warranted today.

This makes even greater sense when considered along with the current trends of rising interest rates and quantitative tightening. Remember, home prices and interest rates have a mathematically inverse relationship: as rates go up, home prices must go down (all else being equal). And as central banks start withdrawing in earnest the excess liquidity that inflated property values to their current nose-bleed heights, expect further downward pressure on prices.

To drive the urgeny home even harder, we haven't even yet talked about the damage an economic recession and/or a painful correction in the financial markets would wreak on the real estate market. With the current expansion cycle the second-longest on record and our all-time-high markets looking increasingly vulnerable, it seems very unlikely we'll avoid at least one of those crises in the near to mid-future.

Here are worthwhile steps we recommend at this point:

  • Consider selling: If you're a homeowner and are not committed to remaining in your property for the next decade+, do some scenario planning. If prices fell 20%, how much of a financial and emotional impact would that have on you? If you have substantial equity gains in your home, Stage Two is the time to protect them. If you have little equity right now, make sure you're fully aware of the repercussions you'll face should you find yourself underwater on your properity. What will your options be should you lose your job in the next recession? Whether to hold, or sell now and rent, is a weighty decision; and the rationale differs for each household -- so we strongly recommend making it with the guidance of your professional financial advisor.
  • Raise cash: The vicious cycle that begins as Stage Two transitions into Stage Three is deflationary. Lower prices beget lower prices. During this period, cash is king. By sitting on it, your purchasing power increases the farther home prices drop. And when the dust settles, you'll be positioned to take advantage of the resulting values in the real estate market. We've written at length about the wisdom of this strategy given current market conditions, as well as how, while waiting for lower prices, you can get 30x the return on your cash savings than your bank is willing to pay you, with lower risk. Our recent report on the topic is a must-read.
  • Educate yourself: Yes, real estate is overpriced in a number of markets. But it has been and will remain one of the best ways available to the non-elites to amass income and tangible wealth. And as mentioned, when the next Stage 3 brings prices down, there will be value to be had -- potentially extreme value. If you aren't already an experienced real estate investor, now is the time to educate yourself; so that you'll be positioned to take informed action when the time to buy arises. Our recent podcast interview on Real Estate Investing 101 is a good place to start.

In Part 2: The Case For Starting To Build A (Small) Short Position, we conduct a similar analysis into the overvaluation and growing vulnerability of the financial markets (which are highly likely to correct much faster, sooner and more violently than the housing market), including the details on a recent short position we've started building.

The tranquil "free ride" the financial and housing markets have had for nearly a decade are ending. The string of easy gains with little effort are over now that the central bank money spigots are turning off at the same time the "greater fools" pocketbooks are tapping out.

For a brief time, prices will waiver, as investors remain in denial and refuse to sell at lower prices. But soon that denial will turn to panic, and prices will plummet.

Make sure you're positioned prudently before then.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

It's a bad day when you've stepped in dog poop.

But it's an even worse day when you're stepping in human poop — especially when underneath the poop is a dirty needle. That's the glory that is San Francisco today.

The city doesn't know what to do. There's more human feces in the street than ever before. This is starting to look like human evolution in reverse. And I want to be a helper in this situation.

RELATED: What the 💩 is going on in San Francisco?

And so, as a helper, I've got an idea for San Francisco. And I'm going to share it with you — free — at absolutely no cost to you. This is a public service.

We made a little sign — "No Human Pooping" — because I think that's clear enough, even for those who may be high on heroin, to understand.

Feel free to download and print as many copies as you'd like, and post them on your property. Or click the buttons below to share on social media.

Something has got to be done about this 💩.

Click here to download your printable copy of the sign.

What the 💩 is going on in San Francisco?

Justin Sullivan/Getty Images

Finally, a beautiful Sunday in your picturesque bayside city. You paid good money to move here. Not cheap. The $150,000 range leaves you just about middle class. In Ohio, that'd buy you a small town. But this is better than Ohio, you tell yourself. Sure, the city isn't as scenic as the postcards, but here you are, at the YMCA fields. You're coaching your kid's soccer team. And today is the co-ed Under-8 soccer final. Really, it's their World Cup. You bought the good oranges and Capri-Sun—the special edition kind with cold-sensitive images on the front. You worked hard for this moment.

RELATED: Illegal Immigrant Hits Jackpot and Is Awarded $190K From San Francisco for Deporting Him

Your job is demanding. Sometimes, you're there 60, 70 hours a week. But somebody needs to coach this soccer team so here you are. And, what. What is that. Your son, he's dribbling past the kid shoving dandelions into the ant hill, and, is he going to score a goal? Yes. Yes, he is, but all of a sudden, right as your son's leg angled back to kick the ball, you hear an animalistic scream behind you. You turn around, and see a man shrieking as he squats over the sidewalk. What is he doing, you ask yourself quickly. Oh, God. You know what he's doing.

Following the death of Mayor Ed Lee, San Francisco Mayor London Breed inherited quite a mess. San Francisco is in shambles. Despite topping nearly every list of the nation's highest cost-of-living prices, San Francisco has been plagued by homelessness, often with unbelievable negative consequences.

I'd like to add that, the segment begins with footage of Mayor Breed walking around San Francisco, and as she passes a group of homeless people, at least one person is openly injecting themselves with a needle.

I shouldn't even have to say this, but helping disadvantaged people is a good thing. The Bible is very clear on the subject.

"Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly; defend the rights of the poor and needy." - Proverbs 31:8-9

San Francisco's approach to dealing with the poor is in fact detrimental to the poor.

"Whoever oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God." - Proverbs 14:31

"Looking at his disciples, [Jesus] said: "Blessed are you who are poor, for yours is the kingdom of God. Blessed are you who hunger now, for you will be satisfied. Blessed are you who weep now, for you will laugh." - Luke 6:20-21

San Francisco's approach to dealing with the poor is in fact detrimental to the poor. Walk around the city and you'll see a lot of thousand-dollar tents that function as homes, gifts from good-natured but ultimately misguided people, who function more as enablers than rescuers. The city has set up injection sites, where homeless heroin addicts are provided with clean syringes and allowed to shoot up without punishment. May God bless them. And may we help them in a better way.

Revolutions are started by youth. And the left is desperate for young blood, or, worse, for fresh blood. They're turning on their own.

As reported by the Los Angeles Times, Sen. Dianne Feinstein is more often considered too radical. In a show of force, California Democrats have chosen Feinstein's opponent, Kevin de León, over her.

RELATED: 'I remember thinking liberals were the good guys': Dave Rubin on why he really left the left

Lynne Standard-Nightengale, a member of the Amador County Democratic Central Committee, said she wanted to "send a message."

I just think we need a younger, progressive person there. The Democratic Party in California has moved to the left, and he personifies those values.

Feinstein and de Leon will face each other again in November because California has an open primary system in which the top two finishers face each other, regardless of party.

The left is going hard left. When Dianne Feinstein is not left enough for you—where are the press reports of the extremists taking over? The trend is spreading. A growing number of Trump's base are former Democrats, who voted for Obama.

When Dianne Feinstein is not left enough for you—where are the press reports of the extremists taking over?

So, in response, Democrats are prowling after a new base, a new young base, who's never voted before.

Thankfully, many have predicted that the next generation of voters will be the most conservative generation since pre-WW2. I guess they've watched as their older siblings (or parents) have returned from college with pink hair, atheism, exorbitant debt, and infinite genders, only to decide that personal responsibility, a moral compass, and belief in God are preferable.