Promoting Useful Knowledge

  Each week there seems to be some event that is out of the ordinary and has nearly everyone talking about it. Last week, we had four of them; Bitcoin became a $1T asset class, NASA landed a vehicle on Mars, the House hearing on the GameStop fiasco, and the cold snap in Texas. I’m opening with the House hearings because, in my opinion, they were a complete joke. Most of the politicians have no idea what’s going on and those testifying gave bland standard answers. I mean it’s not like this happened the day before and you didn’t have time to have your staff educate you on the basics. Ask a decent question please. Honestly, this basically was a complete waste of everyone’s time, but at least it was quasi entertaining. The person that impressed me the most was Jennifer Schulp of the Cato Institute. I felt she did a decent job of dealing with the dumb questions and explaining them so non-industry pros could understand some parts of the industry and what was actually going on. What we sh...

  " Crazy, but that's how it goes. Millions of people living as foes ." Last week, we yet again saw another microbubble as a result of the WallStBets crowd. I was prepared for it though with my anti-bubble suit I purchased. While I was looking for a picture for this post, I found an image from a research paper on actual air bubbles. I thought there was a neat correlation to what we find in markets. The larger macro bubbles make it to the surface and explode violently, while the microbubbles decrease in size and dissipate under the surface. Think about it, the larger a bubble is, like the entire Japanese stock market, NASDAQ stocks, the housing market, the more violent the explosion. The recent activity we’ve seen from the microbubbles, like Work from Home, MEME, or Cannabis stocks have kind not really done too much overall damage. Yes, many people got left holding the proverbial bag, but it wasn’t catastrophic. The 2021 bubbles do seem to be faster and more violent than ...

  What a week! I mean just when you think things are going to slow down, we see something else crazy happen. This week GameStop (-80%) and other meme stocks came crashing back to earth. Cornering the Silver market was a total fail. The richest man in the world is stepping down from running the world’s 4th largest company to play with rocket ships. Apple is now talking about building a car. Maybe you’ll be able to drive that with your watch. There were 40+ new companies that started trading last week, 14 IPOs and 27 SPACs. Janet Yellen moved faster than the normal speed of government and called a meeting with the SEC, Federal Reserve Board, the Federal Reserve Bank of New York, and the CFTC to discuss the recent r/WSB and RobinHood trading activity. At this pace, we might have a Congressional hearing before 2022. While I don’t think anything really comes of it, besides some grandstanding out of Congress, the first think I’d like to see would be short disclosures similar to those i...