News

March 2021

The Digital Dollar is High on the Fed-and-Treasury Priority List

March 3, 2021John Banks

The digital dollar — a USD version of central bank digital currency — is now a “high-priority project.” That was the phrase used by Jay Powell, Chairman of the Federal Reserve, in a U.S. Senate hearing on Feb. 23. “We are looking carefully, very carefully, at the question of whether we should issue a digital dollar,” Powell said. With each passing day, the digital dollar project is making progress behind the scenes. Just as importantly, political momentum strongly favors a

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The New York AG Issues Tether a Speeding Ticket

March 1, 2021John Banks

On Feb. 5 we asked the following question: “Has Bitcoin (and the Entire Crypto Space) Been Boobytrapped by Tether?” Our answer was “no,” and you can read why here. The short version is that Tether, a popular U.S. dollar stablecoin, is probably not a systemic risk. An elegant analysis from someone named “Crypto Anonymous” had argued otherwise, claiming that Tether was essentially a giant counterfeiting scheme that could blow up at any moment. The “Crypto Anonymous” view naturally generated significant

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February 2021

The EV Bull Market is Over

February 24, 2021John Banks

“Because I used to love her,” the Rolling Stones sang, “but it’s all over now.” The electric vehicle (EV) bull market is officially over, too. The EV bull market — which some would call a bubble, or even a mania — has shuffled off its mortal coil. It is neither resting nor pining for the fjords; it is now an “ex” bull market. We can say this with clarity because Tesla — lord on high of the EV manor from

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Speculative High Flyers are Rapidly Losing Altitude

February 23, 2021John Banks

On Friday of last week we said: “There is a formidable bearish case for overvalued technology stocks moving forward, and it is only getting stronger by the day. “The bear case has to do with interest rates at the long end of the curve, and the willingness of the Federal Reserve to sit back as long-end yields (the 10-year and the 30-year) start to rise.” On Monday, Feb. 22, the markets took heed, with various high flyers falling hard. Perhaps

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Because of Texas, a Historic Infrastructure Bill Now Looks Inevitable

February 22, 2021John Banks

Imagine the world as a ball-shaped scoop of ice cream, sitting upright in an ice cream cone. The polar vortex is a circular flow of low-pressure cold air swirling around the top, or dome, of the ice cream scoop. This low-pressure air flow is held in place by a ring of high-pressure warm air that surrounds it like a doughnut. When the jet stream weakens, the ring of warm air that keeps the cold air in a circle around the

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The Great Texas Freeze Highlights a New Era of Weather Extremes

February 16, 2021John Banks

As if the wholly unprecedented nature of political events and market extremes were not enough, we now must also contend with an era of weather extremes. For instance, have you ever heard of a wind-chill warning for North Texas? Probably not, because the U.S. National Weather Service has never issued one — until now. “The cold wind chills could cause frostbite on exposed skin in as little as 30 minutes,” the National Weather Service advised shivering Texans. “Avoid outside activities

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Will the Chinese Government Kneecap Tesla?

February 11, 2021John Banks

Tesla investors face many risks. One of the largest — and one of the least talked about — is China. Tesla has an extraordinary relationship with the Chinese government. Thanks to this relationship, Tesla enjoys privileges and perks no other American company has received. The question is how long the relationship will last. That question, in turn, is tied to national strategic interest as defined by the Chinese government. If the Chinese government decides it has gotten what it wants

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Someone Acted Early on Tesla’s Bitcoin Plan (We Spotted Their Footprints)

February 8, 2021John Banks

Call it a strong hunch: There were people with advance knowledge of Tesla’s big announcement — and they used that knowledge to take large positions in Bitcoin, and Bitcoin-related equities, too. We don’t know these people, but we saw their footprints in the charts. A sizable tremor of buying activity rippled across all our Bitcoin-related holdings the Friday before last. For TradeSmith Decoder subscribers, that led us to issue an “urgent Bitcoin buy alert” on Jan. 29. Before getting into

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Access Drives Engagement: Why the Trading Landscape Has Changed

February 3, 2021John Banks

The stock market is both timeless and ever-changing, which makes it a curious paradox. On the one hand, markets look, feel, and behave exactly the same today as they did 100 years ago, or even two millennia ago. We can read stories of a bull market mania or market panic from the early 1900s, or the 17th and 18th centuries, or even dating all the way back to Roman times — in 2020 we wrote about the Roman Financial Crisis

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The ‘Reddit Silver Squeeze’ is Not Likely to Succeed

February 1, 2021John Banks

When writing about the GameStop squeeze last week, we compared it to Fight Club on Wall Street, referencing the 1999 movie with Brad Pitt and Ed Norton. On Friday, Jan. 29, the Fight Club aspect of the game spilled over into the real world, as a Redditor purchased space on a digital billboard in New York’s Times Square. The advertisement said “$GME GO BRR” and showed a stock price candlestick pattern going vertical. In the movie, Brad Pitt’s character gives

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January 2021

Robinhood Ignites Widespread Bipartisan Fury — But the Media Got the Story Wrong

January 29, 2021John Banks

You have likely heard of Robinhood, the zero-commission stock trading app that exploded in popularity during the pandemic. (It was already popular pre-Covid, but lockdown boredom and stimulus checks sent sign-ups to new heights.) On Thursday, Jan. 28, Robinhood ignited bipartisan fury with its decision to restrict users’ ability to buy calls or shares in GameStop (GME), the stock at the heart of an epic short squeeze. The perception was that Robinhood cut off trading access to its retail customers,

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GameStop is a Game that Might Not Stop

January 28, 2021John Banks

In 2018, Elon Musk said reality as we know it is probably a simulation. His basic rationale was that, because the universe is old enough to produce advanced-technology civilizations, there is a high probability those civilizations know how to run advanced computer simulations. The implication is that life on earth, as you and I know it, is one of those simulations. We are all just characters in an alien version of The Sims (a popular life-simulation video game). Neil deGrasse

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