“Turn on, tune in, drop out” was a counterculture phrase from the 1960s. Perhaps it is time to revive it. The thing to “turn on” in 2020 is awareness of Bitcoin… So that one can “tune in” to a digital store of value… And then “drop out,” or rather opt out, of state-directed capitalism. Make no mistake, state-directed capitalism is the new thing. We saw confirmation of this on July 1, when the U.S. government bought nearly 30% of a
Read nowBridgewater Associates — one of the most successful hedge funds in the world by dollar volume of profits since 1975 — is warning of a potential “lost decade” for stocks. “Globalization, perhaps the largest driver of developed-world profitability over the past few decades, has already peaked,” said Bridgewater analysts in a June 16 note to clients, as reported by Bloomberg. “Now the U.S.-China conflict and global pandemic are further accelerating moves by multinationals to reshore and duplicate supply chains,” they
Read nowJeremy Grantham thinks we are witnessing the “fourth great bubble” of his investment career. This matters because of what Grantham did over the course of that career, and how long it has lasted. Grantham entered the money management business in 1969, using a “quantitative value” strategy long before Wall Street knew what that meant. Grantham himself called it “dopey value,” although the results were not dopey at all. His firm would buy stocks based on fundamental factors like discounted price-to-book,
Read nowOn June 15, a deadly fight broke out in a disputed border region between India and China. It was reportedly an actual, literal fight — with fists and iron rods — between dozens of Chinese and Indian soldiers. It was not the first fight of its kind, nor even the first one this year. In May 2020, another large-scale fistfight broke out in the same disputed area. This time, though, at least 20 soldiers died on India’s side, some of
Read nowOn June 15, the 2020 Lockdown Mania reached new heights of insanity. With the milestone achieved on that day, the mania cemented its place in financial history books. And speaking of history books: If you’ve been around markets long enough, you have likely heard about wacky schemes from centuries past, designed to fleece speculators at the peak of a frenzy. For example, near the peak of the South Sea Bubble in the early 1700s — a mania that pulled in
Read nowA fair number of people believe the Federal Reserve has control over the U.S. money supply. They also assume, by natural extension, that the Fed is responsible for the total amount of money in circulation. Neither of those assumptions are true. It’s important to understand why, as we will shortly explain. The Chairman of the Federal Reserve, in certain ways, is like a jockey riding an elephant. The jockey appears to have control over the elephant. Through various actions and
Read nowThe 2020 lockdown mania — our term for the ripping rally off the March lows, which went completely off the rails in the end — was the worst kind of bubble. It was born of greed and hubris, with little of value left behind. It was powered by ill-considered government stimulus, adding weight to a deficit topping $26 trillion. And it set up the markets, and the economy, for greater pain in its aftermath. Note we say the lockdown mania
Read nowModern Monetary Theory, or “MMT” for short, is a hot topic — or at least it was before 2020 exploded. Prior to the pandemic, there was a lively, ongoing debate about whether MMT was a good thing or a bad thing; whether MMT makes sense, or whether it’s a bunch of nonsense; and how soon deeply indebted Western governments might implement variations of MMT. As of June 2020, we can say that MMT is no longer a hypothetical. It is
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