Interest rates in the United States have been falling for nearly four decades. That was largely due to one man, Paul Volcker, who died this week at age 92. The 10-year U.S. treasury yield, according to the St. Louis Fed, peaked in the vicinity of 16% in September 1981. As of this writing, the 10-year yield is below 2%. From a starting point of 16% to sub-2%, that is one heck of a slide. Some believe it will fall lower
Read nowAre we living in a time of mania? Quite possibly yes. To give you a spoiler for where we’re going, new evidence has come in suggesting an investment mania is at hand. It comes in the form of a $120,000 banana slapped on a wall with duct tape. Before being slapped on the wall, the banana was worth whatever an ordinary banana is worth. After attaining its $120K status, which in part involved the wall and the duct tape, someone
Read nowThe year 2020 is going to be wild. Not only that, the entire decade will be wild. We’ve done a lot of research on this — and our conclusion is that the 2020s could look like a mix of the 1930s and the 1920s combined. In some ways, that’s a good thing. The 1920s saw a mind-blowing technology boom, and the 2020s will, too. But in other ways it’s a terrifying thing. The 1930s was one of the darkest decades
Read now“Venture capitalists are pulling back from startups promising the rapid delivery of everything from groceries to dog walkers,” the Financial Times reported this week, “as the companies face pushback from workers and policymakers critical of their business models.” “What we’re seeing is an increased scrutiny on unit economics that’s being imposed by investors,” said the head of investments for a venture firm. When Silicon Valley investors start talking “unit economics,” you know the party’s over. It is like focusing on
Read nowInflation is like the Cat in the Hat. It always comes back. There are periods, like the one we are in right now, where inflation has a long absence. And, at minimum there are periods where inflation is present, but doesn’t show up in the official government statistics. But inflation never goes away permanently. It always comes back. This is partly because governments make it come back. In a downturn or a recession — which is just a natural part
Read nowImagine having a man who works for you whose only job is to say “No” to things. There is nothing else this man would do for you. He wouldn’t answer your phone, or help you with spreadsheets, or offer you assistance of any kind. If you asked for the slightest bit of help outside his job description he would just say “no” again — the only thing he was good at. Meanwhile, when he wasn’t saying “no” to something, he
Read nowEditor’s Note: We hope you’re having an excellent holiday week. The below “best of” piece from May of this year, on the five risks of retirement, is one of the most important things we’ve written. Enjoy Black Friday and stay safe! “More return with less risk” is a key goal for TradeSmith. That is what our software is meant to help you achieve. This is really important, too — more important than ever, in fact — in the context of
Read nowEditor’s Note: We wish all U.S. readers a wonderful Thanksgiving holiday, and a warm Season’s Greetings to readers worldwide. Today and Friday we will reach into the vault and share some “best of” pieces. The below piece ran in August of this year. It describes what could drive a slow motion “melt-up” type scenario over the next few years — and feels worth revisiting with the indexes powering to new highs. If this scenario comes to pass, the Dow could
Read nowThe Wall Street Journal posted a headline this week that made Ray Dalio upset. Dalio is a multi-billionaire and the 70-year-old founder of Bridgewater Associates LP, one of the largest macro hedge funds with $150 billion in assets under management. We can see why the WSJ headline made Dalio mad — even though the story appears accurate. (Dalio didn’t deny the substance of the article — he just challenged the optics.) The episode is worth unpacking because it touches on
Read nowCryptocurrency can be complicated. But the case for Bitcoin is simple. It all comes down to one chart: The Bitcoin to US National Debt Ratio. The chart itself is simple too, as you can clearly see below. The chart is actually a little bit unfair — to Bitcoin. But even though the chart has an anti-Bitcoin bias (for reasons we’ll explain shortly), it does a good job of capturing the big picture. The chart presumes a total number of 21
Read nowChina giveth, and China taketh away — when it comes to cryptocurrencies at least. Just last month, the entire cryptocurrency market surged, gaining $50 billion worth of market cap in 48 hours or so, on a pro-blockchain speech from Xi Jinping, the president of China. Few had expected China’s leader for life to give such a powerful personal endorsement. The impact on the crypto space was electrifying, with Bitcoin leading the way. Heading into the pre-Thanksgiving weekend, though, China-related news
Read nowHere is a pop quiz, or maybe a joke: Q. When is it bitterly disappointing to have an initial public offering (IPO) worth $1.7 trillion? A. When you were really hoping for $2 trillion, and you see it as a national embarrassment to have to take less, and your sense of money was already so distorted you paid $450 million for a possibly fake Da Vinci painting that lives on one of your yachts. We speak of the initial
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