If there is common theme to some of the market’s speculative bubbles its their thin supporting veneers of fake credibility and plausible deniability. Trump’s Social Media empire, Bitcoin and Evergrande – all share a core of fundamental emptiness.
Yesterday’s events across Tech served to remind us it’s a fluid sector where what we believe one day may be false the next, but deep down there is bedrock. Crypto currencies saw a last-chance bubble pop, while Tesla genuinely surprised me by producing solid results – which don’t for one moment change my perspective its fatally overvalued. Meanwhile, the latest China clampdown on listed stocks shocked markets, but reminds us we need to think differently about the wakening Dragon.
Nothing to worry about… except Pandemic, Bonds, Inflation or Deflation, Record Container Prices and Geopolitics? Is there any chance of compromise and a deal on the US infrastructure package everyone agrees is necessary – or will it sink into the partisan swamp? And Cathie Wood talks up her investment strategies – but what’s the substance behind the leading Zeitgeist Investor?
The Crypto end-phase is full on… but will likely see further incredible moves as the last “greater fools” are enticed into to thinking it’s a buying opportunity. Good luck to them! As the crypto-mythosphere of delusional technobabble evaporates, it’s accompanied by a smell the coffee moment in SPACs, Disruptive Tech, and the other pricing anomalies so blindingly apparent to anyone with an erg of common sense watching these bubblesque markets. Vol will roil markets generally as these dominoes tumble….. Meanwhile.. what future the City of London with 50% of us likely to continue working for home…..?
As the Federal Reserve wakes up to “elevated relative risks” and the rest of us scream “bubble”, the real questions are about real value. Why is a Bitcoin worth as much as Renaissance Art? Why is Dogecoin the top performing asset off the year when everyone knows it's a joke? And when are people going to drink the proverbial coffee?
Today is Earth Day and the world’s leaders will be considering the theme of Restoring Our Earth. I have a very simple and modest proposal to make. Ban Bitcoin!
Coinbase’s direct listing was a muted success. It looks likely to trade in line with volatile bitcoin and other cryptos. On the back of the claims of increased “adoption” of Crypto by the Street, the exchange has first mover status meeting the need for the facilitation of safe crypto investment while expanding services for holders – but what does it fundamentally mean about the long-term future of the “crypto-ecosystem”?
The outlook for the UK looks rosier as pubs reopen, vaccinations beat targets, and the economy grows. But, how should investors be looking at markets when financial assets already look overpriced, and there are clear bubble risks ahead? It’s a matter of staying calm, reading the runes and understanding the markets new mindset!
Seven factors to understand the market shift that’s roiling markets; bond yields and inflation, distortion, recovery, leverage, tech vs reality, exuberance, and value.
Central Banks face a critical ask; how to raise rates to avert fuelling the financial asset bubble without triggering market meltdown. And some brief thoughts on Scotland.