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Tiny Bubbles, Tiny Bear Markets
Howard Lindzon
April 09, 2021
I believe we live in this era of tiny bubbles and tiny bear markets.
I imagine it is from the wacky cocktail of technology and endless government money printing. COVID mixed in has juiced the tiny bubbles and tiny bear markets.
Gamestop seems like a tiny bubble. NFT’s as well. Same with certain blockchains.
On the bear market side…oil went negative last year.
Gold is in its own tiny bear market but may be emerging.
It seems like every global macro thinker can only look at the world ending from all this. I gave up paying much attention to global macro thinkers 20 years ago and it has saved me a lot of aggravation and money. I do still like checking in on a few after I have had a good run though just to make sure they have not flipped to being bullish. That would make me nervous!
I really liked this post from Zen Second Life titled ‘Life Outside The Corporate Matrix’. It is well written, thoughtful and very dark. Here is a taste:
In 2020, the U.S. became 100% Japanified. Meaning that the economy and markets are now fully dependent on dramatic and ongoing stimulus. This means that the U.S. is now locked in a perpetual boom and bust cycle similar to Japan and China. This rally from the March 2020 lows is merely the first sugar rally, but by no means the last. This year, the U.S. national debt will grow four times faster than borrowed “GDP”. Yes, you read that right. Currently, most of Wall Street is betting that the secular bull market in bonds is over. Nothing could be further from the truth. Per the rules of Japanification, U.S. long-term bond yields will soon be heading to zero, although not necessarily in a straight line. First, the two most crowded trades of this era – long stocks, short bonds – must be reversed. The volatility will be epic.
Of course, most people don’t see this coming. Why? Because this era represents the pinnacle of Wall Street fraud and the pinnacle of Main Street gullibility. It’s sheer arrogance to believe that the U.S. will escape the same fate that met Japan and China while taking the exact same path of stimulus dependency. Arrogance, stupidity, gullibility. Call it what you want. Most people today don’t see anything wrong with this current level of widely accepted deception, because this is by far the most corrupt and decadent society in U.S. history.
I have NO idea how to invest in a world that Zen describes. He is smarter than me when discussing the macro and probably even right.
I think there are endless opportunities from this shrinking world filled with high margin software and cool hardware and will keep trying to sidestep the tiny bear markets and participate in the tiny bubbles.
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