Boom, then Bust?

Well, the S&P may not have done much this week, but there were clear signs and signals that the conditions fueling the current ...

BY ANDREW STUTTAFORD Image February 20, 2021
BY ANDREW STUTTAFORD February 20, 2021

Boom, then Bust?

Well, the S&P may not have done much this week, but there were clear signs and signals that the conditions fueling the current bubble(s) are going to continue — and that the bubble(s) themselves are still bubbling away.

Elon Musk, in some ways the man of the bubble (I do hope that comment doesn't disqualify me from some space tourism), got to the point.


Billionaire Elon Musk defended Tesla Inc.'s $1.5 billion Bitcoin investment on Twitter, calling the cryptocurrency a "less dumb" version of cash.

"When fiat currency has negative real interest, only a fool wouldn't look elsewhere," Musk said in a reference to the sub-zero returns on cash caused by negative-yielding debt. The comments pushed Bitcoin to a record on Friday, with prices climbing above $53,000.

Musk is going to Musk, but he is hitting on an uncomfortable truth. When money (and by extension, risk) is as mispriced as it now is, a lot of investments that would not otherwise make sense do so. Musk's term "less dumb" was neatly put.

Meanwhile, from Grant's Almost Daily:

Following another busy deal day, some 154 special purpose acquisition (a.k.a. blank check) companies have come to market so far in this young 2021, raising a total $46.7 billion according to data from SPACInsider.  That compares to $83 billion in such deals all of last year (itself eclipsing all total prior fundraising for the vehicles), and an average $44 billion in annual proceeds from conventional U.S. initial public offerings from 2011 to 2019 per Renaissance Capital.

Luckily for promoters, the current zeitgeist is helping to absorb that wall of supply. The Wall Street ...   READ MORE





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