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 ...

Capital-Letter.png
BY ANDREW STUTTAFORD Image February 20, 2021
Capital-Letter-center.png
BY ANDREW STUTTAFORD February 20, 2021
hero

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.

Bloomberg:

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

spacer

ADVERTISEMENT

NEW ON

Capital-Matters-center.png

Jon Hartley

Corporations Shouldn't Follow Tesla's Lead in Adding Bitcoin to Its Balance Sheet

It seems like Elon Musk is now adjoining two of the most significant bubbles in recent years (Bitcoin and ...

Alexander William Salter

Is Inflation Still a Thing?

How a change in the Fed's framework took us from funny money to crony ...

Andrew Stuttaford

The Mess in Texas

On the menu today: Texas powers down, debt and more debt, government gets in the way of COVID testing, food, and ...

George Leef

Authoritarianism Creeps into the Financial Markets

A large number of investors are thus being dragooned into climate activism without their consent. That should not ...

Kevin D. Williamson

Today in 'What Could Possibly Go Wrong?'

Goodness gracious. From the New York Times: The City of Tucson, Ariz., decided last year to pay rent on five golf ...

Kevin D. Williamson

Understanding the Texas Blackouts

As the Lone Star State shivers in the dark, it's worth considering how we got ...

WHAT NR IS READING

The Case for Nationalism: How It Made Us Powerful, United, and Free

By Richard Lowry

“Makes an original and compelling case for nationalism . . . A fascinating, erudite—and much-needed—defense of a hallowed idea unfairly under current attack.” — Victor Davis Hanson

LEARN MORE
CapitalRecordAd-final1_BLUE_NONMEM.jpg

ADVERTISEMENT

 
 
 
Learn more about RevenueStripe...
national review

Follow Us & Share

19 West 44th Street, Suite 1701, New York, NY, 10036, USA
Your Preferences | Unsubscribe | Privacy
View this e-mail in your browser.

Commentaires

Posts les plus consultés de ce blog

Chris Ramsey can take the heat, but what would relegation for QPR mean for black managers in the Premier League?

The Complete App Toolkit For Your Next Budget Travel Adventure

How a team of innovators overcame the odds to create water from thin air