photo courtesy of Mr Percy T., Auschwtiz 2017.
* 2017 was a rare recording-breaking year where sell-signals did not work, that has left us at a loss for words, a volatile ride for our emotions and spirits despite the absence of market volatility
* Massive disruptions have rewarded the mad, stupid, evil and greedy, leaving us to doubt the experts
* The year has brought to light the abuse of power taking place around the world with little justice served for the poor, weak and powerless which reinforces the need to accumulate wealth as quickly as we can
* Bitcoin has been the ice-breaker get-rich ticket for some, creating $500 bio in wealth, acting as a 24h7d casino for Asians but central bankers cannot tell us to stop buying Bitcoin as they cannot tell us to stop buying pizza or help those 1,000 investors who lost it all in SixCap’s blackbox model
* A $1k investment in Ripple would have netted one $200k for 2017, so who is stupid now ?
* Perhaps it is a silent protest against the clowns in charge or the FOMO (fear of missing out), but the world has the most polarised group of leaders ever with a geriatric camp vs the youngest ever batch of leaders as young as 31 years old
* We have a potentially senile 71 year-old sending having a war of words over Twitter with a 34 year-old on the other side of the world but who deserves credit for all the record blazing year we have had, even as his approval ratings sink to never before seen lows for a US president
* Fundamental analysis, logic, theory, reason and ethics just do not work anymore and experts are wrong in thinking the economy needs fixing when stocks added $15 trillion in new wealth as real estate added approximately $11 trillion vs Bitcoin(&gang)’s 500 bio. This does not include private equity and bond markets
* All that wealth somehow supported the $16.5 trillion in new bonds issued for 3 quarters of the year
* It has not all been fair given that nearly 90% of US stocks are held by just 10% of Americans and 1 in 20 Americans is now a millionaire, just as 40% of Bitcoin is owned by just 1,000 people
* Passive management is edging out active management and owners of capital have not been as rich as powerful as they are now leaving the rest of the people impression of a hate-filled world devoid of trust, morals and scruples with bullies as role models that the majority dare not defy and feel helpless against
* With crazy wealth creation in 2017, it has made $5 mio the new $1 mio which is not a tall order if one had put $25k into Ripple to turn it into $5 mio today but for the rest, the gap will continue to grow because zero to $5 mio is a lot harder than zero to $1 mio
* Mad, Stupid, Greedy and Evil works. The opposite of that would be Logic, Reason, Altruism and Compassion which has no place or profits in the new normal
As we come to the end of a long year, we have to say that we have never seen as many 2017 write-ups, commentaries and reflections as any year before for the record breaking year it has been.
Source : Zerohedge
Everyone is anxiously scrambling to say something for posterity, some recalcitrant, some sarcastic, others grumbling as our mailboxes fill with bankers’ and trading houses unanimously optimistic in robotic brainwashed chorus, each with 1,001 reasons to justify everything about our present Tulip or non-Tulip bubble.
Who can blame anyone screaming to be heard because 2017 is a year like no other – a rarest year that sell-signals did not work and that left us at a loss for words as we will confess right now – numbed and confused as long days come to an end with the winter solstice.
We will not be soul searching this year as we did for 2016 because everybody else has done the job too well in our mailboxes and we can confidently say everyone has done well this year, for it will be quite unimaginable if anyone has not prospered somehow in some way unless they are the unfortunate victims of terrorism, natural disasters, man-made disasters in the refugee crises or tyranny in those countries that we rather not read about.
For everyone else has made tidy returns in real estate, Bitcoins, IPOs’, stocks and bonds, surely on glowing economic prospects and rising wages?
That leaves us at a loss for words for surely this must be the pinnacle of modern civilisation and it does not get better than this? This is as we ended 2017 with the promise of a big fat US tax plan that is designed to Make America Great Again, but we shall optimistically assume America = US and us too.
As we said this time last year in 2016 into 2017 : Alice in Wonderland, it is a surreal feeling indeed and the madness has continued into 2017 where mad behaviour, which has frustrated experts to attribute to non-thinking and low-IQ investors, has been richly rewarded.
There has been too much to process in 2017, if you ask us, where massive disruptions have taken place, in technology, news, politics, natural disasters, social order, re-distribution of wealth and obscene wealth creation.
Re-distribution of wealth eg. Saudi Arabia’s billionaire prince in-charge….. although the Da Vinci was bought by an Abu Dhabi prince.
The call was to Send in the Clowns for 2017 as we wrote last year to expect more volatility, violence big and small, terrorism, fake news, vicious circle of populism and nationalism, hacks and attacks, end of cash and climate change.
Clown may be a kinder word than “Idiot” which is most commonly used to describe Donald Trump according to polls. Source : The Hill
We did have a volatile year in our spirits and emotions even in the glaring absence of market volatility. Daily political developments have inured us largely to broken systems in the world today, as our conviction grows by the day that some clowns are in charge at important places.
It is just the crazy new normal of a bad, mad, greedy, stupid and evil world and the year did not get better after it started with Trump bombing Syria after its chemical attacks, those endless North Korea nuclear tests, terrorism, mass shootings, Catalonia seeking independence, the genocide in Myanmar, Saudi Arabia incarcerating half of its princes, and the protests on Jerusalem which makes the destruction of ISIS questionable even if victory has been claimed.
The crowning glory would be the Me Too (#MeToo) campaign after hordes of women spoke up about their brushes with sexual harassment and abuse over decades, exposing the underlying rot that has shaped the world today – the abuse of power in many corners of the world and society. Powerful men surrounded by sycophants or cronies, hoping to profit from their relationship that probably results in loss for many others.
Some statistics compiled by the FT on the #MeToo campaign which has not moved to include women harassers or gone around the world yet.
If sexual harassment is just one of the consequences of the abuse of power, it does not take a lot of imagination to guess the others like our example below.
Example of a headline cementing the view that power can be abused.
We just need to chat with some of the younger folks and we were not surprised when we ran the idea we read about on Zerohedge that “The World is Criminally Corrupt and Broken” – A Surprising Dinner Conversation With The Younger Generation (which also addressed the unavoidable topic of Bitcoin) by a teenage volunteer, who happens to the skeptic son our dear friend. He agreed readily, emotions stirred which was unusual for that cool gamer-dude façade, and gave us one of his favourite old songs (circa 2015) by 21 Pilots, We Don’t Believe What’s on T.V..
Throw in the environmental challenges, the wildfires, hurricanes, typhoons, earthquakes and volcanoes, to cast the spotlight on the past and present generation’s exploitation of the environment, we should not expect the kids to have too much respect for their adult role-models, at this rate.
Another friend was saying that he has never encountered a year where so much injustice and nastiness has prevailed and, no, he was not talking about the world but her workplace – end of story.
Justice was served to the ISIS which finally fell and some powerful people fell from grace from the #MeToo sexual harassment exposes but what about the rest of the poor, the weak and the powerless? Rohingyans, refugees, Venezuelans, Dreamers, Uighur minority, and the countless others living under despotic regimes that grow more powerful daily, do not have a lot of hope to go by.
Collage of headlines minus many others that depict the misfortunes and injustice that pervade the world.
Who says life is fair ? And who says evil never wins ?
We would defer on China’s clampdown on her renegade billionaires, giving no face to the Fosun’s and Anbang’s, Wanda’s, HNA Group’s and more this year as a feel good factor as the rest of the lawyers in her parliament and advisory body keep getting richer with 100 billionaires in the Chinese parliament. The rich, powerful and corrupt can only be brought down by their own kind ?
Source : Fortune
For All the Bad, Mad, Greedy, Stupid and Evil
…. On Bitcoin
For us, why begrudge the crazy folks who ploughed headlong into Bitcoin and the other coins without knowing what it is because we are ending a year where a stock price can rise near 300% in a day by adding “Blockchain” to its name, which is exactly what happened last week when Long Island Iced Tea renamed itself Long Blockchain Corp with nothing to show for any other effort or initiative.
Who needs Bitcoin ? Heck, folks have started trading eggs and Eggs Futures in China which is something nearly everyone in the world can relate to, we suppose, for the sake of trading something except that Bitcoins trade on Sundays too which makes it a winner. Bitcoin is just a 24h7day casino which explains why the Asians love it.
So much for the FOMO (GREED) theory that is partly to blame for the aunties taking an interest in Bitcoin without knowing that the value is just in the Blockchain …. Fear of Missing Out of the casino gains of over 1,000% on Bitcoin this year.
Bloomberg Tweet to article suggesting that investors are confusing Bitcoin for Blockchain
There will always be people throwing their money away into stuff they do not understand such as a “big data and powerful analytics” blackbox like the one SixCapital claimed to have. Stupid or mad or greedy or evil ?
Source : Straits Times
Alan Greenspan had the same to say about Bitcoin too when he could well be talking about the 1,000 investors who threw in their lot with Singapore’s SixCap who have lost out this year. For the Bitcoin investors have been the winners, so far, as a matter of fact.
What do we do with Bitcoin ? Not much at the moment…. But what do we say about Ripple which has appreciated just about 20,000% this year for each person who threw in $1k to be at $200k ?
Source : CNBC
Who is stupid now?
The experts, of course. No one should listen to the prominent minds anymore. Call it a Tulip Bubble or Ponzi or Pyramid Schemes as the central bankers are saying .
Central banks lost their street cred in 2017 being the only souls on the planet other than Trump who thinks the economy still needs fixing .. to justify their roles, presumably. With stocks exploding, cryptocurrencies going nuts, economic data at multi-year highs, we have Draghi and Kuroda still erring towards caution ?
Then again, central banks cannot tell us that it is mad to pay nearly half a billion for a Da Vinci painting, or not to buy that overpriced watch, so it stands to reason that they cannot tell us that Bitcoin is not worth its buck.
Bitcoin and @-coins are having the last laugh as far as crazy, greedy stupidity goes in 2017, because 2017 is the year Donald Trump “coined” the word “Covfefe” for us, along with mistaking Singapore’s Prime Minister for Indonesia’s and more recently on the 29th of December, confused weather with climate change.
Still Stupid ? Or Stupid Works ? We are dicing with the edge of reason these days.
Perhaps the Bitcoin and @coin revolution has also something to do with the silent protest to the clowns in-charge for we now have a bunch of geriatric strongmen leaders vs the youngest batch of other leaders in the world and that surely cannot work out too well for the future.
Erdogan 63, Xi Jinping 64, Putin 65, Modi 67, Donald Trump 71 and Duterte 72 versus Macron 39, Leo Varadkar 38, Jacinda Ardern 37, Kim Jong-Un 33, Mohammad bin Salman 32 and Sebastian Kurz 31, all younger than Trump’s first-born, Trump Junior.
It is hard to see them all working together in agreement. And for most of 2017, we have this 71 year-old embarking on a war of words (mostly on Twitter) with a 33 year-old on the other side of the world and bullying everyone who stands in his way, as he sparks speculation of Alzheimer’s disease drinking with both hands on cup or bottle and more recently, boasting about his “bigger nuclear button”.
Collage of headlines out of CNN, Newsweek, Washington Post on the US President’s bullying behaviour.
With the leader of the world’s largest economy living with the lowest approval ratings from his voter base, caught fibbing, bullying, accused of sexual harassment, drinking water like a baby and under investigation by the FBI for most of the year, we have to award President Trump all the credit for the record blazing year 2017 had been.
……….. on Stock and Bond Markets
The S&P 500 has been on a roll without a 3% retreat along with other eye catching statistics including the Dow setting a new record for annual record highs (70 so far vs 69 in 1995) and eking a 5,000 point in a year for the first time ever.
We just quit counting as the long year comes to a close as Bloomberg asks if there are Any Stock Bears Left in America ? They note that a “recent survey by the National Association of Active Investment Managers found that even the most pessimistic mutual fund overseers are fully invested in stocks”.
Fundamental analysis, logic, theory, reason and ethics just do not work anymore.
Bond markets had it just as good, risk adjusted, returning 4-10% on the year as volatility collapsed and rates remained low on central bank paralysis and malaise. The crazy central bankers who still think the economy needs fixing maybe right to think about those who were left behind but life is not fair as injustice will prevail for now as the rest of the Harvey Weinstein’s roaming out there.
It is just not worth talking about bonds when so much wealth has been created that, surely, bond demand will only continue to grow even if China claims to be constraining their shadow banking sector and other risky lending practices.
Mad, Stupid and Greedy Wealth Creation
We cannot talk too much about bonds too, because it is a simple case of too much money ?
Stocks up, bonds up, Bitcoin up, real estate up…. It has been an UP year.
Imagine the wealth created in 2017 ? From the Ripple investor who turned $1k into $200k, to the Singaporean en-bloc millionaire who turned a $200k down-payment mortgage on $1mio into a $2mio return ?
Bitcoin and @coins is estimated at $500 bio (totaling up the top 10 “coins”) in value as we speak from a negligible value before. That is $500 bio in wealth created in 2017 – wealth that did not exist before. As much as it sounds, with it’s market cap larger than all but the top 5 largest companies in the world (Apple, Google, Microsoft, Amazon and Facebook), this wealth pales in the face of the rest of the wealth created in the world this year.
Source : Coinmarketcap.com
Real estate added approximately $11 trillion in value for 2017, according to a Savills’ report, assuming constant prices although we should factor in more as new wealth is created in, for instance, the new Saudi Arabia’s new $500 bio mega city – $0 pre-city and $500 bio post-city.
Global market capitalisation contributed about $15 trillion to new wealth, with the Bloomberg World Exchange Market Capitalisation rising from $66 trillion to $81trillion.
With interest rates still trudging along, is it any wonder that 2017 saw a record US$16.5 trillion of new bonds issued, as at end 3Q17 ?
“It Has Not Been All Fair” Rant
Numbers look good.
Now 1 out of 20 Americans is a millionaire which is an accomplishment even if 1 out of 6 Singaporeans is a millionaire as well.
It has just that the richest 10% of Americans now own nearly 90% of U.S. stocks (the highest ratio since 1983) and 40% of all Bitcoins are held by just 1,000 people, out of the estimated 21.5 million blockchain wallets out there which is a low participation rate given that it is banned in China.
The FAANG (Facebook, Amazon, Apple, Netflix and Google) companies, each led by their respective billionaires, have grown too big to fail as Jeff Bezos became the first billionaire to break $100 bio in net worth. This is as politicians start to recognise their global reach and power with Facebook headed for a terrible 2018 and Apple’s phone sales looking less than inspiring going ahead.
The rise of passive management is bringing about the early death of active investment and the demise of the traditional long-short hedge fund model led by former market legends while “black box” A.I. funds are seeing unprecedented inflows even as some founders are increasingly unable to explain how their robots made money.
Source : Nexchange
Source : Business Insider
Yet passive management is just lifting all the boats in the basket, turning the biggest boats like the FAANG’s into behemoths, giving them the power to rule the world and rewarding the inefficient companies to help them defy death to eventually end up as a drag to the real economy which no one in the “millionaire-camp” really cares about so much when they are raking 30% on average from their passive portfolios and expecting those returns to continue into the years ahead as the new norm.
And thanks to a Trump-Bannon led crusade, reporters taking up the cudgels to take down the establishment and making stupid mistakes along the way, leaving a trail of boo-boo’s. Kids and some stupid adults now cannot tell the difference between real news and fake news, as experts confuse over economic headlines and market moves.
What this has all created is an impression of a hate-filled world devoid of trust, morals and scruples with bullies as role models that the majority dare not defy, now that #MeToo has shown the world that the abuse of power has been long ingrained in the system and little folks are mostly helpless, incapable of speaking up unless one is a celeb happens to be on your side.
For the celebs, there are those athletes who can be similarly bullied by their club owners and no one can really be safe from the rich and powerful.
The icing on the cake is that, if all the wealth created in the world in 2017 – the $11 trillion from real estate, $15 trillion from stocks, $0.5 trillion from Bitcoin & gang and more from private equity (eg. Uber, Airbnb, Spotify etc) and bonds, went to the few number of people who hold the wealth i.e. the 10% who own 84% of US stocks etc., that really makes $5 million the new $1 million.
2017 – Where $5 mio is the New $1 mio