July Market Insights: Wall Street Is About To Embrace Crypto, And It’s Not What You Think!
There is an old saying, “never let a good crisis go to waste.” And true to form, Wall Street is capitalizing on the current chaos within the digital asset space. Many will be surprised, but those who take a minute to review how society has historically absorbed innovations will understand that what’s occurring is quite normal. Blockchain’s time has come, and Wall Street is embracing it. Our narrative starts in the Cold War of the 1950s with the birth of a significant technological advancement — the Internet.
June Market Insights: Is AI The Next Goldrush?
We believe that an AI-driven productivity growth investment boom will be this cycle’s Gold Rush, and when coupled with demographics (Millennials), should provide the catalysts to reignite the secular bull market into the next decade
May Market Insights: The FTX Fiasco Has Nothing To Do With Blockchain Adoption
When one thinks of blockchain, one quickly thinks of Bitcoin, NFTs, and cryptocurrencies. Just as so many confuse Mark Twain’s Huckleberry Finn with Tom Sawyer, to the point where the rock band Rush makes satirical fun of the mischaracterization at their concerts with a short South Park cartoon.
April Market Insights: It Looks Like This Holy Fool Was Right, What Now?
Since 2020, I’ve been one of the few holy fools that put forth the thesis that aggressively raising rates into a highly levered global economy would result in another financial crisis. My sin was questioning aggressive rate hikes based on the belief that low unemployment causes inflation.
March Market Insights: Fire and Ice – The Fight Between Inflation and Deflation
If history has taught us anything, however, price stability is a two-way street involving inflation and deflation. How quickly we forget the dominant narrative of the global financial crisis or the prevailing history concerning Japan since the late 1980s—deflation and the inability of monetary policy to get inflation to approach the 2% target.
February Market Insights: Apocalypse Delayed – The U.S. Debt-Ceiling Debate
If the U.S. was to default on its debt obligations, it would cause investors to flee from U.S. Treasuries, leading to a decrease in confidence in U.S. government debt and the U.S. Dollar (USD) as being the medium of exchange for the global economy. In turn, this would negatively affect other markets— interest rates would increase, making borrowing money and purchasing other investments more costly. In addition, a decrease in confidence in U.S. government debt would also lead to extreme volatility in the global capital market akin to the 2008 global financial crisis. The long-term effects of debt-ceiling debates are that inflationary expectations are kept well anchored.
January Market Insights: The 2023 Market Forecast – The Pause that Refreshes
Throughout 2022, I differed from the consensus on what caused the inflation spike. The conventional view was that wages and aggregate demand of the private sector were the main culprits. I disagreed. My thesis was that the twin supply shocks of COVID-19 and the war, along with the extreme fiscal policy response, caused inflation. I adamantly disagree with the false premise that the inflation we experienced was akin to the 1970’s inflation spike.
Coping With Volatility
The summer did not see much respite from the volatility that has gripped the financial markets. The bearish commentators continue to evoke fears that the aggressive moves by the central banks in raising interest rates will inevitably push economies into recession. It is therefore not surprising that many of us feel we are already in recession1 — the current narrative, alongside an increasing cost of living, the higher cost of borrowing and financial market declines, certainly hasn’t helped to support optimism.