23 Dec 2021

As you can see clearly in the chart above. We are in the midst of a Christmas feast. As Dave Portnoy says from Davey Day Trader fame, “markets only go up”. As the US equity markets march towards a new high volatility is collapsing from a dearth of people buying protection. All the while Dr Bearman is getting caned with his shorts. I am still holding folks.

I am coming back to the Magellan story and I am really happy to hear Douglass speak out about the divorce.

‘‘People have tried to create an image that my wife and I [are going through] some nasty divorce – nothing could be further from the truth,’’ Mr Douglass told Magellan’s head of institutional sales, Matthew Webb, in the recorded interview.

‘‘My wife and I remain incredibly close. Actually, we spend a lot of time sharing a house together. We’re spending the whole Christmas holidays together.’’

About 10 days ago I came across an academic research paper saying that you should withdraw funds from fund managers going through divorce as it tends to shave about 0.3% off their annual returns due to the higher cortisol (stress hormone) levels. That research paper is such garbage and has me fired up. Firstly there were about 30 odd cases in their data sample. The big thrust of the research was that divorce triggers stress and stress is bad for managers. I have not read the details so this is typical me firing from the hip without doing a detailed study and asking questions later. For the complexity of this subject 30 cases is nowhere near enough to draw any meaningful statistical conclusions. Furthermore life is one big stress. The difference between the average and the great performers is how they deal with stress. So I find it really distasteful for an academic and journalist to try get some extra mileage on their study on the backdrop of the Douglass divorce and Magellan share price cratering.

I am not sure I know exactly how to explain this but it seems to me that commercial banks are just parking the dollars they are receiving for selling bonds back at the Fed. I would imagine this means very little of the money being created is actually going out into the economy don’t quote me on this but I think it fits in with Jim Rickards narrative that I explained on Tuesday. Let me quickly look for a chart on money velocity I am sure it will back up this claim. Ok there is no updated chart I could find beyond June 2021. As you can see the velocity of M2 money supply is collapsing I believe you will see it even lower when we see the latest updated charts.

In a nutshell what this is really saying is that you need more and more “drugs” to feel the same high. In fact the more drugs being pumped into the economy is still not maintaining the high so ever more are needed. That is why tapering QE is such a big thing and it keeps getting shelved every time the market drops 1%.

Ok finally something light to consider.

18.9 million Bitcoin have been mined already that is equivalent to 90% of the total supply. Based on approximate calculations that means there is another 119 years left to mine the remaining supply. Oh boy if you thought those hash algorithms were complex and energy hungry in the past can you imagine how much more energy hungry they are going to become. To be honest I need to relook at the formulae for the calculation. I would imagine the BTC price is a factor in the hash rate complexity. Lets leave it here for today and a reminder to myself to touch base on the energy complex, i.e. natural gas and oil – very interesting.

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