27 Oct 2021

Ok so look what we have here. Tesla is valued at more than $1 trillion not bad for a company that was starring down the barrel of bankruptcy a couple of years ago. Clearly betting against Musk has been a graveyard trade, I am a fan of his despite my views that Tesla is one of the most over valued companies in history. I realise he is flawed like all of us but he has an ability to push boundaries that normal people just cannot get away with. We need guys like this in the world, just like we need Eliud Kipchoge to teach us that the 2hr marathon mark can be broken and Letesenbet Gidey who smashed the 63 min barrier for women over 21km on the weekend.

Hat tip to The Market Ear highlighting some of the mania:

  1. Traders traded $16B of option premium in Tesla today – 55% of the entire us options market 
  2. Tesla‚Äôs market cap has increased today by roughly 2x Ford’s market cap.
  3. 463x increase from its IPO in 2010

I think there is big trouble brewing in China and not too many people in the west are taking notice as the US Indexes make new highs. Below you can see the Asian high yield bonds index KHYB this doesn’t seem like a flash in the pan. 

I have just seen the Chinese authorities told billionarie Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s deepening debt crisis. Take note folks the communist party are flexing their commie muscles. I must add I have also noticed a worrying outbreak of Covid cases in China. We should all be on high alert here as this could slow down the China economy even more.  Stagflation is becoming more of a worry to me than hyper inflation. Jack Dorsey I think you got carried away as did I.

As we march on to new highs Puts relative to Calls are getting smashed. Clearly the market is setting up for a major decline as it gets more one sided and euphoric.

It is so obvious that the market rally has been “printed” just look at the correlation with the Feds balance sheet. Let us see if there is another “taper tantrum” on the indexes.

Canada has a -1x Bitcoin ETF, ouch that must have hurt this year. Direxion is about to launch a leveraged futures inverse. I wonder if this is a sign of things to come.

The next chart blew me away, can we be heading towards a major increase in the number of labour strikes. I think given the current inflation in the system and the cost of living running away from the average person there is a much bigger incentive for wage increases. Can the government and business handle it. I suspect not which is likely to lead to a lot more civil unrest.

To end today on a bit of a more positive note. I took a lot of inspiration from the head of Moderna saying that the new mRNA technology is going to drive enormous advancement in the biomedical industry as its applications are so much more than what we the lay people have been exposed to.

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