“Money illusions,” said The Magician, waving his wand. Crisp dollar bills rained down on the cheering crowd, each one of them seemingly richer. “We feel good when we’re doing nominally better,” he bellowed, strutting the stage. The Americans cried for more. And on it rained, poured. “A weak dollar policy works its magic in so many mysterious ways.” The Magician called a child onto the stage, blinking into the blindin
“They made the bet,” said the Valley Boy. “We all saw the opportunity,” he said, pointing to the sky. “Pretty hard to miss.” Mankind’s energy usage from all combined sources is equivalent to 0.0125% of the 120,000 terawatts of solar energy hitting earth daily. Since Lucy roamed Africa 3.2mm years ago, we’ve consumed the equivalent of just 2.6 days of sunshine. “When people started talking peak oil, solar soared.” Chi
“No one has a model for this,” said the CIO. “Everyone buying assets today is building somewhat plausible arguments, but they’re really all just geared to decisions made in Beijing.” The most crowded trade in the world is cognitive dissonance on China. “We need persistent increases in debt relative to GDP for the world economy to function. And since 2011, 100% of global non-financial private-sector net credit creatio
“We’re early in the new President’s direction with North Korea,” said the senior military officer, reflecting on his decades of war games and exercises in the Pacific theatre. “We’re changing tactics and it’s pressurizing the situation,” he explained. “The added pressure is causing new reactions.” Kim Jong-Un claimed he was the target of a CIA assassination attempt. That’s an example of the “dear leader” reacting to
“For all of history – prior to 1955 – there was roughly equal probability of inflation or deflation in any given year,” said the economic historian. “But since 1955 we’ve experienced uninterrupted annual inflation. It’s a stunning fact, unprecedented. To an economist in 1955, the coming 60yr inflation would have appeared less probable than a catastrophic meteor impact.” After enduring a series of world wa
“I started out buying private companies at 6x,” he said. “As the years passed, 6x became 8x, then 10x, 12x.” He paused, looking out across Gotham, an island in perpetual motion. “The market is now doing deals at 14x, hoping high multiples remain.” The private equity boom began quietly in the 1980s. The tumultuous 1970s had produced a 7.0 Shiller price-to-earnings ratio for the S&P 500 and 15% 10yr treasury bond y
“The change of change is now negative,” said the CIO. “Global growth is still rising, but the rate of improvement is slowing,” he explained. “Same holds true for global inflation, oil prices, copper, iron ore. Credit growth is slowing in the US, Europe, Japan, China.” If these things were all contracting, we’d plunge into recession, but we’re not there. We’re simply at the point in the cycle where the rate of acceler
“Humans sell low and buy high,” said Yoda, high in the Rockies. “And in those moments they believe it’s for good reason. It cannot be otherwise.” Snow fell, rain too. Spring on its way. “Bear markets end when every piece of news is seen as an excuse to sell. And bull markets peak when the opposite is true.” Somewhere in the clouds Nasdaq futures were breaching all-time highs, defying the latest Twitter tempest. “The
“Freshman,” said a father in the stands, his buddies all laughed. I did too. “Who’s going to tell that kid this ain’t eighth grade anymore?” I smiled, the outsider. It was Jackson’s first game, and he came out hot. “Kid has no chance in hell to score from that far out until he’s got a 100mph shot,” said another father, certain. “He’s got 85mph at best,” mumbled someone. We all nodded, standing together, reliving high
“You know what I dislike about my own argument?” asked the CIO. “I sound defensive, like I can’t accept I’m wrong.” We all know that guy, and rarely want to be him. “No one ever truly believed in my thesis,” he said, describing it: A growing dominance by the global economic elite shapes policy to deliberately asphyxiate dynamism. Because dynamism and its fraternal twin – volatility – are the only real threats t