Jimbo

WAITING FOR THINGS TO BREAK Just waiting for things to brake. Because this system is not operating at anything close to a stable equilibrium level.

EFFICENT MARKETS HYPOTHESIS Markets are not efficient. The efficiency does not reside at the market or price level. It resides at the individual investor level. (the efficient investor hypothesis!!!!) Investors can be "relatively efficient over the long term" by applying value metrics to stock purchases. And only buying stocks which meet their value metrics. Which can be a very small time window of opportunity indeed!!!! Even then this applies only to long term investors. Notice how I dont say perfectly efficient or short term!!!!!!! Short term investors ie traders/speculators really don't care about value. They care about technical analysis and liquidity. As they exist in a different "frame of reference" than long term investors. Uncle Warren covered this in the voting machine VS weighing machine analogy.

EFFICIENCY VS LIQUIDITY Yes...the market price (MP) is determined by the supply of liquidity. The MP is not determined by efficiency....prices are not efficient. Liquidty is like the tide....like the current......that pushes the price around. High liquidity leads to high asset prices and vice versa. We are currently going through a period where the FED is withdrawing liquidity while the US government is increasing the dermand for liquidity. The expression for all this action is found in the short term bond market. Its not pretty.

THE PROBABILITY OF FUTURE INFLATION In the 70's the FED indulged in several waves of printing. We have only had one big wave so far...... The probability of future waves of printing and resulting inflation and interest rate spikes is very high..... As the FED saves the US government from future default crisis. The only way to stop this is US government fiscal discipline Can't see that happening.

THE OPPORTUNITY COST OF CRYPTO Crypto sttill has a One trillion market cap. If you put that into TBills that would be a return of more than $50 billion a year. That's the opportunity cost of owning crypto.

THE BIG FREE LUNCH At the moment the big free lunch is Tbills You are getting the highest return on the government bond curve with the least duration risk. But for how long???? This free lunch is kept alive by the Treasury's bond inversion policies. i.e. the reluctance to fund the defecit through long bond issuance. Because that further hurts the already damaged banks. As inflation goes down the incentives and temptation for the Treasury to sell more long bonds increases. The inversion policy could quietly disappear into the smoke!!!!!! This mitigates against the probabilities for a long bond rally.

THE TROUBLE WITH DISNEY Free cash flow a measly billion....... Hardly enough to support a 150 Billion market cap is it ?????? Used to be 10 billion in free cash flow............ Where did it all go ????????

BEACHED JELLYFISH OF THE DAY Bausch The "Debt impact crater" of the rocket stock otherwise known as Valeant. Market Cap of $3 billlion Debt.....drum roll please..... $20 billion....the toxic waste product of Valeant's flight to the moon and back. Kept alive as a zombie by the QE regime of the FED. Which ended in March 2022. Where is the Beached Jellyfish ETF when you need it!!!!! (which shorts over indebted public companies without the cash flows to pay off their debts) Good idea....until the FED inevitably spoils the party with a pivot.

THE SUN THE SEA AND THE STRAW The short term treasuries are the straw sucking up all the liquidity to fund the budget defecit. While the FED does'nt provide the necessary counterveiling liquidity by printing this dries out the liquidity sea It becomes shallower The shoreline recedes We see who has been swimming naked (Hint....Banks) The jelly fish of greater fool assets and highly indebted companies get stranded and dried out in the unforgiving sun of chapter 11.

INTERESTING FACTOID In China the green candles are red and the red candles are green. Just a different way of thinking I guess.

THE DOCTOR'S BIG SHORT Well Dr Burry has put on the big short. Usually he is too early. But this time around I think his timing is not bad at all.

THE FED HAS BEEN A VERY NAUGHTY BOY In the last four years the FED has really ramped up its interventions in asset markets, 1/ The September 2019 $500 billion BIG BAIL repo hedge fund get out of underwater treasuries jail free card. We still dont know who the hedge funds were that benefited or how much they benefited. 2/ The BIG PRINT of May 2020 to March 2022 ...40% growth in M2. 3/ THE BIG STOP of March 2022 ....basically sending the Bond market. bank and insurance stocks and all the greater fool assets down the toilet....SPAC's Crypto NFT's etc etc. Before this they were content with printing a trillion a year.....which was bad but not catastrophic. Now we wait for the BIG PIVOT

THE GREATEST RUG PULL IN FINANCIAL HISTORY In March 2022 the FED undertoook the greatest asset rug pull in history. We are still experiencing the effects of that frame effect. The Crypto rug pullers are all insignificant in comparision. Most market participants still don't seem to understand this.

THE GRAVITY OF DEBT Eventually all the Treasury bond issuance will weight too heavily on the market. Then it will fall. But we must wait for the usual signs.

TWO WHEELS GRINDING IN OPPOSITE DIRECTIONS What is the stock market It is two wheels grinding in opposite directions 1/ The first wheel...the smallest comprising 5% of stocks ....is about wealth creation. 2/ The bigger wheel.....95% of stocks.....is all about wealth transfer. Choose wisely grasshopper.