Wednesday, March 17, 2021

Hedge Fund CIO: "Ethereum Now Races Toward Becoming The Foundation Of A New Global Financial System"


From Eric Peter, CIO Of One River Asset Management, who in November executed a $600 million purchase of bitcoin, then the largest public transaction to date, with the blessing of Brevan Howard's Alan Howard. He has called bitcoin the most interesting macro trade he’s seen in thirty years in the business.

“Okay, so now please explain how these things are going to change the world,” asked the CIO.

He was not referring to the global transition to monetary/fiscal policy coordination which will interact with political, social and geopolitical forces to create a future quite unlike our recent past. We had already discussed that. He was asking about digital assets, blockchain, tokenization.

Virtualization. It is no longer possible to understand what is happening in markets, let alone what is to come, without developing a deep understanding of these things.

“It is not that they are going to change the world,” I said. “It is that they are already quietly changing the world, markets, and beneath the surface the process is accelerating faster than you can imagine.”

* * *

“I feel super lucky,” said an artist who calls himself Beeple, in an online forum, upon learning that bidders lifted his digital collage to $20mm in Christie’s virtual auction. “Everydays – The First 5000 Days” ultimately sold for $69.3mm to an investor who calls himself Metakovan, the founder of Metapurse, a fund that collects non-fungible tokens (NFTs). ... Continue reading >>>



Identity politics has morphed into identity investing: the newest breed of traders buy stocks simply because they are fans. This is one explanation offered for the continuing rise of Tesla despite the incresingly apparent evidence that its founder and big boss is certifiably insane and the fact that the electric car maker runs is car making operation at a loss and only stays in business by selling carbonm credits handed out by the US Government and various state legislatures, including the global capital of crazy, California, New York state, Illinois and every other corupt, Democrat controlled shit hole.

That Elon Musk has recently anointed himself the Technoking of Tesla while rebranding his chief financial officer as “Master of Coin,”  the title held by Littlefinger, Tyrion Lannister and other characters in Game Of Thrones is not a joke. It’s not even (or not just) an attention-seeking stunt. There’s much more to it than that. However Musk's move has triggered the latest wave of enthosiasm among electric car nerds and tech cult members for buying shares in Musk's great bubble.  

Some have suggested Musk’s idiotic antics over job titles are a ploy to divert attention from the many downsides of Tesla’s performance, the upsides of which exist only in the minds of Musk and the millions of tech fanboys (and a few fangirls,) who believe every bit of hyperbole that spills from his mouth, viz Musk's splashy announcement last month about a $1.5bn bet on Bitcoin which came around the same time as regulators in China, its fastest growth market, were flagging safety and quality issues but triggered another uptick in the price of Tesla stock on financial markets when the news from China should have caused a sharp drop as China is the car company's biggest market.

The latest whacky disclosure coincides with a report from Barclays Investment Bank that shows Tesla’s share of the electric car market in Europe dropped from roughly a third at the end of 2019 to 10pc at the beginning of this year. Tesla is also having problems both technical and legal, with its “self-driving” feature, which, pardon me if I’m being a bit too technical here, when I say that it is effing uselesss. The legal issues mainly concern the families of tesla owners killed when the self-driving technology failed with fatal consequences.

Maybe there’s a diversionary element to it but this kind of tactic on planet Musk is a strategy. You could call it corporate populism. He's telling the faithful what they want to hear.

His Techno Highness regularly demonstrates that he has less than zero interest in governance norms, customer satisfaction or in the traditional conduits of financial information - like bank analysts or the media - instead playing to the crowd through social media (and subversive SEC filings).

Elon Musk updated his Twitter profile to describe himself as the 'Technoking of Tesla'
Elon Musk has changed his job title from chief executive to 'Technoking' of Tesla

It works because the crowd is big enough to make a difference and gullible enough to fall for it again and again. The number of retail investors, the majority of whom are under the age of 34, doubled in 2020, the generation that does not understand there's a big difference between researching something and Googling it. The significance of this trend towards young, independent invetors buying and selling small quantities of stock has only recently become apparent. Encouraged by social media campaigns particularly on the Reddit site, retail investors have accounted for a third of all US stock market trading, meaning they collectively yield greater sway than every single hedge fund and mutual fund in the country combined.

Many of these investors aren’t doing rigorous financial analysis. If they were, they’d be worried that Tesla has a p/e ratio ( a company’s share price expressed as a multiple of how much money it actually makes) of 180x. This compares to an average among US equities of 19x, UK, Germany and France about the same, according to analysis by Schroders. 

At the end of January Tesla was worth $752bn, placing it in the top 10 most valuable companies in the world. In fact it now represents over a third of the market value of the entire global car industry. This is a vast overvaluation for a company run by a nutter that is in reality a niche car maker.

“Such an immense market capitalisation makes sense only if the expectation is that Tesla will come to dominate the entire auto industry, not just the [electric vehicle] market,” says Rob Arnott of Research Affiliates. “Such an achievement requires that both Tesla’s brand and technology become so dominant that the company can earn profit margins that exceed those of Ferrari on a level of production exceeding that of Toyota.”

That ought to sound a bit far fetched even to Musk's biggest fan, it certainly does to one of his biggest rivals Akio Toyoda, President of Toyota, which is memory serves me well vies with Ford and Volkswagen for the unofficial title of world'd biggest car maker. It would clearly be impossible for Tesla to dominate the car industry in such a way while its rivals also continue to see their share prices rise whenever a new EV is announced. And yet that is what the soaring share prices of other EV specialists over the past year and the relatively stable share prices of traditional car markers currently implies. In other words, investors appear to believe there will be no losers from this ultra-competitive race to go electric. In the future there will be no losrs only runners up! How very woke!

This irrational obsession with electric cars is a classic example of what the financial trading community call the “big market delusion”, which usually happens when a new market is created or an old market disrupted through innovation. All the different players get valued as if everyone will win because nobody knows how things will play out. The cannabis market where shares in firms that sell cannabis based products in US states where the drug has been legalised is another example.

Of course, Musk would argue that Tesla is not just another carmaker but a software-enabled business that will overturn the old economics of the industry before turning its sights on robotaxis, self-driving trucks, battery technology and more. Indeed, his new job title kind of makes exactly this point. 

But the short-sellers in the established sector of the market who are betting on Tesla stock prices falling dramatically aren’t convinced. It’s not that they think Tesla is a bad investment at the right price. Clearly the future is electric with western governments calling time on the internal combustion engine. But the sceptics believe that the company’s share price has gone way beyond a basic appreciation of those facts. And their logic is sound. There’s only one problem. 

 Tesla doesn’t have ordinary consumers and shareholders but fans. And, as any follower of English football will tell you, the well from which a true fan draws their misplaced optimism is almost fathomless. But the Tesla bubble is something different again. Apart from being fans of Tesla, fans of Technology and fans of fantasy fiction, many of the new breed of investor understand that they are behaving irrationally while co-ordinating campaigns on social media and entreating each other to hold onto stocks with “diamond hands” even in the face of overwhelming evidence they should sell. 

The traditional investor was looking for a reasonable risk-adjusted return in order to fund their retirement. The new breed rallies to a banner emblazoned with the acronym “YOLO” – you only live once. They are not investing in Tesla because of its p/e ratio or in the hope that sky high share valuations go interstellar; they are investing because of who they are and how it makes them feel. They are investing because Greta Thunberg. They are not investing in business but in causes, to sen a politicical message to ......... we're not sure who. 

Identity politics has morphed into identity investing. And there are signs this new brand of shareholder won’t be put off by the next big market correction as their predecessors were when the dotcom bubble burst. 

A recent survey of US retail investors conducted by Deutsche Bank found that respondents are planning to invest over a third of any stimulus cheque they receive from the Government in equities (is that a money-laden helicopter I hear?) and will treat any sell-off as a buying opportunity.

The very fact that Deutsche Bank conducted such a survey clearly demonstrates that traditional market participants are starting to realise they need to figure out a way of analysing the phenomenon and incorporating it into their own models.

The default assumption must remain that economic gravity will reassert itself in the end. But it may take a lot longer than we mere technosubjects had supposed.

But a cautionary note for potential investors on Musk's "achievement" in getting Tesla into profit. All Tesla's profits to date have come from selling government issued carbon credits to conventional auto makers that have not achieved the unrealistic targets set by 'woke' politicians for reducing emissions. So hailing Tesla's incursion into profitability is a fraud, they are still losing vast amounts on auto making operations.

The carbon credits system is itself a fraud, as independent analysis has shown the shift to electric propulsion does not reduce emissions, it merely shifts them away from the back end of the vehicle to pre - build processes such as mining and processing cobalt and lithium and other rare earth metals and the equally polluting battery manufacturing process.
This article on investors website The Motley Fool explains how Tesla's business model is dependent for its profitability on government handouts.





VW Audi Suspends Electric Vehicle Production Due To Battery Shortage
Today in “news that affects all electric vehicle manufacturers”, Audi has announced that it has suspended production of its e-Tron electric SUV effective February 20 and won’t resume untilfurther notice. The suspension has been a resolve of “resolving production issues”, which are mainly attributed to bottlenecks in battery supply, according to Business Insider.

Tesla Stock Hit After German Regulator Warns Self-Driving Cars Are Unsafe

While the Tesla company and its Ubernerd founder Elon Musk have for several years been the darlings of the stock markets and the media, things may be changing. Like most technology startups, Tesla talk a good launch but fail to deliver real results. Since the cars launched to widespread admirationed at the elegant design, and open mouthed shock at the huge price tags and ...

House battery to store energy will 'change entire infrastructure of the world' - or maybe not
Another costly new product hailed as a breakthough in technology, this time a clutching-at-straws exercise from the failing electric car company Tesla, completely fails to live up to the hype under scrutiny. Hailed as a super battery, a mjor advance in battery technology that will change the world to store power for a household, it turns out to be nothing more than a streamined car battery. It will run the average home for about 2 hours.

Google Self Driving Car Can't Drive Itself
A lot of nerdy types have been getting very excited about the self - driving cars being developed by Google. Being nerdy they are not making such a fuss about the decent looking rides being developed by the likes of Mrecedes Benz, General Motors and Toyota. No, it's the Google wankermobile that turns them on.

All The Reasons You'll Ever Need For Not Buying An Electric Car As Tesla Electric Car Turns Into Firebomb after Collision.
The electric car thing will not go away will it, ever since the science tits who work for Big Tech started proposing that electric cars are the future it has been proved many times in many ways that they are not. Cost, extremely limited range and safety are mong the reasons. And here as a Tesla goes up in smoke, is another ...

Google Car Driverless Because No Sane Person Would Be Seen Dead In One
A few years ago Google boss Eric Schmidt said the company's aim was to get as close to creepy as they could without crossing the line. Well they had crossed the line long before he said that. The latest Google wirdness is the much hyped driverless car. It looks as if it was designed by a five year old. On the other hand it might be the ideal car for paedophiles who want to go cruising for jailbait.

Electric Car Mini Adventure
Keep The Engine Running
Just Drive
Driver Friendly Roads
Rare Earth
Reasons To Hate The Toyota Prius
Renewable Energy Con
V2G Technology

Ford Warns Electric Cars Are Only For The Rich
German politician calls on facebook to abolish free speech
A German politician has given the clearest indication yet that the political elites of the free world are ideologically much closer to Adolf Hitler's National Socialists than the social liberalism they claim to support. Free speech is the basis of all liberal democracy. Heiko Maas, the German justice minister has has written to the Facebook it removes “xenophobic and racist” anti-migrant posts from its website and apps., has written to the company to demand an urgent review of its policy over hate messages.

Free Speech Is Being Murdered By The Media And Left Wing Authoritarianism
Without free speech there is no democracy. Without democracy there is no freedom. But all over the developed world free speech is under attack from politically correct politics. It is time to start resisting, do not believe the propaganda published by mainstream media, question everything and make up your own mind. as The Buddha said, "Believe nothing you read or are told unless it agrees with your own experience and common sense."

Farage Reckless Facing Rabid Left Wing Fanatics
Following the defection to UKIP of Conservative MP Mark Reckless, who yesterday shocked the media and political establishment (everyone else knew it was on the cards.) by announcing his switch from con to Kipper from the podium at the closing session of UKIP's conference, the Kippers latest recruit and his new leader yesterday faced angry but ineffectual protests

Farage Reckless Facing Rabid Left Wing Fanatics
Following the defection to UKIP of Conservative MP Mark Reckless, who yesterday shocked the media and political establishment (everyone else knew it was on the cards.) by announcing his switch from con to Kipper from the podium at the closing session of UKIP's conference, the Kippers latest recruit and his new leader yesterday faced angry but ineffectual protests

Obama administration ‘blocking' information from the press
Uncovering information that should be available to the public has become increasingly difficult under the presidency of Barack Obama, an Associated Press bureau chief says. In some cases, it surpasses the secrecy of the George W. Bush administration. The White House's penchant for secrecy does not just apply to the federal government, according to AP's Washington bureau chief, Sally Buzbee.

Western Hypocrisy In Reporting News about Ukraine And Russia
The opening paragraph of a CNN report on the latest developments in the crisis in Ukraine illusrate perfectly the hypocrisy of Western media in the way they cast Russia as the danger to world peace and America as bringer of freedom and democracy. In fact in the crisis over the US attempt to draw Ukraine into NATO the positions taken by the USA abd Russias are the opposite of the 1962 Cuban Missile Crisis.

Scandal hit Rotherham ‘deleted abuse files’
In a move that puts them among the contenders for lying, self serving shits of the decade, but still in a league of their own un terms of complete and utter shittiness, it has emerged that the scum sucking scab lice of Rotherham Council's controlling Labour group and the public servants they employed had deleted files in order to cover up their complicity in the blatant and systematic child abuse perpetrated under the noses of council officials.

Centralized power - the worst of all possible worlds
The centralization of power over the past few decades in nations of the developed world has led to the evolution of a sociopathic managerial class formed mainly from the old petite bourgoisie who have now gravitted to public sector careers where their delusions of social status and the unaccountability of office lead them to abuse such power as they have.

Kick Political Correctness Out Of Football
As another football versus politiocally correct authoritarianist brings 'the beautiful game' even further into disrepute, we wonder is it time to kick politically correct authoritarianism out of sport.

Intrusive Surveillance Technology, Internet control freaks and The Orwell-Huxley-Dick Dystiopianometer
Are privacy campaigners right to be worried about intrustive internet technology and the massive databases that log our behaviour and parse the data for patters that enable us to be targeted for advertising? Should we bee worried by surveillance or are those that raise doubts just scaremongering? The Orwell-huxley-Dick dystopianometer is rising.

So Who Is Anti - science? Those Who Question Climate Change Or Those Who Would Abolish Free Speech
It was looking as if the global warming scare was dead, then that Nazi shit Barack Obama, seeing his dream of being President Of The World slipping away, gave his science whores enough money to enable them to kick some life back into it. Now the "science" lobby, unable to put together an convinging argument against their challengers are demanding the abolition of free speech.

New World Order War On free Speech Comes To Britain - Guardian editor accused of treason
The right to free speech is under threat from intolerant, authoritarian elitists, call them The Illuminati, New World Order, Scientific Dictatorshgip, Global Elite, whatever. Their goal is absolute power and they know that while the right of free speech, the free press and free access to information exist they cannot succeed.

How academic debate is suppressed on science topics like Climate Change, GMOs, Pesticides and Toxicity of medicines
Intellectual intolerance and the supposed superiority of the scientific education have led not just to the politiciisation of science but to it's being seduced by corporate money and political power. Science was ever fascism's whore of course and the egos of scientists are easily bought. This has led to a very unhealthy emergence of dogmas and orthodoxies and an intolerance of the dissent that is essential if scientific research is to have any credibility.