Submitted by QTR's Fringe Finance
In the world of finance, moments that restore faith in reality are few and far between. However, if there was one such moment last week, it was the conviction of Sam Bankman-Fried. This event momentarily bolstered my confidence not just in regulators, but in the very fabric of reality.
It’s important to give credit where it's due. Many of my readers, along with numerous individuals I follow online, continually chide regulators. Just a year ago, I echoed these sentiments when it became glaringly clear that FTX was a colossal fraud and SBF wasn’t thrown in jail overnight.
Now, a year on, I must congratulate not only the regulators but also the legal system.
Everyone’s diligence in gathering evidence and building a robust case was instrumental in securing a conviction against Bankman-Fried at trial. Prosecutors’ work was both swift (a year is lightning fast to secure a conviction) and commendable.
In addition to restoring my faith in justice and truth, Bankman-Fried's conviction also rekindled my trust in reality.
Most of my readers are aware that my macro perspective on both markets and the economy is that, in plain terms, that we're on the brink of something cataclysmic, which will likely lead to a fresh round of extreme quantitative easing from the Federal Reserve.
And I know it's controversial, but my reasoning has simply come from my belief that several decades of the easiest money in history cannot then meet the fastest acceleration of interest rates in recent history without causing an explosion somewhere. In other words, my thesis for almost everything that I own is based simply on math and common sense.
And while that sounds like the simplest and likely most reasonable way to invest, we all know that the market can stay irrational longer than most people can stay solvent.
That saying became popular because the stock market, subject to micromanagement from the central bank and the government, basically does whatever the fuck it wants (technical financial term) at any and all times.
Reality doesn't play much of a role in a market that is driven solely by passive investing, algorithms, options gamma, revenue-less garbage growth companies, insane valuations, brain-dead morons like Cathie Wood, clueless PhD economists at the central bank, Tom Lee on CNBC every day and the next round of bilge to exit the mouth of our Treasury Secretary at some bullshit fireside chat in Belgium.
In other words, it is anything but reality that has been driving the stock market, especially recently.
I've written at length about how frustrating it has been for me to have been short the market for the better part of the last two years while rates are rising and to have been wrong. I've also written about the fact that the market does generally take its obligatory plunge after rate hikes have concluded, and around the time the Fed begins to cut, which it seems we are not far off from.
But the crux of all this reasoning relies on...(READ THIS FULL ARTICLE, FREE, HERE).
