Vlad Tenev on the democratization of finance

What we are witnessing is a massive transformation taking place across financial markets, driven by the intersection of technology, democracy and finance, and one that is ushering in an entirely new era of financial participation and market dynamics.

~ Vlad Tenev, "Robinhood CEO: We're helping those left behind by Wall Street, not hedge funds," USA Today, January 31, 2021

Michael Weeks and Dominik Schönenberger the financial industry and moral decay

Modern man, enthralled by the contrivance of credit growth and the resulting asset price inflation and unconstrained by the notion of scarcity in economic goods, sees the act of investing merely as that of buying something so as to sell later, hopefully at a profit.  As a consequence, in the pursuit of such elusive profit, we witness the rise of a financial industry replete with every form of artifice which, while ostensibly seeking to give us advice, tends to ultimately impoverish us, not merely in terms of money, but, to a greater extent, through the decay of our innate instinct about what is right and wrong.

~ Michael Weeks and Dominik Schönenberger, "In defence of financial anachronism," Edelweiss Journal, May 24, 2018

(Weeks and Schönenberger are protégés of Tony Deden, founder of Edelweiss Holdings.)

Charles Mackay on speculative folly

Every age has its peculiar folly; some scheme, project, or fantasy into which it plunges, spurred on by the love of gain, the necessity of excitement, or the mere force of imitation.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (1841)

(Cited by Randall Forsyth, "WallStreetBets Might Be New, but Bubbles And Busts Are Not," Barron's, January 30, 2021.)

Albert Edwards on the retail investor being last to the party

One of the surest signs that a bubble is close to bursting is when the retail piles in with leverage. And if the retail warrior millennial mob are angry now, wait until they lose their shirts in any market collapse.

~ Albert Edwards, Societe Generale strategist, "WallStreetBets Might Be New, but Bubbles And Busts Are Not," Barron's, February 30, 2021

Kevin Duffy on compulsive gambling and the everything bubble

Compulsive gambling is a progressive disease.  The parabolic pattern of a bubble mirrors the willingness to take on risk.  Last week, former darlings like Amazon and Tesla sold off as they lack the sheer adrenaline rush of pumping up the stocks of dying companies and taking down billion dollar hedge funds.  (We witnessed a similar phenomenon in 2000 when “Old Economy” stalwarts were dumped for dot-com lottery tickets.)   Lately, speculators have gone from picking up quarters in front of a steamroller to dodging Ferraris for pennies.

~ Kevin Duffy, "Game Over," LewRockwell.com, February 1, 2021

Kevin Duffy on the role of financial markes

We’ve lost sight of the fact that the financial markets exist to efficiently allocate capital.  Mock and destroy that function and you’ve done the same to a functioning economy.  Interest rates are no longer set in the marketplace, but manipulated by central bankers.  Active investment managers seeking value have been replaced by index funds on auto-pilot.  The market’s most capable sleuths and skeptics – short sellers – have been exterminated.  Investors and speculators have become divorced from their key role as price discovery agents.  Price and value no longer matter.

~ Kevin Duffy, "Game Over," LewRockwell.com, February 1, 2021

Kevin Duffy on GameStop narratives

The GameStop frenzy has struck a nerve with so many because it represents a morality play: David vs. Goliath, outsiders vs. insiders, the downtrodden upending the corrupt financial elites. To many long-time critics of bailouts, the Reddit crowd who made out like bandits signifies the beginning of a long-awaited populist revolt. To the young and tech savvy, this is the passing of the old guard which offers a glimpse of the future. 

Lost in all of the hysteria and spin is the real struggle taking place on Wall Street, that between bulls and bears. After 12 years of nonstop Federal Reserve-abetted asset inflation, the bulls have been winning so often, their ranks have swelled while those of the bearish community have dwindled. The short seller, that most extreme expression of skepticism, has nearly gone extinct. It was he who the Reddit crowd targeted and whose grave they’re now dancing on.

~ Kevin Duffy, "Game Over," LewRockwell.com, February 1, 2021