Peter Atwater on how those at the top have leveraged asset inflation

The other place where I think there's been insufficient attention paid is to the excesses of those at the very top.  If you look at the extension of credit, for example, in the private banking space since the financial crisis, it's extraordinary.  A bank like JPMorgan has more private banking loans outstanding today than it has credit card loans.  So you have a massive amount of credit that has been extended, you have an oversupply of elite product providers, service providers, whether it's luxury goods, hotels.  The sense that the elite are different and will never succumb to any kind of a cycle is just mindboggling to me.  And so nobody has contemplated the biggest potential losses could be among the customers that have heretofore been the safest.

[...]

The whole mindset of the financial elite was "Don't sell it, borrow against it.  Because if I have to sell it, I incur an enormous tax event."  And so what they've all done is to keep borrowing against it in the belief that the valuations of whatever it was were permanent.  The art collection...  It's masterful tax strategy, but it is completely devoid of a connection to reality.

~ Peter Atwater, June 2, 2022

Peter Atwater on the parallel peak in stock and bond prices

What I think is underway, though, is a real reversal in sentiment that didn't begin this year, but began almost 18 months ago when you saw Gamestop and SPAC mania accompanied by record volumes of negative yielding interest rate bonds.  So you had this parallel peak in stock prices and in bond prices.  And that is an unprecedented moment in the markets.  We 've never seen this kind of coincidence before.  And so what I don't think investors quite appreciate is we're having an unwinding in both fixed income and equities simultaneous here and there's not going to be any place to hide in that.

~ Peter Atwater, interview with Stephanie Pomboy, Wealthion, 10:50 mark

Peter Atwater on expanded unemployment benefits

We've gone from maternity leave to paternity leave to eternity leave as employees are simply choosing not to come back to work at all.

~ Peter Atwater, tweet, June 28, 2021

Peter Atwater on brain drain into politics as contrary indicator

I think it's really interesting that you're seeing an influx of asset managers, a.k.a.  BlackRock employees into the Biden White House team.  It reminds me, if we go back to the '60s - you had [Robert] McNamara at Ford going into the political space at the top of [the Go-Go '60s].  You've had Gary Cohn and the [investment] banking folks, [Henry] Paulson, [Steve] Mnuchin from the private equity space.  I think it's like hosting the Olympics.  You only host the Olympics at the very top.  You only go into political life at the very top.

~ Peter Atwater, "Super Terrific Happy Hour Ep. 8 - Peter Atwater: Our Sentimental Friend," The Grant Williams Podcast, 56:00 mark, December 13, 2020

Peter Atwater on the everything bubble

Everywhere I look it's mania.  Cryptocurrencies, in bonds, sovereign debt in Europe... you just go one category after another and go "Is nothing sane?"

~ Peter Atwater, "Super Terrific Happy Hour Ep. 8 - Peter Atwater: Our Sentimental Friend," The Grant Williams Podcast, 32:00 mark, December 13, 2020

Peter Atwater on the current financial bubble and coming recrimination phase

Major market tops are a process, not a single event. Markets peak on exhaustion; everyone must be in. Meanwhile, in the background, the weakest leave the party first. 

I don’t pretend to know when the market will top – or if it already has for that matter – but what is already clear is what is ahead: "The Age of Screwtiny." 

By “screwtiny” I don’t mean the plain-vanilla kind of investigation and inspection that naturally arises as confidence falls. That is a given. What is coming will be different. Think scrutiny but with an angry attitude intent on finding those responsible and then nailing them to the wall. 

You see, what is ahead will be the third major betrayal in twenty years. After the dot.com debacle and the housing crisis, the crowd won’t take kindly to yet another bubble burst. 

And today’s bubble is different. This time it isn’t tech stocks or real estate; its illusion. Deception has transcended the financial markets. It’s cultural and it is everywhere. From “influencers” on social media to blitzscaled business start-ups, the past decade has been a Gold Rush in fakery.

~ Peter Atwater, "The Coming Age of Srewtiny," LinkedIn, September 22, 2020

Peter Atwater on socially responsible investing

ESG is the WeWork of money management.

~ Peter Atwater, Twitter post, March 4, 2020

Peter Atwater on manic behavior: The Beatles, Beanie Babies and Tesla

Many will suggest that manias and panics routinely come and go, but history strongly cautions that they cluster. The Beanie Baby Bubble coincided with the peak of the dot.com bubble, and Beatlemania marked the mid-1960s market and mood peaks...

While Tesla may be followed by an even more extreme investor flash mob ahead, the recent clustering of manic behavior cautions not only that sentiment is topping, but that the current peak is extreme. Based on crowd behavior, 2020 could easily bookend the major 2011 low.

~ Peter Atwater, Financial Insyghts, "Tesla: A Flash Mob With Money," February 10, 2020

Peter Atwater on residents of Hong Kong leaving for Taiwan

Few behaviors express sentiment like voluntary emigration.  We finally flee when we see hopelessness.

~ Peter Atwater, August 20, 2019 tweet

Peter Atwater: headlines "on the front page always confirm the bias of the reader"

When somebody picks up The Wall Street Journal, the Financial Times, whatever they do - and you can do it online - is to step back and say, as you're reading these headlines, "why are they here?"  "Why are these on the front page?"  And they're on the front page always to confirm the bias of the reader.  It is very, very rare that you'll see on the cover of The Journal, the Financial Times, the New York Times, something that is challenging, that's going to cause the crowd to step back.   What they want is for you to start reading and keep reading from there.  So the front page is telling you, "this is the consensus view."

So often you will have seen a story that a week ago was on page B-18 move to the front page of the B section, to move finally to the front page of the front section.  So that migration is telling you that the  story has legs, that it sticks and that the momentum is now peaking.  I think it's important to recognize that front page acreage is incredibly expensive.  So nothing can last there.  It hits and goes.  So this is the editors capitalizing on the frenzy, and once it's there it's done.

~ Peter Atwater, "Indicators Hiding in Plain Sight," interview with Grant Williams on Real Vision, 17:30 mark