Let’s not kid ourselves: Donald Trump would like nothing more than to preside over the latter stages of a late-90s-style risk asset melt-up — just so long as he’s out of office or otherwise free from blame in the event of a collapse.
US equities are trading with bubble-like valuations, and signs of froth are everywhere in the wake of Trump’s “surprisingly” emphatic election win this month.
Have a look at the manifestly silly figure below. It depicts a tsunami of inflows to crypto funds, which took in another $1.1 billion last week.
As BofA noted, the $13.5 billion that flowed into crypto-focused products over the past two months accounted for nearly a third of all net crypto fund inflows looking back half a decade.
A lot of the enthusiasm’s down to Trump, a born-again “coiner” who came around after — and I don’t know a nice way to put this — discovering that crypto and Web3 provided for new and innovative ways to bilk people out of money. He also woke up to the many points of overlap between the cryptosphere and the MAGAverse.
(If you haven’t read anything about “World Liberty Financial” — shades of Prestige Worldwide — you should skim the brief profile sketched this week by Zeke Faux and Muyao Shen who wrote, of the Trump family crypto project, “World Liberty’s cryptocurrency isn’t very appealing as an investment [given] the tokens don’t promise a share of the company’s revenue [a]nd the coins can’t be resold, [b]ut they do represent a good way to send money to the Trumps.”)
Note that overall crypto market cap now stands at $3.4 trillion, some $500 billion above the previous record from three years ago which, as it happens, was the last time shares of Tesla were lovin’ life like they are today.
The figure gives you a sense of things. Trump just made November 2021 great again, and I’m not sure that’s a good thing.
I realize this is obvious, but I like pointing it out all the same: If this weren’t Trump’s doing, you’d wake up each and every morning to a veritable chorus of shrill bubble wailing from the usual suspects, but by and large that crowd goes for Trump, and even more for Elon, so… crickets.
Every major US benchmark just logged its best month of the year, or very nearly.
There again, the promise of market-friendly policies including de-regulation and corporate tax cuts are to thank, but there’s also the “animal spirits” factor, which in this case just means blind faith in the idea that just because a man says he’s the best thing to ever happen to the US economy, he is.
That speaks to one of the more astonishing aspects of Trumpism: It isn’t only disaffected, downtrodden blue collar workers with “nothing to lose” who buy the narrative, it’s highly-educated, white collar traders and professional investors, some of whom were just as quick to deride the man a decade ago as they are to sing his praises today, as if anything’s changed about the guy other than his job title.
I’m honestly not sure how free everyone’s going to be to speak truth to this particular power in a year’s time, let alone in two years, but already, in Musk, in Trump’s new crypto friends and in the handing out of political appointments to loyalists who in many cases share Trump’s affinity for flagrant patronage politics, we’re witnessing the establishment of an out-in-the-open spoils system with no modern precedent at the federal level.
If there is a late-90s-style market melt-up, expect the biggest bubble beneficiaries going forward to be those companies and executives with the closest personal relationship to Trump and his family.
I don’t think most voters have any conception whatever of what America’s just done to itself. As a lawyer friend in Baltimore sighed on Friday evening, “Jesus, our f–king country.”
It is kind of hilarious to read about all the “big tech” CEO’s who started “courting” Trump towards the end of October.
https://www.cnn.com/2024/10/27/politics/big-tech-ceos-donald-trump-election/index.html
In the “investment world”, one doesn’t have to like what is going on, but must be ready and willing to recognize and ride a good wave when it arrives.
When The Simpsons writers introduced Frank Grimes to point out the absurdity of Homer Simpson, we could laugh about the universe that those characters inhabited and the untimely end of Frank Grimes. It’s not as funny when the real Homer Simpson is President.
To quote Grimey, “if [Trump] lived in any other country in the world, he would have starved to death long ago.”
Prestige Worldwide. I’m dying. The Step Brothers might do a better job running the country.
Please consider a Culture section. We briefly exchanged comments on this a year ago or so. Movies, books, perhaps a review of high-quality television. I know you’re busy, but we’d all love it.
I second this. H, I know a top tier web dude who could take your site to the next level..
Well said.
Such a major change described in the comments would effectively kill what The Heisenberg Report has as it’s uniqueness. Catch and Kill would be the effect. Maybe that would be a good thing, especially if the MAGAT’s demand to control all expression like some are demanding. It would give a way to fade into obscurity by taking the money and run.
“Engineer” I’m not sure what you’re talking about here, to be completely honest. No one’s suggesting any “major changes” to Heisenberg Report, nor are any such changes planned. By “culture section,” they were referring to my book and film recommendations. It was a reference to some comment section from a long time ago.
I may have misread the posts. I thought a buyout was proposed.
HA! No. Absolutely not. I can assure you that no one was (or would ever) propose a buy out of Heisenberg Report.
I could make an offer but it was not even buy you socks where you like to shop.
Disconnects between people, who are part of the same conversation, can be so hilarious 🙂
Your last two sentences sum up the situation well. Many Americans literally have no ideas. No perspective. No sense of history. I’m in wait and see mode. Imagine if the unraveling of norms and relations in the US and globally is in its infancy. I can’t envision it clearly at all, which is somewhat unusual, so I’ll wait on many trading and investing decisions until the lunatic is screaming in the WH. Unless something breaks (or blows up) that will cause a crisis for T on Day 1. He’s never met a crisis he won’t make worse.