Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "Bravos Research" channel.

  1. At first glance, the idea to devalue USD may make American manufacturing theoretically cheaper, but at the same time it makes usd-denominated capital investment in manufacturing more expensive whether in the US or abroad. The idea that Europe or Asia can or will invest in the US in the future is only an assumption that may not stand up to reality. Sterling's devaluation over time did not protect its manufacturing base. Instead, it was unconditionally allowed to wither on the vine in favour of reliance upon financial services to dominate the economy. Sounds familiar? Furthermore, cutting edge manufacturing is now focussed on AI and automated processes, and less on labour-dependent processes. So, a Renaissance of American manufacturing may not occur, especially in an economy dominated by the demand of the less numerous upper regions of the income distribution.
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  2. Absolutely correct. AI is being embraced by business to protect margins. They're not so much using AI to augment human skills but to replace them. And the last quarter earnings boost was from Nvida's potentially last lot of chip exports to China. US businesses have accumulated a lot of dry powder by pumping and dumping their stocks, but China is so stagnant that Xi approved a stimulus package, and the other large economies are all showing signs of strain, including the US. So, it's time to accept that the US stock market is completely divorced from its greater economy. Treat it like Las Vegas: what happens in Vegas stays there, and has little impact on the world beyond it. If Trump wins he's going tie to toe with China in a tariff war, so no more sales of chips to them. And many of the Mag 7 are considering designing their own chips. TSM's biggest customer is Nvidia, and if they start losing customers... Well, past performance is no guarantee of future returns, are they?
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  3. A Soft Landing this time may be more unlikely this time around because the number of repo fails is climbing, which means that there is a shortage of collateral. If dealer banks are hoarding treasuries and coupons this time around it's because they smell blood in the water. And the blood in the watter may be linked to the Yen Carry Trade being unable to unwind in an orderly fashion. That will shrink the availability of credit for domestic banks too, as they rely on money markets to finance US domestic lending.
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  4. Have you really thought through your assertion? Right now, everything electronic depends on copper to work, including AI data centres. There's been zero uplift on the price for copper. Indeed, the price for copper is falling as demand for it goes down. If what you argue is true, copper should be going up in price faster than gold, as AI hardware becomes pervasive. But it's not becoming any near pervasive in its impact. Gold, the traditional fear hedge, is going up in price faster than copper. And the very same type of hype train went off the rails when the Internet was first posited as the tech that would change everything. And the Internet bubble popping was oh so painful, that many of the NVIDA's of that day like Cisco, have never recovered their hyped valuations until today. Before you argue that "this time it's different", you had better check that gift horse in the mouth before it swallows your stash, and then gets euthanized. Why? Check the NASDAQ Insider Trading data. Look at what the AI insiders are doing, and keep watching until the 24th October. AI sadly, is following the same trajectory as the Internet Bubble burst, like it or not. And like the Internet, the true capabilities of the tech will not settled in the short- to medium-term. It will be the next 5 to 10 years and beyond where the real-world capabilities of AI are revealed. Not now. So, what to do? Decide on a stake size to hold in the market, but bank 50-60% of your profits. Also make sure your portfolio is healthily diversified, so when reality hits the Stock Market, you won't be wiped out. Good luck. Choose wisely.
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  5. "One final important contribution of our paper concerns the “great reversal” in German stock market development towards the end of our period of study. While there is a growing body of literature on pre-World War I stock market development in Germany, the interwar era has been largely ignored. With our IPO data set extending beyond 1914 we are in a position to offer insights concerning this period. We show that the hyperinflation of the early 1920s did not have as detrimental impact on German equity markets as might be anticipated. We also document how subsequent counterproductive interventions by the Nazi government choked off IPO activity and destroyed the German stock market during the 1930s." - Burhop et al. (2016). “The Rise and Fall of the German Stock Market, 1870-1938" , page 2.
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  6. Hopium is a strong drug. It can distort reality by the strength of wishes. But by burying your head in the sand, you are presenting a bigger target for reality to kick.
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