Wall Street is not main street.
And correlation is not necessarily causation, but it's also not necessarily not causation.
I was listening to a Coffee and a Mike Podcast with Ayesha Tariq, and she was asked how scary things are now, and she replied, “I think it’s very scary.”
It reminded me that the world of Wall Street and Fintwit types (including me) is so alien to that of most people.
Maybe a few of my poker buddies have heard about Silicon Valley bank, and maybe their 401k is down and they’re afraid to look at the statement, but they’re not scared, certainly not about what’s happening to First Republic. If they own stocks at all, they haven’t sold anything. They could not care less about the “FED DECISION” tomorrow.
If they’re scared of anything, it’s a higher cost of living.
They spend approximately 1/10th of 1% of the time following markets and related nonsense as I do, and I have to remember that all Wall Street cares about is Wall Street, and that Wall Street’s worries are not the worries of several hundred million Americans.
You know who’s scared? Bill Ackman and Barry Sternlicht.
The most repulsive things about guys like these (besides always calling for higher inflation) is that they present themselves as only looking out for the little guy - they’re worried about YOU and your family.
Right. I have a bridge to sell you. Higher rates mean lower returns for them. That's it, always talking their books. These guys could not possibly care less about you and your family. You can tell because they only come on CNBC to cry when their net worth has a chance of declining.
Half of Americans own NO stocks. Most couldn’t name the Fed Chair.
The next 40% of Americans collectively have half as much in stocks as the top zero-point-one percent do (10.8% vs 21.8%).
These people are largely at the mercy of the Jim Cramers and Farmer Jims, or their employers who - to be safe - funnel them into the most price-insensitive index funds, where 5 stocks are 25% of their holdings.
The stock market is really about the top 0.1%. It used to be about funding companies, now it’s become literally casino, but casinos have better regulation.
As Steve Randy Waldman says, "Billionaire politics is about making human shields of the merely affluent."
Even if you make $500k a year and are worth 7-figures you are still far closer to the homeless person down the street than you are to David Tepper.
So besides Wall Street, what does the pundit class really care about?
War.
Ukraine is a mild concern in Scranton…locals say something about the nation doesn’t work any more — inflation is soaring, wages aren’t keeping up, labor shortages appear everywhere, government is dysfunctional and the American dream seems just out of reach.
“If you put your fingers on the pulse of America, it’s not healthy,” said Shane Cawley, a local ironworker who introduced Biden on his last visit to Scranton in October.
The actual mood in America? “Scared, desperate,” Cawley said. Inflation is “out of control” and Americans are increasingly frustrated with a bitterly divided political class, he said. “Not just frustrated. Angry, straight angry.”
Obviously I'm no economist, but M2 Velocity is simply "the ratio of quarterly nominal GDP to the quarterly average of M2 money stock," or, as I like to call it, the Main Street to Wall Street Ratio.
So the other thing Ayesha Tariq mentioned was how amazed she was about who one can reach on Twitter, and this completely resonated with me.
She said Jim Chanos followed her the other day. Heck, Mr. Chanos has followed me for years (I’ve forever been a fan), and even DM’d me recently to scold me for making what he construed as pro-Elon tweets (re: free speech). Considering that I am now banned by the same Elon Musk, I must say Mr. Chanos seems to have won that friendly debate.
I mean, it’s ridiculous the people who followed me (and vice versa) on Twitter (now seemingly lost). Some of the most amazing people in finance.
(The list of famous people who blocked me is also awesome: Larry Kudlow, Adam Posen, John Podhoretz, Bill Ayers, Kara Swisher, Pedro Da Costa, Cliff Asness, Joe Kernen, Carl Quintanilla, Mike Santoli, Peter Daszak, Andrew Ross Sorkin, Max Boot, The WEF, George Selgin, Steven Pinker, Bank of Jamaica, Noah Smith, Brookings Econ etc.)
I’m not bragging (actually I am), but I was followed by people like [redacted because there’s too many to list]and so many others I hope to get back to, someday, if only to advertise my Substack and read all your tweets. Please keep bugging Elon.
I mean, heck - I got followed by Danny Moses, Porter Collins and Vincent Daniel. That’s the Trifecta right there.
I have to say though my two greatest moments have to be:
When Tony Deden wrote me an encouraging email during one of the prior times I was permanently suspended from Twitter.
When JIM GRANT emailed me about my campaign for him to be the 2024 U.S. Presidential Candidate (which he was unaware of). I’m still writing him in, unless Ron Paul runs.
"One can't learn much and also be comfortable." - Charles Fort
WOW those were very coherent sentences. No beer today?
Sadly you are right most people wouldn't know a put from a call and have no money to put in the stock market and those that have a 401K have no idea where to put it cause it's all smoke and mirrors.
I say END THE FED NOW!!