This time is different because there’s free tequila…

We poke a lot of fun at the MANY absurdities we see in this current bubble.

As we’ve discussed countless times over the past few years, there are consequences from the fact that central bankers have conjured trillions of dollars out of thin air and pushed down interest rates to zero.

Stock, bonds and real estate are at or near record highs. Bankrupt countries are issuing trillions of dollars of debt with negative[...] Click here to continue reading

Netherlands prosecutes its own citizen for calling Turkish dictator a “Goat F*cker”

It was mid-September in 1683, almost 335 years ago to the day. Turkish forces of the Ottoman Empire surrounded Vienna, one of the most strategic cities in Europe at the time.

Controlling Vienna meant controlling the Danube River, which flows from Western Germany to the Black Sea, providing critical access for the Ottomans to invade the rest of Europe.

So if Vienna fell, Europe would soon follow.

The Holy Roman Emperor, Leopold[...] Click here to continue reading

Ten years after the crisis… they’re doing the same thing and expecting different results

“Holy Crap-- turn on your TV! This is crazy!”

It was Sunday, September 14, 2008. Exactly 10 years ago to the day.

My friend Jeff called me and told me to turn on the television—where I saw dozens of people on the streets of Manhattan filing out of a skyscraper carrying boxes full of their office junk.

They were all employees of Lehman Brothers, one of the largest investment banks in the[...] Click here to continue reading

Elon Musk smoking weed has much more dire consequences than you realize

An insane event on March 2, 2017 likely signaled the top of the current market…

On that day, shares of Snap (SNAP), owner of the popular Snapchat app, went public at a valuation of more than $30 billion.

But it wasn’t the sky-high stock price that made this IPO special. Nor was it the fact that the company’s co-founders, 26-year old Evan Spiegel and 28-year old Bobby Murphy, became multi-billionaires overnight.

What[...] Click here to continue reading

The pension crisis is bigger than the world’s 20 largest economies

If your retirement plans consist entirely of that pension you’ve been promised, it’s time to start looking elsewhere.

As you probably know, pensions are giant pools of capital responsible for paying out retirement benefits to workers.

And right now many pension funds around the world simply don’t have enough assets to cover the retirement obligations they owe to millions of workers.

In the US alone, federal, state, and local governments, pensions are[...] Click here to continue reading

Jim Grant’s 10 most important lessons in finance – Part 2

[Editor’s note: Yesterday we published the first installment of a special essay from Jim Grant on the 10 most important lessons learned in his 35 years in finance.]

Today, we continue with the final lessons…

6. Markets are not perfectly efficient. Because the people who operate them aren’t perfectly reasonable. The debate over efficient markets has raged since the birth of public markets. Grant’s comes down on the side of inefficiencies—of lucrative inefficiencies.
[...] Click here to continue reading

The 10 most important lessons in finance from a legend in the field

[Editor’s note: Yesterday, we published a podcast we recorded with the legendary financial commentator, Jim Grant.

Jim is the editor of Grant’s Interest Rate Observer – one of the most-respected and followed financial publications in the world. In his 35 years writing Grant’s, Jim has seen a financial cycle or two.

And he’s amassed a network of many of the most important people on Wall Street (who often share their insights in his[...] Click here to continue reading

Market hits new highs on back of Fed announcement, forgetting the Fed is clueless

Hallelujah, the US stock market is once again at an all-time high thanks to a little help from our friends at the Federal Reserve.

Every summer, central bank officials from around the world gather in Jackson Hole, Wyoming (which, if you haven’t been, is REALLY spectacular. Jackson Hole, that is, not the Fed conference.)

The event was held last week. And the main event was a speech from the new(ish) Fed Chairman Jerome[...] Click here to continue reading

Fool me once, shame on Elon. Fool me twice. . .

There’s no doubt you know the story…

On August 7, in the middle of the trading day, Tesla founder Elon Musk surprised investors with a tweet saying he was considering taking Tesla private at $420 per share (a $72 billion valuation) with “funding secured.” He quickly followed up with “Investor support is confirmed.”

Shares of Tesla soared 13% to $387 on the cryptic social media update from Tesla’s exalted chief.

The news[...] Click here to continue reading

Some thoughts on the ‘longest bull market ever’

Well, it happened. Yesterday the US stock market broke the all-time record for the longest bull market ever.

This means that the US stock market has been generally rising for nearly a decade straight… or even more specifically, that the market has gone 3,453 days without a 20% correction.

That’s a pretty big milestone. And there’s no end in sight. So it’s possible this market continues marching higher for the foreseeable future.

[...] Click here to continue reading

Digital Nomads: The best city you’ve never been to

[Editor’s note: While Simon is traveling today, other members of the Sovereign Man team penned today’s missive.]

Every year before and after the annual Liberty and Entrepreneurship Camp held in Lithuania, the Sovereign Man team takes some time to travel in Europe.

Vilnius – The capital of Lithuania - by itself is a fantastic place to spend time in. It boasts one of the largest medieval ‘old town’ city centers in Europe.

[...] Click here to continue reading

These people lost one-third of their savings in a single week (not in crypto)

Let me say up front-- I know I’ve been a bit quiet lately.

It happens every year around this time when I hold the annual Liberty and Entrepreneurship Camp that I’ve been sponsoring for the past nine years.

The event is incredible: I bring in top entrepreneurs and business executives, plus students from all over the world-- places like Ivory Coast, Brazil, Singapore, Russia and the United States.

It’s five days of[...] Click here to continue reading

Why Japan may spark the next crisis

In a world full of reckless and extreme monetary policy, Japan no doubt takes the cake.

The country has total debt of more than ONE QUADRILLION YEN (around $10 trillion) pushing its debt-to-GDP ratio to a whopping 224% - that puts it ahead of financial basket case Greece, whose debt-to-GDP is around 180%.

Japan spent 24.1% of its total revenue (appx. 23.5 trillion yen) last year servicing its debt – both paying down[...] Click here to continue reading

Finally. A major victory for common sense

In a major victory for common sense, a group of cosmetologists defeated an insanely stupid regulation passed down by the state of Louisiana.

Louisiana, just like the other 49 states in the Land of the Free, governs licensing requirements for dozens… hundreds of professions… ranging from athletic trainers to tour guides to barbers and cosmetologists.

And most of the time the licensing requirements are just plain idiotic.

In Louisiana, for example, the[...] Click here to continue reading

Bankrupt Philadelphia plunders its property owners for cash

Like a lot of major cities in the United States, Philadelphia is in pretty rough financial condition.

One of the city’s biggest problems is its woefully underfunded public pension, which has a multi-billion dollar funding gap.

In 2001, Philadelphia’s pension fund was still in decent shape with a funding level of 77%, meaning that it had sufficient assets to meet 77% of its long-term obligations.

By 2017 the funding level had dropped[...] Click here to continue reading

No one has ever lost this much money in all of human history

As you you’ve no doubt seen by now, shares of Facebook plunged around 19% this morning.

In fact it was down as much as 25% in after-hours trading, wiping out $120 billion of wealth in a matter of minutes.

To be clear, that is the largest single-day loss of value ever seen in the history of the world.

(And Mark Zuckerberg’s net worth fell by $17 billion as a result… though I[...] Click here to continue reading

Government’s already-dismal budget forecast just got 106% worse

Yesterday the Office of Management and Budget released a new report called the “Mid-Session Review” of the US federal budget.

It’s something they’re required by law to do-- periodically review and update the government’s budget and track the changes.

The last government budget update was released in February. And according to the February budget, the government’s deficit for this fiscal year was going to be a whopping $873 billion.

Now they’re projecting[...] Click here to continue reading

Billionaire Druckenmiller: “Can we try capitalism? Real capitalism. Give it a chance”

Over the weekend I came across a recent speech given by hedge fund billionaire Stanley Druckenmiller that really lays out the pitiful state of free markets around the world.

Druckenmiller gave the speech a few months ago upon receiving the 2018 Alexander Hamilton award-- which is given to a figure that best carries out the spirit of one of America’s Founding Fathers.

The Alexander Hamilton Institute promotes free markets, free trade and limited[...] Click here to continue reading

Netflix lost $17.8 million for each of its 112 Emmy nominations

It was only a few day ago that Netflix was riding high.

The streaming company had been nominated for a whopping 112 Emmy awards, more than any other network.

And they’d further managed to unseat HBO’s 17-year reign as the undisputed king of Emmy nominations.

That’s all fine and good. Netflix certainly has some great shows.

But reality started to set in yesterday afternoon when the company reported its quarterly financial[...] Click here to continue reading

IRS to revoke 362,000 passports from US citizens

About two and a half years ago, I told you about a particularly nasty piece of legislation that President Obama quietly signed into law towards the end of his administration.

They called it the “FAST Act”, which stood for Fixing America’s Surface Transportation.

Yet despite $300 billion earmarked for infrastructure repairs, they didn’t manage to fix very much of America’s surface transportation.

The legislation did, however, have two major effects:

1)[...] Click here to continue reading

How to retire in style even with Social Security going broke

We’ve spent a lot of time in our regular conversations talking about the looming retirement crisis around the world.

The data is horrific. Pension and Social Security programs in nearly every developed nation are woefully underfunded.

In the United States, senior government officials including the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, have stated unequivocally that Social Security’s trust funds will run out of[...] Click here to continue reading

The root of the debt crisis: every $1 in debt generates just 44 cents of economic output

Exactly ten years ago, in the middle of the summer of 2008, the world was only two months away from the most severe financial crisis since the Great Depression.

At the time, the size of the US economy as measured by Gross Domestic product was around $14.8 trillion-- by far the largest in the world.

And the US national debt back then was about 64% of GDP-- roughly $9.5 trillion.

Fast forward[...] Click here to continue reading

Here’s a great example of a company using Blockchain to solve a real problem

Today I just wanted to send you a quick note to highlight a great example of a company that’s using Distributed Ledger Technology (DLT) to solve a real-world problem.

I thought this would be important given that most of the noise in the crypto space these days is still almost invariably focused on the Bitcoin price.

A quick Google search for “Bitcoin” reveals headlines from CNBC to Fortune Magazine, all about whether or[...] Click here to continue reading

Some historical context on the future of Bitcoin

On March 29, 1879, a widely circulated newspaper called the American Register published a scathing editorial stating that “it is doubtful if electricity will ever be [widely] used” because it was too expensive to generate.

Several months later, the Select Committee on Lighting and Electricity in the British House of Commons held hearings on electricity, with experts stating that there was not “the slightest chance” that the world would run on electric power generation.
[...] Click here to continue reading

Guess which bank just froze my funds over a simple transfer

What I’m about to tell you is a true story that highlights just how pathetic the banking system has become.

A few months ago I was presented with a compelling opportunity to invest with a prominent, well-established private business based in the UK.

And, after extensive due diligence, I decided to make the investment… around $4 million.

Because this particular investment happened to be denominated in US dollars, though, the funds were[...] Click here to continue reading

The worst deal anyone ever made…

It’s considered the worst merger in history.

Back in January 2000, AOL bought Time Warner for $162 billion, which was considered an astonishing amount of money back then.

Their goal was to create a tech/media giant. And they failed miserably.

Time Warner was having a difficult time establishing an online presence, so they thought they would benefit from AOL’s 26 million dial-up subscribers.

And AOL, the leader in “online” at the[...] Click here to continue reading

The latest casualty in the global pension catastrophe is…

In the year 6 AD, the Roman emperor Augustus set up a special trust fund known as the aerarium militare, or military treasury, to fund retirement pensions for Rome’s legionnaires.

Now, these military pensions had already existed for several centuries in Rome. But the money to pay them had always been mixed together in the government’s general treasury.

So for hundreds of years, mischievous senators could easily grab money that was earmarked for[...] Click here to continue reading

Do you have a cryptocurrency addiction? This British hospital has a treatment for you

By the time Louis XIV passed away in 1715, seven decades of his absurd extravagance had nearly bankrupted France.

His reign was marked by constant warfare and the most excessive spending imaginable, from opulent palaces (including Versailles) to a costly welfare state-- public hospitals, parks, monuments, museums.

Louis XIV had turned France into the world’s leading power. But it came at a heavy cost.

The national debt was nearly as large as[...] Click here to continue reading

This former trillionaire is flat broke

It’s hard to imagine, but today is actually Sovereign Man’s 9th birthday.

Nine years ago, on June 19, 2009, I sent out the first ever Notes from the Field email.

To commemorate the occasion, I thought I’d republish that first article… because I think it still captures the challenges we face, as well as the boundless solutions ahead of us.

I hope you enjoy.

=====

William “Bud” Post is flat[...] Click here to continue reading

Surprise! Taxpayers have been footing the bill for sexual misconduct in Congress

On January 23, 1995, President Bill Clinton signed into law a piece of legislation that had been almost unanimously approved by both the United States Senate and the House of Representatives.

It was called the Congressional Accountability Act of 1995-- CAA.

The idea behind the CAA was to force Congress to abide by the same rules of workplace health and safety that private companies have to follow.

And one notable example was[...] Click here to continue reading

The Hitler of South Africa tells white people he won’t kill them. . . yet

Earlier this week while most of the world was transfixed on the World Cup, the Trump/Kim handshake, or a multitude of other sundry events, Julius Malema, aka the Hitler of South Africa, was busy telling white people in his country that he’s not going wage genocide against them. Yet.

In an interview with TRT World News published this week, Malema said, “We have not called for the killing of white people. At least for[...] Click here to continue reading

The most successful investor in modern history is selling… here’s what it means for you

It’s typically pretty hard to find anything exciting to say about drywall.

Yes, drywall… as in, the building material that’s used for interior construction.

Drywall, also known as wallboard, is manufactured from rehydrated gypsum to produce a calcium sulfate plaster, that’s later mixed with mildew-resistant foaming agent. . . hello? Are you still there?

Seriously, though, in this particular case, drywall is a big deal.

I’ll explain.

The largest distributor[...] Click here to continue reading

The real opportunities in cryptocurrency… aren’t cryptocurrencies

Hallelujah.

After almost a decade since Bitcoin was created, the SEC announced last week the creation of a new, senior position to coordinate the agency’s cryptocurrency and ICO efforts.

As usual, the government showed up late to the party. But at least they showed up.

The good news is that the person chosen by the SEC to fill that position is quite sharp.

She has an engineering background, obtained her law[...] Click here to continue reading

It’s official: Medicare trust fund will run out of money in 8 years

Two days ago the respective Boards of Trustees for Medicare and Social Security released their annual reports for 2018.

As usual, the numbers are pretty gruesome... and the reports plainly stated what we’ve been talking about for years: the trust funds for both Social Security and Medicare are going to run out of money.

Soon.

In the case of Medicare, the Trustees project that its largest trust fund will be fully depleted[...] Click here to continue reading

How many more banking scandals will it take to make a change

This morning after my plane landed from Bangkok, I was having breakfast in the business lounge in Sydney and glanced at the local paper, The Australian.

The front-page headline told the story of yet another banking scandal:

“Cartel case nets six bankers”

The article was about how six prominent investment bankers in Australia colluded to defraud investors.

This comes the day after Australia’s financial regulator hit Commonwealth Bank with an AUD[...] Click here to continue reading