Tag Archives: Most Recent Stories

Here are some things I think I am thinking about: Is the Housing Market a Bubble (Again)? I’m starting to see a lot of chatter about a housing bubble 2.0. So I went on Twitter and asked people what they thought. There were tons of smart responses if you want to review them. Ben Carlson also wrote a nice piece about the state of the housing market. I think Ben gets the big picture right. Basically, this isn’t that much like 2006 because: The buyers are mostly high creditworthy wealthy...

One of the persistent themes since 2008 is the theory that there has been excessive “asset price inflation”. I’ve talked about this quite a bit before, but it is worth repeating. And no, “assflation” does not refer to the 19 lbs we’ve all put on during COVID. It refers specifically to the term “asset inflation”. This is the idea that the “inflation” that was supposed to show up in consumer prices has been showing up in asset prices like stocks and housing. There’s a bit of truth to this,...

It’s become popular during the last year to argue that “stocks only go up”. And yes, it sure feels like that some times. In fact, in the long-term, it’s mostly true. The odds of you losing money in the long-term are low: The problem with this view is that we don’t live our lives in the long-term. We live our lives in the short-term and a large portion of our financial liabilities are short-term – our rent, mortgage, car payments, etc. In financial portfolios we have what is called a...

The key to understanding the COVID-19 recession was in understanding that it was an exogenous shock. This made it quite different from your standard recession in the sense that a boom did not cause the bust. There was no endogenous build up of unsustainable forces that led to the decline in output. COVID was much more akin to a natural disaster. This meant that the recession could be deep and painful, but it was unlikely to last very long. This was crucial to understand (and a key...

On Sunday evening, before GameStop had fallen 85% from its peak, I said: My guess is GME will collapse in the coming months or year when this charade passes and a lot of people will get hurt along the way. I can’t lie. I am really mad to be right about this. Mainly because all of the narratives surrounding this whole charade have been so disingenuous/misinformed and a lot of famous people promoted those bad narratives along the way. And now we’re finding out that a lot of small retail...

Here are some things I think I am thinking about. Actually, they’re all basically the same thing and they’re all GameStop, of course. But whatever. 1) The Short Sellers Did It!  The GameStop saga has been a nearly endless stream of bad narratives. And the one narrative that no one is discussing, the one that actually makes sense is “YOLO gambling is reckless”. But we’ll come back to that in a minute. The bad narratives started with evil short sellers. You know how it goes – short sellers...

The recent craziness in Gamestop has resulted in a lot of hot takes on short selling. I have the hottest takes, of course, so let’s dive into this a bit deeper and put this debate to rest.  Here’s a piping hot take from the richest man in the world: Wow. That kinda makes sense. But wait, does it really? No, Cullen, stop. Back up. Let’s explain how this works first. Just so we’re all on the same page. Short Selling Basics. This whole convo kinda reminds me of the buyback debates or the...

I’d love to talk about the mechanics of Central Banking or index funds, but the only thing that matters in financial markets right now is Gamestop. So…we’re going to talk about index funds. Seriously. But also we’ll talk about Gamestop so don’t worry. If you haven’t been reading up on the Gamestop saga then maybe circle back to yesterday’s article.  1) Robin Hood or Robinhood? The big story of the day is that Robinhood the trading platform shut down access to buying new shares of Gamestop....

Here are some things I think I am thinking about: 1) There’s Gonna be a Civil WHAT?  Here’s an interesting tweet from Ray Dalio: I really like Ray Dalio. His All Weather portfolio is more or less the kind of permanent portfolio that I think most savers should try to implement (for most of their savings). But I have a hard time figuring out how some of his broader macro views fit into all of this. For instance, he believes that there are long-term debt cycles that create patterns in social...

I recorded this podcast a few weeks ago with Cam Passmore and Ben Felix on the Rational Reminder show. Ben had read some of my work over the years and reached out to me before publishing this absolutely wonderful explanation of QE. He asked for my critique of the video, but I couldn’t find any. He had succinctly and thoroughly explained the topic like few can. Then he asked me to come on his podcast to do something I’ve never done before – go through my popular paper “Understanding the...