298 what's next?

January 10, 2021

So I imagine we're all more than a little curious what's next.

To make my best guess, let's go back, to the Trump template, which as far as I can tell, is a shitty knockoff of his buddy Michael Milken. I've talked about this before, but until I see a meme about it, the message bears repeating.

He was the leveraged buyout junk bond king of the '80s. He bought bigger companies based on big promises (junk bonds=you know it's a risk, but look at that potential upside), then restructured those companies into other, debt heavy entities. (Remember when Kraft started making cigarettes?)(Or was it when RJR started making Triscuits?) Then he extracted as much money as possible, before watching the companies fall apart.

This is a pattern which many, many investment bankers have subsequently copied. It's great for making them money, it pretty much sucks for every company they buy. (Toys R Us is a fine example, oh, and all those airlines that used to give us food, and...)

So, the pattern goes like this:

1. Leverage. Spend a little of your money to get a lot of someone else's.

2. Rebrand. This is simply to make it seem like you're adding value, when what you're doing is creating a smoke screen.

3. Bankrupt. This is where you take all the good stuff, and leave behind the trash for other people to deal with.

(If you count forfeiture as elimination, we could still be on track.)

4. Walk with cash. We have some early clues as to what that looks like.

But really, that's chump change.

Now we're starting to talk.

But really, it's our money he wants.

Remember those tax cuts he gave himself?

Looks like he saved himself...a couple billion dollars.

And there's the story right there. The rest of this big scary show? It's just the window dressings of a narcissist.

So, what else isn't being said?

There's this scary notion that the "insurrection" is just getting going.

(And it is. I don't know what the timing will be, or if the two groups of little guys will ever team up, but we can only get robbed for so long before something will break.)

The current state of the real estate market is telling. Want to know why houses are still selling while we have massive unemployment?

Rich people be seeking safety.

We have low interest rates, but you have to have 20% down to take advantage. So people with money are burying it in real assets, and the rest of us are renting.

Oh, and there's a pandemic. Almost 1000 people died of Covid-19 in California yesterday. In one day.

(If you're curious, we normally have about 750 deaths per day, of all causes combined.)

And if all of that wasn't confusing enough, let's look at the EV bubble.

I've never done any stock picking, but if you do, I imagine a bubble is a seductive thing.

Time it right, and watch your money balloon. Time it wrong, and watch your money go bye-bye.

A bubble is pretty much a legal pyramid scheme. But it's also a pretty big indicator of where our desire and hopes lay, so that's nice. EVs! Whoo-hoo!

(Except, really, they're not that great for the environment. Electric bikes? Now we're talking.)

(Or should I say, "singing a different tune?")

Look who's getting into making skateboards! (A "skateboard" is a EV platform. You basically build a frame with batteries, wheels and motors, then drop a body on top. It makes it relatively easy to build a bunch of differently styled cars.)