Cem Karsan 🥐 Profile picture
Founder, Kai Volatility. 24y Quant/Vol/Flow PM. Ex-MMaker,+10% of SPXOpt’s‘06-10. @phillipsacademy, @RiceAlumni, @KelloggAlumni, Vanna-Charmer🐍,🚫Invest Advice

May 23, 2022, 9 tweets

1/x It’s human nature to look @ a trend & extrapolate it into the future. We’re pattern recognition machines...& a 2 generation long (40 yr) trend’s ~impossible for collective psychology to imagine turning. But extrapolating a growth trend w/out understanding its causes is folly.

2/x but 40 yrs of monetary policy dominance & secularly ⬇️IRates (⬆️ liquidity) has single🤚‘ly created a technological revolution. After all, unconstrained capitalism, + infinite resources (free $) leads, much like, mesozoic CO₂ levels 4x >today => abundant plant life =>large🦕

3/x Unconstrained mon policy ultimately is natural selection on steroids. So,what’s wrong w/natural selection on💊, U ask?! It’s not ‘Fair’. Absolute power begets > power, > inequality, < haves, > have-nots. It hollows out a middle class, leads to distrust, < societal cohesion,

4/x it drives POPULISM, & it eventually leads to redistribution of wealth, & societal upheaval. It’s a tale as old as⏱…Donal Trump &Bernie Sanders/AOC are the same. They are ‘populist creations’ of the federal reserve & monetary policy. All ‘Leftist revolutionaries’ in rhetoric

5/x The secular move of the right => left led to a revolution in wait… & eventually the arrival of Covid led to the inevitable Tidal🌊 of fiscal policy. Real 🚁💰. $12 Trill, the size of the New Deal, adjusted for the size of the economy. That’s nothing < a populist revolution.

6/x & it’s just the tip of the iceberg. More populism means more nationalism, More labor rights, & an unwind of globalization… Rates are in the process of being forced structurally ⬆️ for the next 10+yrs as the engine of the economy again becomes demand, not supply.

7/x So, if you are still looking @ the breakneck rate of technological advancement & 🤞🏽projecting it into the future like Cathy🪵, you’re missing the view from 30k ft. The ‘ARKK’ of technological innovation is turning down & the lifeblood CO₂ of technological innovation, cheap💰

8/8 to ‘🌎 Palo Alto’ is in the process of being choked off. So steer clear of the 🐍🛢 & promises of extrapolating the previous trend… The tide is going out. GL🍀, B💦.

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