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Brendan Bernstein @BMBernstein
, 3 tweets, 1 min read Read on Twitter
Civilization is indistinguishable from diminishing time preference.

Keynesianism is accomplishing its primary goal of reversing this process: encouraging short term debt fueled consumption at the expense of capital accumulation. Savings down from over 15% to 3% in 30 years.
This goes hand in hand with the current political circus and consumerism, and Keynes, the champion of these policies, actually recognized it
When monetary systems debase, so do their civilizations.Taken to its logical conclusion either it reverses through a collapse or a proactive reengineering of incentive structures

As interest rates hit 0 and savings show no sign of reversing, I'm inclined to think it's the former
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Deficits will increase until there are negative ramifications. But that will be too late

People lose faith in the USD and the only recourse to weakness will be to jack rates up

In 2022 100% of our budget will already be going to existing liabilities

We cant afford higher rates
It’s easy to see this spiraling out of control

Other countries stop buying treasuries —> we jack up rates further -> our interest expenses increase and we need to issue more debt —> more people stop buying —> higher rates...etc
Given our existing liabilities — both entitlements + debt — we’re on a surefire path to massive tax hikes that all go to pay *existing* entitlements

This is a recipe for instability.

The working class is going to be funding the excesses of the last 50 years
Read 3 tweets
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Cramer in 2000, days before the collapse:

"throw out all of the matrices and formulas that existed before the Web....they can't make money for you anymore, and that is all that matters. If we use any of what Graham and Dodd teach us, we wouldn't have a dime under management.”
This is similar to "cryptonetwork valuation thinking

Null hypothesis should be that the status quo is unchanged: assets are worth discounted future cash flows

Errors with tech valuation weren't because of a lack of tools but bc of errors predicting cash flow and new biz models
The tacit assumption is that crypto has created an entirely new paradigm -- for both asset valuation and fundraising

But my base case assumption is that other than which ONE ASSET wins as the primary money, the only way others can accrue value will be through cash flow
Read 4 tweets
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i'm long web 3 if it means decentralizing trusted 3rd parties

but IMO every attempt on a b-chain is not close to what it'll ultimately look like

progress in crypto is just inertia --Iterating on existing b-chains just for innovations sake

nobody questioning the premise itself
what if the right model to create a censorship resistant web isn't on a blockchain with a native token?

most goals can be accomplished with existing software. Do people forget the whole p2p wave?

governance of OSS already exists and so do distributed protocols (DHTs, IPFS)
feels like people are wedded to the token model from a sunk cost fallacy, and all the investment $$ of web 3.0 is still going into very similar ideas

but my bet is that FB isn't going to be disrupted by a social network on a blockchain that ICOs....
Read 6 tweets

Related threads

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The economy has slowed down, the Rupee has been devalued, interest rates have gone up and there has been some increase in the rate of inflation. Why has this happened? And what prospects does the economy hold in 2019? @Hammad_Azhar answers these questions thenews.com.pk/print/413356-t…
Pakistan’s economy is recovering from what can be best described as a ‘consumption led’ growth period that was financed by short term debt instruments and a stifling of investment climate. Consumption as % of GDP went up from the worrying figure of 91.8% in FY14 to 94.5% in 2018.
Correspondingly, total gross investment (that includes government investment also) in Pakistan was reported at just 16.4% of GDP in FY18 whereas India’s figure stands at close to 30% and Bangladesh is at 31% of GDP.
Read 57 tweets
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Hey (American) people that are kinda/sorta around my age. Let's talk about our future.

Along with tackling climate change, we have another looming disaster -- a financial one. It was handed to us by Baby Boomers. (A small thread with mean jokes.)
Let's go back to right after World War II. Historically, the US debt-to-GDP ratio was around 30-40%. (Source: fred.stlouisfed.org/series/GFDEGDQ… ) This is the only portion of this thread where I bring in a boring chart, I swear.
You'll notice that right around the time Ronald Reagan was elected President, this chart starts climbing. That's when Baby Boomers became the majority of the American electorate. It was Baby Boomers who shifted our debt policy, with literally no plan to repay their debt.
Read 33 tweets
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RBI and SEBI say they're on the case. This is a good piece of news and I really don't want specifics. Here's why.
There's some fear of redemptions in mutual funds. Even MFs have to be able to sell to handle redemptions. They don;t have a lender of last resort who tehy can borrow from to tide over a temporary liquidity issue.
If the redemption pressure increases, RBI will open a line of credit - through banks - for mfs to borrow and use the bonds they have as collateral. HOwever they are expected to only take the highest rated paper initially - in a full blown crisis they will take more.
Read 12 tweets
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The (likely) possibility of the yield curve inverting within the next couple of months cannot be viewed as the rock-solid indicator of economic recession that it has been in the past.
A couple of reasons why:

1. The Fed bought trillions of dollars of U.S. debt following the Financial Crisis in an effort to keep long-term rates low
2. The Fed is now raising short-term rates in an effort to flatten the curve and normalize rates
This artificial manipulation of the markets through trillions of dollars of bond buying means we must also manipulate our view towards the indicator in light of the change in context.
Read 11 tweets
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1/ After reading his incredible [private] whitepaper and having a few discussions on the subject with @parkeralewis, here’s a thread on the utter incompetence + inconsistency of the Federal Reserve leading up to and following 2008.
2/ The two decades leading up to 2008 saw debt in the US nearly quintuple from $11.2T to $52.5T with mortgage and financial debt leading the charge.
3/ Throughout this period, the Fed reacted to recessionary business cycles by aggressively lowering interest rates (Fed funds rate); from ~9% to ~3% in ‘90 to ‘91 and ~6% to ~1% in ‘00 to ‘03 with rates NEVER reaching the levels of the prior lowering cycle.
Read 28 tweets
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1) Time for another #QAnon thread.

This thread covers Q posts on #8chan #GreatAwakening from Thursday and Friday, January 18 and 19, 2018.
Link: 8ch.net/greatawakening…
2) Q begins with a self-explanatory post.
Thursday was a big news day with the disclosure of a 4-page memo written by the House Intel Committee summarizing unthinkable weaponization of the NSA intelligence by high-ranking members of the FBI & DOJ.
3) “It's troubling. It's shocking,” Rep. Mark Meadows said. “Part of me wishes I didn't read it. I don’t want to believe that those kinds of things are happening in this country that I love so much.”
foxnews.com/politics/2018/…
Read 59 tweets

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