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Cathie Wood Profile picture
@CathieDWood
Aug 4, 2019 • 4 tweets • 2 min read • Read on X
The 50 years ending in the Roaring Twenties also spawned more transformational innovation than any other period except now: yield curves were inverted more than 50% of the time, with the steepest inversions during periods of most rapid growth thanks to “good deflation”.
How will banks respond to inverted yield curves that will crush their net interest margins, not to mention online services like the #CashApp by and #Venmo by nipping at their heels and #Marcus by with high interest-bearing accounts aiming for their heads?
Banks could activate the $3 trillion+ in fiat “kindling” that has accumulated in reserves at the Fed during the past 10 years. With an aggressive push into variable rate loans, they could arrest the decline in money velocity and raise the specter of inflation once again.
In that environment, #bitcoin would become the new age hedge, serving a noble role alongside #gold and silver.

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More from @CathieDWood

Cathie Wood Profile picture
Aug 6
After I recorded “ITK” on Friday, today the VIX (Equity Volatility Index) shot up to 65, the fourth highest level in the past 40 years: after “portfolio insurance” failed on Black Monday in October 1987, Lehman went under in 2008, and COVID hit in 2020. What does this move mean?
In 1987 and 2020, the panic/cathartic moves in the VIX created significant buying opportunities, particularly for stocks trounced during those downturns. In 2008, however, after the VIX spiked, the broad based equity markets did not bottom for another six months in March, 2009.
In our view, the spike in the VIX today stems from conditions resembling both 1987 and 2008. On Black Monday in 1987, portfolio insurance failed because those relying on it tried to cash out at the same time, much like those relying on the carry trade with Japan today.
Read 8 tweets
Cathie Wood Profile picture
Jun 6
I’d argue that no other executive is as aligned with shareholders as @elonmusk, who committed to no salary, no bonus, no stock comp FOR 10 YEARS, unless he created tremendous value for @Tesla shareholders.
Moreover, Musk will not be able to cash in on his options until 5 years after exercising them. Based on this pay package, Elon has worked without compensation since 2018, and IMPORTANTLY current shareholders will benefit from another 5+ years of Elon at the helm.
What were the odds that Musk would hit the goals in his comp package? Although @TashaARK and @skorusARK published our model in 2018 showing that, with brilliant execution, the targets were possible, most analysts, auto manufacturers, and media thought they were laughable.
Read 10 tweets
Cathie Wood Profile picture
Feb 5
I believe the Delaware court decision, forcing #Tesla to void the March 2018 vote on Elon Musk’s performance-based pay package, is un-American, an assault on investor rights, and an insult to the Board of Directors of one of the most stunningly successful companies in US history.
I have known Robyn Denholm, Chair of Tesla’s Board, professionally for 17 years since she was named Juniper Networks CFO in 2007. Robyn was and is an independent Director on Tesla’s Compensation Committee.
Robyn is a professional of unquestionable integrity with a no-nonsense, objective, truth-wins-out philosophy. In 2014, when Tesla named her to its Board, I remember thinking that she would add a fresh pair of eyes and enhanced rigor to every part of the process she touched.
Read 11 tweets
Cathie Wood Profile picture
Oct 26, 2023
Government statistics do not seem to be capturing how weak the economy is. Many companies are reporting shockingly weak revenues. UPS’s US delivery volume growth is worse today than in 2007-2009. After falling for nearly two years, it dropped another ~11% last quarter. Image
At first I thought that Amazon still was taking share and causing problems, but this chart suggests that market share has changed very little since 2020. Image
This week, another economic bellwether, 3M, reported that global organic sales dropped more than 3% year over year on a local currency basis last quarter. The services side of the economy is unlikely to escape the global monetary tightening that is gripping these companies.
Read 7 tweets
Cathie Wood Profile picture
Aug 15, 2023
China is exporting deflation in a more profound way than I believe many economists and strategists appreciate. All else equal, the 15% depreciation in the yuan relative to the dollar in the last year should have increased its PPI inflation rate by 15%. Instead it has dropped 4%.
In other words, the deflationary vortex emanating from China is approaching 20% (15%+4%), highlighted by the burgeoning defaults in Chinese real estate and trust companies.
After it entered the World Trade Organization in 2001, China’s real GDP grew at a double digit rate for nearly 20 years. Rapid growth can cover many economic sins, typically excessive debt and associated leverage. Those excesses are surfacing in China now.
Read 5 tweets
Cathie Wood Profile picture
Mar 23, 2023
Ironically, as crypto assets soared during the Silicon Valley Bank meltdown, this administration suggested that investors in regional banks - equity and bond holders - should prepare to be “wiped out” in the aftermath of an unprecedented 20-fold increase in the Fed funds rate.
Now we are hearing anecdotes not only that businesses and individuals are hedging their fiat assets with some crypto assets but that they also are lowering risk and increasing returns by shifting from low yielding bank deposits into higher yielding money market funds, a win-win.
As a result, now that they can borrow at will from a government facility at ~4.5%, regional banks seem to be moving from a liquidity crisis to a slower moving solvency crisis.
Read 7 tweets

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