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Jim Bianco Profile picture
@biancoresearch
Jan 29, 2021 • 6 tweets • 2 min read • Read on X
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Thread to explain the mkt

Q: Why is GameStop still trading at $350 when everyone that understands "fundamentals" think this is a $5 dollar stocks?

A: The only "fundamental" that matters, 62M shs short with 50M share float. It is physical impossible to cover this short.

(1/6) Image
This squeeze does not stop until this short is covered

I would GUESS that is when it gets below 25M shares, or 50% of float, and probably much less than that.

Viewed this way, what happened this week it is not that irrational.

(2/6)
Q2: Why is this driving the entire stock market down?

A2: Because the "masters of the universe" are not surrendering their shorts/covering.

So the fear is these shorts will rise so much, leading to losses and inability to meet margin calls. Brokers at risk

(3/6)
Note this is a fear, the financial system is not impaired now.

But it was reckless and irresponsible for the "masters"/brokers/prime brokers/clearinghouses/regulators to allow this to happen. They are now paying the price.

bloomberg.com/news/articles/…

(4/6)
What's Next?

Will the "masters" cover shorts or think they have a giant pay-day ahead when these short stocks collapse? If wrong, margin calls put the financial industry at risk.

Viewed this way, we can see why the S&P is down 2% today and near the lows of 2021.

(5/6)
The "retail revolters" did not get lucky. They saw this vulnerability was allowed to happen and took advantage of it.

(6/6)

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More from @biancoresearch

Jim Bianco Profile picture
Feb 1
1/6
10% of the outstanding $BTC is held by $MSTR and the 11 Spot BTC ETFs.

These are the ways normies hold $BTC in regulated brokerage accounts.

Collectively, the avg purchase price is $85.36K, meaning the average is now ~$8k underwater, with an unrealized loss of ~$7B.
🧵 Image
2/6
The 11 biggest spot $BTC ETFs now hold 1.29M $BTC – worth over $115B (Friday PM).

These ETFs hold roughly 6.5% of all $BTC in circulation.

The 3 largest – iShares’ $IBIT (blue), Fidelity’s $FBTC (red), and Grayscale’s $GBTC (orange) – hold 5.65%. Image
3/6
The 11 Spot $BTC ETFs average purchase price is ~$90.2K (blue), about $13K (16%) above the current price (bottom panel).

Note these ETFs are collectively on a record 10 consecutive outflow days. $BTC is down ~8% since Friday's NYSE close. Image
Read 6 tweets
Jim Bianco Profile picture
Jan 19
1/11

What is Housing?

Affordable shelter or path to retirement?

It cannot be both.

We tried to make it both in the early 2000s and almost wrecked the financial system.

🧵 Image
2/11

The average home price is $417K (above), an all-time high.

This means around 43% of a median household income (~$84K) goes to housing.

For the last three years, this has been comparable to the (unsustainable) housing peak in 2006. Image
3/11

For 50 years, from the end of World War II through 1997 (red box), housing was affordable. Prices rose by the inflation rate.

In other words, it held its value but remained within reach of most renters/first-time homebuyers. Image
Read 11 tweets
Jim Bianco Profile picture
Jan 4
1/5
Thoughts on market reaction to the Venezuela news.

tl:dr

The spigot in Venezuela waiting to be opened to flood the world with crude oil and lower its price has been broken for a while.

It will take several years to fix it.
2/5
Venezuela is a founding member of OPEC their official statistics show its production (blue) is down 71% from its 1998 peak.

Its sustainable capacity (max output in within 90 days and held for a year) is 1M barrels/day (orange).

Venezuela is at its maximum now. Image
3/5
Why the big production decline?

Socialist Hugo Chávez was elected in December 1998. He turned out to be a brutal dictator. Only to be replaced by an even more brutal dictator, Nicolás Maduro, when Chávez died in March 2013.
Read 5 tweets
Jim Bianco Profile picture
Nov 27, 2025
1/7
This analysis concludes by saying "something is seriously wrong with the housing market."

Not based on this chart.

tl:dr - New home sizes are falling to account for this spread falling below zero. Adjust for that, and there is nothing to see here.

Short 🧵
2/7
Same chart with prices in the top panel.

It is correct that the new home premium (green) above existing home prices (blue) has collapsed from 38% in 2013 to below zero today (the lowest in 54 years).

Why?

See new home prices (orange), they stalled. Image
3/7
Here is the average home price (orange) and the home's size (blue). The reason prices are falling is that builders are constructing smaller homes.

But as the bottom panel shows (green), the price per square foot is as high as ever.

No bear market, just smaller homes. Image
Read 8 tweets
Jim Bianco Profile picture
Nov 25, 2025
1/8
Following @deanbaker and @ezraklein ...

Homeowners will not tolerate a "fix" that will lower prices. So, nothing will get done about affordability.
=
What is housing?

* Affordable shelter?
* Piggy bank that funds retirement?

Both cannot be true at the same time.
2/8
For the 50 years following WWII (box), home price gains kept pace with inflation ("real" prices), making housing affordable.

Starting in the late 90s, housing went into wild boom-bust cycles.

This is when housing started to be viewed as a piggy bank to fund retirement. Image
3/8
400 years of real (inflation-adjusted) home prices in Amsterdam show that housing has remained affordable for centuries.

This view began to break down in the late 1990s, as housing became the piggy bank for retirement. Image
Read 8 tweets
Jim Bianco Profile picture
Nov 16, 2025
1/4
I assume Marks is referring to the 1-year forward P/E ratio for the S&P 500, the standard Wall Street valuation metric (which is closer to 25 now, but was 23 a few weeks ago).

Here is a long-term proxy for that ... the Shiller Cyclically Adjusted Price/Earnings (CAPE) ratio back to 1881. It is a 10-year average of P/E/ ratios.

At 40, it is one of the highest readings ever, even higher than 1929.Image
2/4
What does it mean that valuations are this high?

The scatter graph below goes back to 1881.

It shows the NEXT (future) 1-year REAL (after inflation) return of the stock market on the y-axis.

The CAPE on the x-axis.

The red box is the returns when the CAPE is above 34. It's a mixed bag of positive and negative returns.
Restated, valuation is NOT a good timing tool.Image
3/4
But if the y-axis is extended to the NEXT (future) 5-year REAL (after inflation) return, then THERE IS NO EXAMPLE, OVER THE LAST 150 YEARS, OF THE STOCK MARKET BEATING INFLATION OVER THE NEXT 5-YEARS WHEN THE CAPE IS ABOVE 34.

Restated, valuation is an expectation tool. Unless one makes the case that corporate earnings are going to have their most significant surge in history, the stock market is destined to disappoint over the next several years.Image
Read 4 tweets

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