Another Shoeshine Boy Moment

We recently pondered the markets while trying out our brand-new electric soup-cooling spoon (see below). We are pondering the markets quite often lately because we believe tail risk has grown by leaps and bounds and we may be quite close to an important juncture, i.e., the kind of pivot that can generate both a lot of excitement and a lot of regret all around. Provided one manages to grasp the nettle with the proper combination of preparation and luck, the emphasis may be on excitement rather than regret.

Modern soup-cooling spoon for the sophisticated gourmet. We are not the gentleman in the picture, we don’t even know him, we just wanted to show this nifty spoon in operation. Once you have one, you will wonder how civilized life was even possible before it.

Photo credit: Hans Reinhart/Getty Images

We let all the bits and pieces of data and information at our disposal parade before our mind’s eye, hoping they would confess under its stern gaze. Of course no such confession could be obtained, but eventually, a thought occurred to us. This is known to happen from time to time.

Before we get to that, we wanted to report on another “shoeshine boy” moment a good friend related to us a few days ago via e-mail:

“Saturday I was waiting in the line at a battery store… a kid behind me asked me if I was in Bitcoin and Google and a few other of the hot ones…”

“I’m not kidding. Then later after he left, another guy asked me what stock he was talking about…”

Complete strangers standing in a line at a battery store striking up conversations about bitcoin and FANG stocks out of the blue? That is definitely a signal of sorts. It is, of course, a good bet that whatever speculation caught their fancy, has probably already made them more money within just the past few days than the yields investors in government bonds can hope to earn over the entire next century (+/-).

It actually makes one wonder why anyone would buy a German 10-year Bund yielding 30 basis points. At least it is no longer trading at a negative yield-to-maturity. Around $9.7 trillion in government debt are still privileged to remain in that bizarre territory. Since bonds with negative yields implicitly suggest that the arrow of time has magically reversed for some people, we cannot be entirely sure if reports claiming they exist aren’t actually infiltrating our world from a parallel universe.