To The Moon

News and my thoughts from last week (21Oct24)

• MICHAEL SAYLOR THINKS BITCOIN WILL HIT $350,000 IN 2024.

• How many war fronts can America afford?

• BILLIONS WORTH OF SHORTS WILL BE LIQUIDATED IF BITCOIN HITS $72,000. - X user - BitcoinLFG

Final numbers for fiscal year 2024 Total US govt revenue = $4.918 trillion Interest on natl debt = $1.133 trillion 23% of all govt revenue went to interest on the debt. 2025 fiscal year started Oct 1st, we are on pace for 30% of all govt revenue going to interest payments. - X user Wall Street Silver

This would reduce the resources needed for infrastructure, healthcare, utilities, education, defense, and more. Is it ok to live in deficit?

• DEL BIGTREE: SURGING CHILDHOOD ILLNESS IN THE U.S. WILL DESTROY OUR NATION’S FUTURE “1 in 22 boys right now has autism in America. We are on the verge of not being able to mount a standing army. What is going on? Why are our kids so sick? It all started right around 1989. This entire explosion of all these autoimmune diseases, autism, lupus, cancers in children, all of it, skyrocketing, ADD, ADHD. Nearly 50% of kids are pre-diabetic or moving towards diabetes. Nearly 70% of Americans are now obese or on the verge of obesity.” Source: delbigtree

US corporate executives of the S&P 500 companies have been buying the least stock since the start of the 2021 bear market. If you are an investor it is an important trend to notice... Chart: jasongoepfert

Dropping insider trades?

$500B was added to the national debt in just the last 3 weeks… Half a TRILLION in 3 WEEKS. Front running the election. The government is out of control. - X user Geiger Capital

43% of the Russell 2000 companies are unprofitable, the most since the COVID CRISIS. At the same time, interest expense as a % of total debt of the Russell 2000 firms hit 7.1%, the highest since 2003. This is insane. - X user Global Markets Investor

(AP, June 2024) Zombies are companies that failed to make enough money from operations in the past 3 years to cover the interest on their loans. Nearly 7,000 publicly traded companies around the world are zombies, including 2,000 in the USA.

Norway wanted to increase tax revenue by $146M. To achieve this, the wealth tax was raised. The result however was slightly different: individuals worth $54B left the country. This led to $594M less in wealth tax revenue. The net loss? $448M. The Laffer Curve is Econ. 101. - X user Visegrad24

• Ongoing African drought has plunged Zambia into daily blackouts as hydroelectric dam unable to run - EuroNews

• Crude oil prices could go into triple digits if supplies are disrupted by conflict in the Middle East, despite weak market fundamentals. Is this inflationary? - WSJ

• BlackRock has become the largest shareholder in the UK’s biggest brickmaker as it bets on a property sector rebound spurred by the Labour government’s plan to build 1.5mn homes over the next five years. - FT

• Companies backed by private equity have been more likely to default than other borrowers as sponsor firms use out-of-court restructurings to preserve their stakes, new data from Moody’s shows. - WSJ

• the private equity and venture capital deal value in the oil and natural gas sector between January to mid-August this year surpassed the $6.61 billion reached at the end of 2023. - Oil Price

• Global interest rates are now on the way down, and countries such as Zambia and Sri Lanka are finally exiting default, many countries have been left with scant resources to service foreign currency debts and little access to capital. - FT

• For victims facing catastrophic losses due to water damage from either storm, many “are just walking away,” Friedlander said. “Most people can’t realistically afford to rebuild their homes.” - NBC News

From X user The Kobeissi Letter

US households now hold 48% of their assets in equities, the highest since the 2000 Dot-Com bubble peak. Since the 2020 crash, this has risen by ~13 percentage points as the stock market has rallied 160%. Over the last 15 years, this percentage has DOUBLED. Interestingly, Americans' allocation to bonds and cash is just 16% and 15%, respectively, well below their long-term averages. In other words, households are all-in on the stock market rally. Bullish sentiment is at record levels.

Equities may be their tool to fight inflation and accumulate wealth. Given the economy, will there be blood in the streets soon? Do not leverage.

Credit markets have rarely been this optimistic: US bond credit spreads declined to 80.4 basis points, the lowest in 19 years. Since the 2022 bear market, credit spreads have HALVED. In other words, the difference between company and government bond yields is the narrowest in two decades. This means investor optimism about the condition of the US economy has skyrocketed. Market sentiment is through the roof.

Small-cap companies are struggling: The share of unprofitable Russell 2000 companies is now at 43%, the most since the 2020 pandemic. This even exceeds the 41% seen at the end of the 2008 Financial Crisis. Adding to concerns, interest expense as a % of total debt of Russell 2000 companies hit 7.1%, the most since 2003. Small companies are struggling to service their debt due to historically high interest rates. As a result, the Russell 2000 is the only major index that has not exceeded its 2021 all-time highs. Small-cap companies are in desperate need of rate cuts.

A lack of profits meeting high interest servicing can be overwhelming for small cap businesses.

@TigerStars

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