Time Could Reuse This Cover Without Raising Eyebrows
FWIW - It feels like @Time could rerun this cover this week and no one would blink. https://t.co/cEGZaumcmS
Markets Feel Like a Roofless Room, Unlimited Upside
This morning's garage band - "The One-Page Memo" - comes from the headlines. While the group's lyrics are hard to make out, the crowd's reaction suggests it's latest hit mimics Pharrell. For the markets, it's clearly a room without a roof.
K‑Shape: Assets Rise, Prices Fall, Winners vs Losers
The K-Shaped Experience Asset inflation on the arm. Price inflation on the leg. One is either a beneficiary or a victim.
Delta's K‑Shaped Service: Premium Ups, Economy Down
I'm not sure there is a company that embodies the K-Shaped Experience like Delta Airlines. At the same time its finding new ways to spoil its premium customers, it is doing everything it can to curtail services to those at the...
Blaming AI for Layoffs Fuels Bottom‑tier Resentment
The more companies attribute layoffs to AI, the more they remind those at the bottom why they should hate AI...
Rising Gas Prices Deepen K‑Shaped Inequality, Empower Elite
FWIW - The further gas prices rise, the more our K-Shaped Economy becomes a Top-of-the-K-Dependent Economy.
Focus on Profit Impact, Not Revenue Share, of Top Customers
FWIW - Analysts need to stop asking companies what percentage of their revenue comes from the top of the K and start asking them what percentage of their profits the top contributes to the bottom line.
October's Investor Sentiment Hit an Extreme Low
Yet another indicator highlighting what an extreme point in investor sentiment last October really was...
Bottom‑of‑K Passengers, Not Budget Carriers, Need Help
It's not a "Budget Airline" bailout so much as bottom of a K-Shaped Airline Industry assistance. $UAL and $DAL are the arm of the K today. Maybe the real problem isn't the budget airlines but the financial condition of...
Subjective Metrics Mask Risks, Threatening Private Credit
The world of finance is awash in subjective measurements that are believed to be objective facts until confidence falls. And therein rests the greatest risk to private credit.
Unprecedented Wave of Accounting Restatements Looming Ahead
FWIW - I don't think it is too soon to suggest that the volume of accounting restatements ahead will be unprecedented.
Self‑Dealing Mergers: Sabotage A to Boost B
If you controlled Company A and planned to merge it with Company B, which you also controlled, wouldn't you d9 all you could to diminish the value of Company A, by piling on enormous capex that ultimately benefits Company B,...
Avis Fails to Pivot From Shoes to AI
Dear Avis, You were supposed to announce a pivot to being an AI company not a shoe company.
Today's Energy Crisis Fueled by Crowd Speculation, Not Scarcity
FWIW - The most important difference between today's energy crisis and the one from the 70s is the crowd's ability to gamble on it. As energy and food inflation take hold, it is hard not to imagine the meming of commodities. Then...
Retail's ODTE Call Buying Sparks Scratcher Mania
It's not just that retail is buying call options that matters; it is that their weapon of choice is ODTE. It's scratcher mania.
Blindly Following a Deified CEO Risks Market Collapse
FWIW - Nothing against the man, but I can't think of a worse decision. Following a deified CEO is already an impossible challenge. If markets fall and he has his hand on the rudder, he doesn't stand a chance against following board...
Market Cheers Reopening of Already Open Strait
Given current mood, it's easy to imagine the market eagerly celebrating the reopening of the already opened Strait.
AI Struggles as People Prioritize Immediate Costs Over Future Gains
And therein lies AI's biggest challenge. In the "me here now" world of low confidence, no one cares about abstract future benefits when faced with immediate tangible costs...
Low‑income Families Can't Just Flee Rising Costs
In case there is any lingering confusion, "Well I'll just move to Miami," isn't something those at the bottom of the K can say when their utility company threatens to raise rates or their landlord announces rent is going to...
Airlines and Automakers Transform Into Luxury Brands
Just as the airline industry has become a luxury goods company in drag, so, too, has the auto industry. https://t.co/A8aU8LzaqC https://t.co/3E79dCTZ4M
High Gas Prices May Spur Blame on Record Exports
Not saying it is right, but if prices at the pump don't drop further, it won't be long before consumers begin to blame "record exports." Surplus and $4.00 gas don't fit comfortably next to each other in our mind.
Airlines Turn Luxury: Delta, United Rebrand for K‑Shape
Hermes with real wings? At this point, I don't think it is wrong to consider the major international airlines, like Delta and United Airlines, luxury brands given who they structurally repositioned themselves for our K-Shaped Economy.
Analyzing Iran War's Next Steps and Global Ripple Effects
Come for @RanaForoohar's take on what happens next with the Iran war. Stay for @LukeGromen's response on the far-reaching implications. https://t.co/mXUaZa7w04
Global Events Become Luxury for the Elite
It's time to add international travel to major sporting events, concerts, and Broadway shows as an activity only those at the top can now afford to experience in person.
Laissez-Faire Regulation Inevitably Breeds Self‑regulation Fallout
Given the current era of laziest-faire regulation, just a reminder of the inevitable consequence of self-regulation...
Invulnerability Breeds Blindness as World Changes Unnoticed
People talk a lot about the hubris that accompanies overconfidence. That pales in comparison to the blindness. Invulnerability eliminates doubt, and in turn, our need to pay attention to the world around us. Meanwhile that world is changing. And we have...
Morning Sight: Three Ships Navigate Hormuz Strait
I saw three ships go sailing out The Hormuz Strait, the Hormuz Strait I saw three ships go sailing out The Hormuz Strait in the morning.
AI Exposes Popular Beliefs, Not Objective Truth
The more I use AI, the more I see it revealing common knowledge rather than truth. This is incredibly useful to me as a social scientist. I can easily see what the crowd believes to be true and the clear...
Certainty Skews Perception: “Even Better” Reveals Bias
A great example this morning from @ThisIsSethsBlog of the subtle ways our feeling of certainty impacts our view of the world around. When we say things can only get "even better" or "even worse", we're unknowingly expressing how certain we are...
Gas Prices Aren't Down, Just Rising Slower
Am seeing lots of headlines today suggesting that consumer sentiment should improve because "gas prices have moderated." While I am hopeful of an improvement in how consumers feel, what has moderated is not the price of gas, but its pace of...
Affordability Awakens Elite to Stark Consumer Reality
I feel like consumer sentiment is having its "affordability" moment as those at the top suddenly awaken to the reality that the world around them bears no resemblance to their own lived experience.
Middle East Tensions Sung to Holiday Tunes
For those who prefer to get their Middle East news updates via Christmas songs... I saw three ships go sailing out The Hormuz Strait, the Hormuz Strait I saw three ships go sailing out The Hormuz Strait in the morning
Now Is the Worst Time for Inflation and Recession
Not sure I would choose this moment for higher inflation, a recession, or worse, a combination of the two... https://t.co/KWuFPa4buE
Oil Price Dip Signals Early Global Economic Slowdown
Given the world's dependence on fossil fuels, I would encourage you to look at this as the heart-rate monitor for the global economy, pulled forward by a few weeks. https://t.co/Q4PWG7rSWB
When Confidence Wanes, Shared Control Disappears
Control comes in three forms: yours, mine, and ours. The challenge with this is that as confidence falls and "Me Here Now" thinking sets in, the third option naturally evaporates. And then, it become a clear choice. It is either yours...
Hedging Reveals Balance of Confidence, Narrative, and Action
The equilibrium between confidence, stories, and actions is never clearer than when we turn to hedging...
Confidence Needs Both Certainty and Control
And people laughed when I said confidence requires two things, a feeling of certainty and control.
Overconfidence Breeds Unexpected Dependence on Others
There's often irony in cycles of confidence. For example, just after we overconfidently announce we don't need the help of others, we suddenly need help from anyone we can find.
Crude Prices Now Double Speed of 2022 Surge
In the buildup to Russia's invasion of Ukraine, it took 91 days for the price of crude to rise from 66 to 112. This year, it took but 42 days for the price of crude to cover the same ground. https://t.co/052pDnWj0v
Media Hype Mirrors CEOs' Enthusiasm for Corporate Hedges
LOL - The media's coverage of corporate hedges - not to mention CEOs' delight in those hedges - would appear to perfectly mirror their perceived value... https://t.co/iyhM43S3Yl
ETF Rush to Mimic QQQ Before SpaceX IPO
As ETF providers race to create QQQ substitutes ahead of the SpaceX IPO, I guess we're going to force-feed not one snake but an entire Medusa-head full of snakes. How all those snakes digest what looks to be one supersized rat...
Bag Fees Are Tiny; Airfare Spikes Dominate Concerns
FWIW - Those focused on bag fees are watching the wrong thing. They're a rounding error compared to what is happening in airfares.
IMF Should Fear Capital Flight From US Markets
FWIW - If America is blamed for higher prices and shortages around the world, the flight the IMF should be most concerned about is out of American capital markets headed back to domestic economies.
Blaming “America Inc.” Fuels Global Price Surge
ICYMI - My thoughts in the FT on what happens if "America Inc." is now blamed for higher global prices https://t.co/SqaqFvPCfI
Crisis Is a Tunnel: Focus, Blindness, Passage
"The tunnel of crisis" is the perfect description of how we experience moments of extreme powerlessness and uncertainty. - Intense focus - A complete lack of awareness of what is happening around us - Something we must go through to get to the...
Bigger IPOs, Bigger Whims: Underwriters Face Rock‑Star Demands
IPO company demands of their underwriters always remind me of rock star requests for Fiji Water and bowls of green M&Ms. The bigger the deal, the more outlandish and self-serving the demands.
Markets Now Directly Drive Consumer Prices, Lag Vanishes
Yet another example of the shrinking time lag between market price changes and consumer price changes. While the market may not be the economy, what is becoming all too clear is that the economy is now the markets.
Confidence and Vulnerability Share Blind, Impulsive, Uncoachable Traits
Thread: While we think of extreme confidence and extreme vulnerability as opposite ends of the spectrum, they share many traits. We're equally impulsive and emotional. We don't scrutinize. We're blind to a lot. And deaf, too. We are...
Leaders Fire to Protect Ego, Not Performance
FWIW When leaders fire subordinates it often has less to do with the failures of the subordinate (which typically have been long known) than the mounting vulnerability felt by the CEO. Short of embezzlement, you never see CFOs, CTOs and COOs...
Real‑World Example Shows Mood Drives Leadership Style
Once again, the real-world provides the perfect real-time example. In this case for today's class on the unappreciated connection between social mood and leadership styles.