Years of interest rates at near zero levels will do strange things, like incentivizing investors to throw highly leveraged capital at all manner of “sure things”.
In one stark example, two levered ETFs tied to Michael Saylor’s Bitcoin-hoarding company Strategy, which were together worth more than $5 billion at one point, are down about 40% in three days. Leveraged funds, promising two times the daily performance of Nvidia Corp., Tesla Inc., Amazon.com Inc. have tumbled. Triple-leveraged bets on innovation and semiconductor stocks have slid 20%.
It’s all designed to get more support for the NDP.
Sorry, I meant to post the above in the CLC item
Who was that masked banker that held Canadian interest rates near zero for much longer than required?
Does anybody remember when not to long ago Pierre Poliviere was giving economic advice to people that they should invest in Bitcoin?
.
At the time of his urging to buy it,Bitcoin was trading at around $30,000, and it promptly fell down to $25,000 and Justin Trudeau and the Liberals and the bought and paid for Liberal Media we’re all having a good laugh about his financial advice.
Shitlibs in the park where I walk my dog were all having a great laugh about it.
A year later it was starting to climb in price like crazy,trading at $70,000.
Not one word has been spoken about it by the Liberals and their bought and paid for media since.
ponzi scheme for the new era
And that “highly-leveraged” cr@p is all poison, or maybe even kryptonite.
Best example I’ve heard-of were the two Nobel-Prize-winning geniuses of the Long-Term Capital Management (LTCM) Fund. They put-together an investment fund chasing very small gains that were ‘absolutely guaranteed”, because the assets being invested-in had ALWAYS given very small, but reliable gains. Obviously if the gains are very small, the only way to make money off the investment is by putting-in a HUGE amount of money up-front. So a whole lot of high-rollers leveraged themselves to the hilt and went after the “sure thing”.
But of course, when you’re leveraged to the hilt, it only takes a very small drop to clean you out – which is what happened to LTCM; and so famous were the names involved, all of whom were facing losing-their-shirt-scale losses, that the guvmint put-in $3.6 Billion dollars to bail LTCM out. “What the hey, knowwutImean? – it’s just money, and we can always get more of that”…
https://en.wikipedia.org/wiki/Long-Term_Capital_Management