Wandering Capitalist

“With my family, I’m a communist. With my close friends, I’m a socialist. At the state level of politics, I’m a Democrat. At higher levels, I’m a Republican, and at the federal levels, I’m a Libertarian.” - Nassim Taleb

U.S. Banks are currently facing unrealized losses of $306 Billion 🤯👀

@unusual_whales @Rickitysplit503 People don’t understand how dilution can be bullish. I call that opportunity. $GME

@paulg 👇

@paulg Paul, We don’t have a tax problem. We have a WASTE problem. Every Amazon server runs technology funded with tax dollars. We get great returns on accretive public spending. WEALTH CREATION. 👇

How to Convert Between Wealth and Income Tax: paulgraham.com/winc.html

@adamtaggart Lower rates

In April, the American male labor force participation rate hit its lowest level since records began in the 1940s We are losing one of the bedrock pillars of our society What can be done to reverse this existential trend?

@overthelimiting @pmarca Or

@pmarca Inflation is Gov Spending Full Stop.

Interesting.

@pmarca With some exceptions, it’s largely true.

@staypredictable Bingo!

Forms of accretive dilution: 1. Your company loses money or is just not doing well. The share price surges up to a valuation level that is well above what fundamentals can justify at that time. You sell shares at that high price and retain the cash. Cash floor is now increased. Similar effect as buying shares back when the valuation becomes far too low. Financial engineering if done right. 2. You acquire a company through dilution. The acquisition immediately causes your EPS to rise despite the increased share count. You have increased how much earnings power each shareholder gets. Forms of bad dilution: 1. Your company loses money. You dilute at lower and lower prices over time and use the cash to keep the company afloat as the cash is burned into losses. You preserve no cash floor and your debt is still hefty. 2. You acquire a company through dilution and the EPS after the acquisition is now less due to the share count increase. The dilution overpowered the increased earnings per shareholder. If you treat all dilution the same, you are wrong. You need to do the math. $GME $EBAY

@venturecapitans @timstarr2001 @dandolfa I suppose housing inflation is one area of inflation affected by monetary policy. I concede that point.

@Venturinglist @timstarr2001 @dandolfa Yes and monetary policy has caused landlords to pass higher mortgage costs to tenants, thereby making rents and OER components go up.

I don't think people appreciate how little monetary policy has to do with inflation right now. And those that believe it's all about monetary policy do not appreciate how insane fiscal policy has been the last 5 years.

@venturecapitans @timstarr2001 @dandolfa Exactly. 2020 inflation was triggered by the supply cut that Trump agreed to with OPEC.

@timstarr2001 @Venturinglist @dandolfa Actually, it’s pretty spot on. Former Fed governor Miran recently covered this. For example, memory prices (supply input) is causing an increase in PCE. Low supply of inputs causes inflation.

@shacknews By the way, you might want to study how dilution is normal for raising capital, just in case it comes down to actually raising money.

@shacknews How is it dilution if they are authorized but not issued shares? Do you understand dilution at all?

GameStop (GME) board of directors asks shareholders to vote in favor of up to 400% share dilution dlvr.it/TSgsmX

@DrJStrategy @tyillc 🤝Inflation is determined by the inputs to the economy. Labor and Energy. Energy is primarily oil right now. Oil supply tracks inverse to inflation. Furthermore, live under a fractional reserve banking system. The “printing” is done by private bank lending, not the US treasury.

Let’s be honest. Warsh at the Fed. Kevin Warsh’s arrival at the Federal Reserve is not a personnel change. It is a regime change attempt inside an institution built to prevent one. A supply-sider now runs a central bank hard-wired for Keynesian demand management, and the machine is already resisting the new code. The next mistake is visible in plain sight. Keynesians on Wall Street and inside the Fed are treating a supply shock as if it were a demand boom and calling for tighter money. This is dogma masquerading as seriousness. A chokepoint in the Strait of Hormuz, a jump in energy prices, and a cost shock rolling through transport, food, and manufacturing are not evidence of overheated demand. They are evidence of a damaged supply side. Monetary policy cannot reopen a shipping lane. It cannot pump more oil. It cannot repeal geopolitics. It can only crush demand somewhere else, usually with a lag, and usually in the most interest-rate-sensitive corners of the economy first, housing, commercial real estate, capital spending, and durables. Those sectors did not close the Strait. They are simply first in line to pay for the Fed’s intellectual mistakes. That is the Keynesian reflex in its purest form. Every price spike becomes “inflation.” Every inflation scare requires a rate move. Every rate move is advertised as proof of resolve. It is nonsense. A change in relative prices caused by a supply shock is not the same thing as an inflationary spiral. Pretending otherwise is how central banks turn an external shock into a domestic recession. Machiavelli explained why change is so hard. The innovator makes enemies of everyone who did well under the old order and wins only lukewarm defenders among those who might benefit from the new. Christensen gave the same warning in corporate language. Incumbent institutions kill disruptive change because their processes, incentives, and prestige are built around the existing model. That is the real problem Warsh faces. The resistance is not incidental. It is structural. The test for Warsh is not whether he can sound tough on television. It is whether he can resist the Wall Street catechism that every supply shock must be met with tighter money. If he hikes rates into a supply-driven price spike to prove his anti-inflation credentials, he will not have broken with the Keynesian regime. He will have submitted to it. This is not the 1970s. Expectations are not unanchored, and the productive economy is already scarred by years of policy excess, fiscal decadence, and institutional bias. The hope is that Warsh understands the difference between inflation and a supply shock, ignores the Keynesian pundits, and refuses to compound one policy error with another.

@timstarr2001 @dandolfa Inflation is determined by the inputs to the economy. Labor and Energy. Energy is primarily oil right now. Oil supply tracks inverse to inflation. Furthermore, live under a fractional reserve banking system. The “printing” is done by private bank lending, not the US treasury.

@dandolfa Yes, but it still affects money supply size, therefore counts as "monetary policy."

$GME he’s been quitting #GME for many years now.

@Financhle @sneedweb Who do you think will buy the discounted $eBay shares? Vanguard? Blackrock? 🤣 INSIDERS?!?!??

This is pure fantasy lol. eBay has ~444m outstanding shares with 90%+ locked up by big institutions (Vanguard, BlackRock, State Street) and those passive funds don’t dump cheap. Gamestop’s hypothetical ~6.5% stake is all long-dated options and not real voting shares yet. To get real control they’d need to buy hundreds of millions of shares and heavy buying would spike the price anyway. eBay can also just slap on a poison pill at 10-15% ownership and Delaware law backs them up. They already rejected GME’s $125/share offer. Gradual buying might apply pressure but it won’t quietly hand over control the math doesn’t work.

We are probably going to witness a creeping takeover. 👀 GameStop is going to gradually purchase shares of eBay through the open market. In the end $GME will gain control of $EBAY without paying the shareholders a premium.

$GME …so, institutions have been adding. Insiders have been adding. Shares have to come from somewhere. That only leaves retail, yes? 😭 -We are the problem?- I’m AMAZED how retail has sold for 64 straight months. Seems, we have billions of shares in giant pockets to sell.🤔

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