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Welcome to The Water Cooler for April 27th, 2022. It’s raining AGAIN today in Spain. WTF.
What is the WC?
It’s a random mix of stuff that could make you smarter (or at least help you sound smarter down at the pub). Anything useful/interesting/notable that’s on my mind will get pumped into your inbox every Wednesday.
Stimulus Checks Boom V. 2
40 million Americans owe $1.6T in student loans today.
The Biden administration is looking to forgive those loans for around 10% of borrowers, which will either pump $160B into the economy or cost hardworking taxpayers $160B, depending on how you look at the controversial issue.
But no matter how you look at it, putting an average of $40k into the hands of four million millennials could have a huge impact on the alternative investing space.
It’s way too early to tell what the outcome is going to be, but if $1,500 stimulus checks did this…
…imagine what $40k is going to do.
Remember Between Two Ferns?
Last week, I talked a bit about Netflix’s big miss and how that means you’re going to have to start paying for the streaming service (but at least you’re not this guy).
Today, I learned that one of the most hilarious YouTube Things from ten years ago got turned into a Netflix film, and that makes me very happy.
In case you don’t remember/know Between Two Ferns:
Somehow Netflix turned Between Two Ferns into a feature film a couple of years ago. The snobs at IMDB aren’t Super Huge Fans, but what do they know? Watch the trailer here:
I actually don’t know if the film is going to be any good or not, but do spend an hour of your life watching all the original YouTube videos. Those are definitely good.
Everyone’s getting poor!
Noted SPAC Guy Chamath Palihapitiya released his annual letter this week, and while there’s nothing too groundbreaking, there’s one bit I want to tease out…
Inflation is here!
Since 2018, the correlation between the S&P 500 and M2 (the amount of money pumped into the economy) has been 0.92. That means (more or less) that every dollar put into the US economy meant another dollar into the stock market.
More money in means the stock market goes up. That’s stopped now, which is a Big Problem for the stock market, but the corresponding inflation hasn’t gone away.
And the markets are down >20% on the year, with many tech stocks faring far worse.
So, if you’ve been long equities with no inflation hedge, you’ve now got way less money, and things cost way more. Stack them on top of each other, and that’s a 30% haircut.
Not that that’s stopping consumers from shopping their lives away… Visa reported a 17% purchase volume growth in their earnings report yesterday.
Sounds to me like 8.5% inflation is actually much lower than reality.
Time to invest somewhere that hedges inflation?
Rum is not just for pirates
There’s been a lot of focus lately on Bordeaux and Whisky as investable assets, and for a good reason.
And honestly, it seems like whisky is accelerating, if anything. But what if you think the whisky bubble is about to pop? Or that you’re too late?
Let me introduce you to my good friend, rum. The fruity spirit is going upscale.
One to keep an eye on.
Elon + Twitter = $ for banks
No matter what you think of Elon Musk’s attempted acquisition of Twitter (and FFS, y’all really seem to care a lot), one thing’s for sure: Like death and taxes, the banker always takes his cut.
Of the $46.5B Elon is shuffling toward Twitter, well over $100m will line banker’s pockets as advisory fees.
That’s all for this week, folks.
Fun fact, Stefan’s favorite drink is a porn star martini.