THE MORNING LINE
Twitter and bitcoin share a key similarity in that their success while it lasted was just hubris. Realize that both were birthed by a virtual medium capable of monetizing turds if there is any discoverable demand for them. Cardi B’s megahit single Wet Ass Pussy was proof of this. Twitter proffered turds in the form of members-only censorship that took delight in defecating on the Bill of Rights, particularly the First Amendment. But it took Elon Musk, with unlimited quantities of f**k-you money, to put a number on Twitter: $44 billion. Unfortunately for him, nearly all of it was for ‘good will’ that appears to have vanished. Nor is he likely to be consoled when it is discovered that the dark secret of Twitter’s overwrought ex-employees is that they can start a Twitter of their own with just a few mill, a rackful of servers and a dozen high school dropouts working from home, paid $20/hour to code.
Cute Little Bird
So what are the notoriously spoiled workers so disgruntled about? Leave it to an apparent millennial sympathizer reporting for The Wall Street Journal to excuse them with a high-minded quote uttered by no one in particular: “Employees said Mr. Musk pushed people to work well over 40 hours a week, but said they didn’t feel there was a compelling vision to justify it.” A compelling vision? Yeah, sure. And exactly what lofty end did they see themselves serving under Jack Dorsey, Orwell’s darkest nightmare masquerading as a little blue birdie? Stay tuned to the blogosphere for more dithering on this and other topics of scant interest to folks who live in the real world. What should please the company’s make-believe workforce in any event is that Musk set an intergalactic record for overpayment. If Twitter had changed hands for, say, a still-hugely-overvalued $40 million, no one would have given a rat’s ass what his plans are for the company.
Which brings us to bitcoin, another hubris-rocket fueled by insane excesses of speculative money and greed. Its sensational rise was based on a sexy story invented by, for all we know, a Hollywood flack: Bitcoin entered the space-time continuum via an algorithm written by a mysterious nerd-cum-rock-star known as ‘Satoshi Nakamoto’. His secret sauce was scarcity: there will never be more than 21 million bitcoin in circulation. An irony is that satoshi coinage inspired more than 2,000 cryptocurrency knockoffs, practically all of them rendered worthless by bitcoin’s nearly 80% plunge.
When the bitcoin craze broke into a gallop in 2021 spurred by salacious tales of teen millionaires, it was on its way to becoming the Tulip-o-mania of this era, albeit on a global scale. The Murphy men who run our banking system cautiously signed on (even if Warren Buffett suspiciously did not), warming up the press and the rabble with luncheon speeches that lent bitcoin a veneer of respectability. No one seems to have noticed or cared that the banks themselves appeared to have no skin in the game. Their huckstering was meant to get bitcoin off the launching pad and solidly established in the firmament of Ponzis and shingles-and-siding hustles. Then, the supposedly smart money would rendezvous with the crypto mother-ship they’d helped create.
Alas, bitcoin’s pitch-men will have to start nearly from scratch now that the second-largest bitcoin exchange, FTX, has gone belly up in a scandal that is certain to widen. Its founder, Sam Bankman-Fried, has gone from patron saint and second-largest Democrat donor to schmuck in less than two weeks. You can bet that he will resurface a few years from now, claiming to have solved the nation’s energy problems with cold fusion. By that time, bitcoin will have bounced its way down to zero, where all speculative manias eventually come to rest.
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You don’t need to be chartist to see that Apple is not about to go quietly into the night. Since the beginning of the year, every worrisome selloff has been answered by a rally of nearly equal breadth. The stock’s long list of sponsors includes virtually every giant investment fund on the planet, many of them sovereign funds with no foreseeable need for quick cash. It is predictable that they will support the stock for as long as possible, presumably until they are overwhelmed by redemptions by individual investors grown mortally fearful of plummeting iPhone sales. That could only occur
Last week’s so-so bounce offered scant respite from the hard selling that has hammered the dollar since late September. Hidden Pivot levels aside, the Dollar Index looked sufficiently winded when last week ended to give us reason to expect more selling down into the void circled in the chart. It is bracketed by two lows at, respectively, 104.64 and 101.30. Although I doubt the second will be breached by this long-overdue, hard correction, I wouldn’t bet the first will hold.
I discontinued coverage of bitcoin a while back because its slow death had become too boring to watch. The grim reaper picked up the pace this week, however, spooking this bitcoin proxy into its biggest two-day plunge since June. If Bertie finds no support at the secondary pivot (p2=15,382), you can assume it’s headed down to the ‘D’ target of the pattern, 12,108. The ABCD here looks too obvious to deliver bounces precisely from those two Hidden Pivot supports, but don’t be surprised if the chimps who control it try to engineer a last-ditch reversal from midway between p2 and
Friday’s gap-up rally exceeded by a few cents a minor ‘D’ target at 31.05 that I’d flagged here earlier. This is mildly encouraging, but check out the weekly chart (inset) for perspective. Even if the uptrend were to continue a further $4, exceeding mid-June’s ‘external’ peak at 35.26, the move would still be $7 shy of creating a bullish impulse leg on the weekly chart. That is what we should require if we’re to infer that the bear market begun from $66 two years ago is over. From a trading perspective, however, our short-term bias should wax aggressively bullish if
Much as I’ve been hating Bertie lately, I’d have been eager to bottom-fish down near D=17,903 if this bitcoin proxy had come closer to it. The Hidden Pivot target should have been achieved, given the way sellers stabbed p=25,223 on the way down a month ago. Instead, we saw an upturn from $700 above it. Ordinarily I would infer this is more bullish than a reversal from the target itself. In this case, however, I have assumed buyers jumped the gun only because of the obviousness of the pattern and its target. That doesn’t mean a real rally could not
I’ve been shouting about this for many years, but let me repeat it once again: The last thing the world needs is a strong dollar, since it will lead inexorably toward ruinous deflation. Over several decades, I’ve never wavered in my hyper-bullish outlook for the dollar, even amidst current headlines screaming about inflation, and regardless of what most economists were saying. That’s because I see no resolution for the global debt bubble other than via massive liquidations that would be tantamount to deflation. A stock market bear will be the catalyst, assuming some ‘black-swan’ asteroid does not hit us first.
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