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Let's start with this...

Magazine cover indicator strikes again?

Usually it's a great countertrend indicator (68% strike rate over the next 360 days), but there was something missing... 👇

Brent's bang on (and he's basically the authority on the matter as one of the authors of the study)

Once we see the DeFi's eating the world, end of the traditional banking system covers, then the signal will have more weight...

On that note, it doesn't seem like the regulators have a clue.

Gensler's testimony revealed how little the SEC understands and the lack of resources. They're 'short-staffed' and running way behind the pace of innovation.

If regulation is coming, a heavy-handed approach of naming everything a security is the likely starting point.

No doubt the legislation will be full of loopholes, and that's when the battle will truly begin...

The SEC is ‘short-staffed’ and it needs more help to tackle everything from crypto to China, Gensler says
SEC Chairman Gary Gensler says that Wall Street’s top regulator is trying to juggle an long list of challenges with a smaller staff.

Ransomware is being targeted first, probably because it's an easy way to signal that they're doing 'something'...

There's not much substance 👇

The Biden administration is preparing an array of actions, including sanctions, to make it harder for hackers to use digital currency to profit from ransomware attacks, according to people familiar with the matter.
The government hopes to choke off access to a form of payment that has supported a booming criminal industry and a rising national security threat.
The sanctions are expected to single out specific targets, rather than blacklist the entire crypto infrastructure where ransomware transactions are suspected of taking place.

WSJ News Exclusive | U.S. to Target Crypto Ransomware Payments With Sanctions
The Biden administration hopes to disrupt the digital finance infrastructure that facilitates ransomware cyber attacks, a national security threat traced to Russia.

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Evergrande's still a thing (and will be for a while)...

It's definitely not Too Big To Fail 👇

Our views on this should be well-known by now, but just ICYMI...

What’s up with China’s property market?
Evergrande, the real estate darling of China. At first glance, it appears like a straight-A student. However, it would take a prudent investor just five minutes of legwork to reveal that this company is, in fact, a troubled child.

Now, there's lots of fast-moving news around events like this and you'll see headlines/tweets like this... 👇

Quote tweets and replies are a fantastic reactionary sentiment check.

But is this 'new' information?

UBS have been covering Evergrande's fall for a year now.

After setting a neutral rating & target price of HK$15.20 last September, they downgraded and changed the target to $6 in January, then lowered it again to $3 in July!

They saw the liquidity crunch coming too...

With 77% of Evergrande’s liabilities due within 12 months, the developer may continue to cut property prices to stimulate pre-sales, which will substantially erode earnings and margins, the UBS analysts wrote.
Evergrande’s total liabilities -- which includes commercial bills and other short-term payables -- grew to a record 1.95 trillion yuan last year, even as the company reduced its pile of interest-paying debt.

Even published on Bloomberg...

UBS Analysts Say Evergrande May Tumble in Dramatic Sell Call
China Evergrande Group was downgraded to sell by UBS Group AG analysts, who said shares of the world’s most indebted developer may lose more than half their value.
UBS Analysts Who Predicted Evergrande Rout See Another 40% Drop
UBS Group AG analysts who correctly predicted in January that China Evergrande Group’s stock would lose more than half its value now say the selloff has a lot further to run.

More importantly, does this 'news' really add anything to the picture?

They're only stating the obvious that liquidation is a worse scenario than restructuring.

These commenters are full of doom regardless.

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The Generational Divide & The 'Great Wealth Transfer'

Ignoring the hyperbole, it's an interesting chart...

But does it show anything unexpected?

Generally speaking, older generations should have a greater share of wealth. They've been around longer to compound it!

As people retire, they'll begin to chip away at that wealth.

Basically, they still need to spend but they don't have the same incomes.

Eventually they die, and the wealth is inherited by the next generation(s).

Here's the big reveal...

The chart's completely misleading.

That greatest wealth transfer ever isn't just around the corner...

Even if it was, who would that wealth predominantly go to? 👇

Taxes, inequality & generational games

Yep, they're keeping it in the family!

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