This morning: As the Federal Reserve wakes up to “elevated relative risks” and the rest of us scream “bubble”, the real questions are about real value. Why is a Bitcoin worth as much as Renaissance Art? Why is Dogecoin the top performing asset off the year when everyone knows it’s a joke? And when are people going to drink the proverbial coffee?
I am going to be sending US Federal Reserve governor and head of financial stability, Lael Brainard, her second coveted No S**T Sherlock award. This is not an insult – she is a very erudite, clever and talented central banker, but she really could not have stated the downright bleeding obvious any clearer than we she warned yesterday that some asset valuations are “elevated relative to historical norms… [and].. maybe vulnerable to significant declines should risk appetite fall.” (Check it out in the FT: Fed warns of hidden leverage lurking in the financial system.)
Really?
Who knew… ?
“Measures of hedge fund leverage may not be capturing important risks..” or that the pandemic may “stress the financial system in emerging markets and some European countries..” Well… I am very glad someone has finally noticed… To think we all missed it.. (US Readers: sarcasm alert.)
If Lael really wants something to worry about, how about stock market volumes (declining) versus crypto-trading volumes – which topped $1.7 trillion during April. Again, check out the FT: “Crypto trading volumes boom as activity cools on stock markets”. It’s like watching a teething toddler chewing on a live electric cable.. and wondering what will happen next..
