GN

When luxury becomes politically embarrassing, the state faces a choice: reduce inequality or reduce visibility. Censoring the spectacle addresses the second, not the first. A society should ask what social conditions made money worthy of worship. #china

As an intellectual exercise, armed with decades of historical market data and the benefit of hindsight, the solution appears almost embarrassingly simple: avoid being invested during declines and participate fully during advances. Who wouldn’t want to sidestep every bear market while capturing every bull run? The problem, of course, is that what looks obvious on a chart becomes nearly impossible in real time, when uncertainty replaces hindsight and every decision must be made without knowing what comes next. Market timing, despite its intuitive appeal, has a long history of turning elegant theories into expensive lessons.

What would you say about that chart?

This is the oldest trick in the minority-scapegoating playbook, and it has never stopped working. Medieval Jews were accused of poisoning wells and conducting ritual murders - charges so detached from reality that their persistence across centuries reveals something about the function they served rather than the facts they described. The function was to convert economic resentment into moral permission. Once the minority is not merely successful but dangerous, not merely different but treacherous, the majority’s grievance upgrades from envy into righteousness, and what follows can be justified as defense rather than aggression. Malaysia’s version was more sophisticated than a pogrom and more durable than an expulsion - it was institutionalized into law, built into the constitutional architecture of the state, and dressed in the language of corrective justice rather than ethnic hostility. The New Economic Policy did not present itself as punishment for communist sympathies or commercial dominance. It presented itself as rebalancing historical inequity. The effect was the same: legal mechanisms transferring advantage from one community to another, with the ideological groundwork already laid to make resistance by the targeted community read as further evidence of disloyalty. The Chinese community in Malaysia absorbed this and accommodated it, as analogous minorities have always done, because the calculus was straightforward. They had built their lives there. They had nowhere particularly better to go. China had no special use for Malaysian Chinese who had been gone for generations and who were, in any case, associated in Beijing’s mind with overseas capitalist networks rather than revolutionary solidarity. So they paid their taxes, accepted the quotas, swallowed the discrimination, and continued to out-perform economically within the constraints placed on them - which of course only refreshed the resentment the constraints were designed to address, because a minority that remains visibly successful despite formal disadvantage confirms every suspicion about its unfair advantages rather than dissolving them. What history shows, with uncomfortable consistency, is that accommodation does not purchase permanent security. It purchases time. The arrangement holds while the majority finds it useful and while economic growth makes the cost of disruption higher than the benefit of ethnic mobilization. When those conditions change: when growth stalls, when political entrepreneurs find that identity pays better than policy, when the generation that remembers the last rupture is gone, the minority’s economic prominence stops being tolerated and starts being the reason given for what happens next. The ideological accusation, dormant during prosperous years, is always available for reactivation. It was never fully retired. It was filed. Malaysia has not reached that point, but the structure it has built: legal ethnic hierarchy, religious boundary enforcement, economic resentment administered rather than resolved, the communist accusation available in the historical record as a precedent for reframing Chinese success as Chinese threat, and collective memory of 1969 fading with the generation that lived it - is not a stable equilibrium. It is a familiar one. And the places it has appeared before did not end well for the community playing the Chinese role. That is the parallel. That is why it matters. Not as prediction but as pattern recognition and patterns this consistent across this many centuries, this many continents, and this many ideological disguises deserve to be taken seriously rather than dismissed as alarmism.

Deutsche Bank on the huge stock market run-up: "Since WWII, the only other time the S&P 500 has risen this rapidly (except after a recession) was months before a huge market crash."

My favorite trading floor trivia: the CME once had to regulate shoe height. Because visibility meant money in the open-outcry pits, shorter traders started wearing massive platform shoes just to be seen over the crowd. The height arms race got so dangerous that the exchange finally capped heels at two inches to stop people from literally breaking their ankles mid-trade.

On #SpaceX IPO:

The Crisis That Never Ended The financial crash of 2008 was never truly resolved. Banks survived, stock markets recovered, and politicians declared victory, yet the structural weaknesses that caused the collapse remained almost entirely untouched. Since then, Western economies have operated in a permanent state of instability hidden beneath the appearance of normality. Governments stabilized financial systems through enormous debt expansion, central bank intervention, and money printing, but they failed to rebuild productive industries, modernize infrastructure, or create sustainable long-term growth. The result is visible everywhere today: industrial decline, rising living costs, political polarization, militarization, fragile supply chains, and growing distrust toward institutions. The crisis did not disappear. It simply changed forms over time. The comparison with 1929 is impossible to ignore. After the Wall Street crash of the Great Depression era, governments protected financial elites while ordinary populations absorbed the economic pain. Trade wars emerged, political extremism spread, social frustration intensified, and eventually militarism and authoritarian movements gained power across Europe. According to this interpretation, 2008 became the modern equivalent of 1929. The ruling classes once again protected financial systems first, while ordinary citizens experienced wage stagnation, reduced opportunities, higher living costs, and declining economic security. Just as the Great Depression reshaped the political order of the twentieth century, the unresolved consequences of 2008 are now reshaping the twenty-first. Greece became one of the clearest examples of how Europe handled the crisis. Publicly, the debt crisis was presented as a story about irresponsible Greek spending and economic mismanagement. In reality, many of the so-called “rescue packages” were designed primarily to protect major German and French banks that had heavily exposed themselves to Greek debt before the collapse. Greece received enormous loans, but much of the money immediately returned to financial institutions rather than supporting the Greek economy itself. In exchange, Greece was forced into extreme austerity measures. Salaries, pensions, and public spending were cut dramatically. Unemployment exploded, businesses collapsed, and many young educated Greeks left the country because they no longer saw a future there. The economic logic behind these policies was deeply flawed. Reducing wages and pensions by forty percent inevitably destroys domestic demand. When ordinary people lose purchasing power, businesses stop investing because there are fewer customers able to buy products or services. Yet European institutions continued demanding more austerity even as the economy collapsed further. Raising taxes such as VAT during a severe recession only worsened the destruction. The policies resembled an attempt to save a dying patient by draining even more blood from the body. What made the situation even more revealing was that many officials privately understood these policies would fail, but politically they refused to reverse course because admitting failure would also mean admitting they had misled their own populations about the purpose of the bailouts. Germany now faces many of the long-term consequences of the same economic system it once defended. For years, German prosperity depended heavily on industrial exports, cheap Russian energy, and stable manufacturing dominance. But after relations with Russia collapsed and the Nord Stream pipelines were destroyed, German industry suddenly lost one of its central competitive advantages. Energy-intensive industries faced dramatically higher costs almost overnight. Companies such as Volkswagen now struggle to compete with Chinese electric vehicle producers like BYD or American companies such as Tesla because Europe underinvested in technological innovation for years while competitors moved aggressively into battery technology, electric mobility, and industrial modernization. At the same time, Europe increasingly turns toward militarization as a substitute for industrial strategy. Factories that once produced civilian goods are now redirected toward military production because governments no longer possess broader economic plans capable of generating growth. Defense spending creates guaranteed state demand, keeping parts of the industrial sector alive. Yet this creates an extremely dangerous cycle. Once economies depend on military production, external enemies and geopolitical tensions become economically useful. Conflicts begin serving industrial and financial purposes in addition to political ones. Military Keynesianism gradually replaces productive economic policy. The war in Ukraine accelerated this process dramatically. Europe replaced relatively cheap Russian gas with expensive liquefied natural gas imported from the United States. The process itself is enormously expensive and inefficient. Gas must be extracted in America, cooled into liquid form, transported across the Atlantic, unloaded in Europe, and distributed through costly infrastructure systems. European consumers and industries ultimately absorb these costs through higher energy prices and declining competitiveness, while large energy corporations benefit enormously. From a purely economic perspective, the arrangement appears irrational, yet it continues because geopolitical priorities override economic logic. Another major transformation involves the rise of technological power concentrated in a small number of corporations. Traditional capitalism was built around factories, machinery, and industrial production. Today, some of the world’s most powerful companies produce very few physical goods at all. Corporations such as Amazon, Google, Meta, and similar firms derive their power from controlling platforms, algorithms, communication systems, data, and human behavior itself. Their main product is influence. This represents a completely new form of capital, sometimes described as “cloud capital,” where digital infrastructure becomes more valuable than traditional industrial ownership. This transformation also explains the growing rivalry between the United States and China. Future global dominance increasingly depends not only on military power, but on control over technology, artificial intelligence, digital finance, semiconductor production, batteries, renewable energy, and supply chains. China invested heavily in manufacturing, solar energy, electric vehicles, and industrial infrastructure while many Western economies focused more heavily on financial speculation and asset inflation. As a result, Chinese companies increasingly dominate sectors that Western countries once expected to control themselves. The structure of global finance is changing as well. Systems such as SWIFT are increasingly viewed outside the West not as neutral financial infrastructure, but as geopolitical tools controlled largely by the United States. This is one reason why BRICS countries search for alternative payment systems and decentralized financial mechanisms. Blockchain-based systems and new international payment structures are viewed by many countries as ways to reduce dependence on American financial dominance. At the same time, stablecoins such as USDT and USDC represent another major shift because they partially privatize aspects of the dollar system itself. Private technological corporations increasingly issue digital dollar-based assets that operate globally alongside traditional state-controlled monetary systems. Europe’s internal structure makes these challenges even harder to manage. The eurozone created a shared currency and central bank without creating a true fiscal and political union behind them. During periods of stability, this system appeared functional. During crises, however, its weaknesses became obvious. Countries with completely different economies, debt levels, and industrial capacities share one monetary system while maintaining separate national budgets and political priorities. There is no fully unified mechanism capable of redistributing losses or coordinating investment effectively across the continent. The result is fragmentation, political tension, and chronic economic paralysis. One of the deepest problems is that Europe no longer suffers from a shortage of money, but from a shortage of productive investment. Trillions of euros were created after 2008, yet very little entered real sectors such as manufacturing, infrastructure, transportation, education, or energy independence. Much of the money remained trapped inside financial markets, stock buybacks, and real estate speculation. Housing prices exploded across major European and American cities while productive industrial investment stagnated for nearly two decades. In cities like Berlin, London, Paris, and New York, many highly educated people with stable jobs can no longer afford homes or long-term financial security. This loss of economic optimism is politically explosive. Previous generations believed that hard work, education, and stability would allow their children to live better lives than they had themselves. That belief is disappearing. Younger generations increasingly experience insecurity, debt, expensive housing, unstable employment, and declining purchasing power as permanent conditions rather than temporary difficulties. When societies lose faith in economic progress, political anger inevitably grows. Support for radical political movements, nationalism, and anti-establishment figures becomes stronger because traditional institutions no longer appear capable of improving everyday life. The legitimacy of European democracy itself is also increasingly questioned. Officially, the European Union presents itself as a system based on consensus and democratic cooperation. In practice, power often appears concentrated among unelected institutions, dominant economies, and bureaucratic structures insulated from democratic pressure. Examples such as the Greek debt negotiations, repeated referendums ignored or repeated until politically acceptable results emerged, and pressure placed on member states regarding sanctions or financial policies all reinforce the perception that democratic participation inside Europe is limited when it conflicts with larger institutional interests. At the same time, raising interest rates to combat inflation creates another dangerous contradiction. Inflation caused by supply shocks, energy crises, and expensive imports cannot be solved simply by making borrowing more expensive. Higher interest rates may reduce economic activity, but they do not lower energy costs or repair supply chains. Instead, they destroy investment, weaken businesses, increase unemployment, and push economies closer toward recession. It resembles curing a patient’s fever by shutting down the entire body rather than treating the infection itself. Despite all these problems, decline is not inevitable. Europe still possesses enormous wealth, advanced infrastructure, strong universities, technological expertise, and industrial knowledge. The real crisis is political rather than material. The continent has the resources necessary to rebuild productive industries, invest in energy independence, modernize infrastructure, and create long-term economic stability. What is missing is political coordination and the willingness to prioritize productive investment over financial stabilization and short-term crisis management. The greatest danger is that permanent instability slowly becomes normalized. Economic stagnation, geopolitical tension, militarization, social fragmentation, inflation, and declining living standards are increasingly treated as unavoidable realities instead of signs of systemic failure. History repeatedly demonstrates that prolonged economic insecurity eventually reshapes political systems as well. When populations stop believing that institutions can improve their lives, democratic trust weakens, frustration intensifies, and societies become increasingly vulnerable to extremism and conflict. The crisis that began in 2008 never truly ended. It merely spread into every sphere of modern political, economic, and social life, creating a world in which there is no longer any real safe haven.

Deutsche Firmen haben den Rassenausweis neu erfunden. Er heißt jetzt "C3." Früher hat man Papiere verlangt. Heute verlangt man "C3 Deutsch." Eine Sprachstufe, die es nicht gibt. Die nie existiert hat. Die niemand zertifizieren kann, weil kein Prüfinstitut auf der Welt sie ausstellt. Aber sie erfüllt denselben Zweck. Kein Stempel. Kein Formular. Kein Beamter. Nur eine Zahl hinter einem Buchstaben und du weißt sofort, wer gemeint ist. Und wer nicht. Das ist die Eleganz davon. Der Rassenausweis 2.0 braucht keine Bürokratie. Er braucht nur eine LinkedIn-Stellenanzeige, einen Laptop, und die stille Übereinkunft, dass alle so tun, als wäre "C3" ein echter Standard. Smalt, Berlin. 20 Mitarbeiter. €12M Venture Capital. Kunden: deutsche Hausbesitzer. Partner: türkische, polnische, vietnamesische Handwerker. Die Menschen, an denen sie verdienen dürfen hier nicht arbeiten. Sauber. Effizient. Rechtlich kaum angreifbar. Genau wie damals. Nur ohne die schlechte PR. Antidiskriminierungsstelle des Bundes Links:

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My personal Chart of Fears: 4 periods where the Dow went nowhere, sometimes for decades: 1. 1906–1924 (~18 years) San Francisco. WWI. Spanish Flu. Two decades of noise, no progress. 2. 1929–1954 (~25 years) The longest drought in market history. The Crash of '29 didn't bottom until '32 — and the Dow didn't reclaim that peak until the mid-1950s. A full generation. 3. 1966–1982 (~16 years) The invisible bear. The Dow oscillated between 600–1,000 for 16 years. Vietnam, Nixon, stagflation, oil embargoes. Real returns were deeply negative once you adjust for inflation. 4. 2000–2013 (~13 years) The "Lost Decade" that was actually 13 years. Tech bust → 9/11 → GFC → European Debt Crisis. The Dow in 2013 sat roughly where it did in 2000. Total: 72 years of the last 126 spent going sideways. The chart looks like a rocket ship in hindsight. It didn't feel like one to anyone living through it.

Beliefs are hypotheses to be tested, not treasures to be protected. Update your views effectively.

Comparing is a critical element of investing. Investors compare all day: stocks versus bonds, active versus passive, value versus growth, stock A versus stock B and now versus later. Humans are quick to compare but not very good at it. Perhaps the most important comparison an investor must make and one that distinguishes average from great investors, is between fundamentals and expectations. Fundamentals capture a sense of a company’s future financial performance. Value drivers including sales growth, operating profit margins, investment needs and return on investment shape fundamentals. Expectations reflect the financial performance implied by the stock price. Making money in markets requires having a point of view that is different than what the current price suggests. Michael Steinhardt called this a “variant perception.” Most investors fail to distinguish between fundamentals and expectations. When fundamentals are good they want to buy and when they are poor they want to sell. But great investors always distinguish between the two.

The key word is “average.” A few people are probably going to get millions, while others get pizza and a handshake.

After 24 years in Germany, one observation stands out: Germans often dislike each other long before they dislike foreigners. Bavarians mock Prussians, East and West Germans still distrust each other, Swabians and Franconians trade stereotypes endlessly and nearly every region believes the others are somehow arrogant, provincial, lazy or backward. The same logic extends outward. Many Germans associate Eastern Europeans with cheap labor, Muslims with aggression and parallel societies, Africans with welfare migration, Russians with authoritarianism, Americans with political dominance and Asians with wage competition. Whether fair or unfair is almost irrelevant here - these perceptions exist, they shape political behavior and pretending otherwise solves nothing. Toward South Americans, Germans are mostly neutral simply because there are not many of them in Germany. Most South Americans move to Spain or Portugal instead, so Germans rarely interact with Brazilians or Argentinians. Americans are not especially liked either because many Germans feel Americans constantly tell Germany what to do and that Germany still cannot act fully independently. At the same time, Germans often admire countries they perceive as socially harmonious or geographically distant from Europe’s political tensions. Who do Germans like? Sweden occupies a special place in the German imagination. Germans are told Sweden is the ideal social state and many see it as an example to follow even though most know almost nothing about the country itself. Whenever I describe how Sweden actually works, I lived there for some time, people look at me in disbelief and say: “That can’t be true.” Germany also romanticizes Australia and New Zealand. Many Germans dream of moving there simply because those places feel distant, exotic, relaxed and untouched by Europe’s historical burdens. For some reason, Australia in particular exists in the German imagination as an exceptionally attractive and exciting country. What many outsiders misunderstand is that Germany is not a socially unified nation hiding occasional tensions. It is a country built on layers of historical, regional, economic and cultural mistrust that long predate modern migration. Immigration simply attached itself to fractures that were already there. The irony is that Germans often describe themselves internationally as highly tolerant and post-national, while internally remaining deeply tribal in ways foreigners rarely notice.

The irony is that Buffett’s advice became famous precisely because almost nobody can operate under Buffett’s conditions. “Get rich slowly” sounds universal until you remember Buffett built his fortune through concentrated ownership, private deals, insurance float and access retail investors will never have. And investing with billions versus investing with a few thousand dollars are fundamentally different games because liquidity itself becomes a constraint. A retail investor can move in and out of small caps, niche sectors, or asymmetric opportunities instantly without moving the market. Buffett cannot. Once you manage hundreds of billions, flexibility disappears and preserving capital becomes more important than chasing explosive upside. Strategies that work for retail accounts become unusable at institutional scale. The “think in 7 years instead of 3” line also ignores that time horizon depends on financial reality. A billionaire can survive decade-long drawdowns, illiquidity and macro cycles. Most retail investors cannot. For someone managing massive capital, patience is an asset. For someone fighting inflation, taxes, housing costs and stagnant wages, waiting decades for average market returns is often presented as wisdom when it is partly a reflection of limited alternatives.

Investors in June 2026

Charts of the week