What's "Free" About "Free Speech"?

Without being aware of it, we've privatized "free" speech in the form of digital monopolies.

Free speech is getting a lot of attention these days, so let's consider what's actually "free" about it and what's not "free." The general view seems to be that censorship is the threat to free speech, and that's certainly an issue. But that's not all that's going on in the realm of free speech.

Let's return to the pre-social-media days and consider what "free speech" meant. It did not mean we could demand a newspaper publish our opinion. The newspaper was a private enterprise and its offices were private property. As such, it had the right to choose what it would publish. Free speech meant that we could pass out leaflets on the public sidewalk outside the newspaper offices, or we could launch a competing publication.

On a smaller scale, consider my blog / site. Over the years, some readers have complained that I didn't host a "comments" forum where they could post their views. I tried one such option many years ago and gave it up as too much work. This is a private enterprise. I pay for the server. The content is copyrighted. I am not obligated to offer a forum for others to post their views. They are free to launch their own blog / site. That's free speech in the digital age.

In other words, free speech doesn't mean everyone has a right to address an audience hosted by a private enterprise; it means everyone can stand on the public sidewalk and pass out leaflets or pay for a server to post their views online. I complain about being shadow-banned by various institutions, but they have no obligation to post whatever content I create; they're private enterprises pursuing their private interests by maximizing profits.

The way they maximize profits is encourage users to post content / perform searches for "free" and then monetize that "free" content / search by collecting data on users and selling it at a premium. This model has generated enormous profits and trillion-dollar enterprises.

There's nothing "free" about these enterprises' platforms accepting our "free" content. We choose to give these enterprises content for free, and they're free to monetize this content and the data they collect on us. We can opt out by not posting content on their platforms and not using their search engine.

But this isn't the entire story, either, is it? These enterprises are monopolies, dominating the search / social media realms, realms which are now dominant cultural, social and political influences in the digital / online era. The appeal of reaching a vast audience so easily is simply too irresistible, and so we not only give these enterprises our content for free, we've granted them extraordinary powers few of us truly understand.

Bruce Schneier served up a nuanced, wide-ranging critique of this revolution in his essay The Hacking of Culture and the Creation of Socio-Technical Debt. Here are some key excerpts:

"Blending Stewart Brand and Jean-Jacques Rousseau, McKenzie Wark writes in A Hacker Manifesto (2004) that 'information wants to be free but is everywhere in chains.'

Ultimately, this notion was foundational in the construction of the era we find ourselves in today: an era in which internet companies dominate public and private life. These companies used the supposed desire of information to be free as a pretext for building platforms that allowed people to connect and share content. Over time, this development helped facilitate the definitive power transfer of our time, from states to corporations.

Like any well-designed operating system, culture is invisible to most people most of the time. Hidden in plain sight, we make use of it constantly without realizing it. As an operating system, culture forms the base infrastructure layer of societal interaction, facilitating communication, cooperation, and interrelations.

Culture can also be hacked--subverted for specific advantage. If culture is like an operating system, then to hack it is to exploit the design of that system to gain unauthorized control and manipulate it towards a specific end.

Culture hacks under digital capitalism are different. Whereas traditional propaganda goes in one direction--from government to population, or from corporation to customers--the internet-surveillance business works in two directions: extracting data while pushing engaging content.

The extracted data is used to determine what content a user would find most engaging, and that engagement is used to extract more data, and so on. The goal is to keep as many users as possible on platforms for as long as possible, in order to sell access to those users to advertisers. Another difference between traditional propaganda and digital platforms is that the former aims to craft messages with broad appeal, while the latter hyper-personalizes content for individual users.

The far more pressing issue is that both have virtually unchecked surveillance power. They are both reshaping societies by hacking culture to extract data and serve content. By determining who sees what when and where, platform owners influence how societies articulate their understanding of themselves.

This has two consequences. First, companies that control what users see in a nontransparent way influence how we perceive the world. Second, by optimizing algorithms for individual attention, a sense of culture as common ground is lost. Rather than binding people through shared narratives, digital platforms fracture common cultural norms into self-reinforcing filter bubbles.

This fragmentation of shared cultural identity reflects how the data surveillance business is rewriting both the established order of global power, and social contracts between national governments and their citizens.

The rise of digital surveillance as the business model (is) turning instruments of social cohesion and connection into instruments of control.

(Citizens) become de facto free labor for the tech companies providing them. The value generated by this citizen-user-laborer stays with the company, as it is used to develop and refine their products. In this new blurred reality, the relationships among corporations, governments, power, and identity are shifting. Our social and cultural infrastructure suffers as a result

Permitting internet companies to hack the systems in which culture is produced and circulates is a short-term trade-off that has proven to have devastating long-term consequences."

Without being aware of it, we've privatized "free" speech in the form of digital monopolies. "Free" speech is now subject to "community standards" that are both Orwellian in the finality of their control (no recourse, no appeal process) and Kafkaesque in their arbitrariness and vagueness. As in Kafka's The Castle, we can peer through a peephole at the power of "community standards" but cannot engage it. We are powerless observers.

There are only two ways to retrieve the power we have unknowingly transferred to digital monopolies: 1) regulate these monopolies as public utilities, or 2) nationalize them and strip out all the surveillance / monetization features, leaving only the basic search / social media functions.

This runs into the buzzsaws of The Market and private enterprise, which are core to the ideology of "free enterprise." The government regulates privately owned utilities, as these provide essential public services. If we consider this common sense, then why is it anathema to regulate digital monopolies for the same reason?

We can have either "free" enterprise, or "free" speech. We can't have both when "free" enterprise has a lock on "free" speech.

This photo is from the 1976 film All the President's Men which elevated journalists to heroes / heroines in a world of power hiding its abuses. Now that digital monopolies are the power hiding their abuses, who will be the heroes / heroines that rescue the citizenry from digital exploitation and servitude?





New podcast: Is the Everything Bubble About to Pop? (37 min, 40 charts)

---

My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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When Local Newspapers Close, We Lose What Matters: Journalism

Self-serving special interests are delighted to fill the void when local journalism disappears.

The vast majority of social media is opinion, spin or all about me. Whatever passes for analysis is often cherry-picked data packaged to support the spin.

There are a number of dynamics driving this post-truth competition for attention and engagement, but they boil down to money and selfhood in the online era.

Money is an obvious dynamic: the tech monopolies in search and social media and the media conglomerates all reap billions of dollars in revenues from users' attention and engagement, as the data collected from users is sold at a premium. The more time users spend online, the greater the revenues and profits.

Why do people spend such large chunks of their lives posting "free" content on platforms? Many, including myself, of course, are hoping to make money by attracting subscribers, viewers, sponsors, advertisers, etc. to their feed / site, while others seek to establish a selfhood online that is larger and more fulfilling than the one they have in the real world.

Changing our selfhood in the real world is difficult; it's much easier to curate a carefully edited mise en scene version of ourselves and our life online.

What's been lost in this frenzied competition for eyeballs and "likes" is the distinction between opinion and journalism. The post-truth cliche is that there is no distinction, that everything is mere opinion and spin, but this is not true: journalism is different from opinion and spin.

In the post-truth competition for attention and engagement, the more sensational the content, the better. In contrast, much of journalism is DBI: dull but important. It's never going to attract the same attention as sensationalist extremes, and few are willing to pay for it.

The core claim of the post-truth era is that there are no facts, there are only ambiguities and interpretations that can be spun 360 degrees at will. Actually, there are facts, for example, the city council voted 5 to 2 to approve the transit station project, and the county received funding for the rehab of the bridge.

From 1988 to 2005, I was a free-lance journalist for metropolitan newspapers, paid to cover housing and urban design issues as well as other topics. Under the guidance of editors, I learned what I call the journalistic style of research, interviews, fact-checking and composition.

The basic idea is to interview subjects who are involved in the issue or knowledgeable observers, gather facts (who, what, when, where, budget, policies, master plans, etc.), confirm the quotes from the sources and if there was a controversial decision looming, make sure the competing views were represented, while making clear who had a financial stake in the issue.

I've endeavored to maintain the core tenets of the journalistic style in my posts from 2005 to the present.

Though few seem to notice, old-school journalism is still being done the hard way, and no, it's not all opinion and spin. Yes, a point of view can be established--for example, the muckraking investigative journalist makes it clear that The Little Guys are uncovering the dirt the Big Guys have been successfully hiding from the public--but this is different from opinion and spin. It's in plain sight, and part of the story being presented.

Yes, bias can slip in, for journalists are human, too, but the goal is objectivity--a standard that has been buried by an avalanche of spin, both institutional and online.

While most of what passes for "news" focuses on national and international events, what has more direct impact on our lives is what's happening in our city and county. These local decisions are the beat of local newspapers, who pay journalists to do the dull but important work of showing up to county council meetings, public hearings, judicial hearings, interview elected and appointed officials and their critics--all the scutwork of journalism that actually matters in our real-world lives, as opposed to the make-believe "life" we present online.

While the precise percentage of mass media ownership concentrated in the hands of a few corporations is open to debate, that most of the mass media is owned by a few corporations is not open to debate. This concentration is especially apparent in the tech monopolies in search and social media, where a cryptic Orwellian message that you've "violated community standards" sends you to Digital Siberia without any recourse.

The 6 Companies That Own (Almost) All Media

These global corporations have little interest in local journalism because it's expensive and rarely profitable. Local newspapers were once supported by advertisers, classified ads and subscribers. Craigslist and similar sites dismantled classified ads, and few younger readers bother subscribing to the local newspaper because "all the news is online for free."

Yes, all the corporate-packaged and sensationalized news is online, but local journalism dies when local newspapers go under. Investigative journalism and shoe-leather journalism are time-consuming, unglamorous and do not lend themselves to sensationalization. Few people are willing to pay for this work via direct subscriptions to journalists. Yes, there are a few superstars with thousands of paying subscribers, but local coverage attracts few subscribers. The investigative journalists I know only survive financially because their spouse has a steady job.

Self-serving special interests are delighted to fill the void when local journalism disappears. Once there's nobody left who is paid to dig beneath the surface of press releases, then there's no pushback when local power brokers carve up whatever's available. The public, uninformed and clueless, is powerless.

This California city lost its daily newspapers--and is living what comes next.

Relying on stalwart volunteers to do all the work local journalists once did is not realistic. Imagining that local journalists can recruit a couple hundred people to pay them a monthly stipend is also not realistic, as the work is DBI: dull but important, and few people will pay for what they imagine is "free" online.

The best way to support local journalism is to subscribe to your local newspaper before it disappears from lack of public support. Journalism is a trade, a profession, and it's not the same as opinion or PR-marketing-spin. We don't seem to even miss it when it's gone, but we are so much poorer when it's gone, a profound poverty we don't even recognize until it's far too late to reverse it.





New podcast: Is the Everything Bubble About to Pop? (37 min, 40 charts)

---

My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Mark ($108), for your outrageously generous patronage to this site -- I am greatly honored by your support and readership.		Thank you, Walter B. ($70), for your superbly generous subscription to this site -- I am greatly honored by your support and readership.

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Does Anyone Else Smell a Market Crash in the Air?

Markets are manipulated, yes, but they're still structures of tightly bound, self-organizing complexity which lend themselves to sudden non-linear collapses.

Just as thunderstorms scent the air before their arrival, market crashes often announce themselves in the autumn zephyrs. Markets don't crash when everyone's in full-blown panic; they crash when the headlines and data are reassuring, analysts are confident in ever-higher profits, and complacency reigns supreme, evidenced by record-high household allocation in stocks and Bullish sentiment readings.

Markets crash after a brief bit of panic selling is immediately bought and markets are returned to a permanently high plateau of valuation as we saw in August, as the S&P 500 shot back up within a whisker or two of all-time highs. Punters buy every dip because this quick reaction to any drop has been richly rewarded for 15 years, and everyone has confidence in the Fed Put, i.e. the belief that the Fed will move Heaven and Earth to restore "market confidence" and the wealth effect.

In other words, market participants have embraced moral hazard: there is no real downside, there is only upside to buying every dip.

Markets crash when the rot beneath the surface is invisible or goes unnoticed. The few doom-and-gloomers who note extremes are immediately mocked off the stage, and the headlines tout the resilience of the economy, markets, employment, profits, and the techno-wonders heading our way.

After the crash nobody predicted, analysts swarm like ravenous locusts to the digital airwaves to lay claim to their prescience: look, look, I added a one-line disclaimer about "irrational exuberance" at the end of my report!

I'll spare you the analog charts and go right to the chase: the Oasis Indicator, brought to our collective attention by Joe Sullivan-Bennett via BondVigilantes.com: The Peculiar Relationship Between Oasis & Periods Of Extreme Market Volatility (Zero Hedge). (Fun fact: Before Oasis Wonderwall, there was George Harrison's 1968 soundtrack LP Wonderwall.)

Those turning up their nose at the Oasis Indicator might benefit from pondering these "jaws of death" charts. Everything is extreme and stays extreme until it doesn't. Consider the gaping pearly teeth of the SPX (S&P 500) and JPY (Japanese yen).



Or the Mack the Knife of SPX and Fed reserves: You know when that shark bites with his teeth, Scarlet billows start to spread...



And last but not least, the 2-year Treasury yield and the Nasdaq Index: a loaded mousetrap if there ever was one.



There's no convincing the complacent. You either sense what's coming or you don't. It's like a sixth sense in a way, an intuitive awareness developed by absorbing huge losses in previous "unpredicted" crashes.

Markets are manipulated, yes, but they're still structures of tightly bound, self-organizing complexity which lend themselves to sudden non-linear collapses.

But never mind, a little autumn shower never hurt anyone. And so nobody carries an umbrella on a day that starts out sunny and clouds over too quickly to respond.

Playing It Safe (9/6/24)

Is the "Everything Bubble" About to Pop? (9/4/24)

What If All the Conventional Models Fail to Predict What Happens Next? (9/2/24)

New podcast: Is the Everything Bubble About to Pop? (37 min, 40 charts)

---

My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free

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Playing It Safe

Violent crashes followed by equally violent rip-your-face-off rallies as we experienced in August are not signs of a healthy, stable stock market.

An astute reader recently asked me: "If you had to rollover a pot of money from a 401K in the next month, how/where would YOU invest it?" Please note that my answer is not investment advice; I am only responding to the reader's direct question: what would I do? In other words, given my circumstances, age, risk appetite, assets, income, obligations, etc., what would I personally do? My answer is only relevant within the context of my own individual circumstances. Everyone else with their own unique circumstances will have their own answer.

My answer: I'd play it safe. What "safe" means depends on the person, but for me, "safe" means cash, and cash equivalents that earn some sort of yield, for example, short-term Treasury bills / notes / bonds which I can buy via TreasuryDirect.gov. For someone else, "safe" may be some other asset or perhaps diversifying their bets in the casino: some on the roulette wheel, some on the poker tables, etc.

Why would I play it safe? Two reasons come to mind. 1) Mr. Buffett just sold a dollar amount of Apple stock equal to the GDP of a small nation. That is a very clear signal of how he views valuations and the global economy. Mr. Buffett was widely considered an out-of-it old fool when he missed the dot-com NASDAQ bubble in 1999, but a few years later after the NASDAQ had fallen 85% from its peak, perceptions of the out-of-it old fool changed.

2) Violent crashes followed by equally violent rip-your-face-off rallies as we experienced in August are not signs of a healthy, stable stock market. This kind of action smells very strongly of insiders and major players "distributing" (i.e. selling) to retail (households with stock portfolios, 401Ks and IRAs, and passive index funds which are bagholders all the way down should stocks crash) in anticipation of a serious, prolonged decline in valuations.

There is an overwhelming abundance of signals and analyses--Treasury yield inversions, etc.--but these two suffice. But if you insist on two more, consider 3) the percentage of household wealth in stocks has reached an all-time high. This has a very strong correlation with major multi-year tops in the stock market.

4) Volatility remains complacently untroubled. Sure, volatility as expressed in the VIX index is suppressed to keep stocks nicely elevated, but the complacency is evident in other readings as well. Recency bias has made punters extremely complacent and confident that A) buying the dip will be handsomely rewarded every time, without fail, and B) the Federal Reserve will do "whatever it takes" to save the stock market from any spot of bother. That these conditions may no longer be guaranteed hasn't yet entered the risk-return analysis of most punters.

OK, here's a lagniappe indicator: the bat guano-quatloo / JNK-Mongolian Cattle Futures Index ratio. Interpret this one however you like, but to me it is suggesting that playing it safe has a favorable risk-return thingy.



Is the "Everything Bubble" About to Pop? (9/4/24)

What If All the Conventional Models Fail to Predict What Happens Next? (9/2/24)

New podcast: Is the Everything Bubble About to Pop? (37 min, 40 charts)

---

My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free

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Thank you, Brian R. ($7/month), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.		Thank you, Richard C. ($7/month), for your superbly generous subscription to this site -- I am greatly honored by your support and readership.

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Read more...

Is the "Everything Bubble" About to Pop?

Among the big winners of the Everything Bubble is--yes, I know you're shocked--Wall Street.

Is the "Everything Bubble" about to pop? Let's start with what we're told: there is no bubble, all the assets soaring to unprecedented heights are reasonably priced at a "permanently high plateau" because of AI, scarcity of housing, scarcity of Ferraris, interest rates trending down, the Fed waving dead chickens around the campfire, people buying toothpaste, and so on: you name it, it's a reason for assets to drift higher.

This all sounds rather splendid, but somehow the pump inflating the bubble goes unmentioned: it's the money, Honey, the tens of trillions of yen, yuan, euros, dollars, pesos, etc., being borrowed or conjured into existence since the last spot of bother in 2008, where each unit of currency enters the global free-for-all chasing assets.

Thanks to historically low yields, cash is trash and the way to make a killing is to rotate from AI chip makers to Ferrari to Colgate, and then on to the next hot sector: maybe uranium, maybe bat guano, maybe a new doggy-themed crypto, maybe the next iteration of the yen carry trade, it doesn't really matter because capital is digital and therefore mobile.

Hand-in-hand with the endless spew of new "money" and credit are financialization and globalization, which have transformed every asset into a fully globalized, commoditized asset that can be securitized, packaged, collateralized and leveraged in a financier's Heaven of finance becoming the measure of All Things.

The house across the street is no longer shelter: it's a financialized asset that's now part of a portfolio of rental properties owned (and leveraged) by some entity based in Dubai, which might securitize the portfolio and sell it to pension funds in Norway.

Or it's one of dozens of short-term vacation rentals (STVR) in a wealthy family's private wealth management portfolio.

The same holds true for every asset on the planet. Farmland isn't for growing food--it's for growing wealth as the global "scarcity" of places to stash capital drives its value out of the reach of those who would actually like to use the land to grow food.

For the wealthy, what's abundant is credit, and what's scarce is assets to soak up the sea of capital sloshing around the wealth management funds, philanthro-capitalist foundations, and other outposts of the top 0.1%, which as this chart illustrates, have ridden the credit-fueled Everything Bubble to unprecedented heights of private wealth.



We're told the bubble is a tide raising all boats, but this is, ahem, misinformation, as the bottom 50%'s share of the financial windfall remains a signal-noise 2.6%.



The primary effect of the Everything Bubble is an extreme of wealth-power inequality. As the chart above illustrates, the wealthy got much richer while everyone else acquired more debt, i.e. the obligation to pay more of one's earnings to the wealthy who own the mortgage, auto loan, student loan. etc.

There's a funny little effect of extreme wealth-power inequality known as social disorder which can manifest in all sorts of equally funny ways, as popular uprising, wildcat strikes, opting out, civil disobedience, and various other ways of expressing no mas.

Here we see just how extreme the Everything Bubble has become in residential real estate, nearly doubling the insanity of the 2006 housing bubble. Recall that the Case-Shiller Index tracks the market price of the same houses over time, so there's no way to game the statistics.



Among the big winners of the Everything Bubble is--yes, I know you're shocked--Wall Street, as the broker-Dealer index has outpaced even the bubblicious S&P 500 stock index.



The Everything Bubble is global, which means its deflation is going to hurt the entire global economy. Consider this chart reflecting the concentration of China's household wealth in housing: almost 80% of all household wealth is in housing, a bubble which is now popping despite the authorities' efforts to reinflate the bubble. Prices are off 25% to 37% in Tier 1 cities, and even more in Tier 2 and 3 cities.

The reverse wealth effect as the primary store of household wealth wilts will be monumental. Trust isn't just personal; trust is the critical glue in markets and governance. Once trust is lost, it's somewhere between difficult and impossible to win it back.



That the bloom is off the Everything Bubble Rose is visible in anecdotal evidence dribbling in from the real world: housing valuations in various markets are off 25% from their peak, housing inventories are rising, sales are slowing, restaurant chains are going belly-up, credit card debt is soaring to new heights, dollar-store stocks are cratering, and so on.

But hey, the real world doesn't count; the only thing that matters is financialized assets going up. If the yen-quatloo pair is taking off, everything's good.

There are a couple of funny things about amassing $315 trillion in debts globally to drive "growth": one is the interest due on all that debt, which becomes unsustainable should yields rise, and inflation, which either pushes yields higher, making it impossible to continue funding "growth" with more debt, or it lays waste to the purchasing power of wage earners' incomes, popping the bubble of free-spending consumption propping up the global economy and debt bubble.

Gordon Long and I explain these dynamics in our new podcast:



You can watch it below or here: Is the Everything Bubble About to Pop? (37 min, 40 charts)



To summarize: will the Everything Bubble pop? Yes.

Will the authorities try to reinflate the bubble? Yes.

Will it work? No.

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Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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