Dateline: October 29 2029
It’s 20 years since the global financial crisis sent markets reeling and governments scrambling to stabilise their economies. Low interest rates and booming global trade saw the 2020s shrug off the Covid-19 crash, and soon the S&P 500 was hitting new all-time highs.
With breakthrough advances in technology, including artificial intelligence, robotics and biotech, and boosted by massive investments in clean energy and the burgeoning space economy, the new bull run gathered momentum from early 2024. The rapid rise of India more than compensated for China’s lacklustre performance, and conflicts in Europe and the Middle East did little to dampen the mood for investors. In some industries, war is good for business!
By 2026, investors who had been sitting on the sidelines got Fomo and piled into the markets in a big way, especially in Asia. Electric vehicles, autonomous drones and air taxis, battery metals and new energy minerals — as well as old standbys such as copper — were the growth industries that swelled the wave to euphoric levels. Optimism pervaded markets worldwide as innovative technologies, sustainable practices, and resilient economies fuelled an extraordinary period of growth.
But now it’s all come crashing down. Triggered by a combination of factors, including escalating geopolitical tensions, concerns over inflation, and rising interest rates, Asian markets began to falter. As stock prices in Asia plummeted, panic spread like wildfire. The contagion soon reached the shores of the US, where Wall Street experienced its most significant single-day drop since the dark days of 2008. The Dow Jones, S&P 500 and Nasdaq indices all tumbled in a domino effect of panic selling.
In the turbulent aftermath of this market turmoil, we face tough questions about financial stability, global interdependence and the challenges of an interconnected economy. But the scale of the decline serves as a stark reminder of the inherent volatility of financial markets, even in an age of accelerating technological progress and economic growth. In a rapidly evolving world, uncertainty remains the only certainty, and we need to expect the unexpected!
- First published on Mindbullets on October 26 2023
Stop the game, I want to get off
Meme trading is killing the market
Dateline: February 27 2024
Over time financial markets have become increasingly sophisticated, offering far more than stocks, bonds and commodity futures for investors and traders. Now we have derivatives, ETFs and funds of funds, as well as cryptos and crypto funds. We have shorts and calls on everything you can imagine — even the national debt of sovereign countries.
It’s become a giant digital casino, with its own betting rules.
The masters of the game used to be the hedge funds. They had deep pockets and clients who could afford to take “insane” risks for possible outperformance. Hedge funds typically underperformed when markets were rising, but in turbulent, chaotic cycles, they usually won when others lost. Volatility was their friend, and they became a powerful force.
There were lots of rules against insider trading and other unsavoury practices, but everyone knows that the small-time investor is always at a disadvantage. The insiders have superior information, and collusion can happen, secretly. Despite the oversight. And analysts and influencers always make “full disclosure” to claim they’re not manipulating the market.
But gamers and cyberpunks are under no such obligation. They’re allowed to “dis” companies or talk them up at will. Hey, they’re not part of the system! And if they decide to rally around some lame-duck stock that the hedge funds are trying to kill off in the name of trading profits, who’s going to stop them?
All it takes is a popular meme to go superviral, and the next thing you know, all wallstreetbets are off. It’s called the “meme squeeze” and hedge funds have been licking their wounds since the GameStop fiasco. “We have painfully learnt that social media memes can matter more for share performance than actual financial metrics,” Barclay’s analysts confessed.
It’s like the Arab Spring or a brand army, only it’s all about boosting or killing companies on the market. The new investment oracles are found on Insta and Reddit, not the business network channels.
It’s a new game, and the gamers are masters at it. If you can’t figure it out, it’s time to leave, because it’s not going to stop!
- First published on Mindbullets on February 25 2021
• Despite appearances to the contrary, Futureworld cannot and does not predict the future. The Mindbullets scenarios are fictitious and designed purely to explore possible futures, and challenge and stimulate strategic thinking.
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