Readers can do a search of Winter Watch using the term “Ponzi” or “Ponzi units” and see our persistent focus on this issue. Over the last week, we reached a point that can only be described as Ponzigeddon.
It’s especially acute in the cryptocurrency space. Losses from the highs are approaching $2 trillion. There are an estimated 1,900 cryptocurrency hedge funds, and most appear to use leverage to trade at higher volumes while putting up only a small amount of collateral.
Data shows that nearly 75% of all #cryptocurrencies are now down more than -90% from their all-time highs.
This crypto bear market has put an estimated 83% of crypto investors (356 million) at a net loss. pic.twitter.com/ZQ0NF0uKt1
— OracleHawk (@OracleHawk) June 17, 2022
Bitcoin goes under 18k, down nearly 2k in last 24 hrs.
— unusual_whales (@unusual_whales) June 18, 2022
A Ponzi exists to enrich kleptocrat insiders. There’s no actual value otherwise. Ponzis are also highly unstable. They’re either inflating or deflating (rapidly). They cannot exist in a state of equilibrium. On the way down, it goes fast.
They trade on emotion, they are volatile, and they create religious fervor, driving them to insane heights. The Crypto cowboys (aka Fukwitz) that speculate and leverage Ponzis using debt often gamble in multiple Ponzis at once. This causes them to defuse in tandem.
True believers in these cults tend to fight it out to the last man. Note intense bagholder buying right as cryptos rolled over for another leg in May. VandaTrack data shows that Fukwitz bought into crypto-related stocks and ETFs to the tune of $570 million over the past 10 trading days. This suggests true capitulation hasn’t occurred yet.
When pornstars were pumping shitcoins, when you’re taking financial advice from @miakhalifa, it’s late in the fraud of the Ponzi.
Crypto companies spent $100 million of now-precious cash — on Superbowl ads.
They rarely come back to old Ponzis but Fukwitz always try to make it back in a different Ponzi. Some people just are attracted to Ponzis. The market exists to separate them from their money.
“Founders of $10 Billion Crypto Hedge Fund Have ‘Ghosted’ After Bets Go Bad
Three Arrows Capital, founded by two high school friends, is MIA as firms scramble to assess the damage amid indications the fund has been wiped out.” #ThreeArrowsCapital https://t.co/k9e4H6O4z9
— Zero Shorts (@zeroshorts) June 19, 2022
The stock and bond market was definitely in Ponzi-land. It’s a Ponzi scheme with low interest rates and zombie companies. The following chart reflects conditions BEFORE an economic bust.
These are huge iceberg markets and the defusions are more deliberate, but damaging just the same.
The causa promixa that set up Ponzigeddon were negative interest rates (NIRP and ZIRP) on roughly 25% of global bonds. This can be gleaned in the chart below. Once the negative interest-rate punchbowl was removed, the Ponzis began to collapse. Last man standing with ZIRP is Japan and their currency is getting smoked.
The previous profitable trades of small option traders drove the stonk market higher from gamma. Now that’s diametrically reversed.
The most leveraged, most speculative players in the market are sitting on massive losses.
Best guess is the smallest options traders have taken $600 million+ in losses since Thanksgiving. pic.twitter.com/n4R9j9nNF9
— Jason Goepfert (@jasongoepfert) June 18, 2022
This margin debt liquidation is only through the end of May and before the latest wrecking ball noted in the chart above.
In the seven months since the peak in October, margin debt dropped by $183 billion, or 20%. Super-leverage is entwined in almost every sector. In both the 2000-2002 and 2007-2009 episodes, margin debt dropped 50%, right along with the markets.
JPOW’s soft landing pic.twitter.com/TYbDeg1tGF
— Ligma Alpha Capital (@Alias_Analytics) June 18, 2022
Sub-zero behavior just continues on and on.
— Kuppy (@hkuppy) June 14, 2022
We aren’t in Kansas anymore, Toto. How does cattle die en mass in some summer heat?
Thousands & Thousands of cattle dead in organized sections in the open field (Ulysses Kansas).
They want us to think that they died from the heat. They are going to use the heat narrative for a lot of atrocious upcoming future events.
The attacks will continue. WAKE UP! pic.twitter.com/VApjGWiGD0
— Myron T. Moore (@myrontmoore) June 15, 2022
The wags are claiming the cattle were stressed at night, but the truth is that temperature dropped considerably to 74 F overnight on the 16th.
— Funkytown12.0™ (@0Funky11) June 15, 2022
Coal loads just derail going across flat Kansas farmland?
Coal train derailment today Lawrence, Kansas. pic.twitter.com/6tVJsEP5wT
— Suzanne (@suzanneb315) June 18, 2022
Food processing facility in Kentucky goes up in flames. That makes #98.