Log Pilot retweeted
COLDCARD makes retirement attacks impossible, generate your own entropy and reproduce it provably! coldcard.com/docs/verifying-…
Log Pilot retweeted
The next time you’re feeling down, remember it's all about perspective. I got a friend who reads 2-3 books a week, works out twice a day, has no financial worries, & has people who want to have sex with him all the time & yet he constantly complains about how much he hates prison
Log Pilot retweeted
Andrew Lo, MIT - the economist behind the "physics envy" critique of finance - on the most dangerous instinct investors have:
every time NASCAR adds a new safety feature - reinforced bumpers, roll bars - drivers crash more, not less.
they feel protected, so they push harder. economists call it the Peltzman effect: make people safer and they spend the safety on extra risk.
now apply it to markets. when volatility is low, investors don't sit still feeling safe - they pile on leverage and risk, convinced the danger is gone. the risk didn't vanish. they just stopped seeing it.
his warning: the calmest markets are exactly where people quietly load up on the most hidden risk - right before it snaps back.
~50-min Google talk, free. the MIT economist on why "safer" quietly makes us reckless ↓
Mark Spitznagel - founder of Universa, the "black swan" fund Nassim Taleb advises - on the most counterintuitive idea in investing:
add a 3% sliver of crash insurance to a stock portfolio. give that insurance a 0% expected return - it makes nothing over time.
it still raises the portfolio's long-run compound return - by roughly what you'd get from putting that same 3% into an asset returning 20%+ a year.
how? by killing the deep drawdowns that quietly destroy compounding. but the insurance has to actually fire in a crash. one that only sometimes pays out is "like a parachute that only sometimes deploys - you're better off not wearing one."
most "safe havens" - gold, the dollar, hedge funds, even a Picasso - fail that test.
~13-min talk, free. the man who made ~4,000% in the 2020 crash, on what actually protects you ↓
Log Pilot retweeted
Let’s be honest.
Warsh at the Fed.
Kevin Warsh’s arrival at the Federal Reserve is not a personnel change. It is a regime change attempt inside an institution built to prevent one. A supply-sider now runs a central bank hard-wired for Keynesian demand management, and the machine is already resisting the new code.
The next mistake is visible in plain sight. Keynesians on Wall Street and inside the Fed are treating a supply shock as if it were a demand boom and calling for tighter money. This is dogma masquerading as seriousness. A chokepoint in the Strait of Hormuz, a jump in energy prices, and a cost shock rolling through transport, food, and manufacturing are not evidence of overheated demand. They are evidence of a damaged supply side.
Monetary policy cannot reopen a shipping lane. It cannot pump more oil. It cannot repeal geopolitics. It can only crush demand somewhere else, usually with a lag, and usually in the most interest-rate-sensitive corners of the economy first, housing, commercial real estate, capital spending, and durables. Those sectors did not close the Strait. They are simply first in line to pay for the Fed’s intellectual mistakes.
That is the Keynesian reflex in its purest form. Every price spike becomes “inflation.” Every inflation scare requires a rate move. Every rate move is advertised as proof of resolve. It is nonsense. A change in relative prices caused by a supply shock is not the same thing as an inflationary spiral. Pretending otherwise is how central banks turn an external shock into a domestic recession.
Machiavelli explained why change is so hard. The innovator makes enemies of everyone who did well under the old order and wins only lukewarm defenders among those who might benefit from the new. Christensen gave the same warning in corporate language. Incumbent institutions kill disruptive change because their processes, incentives, and prestige are built around the existing model.
That is the real problem Warsh faces. The resistance is not incidental. It is structural.
The test for Warsh is not whether he can sound tough on television. It is whether he can resist the Wall Street catechism that every supply shock must be met with tighter money. If he hikes rates into a supply-driven price spike to prove his anti-inflation credentials, he will not have broken with the Keynesian regime. He will have submitted to it.
This is not the 1970s. Expectations are not unanchored, and the productive economy is already scarred by years of policy excess, fiscal decadence, and institutional bias.
The hope is that Warsh understands the difference between inflation and a supply shock, ignores the Keynesian pundits, and refuses to compound one policy error with another.
Kevin Warsh is to be sworn in as Fed chair on Friday, and some investors say the central bank’s next move could be a rate hike—not the cut he was hired to deliver on.wsj.com/3Phncg3
Log Pilot retweeted
Well as you point out power law tails is quite a different domain and statisticians / econometricians are usually dealing with that certainly in financial data. We are talking about about a power law backbone as the fundamental underlying reality. Autoregression is not a problem (a) of course there is just as a rocket can folllow a parabolic power law in general and its current position depends on prior position (it also has deviations due to atmosphere, gravity variations and of course any burns) and (b) one can correct to AR(2) level with generalized least squares and get a Durbin-Watson statistic very close to 2, it is then still a power law and the power law exponent actually steepens slightly.
Of course there is a whole underlying physically motivated theory of Metcalfe’s square law for networks x observed viral adoption spread as a cube law. I generally avoid arguments with statistical purists they forget to ask Why it has followed a power law as price increased by 7 orders of magnitude because they refuse to see the evidence directly in front of them.
Log Pilot retweeted
We need an Eponymous Law for naming bills. Something like:
"Orwell's Law of Nominal Inversion": The more virtuous a bill's name sounds, the more likely its effects are the inverse!
Log Pilot retweeted
Haha sure!
Power law trend price (blue) is at 122.5K, and the “soft floor” price (orange) is at 66.5K.
This puts current price (65k) just below the pl floor, and ~87% below the pl trend.
For context, instances when price fell below -85% divergence were around:
-Sept. 2023 (-90%)
-Dec. 2022 (-120%)
-March 2020 (-90%)
-Sept. 2016 (-95%)
-April 2016 (-95%)
-Sept. 2015 (-120%)
So here in Feb. 2026 and BTC at 65k … yes, it could still dip lower short term.
But we are in a zone of historically excellent entries.
Enjoy ⚡️
#bitcoin
Log Pilot retweeted
Fun Fact: Many of the musicians on “Buena Vista Social Club” were in their 70s, 80s, and even 90s when they recorded. Their voices and playing carry decades of Havana’s musical history, and Ry Cooder captured it all in just six days of live, largely improvised sessions.
Log Pilot retweeted
Bitcoin may or may not revisit its support levels in the near term, but if it does: the lower it goes, the less time it is likely to spend there before running up again.
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🚨WORST CASE... we dive into this support rainbow IF we head down. Coincidentally (or not?), the estimated marginal production cost level, electrical cost, etc. (estimated with error) also happens to live in this range, or just above it.
See the TABLE in the figure for the implied support prices if we were to reach them today. With BTC currently around $92K, these represent 27-41% further correction from today.
Historically, if price breaks below the 10th percentile, it would only remain below that level for an average of 36 days in any given year.
For the 5th percentile (what I normally use as "support"), price would remain lower for an average of just 18 days per year.
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💡KEY INSIGHT: The deeper we go into the support rainbow, the lower the likelihood we continue lower, and if those lower quantiles are reached, the fewer days price is likely to spend there. *NOTE* the 1st percentile is exceedingly unlikely.
All support levels built from the most powerful long-term price model in my opinion: the power law (derived here using quantile regression).
The issue with @Strategy / $MSTR isn’t whether the company can outperform Bitcoin from a starting point near 1 mNAV. It’s that any contraction from a price level above 1 mNAV creates far more downside than the leverage from the prefs can make up for.
When MSTR is trading at a premium, even a small pullback makes outperformance extremely difficult.
The math is basically the effect of that contraction (for example, moving from 1.5 to 1 mNAV, or worse) on the share price, versus the impact of the percentage by which the company is increasing Bitcoin per share.
Of course, real-world factors add more drag. Pref purchases that are underwater, dividend obligations, and how those obligations are handled if the stock trades below 1 mNAV for a period of time. Some of the potential responses to that situation could even lead to slight contraction in Bitcoin per share. We’ll have to wait and see how @saylor handles it.
My view is that betting on steady and dependable mNAV expansion belonged to the 2023–24 environment. It still makes sense to buy MSTR common shares at or below 1 mNAV, but the risk of buying (or holding) above mNAV far outweighs the potential reward.
#mstr #bitcoin
