Happy All Saints Day, y’all.
Picking up where matters left off, last week, I had declared a (perhaps permanent) moratorium on risk management.
And, seeing as how today’s a holiday, I’m extending the ban. At least through our annual ritual of honoring all them marching saints.
However, the ban applies exclusively to what I like to refer to as the actual world, and specifically not, to the metaverse.
The latter comes to urgent prominence, of course, with an announcement out of Cupertino, CA that the local corporate colossus is changing its name. Yes, as everyone is now aware, what was once Facebook is now Meta. In one short month, it will also be swapping out its current ticker: from the handy FB (which, at last count, had been fluidly typed a bajillion times into Bloomberg terminals) to the decidedly clunkier MRVS.
The company had been teasing a modification of its handle for several weeks, and I’m thinking: a) it’s a deflection from the political pounding they’ve been taking on all sides; and b) that they’d make a more obtuse move with their modified branding. Maybe something like “VisageManuscript” or swapping in a symbol and calling themselves “The Company Formally Known as Facebook”.
But I was wrong. Facebook is out; Meta is in. Sorta like Google becoming Alphabet. Only different. As the name suggests, Facebook, er, I mean, Meta, is pushing its big, fat, chin and proboscis into the metaverse – an on-line only alternative domain in which the real-world heels of All God’s Children are anticipated to cool.
‘Round those meta-parts, one can buy houses, build schools, malls, playgrounds and other trappings/accoutrements of fine living, and adopt physical appearance based upon avatars of our own creation (on balance, a big upgrade). There, you can bring up your kids, attend ballet recitals and run for local offices. Bands are gonna blow the joints apart with, er, live shows. I’m not sure if they’ve figured out how they’ll work in the whole youth soccer thing, but I promise you this: Zuck and his crew are on the case.
It’s also presently unclear whether real dollars, crypto or meta-bucks will be the ‘verse’s legal tender, or, in the case of the first two of these options, how the whole taxation thing is gonna work. Presumably, though, public revenuers at every level will take a focused interest as all this unfolds.
No one in my field of awareness would accuse Zuck of having fallen off the turnip truck, so, I’m thinking, maybe there’s more to this whole meta deal than I first imagined. Zuck is making a pretty big bet here, after all, and has won more of these than he’s lost.
So maybe it’s time to hop on the meta train — and disembark to that shining City on the (virtual) Cloud.
But doubts, linger, particularly that inconvenient reality that it may take some time for the meta to entirely obliterate the physical, and, in the meantime, challenges associated with the latter, will, unfortunately for most of us, abide.
Take, for example, the recent performance of the stock that, for the next month at any rate, will still trade under the ticker FB. It rallied a bit – presumably owing to its metamorphosis — on Friday, but on the whole, Zucky’s balances have seen better months:
If I’m reading this chart correctly, MZ is > 20% poorer today than he was around Labor Day. And that’s to say nothing about all the hurt feelings he’s had to endure. It seems, lately, that everyone hates him, with half of the country upset that he funneled nearly a half bil into the 2020 election, and the other half absolutely incensed that he’s not doing more to suppress content supplied by those that disagree with elements of the current orthodoxy.
Even his employees are mad at him. What’s a poor Harvard Drop Out/centi-billionaire to do?
Answer: create a metaverse.
And do so quickly — because the non-meta realities that we confront are clearly less pleasant. Q3 GDP just dropped, at a disappointing 2.0%, with it’s inflation gauge clocking in at the highest in more than three decades. On a happier note, a huge blowout in wages was a major contributing factor:
This here graph should be considered glad tidings, and I am not here to kill the buzz. But as everyone knows, the hiring situation in this country is at near-desperation levels. Sooo many job openings, more than ten million of them at last count.
There are those among us (for instance, Janet Yellen) who would characterize this as a high-class problem. But with Frisco gas at $4.75, empty shelves, ship-clogged ports of entry and other shortages, I’m not entirely convinced.
These problems, presumably, don’t exist in Zuck’s metaverse, where ports can be emptied, stores stocked, and petrol aplenty created – all with a click of a mouse.
The metaverse also seems to have solved the problem of rising crime rates. There is no crime in the metaverse. But there is crime here on terra firma, in towns like Minneapolis, which, improbable it would seem, is actually gonna hold a vote on Tuesday to determine whether or not it will eliminate its police force in its entirety. Please join me in hoping for the best – in the town that gave us 
.
I won’t prognosticate, though, because I must also acknowledge, here in the land where falling trees actually demolish cars, that last week’s prediction of blowout earnings for the big tech high rollers was less than a perfect strike. These reports came to us as a mixed bag, and, overall, as a disappointment.
Investors didn’t seem to give much care, though, pushing our equity indices to yet another series of dubious highs.
Aside from hiring out fabulous architects and interior designers to build new virtual domains, all human focus will presumably turn to this week’s FOMC meeting, where the powers that be are expected to formally announce the dreaded taper. They are doing so at an interesting pass, with an economy losing steam, but with upward price pressure at generational highs. With a wonky, undefined, and morphing reconciliation bill looming. With global bureaucrats agreeing to minimum taxation levels and seeking victory laps on fossil fuel obliteration — amid what may materialize as crisis-level heating fuel shortages across the globe.
Meanwhile, the bubbling crude and its by-products are not the only greasy commodity in short supply. This morning, I had a glance at the latest from the Palm Oil market:
It’s just possible that some of my readers are unaware that Palm Oil is the most consumed edible oil in this real world of ours. The Asians cook with it more than we do, but you’ll be happy to know that we find it in domestic products including lipstick, detergent, and ice cream.
It’s a three-bagger since the lockdown.
It faces a real-world supply/demand imbalance at the moment, but no such issues exist in the metaverse, where Palm Oil emerges on the third drop down menu from the home page.
Considering all of this, while I’ve switched off risk in the legacy markets, I’ll not be idle. I am focusing on my meta risk algos and am pleased to report that there and thus far, all factor models and scenario analyses yield unilaterally positive outcomes.
The details, of course, remain a personal trade secret, and won’t be revealed until a point of my own choosing. I’m in no hurry, though, because even the latter-day Moses of Cupertino is gonna need some time (and a pant load of Benjaminz) to deliver us from our present bondage and into the promised meta land.
In the meanwhile, the rest of us should probably do what has always best suited us: keep out eyes wide open and our feet a’moving.
And, in closing, while I’m not certain if there are saints in the metaverse, I certainly hope there are. And, today at any rate, I’ll include them in my celebrations, as I await their marching in.
TIMSHEL