2025 may go down as The Year When Everything Happened in No Particular Order, tracking William Gibson’s famous line that “The future is already here, it’s just not very evenly distributed.”
Those expecting inflation will find it, those expecting deflation will find it, those expecting a stock rally will get a rally, those expecting a crash will get a crash, and so on......
Speaking of swans, the tremendous speculative fervor that has become the dominant force in global markets is now so taken for granted, perhaps it is a Gray Swan nobody recognizes.
Huge fortunes have been made by betting on speculative bubbles rising higher than prudence suggested was possible.
These gains fire the imaginations of speculators large and small, and so any rally in a speculative asset--which now includes every asset--will be chased with great confidence.
The desire to speculate on something, anything, is still immensely strong. That desire will manifest in one asset after another, inflating new rallies and pulling in punters far and wide.
But the tides are relentless and any such speculative frenzy is unlikely to last as long as the proponents expect.
Machiavelli's wisdom applies here: "The wise man does at once what the fool does finally."
In other words, perhaps there will be no sure things anywhere in the speculative universe.
It may take multiple crashes to whittle away at this speculative fervor. The forces building sand castles will gain the upper hand for a short while, and spectacular gains will be reaped, and then the tides will erode the sand castles and the valuations will fall.
The process of draining the pool of speculative fervor takes time. If there is anything that's a sure thing, it's that the pool of speculative fervor will be drained, as impossible as that seems in this moment in history.
