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Ripple Effect

A Market In Search of The Greatest Fool

Loading ...Addison Wiggin

July 24, 2025 • 1 minute, 21 second read


margin debtmarket valuation

A Market In Search of The Greatest Fool

Q: What happens when you close down most public spaces, give everyone $1,200, and only leave the stock market open?

A: You turn Wall Street into a giant casino.

One of the fascinating cross-currents of the pandemic era was seeing that experiment play out in real time.

For millions who could work remotely, the extra $1,200 was like getting capital to buy lottery tickets.

That money went into stocks like GameStop, as well as many SPAC firms – shell companies looking to take small, high-growth opportunities public.

By the time the mania peaked in late 2021, margin debt was at an all-time high as institutional money raced to catch up with retail investors.

But new all-time high margin debt is back today:

Turn Your Images On

Margin debt is now back above its 2021 peak

We had a bear market in 2022, as rising interest rates sucked marginal capital out of the market.

Along the way, we saw that many investment opportunities of the time were simply one buyer getting in ahead of the next buyer…. in search of the “greatest fool” who bought last.

~ Addison

P.S. Given the resurgence in “meme stocks” the past few weeks – Opendoor, Kohl’s – it may be a sign of market froth. And it may take a 5-10% pullback to get some sanity back in the markets.

If you’re leveraged in this market. Don’t be. You’re in a crowded trade. When a trade is crowded, getting to the exit first is on everyone’s mind. Panic now and avoid the rush.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)


The Useless Metal that Rules the World

August 29, 2025 • Dominic Frisby

Gold has led people to do the most brilliant, the most brave, the most inventive, the most innovative and the most terrible things. ‘More men have been knocked off balance by gold than by love,’ runs the saying, usually attributed to Benjamin Disraeli. Where gold is concerned, emotion, not logic, prevails. Even in today’s markets it is a speculative asset whose price is driven by greed and fear, not by fundamental production numbers.

The Useless Metal that Rules the World
The Regrettable Repetition

August 29, 2025 • Addison Wiggin

Fresh GDP data — the Commerce Department revised Q2 growth upward to 3.3% — fueling the rally. Investors cheered the “Goldilocks” read: strong enough to keep the music going, not hot enough (at least on paper) to derail hopes for a Fed pivot.

Even the oddball tickers joined in. Perhaps as fittingly as Lego, Build-A-Bear Workshop popped after beating earnings forecasts, on track for its fifth consecutive record year, thanks to digital expansion.

Neither represents a bellwether of industrial might — but in this market, even teddy bears roar.

The Regrettable Repetition
Gold’s Primary Trend Remains Intact

August 29, 2025 • Addison Wiggin

In modern finance theory, only U.S. T-bills are considered risk-free assets.

Central banks are telling us they believe the real risk-free asset is gold.

Our Grey Swan research shows exactly how the dynamic between government finance and gold is playing out in real time.

Gold’s Primary Trend Remains Intact
Socialist Economics 101

August 28, 2025 • Lau Vegys

When we compare apples to apples—median home prices to median household income, both annualized—we get a much more nuanced picture. Housing has indeed become less affordable, with the price-to-income ratio climbing from roughly 3.5 in 1984 to about 5.3 today. In other words, the typical American family now has to work much harder to afford the same home.

But notice something crucial: the steepest increases coincide precisely with periods of massive government intervention. The post-dot-com bubble recovery fueled by Fed easy money after 2001. The housing bubble inflated by government-backed mortgages and Fannie Mae shenanigans. The recent explosion driven by unprecedented monetary stimulus and COVID lockdown policies.

Socialist Economics 101