Last Bear Standing

‘Behind every great fortune is a crime,’ wrote Balzac. On January 29, 2018, YouTube watchers were seeing one.

Down the highway rolled a sleek 18-wheeler,a heavy truck that promised not to destroy the planet. It was the creation of Trevor Milton and his hot-shot company, Nikola.

Trouble was, the video was a fake. The motive force was gravity, not Nikola’s advanced technology. The truck wasn’t running on its own power; it had none. It was just coasting down the hill.

For a while, the stock boomed. It rose to over $2,000 a share in June, 2020. Milton was a billionaire. But it now trades around $1.

A lot happened between $2,000 and $1. Among them, Trevor Milton got a four-year prison sentence.

MarketRealist.com:

A video purportedly showing a zero-emission truck in motion turned out to be fake and a court later found the ex-founder and chairman of Nikola Corporation guilty of defrauding investors by misleading them about the company’s technological capabilities to artificially inflate its stock price. Milton was convicted of one count of securities fraud and two counts of wire fraud. The judge sentenced him to four years in prison along with a fine of $1 million.

According to Wall Street lore, a bull market will continue “until the last bear gives up.”

In 2023, famous bear short-seller Jim Chanos gave up. The Financial Times reported:

One of Wall Street’s best-known bears, Jim Chanos, has told his backers he is closing his main short-focused hedge funds after more than three decades. Chanos is best-known for his bet against Enron, the energy trader that collapsed in 2001… In a letter to investors seen by the Financial Times, Chanos wrote: “It is no secret that the long/short equity business model has come under pressure and interest in fundamental stock pickers has waned.”

Waned?!

Investors not interested in fundamental research?

Why bother with real research when you can get 25% (the S&P gain, 2024) for not doing it? Nvidia rose 171% last year, while the S&P 500 itself was up 25%. Fundamental research would have steered you away from both. In terms of value, neither looked like a good deal.

And this week, Hindenburg Research — which had revealed the fraud at Nikola — has thrown in the towel too. Reuters:

Hindenburg Research’s founder said he would disband the firm whose reports sparked heavy selling by investors and investigations by authorities, wiping billions from the market values of companies including India’s Adani Group and U.S.-based Nikola.

In a normal stock market, some companies do well; their stocks go up. Some don’t do so well; their stocks go down. Researchers try to figure out — in advance — which are which. Good research pays off.

But a normal stock market is fairly stable. As one company earns more, it takes sales from another company, which earns less. As one company cuts costs, it cuts income to other companies. Overall, the stock market doesn’t rise, or fall, very much. Because total purchasing power rises slowly, with GDP… at only around 3% per year. A stock market surge of 25% is unnatural, implausible… and suspect.

But a stock market juiced by the Fed… by hype… by hope… and tech ‘aspirations’… is a whole different thing. Real investors disappear; in come the clowns and gamblers.

How else to explain Fartcoin? The cryptocurrency made its debut in October. By December it had a value of $1.2 billion,which is a lot of pay for something of no known utility. But it was a perfect meme investment,created anonymously and said to have something to do with Elon Musk’s interest in the sounds of flatulence.

No use trying to do research on that one. There is nothing to research — no earnings, no profits, no business, no assets, no balance sheet, no audited financial reports, no CEO or parking lot attendant… no hush money… no lobbying expenses… no hanky panky in the office, no executive travel… no company logo. No nothing. Even gravity seems to be missing.

Maybe Hindenburg was the ‘last bear.’ Maybe not. But when Ursa Ultima finally gives up, we predict, the need for sharp pencils, green eye-shades, sober judgement and a gimlet glance will soon come back into fashion.

More to come…

Regards,

Bill Bonner, Bonner Private Research

~~ Bill Bonner, Bonner Private Research

‘Behind every great fortune is a crime,’ wrote Balzac. On January 29, 2018, YouTube watchers were seeing one.

Down the highway rolled a sleek 18-wheeler,a heavy truck that promised not to destroy the planet. It was the creation of Trevor Milton and his hot-shot company, Nikola.

Trouble was, the video was a fake. The motive force was gravity, not Nikola’s advanced technology. The truck wasn’t running on its own power; it had none. It was just coasting down the hill.

For a while, the stock boomed. It rose to over $2,000 a share in June, 2020. Milton was a billionaire. But it now trades around $1.

A lot happened between $2,000 and $1. Among them, Trevor Milton got a four-year prison sentence.

MarketRealist.com:

A video purportedly showing a zero-emission truck in motion turned out to be fake and a court later found the ex-founder and chairman of Nikola Corporation guilty of defrauding investors by misleading them about the company’s technological capabilities to artificially inflate its stock price. Milton was convicted of one count of securities fraud and two counts of wire fraud. The judge sentenced him to four years in prison along with a fine of $1 million.

According to Wall Street lore, a bull market will continue “until the last bear gives up.”

In 2023, famous bear short-seller Jim Chanos gave up. The Financial Times reported:

One of Wall Street’s best-known bears, Jim Chanos, has told his backers he is closing his main short-focused hedge funds after more than three decades. Chanos is best-known for his bet against Enron, the energy trader that collapsed in 2001… In a letter to investors seen by the Financial Times, Chanos wrote: “It is no secret that the long/short equity business model has come under pressure and interest in fundamental stock pickers has waned.”

Waned?!

Investors not interested in fundamental research?

And this week, Hindenburg Research — which had revealed the fraud at Nikola — has thrown in the towel too. Reuters:

Hindenburg Research’s founder said he would disband the firm whose reports sparked heavy selling by investors and investigations by authorities, wiping billions from the market values of companies including India’s Adani Group and U.S.-based Nikola.

But a stock market juiced by the Fed… by hype… by hope… and tech ‘aspirations’… is a whole different thing. Real investors disappear; in come the clowns and gamblers.

More to come…

Regards,

Bill Bonner, Bonner Private Research

The last time Uncle Sam had this much debt rolling over, interest rates were effectively zero percent. That allowed for a massive expansion of total debt, even as total interest payouts shrank.

Having said all that, why does President Trump want Greenland so badly (other than as retribution for not being awarded the Nobel Peace Prize)?

He insists it’s for national security, but, as I mentioned earlier, the U.S. military already has broad access to the island, as spelled out in the 1951 agreement signed by the U.S. and Denmark. Further, Greenland is under the protection of NATO, of which the U.S. is a member. If Russia or China tried to attack it, Article 5 of the treaty would be triggered, activating NATO forces.

Recent reporting suggests that some of Trump’s wealthiest backers see Greenland not as a military outpost or mining play, but as a blank slate. According to Reuters, influential tech investors—including Peter Thiel and Marc Andreessen—have pitched the idea of turning parts of Greenland into a so-called “freedom city,” offering a low-regulation, quasi-autonomous hub for next-gen technologies.

Japan’s 40-year yield climbed to a record 4.21%.

Japan holds $1.2 trillion in U.S. Treasurys.

When their domestic yields spike, Japanese capital returns home. That means selling U.S. assets: stocks, bonds, ETFs. That selling pressure cascaded through the global financial system.

This mechanism isn’t new.

Social spending in Europe has roughly doubled in the past 30 years. But only in 2025 has defense spending returned to levels last seen when the Berlin Wall was still standing.

Treasury Secretary Scott Bessent estimated on NBC’s Meet the Press over the weekend that the US has spent 22 trillion dollars on its commitment to NATO. Or, roughly two-thirds of the U.S.’s $38 trillion in national debt.
Social spending in Europe has roughly doubled in the past 30 years. But only in 2025 has defense spending returned to levels last seen when the Berlin Wall was still standing.

The last time Uncle Sam had this much debt rolling over, interest rates were effectively zero percent. That allowed for a massive expansion of total debt, even as total interest payouts shrank.

Having said all that, why does President Trump want Greenland so badly (other than as retribution for not being awarded the Nobel Peace Prize)?

Japan’s 40-year yield climbed to a record 4.21%.

Japan holds $1.2 trillion in U.S. Treasurys.

When their domestic yields spike, Japanese capital returns home. That means selling U.S. assets: stocks, bonds, ETFs. That selling pressure cascaded through the global financial system.

This mechanism isn’t new.

Social spending in Europe has roughly doubled in the past 30 years. But only in 2025 has defense spending returned to levels last seen when the Berlin Wall was still standing.