Last Thursday morning, these were some of the headlines on the WSJ web site:
Beyond Meat Goes Meme: Traders Pile Into Struggling Faux Meat Shares
NHL Deal with Kalshi, Polymarket Adds to Pressure on Sports-Betting Companies
Other top stories included a 37 percent drop in profits at Tesla and an attempt to unravel the “circular deals” in the AI world.
The claim that Wall Street is gambling-adjacent is something I used to associate with cranky old people. Now I am old and cranky.
I am particularly anxious to take a swipe at “prediction markets.” These were touted as ways to get informed analysis of policy decisions. Maybe we would get the market’s opinion of a proposal to freeze rents in New York City. Or so it was claimed in theory.
But actually-existing prediction markets do not have trading volume in anything that could provide information to business leaders or policy makers. They are just outlets for gambling on sports and elections.
None of the stories last Thursday were about Bitcoin. But I still consider that to be the realm of gamblers and scammers1.
The price-earnings ratios in the stock market keep getting higher and higher. For earnings, many of the largest stocks rely on deals with OpenAI, an enterprise whose spending far exceeds revenue, and whose organization structure is not yet conducive to operating as a public, profit-seeking business.
Stock market investors gamblers are making bets on the AI revolution. But do they really know something? I doubt it. No one knows who will end up reaping the benefits of AI.
I think that much of the financial excesses arise from the explosive deficits of governments, primarily the U.S. federal government. I see deficits as a form of money-printing. Some of the printing is called “bonds,” but it all amounts to artificial paper wealth.
Those of us who own government bonds see assets in our portfolios. The unfunded liabilities of government, including promises to future retirees for health care and Social Security, as well as principal and interest on existing government debt, are not listed in your personal financial statement.
In short, we are awash in phony paper wealth, and this is fueling speculation and gambling.
Have a nice day.
If MSTR isn’t the most gigantic scam of all time, I don’t know what is.
“Now I am old and cranky.” There are no solutions; only tradeoffs.
I’ve been taking a welding class at a community college. For eight hours per week, I shut off my phone and practice joining metal together. Surprisingly, it cheers me up. It forces me to focus on a simple yet difficult task.
This is a tangent, my apologies. But one new - or soon to occur - gambling-related (thus gambling-adjacent-market-trading) development could be what happens when use of the new GLP1RA peptides becomes more widespread. Basically, under the influence of this stuff, many problem-gamblers will suddenly stop gambling. Let me explain.
For context: this stuff is genuinely revolutionary in terms of capacity to change lives and whole societies, though most people are either unaware or have not taken the reported results and their potential seriously, and the situation fits with Gibson's, "The future is already here — it's just not very evenly distributed." It's completely plausible that serious obesity will be more or less eradicated in the next decade, and that the "human figure aesthetic environment" in countries like the US with a lot of very fat people will become almost unrecognizable soon.
But one unexpected common side-effect of these substances, especially retatrutide (still in very-promising trials, see Eli Lilly's aptly-named TRIUMPH study) is some kind of significant interference in the brain's dopamine-release-and-craving system (probably in the mesolimbic and tuberoinfundibular pathways). In this way they are almost the opposite of the prolactin-suppressing dopaminergic agonists like cabergoline or ropinirole, which, like testosterone, sometimes cause pathologically obsessive conduct of high-risk-high-reward behaviors.
Suppression of appetite or "food noise" (the constant desire to snack, never feeling full) turns out to be just one manifestation of the broader impact. On the downside - and in combination with the impact of significant calorie-deficit - it seems to produce anhedonia (sometimes even anorgasmia), lower motivation and 'drive', and lower libido.
On the other hand - and perhaps one day a target for "off-label prescription uses" - people who were just trying to lose weight are frequently reporting almost miraculously sudden cessation of impulsivity, reckless thrill-seeking from risky activities, and addiction-like desires and bad habit vices they've struggled with for years. The experience reports include everything from serious alcoholism, to speeding on motorcycles, to chronic abuse of other substances to major problems with sex, pornography and gambling, which really do stop, and do so all of a sudden.
My joke is that these are the most "Anti Las Vegas" substances ever discovered. I wouldn't want to, um, bet against, the power of the various Las Vegas lobbies, but I'm positive they don't yet see this problem (for them) coming. By the time they do, at minimum they'll try to fight off-label prescriptions, or else it'll simply be too late and/or they'll start handing out free testosterone shots and Adderall and Ropark pills like candy. My guess is that the trading platforms would be doing this for their VIP customers already if it weren't for the fact those same VIP customers are probably sourcing the stuff for themselves already.
Now, consider the wild implications for a moment. Human cultures (and some genetic evolution) have fought uphill battles and struggled mightily to control vices and cardinal sins for thousands of years, and I think it's fair to say that despite all that, they still have had only limited success, requiring very powerful social measures to produce outcomes with plenty of people falling through the cracks appropriate to their particular weaknesses, whether its food, sex, gambling, etc. It has just been part of the tragic human condition that there has never been any sudden quick fix without frequently debilitating side-effects. Until now!
Now, something that powerful is genuinely on the civilizational-discontinuity level of antibiotics. Or AI. We're way beyond "Average Is Over" understatement now. The near future is gonna be truly shocking in a number of ways.