BUBBLES BURSTING

It is an extremely stormy and unwelcoming day in Paradise. Howling winds incessantly whipping majestic, coconut-laden palm trees, once proudly piercing into the sapphire blue skies, have unexpectedly brought freezing temperatures to Nassau.

‘17 degrees-freezing’, that is, to put things into perspective.

Soft, balmy breezes caressing the mirror-like, calm, turquoise Caribbean sea; crispy reflections of an iridescent chilled Pinot Grigiogreen in the tacky Louis Vuitton shades of over-confident, invincible Crypto Billionaires, have all miraculously and suddenly vanished; replaced by a raging sea with angrily crashing waves now ravaging the powderwhite sandy beaches, devoid of human life.

How ‘real’ were the US$200 Billion which Musk lost, to begin with?

Even the fluorescent angel fish, once toying under the glassy, sun kissed surface of our serene waters, have all but disappeared.

The weather seems to be eerily evocative of the new economic climate, not just in The Bahamas, but globally.

Flows of seemingly never-ending ‘Goldilocks’ days of perfect ‘everything’ have been brutally interrupted by a much overdue and needed ‘wakeup call’ from reality. A reality nobody believed existed anymore, a reality so distant, that it was painful to realize that we had actually stopped to live and adhere by healthy rules and standards of the past, guided by some kind of sanity.

Instead, we continued and moronically rejoiced to live in a self-created fantasy world, based on utopian and completely unsustainable premises and expectations.

Free money, compliments of Central Banks and little or no corporate accountability, fueled fantasy projects supported by fantasy valuations.

It was all the rage. Whoever refused to jump on Sergeant Peppers magic mystery tour bandwagon, was ridiculed and belittled, left behind to choke in the dust of immense clouds of fake assets and fake money spewed out by fake financial geniuses.

Like a tornado, FTX had ripped through the economic and social fabric of this tiny island nation, leaving debris and suffering behind. A kind of ‘Schadenfreude’, now almost ubiquitous and justified, has descended on the world, after armies of arrogant, young ‘know-italls’ had their self-invented Billions go up in smoke, their Lamborghinis and Gulfstreams confiscated, forced to swap $50 Million beachfront houses for rat infested prison cells.

These financial tsunamis sadly are but the tip of the iceberg of an economy, which has irresponsibly created monster and zombie companies boasting mind-blowing valuations, based on mysterious and questionable methodologies and largely wishful thinking. A kind of musical chairs game, which would come to a screeching halt, once the music stopped. And by God, is it silent now!

‘Wunderkind’ Elon Musk losing $200 Billion. The press makes it sound almost like an achievement, a new Guinness book of world record: ‘The man who has lost most money in the world, ever…’. Quite an achievement it is.

If your wealth is built on astronomic and unsustainable long-term earnings multiples, accepted and cheered by investors blindly racing towards the inevitable cliff in a 24/7 champagne and caviar orgy, then there is only one certain outcome: a blow up.

When 12 months old tech start-ups without earnings or assets and no certainty of ever achieving any revenues or tangible value for their shareholders, are worth more than a Ford or a General Motors company, then we have reached a ‘Sodom and Gomorrah’ moment, which will cost us dearly.

TESLA at least has a real business and generates real earnings. If, however, a valuation of US$1.1 Trillion based on quarterly revenues of US$3.3 Billion is healthy and justified, was more than questionable a year ago and the recent market correction has provided us today with a clear answer.

How ‘real’ were the US$200 Billion which Musk lost, to begin with? How real were the FTX tokens and the company’s share price? How real is anything, if it is not based on sane, proven and healthy assumptions, but only on utopian dreams of Babylonic proportions?

We are waking up with a huge hangover from a nightmarish dream of never ending easy riches and wealth, devoid of any kind of risks, threats or hardship or loss.

I’m afraid this is just the beginning of a long and painful hangover, which will hopefully provide some overdue humility and appreciation for true labor and toil, or ‘Ponos’, as advocated already by Sophocles in ancient Greece as far back as 400 BC. The Greeks did know a thing or two about creating empires. Real ones.