May 18, 2021
Let’s take a look at what the chart of this Chinese stock market bubble looks like, compared to the current era high flyers …
You can see the aggressive rise in both the Shanghai and bitcoin—similar ascent angle. And the decline has already been sharp.
On a related note (given Tesla’s investment in bitcoin), Tesla’s chart looks similar …
And below, we can see the meteoric rise in the price of lumber.
As we discussed in recent Pro Perspectives notes, despite the hot housing market, lumber prices have been disconnected with reality. The supply of standing trees (called stumpage) is abundant. The timber growers are getting no more today for a ton of stumpage than they were decades ago.
This lumber market, like the two above, seems to have had a healthy dose of speculation. And all three are now experiencing sharp declines. And the declines tend to get more and more slippery as speculators try to squeeze through the exit door at the same time.