I Found It: The Ballsiest Zoom Move of All-Time

Zoom confidence, Labor shortage, Commodities surging, The metaverse, ??????????

Welcome back, Idiots!

I write about the markets here often, but I am by no means an expert in finance (or anything for that matter). I do get my information from experts, though.

My go-to for knowing what’s going on in the markets is Grit Capital. Smart, funny, and edgy market insights every Friday morning (quick weekly wrap-up), and Sunday night (the meat and potatoes).

It ain’t your daddy’s financial newsletter.

Let’s get to it.

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  1. AYFKM: I Found It: The Ballsiest Zoom Move of All-Time

  2. ECONOMY: Nobody Wants to Work

  3. COMMODITIES: “Nothing to See Here!” - Jerome Powell (probably)

  4. TECH: WTF is the Metaverse?

  5. ???????????: ¯\_(ツ)_/¯



AYFKM

I Found It: The Ballsiest Zoom Move of All-Time

Distracted driving is dangerous. I think we can all agree on that.

You’re driving along minding your own business. Suddenly, some asshole veers into your lane and you have to channel your inner Dominic Toretto1 just to avoid them.

Then you look over and see this:

How many times has that happened to you? AT LEAST a billion, easy.

That’s why discussing additional penalties for distracted driving was on the agenda this week for Ohio lawmakers who met on a publicly streamed Zoom call.

Now, we’ve had plenty of people doing inappropriate things on Zoom calls over the last year, but this one is by far my favorite.

State senator Andrew Brenner decided that this meeting (about distracted driving) was the perfect time to test out a fancy new background.

Look at the confidence. This man has cojones.

That is not the look of a man who thinks there’s any chance that he’s not 100% pulling this off.

Just cocky as shit pretending to look around his living room (for traffic) like he’s not wearing a literal seatbelt.

Safety first!

In his mind, this plan is working. Flawlessly.

Absolutely nobody is onto him.

We should all aspire to have this level of confidence one day.


ECONOMY

Nobody Wants to Work

Economic experts were anticipating a BIG jump in the jobs numbers for April. The consensus estimate called for around 1M jobs added. Some were as high as 2.1M (above).

The actual number reported Friday morning = 266k. That’s no bueno.

There are several contributing factors, but according to the Labor Department, there are more job openings now than there were in March before the pandemic hit.

Yet the labor market looks like this:

So why aren’t people working?

Some say they still fear getting or spreading COVID. I don’t think that excuse will hold for too much longer.

Others are parents (mostly mothers) who are unable to work due to a lack of child care services. A serious problem that will hopefully be alleviated soon. Right now roughly 60% of schools are fully reopened.

And then there are those for whom it is financially prudent not to work. Right now, many receive more in unemployment benefits than what they’d earn if they got a job.

“And anyone who previously made less than $32,000 per year is better off financially in the near term receiving unemployment benefits, according to economists at Bank of America.” - Bloomberg

That can be interpreted in 2 very different ways: either the minimum wage is too low, or the benefits are too high.

No matter which flavor of crazy you subscribe to, the problem remains constant: people aren’t working.

“I really enjoyed what I did. If the government is going to pay you to stay home, you’re going to do that unless that job you really want comes along.” - Lorne Zaman [lost job; not looking]

P.S. 1 hour and 46 minutes after the jobs report:

P.P.S. Economist Aneta Markowska’s estimate missed by 1,834,000. She doubled down on Friday.


COMMODITIES

“Nothing to See Here!” - Jerome Powell (probably)

About a month ago Fed chair Jerome Powell told us that the price increases we have been (and still are) seeing were temporary, due to supply lagging the surging demand of reopening. He called this “transitory” inflation.

Let’s check in on some commodities.

If you were thinking about building that treehouse, or putting up that new fence, right now is probably not the best time.

The last price of lumber was $1,670.50 per 1000 board feet. That’s 4x over the last year.

The lumber industry typically gets hit hard during financial crises and recessions. Mostly due to a lack of homebuilding. Everyone’s broke LOL.

So when the pandemic hit, they followed the crisis playbook and liquidated their inventories to avoid losses. They were anticipating little to no demand.

It turns out 2020 was very different from 2008 and 2018. Like, completely opposite different.

Cheap money plus a desire for more space in quarantine caused a surge in demand for new homes and home renovations. Sawmills have not been able to catch up.

Hindsight = 20/20.

Corn is up about 50% so far this year to $7.50 a bushel. It’s at its highest level since 2012. Last month’s increase of 16% was the biggest one-month jump in 2 years.

The main reason is an unexpected spike in demand in China due to a swine fever outbreak.

But corn is used for everything: livestock feed, starch, sweeteners, oil, beverages, alcohol, fuel ethanol…

Prices could remain at these levels through the summer. It’s a great time to be a corn farmer!

Copper soared to an all-time high this week, rising as high as $10,440 a ton.

Manufacturing is on the rise with major industrial economies around the world recovering and (re)building, increasing demand. Take the big infrastructure plans here in the US, for example.

Climate-friendly efforts to cut carbon emissions rely heavily on copper, as do electric vehicles (4x more than a normal car). These types of efforts are on the rise.

It should be noted that copper mining is not easy, nor is it cheap.

Steel is nearly triple its 20-year average at around $1,500 per ton.

The same thing that happened to the lumber industry happened to steel.

It was also hit hard by the rapid recovery of the auto industry.

Lumber, corn, copper, and steel are just 4 examples. There are many more: gas, chlorine, chips, etc.

An increase in the prices of commodities and raw materials = an increase in the prices of consumer goods. Here’s a list of 28 companies that are hiking prices in response.

Is this all the Fed’s fault? Of course not.

But even Warren Buffet is telling us that this isn’t “transitory.” It’s substantial.

TL;DR: Call it what you want. Prices are rising.


TECH

WTF is the Metaverse?

“The metaverse is a shared 3D space where users can see other people and share experiences. It can mirror the real world, or can be a total fantasy. That’s up to the user and both versions - and everything in between - will be supported.” - RedSharkNews

Got it? No?

Let’s try a different way: think Ready-Player-One…

Except not just for video games…

Basically, the Metaverse is what you get when you smash together augmented reality (AR), virtual reality (VR), artificial intelligence (AI), extended reality (ER), 5G, and a whole bunch of other technologies that we’re all too dumb to understand.

“So to some users it will be like being inside an actual computer game. To others it will be the way we do our shopping. To industry, it will support micron-accurate simulations of production processes. To a surgeon, it will allow them to actually be inside a human body.”

I’m just finding out about all of this now, but apparently, it’s something that nerds have been working on for years.

Fortnite creator Epic Games just raised over $1B to help create one ($200M of which came from Sony.)

Zuckerberg’s Facebook Horizon is currently in beta (invite-only), but it’s one of the tech giant’s next moves.

Nvidia has been working on Omniverse, which simulates real-world physics, for 4 years. Their goal is to create a digital world of the physical world, where every single building has a digital twin.

What exactly the metaverse will look like varies wildly depending on who you ask.

From my extensive research (Google), a common theme seems to be that only 1 metaverse can exist for the metaverse to be possible at all.

That seems reasonable…we call it “the” universe, not “a” universe…

But with so many companies working on their own interpretation of such an abstract concept, I suspect the true Metaverse is a lot further away than many would have us believe.

“The science-fiction metaverse is near.” - Jensen Huang, Nvidia CEO

More likely is a lot of companies creating their own “metaverses” by slowly rolling out features and services that incorporate all of these technologies (like Amazon Salons).

At least in my opinion.

Though I will admit, after reading all about it and typing all of this, I still don’t know what the f*** the metaverse is.

I assume that you, the reader, are also confused.

For that, I apologize.

TL;DR: The world is further distancing itself from reality.


TECH

Jetpacks Are Here and They Are AWESOME!

Richard Browning is one of my new favorite people. He’s the founder and CEO of Gravity Industries, a company that has been working on making jetpacks a reality for years.

He’s also their chief test pilot.

How do you even get into the jetpack game?

First, make sure you inherit an obsession with engineering. Do this by having your grandfather be a wartime pilot who later served as the CEO of a helicopter company.

Then make sure his son (your father) grows up to be an aeronautical engineer.

Then spend your childhood tinkering in your father’s (the aeronautical engineer) workshops until you get a job working for big oil.

Then make a ton of money by creating an innovative GPS tracking system for your big oil employer (BP).

Then quit your job and satisfy your inherited obsession by making the mother of all online impulse purchases: A JET ENGINE. Shipping & handling not included.

Then take your obsession even further by throwing hundreds of millions of dollars at it until you have a functional Jet Suit.

Boom, easy.

Basically - be Tony Stark.

This week Mashable reported that Browning and a bunch of British Royal Marines teamed up to test the Jet Suit in some maritime boarding exercises.

The tests were very successful.

How much does one cost? $430,000.

At least we can dream:


IDIOT BUFFET
📈 (Don’t) Fear the Reaper: How inflation can destroy returns [Grit Capital]
📊 My neighborhood is about as politically diverse as I expected…check yours at NYT.
🤦‍♂️ California wants to get rid of advanced math classes so as to not upset the dumber kids.
📈 You will soon be able to own the Declaration of Independence...sorta...
🤦‍♂️ Tiffany & Co. wants to make men’s engagement rings a thing.
Jeff Bezos got himself a 417-foot new toy (it’s a Y721 superyacht).
The largest oil pipeline in the US has to be shut down after a cyberattack.
🦏 I bet you don’t know how rhinos are transported (it’s upside down).
Florida bill wants to fine social media platforms for banning politicians. Except for Disney, they get a pass.
🎨 Vincent van Gogh. Pablo Picasso. Leonardo da Vinci. BOB ROSS.

Thanks for reading and have a great week!

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