Thought Leadership

Disappearing forests, melting glaciers, and frequent extreme weather all signal to us that the planet Earth is stressed. Today, many primary school students can recite the looming environmental crisis in one form or another. [PDF Link]

Referring to the Bitcoin phenomenon as a craze must, in the eyes of its enthusiasts, reflect my bias already. As a finance academic and long-time market watcher, I can’t help but see the stratospheric Bitcoin price, along with negative 10-year US Treasury repo rates (reaching minus 4.25 per cent) and how social media propelled GameStop’s rise and fall, as a collective symptom of the underlying illness of the global economic system. [PDF Link]

A battle of retail versus institutional investors reached its climax when Melvin Capital Management covered its short positions in GameStop at a signficant loss and had to be rescued. As the price of GameStop soared from US$20 to almost US$500, Melvin Capital Management and other hedge funds with short positions on its shares suffered almost US$20 billion of losses. [PDF Link]

In the recent battle on Wall Street, retail investors soundly defeated hedge fund billionaires at their own game and decimated hedge fund Melvin Capital Management to the tune of several billions of dollars.

Digital technology makes it possible to create cryptocurrencies like Bitcoin. Naturally, the same technology can be deployed to tokenise the fiat monies issued by sovereigns; pools of durable goods; financial claims; or any properties of intrinsic value.

As the Covid-19 pandemic devastated the global economy and created an unprecedented uncertainty in global markets in 2020, an alternative financial vehicle known as Special Purpose Acquisition Company (SPAC) flourished as an innovative capital-raising method. In 2020 alone, almost 250 SPAC initial public offerings (IPOs) raised more than U$81 billion – more than all previous SPAC IPOs combined.