Kevin Warsh takes the reins at the central bank, why the AI memory chip boom faces a cyclical reality check, and Evercore’s formula for decoding prediction markets.
Besides the fact that they spam advertisements, I really dislike these prediction markets like Kalshi and Polymarket, and I feel that there’s way too much noise and it’s not always accurate because of the sheer number of bots and insiders (like how that Navy Seal was betting on geopolitical events that he was literally doing a while back and got caught). The main issue for analysis is it’s very hard to differentiate whose a trigger happy gambler versus an informed insider, so, although I’m no expert, stay skeptical whenever you see people referencing surface level observations (like Blah Blah has a 54% chance of happening according to Kalshi).
The AI infrastructure buildout is real. The assumption that hardware demand scales linearly forever is where the risk begins. One efficiency breakthrough and the market suddenly remembers semis were cyclical the entire time.
Every time Wall Street declares a cyclical industry has permanently changed, its usually right before it hasnt.
Excellent post! I think most investors don't do much risk management analysis and are treating Polymarket like a casino. You have to be very careful because very clever traders know how to profit from retail. That said, I love the idea of Polymarket since it provides us asset managers with a lot of information, but you have to know how to distinguish valuable information from price manipulation on prediction platforms.
Besides the fact that they spam advertisements, I really dislike these prediction markets like Kalshi and Polymarket, and I feel that there’s way too much noise and it’s not always accurate because of the sheer number of bots and insiders (like how that Navy Seal was betting on geopolitical events that he was literally doing a while back and got caught). The main issue for analysis is it’s very hard to differentiate whose a trigger happy gambler versus an informed insider, so, although I’m no expert, stay skeptical whenever you see people referencing surface level observations (like Blah Blah has a 54% chance of happening according to Kalshi).
The AI infrastructure buildout is real. The assumption that hardware demand scales linearly forever is where the risk begins. One efficiency breakthrough and the market suddenly remembers semis were cyclical the entire time.
Every time Wall Street declares a cyclical industry has permanently changed, its usually right before it hasnt.
I think the prediction markets section is the most useful part here.
They are becoming hard to ignore as a signal, especially around Fed expectations, but I agree that the context behind the number matters a lot.
Excellent post! I think most investors don't do much risk management analysis and are treating Polymarket like a casino. You have to be very careful because very clever traders know how to profit from retail. That said, I love the idea of Polymarket since it provides us asset managers with a lot of information, but you have to know how to distinguish valuable information from price manipulation on prediction platforms.