'In February 1637, at a routine auction, buyers simply stopped showing up to pay the exorbitantly inflated prices. The market abruptly collapsed, and prices fell to just a tiny fraction of their peak value within a few weeks.'
The tulip collapse was not a fundamental repricing. It was a liquidity event. The asset did not change. The marginal buyer disappeared. What looked like a store of value was revealed, overnight, to be a market of one direction with no depth on the other side.
Krishnam's central observation in Market Tremors is that every major dislocation in recorded market history shares this architecture.
Price is not discovered in equilibrium
@TrustlessState. It is discovered at the margin, and the margin is always thinner than the chart suggests. The 1929 margin calls, the 1987 program selling cascade, the 2008 repo freeze: each began not with a fundamental deterioration but with the sudden absence of a bid.
The asset was the same asset it was the day before. The clearing mechanism was not.
This is why metrics built on marked assets are structurally incomplete.
They measure the numerator at the last traded price. They have no opinion on what that price becomes when the auction room empties.
The structural answer is not to avoid exposure. It is to own the convexity that pays when the room empties. Long volatility is not a hedge in the portfolio insurance sense. It is the only instrument that is explicitly long the gap between quoted price and clearing price.
Tulips were not a story about greed. They were a story about what happens to any asset when the bid is structural rather than fundamental.
Fade D2 at your own risk. 30 straight positive months.
steady lads
โข 32yr of dividend coverage on an asset that yields you zero.
โข coverage paid by the ATM, not the stack. At 115
$MSTR ?
โข the 11โ
pref at 89 has no bid, I love you
โข "volatility is vitality" until the pref needs a bid
shock absorber, or Su Zhu special?
what's your read on
@saylor?