A hedge fund manager put a jar of 1,776 jelly beans in front of a room at Google and proved in two rounds why most investors will always lose money. for free. His name is Joel Greenblatt. Gotham Capital. 50% a year for a decade. he asked the room to guess how many jelly beans were in the jar. First round: everyone wrote their guess silently. no talking. no looking around. the average was 1,771. five off. almost perfect. Second round: people said their guesses out loud. heard each other. adjusted. the average collapsed to 850. same room. same jar. the only thing that changed was influence. He told the room: the second guess is the stock market. everyone knows what they just read in the paper. what the guy next to them said. what they saw in the news. the cold independent guess was better. that is not how the market works. but that is where the opportunity is. Then he showed 20 years of data. the cheapest 20% of stocks averaged 38% a year. the most expensive averaged the least. the strategy is simple. the reason it still works is that people are still crazy. and they always will be. 55 minutes. one jar. still free.

Institutions don't need another yield app. They need infrastructure that fits how they already operate on-exchange, non-custodial, certified. We built the module that does it. Nothing like it exists.

I’m glad the conversation has shifted in this direction…and I am glad others are beginning to understand it. But all this started back in 2008 with QE and “abundant reserve” monetary policy. Both Warsh, and the WSJ, supported this overreaction in monetary policy. It wasn’t actually needed. And counterfactual proof that it worked is nonsense. Before QE, there was an active market for short-term interest rates and banks all had Federal Funds Trading Desks (FFTD). The Fed could influence the rate by adding or subtracting reserves, but banks traded billions of dollars of overnight money every day. After QE, banks are flooded with reserves and all those FFTD’s are gone. There is no longer a market for federal funds. So, where does the funds rate come from? Well, the Fed just makes it up. In short, it is “price fixing”. The Fed literally makes up the cost of money in the short-term. They claim there are market signals, but this signals are distorted by heavy-handed capital and liquidity rules and regulations. So, while the market may influence long-term rates, it has no say in short-term rates. The only way to fix this is do QT until there are no excess reserves anymore and banks start trading federal funds again. We are a long way from that. There are massive losses on both bank books and the Fed’s balance sheet, more losses than the subprime market had in 2008. We have had 40-year highs in inflation. The Treasury funded trillions of dollars of government growth at artificially low rates (basically 0%) The market waits for the Fed to tell it what short-term rates are and has no input itself. This entire QE experiment has been a failure.