Why stocks went down yesterday

No subtitle needed, I think the title summed it up pretty succinctly.

The market just pooped its pants… which means the “exhausted trader” pics will be out in full force this week….

(Bernie Sanders bottom left?)

But what actually happened?

Well, the short answer is incredibly boring unless you knew all the boring details, then it somehow becomes interesting.

But I’ll split the difference:

Our central bank (controls the money) is the Fed.

Japan’s central bank is the Bank of Japan. (Much less cool than THE FED 🥊 .)

And for reasons that are far too ridiculous and quite frankly still unclear to me… the Bank of Japan just concluded 8 years of negative interest rates.

Which means, to put it simply, you used to be able to borrow money very cheaply in Japan, then invest in the United States where interest rates (and thus expected returns are higher).

If that doesn’t make sense that’s the point. If it’s boring THAT’S THE POINT.

It’s meant to be boring + confusing so you tune it out.

That’s why I have to dance like a chimpanzee in this SubStack just to keep you animals entertained.

But I digress..

You see - I started following the markets intently in 2015 when I beginning my career in finance at Barclays Investment bank in NYC. Ironically, my internship was at the old Lehman Brothers building, which was ground zero for the financial collapse just a decade earlier.

And in addition to watching naked men in Cowboy hats have standoffs with the police in Times Square (that’s true), I got to observe a lot of other sketchy sh** that made the naked cowboy man look reasonable.

Once you get past all the complicated lingo, complex math, and impenetrable egos that are synonymous with finance, you realize that truly, no one has any clue what is going on.

The “exhausted trader” archetype exists because they’re constantly attempting to make sense out of something that is inherently senseless (or at the very most, rigged).

The markets are a casino, the odds are already set by folks that you don’t even know exist, and the rest of us are just playing the slots drinking cheap vodka to numb the pain.

Don’t believe me? Scroll back up to the pictures and COMPARE THEM TO THESE!!!!

(Lol the caption “stressed man losing money” 😂)

………….the point is, the Bank of Japan raised rates the eensiest bit, ending the negative interest rate experiment, and now all of those savvy young gamblers who cooked up this brilliant scheme are forced to unwind these trades or take massive losses.

The problem is there’s a lot of folks and only one exit… and the more they lose, the more they have to sell, which makes prices go down even further.

(If you’re really interested in this, this X post does a great job summarizing what happened.)

“Michael, you’re a sweet guy man, but I subscribed to this for music business advice…...”

A moment, please..

Some real things are happening here folks.

The financial system is taking some serious shocks.

The world (at least feels like) it’s on the brink of war.

Our political leaders are like the Muppets if the Muppets were 150 years old.

My point: the world is changing, and what has worked in the past won’t work soon.

Things are moving quickly, which means the artist who plants seeds now will have a little something something to harvest come war-time 😎 .

So when you read these headlines… don’t just bury your head in the sand.

Ask yourself “what does this mean for my audience? How does this impact my supporters? How can I use this as an opportunity to connect?”

Over time, you’ll see how the successful artists are actually the ones who capitalize on what their audience actually wants and cares about. So if you’re never asking yourself what they actually care about… then how would you know?

Folks are scared right now, and rightly so. They want connection + transparency, not just mindless entertainment and pre-save campaigns.

Your marketing strategy needs to align with the broader macro trends if you want to be relevant while you’re still alive. (Unless you want to die unappreciated, which apparently no one is interested in anymore.)

With that said, here are some macro trends I’ve noticed in the music community that you should take advantage of: 🕵️‍♀️

1. Everyone should be focusing on community. For real though. You gotta find ways to actually connect with people if you want to build trust right now. There’s a difference between starting a Discord server and building an actually community. Trust me, my Discord server died a long time ago ☠️

2. Human flaws are cool now. AI will soon make everything better than us, which means the only thing we have left to ourselves are our flaws. Mark my words, making mistakes will be the new secret handshake among humans. If you can’t bear to make a mistake, then it’s time to get therapy cause you’re gonna need to soon if you want people to notice you.

3. Play for your people. So many artists/bands/businesses nowadays ignore their real audience because they aren’t the audience they want. Let me repeat that. So many artists and businesses always ignore their real audience because they aren’t the audience they want. Who shows up is who you play for. That is how you grow. If the guy who sold you weed is your only fan, then you better give the man a good show.

There is some crazy shiz happening right now and people need something to hold onto….. like Woodstock during Vietnam (or whatever, I wasn’t alive.)

The point is, take a moment to stop thinking about how you can get your audience to do something, and connect with them for real. They will reward you for it.

For example, I usually end my SubStacks with a “Subscribe” button and a desperate plea.

But this time I’m just here….. to connect.

……

🤓

So anyways, that’s why stocks went down.

- Michael from Mad Records