Thread by @contrarian8888

Phenomenal thread.I agree fully that the old playbook has changed and oil companies are too focused on paying down debt and being rewarded by investors as opposed to drilling more. This is important and clearly that would have +ve cyclical ramifications for energy to do well. BUT

https://twitter.com/BvddyCorleone/status/1370413136608645123

I’d add that there is a labor market hysteresis focus by Yellen and the Fed whereby in many of their speeches they have focused extensively on stimulating to maintain full employment-ie the benefit of maintaining full employment numbers is far

Better than that of any inflation. In fact even Brainard mentioned that the we need to accommodate inflation and not react in a Phillips curve framework. Couple this exceptional fed monetary looseness + fiscal stimulus galore- ask yourself will the Dems allow next year to have a

Big fiscal gap or will there be more and more fiscal packages- i presume the latter. Add in the fire from a TGA liquidation and you have exceptionally boom type conditions + benefit from huge pent up demand/excess savings etc etc. Now everyone thinks this will just last 1-2

Quarters and then we will go back to the deflationary view we have been in for the last 12 years. i disagree with the view because the govts have discovered FISCAL and the fed is now focused on inequality and labor mkt hysteresis- this means exceptionally loose fiscal+monetary

Leading to a new regime change benefiting commodities and crippling growth stocks. (Which i see multiples easily falling 50%). This month has been the appetizer but to think that a regime shift has happened where investors have focuses on bonds/tech stocks for 12 years and have

All shifted to Energy and commodities is asinine. This regime shift will take many many quarters and only when I see people convinced commodities are the only game in town will i think the cycle has played out.