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More from @hendry_hugh

Hugh Hendry Acid Capitalist

@hendry_hugh

Apr 25, 2024

The Kobayashi Test

Risk assets are on a tear
Sure, there's a pullback
But the huge global carry from borrowing depreciating yen and buying US assets is in its ascendancy
The Fed is trapped by US growth
Ignore the aberration of today
The fiscal spend is baked in
It's a known entity that will underwrite US GDP into 2027

High US rates flood capital markets with the world's speculative capital
Sends asset prices to the stratosphere
The rest of the world (RoW) needs lower rates
ECB cuts will accentuate the draw into US markets
Inflate risk asset prices higher even more

BoJ rate hikes are a con...
Japanese trapped like the BoE in 1992
Yen rates today comparable to BoE at 12% on eve of Black Wednesday
Why ?
Because Japanese debt servicing already takes one third of government revenues at zero rates

Read 6 tweets

Hugh Hendry Acid Capitalist

@hendry_hugh

Feb 27, 2024

So good was this FT piece that I set about re writing it, acid cap style

It is very significant that this story is reaching a wider circulation of understanding

I hear the echoes of history everywhere, ominous they are...

So let's begin.
#GlobalTradeft.pressreader.com/article/281895…

In the twisted ballet of global trade, where market tales weave like specters in the shadows, Keynes glimpsed the riddle we face. Back in 44 at Bretton Woods, he rallied for a global trading realm aimed at regulating against persistent imbalances, but what we got is a far cry

The discourse on trade, if it even exists, is surely an oxymoron. I'm not certain it even reaches the dim hallways of technocracy. Myopic, unable to see the forest for the trees, policymakers consistently overlook the crux, the enduring gap between deficit and surplus nations.

Read 13 tweets

Hugh Hendry Acid Capitalist

@hendry_hugh

Feb 15, 2024

1. Let's walk The Heisenberg waltz
Succumb to the hands of Werner in '27...
Quantum truths be told
A cosmic dance with there being no certainty in heaven...
Particles run wild
Darn particles run free, in the quantum ballet
Position and momentum, ha, a nebulous construct

2. Measure one, Five-to-One, lose the other
A cosmic trade, a cosmic fade, no one gets out alive
$ Yen, soon we'll surpass 151
A delicate trance where certainty will surely fade.
Mathematics and its fables, an equation of chance,
Where enigmas prance and parade...

3. In the quantum dream, uncertainty takes the lead
A mystic tango of the particles' creed.
In the realm of Delta x\ and Delta p\, chaos unfurls...
The Planck
Its constant whisper, secrets of the quantum underworld.

Read 8 tweets

Hugh Hendry Acid Capitalist

@hendry_hugh

Feb 14, 2024

1. Today (yesterday) was not an exit...

It was an unhinged carnival ride through the heart of the chaos to come.

A twisted financial odyssey where reality bleeds into delirium, where the edge of reason is so far, far away.

2. The LA sun dipped tonight into a cosmic tequila sunset, I saw it with my own eyes, your day had passed, but here, alone, the shadows danced with the ghosts of quasi-sanity.

3. In the realm of the bizarre, I stumbled upon the carnival. A mardi gras with no exit, only entrances to dimensions unknown. A psychedelic ribbon of uncertainty; maybe none of us had any choice but to hitch a ride on the back of some gnarly yen chaos

Read 4 tweets

Hugh Hendry Acid Capitalist

@hendry_hugh

May 5, 2023

https://twitter.com/1337_FAFO/status/1654572053872222208

Q: Zirp means inflation to the moon

A common mistake

The interest rate fallacy

Lets try and Jack Kerouac this...

https://twitter.com/1337_FAFO/status/1654572053872222208

Central bankers don't have control over interest rates

I know, crazy right ?

You all associate high interest rates with tight monetary policies and zero with an abdication of the senses

You've been sold a lie

Repeat after me: easy money isn't cheap money

You see zero rates and you think, merde, credit must be gushing, the economy must be hot to trot

Nope

Its a question of supply Vs demand

Sure you wanna borrow at zero but the economic background that took us there means the financial sector really doesn't want to lend to you

Read 15 tweets

Hugh Hendry Acid Capitalist

@hendry_hugh

Apr 29, 2023

@Brad_Setser

At last !!
A new Acid Capitalist Podcast...

With the indomitable, @Brad_Setser, a senior fellow, no less, of the Council of Foreign Relations
And boy !
Do I have things to get off my chest...
I will complete this tomorrow
So much to say, so little space

Now what doesn't Brad know about foreign trade and the conduct of sovereign nations ?? What doesn't he know about how they conduct themselves in this merry-go-round of economic bedevilment ? He was the perfect and most generous host to titivate my curiosity.

Brad's a master at throwing light on those nations that suppress the scale of their surplus savings and FX exchange balances. The real QE masters that have driven our asset prices to the sky...
And he's not afraid to speak his mind.
Just what could we possibly have to discuss?