This ain’t gonna play well in Nov ‘22 for Dems.
The calculus was to push Inflation blame game on Russia…. Instead they are gonna get the Alt Left War on American Energy made Putin Richer & Americans Poorer.

Really bad optics…& factually correct. If I was him… I’d quickly come to some Russian resolution..

Like Yesterday.
Who is advising Biden? Republicans should shower them with gifts.

Biden’s Approval for handling Russia is only 36% & 35% with Independents.

All this is good for Banks & De-Reg.. the weaker he gets the lower the risk of the Alt Left filling up Fed roles. ImageImage
Only 30% of Independents approve of his handling of the Economy… this could easily get to a 2 handle.

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More from @gamesblazer06

Feb 14
10Y +4bps to 1.98%
30Y +4bps to 2.28%
Growth rarely Decelerates meaningfully with $ZROZ down to this degree, unless This Time Is Different. Highly Doubt it
$XLF #Reflation
Margins usually Peak ~Year 3 (+/-) of a Recovery. For instance, Margins Peaked a Decade before the last Credit Cycle ended. Leadership changes…& Cycles usually Sequence.

$XLF #Reflation
Read 7 tweets
Jan 23
U nailed it imho….first thing people do is go back to the last episode (2018-2020) w/o a good understanding of the changing contextual backdrop as well as QT mitigants that are currently in place & evolving further.
$XLF #Reflation
Another big time clue imho… $BAC did a 4.5% Pref Issuance a few days ago… if that ain’t a sign the Market has too much liquidity not sure what is….
$XLF #Reflation
Read 5 tweets
Jan 22
The question for Investors (longer term horizon) is when do you sell $XLF ?
The answer is when Deposit Betas finally catch up to ~50% or 10Y3M Inverts Investors start to Pay Less & Less for every $1 of earnings power (driven by the Flow Through Rate of Inflation)….
Long Term “Investors” who respect the Credit Cycle Started selling $XLF at the Peak of Price/TBV on $BKX in Jan 2018 at 2.1x & also long $ZROZ …as Deposit Betas were Peaking + Cyclicals/Commodity stocks like $CAT etc..
The other natural question that should pop up is…well if the Taper is coming & BKX is 1.8x…why shouldn’t 1 sell now? Won’t the Fed kill the Cycle w QT.. why on earth would 1 wait around… after doubling/tripling money from the March 20 bottom.. why wouldn’t 1 crystallize gains?
Read 7 tweets
Jan 21
From most recent peak:
$XLF -7.5%
$QQQ -13%

YTD:
$HYG -1.8%
$XLF: -2.1%
$LQD -2.7%
$QQQ: -12%
$BKLN Flat
$JPM $145 - Way Oversold imho.

Banks, Front End & Valuations….
$XLF #Reflation
The Yield Curve….

Not Remotely close to an Inversion. $XLF #Reflation

Closed at 1.58% -4bps.
Read 16 tweets
Jan 21
Reserves up to $4.98B as of the 19th
If the thesis is QT is causing the Sell Off… maybe look at Reserves. Market Liquidity is Up… Not Down.

+$129B WoW $XLF #Reflation
Bank Liquidity has gonna Bananas… the Wall of Cash is coming…. So are Rate Hikes. $XLF #Reflation
Read 4 tweets
Jan 21
This set up doesn’t exist today…CCCs were widening in late 2018 & 2019….Fuse was lit… now not so much.

CCCs don’t care at all about #TechPetrocks $ZROZ & high duration stuff getting smoked.

$XLF #Reflation 🚀
Yield Curve (10Y3M) Steepening, Dr. Copper Ripping, HY Bonds Unch all year at +310bps OAS, CCCs have tightened -12bps this year..& tightened by -18bps in the last 10 days…
$HYG is 4 year effective/spread duration… not terrible… CCCs shorter at 3 yrs & +667bps OAS. $XLF
The Yield Curve is Steepening….

Front End of the Curve ain’t anywhere close to a Double Dip Recession.

Maybe the Talking Heads know more than the Bond Markets?
I Highly Doubt it.
$XLF #Reflation
Read 5 tweets

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