Macro Confessions Part XXX, Me, The Acid Capitalist, I'm joined this week by my trusted lieutenant, @ToStRo and together with The Sweeney Alchemist @writes_sweeney , we brew a heady mix of Putin Put Downs and attempt re-set the global macro chessboard.
Chris, @writes_sweeney busies himself with a meaty cheese burger..
Convexity has jumped from our Bloombergs to the theatre of war. The asymmetry of urban warfare was well understood by all those not intoxicated by the greed and fear of fascist states. Urban assaults favour the defenders...
But like a Bloomberg scenario analysis, convexity has leapt from the city to the surrounding fields and outer limits of the metropole. Anti-tank and anti-aircraft technology supplied liberally to the democracy of the Ukrainian statehood is making this war more asymmetric
Putin hasn't lost his marbles. A gangster political system has destroyed proper intelligence. Corruption has fostered an almighty state failure. It's as though the former KGB has been transformed into mammoth PR agency intent on amplifying the wishes of its only client.
Ok, enough war-war. Bretton Woods died in the 1960s. Those that seek to right off the hegemony of the $ collateral system owing to the escalation in the world's first truly global war are mistaken. Is the world shifting, tilting on its axis? You bet!
But not as the apologists and doomsayers would have you imagine. Zoltan who????
The axis has always been defined by the supposed might of the current account surplus nations versus the receding power of those nations succumbing to current account deficits. Think again...
The axis has always been defined by the supposed might of the current account surplus nations versus the receding power of those nations succumbing to current account deficits. Think again...
Channel all your paradoxical thinking. It's been a Wizard of Oz illusion all along. To quote the mighty Wizard, My people have been wearing green glasses so long that most believe this really is the Emerald City. The Acid Capitalist is gonna spell it out for you...
Having assets that people crave, that they must own, gives you power. If you can't create enough assets in your OWN currency that outsiders really want then you never had wealth in the first place. This chimera of wealth is simply the confiscation of other nation's benevolence.
The world is changing! What should China do? It should revalue its fx higher. It should promote economic policies promoting trade deficits. Abolish capital controls. It should celebrate individual liberty and a rules based, transparent legal system. Never gonna happen.
The elite leaders of mercantilist nations surround themselves with the same corruption and fear that is responsible for the debacle in the balkans.
The Bitcoin? The problem is almost the same. It's one of distribution. The price needs to CRASH to liberate the distribution and promulgation of the digital system. Presently, The Bitcoin represents another form of wealth confiscation. BTC and the CCP billionaires, hmm?
All of the early adopters hold all of the system-wide wealth. To buy today you have to pay a deadweight rent that requires cash money. Is the Russian state going to buy with rubbles?
The Acid Cap portfolio? I'm long as much gold as volatility permits, maybe its 25pc of the fund. I'm long the corrections. EU Carbon, the price is a steal. Facebook, Paypal, Shoprite, Snap, I'm making this up (!) but 60% drawdowns in serious businesses are wealth restorative.
I'm long AG equities. This is so simple! It’s all about fertiliser - Russia exports all 3 nutrients. Nutrien, Mosaic, CF, OCI, K+S. There aren’t formal sanctions on Russian/Belarusian potash - it’s 30% of global supply combined - but Yara did just say they stopped buying,
hmm, I'm a buyer. You set up to buy Jordan?? Arab potash looks great...
So far, so short vol so I would bet against the Arab oil princes. A line is being drawn in the sand. Where people see formidable MIGHT I only see weakness. They fail to accumulate wealth assets that I want to own. Nothing lasts forever.
And yes, Chinese yuan vol continues to fall but it's hovering just over 2%, feels asymmetric to me. China no longer feels scary. I'd be long one year 6,40 calls.
And the fat lady in the Treasury market won't sing until rates match or dip below their 2020 lows. There's got to be a groovy one-touch that I can bust some of my potentially enormous ag equity futures on..?
But remember, this is a fantasy conversation by someone calling themselves the Acid Capitalist whose knocked a bottle of Casamigos tonight. If you can't work it out yourself let me reiterate that this is entertainment and NOT financial advice.
Take the reds, reject the blues...
Take the reds, reject the blues...
00:10:40 THE 2020 MOMENT, WHY I FEAR STOCKS HERE
00:20:00 CONVEXITY WARFARE
00:41:00 CONVEXITY BURIED WITHIN COMMODITIES
00:54:30 WIZARD OZ TRADE DELUSIONS
01:07:10 IN GOLD WE TRUST
01:12:00 THE BITCOIN AND THE CCP
01:20:23 THE ACID CAPITALIST WAR PORTFOLIO
00:20:00 CONVEXITY WARFARE
00:41:00 CONVEXITY BURIED WITHIN COMMODITIES
00:54:30 WIZARD OZ TRADE DELUSIONS
01:07:10 IN GOLD WE TRUST
01:12:00 THE BITCOIN AND THE CCP
01:20:23 THE ACID CAPITALIST WAR PORTFOLIO
Be deviant in your thoughts and may you see tomorrow before others...
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