Musings of the Day, 5/2/24:

I love this headline from today's DB CoTD:

"How to work only 24 days a year"

The Pelican has taken note!! 😎

After what I heard yesterday from Pusillanimous Powell, I am going to repeat what I said to @JackFarley96 here:

Watch out for a Bear Steepener first and then for an even nastier BULL Steepener if the Fed capitulates on H4L too soon.

https://twitter.com/jackfarley96/status/1720121510981972398

@JackFarley96 If the Fed can’t do its job, the BOND MARKET WILL.👇

https://twitter.com/urbankaoboy/status/1720088953775354148

Glad to be back on again with @dmoses34 & @GuyAdami to talk about Macro, JPY, CNY, Gold, Oil but perhaps most importantly -- HOW CONTAGION HAPPENS. We end with an Idiosyncratic Event-Driven idea.

Show Notes became a full Thread this time!

urbankaoboy.com/p/interview-on…

I highlighted BOJ's Dilemma as potentially the FIRST Domino in last weekend's "Battle of the BADS" post.

From the Show Notes this weekend, I wrote:

"Devaluation is the LESS BAD Choice for each of the individual actors (BOJ/PBOC/ECB) acting on its own because even though these countries run the risk of importing Commodity Inflation, they also benefit from Export Competitiveness...

The PROBLEM for Risk Assets globally is that when all of these CBs make the decisions that are most optimal (LESS BAD) for themselves, they can trigger COMPETITIVE DEVALUATIONS, which is what led to the Asian Contagion 1.0 of 1997-1998."

https://x.com/Fxhedgers/status/1779498414381703228

We talked about how continued USDJPY Devaluation can lead to a Bear Steepener. It seems to be playing out in real-time today.

$TLT

Musings of the Day, 4/11/24:

Incredible gaslighting, pun intended.

Just how stupid do they think consumers are?

https://twitter.com/zerohedge/status/1778409359673840002

Incredible one day wobble in the Bottom-Most Jenga Block of the Risk Edifice!

My $XOP Hit & Fade continues as I uncap my Put Spreads this am.

I am fading the Geopolitical Risk and betting that the USD Wrecking Ball takes its toll.

https://x.com/UrbanKaoboy/status/1776246101491986598

Musings of the Day, 3/18/24:

Given the inability of $TLT to bounce (and the potential Bear Steepener that portends) and the mixed reactions to the AI Lovefest today, I would not be surprised to see Equities end in the RED by EOD.

Been pondering the $BA Macro effects.

Will this ration Jet Fuel/Oil Demand (Deflationary) or will it spike airfares (Inflationary)?

Maybe a little of both and a net nothing-burger?

zerohedge.com/markets/less-f…

Macro:

Not quite a Red Day, but quite a conspicuous FADE into the close.

Micro:

While y'all have been enjoying Jensen, my brain is scrambled eggs from listening to ~6 hours of closing arguments in the Puerto Rico PREPA Bankruptcy hearing.

Musings of the Day, 3/12/24:

The CPI came in hotter than expected but maybe not hot enough to forestall a Fed that seems eager to cut (at least based on market reactions).

My own odds of a June cut are rising, although I think it sets the stage for a problem in 2025.

I agree with @biancoresearch 's thesis that if they don't cut by June they are trapped into inaction for fear of seeming partisan.

Therefore, I expect a certain "lumpiness" to the Fed's calculus for the June decision.

Mixed Signals:

Gold, Long Bonds, and the USD all seem to tilting towards H4L, although Equities do not (as usual).

New post in Bio!

Re: Investing - Private Credit & The Ostrich Effect.

Private Credit is the fastest growing piece of the Leveraged Credit Trifecta which also includes Leveraged Loans and High Yield.

This piece covers:

- 4 Liquidity Categories for Yield Vehicles
- The Ostrich Effect of not Marking-to-Market
- CLOs vs BDCs
- Volatility vs Risk of Permanent Capital Impairment

#PrivateCredit #HighYield #LeveragedLoans #Credit #CLO #BDC

Here is a strong sign that Private Credit is providing Exit Bid financing for Lev Loans.

2023 was the first time in years that the Lev Loan market CONTRACTED despite continued CLO growth.

Private Credit is IMPROVING Supply/Demand dynamic for Lev Loans.

Looks like this post is down-throttled no matter what, so here’s the link:

urbankaoboy.com/p/re-investing…