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Darius Dale

@42macroDDale

Nov 9

@cz_binance

Good morning and God bless! Time to focus on the #NextPlay.

The @cz_binance-@SBF_FTX drama teaches our #Crypto friends three lessons:
1. Decentralization is a self-serving illusion
2. Macro > Micro when Macro is bad
3. USD liquidity trumps all until $ is not the reserve currency

I spent dinner discussing the #FTX saga with my fiancé who knows as much about how global financial markets work as the average #Crypto bro. My explanation to her (and them) is as follows:

1. We live in a world where the price of every key asset in the world is in US dollars

2/

2. As a function of #1, we are all hyper obsessed with how many US dollars are available to price all the existing and future assets in the system

3. As a function of #2, we are also hyper obsessed with how fast that [unobservable] quantity of dollars is growing or shrinking

3/

Read 8 tweets

Darius Dale

@42macroDDale

Nov 6

https://twitter.com/macromindcap/status/1589301182454824960

Demand destruction is the only thing the Fed can do to stop the ~$8tn of checkable cash on HH balance sheets from continuing to inflate the CPI.

I agree we need more supply long term. But ZIRP and QE — i.e., WHY we have inflationary populism to begin with — is NOT the solution!!

https://twitter.com/macromindcap/status/1589301182454824960

@CNN

The solution is obviously thoughtful fiscal and regulatory policy that promotes effective reallocation of resources within and across our borders.

If you haven’t watched @CNN or @FoxNews lately, that sh!t ain’t gonna happen anytime soon. So the Fed is doing the best they can do.

What I am trying to do with this weekend’s rant is:

1. Get you to stop wasting time on topics that will not matter to your returns on any investable time horizon.

2. Get you to understand how global capital markets actually work — specially that the US gov’t is fine (for now).

Read 4 tweets

Darius Dale

@42macroDDale

Nov 5

@MebFaber

Another BANGER by our friend @MebFaber ft. @TotemMacro, former Head of EM at Bridgewater (@RayDalio’s fund).

I’m biased b/c @42macro shares many of the same views — views that are in direct contention w/ popular views on Fin-Twit that do not pass the analytical rigor smell test.

One poorly researched, popular Fin-Twit view that has chapped my ass of late is the discussion about bond market liquidity. The bond market is fine. Bond prices are going down b/c investors have altered their views on the expected path of policy rates and stickiness of inflation.

If the bond market was experiencing a liquidity crisis like the UK, we’d see term premia gap higher. They are not. In fact, they are still NEGATIVE:

Read 7 tweets

Darius Dale

@42macroDDale

Nov 1

@42macro

PROCESS THREAD: One of the things that sets the @42macro research process apart is I update our 125 to 150-slide monthly Macro Scouting Reports daily to prepare for client meetings. That is to ensure I don't miss any critical Macro updates like today's September JOLTS release. 1/

Obviously not every slide in the deck needs to be updated every day, as some only feature monthly or quarterly data. But I do go through every economic release, from every major economy, every single day, to ensure that I do not miss updating any slide that requires an update. 2/

@Mike_Taylor1972

While that sounds psychotic, you'll quickly learn from top buysiders like my mentor @Mike_Taylor1972 that this is the level of daily discipline that separates stud investors from those that fail on the buyside. That discipline is the difference in being UP YTD vs. DOWN 20-70%. 3/

Read 5 tweets

Darius Dale

@42macroDDale

Oct 31

@NickTimiraos

COACHING THREAD: In response to the @NickTimiraos article I tweeted, I've had no less than two dozen retail investors tweet at me some version of the following:

"High credit card debt = the household sector balance sheet is not healthy nor is consumer spending resilient".

1/

https://twitter.com/kajd17/status/1587106710090665985

Ignoring the very obvious fact that anchoring on a NON-STATIONARY TIME SERIES like nominal credit card debt should not ever ever ever be used to form the basis of CYCLICAL (read: stationary) determinations, the reason high credit card debt it misses the mark is threefold... 2/

1. The US household sector is FLUSH with checkable Cash on both an absolute ($7.6tn), share-of-total-assets (5%), and share-of-disposable-personal-income (41%) basis.
2. Household debt is low, at only 88% of nominal disposable personal income (vs. 115% pre-GFC)... 3/

Read 6 tweets

Darius Dale

@42macroDDale

Jan 14

The stock market is making me nervous about a deeper pullback. It is trading over a percent below the Lower Boundary of its Probable Range, indicating it wants to at least break down to neutral from the perspective of our Volatility-Adjusted Momentum Signal (VAMS).

THREAD 1/

That said, the last time we saw such a deep downside deviation w/r/t the S&P 500’s Probable Range was on 5/12/21. At the risk of anchoring on an n-size of 1, investors can breathe a sigh of relief b/c that was not a sell signal on either a one-week or one-month forward basis.

2/

I watch Micro Caps $IWC and Frontier Markets $FM as ancillary signals of broader "risk off" conditions -- which our primary risk tools are disconfirming. Both are bearish VAMS, but neither has broken to new lows. That is a good thing for broader risk appetite until it isn’t.

3/

Read 4 tweets

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