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Michael Kao Profile picture
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Feb 15 • 6 tweets • 3 min read
Musings of the Day, 2/15/23:

Gold is confirming my suspicion that #1 (USD Wrecking Ball) is about to slam risk.

Interestingly, $BTC / High Duration Garbage like $ARKK is bucking that trend right now.

Who's gonna win out? 🤔

Yellow = Today's Yield Curve
Pink = 1 Month Ago Yield Curve

Risk Assets are whistling past the graveyard again.☠️💀
Do y'all remember this thread?

JPY is on fast approach to the first Fed/BOJ "picture-painting" intervention zone of Q3'22.

#USDWreckingBall

urbankaoboy.substack.com/p/re-inflation…
Love it. I may have to borrow this one!
Pick your poison for the best USD Wrecking Ball. I suspect I know what people will pick.
The zeitgeist feels oh so 2021.

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More from @UrbanKaoboy

Michael Kao Profile picture
Feb 13
Musings of the Day, 2/13/23:

The topic of Russia’s “remarkable” maneuvering around US/EU sanctions came up last week at West Point. I mentioned that the only way their war machine gets choked of funding is if Russian seaborne OIL GETS BLOCKADED. Nothing Else Matters (🤘).
Meanwhile, GOLD remains a conundrum to me.

Does its recent puke presage:

1) a resurgence of the USD Wrecking Ball?
2) a softening of geopolitical tension?
3) reduction of market fear?

This is the reason why I've never liked the "barbarous relic" -- noisy signal quality.
Not sure what to make of this chart, but gun to my head, I'm OFFERED.

Gold: Image
Read 6 tweets
Michael Kao Profile picture
Feb 12
Musings of the Day, 2/12/23:

Ummm, as much as I’d like this to be true, I’ll take the under.
This matches the description of the “tic tac” that a fighter pilot recalled to @lexfridman a while back.

Hope we didn’t just start an interstellar war! 👽
Here’s the podcast I’m referring to. overcast.fm/+eZyAFkzBk
Read 6 tweets
Michael Kao Profile picture
Jan 11
Re: Inflation/USD Wrecking Ball-Who's Gonna Out-Hawk the Fed?

When I think about the relative capacities for CB's to embrace "Higher For Longer" policies, I still don't think anyone can out-hawk the Fed. (MINI-THREAD)
I've been expressing this sentiment for a while. CB's can jawbone, but they have yet to back up tough talk with tough action.
There are many reasons why I think RoW's CB's will be hard-pressed to narrow interest rate differentials between the US and their respective regions. The first reason is just relative economic strength.
Read 28 tweets
Michael Kao Profile picture
Dec 22, 2022
Re: Oil-The Great Re-Opening (Or NOT)

As I've been saying, I would LOVE to be proven wrong on my ST bear view on Oil given my LT bull positioning, but anyone betting on a big rebound based on the Great China Re-Opening needs to be very careful. (THREAD)

Yesterday, Lakshmi from Cap One put out her last note of the year and focused on PRODUCT demand. Remember that refiners consume Oil, and consumers consume products.

Some sobering charts follow: Image
Drilling down (pun intended) to the US: Image
Read 51 tweets
Michael Kao Profile picture
Dec 10, 2022
Musings of the Day, 12/10/22:

BOE is in same quandary as ECB/BOJ/PBOC — can they out-hawk the Fed?

Conversely, when we truly pivot, will RoW hold out and let Fed out-dove them?

#USDWreckingBall
Missed this Fir Tree lawsuit over $GBTC. Thanks for flagging this, @DoombergT. Must-read.
From GS this am:

“The last few weeks have demonstrated how prone the market is to FCI easing when the marginal policy decision becomes incrementally dovish.”
Read 21 tweets

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