Lawrence McDonald Profile picture
Father of two, Former Head of Macro Strategy Soc Gen, NY Times Bestselling Author, Long-time @CNBC & @RealVision Contributor, founder of the @BearTrapsReport
fasterlight Profile picture Street Freak Profile picture Patryk Kubiak 🇵🇱 Profile picture 3 added to My Authors
13 Oct
*IEA WARNS WORLD ISN’T INVESTING ENOUGH FOR FUTURE ENERGY NEEDS - Bloomberg

Here is a look at the 2021-2041 “Demand”Picture:

+One billion human beings in China without an automobile.

+One billion human beings in India without air conditioning.
Last 30 years we have taken 7 million manufacturing jobs out of the US.

Bad News: Ghost towns litter the rust belt, Michigan, Wisconsin, Pennsylvania have been decimated. Opioid deaths up 1000%.

Good News: We lifted 500m people globally out of extreme poverty. Davos smiles.
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Unintended Consequences - Energy Consumption

In India, China those moving into the middle class from poverty, urbanization trends - consume 100x more electricity annually than the impoverished back in the country. Real GDP per capita trends are surging. .@Go_Rozen has the data.
Read 5 tweets
2 Jul
US Employment Total Full Time Jobs

2021: 126m**
2020: 114m
2019: 132m
2018: 129m
2017: 126m**
2016: 123m

*close to 6m jobs below 2019 levels, Bureau of Labor Statistics data.

via @BearTrapsReport
Full-time jobs rolling over? What gives?
USA Full Time Jobs

2021: 126 million vs. 333m population
2007: 122 million vs. 300m population

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Read 5 tweets
2 Jul
U6 Unemployment in the USA 9.8% is all you need to know, still, nearly 7 million people are NOT in the labor force than were in, Jan 2020.
Since 2007, US full-time jobs are +4 million with a population +32 million. This is one of the MOST important macro-political economic facts that exist today, with colossal implications.

cc @carlquintanilla @andrewrsorkin @elerianm @nfergus @Neil_Irwin @gilliantett @DougKass
The easy answer nearly EVERYONE falls back on is the aging population, retirement - demographics. It is an important piece of the puzzle but hides a dark picture. In June 122,000 persons, 25 to 34 years of age left the labor force.
Read 5 tweets
2 Jun
Dear $AMC Shareholders, Credit Markets are trying to tell you something, will you listen?

New Post - AMC 5.75% due 2025 are offered at 81 cents on the dollar. Meanwhile, the stock is trading at all-time highs. The disconnect indeed is very telling...

thebeartrapsreport.com/blog/2021/06/0…
AMC JUMPED MOST INTRADAY SINCE JANUARY - Bloomberg
Today

Bonds: AMC 5 ¾ 06/15/25 down at 79.795 / -$0.232

vs.

Equity up at $62.55 +$30.51

via @BearTrapsReport

*After 30 years of trading stocks and bonds, 95% of the time I can assure you, credit leads equities. That´s a 12.25% yield to worst vs. 5 year Treasuries at 0.79%.
Read 7 tweets
28 Mar
We have had 3 recent LTCM like blowups:

March 2020: Relative Value Interest Rate Swaps

January 2021: Melvin Capital

March 2021: Archegos

*Common denominator? Massive Leverage.

Join @andrewrsorkin and @Convertbond tomorrow on @SquawkCNBC at 6:45am for the backstory.
Nomura $2B hit on tape

Nomura is a small prime broker, CS is a big one, MS / GS as well, CS must have the biggest hit relative to Nomura at $2B - we have to assume $8B to $12B hit across them all?

CDS was telling us something Friday.. Credit leads equities..
1. No one knows how big he was or how levered.
2. Have to assume goldman went first and protected itself. MS not far behind.— but with bigger exposure could have a loss. Those that acted slower (nomura, cs) probably left holding the bag???

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Read 4 tweets
26 Feb
The Year 2021

Two 6 standard deviation moves so far.

- hedge fund deleveraging in the GameStop drama.

- relative value rates, sell-off in 5s vs rest of the curve, US treasuries.

*in both cases too much capital was hiding out in crowded venues.
When central banks do NOT allow the business cycle to function over longer and longer periods of time - the good news is wealth creation becomes colossal. Bad news is Capital moves into crowded venues, poised for disruption.

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In rates, as the bond market sold-off. Originally, the long end 30s was deemed at risk, capital moved into 10s, 7s, a “safe” place. As selling pressure moved into the middle part of the curve, trillions moved into the front-end looking for duration risk shelter.

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Read 5 tweets
24 Feb
If you are trading stocks right now (especially tech), you must realize, you are really trading bonds.
Is your pension fund long duration?

-24% off sale.

#Bonds Image
*NASDAQ 100 EXTENDS DECLINE TO 2% AS TECH STOCKS SINK - Bloomberg

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Read 4 tweets
28 Jan
INTERACTIVE BROKERS PUTS SOME OPTION TRADING INTO LIQUIDATION - Bloomberg

*Market participants wisely moving ahead of the regulatory sword.

Very important read, new updates here:

thebeartrapsreport.com/blog/2021/01/2…
*ROBINHOOD RESTRICTING TRANSACTIONS FOR GME, AMC, BB, OTHERS - Bloomberg

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*SENATE PANEL TO HOLD HEARING ON CURRENT STATE OF STOCK MARKET - Bloomberg

*more macropru pressure on Powell. China has more interest in systemic risk reduction than Federal Reserve right now? See #PBOC actions.

cc @steveliesman @jturek18 @GabyHeffesse

thebeartrapsreport.com/blog/2021/01/2…
Read 4 tweets
27 Jan
Companies Outed by Short Sellers

Enron
Wirecard
Sunbeam
Lehman
Worldcom
Madoff
Cendant
Tyco

*In a world of state-controlled central bank liquidity, message boards, and leverage; who are we actually protecting?

Must read:

thebeartrapsreport.com/blog/2021/01/2…
White House Psaki: says the Biden team is "monitoring" the surge of GameStop shares. 

"The stock market isn’t the only measure of the health of our economy”

What can the Fed do? New toolbox?

thebeartrapsreport.com/blog/2021/01/2…
Froth Impact: Market Trigger’s the Policy Response

SEC: “We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets.”

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Read 4 tweets
10 Jan
Goldman Year End Targets vs. Current Level

Gold: $2300 vs. $1835
Brent: $61 vs. $56
Copper: $9500 vs. $8100
Core PCE Inflation: 1.6% vs. 1.4%
US GDP: +6.4% vs. -3.4%
Treasuries: 1.30% vs. 1.11%

via @BearTrapsReport
One of the problems with sell side banks is a classic silo-ization. Splintered fiefdoms litter the field often times with little top down coordination between the views of equity analysts, economists, high yield bond traders, fixed income strategists, rates trading etc.

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Each group is a power center with their own p/l, their own Senior MD leadership - with the highly profitable silos carrying the most weight, influence over high level decision making across the firm. In periods of significant market dislocations

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Read 7 tweets
8 Jan
Indoor dining restrictions, weather seasonal impact. Leisure & Hospitality Sector, a colossal 498k jobs were lost in December, 372k of those L&H layoffs were at restaurants and bars. Fiscal relief is NOT focused here, should be.
In the first week of '21, Wall St. strategists already have to revise their growth forecasts and average missed on jobs numbers. Reprint the 500-page new yr outlook, a good kindling recourse for the fireplace.

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Why does @stoolpresidente have more focus here than Congress? House and Senate are shotgunning billions of dollars around the planet. More targeted U.S. focused assistance to those in need is in order, asap.

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Read 4 tweets
4 Oct 20
US 30 Year Bond Yield

Oct 2: 1.49%
Aug 6: 1.16%

*when stocks or bond yields, don't go down when they should, it is very telling...
Since Early August - 60 Days

Microsoft $MSFT -5%
Amazon $AMZN -1%
Nasdaq 100 $NDX +1%
Materials $XLB +6%
Dow Transports +12%

via @BearTrapsReport
Look at the above two tweets and ask yourself one question. Where on earth would the performance data be if we did NOT re-lockdown and had a vaccine? Then think about the next 12 months.
Read 7 tweets
2 Oct 20
BIG Problem Looking forward: At 61.4%, the lowest labor force participation, going back to 1976.
Lots of American families on the outside, looking in. These people MUST be brought back into the labor force soon. Every day that does by, re-entry is harder. Colossal political demand for UBI* / long term unemployment benefits, Colossal election impact.

*Universal basic income
Sustainability??? The colossal political impact here, speaks to people in the streets, NOT at work, not participating. Solutions needed asap.

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Read 5 tweets
30 Sep 20
Dear Nancy and Steven... Hello anyone home?

Layoffs overnight

Continental AG: 30k
Disney: 28k
Royal Dutch Shell: 9k

Via @BearTrapsReport
*GOLDMAN TO ELIMINATE ABOUT 400 JOBS, ENDING MORATORIUM ON CUTS

* Airlines prepare for tens of thousands of job cuts unless 11th hour bailout is reached

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ALLSTATE CORP. TO CUT ABOUT 3,800 JOBS - Bloomberg

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Read 4 tweets
25 Sep 20
Don't make it a long dance with the devil...

thebeartrapsreport.com/blog/2020/09/2…
We are talking about a borderline scam here? It’s a mathematical fact - this beast is NOT long for this world. Sustainability is the question. A high stakes game of musical chairs, DON’T get caught holding the bag. Image
Happy Birthday

% Return Since 2010

QQQ: +520.7%
TQQQ: +6,931.6%

Wait… what?

% Return Since the Feb 2020 Top

QQQ: +11.3%
TQQQ: -5.1%

Since Sept 2

QQQ: -12%
TQQQ: -37%

Wait… what??? An $8B problem - Leverage, 3 things you need to know:

thebeartrapsreport.com/blog/2020/09/2… Image
Read 4 tweets
19 Sep 20
WSJ: An Investor Bought a Coral Gables, FL Home for $27.8 Million Last Year. Now He’s Relisting It for $49.9 Million.

This is some depression..
* U.S. AUG NATIONAL MEDIAN HOME PRICE FOR EXISTING HOMES $310,600, +11.4 PCT FROM AUG 2019

NAR: "Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market"
Shoutout to @zerohedge
Read 4 tweets
16 Sep 20
Forward Guidance; very dovish on the NO rate hikes front, NOT so much on the sustainability future QE. I think they want to see what happens with Cares 2.0, prior to longer run QE promises.
Parsing the future policy paths of asset purchases and rate hikes is NOT “Very Powerful Forward Guidance.” Offering clarity and certainty on one and not the other, doesn’t qualify as dovish relative to expectations. The beast inside the mkt wants more I suspect.

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The serpent inside the market wants more love from the Fed and Congress... Lots of fails at the 20, now the 50...

(3) Image
Read 4 tweets
16 Sep 20
*SNOWFLAKE OPENS AT $245, IPO AT $120
SNOW: $500m sales, $65bn? valuation near $276...
Sorry, $80B now..
Read 4 tweets
14 Sep 20
September is on track for a 5% value over growth stocks outperformance, rare times indeed.

Via @BearTrapsReport Image
Russell 1000

Today

RLV Value: +0.70%
RLG Growth: -1.20%

September

+0.20%
-5.80%

#Rotation
September is now approaching 7% value > growth outperformance... Ten trading days left in the month... Important chart above.

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Read 4 tweets
3 Sep 20
The largest valued stock in the S&P 500, Apple - Worth nearly $2.3T this week just traded in a 9% range, with an 8% candle, file under NOT healthy price action.

thebeartrapsreport.com/blog/2020/09/0… Image
S&P 500: It had been 29 days since we had a -1% close, until today (-3.7% now). Which is nothing when you compare Oct 8th, 2019 till Jan 24th, it was 74 days without a 1% negative close.
Nasdaq his the 100-day moving average, a first since April, 10% off sale... #QQQ

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Read 5 tweets
2 Sep 20
Highest VIX recorded with Stocks at All-time highs: Of the top 20 occurrences, there were 17 in the 1999-2000 period, and three over the last 7 days.

Sept 2, 2020

VIX: 26.57*
S&P 500: 3580 (record)

*highest VIX all-time with stocks at all-time highs.

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It’s “high-noon” – the only character missing is Gary Cooper. Someone is going to get hurt...

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Read 5 tweets