Do you believe the lights will be on or off in 10 years time across N.A., Europe & APAC?

If u believe the lights will be on (as I strongly believe), & people will be heating/cooling their homes, driving their cars etc, i.e. using energy, then here's a thesis...

1/N Energy use has correlated with human progress, and also quality of life, for hundreds of years

Every decade that passes, we do use more energy, and that's absolutely normal, and absolutely fine, assuming humans aspire to live a better life over time

2/N

Quick back of envelope calculation for how #ElSalvador could generate enough $BTC from mining to easily pay off interest & principle from $1B “Volcano Bond”

Annual BTC mining rewards = $13B (assuming $40k price), ignore fees

Electricity used = 120TWh

Hours in year = 8760

1/N Therefore Power used = 120TWh / 8760 = 13.7GW

@nayibbukele said they ALREADY have a 95MW thermal facility drilled

So ASSUMING just this 95MW can be all used for BTC mining, and assume an average efficiency of miners, this can generate:

95/13700 = 0.7pc of rewards

2/N

Vlad on the @elonmusk Clubhouse now is sinking as usual, he hasn't apologised...

AGAIN...

SMH, 101 in how not to deal with a crisis

How hard is it to say 'sorry, we let you down' as the first thing, not 'I'm the Chief Executive Officer of Robinhood'

Elon immediately cringed But Vlad just disclosed that Robinhood has had a $3B request for cash from clearing house (I think) which they didn't have (this is new info I think), hence the raise - we all knew this, but not the number

At the heart of the $3B was the increase in VAR (as many have noted)

On this now, room already full with 6k folk! Elon just invited Vlad from RH into the room :D

This wasn't picked up much (that I saw)...

This is Al Kelly, Chairman & CEO of Visa Inc talking about Crypto in their earnings call 3 days ago...

As @elonmusk said, it's inevitable (well that might have been about crypto, not sure!)



@RaoulGMI "Today, 35 of the leading digital currency platforms and wallets have already chosen to issue Visa, including coin-based Crypto.com, BlackFi, Fold and BitPanda. These wallet relationships represent the potential for more than 50 million Visa credentials...."

RANT:

So Powell mini-crashes stocks as markets want MOAR from him (markets never get enough do they...)

This freaked out Trump, so predictably he touts vaccines for almost immediate release (soon they will have been FDA approved in the PAST from now... 😬)

1/N

@HRGPFOREVER

https://twitter.com/PlungingAdvice/status/1306304371144171528

But pump didn't work, markets know it's just BS talk...

OH GOD NAZZY IS DOWN!

So Trump has to be Pelosi's best bud (he finds really hard to do), but he won't speak with Pelosi as he just can't (for some unknown reason a POTUS can't speak to another politician... OK 🤡)

2/N

#bitcoin volatility ranges vs other assets a mini thread:

(as measured by the BVOL index = rolling 30-day annualised vol)

Dec 2017: 81-162
Sept 2020 (last 30 days, mid-Aug to mid-Sept): 27-44

Price c. $10,000 both times

Which is more of a bubble?!

1/N Sept 2020 (last 30 days) volatility for:

Silver (VXSLV): 46-84
GDX (VXGDX): 41-52
Nasdaq (VXN): 27-48
Gold (GVZ): 20-28
Oil (OVX): 30-59

Bitcoin (BVOL): 27-44

So Silver and GDX, Nasdaq and Oil are currently more volatile

Gold is less volatile

2/N

Quick macro thoughts... Will probs be a mini thread...

S&P (or QQQ...) still undecided, could go either way; lower vol right now means insurance (i.e. long vol trades) is cheaper

Duration (30Y USTs) hanging at 1.4%, VXTLT <15, and as low as since pre-COVID (probs bullish) Gold has been coiling up again, GVZ went below 20 briefly on Monday, it's c. 21 now, if it breaks down to mid-teens again (like July) then could be a great buying opportunity for LEAP calls (lock in the low vol)

Oil is struggling, lots of debate on supply/demand, and on USD...

This is a must watch video from @GeorgeGammon

Interestingly I came to the exact same conclusion on Thursday last week (b4 this video came out), having spoken to REAL PEOPLE in CBs and also Commercial Banks, to understand the flows and mechanisms

1/N

TL;DR is that M2 can increase due to QE, when non-banks (e.g. pension funds, insurance co's, biz's, retail investors) sell bonds VIA the bank to the Fed (bank = intermediary); as the bank does credit the bond seller with new deposits, hence M2 does increase

2/N

Super interesting insight from @edwardnh today in the @RealVision Daily Briefing @RaoulGMI

Here is the data from FRED that backs it up, his point is that Initial Jobless Claims are going to skyrocket due to a known Seasonal Adjustment (remember claims quoted by media = SA)

1/N Here is the NSA / SA data for Initial Claims (*100), you can see a fairly predictable pattern for the last 5 years, the NSA:SA ratio can therefore be roughly predicted moving forwards

@DiMartinoBooth @chigrl @PriapusIQ

2/N

Let's talk about position sizing, I often get asked about it, and ofc there is no 'right' answer, however a few rough ideas might help you think thru the dynamics

H/T to @KeithMcCullough @RaoulGMI @apollotradingsd @HedgeyeDDale @MetreSteven @chigrl for nuggets over time!

1/N When I was a VC @atomico I used to joke that a famous B. Franklin quote was wrong:

"...nothing is certain except death, taxes, AND cap tables have to add to 100%"

The 4th is your P.A. allocations must = 100% of liquid investable assets if one includes cash

2/N

Was thinking about the Fed H8 form today - this is what you do on weekend if you are a kool kid these days (along with a bit of RH trading ofc...)

As far as I am aware, i've not seen this logic laid out on FinTwit, please correct me if wrong

1/N The mic drop is that the Fed bought far fewer Treasuries in June than US banks did

[cue @'s for people who might care]

@RaoulGMI @bondstrategist @apollotradingsd @DiMartinoBooth @TetotRemi @chigrl

2/N

US #COVID cases tend to peak on Thursdays and Fridays, over recent weeks this is consistent, and we just had a new high (according to worldometers.info/coronavirus/co…) on a Wednesday of just over 60k

It's plausible we see 70k this week

1/N US Deaths tend to peak on Tuesdays (perhaps a consistent) lag from weekend, and we did see a peak this week of 993, which is the highest for 4 weeks

Deaths on Wed 8th were the second highest for 4 weeks

2/N

Let's dive into some bull vs bear dynamics in the markets, what are the key themes, opportunities & risks

This isn't an exhaustive list, i'd love to hear your thoughts on what is missing

As always, please always DYOR before trading

1/N 'Fed Put' is the overriding narrative for equities, although the actual Fed Put is with Treasuries, and Corp Bonds - as they are actually directly buying both of these

However, there are ways for newly printed money to enter the real economy and end up in stock markets...

1/N

Let's talk TIPS, but not $TIP, instead let's dive into $LTPZ, Pimco's Long-Term TIPs ETF, effective duration 22 years, $700m AuM, 0.2% TER

I don't think i've ever seen $LTPZ on FinTwit, I came up with a simple framework to help...

@bondstrategist @AndreasSteno @RaoulGMI

1/N It's simply a 'duration TIPs' ETF, just like $TLT or $EDV are 'duration Treasuries' ETFs

And it has some pretty cool characteristics in this world of out of control Central Banks...

@PriapusIQ @apollotradingsd @TheBondFreak @GeorgeGammon

2/N

It is a 'V' bro?

(for US economic recovery)

Quick thread looking at some real time data

Bottom line = no, it's not (sorry, but it's not)

@TetotRemi @RaoulGMI @DiMartinoBooth @chigrl @Barton_options

1/N The ECRI @businesscycle leading indicator for US has stalled out in absolute terms over the last two weeks

Learn more:
businesscycle.com/ecri-reports-i…

2/N

I want to dispel a giant misconception on FinTwit regarding PMI data - about 95% of people don't understand what the PMI is, including many famous analysts and FinTwit celebrities

It just takes two graphs (see later)

But first, the China Manufacturing Data from Feb/Mar

1/N Here is the China Manufacturing PMI, clearly it shows a giant 'V' shape bounce right? It was 35 in Feb, and 52 in March

No it does not, it really really really really really does not...

If you think that, please read on...

2/N

Lots of confluences in SPX:

- Same c. 20% retrace as 2008 below going lower (also 38% Fib from ATH)

- Hit high end Hedgeye Risk Range at close (bearish trend)

- End of month rebalancing = some 'bid' to stocks

- Large IV disc. (30-40% across sectors)

1/N

@KeithMcCullough - Usual MSM hysteria about Fed/Stimulus saving the day (maybe it does, but does it REALLY solve anything?)

- Market shrugged off 3.3m Initial Jobless Claims without even noticing (it was worse than consensus = complacency)

- Perma bulls saying to 'BTFD' was obvious

2/N

Question: Is #BTC a 'store of value'? New hypothesis from me follows

Answer: No - of course it's not objectively by price action over last 2 weeks (anyone that says other is honestly deluded), BUT there might be a subtly to consider...

@RaoulGMI @DTAPCAP

1/N #bitcoin got dumped SUPER HARD the first -10% SPX day, BTC got dumped -47% <---- anyone that says this is a store of value is smoking something very strong

HOWEVER...

The second massive SPX dump of -12%, BTC dumped by -25% (SPX dumped more remember...)

So half as much...

2/N

US has 11 deaths from #Coronavirus this is far higher than 154 cases would suggest (Korea 35 deaths from 5,600 cases. FR+DE+SP = 6 deaths from c. 800 cases)

I am using 50m+ pop countries with great healthcare to compare

@Barton_options @GlennLuk @Bovell_GM

1/N This reminds me of...

Iran 2 weeks ago...

There were about 10 deaths in Iran and apparently 50 cases. ViruTwit correctly said 'no way is that possible unless virus has mutated to a far more lethal strain'.

There is zero evidence the virus has mutated in Iran.

2/N

US Q4 #GDP thoughts: Consensus = 2.0% (BBG), Atlanta Fed 1.7%; NY Fed 1.2%; Hedgeye 0.07%. A friend of mine who loves to model this stuff has 0.7%. These are QoQ SAAR numbers, this means Q3 to Q4 growth rate which is THEN ANNUALISED @HedgeyeDDale
1/N US Q3 GDP was 2.1%, so anything below this = slowing of growth in rate of change terms.

I don't see any upside to the above consensus number of 2.0%. I see a lot of potential downside.

The bond market in recent days is front running a combo of weak GDP growth, and #Corona

2/N