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EconstratPB Profile picture
EconstratPB
@EconstratPB
New Public Account for PB
2 subscribers
Oct 21 • 10 tweets • 3 min read
So I started writing this note on a flight back from Austin on Sunday night.

I'd taken my 15-year old gear-head of a daughter to watch F1 for her bday, hence the imagery. Image The week before, while everyone was focused on Trumps latest tariff threats over rare earths, it hit me that the core economic issue between China and the United State was a repricing of the terms of trade.
Sep 19 • 4 tweets • 1 min read
Next week is the two year anniversary for the substack.

I will post the trading blotter that @dampedspring suggested I keep, which is up 47.23% YTD and 59.86% since inception on August 5, 2024.

Every trade. Date. Entry. Exit. Sizing. No one has infinite balance sheet and it will be evident margin risk was respected.

Open positions will not be disclosed. Members only.
Sep 19 • 6 tweets • 2 min read
Somebody asked if I puked 4900.

The answer is no.

🧵 As the March selloff got underway, I hedged my US equity longs with RoW shorts, as USA was 2-sigma oversold relative to RoW assets. Image
Sep 19 • 7 tweets • 1 min read
With one quarter left to 2025, 2026 is now coming into focus.

Get ready for usual lazy approach to price targets, which will consist of the following: 1. Some iteration of NGDP growth to get a revenue growth target. Usually 5%.

2. Multiplied by profit margins to get earnings growth, usually resulting in around 10% EPS growth.
Sep 9 • 4 tweets • 1 min read
There’s a demand side and a supply side to the la or mkt, with feedback loops.

If the labor supply side is shrinking then there’s a lower aggregate demand impact on the labor mkt.

At the macro level this means less people buying shit so less workers to service them. Labor required to keep the labor mkt in balance falls.

Ultimately what we and policy makers want is a balanced labor mkt.

You want a little slack but not too much.
Sep 8 • 9 tweets • 2 min read
Would agree this is somewhat true, but mostly in academic and pseudo-intellectual fields like the social sciences or politics.

From my experience as a student and a very very frequent traveller with fam there: People in business have respect for American capitalism.

People in the hard sciences and engineering had similar respect for American can-do.

Normies and their children who experienced American liberation and rebuilding had immense respect and gratitude.
Aug 27 • 5 tweets • 1 min read
In doing the research for this note, I came across some insane return data for foreign markets.

Spoiler alert: it is total dog shit. Image The most insane was that the win rate for emerging markets in the post pandemic period was 44.07% over any 3yr holding period since the pandemic.

You're basically guaranteed to lose money.

And the average 3yr return was -84bps. NEGAVTIVE after 3 fucking years.
Aug 22 • 9 tweets • 2 min read
I think labor does firm up. But not bc hiring suddenly goes up.

Waiting for hiring to pick up is the wrong way to look at policy formulation. Fed policy does not target employment growth.

Employment growth (or decline) is a residual to the real goal, which is employment balance, signaled by available slack (or tightness).
Jul 11 • 5 tweets • 1 min read
Tight/lose as a definition is a relative metric.

If inflation has come down then by definition MonPol was relatively tight.

If nominal GDP growth rate has slowed (which it has) then by def MonPol relatively is tight. Given the above, inflation expectations cannot be unanchored.

There is a logical inconsistency between unanchored inflation expectations and actual falling inflation and falling NGDP.
Jul 10 • 7 tweets • 1 min read
This is the social/political commentary equivalent of freaking out over a high frequency data point.

And why this person has 1mm+ follows with rage bait. In the real world, no one cares about anyone or anything.

In the pretend world we do.

But we use the pretend world to maximize our real world objectives.
Jun 4 • 9 tweets • 2 min read
I am removing the paywall to this short note sent to subs yesterday.

pinebrookcap.com/p/high-frequen… The note was about today’s ISM services print.

It wasn’t a forecast or a projection, but a guide to contextualizing data.
May 31 • 5 tweets • 1 min read
The narrative of elite colleges soaking up tax payer dollars is a flawed one, and one meant to get the online crowd excited.

UC Berkeley runs the Lawrence Livermore Labs and Los Alamos nuclear weapons labs. Without the elite brainpower, our nuclear defense posture is dead in the water.

The nukes don’t make themselves folks.
May 26 • 6 tweets • 1 min read
Since everyone is going goo-goo-ga-ga like my kids over the Substack leaderboard, I think the focus on what the substackers are making is the wrong one.

Should be on the quantifiable PNL. This is hard bc as @mikeharrisNY has pointed out, 10 people with the same exact signals will all have different PNL results (timing, fills, sizing, risk management, and on and on).

But over time, a rough convergence between PNL and process does become self explaining.
Apr 18 • 6 tweets • 2 min read
Weak argument. When the governance style of the current political leadership is based on fear and intimidation, my status (legal, class, education, wealth, skin color, etc) is a false reassurance. Everyone is a target. If they can go after “those people” on false or flimsy premises they can go after you.
Apr 2 • 9 tweets • 2 min read
For the crowd that screams no fair like my kids, we allow countries to tariff us and give “unfair” trade a pass bc of the benefits it confers on us. Ergo, we let the French tariff our wine so we can get access to wholesale financial markets which we dominate and scale up bigly while they sit on an unprofitable wine glut that their tariffs subsidize.

In effect we pay them to stay outta our way and stay poor 😂
Dec 17, 2024 • 9 tweets • 2 min read
Ok the 2025 outlook raised a lot of questions.

Those questions were perhaps best enunciated by @dampedspring who provided very constructive critical feedback, which prompted the follow up note to explain my thinking.

pinebrookcap.com/p/market-comme… x.com/econstratpb/st… My outlook is an exercise in reasoned optimism as opposed to hand-wavy, blind, 💩 at the wall throwing.

My approach was to try to understand what is happening in the real economy at the micro level and also the macro context.
Dec 3, 2024 • 7 tweets • 1 min read
Ok folks, here’s my 2025 SPX/risk outlook.

pinebrookcap.com/p/market-comme… Paywalled but a lot of it is free so have a look and pls retweet to get around Elno’s gaslighting.
Aug 14, 2024 • 4 tweets • 1 min read
Want to share an innovation with the broader community here.

Some folks have been pushing me to publish trades as evidence of skin in the game, being a risk taker instead being a talking head, and for accountability and transparency. This includes folks who sub and need a little more guidance on how to monetize the macro thesis.

Also includes friends like @dampedspring who want me to challenge myself to grow and take my process to the next level.
Aug 1, 2024 • 5 tweets • 1 min read
Lots of head scratching over moves in the rates complex this month.

On May 29, I published a note called Duration is the Most Hated Trade. In the note I argued that people were
conflating structural developments with cyclical one.

Recall the noise around what R* “should be” (higher) and how yields would move up.

Need Kashkari was most vocal about this view.
Jul 6, 2024 • 10 tweets • 2 min read
Gluten for punishment so getting in the cage with Bob.

I think this is an ideal Goldilocks. Mkts look forward and what’s coming in 2H is priced, with a discount ofc.

The wedge between realized and priced expectations is dynamic, not static.
Feb 25, 2024 • 4 tweets • 1 min read
We’re not getting a recession in 2024 or 2025 with this kind of NGDP growth (absent a shock ofc).

The amount of nominal income circulating in the economy is absolutely bonkers. That little blue line in the top left chart just needs to level out a little and coast until it hits the yellow trend line years into the future before a recession shows up.

Again absent a shock or policy mistake.

And even then there’s a lot of runway.