Lots of chatter out there about how there is a GLOBAL long-dated bond selloff afoot and how that is weird. (This is a 🧵).

I am sympa to that view as I've called President Trump a "Human Steepener" and was SHORT DURATION due to his campaign from September 2024 to January 2025. But then something strange happened: the GOP in the House REVOLTED against President Trump's campaign promises and the One Big Beautiful Bill (once we combine it with the TAX increase that is the tariffs) came out far less profligate. As a result, I ended my short duration position in January 2025, due to that revolt. Since then, the 10-year has been well behaved and even has dropped below 4.2% today.

Canada and Mexico won the trade war. Hear me out... A very short 🧵.

By the time USMCA is up for renegotiations, the White House will have suffered such a huge backlash against de-globalization (which nobody in the US actually wants) that the USMCA loophole will be ossified. At that point, only Mexico and Canada will have 0% tariff access to the US market, which will attract an enormous investment boom in both countries as other exporters surge investments to gain access of the US market.

Markets appear to be FADING Iran-Israel conflict today. Many commentators equate that with the "end of the war." I don't necessarily agree with that. Kinetic action by both sides could continue for months and even years. But markets could learn to ignore it. Take the Iran-Iraq war from 1980-1988. It is not that much different from current tensions between Israel and Iran. The entire West - including the US and France - essentially propped up Saddam Hussein in that conflict.

I think that the @WhiteHouse should print out these charts and send to @realDonaldTrump. It's very simple. They explain why the pivot away from wanton trade war is political obvious. In my view, President Trump did not "capitulate." He responded to material constraints. It's actually funny to see all these liberal critics of President Trump who also happen to be bearish. They're melting down. But why? If the trade war doesn't make sense in the first place, should Trump not be praised for pivoting out of it?

I am in Europe right now. Many friends and clients over here are buying into the narrative that Europe is being "sidelined" by the US in its negotiations with Russia.

I see it differently. Every time Europe made a deal with Russia - for example, the Minsk agreements - the US undermined it. It is not a secret that the US encouraged Kyiv to essentially ignore that deal, which ended the 2014-2015 conflict.

Some thoughts on the LA fires, given the curious situation that I find myself in... being in the midst of a macro calamity.

To be clear, I don't believe in "reports from the ground." they are often actually the least sober. Least useful. So... a cautious and modest 🧵. First, we now have the first reports of the size of the "Palisades fire." See below.

Looking for some early January weekend reading? Highly recommend this @SteveMiran piece from two months ago on restructuring global trade architecture.

hudsonbaycapital.com/documents/FG/h… It is very good! I have 10 thoughts on the report.

1) What does the US do about Chinese "enemy shoring" around the world? Is the US prepared to raise tariffs to 60% against even geopolitical allies that Chinese companies use as transit exporters?

This is a 🧵on the state of America's relationship with globalization in light of Trump's potential pivot towards 1980s-style resolution to the now six year trade war with China, as articulated in the @Bloomberg interview on October 15.

If President Trump had one superpower, it would be to "sniff out" the median voter preferences on the most important issue of the moment. In 2016, he outmaneuvered Secretary Clinton on trade, forcing her to abandon the TPP deal in her campaign rhetoric -- a deal she obviously negotiated!

The media is going to spend the next several weeks obsessing over President Biden's replacement. This will drown out what I think was a pretty important signal from President Trump's nomination speech in Milwaukee. Allow me to elaborate... First, you can find the entire transcript of Trump's speech here: scrible.com/app/pdf-viewer…

There is a lot of criticism of 🇩🇪 military readiness. Even (ESPECIALLY?) my good German friends are highly critical. However, everyone who thinks 🇩🇪 would get rolled in a war with 🇷🇺 should read the op-eds and analyses of 🇺🇦 war readiness pre-2014. It was much much wrose! The reality is that Ukrainian military - as unprepared, corrupt, undermanned, and under-provisioned as it was in 2014 - did a half decent job against Russian-backed militia in Donbas. They held back the assault on Mariupol in 2014-2015. Russia did not conquer all of Donbas!

I hope that everyone is having a great ending to the year 2023! As you are taking it easy and mulling over the past 12 months, I thought it was a good time for a 🧵about geopolitics and finance. When most investors think about how geopolitics and markets intersect, their unit of analysis is most often EVENTS. Something “geopolitical” – i.e., not macroeconomic, policy, or financial – occurs and one must, as an investor, react to it.

@INArteCarloDoss And by the way, this was exactly the lesson that American households learned from the 1970s. Savings rate went on a 35 year decline after that inflationary era. We learned to love credit as being a "saver" means you're an idiot when inflation is high. @INArteCarloDoss Lo and behold, American households seem to be re-leveraging.

This entire weekend, I've been wondering what Russia's Renaissance Man / Tupac Fan / "Managed Democracy" Tsar (#irony) Vladislav Surkov thinks about the Prigozhin coup. He apparently gave an interview to political strategist Alexey Chesnakov. You can read an excerpt from that interview here:

meduza.io/en/news/2023/0…

One interesting takeaway from the attempted mutiny/coup is that Prigozhin kicked it off with a 30 minute speech on Telegram that has largely been translated to Western audience through second-hand reports. Here are some direct snippets from it that are interesting... “Between 2014-2020 Donbas was looted by those close to the president, FSB, and oligarchs. These are people who stole from the people of Donbas. There was supposed to be local police/army presence to defend the population in case on a Ukrainian attack."

The media/policymakers/geopolitical "tourists", everyone is largely freaking out about Macron's comments about China. But this is nothing new. The US has not made the case to convince Europe that China is a critical threat. Unlike the USSR during the Cold War, 🇨🇳does not occupy sovereign states (anywhere, but particularly in Europe). It does not espouse an ideology to which European political parties owe an allegiance. And it does not finance terrorists inside Western Europe. USSR did all of that.

The Epic Tech Pwnage theme has been the main focus of my team, so we are not surprised that the Fed hawkishness ultimately broke Silicon Valley Bank. I think that there are two macro implications of this event. First, the tech/SAAS decade is over (as I posit in the below Montgomery Summit talk that I gave just a day before the SVP collapse).

The 🎈incident tells us a lot more about US domestic politics and the US political posture towards China than about Beijing's intelligence gathering capabilities. As such, it is an important insight into "Machiavellian America" that investors should definitely heed. However, investors should not confuse the hysteria in US media for a global response to this incident. Afterall, the US itself has publically announced "balloon spy program," see the Politico article from just five months ago!

politico.com/news/2022/07/0…

I have no insights into the Adani Group saga as I have zero experience reseaching single name equities. I would not even know where to begin.

However, I think that there is a broader macro story here that folks are missing. A brief 🧵... The problem for 🇮🇳 is simple. It does not invest , particularly into fixed assets. If India is to be the beacon of friend/near/off/whatevershoring, it needs to start building infrastructure. That has not happened. As chart below shows, FDI has continued to focus on services.

This is my 🧵on the US October 7 semiconductor ban against China. I had a lot of questions about this from FinTwit followers. Since I write research for a living, I cannot just post everything I'm thinking on Twitter. But here are some thoughts... First of all, for everyone who wants a basic understanding of what is going on, please read the excellent report by @Gregory_C_Allen from @CSIS. I think it is the best summary that will satisfy both semi newbies and technical experts alike.

csis.org/analysis/choki…

It's time for a thread on the European natural gas freakout. No doubt, Europe should be concerned given that the TTF contract is up over 200% YTD. But with the EURUSD at parity (a level it never reached during the height of the Euro Area crisis), how much of this is priced in? Clocktower Group did the math and we believe that there is almost zero probability that Europe does not achieve gas storage levels of 80% by October 1. They may even get to 90% by then. Today, media reported that Germany is already at 80% storage.

So my tweet yesterday caused a third of you to lose your mind… and start throwing topographic maps of Ukraine in my face... Allow me to elaborate on why the Russian “special operation” is a haphazard military operation at best, and a ballet performance at the Bolshoi at worst.

https://twitter.com/Geo_papic/status/1502366925237538822

Here is a map of the infamous Schlieffen Plan. One main thrust into Northern France by the German Empire along four axes. Note the lack of spearheads anywhere else on French territory. No thrust into Alsace, for example.