LAST CHRISTMAS I called for a crash,
But the very next day…vol supply took it away.
This year…I’ll save you the tears,
I'll give you something special… Once bitten & twice shy,
I keep my distance, but the crash, based on macro, still catches my eye…

Tell me baby, do you recognize the thing supporting SPU’s?
Well, it's been a year of limitless structured product flows…It shouldn’t surprise you.
Happy Christmas, the banks structured it & sold it.
With a note saying "It’s better than the market!" & They meant it.

Now, I know, it seems what a fool shorts have been…
But if you unpinned Volatility on a blowoff top, I know the macro landscape would tempt me again…

TRADING VOL IN THE COMING WINTER WONDERLAND

Storm sirens🚨 ring, R U listening?
In the gutter, cheap equity skew is a-glistening!

A beautiful sight.
We're lucky🍀 tonight.
Trading vol in a coming winter wonderland.

Gone away is the call squeeze…
Next up comes the put squeeze! To sing a calm song
While most PM’s puke🤮their longs
Trading vol in a coming winter wonderland!

In the crash, we can build a long,man!
We'll pretend that we r J.P.Getty
We'll say ‘R U offered?’
They'll say ‘Yeah man!’
But we’ll separate the baby from the bath when SPU’s R down!

1/X If U R 👀 TODAYS’ PUBLIC REMOVAL OF FORMER 🇨🇳 PRES. HU JINTAO IN DISBELIEF👇 A brief🔬 into the childhood & upbringing of Xi Jinping by @NewYorker: “(Xi Jinping’s) father, Xi Zhongxun,🇨🇳’s propaganda minister @ the time, had been fomenting revolution since the age of 14, when 2/X he & classmates tried to poison a teacher whom they considered a counterrevolutionary.He was sent to jail, where he joined the Communist Party. Eventually he became a high-ranking commander, which plunged him into the Party’s internal feuds. In 1935, a rival faction accused

1/x In a 🌎 of secular inflation, the proper response to 📈 in demand is to 📈 supply. U currently👂a lot of talk about this, as it relates to commodities. But what about labor costs?? As protectionism grows, we are increasingly turning away the exact supply we need most of all. 2/x“Unfortunately, the H-1B process is falling increasingly out of date & badly failing to serve its original purpose of turning on the talent tap for top innovative companies. Congress sets an annual cap on how many H-1B visa holders can come in, & that cap is now far below what

End of an era.’Roger v. Rafa, just 1 name apiece required, belongs up there w/McEnroe v. Borg, Evert v. Navratilova, Sampras v. Agassi, Ali v. Frazier, Magic v. Bird, Brady v. Manning.
Federer & Nadal showed off individual greatness & compelling contrasts across their 40 matches, 14 @ Grand Slams: righty v. lefty, attacker v. grinder, seeming effortlessness v. relentless intensity.
& yet, there was an unmistakable element of poetry w/these 2 men who challenged each other & elevated eachother performing as partners, slapping palms & sharing smiles.’

1/x “The near-term prognosis for inflation is not good. Each month’s 12-month inflation rate matches the previous month’s rate, + a new month, - the corresponding month dropped from the previous year... The next 4 months to be dropped from 2021 will be 0.9%, 0.5%, 0.2%, & 0.3%, 2/x respectively. The Clev Fed produces an “inflation nowcast” which estimates what the monthly inflation would be if the month ended today. If their nowcast is correct, the 0.9% from June 2021 will be replaced with 1% for June 2022. If inflation in each subsequent month through

@DanOBrienPoker @PeterZeihan 1/x I agree w/much of what @PeterZeihan says. partially disagree here. As Peter aptly explains, 🇨🇳’s a insecure country w/great aspirations. It’s in dramatic demographic decline w/out the critical external resources it needs. IMO, this makes them incredibly dependent on shipping @DanOBrienPoker @PeterZeihan 2/x lanes & tech infrastructure. These dynamics paired w/🇹🇼’s deep cultural/symbolic importance, make🇹🇼 ‘reintegration’ non-negotiable. In this context 🇨🇳’s seen their 🪟closing. This is why they’ve decided to move now. 🇷🇺’s actions in 🇺🇦& the cohesive response from the west has

1/x It’s human nature to look @ a trend & extrapolate it into the future. We’re pattern recognition machines...& a 2 generation long (40 yr) trend’s ~impossible for collective psychology to imagine turning. But extrapolating a growth trend w/out understanding its causes is folly.

https://twitter.com/EricBalchunas/status/1516129703467401227

2/x but 40 yrs of monetary policy dominance & secularly ⬇️IRates (⬆️ liquidity) has single🤚‘ly created a technological revolution. After all, unconstrained capitalism, + infinite resources (free $) leads, much like, mesozoic CO₂ levels 4x >today => abundant plant life =>large🦕

1/x Considering that the market had the largest drop since 🎃 2020 on Monday w/ fixed-strike vols ALSO down SIGNIFICANTLY, now is as good a ⌛️ to reiterate the market mechanics of this "Pain Trade".

https://twitter.com/jam_croissant/status/1302785814468931585

2/x As we mentioned in our 🎅 December investor newsletter kaivolatility.com/hubfs/December…, there is considerable support for the market in the immediate term. Even with surging commodity prices, FX turbulence, QT, and the exogenous shock of war in Europe,

1/x It is time to wake up to the fact that the Fed has little to no power to control price inflation…the fact that they are charged w/ price stability in today’s economy is a charade….For 43 yrs the Fed has lowered rates & For 43 yrs the result of this policy has been secular 2/x PRICE DEFLATION & ASSET INFLATION. Why in the🌎, after 42 yrs would ANYONE think that by now raising rates the Fed will somehow have the same effect of PRICE DEFLATION & ASSET INFLATION?! I’ll be the 1st to say it, but a major policy error is in the works, & the Fed has no

1/x Tho🇹🇷’s circumstances are mostly self-inflicted, it’s in many ways a canary in the coal mine… INFLATION puts central🏦’s in a 📦. The year ahead for ALL POLITICIANS & ALL ECONOMIES will be defined by their reaction to this new zeitgeist of inflation. asia.nikkei.com/Editor-s-Picks… 2/x Inequality, the theme of the last decade, is still front & center, which makes the likely reaction fxn’s to continue to be populist. In many countries inflation & the challenges it creates for govts will breed instability in the yrs to come, forcing change. Placing yourself @

1/x I’ve created a monster…So many talking heads talking about things they don’t understand @ this point. JHEQX has been completely very lows at this point. Everybody’s speculating as to the scale of Futures to buy or Futures to sell. It’s all Nonsense. Ignore the 🐍 oil.

https://twitter.com/spotgamma/status/1475904275192721415

2/x So much misinformation…In reality it’s simple. This trade covers a set amount of S&P500 equity exposure. This equity exposure doesn’t change…The hedge gets replaced once a quarter. The trade is always traded delta neutral w/in-the-money calls of the expiring quarterly OpEx.

1/x As we approach the end of this calendar chapter, the next chapter lies before us, waiting to be✍️.@ this🕰 let us take stock in how our character’s developed & the potential growth that’s yet to be✍️.If I’ve been part of your📖this year🙏🏽join me by paying it fwd & Donating!👇 2/x This year we’ll be using the GiveWell charity platform. It is an analytical platform for determining the most effective charities. To learn more about their process 👉 givewell.org/how-we-work/pr…. Still Unsure which one to donate to? Donate to their "Maximum Impact Fund"!

1/x “There have been few, if any, instances in which inflation has been successfully stabilized w/out recession…Every U.S. economic expansion between the Korean War & Paul A. Volcker’s slaying of inflation after 1979 ended as the Federal Reserve tried
washingtonpost.com/opinions/2021/… 2/x to put the brakes on inflation & the economy skidded into recession. Since Volcker’s victory, there’ve been NO outbreaks of inflation UNTIL THIS YEAR, & so no need for monetary policy to engineer a soft landing of the kind that the Fed hopes for over the next several years.

Hey Stonks,
I got somethin' real important to give you in ‘22
So just sit down & listen
Stonks, you know we've been together such a long, long time
(since ‘82)
And now I'm being forced by fiscal to lay it on the line
Wow, you know it's Christmas & my dual mandate’s offsides… Gonna give you something so you know we’re not too behind
(the curve)
A gift real serious, so time to put in a market top,
Take a look inside, it's our Fed policy in a box.
It's in a box.
Not gonna buy you no more low Interest rates
That sort of gift will stimulate too much

1/x Many of you have asked why I have 🛑‘ed with the 🥐’s. I haven’t… You just have to 👀 a little closer @ other mediums… 🍌 🦍 🍌 2/x The 🪧’s are all around U. 100k VIX 20 calls were sold today. 100k+ es 10/20 margin puts sold. 🍐 these 🍌🍌 w/The 20k Spx call spds monetized yesterday by the IBKR 🐳 & the SPX 10/20 4475puts bot today on close, w/ 👸 @ the 🏖, but on her way back 10/27, w/ still weak but

1/x Not surprisingly it’s been a good time to wrestle🐻’s. Enough green’s been made doing so, we’d be forgiven comparisons to Lou Ferrigno… As discussed last Friday the pre-Fed Bear dip down to 4300-4350 was to be bot w/ 🙌. Now, as we approach the 20 day, comes the final🐻toss. 2/x The necessary🍌🍌🍌’s needed for our final hulk strength comes supplied @ EOQ from our tried/true JHEQX…the clues were all there last Mon w/Icahn’s follow up sales of Dec 3600 puts…Truth be told the market sell off never stood a chance. The steep skew & the ‘wall of worry’

1/x I’ve been traveling abroad for meetings, so just a few small 🥐crumbs this AM…& no 🥐this Wed. 👀4508*** after Resistance @ 4534.75, carefully this AM, as weak new highs w/out follow thru can often lead to unwinds. But🕰’s not a🐻friend, & it’s now or never if🐻are to try & 2/x take control at some point this fall, as the front-run fed reaction triggered @ 4380 a week ago by Icahn, could very well now see a sell the news reaction, while we’re still in a🪟of⚠️here until Labor Day. given the speed/size of the move, sentiment overreach, &👸&🦥still @

1/x Whoa horsy. Whoa! The BTD crew has given us another quick 100 pts again in the 🪟of weakness, but we are now beginning to outrun our correction in 🕰. With Jackson hole event-Vol still a week away, Vol in front of Jackson Hole is well supplied.All those 🍌🍌should help to put 2/x the brakes on the rally. After all rumor has it the Wild Tapir🐗 is still circling somewhere just outside of town and our 👸 & 🦥 are not here to protect us, with breadth still abysmal. That’s not to say we’re really at any major risk this week, just that some participants

1/x A quick morning 🥐 with your ☕️. We are at a fork in the road. Today’s close is🔑. The morning print should be stable, holding up here for the remainder of Icahn’s live puts & dealer gamma to expire on open. As MS’s been adamant about, there’s a decent amount of Vega roll off 2/x for dealers, so no 1 is sticking their neck out on a Friday until there is more continued clarity on the lurking tail. 1 of the oldest rules in the📚of🥐is don’t be a hero on a Friday, particularly in a weak market. This is never more the case than on OpEx in a🪟of weakness.

1/x Fall’s almost here. &👸&🦥 are excited for their late summer ‘trip’ to the🏖. The W.of Fortune always seems to crush ratings in the summer when everyone’s@home watching daytime TV. But the fall, especially w/👸away, can find the ratings stopping dead in their tracks. This

https://twitter.com/jam_croissant/status/1425334683617972224

2/x fall in particular with the rate of Delta growth finally slowing there is more and more liquidity flowing into the real economy, which could very well counteract much of the