Macro Dragon: And The Beat Goes On...
Summary: Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
Macro Dragon: And The Beat Goes On...
Top of Mind…
- Good Morning – Afternoon – Evening – Night folks…
- KVP is working on a Bitcoin piece that was supposed to come out today – yet not happy with it yet… but will def. be out this wk… come hell or whisky sours…
- So word of the day is Karma, as we seem to be getting a Covid-19 (C19) outbreak in the White House – some of you may recall KVP’s brutal postulation a few months ago… not ethical by any means… but if you want skin in the game & alignment for the greater good of the American tax payer… everyone in congress & the white house should get Covid-19… that how you get structural log-term change… not when its “everybody’s problems”… but when it’s a problem for people who are in power (the 1% of 1%). When it is unequivocally something that we have to deal with, then sustained changes to the systems & processes of the economy’s & society’s eco system finally come to being
- Let’s put it this way, do you think health care reform in the US - that would give healthcare for all & cut our the cancerous bloated overpricing of drugs & services – has a greater chance of structurally occurring if more member of congress catch Covid-19 or less? If Trump catches it or does not catch it?
- Skin in the game is everything… because it aligns responsibility & accountability…
- On another note & let’s not get too sensational, but the probability of both Trump & Biden getting C-19 & not making it, is not high, yet its also not zero
- In such a situation, default would be pence for the Reps (Assuming his wife is on-board of course) & all of a sudden the Bern would be back on the dems squad. By the way, if it was only Trump who got taken off the Map, KVP feels that Pence would wipe the floor with Biden… we are talking left, right, forward, backwards, behind the doors, the little knock & crannies… completely wipe the floor with sleepy joe…
- Still think Biden has one potential kryptonite move left… & its not an odd gaff here or weird hug there… its who he picks for VP. Now the killer move would be Obi… but Obi ain’t coming back (sigh)… plus Obi’s still got bodies & baggage for pushing through the affordable health care act (which by the way, this would have been the pristine environment to put that across).
- AOC would be perfect for the populist & younger voters, yet she’s still too young herself (need to be at least 35). Bernie, Warren, Bloomberg would be 100% wins, but not sure how likely the boys would be comfortable to play #2. An outsider be a complete roll of the dice, Will Smith, Mark Cuban anybody? KVP personally would pick either Mitt Romney from Utah (for the bipartisan move of the century), Warren (For the certain win) or my personal fav, maverick & entrepreneur Andrew Yang.
- If you are talking about one of the few real key tail risks to a big reversal lower in equities, its Biden being taken out by C-19 & Bernie stepping up to the plate (while shaking 30K email Hillary off his shoulders)… that would initially freak equity markets out… the probability of such an event is likely not +50%, yet its not zero… so maybe 5-10%? Still it’s interesting to add on the contingency board…
- Our resident Texan, & Saxo head of currency strategy did a great US political piece that is worth a look: It is time for markets to consider a Biden presidency
On the Radar Today
Inflation themed day, today.
It worth noting that o/n we got much better than expected New Loans out of CH at 1700B a 1300B e 2850 B… also we are hearing of BTE consumption happening as well as demand for industrial metals…
- CH: CPI 3.3%a 3.7%e 4.3%p, PPI -3.1%a -2.6%e -1.5%p (note that deflationary to the rest of the world)
- US: CPI 1.7%e 2.1%p, FOMC speakers Harker + Quarles + Mester, UST bond auction
- JP: Leading Indicators
- AU: NAB Business Confidence -46a -65p
Start-End = Gratitude+Integrity+Vision. Create Luck. Process > Outcome. Sizing > Idea.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.