Fed Hikes Driven by Macro Policy, Not Oil Spikes
In the two oil shocks of the 70's the Fed tightened due to the broad inflationary impact of leaving the gold standard and Bretton woods. Oil was a symptom not a cause of inflation In 90 the Fed paused cuts but didn't hike as the economy was recovering from the broad credit contraction of the S&L crisis In 2007 the Fed hiked not due to oil spike but due to an economy in the midst of a leverage bubble. In 2022 the Fed hiked not because of the oil spike but because of massive money printing and fiscal spending All the oil spikes except possibly 1990 are not comparable and fwiw 5 spikes is irrelevant anyway.
Fed Shouldn't React to Oil Supply Shocks
Should the Fed hike due to a supply shock in oil? No. Should the Fed cut due to oil supply shock causing weaker real growth. Also no. Get a grip pundits.
CLZ26's High Risk Premium Reflects Delivery Incentive
CLZ26 price of 75 is the expected forward spot price of oil for December delivery plus a risk premium. That risk premium is likely higher than normal (Z26 is cheaper than normal) due to the high incentive for those...
Desperate Financing Deals Tank Issuers, Boost BTC
I'm not gonna bother. This is another atrocious deal for the issuer. $MTPLF joins $ONDS, $BMNR, $IONQ doing a deal which costs 25-40% of proceeeds to get desperation financing. All companies that have done this deal have...
Alternative Fed Tightening Tools, Not Rate Hikes, Curb Inflation
FWIW while many are suggesting Fed Rate Hikes and markets are beginning to price that as well. We much prefer 1. Ending RMO 2. Addressing the uneven distribution of reserves by establishing a minimum reserve requirement to protect the high...
Central Banks Delay Hikes in Supply Shocks, Await Wage Inflation
The supply shock move in Energy prices, fertilizer prices, and food prices IS a Rate hike which slows the economy and is disinflationary to goods and services that are not energy and food. A dual mandate central bank doesn't hike...
Trade on Macro Fundamentals, Not Noisy Economic Data
Don't stare at spot noisy reported economic data. Answer these questions at a high level. Directionally not precisely. Is the U.S. labor market healthy and labor is in demand Is the population growing Is the 6 month to a...
IBIT + Short Call Matches STRC’s 11.5% Yield
One last comment on $STRC as I am bored of the whole thing and happy just owning long $IBIT Over the next year you could own STRC and get 11.5% yield. Or Go long IBIT and short ATM call and collect...
MSTR Overvalued, STRC Cheapest—Buy IBIT Instead
Let me summarize my view on $MSTR The entire capital structure is rich to BTC. Except for the fact that the company will issue at par as much of $STRC as investors want to buy AND only issuance or BTC...
Oil Futures Can Hedge Inflation Swaps via Energy CPI Component
Curious ? Inflation swap traders. Do you do partial arbitrage on inflation swaps using long dated oil contracts? For instance if receiving inflation do you sell CLM6 and buy CLM7 given that 8-20% of the cpi basket is...
Expect a 4‑Hour Market Stall After Rapid Move
Those who smoke brisket can relate. In big move days the move happens rapidly till about now. Then the combination of 0DTE and leveraged ETF rebalance flows causes a 4 hour stall. Wrap the meat. Leave...
Trump Bought Just 20M Barrels Amid Low Oil Prices
It's pretty amazing that the Trump administration only bought 20MN barrels of oil given oil averaged in the low 60's.
Ponzi Selling to Ponzi; Saylor Tweets Trigger Sell‑off
A ponzi selling to a ponzi. Perhaps I am being manipulated but all these Saylor tweets make me want to sell my coin not buy more.
MSTR Spends $1B Annually on Zero‑yield Assets
The capital structure of $MSTR costs just under $1BN to fund every year. The assets of the company earn zero yield. The carry is paid by issuance.
Market Already Priced the Rally; Right‑tail Calls Unchanged
SPX is up 100 handles since Friday close. 10 Delta "right tail" 3 month calls are unchanged. The right tail was more than fully priced. If you are congratulating yourself for "calling" a taco/war cessation or whatever....
Choose Volatility Sales over Raising Cash This Week
Did you raise cash last week or did you sell vol, deploy cash, and sell put spreads?
VIX at 28 vs SPX Down 4.6
Vix front contract is 28 SPX Level 6650. Down 4.6% from ATH Which one is "wrong"
Fed Needs Inflation Surge Before Rate Hike, Bear Ste
Nice job Fam getting my old colleague and experienced central banker 5k followers in 3 days. Still massively underfollowed. Fwiw IMHO the U.S. Fed is going to need an explosion of inflation to hike in the next year....
Diversify Now; Active Hedging Won’t Save a Sinking Portfolio
With vol high/skew high but OTM calls also high and with equities in a minor drawdown those with undiversified max long U.S. equity portfolios are whipping around "options" trade ideas as the solution. Looking for ways to hedge. ...
Short‑term OTM Calls Miss Right‑Tail Market Moves
If you sold long stocks on Friday and bought 10d 3 month calls at equal notional you are going to underperform badly in most right tail events. Doing it delta neutral is highly likely to get destroyed in most...
KORU Rebalances on MSCI Korea Close, Not US ETF
Hey Friends. Been digging through the $KORU Docs. With Kospi and MSCI Korea 25/50 down sharply overnight this thing is looking like a down 30% day. As far as I can tell its NAV and Rebalance timing is...
Investors Flee SPY for TLT, GLD, USO
People actually sold $SPY , bought $TLT and Bought $GLD and bought $USO on the open. Who the heck are these people?
Massive Buybacks Signal Shrinking‑to‑Grow Strategy
You know who has a buyback of more than 25% of their equity market cap? A company that is shrinking to "grow". Like $EK back in the day. Return of capital style buyback $CRM
DSData: Cheapest Real‑Time Analyst Beats AI on SPX‑NVDA Insights
Better than AI we have DSData powered by @DanielSimonyi details in pinned tweet Cheapest reasearch analyst on the planet. Client prompt "have you looked at how spx moved with prior NVDA earnings reactions? on train so can't look closely, but...
MSTR’s Upcoming SPX Addition Ignored by Pumpers
$MSTR the March SPX additions and subtractions are less than a month away and the announcement 10 or 17 days away. Why aren't any of the pumpers discussing the potential for addition? Have you given up?
Apple Becomes Modern Two‑Year Note, Rallies on Risk‑Off
Pretty cool that $AAPL has become the two year note of the modern age. Risk off equals appl rally.
Companies Issue Equity Under Pressure,
$WHR. Typical. Corporate strategy has always been Issue equity when you have to NOT when you can. Stocks down 7% on a forced issuance. $ORCL same story still dumping ATM every day https://t.co/vIGKQDwhZB
Buybacks Drop as Capex Takes Priority, ESO Dilution Fades
There are two reasons why buybacks are falling and likely to fall more 1. CApex as a use of FCF is deemed more important than share count reduction or SBC dilution offset 2. To the extent stocks fade the ESO awards provided...
New DSR Highlights Debt‑Equity Promise for Hyperscalers
New DSR released to clients. Part 3 in the Hamburger Series - Hyperscalers. As a reminder the idea is that to get a hamburger today one needs to promise to repay (issue debt and equity) on tuesday. ...
Meta's Compute Spend Aims Solely at Internal Profit
$META is an interesting case. Make a massive compute investment entirely for internal needs. Unlike virtually any of the big data center spend which in other cases is partly internal and partly to rent to others, META ROI seems...
Foreign Investment Steady, US Stocks Slightly Lagging
Balanced take from Bob. While the headline may be different than my "get out" thesis. The meat says the same. Flows suggest marginally weaker dollar and relative underperformance of U.S. stocks vs ROW. Don't panic out...
Smart Money Exits IBIT, Likely Profiting From MSTR Shorts
13F nonsense Look at all these sophisticated investors dumping $IBIT in Q4. Are they just dumb noobs to crypto with paper hands or perhaps they were unwinding short $MSTR long IBIT trades. And taking massive profits. https://t.co/6VVrnNnB6Z
