David, your every post is filled with such nuggets of wisdom. Sometimes, I don't follow you because I am not an expert in understanding global dynamics of supply chain. So I hope you help me out here a bit please.
In last post you said "Outside of the Strait of Hormuz, the global plumbing of world trade has not been interrupted."
In this post you are mentioning "An energy supply shock adds further pressure to supply chain abundance, at a scale that ripples through the entire economic system."
I must be oversimplifying and I am definitely not an economic expert, but to me, they sounded a bit contradictory. Or maybe this is why you had this post update to correct some of the stances from last post? Or maybe this is what you meant by when you said we might have a hybrid type of situation between the moderate inflation and weak productivity? I don't know for sure. Could you please help reconcile this for me?
Great article thanks David. I had a look at your trade Blotter, and light of the article, just had a question on the macro and logic of your positions.
Are XLI + RSP positions for the "Phase 1 Is Not Over Yet" until behaviour change sets in, whilst the harder positions (XLB, ITA, EWU) do more of the macro work?
If I had to guess logic of positions it would be:
Long the direct beneficiaries of conflict and commodity disruption (ITA, XLB),
Long the eventual Fed response (XLRE),
Long international re-rating (EWU), while maintaining broad U.S. equity exposure (RSP, XLI) during the still-intact Phase 1 window?
Apologies if this is answered somewhere else or my questions are stupid, but understanding context of your book against your article will help me understand macro so much better.
These two recent articles are extremely important. A real macro compass. Thanks for your professional sharing — tremendously valuable.
If US becomes Europe
What does Europe become 😬
Haiti 😂
🥲
David, your every post is filled with such nuggets of wisdom. Sometimes, I don't follow you because I am not an expert in understanding global dynamics of supply chain. So I hope you help me out here a bit please.
In last post you said "Outside of the Strait of Hormuz, the global plumbing of world trade has not been interrupted."
In this post you are mentioning "An energy supply shock adds further pressure to supply chain abundance, at a scale that ripples through the entire economic system."
I must be oversimplifying and I am definitely not an economic expert, but to me, they sounded a bit contradictory. Or maybe this is why you had this post update to correct some of the stances from last post? Or maybe this is what you meant by when you said we might have a hybrid type of situation between the moderate inflation and weak productivity? I don't know for sure. Could you please help reconcile this for me?
I’ll reply tomorrow. I need some sleep.
Banger. Makes me feel even stronger about a reversal in yields after the crisis resolves.
Thorough, concise, yet nuanced. Gonna read again in the morning so my brain can cook it a little.
Awesome. Do it.
Great article thanks David. I had a look at your trade Blotter, and light of the article, just had a question on the macro and logic of your positions.
Are XLI + RSP positions for the "Phase 1 Is Not Over Yet" until behaviour change sets in, whilst the harder positions (XLB, ITA, EWU) do more of the macro work?
If I had to guess logic of positions it would be:
Long the direct beneficiaries of conflict and commodity disruption (ITA, XLB),
Long the eventual Fed response (XLRE),
Long international re-rating (EWU), while maintaining broad U.S. equity exposure (RSP, XLI) during the still-intact Phase 1 window?
Apologies if this is answered somewhere else or my questions are stupid, but understanding context of your book against your article will help me understand macro so much better.
Thank you