Co-host of the Odd Lots podcast. I like financial crisis hindsight, spurious correlation and puppies. London ➡️ New York ➡️ Abu Dhabi ➡️ Hong Kong ➡️ New York
New York
- Tweets 24,714
- Following 4,816
- Followers 210,212
- Likes 26,773
I used to think that anyone who had a puppy must be in a permanent state of delirious happiness. Now that I have a puppy of my own, I realize I was right.
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Weird that no one’s ever tried to spark a domestic manufacturing revival by destabilizing every single source of capital including private, public, domestic and international, before?
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For the first time in history, the entire U.S. Treasury curve is below 1%.
bloomberg.com/news/articles/… by @StephenSpratt & @Ruth_Liew10
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The absence of true price discovery in an increasingly financialized economy and the subsequent failure of the private sector to allocate capital in a manner that is productive and useful for societies.
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If he's capable of keeping his crypto in cold storage but cannot figure out how to open a TreasuryDirect account when 6-month t-bills are yielding 5.14%, then that's a dealbreaker ladies.
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We’re about one DM away from SBF claiming that evaporating $8-$10 billion of people’s money was really just a helpful way of lowering inflation.
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New paper finds that increased corporate power is basically responsible for all of the negative financial and economic trends of the past few decades, including stagnant wages, rising inequality, more household debt and financial instability.
federalreserve.gov/econres/f…
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This is a big deal. Wall Street analysts self-censoring their research is never a good thing, especially someone like Mike Cembalest.
bloomberg.com/news/articles/…
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Bitcoin: the ultimate inflation hedge, cannot be manipulated, independent of traditional finance and central bankers.
Also Bitcoin: A CEO tweeted something negative about us so now we must die.
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I need 1,500 more followers to overtake someone on my list of enemies. If you believe small, petty victories that no one else but you will ever notice are a worthwhile endeavor, then please retweet so I can win a game that only I am playing.
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guys will be like “sorry i have a lot on my plate right now” but it is literally just borrowing yen at cheap interest rates and buying higher yielding assets abroad
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EXCUSEFLATION
A growing body of analysts and researchers see a pattern playing out across Corporate America, with companies using the unusual disruptions of recent years as an excuse to raise prices, and expand their profit margins.
bloomberg.com/news/articles/… with @TheStalwart
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"We find that funds with facial unattractive managers outperform funds with attractive managers by over 2% per annum. We next show that good-looking managers attract significant higher fund flow..."
(H/T @SnippetFinance)
papers.ssrn.com/sol3/papers.…
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Just three VCs with some very...specific...ideas about when it's appropriate to panic or not
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Someone should set up a Twitter account where they just screenshot other people's NFTs and then post the reactions.
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Some personal news...
I'm moving back to New York to focus on Odd Lots.
@TheStalwart and I are now going to be 100% dedicated to podcasting and blogging, with plans for further expansion this year.
I can't wait to be back in the US time zone and to focus on writing full time!
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Hats off to the Jefferies analyst who keeps flying economy between Shanghai and Beijing to estimate load factors.
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TIL the Chinese military has built full-scale replicas of Taiwan's Presidential Office Building in Inner Mongolia.
bloomberg.com/news/features/…
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Wrote about how the Wall Street Bets phenomenon is changing markets, and how ill-equipped the establishment is to deal with it.
bloomberg.com/news/newslette…
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China keeps publishing fewer and fewer economic statistics.
JPMorgan via @SnippetFinance
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Via Goldman Sachs: Last week was the largest active hedge fund deleveraging event since February 2009, with long positions sold and shorts covered in every sector.
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It's gonna be wild if Nigel Farage losing a Coutts account leads to more UK bank CEO oustings than, say, the 2008 crisis.
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Honestly, at this point it’s kind of comforting to see that the bond market can still intimidate everybody
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SILICON VALLEY BANK
Some takeaways and thoughts regarding the SVB situation on a Friday afternoon before logging off for the weekend.
First, what happened?
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Good news for those thinking of buying oil on the cheap. This old story about my attempt to buy a barrel of crude is now free to read so you can learn exactly why that's a bad idea.
bloomberg.com/news/articles/…
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It's amazing to me that some people are still litigating whether companies helped push up prices post-pandemic.
The companies themselves are telling you that they've been exploring elasticity and have been pushing price to expand margin.
Listen to what they're saying.
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A bank with subpar risk management and flaky depositors just changed the US financial system forever.
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Call it a hunch, but it feels like this might be the time to do an Odd Lots-style investigation of the US health insurance system.
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In all seriousness, when I used to visit Beijing in the early 2000s it was well known that you could buy insanely cheap luxury handbags that were *not* fake versions but were actually sourced directly from the factory. The fakes were more widely available but the real 'fell off a back of the truck' ones were definitely out there...
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Oops.
Goldman Sachs predicts that England will win its first major tournament in 55 years, based on a probability model using 6,000 matches trib.al/erjtndF
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In 5 hours my dad will wake up and call me to ask why gas stations aren't paying him to fill up his tank and I'm going to have to explain crack spreads, I just know it.
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I heard if you whisper 'standard deviation' three times while looking in a mirror in a dark room, Nassim Taleb will appear, give you a withering look, and tell you that your intelligence lies on the far left side of a Pearson type IV distribution.
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We're in the midst of the longest bull run for stocks without a major drop on record. Via Goldman:
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France's central bank woke up today and chose violence.
📄 [Working Paper] Modern Monetary Theory (#MMT) is neither a significant scientific contribution nor a good compass for policymaking.
New Working Paper by F. Drumetz & C. Pfister 👉 bit.ly/3EWRIS3 #BdFeco
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I am shocked, shocked I tell you, to discover that the odds being produced by a bunch of gamblers accessing a gray betting market through a VPN might be prone to manipulation.
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So to summarize, it seems a titan of 'decentralized,' 'disruptive' and unregulated crypto got in trouble for essentially recreating a pre-Glass Steagall and pre-Volcker Rule banking conglomerate with customer deposits used to fund trading activities.
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Overnight we saw mass social unrest, continued culture wars, the prospect of martial law, a curfew in the world's biggest financial center, and the looting of a retail icon. So naturally, futures are up.
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People say a flattening yield curve may not be a good indicator of a future recession because the term premium remains very low. But alternatively and potentially more likely, term premia are mispriced.
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The guy cheering on Trump's tariffs and telling stock investors to shut up about their losses is literally betting against Corporate America viz CDS.
Chamath's CDS Bet: Outlining Major Corporate Debt Default Risks
"With all of the tariffs, the one thing that we haven't sufficiently talked about is there is a tremendous amount of corporate debt that supports these businesses today."
"And you would say, 'Well, if long-term rates go down, there's no real risk.'"
"But the tariff picture actually impacts revenues."
"And the problem with that is that there's a lot of companies that have debt covenants tied to revenue and EBITDA."
"And so this is what I spoke about at the beginning of January, which is, the one risk that is uncontrollable, is what happens to corporate debt and could we see a wave of defaults and a wave of action?"
On our 2025 predictions show in January, @chamath picked credit default swaps as his best-performing asset this year, calling it a long-shot with major upside:
" I would be long CDS. I'm buying insurance using credit default swaps. I think that there is a small chance of some volatility next year. I hope it doesn't happen. I hope that this trade loses money. But if it hits, it will be the best-performing asset of 2025."
Fast-forward to April:
" It has hit. For every billion dollars of risk you would've put on, would have cost you ~$1M, and that million dollars would've made you ~$7M in about three months."
"Why is this important? The CDS actually represents the structural risk in the United States corporate economy."
"So when you see these spreads blowing out, this is actually a very important warning sign."
"This is what was the canary in the coal mine for the Great Financial Crisis."
"The tariff picture and the recession picture will get played out in this chart."
"And I think it's something that folks can and should probably pay tremendous attention to."
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And here's the GameStop strategy going global.
Traders in Australia are targeting the stocks with big short positions and low equity float to force a squeeze.
bloomberg.com/news/articles/… by @EyeOfJackieChan
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Over the past 24 hours China has:
- Restricted the amount of time kids can play online games to a maximum of 3 hours/week
- Vowed to crack down on private equity
- Described the crackdowns as a "profound revolution" & "a return from the capital group to the masses of the people"
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A potential supply chain snarl in the making - Europe's heatwave means that water in the Rhine is just inches away from becoming too shallow to transport commodities shipments.
bloomberg.com/news/articles/… by @JWittels
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Jackson Hole is awesome because Christine Lagarde will literally walk by and compliment you on your boots.
(This just happened, I have no witnesses)
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Shout-out to my friends at Deutsche Bank for their tireless work in the non-profit sector.
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Crazy thought. What if the best response to mitigating the economic impact of the coronavirus outbreak isn't monetary policy or fiscal policy but (man, this is so crazy) effective healthcare policy. Insane, I know.
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Bitcoin remains fairly valued according to my avocado-based pricing model, even after rising past $11,000.
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They say you should aim for one act of kindness a day.
So here's Bitcoin on a log-scale:
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Regulators are investigating DeepFuckingValue.
nytimes.com/2021/02/03/busin…
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The Trump-Musk breakup isn't finalized until Pete Davidson enters the picture somehow.
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Polymarket is doing fresh checks to make sure traders in the US aren't betting on the presidential election trib.al/ibT7WGh
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Don't look now but someone's been tapping the Fed's discount window.
bloomberg.com/news/articles/…
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Weird that the first banks to fail all happened to be three lenders with rapid deposit growth fueled by tech and/or crypto, though 🤷♀️
But it’s important to understand that SVB’s failure didn’t arise from risky startups doing risky startup things. It arose from SVB’s over-exposure to boring old mortgage bonds, which were considered safe at the time SVB bought them.
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You can replace the term "distributed ledgers" with "shared Excel sheets" in 90% of talk about blockchain and finance.
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GameStop, AMC, Tootsie Roll, BlackBerry: there's a theme here and it's elder millennial nostalgia.
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I told @TheStalwart I’d take him to one of the best restaurants in London. A really underrated spot
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In the past hour I've been called a monkey, a clown, an idiot, a retard, that I look evil, that my face looks smashed in, and that I'll 'make a fine waitress one day.'
All because of an observational tweet about Bitcoin's reaction to CPI data.
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