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Given the nature of this platform, it is hard to know what kind of track record folks have in making major macro calls.
Here's a look at my track record over the last few years. Thread.
Bob Elliott
38.3K posts
Bob Elliott
@BobEUnlimited
CIO at @UnlimitedFnds | PM of $HFGM, $HFEQ, $HFMF, $HFND | Fmr @Bridgewater IC | One of the few "sane" voices on #fintwit | Comments not investment advice
- There are increasing signs that the Embargo by the new admin is starting to have real economic consequences. Container bookings have collapsed, ports are seeing reduced activity, trucking is decelerating, and retailers say in a few weeks store shelves will be empty. Thread.
- The selloff in US bonds has sparked a global dump of developed world sovereign debt. Since US yields started rising after the Fed meeting in Sept, global bond yields are higher, while the dollar and gold are surging, reflecting an increasingly global debt contagion. Thread.
- It doesn't take a PhD to understand tariff impacts: - 10% tariffs are mostly absorbed by foreign producers. - 50% tariffs are mostly paid for by domestic consumers. - 245% tariffs stops all trade.
- It seems @SecScottBessent’s “quick face-saving deals” strategy isn’t working even with close allies who appear unwilling to fulfill their roles in the Kabuki theatre.
- Trump's comments tonight make clear @SecScottBessent tipped a select group folks about the admin's planned policy shift toward China at a JP Morgan event last night. Seems Bessent has forgotten that age old lesson about laying down with dogs.
- The US banking system is built on the expectation that equity and bond holders accept the bank economic risk and depositors, particularly the small folks, do not. While that is not legally the structure, its important to keep in mind that's functionally how it works. Thread.
- Feels eerily similar to May 2008.
- Hearing from some insiders: -big banks actively working on buying svb business -fdic considering insurance / liquidity covering up to 95pct of uninsured depositors to acquirer -Monday 250k on track -50pct of uninsured paid out next wk Cant confirm myself but seemed worth sharing
- This is not the 2008 cycle. Those drawing conclusions from '08 about the need to cut fast today to avoid the risk of a precipitous drop in growth ahead are missing the big picture. '08 was the bursting of the greatest debt bubble in 100 years. This cycle is totally different:
- Fed/FDIC decisions on SVB determine whether they risk a bank run trillions of dollars in size. 1/3 of US deposits are in small banks and ~50% are uninsured. Haircutting SVB depositors will raise sensible questions about holding deposits at any small bank, risking a broader run.
- There are increasing signs the new admin is committed to cutting 25-35% of the federal workforce, totaling as much as 800k job losses ahead. These cuts would add 50bps to the unemployment rate even before considering knock-on consequences + contractor/consultant cuts. Thread.
- An aggressive global easing is here without a global slowdown or any stress in asset markets. Such Over Easy policy has been pursued in the past by individual countries, but has never been run at a global scale. Thread.
- Years ago I led research on the GFC and was way out front suggesting trillions in losses, so I know a little something about crummy banks. Getting panicked calls about the risk of SVB deposit losses, a bank with: 1) 15% tier 1 2) 40% LTV 3) 100% deposit liquidity coverage