I work at a Macro Fund, used to be a consultant, I have a Columbia MBA and a very large comic collection. Charitable interpretation is advised.
Westport, CT
Joined April 2023
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Midjourney is going to make $200 million in revenue this year with only 40 employees and without any external money. It is impressive. Also scary if this heralds how few employees AI is going to need compared to the number of jobs that it will obliverate.
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In my view, China's economic deceleration has scary common points with what happened in Spain. Both depended on a massive real estate bubble. Both local governments depended on income from land sale and repurposing. And you know how Spain ended... The main difference is China can be a significant economic drag for the rest of the world.
Just a couple of data points from @reuters
Property sales by floor area declined 28.1% year-on-year, extending a 19.7% fall in May...
For June, property investment totaled to 1.2849 trillion yuan, falling 20.6% from a year earlier after a 21.5% drop in May..
Prices and volume coming down like a rock.
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With 30y mortgage rates at 7.3% and inflation falling, I can't see how the FED is not done here.
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Recent data reveals a drop of 1.5MM job openings since the peak in Mar '22, just a notch below the GFC period, which was 1.8MM. But unemployment has barely changed. This not only increases the chances of a soft landing (an amazing feat) but...
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1/3 It was a good CPI print. Lower energy prices & major contributors like used car & airfare prices caused lower inflation, but core inflation, the best long-term predictor of overall inflation still stands at 4.8%. Some thoughts: (Thread 👇)
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2/3 Getting to 2%, even if the gap has been greatly narrowed, will be marginally difficult. The tightening effects will be increasingly noticeable, and pressure on Powell to stop will ramp up, but I think he will remain committed to the goal.
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Not only the CPI print has been dovish (3%) but has been falling for 12 straight months. Definitely gives some creedence to what is priced in the curve. Buying bonds in the long end starts to sound like a smart trade.
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The market is now certain that the FED will raise once more later this month. Big change from one month ago. But we still expect easing to start next May... 🤷higher for longer?
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Very thoughtful piece from @meduza_en. The next months at the Kremlin are going to be busy... meduza.io/en/feature/2023/06…
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This article from Michael is fantastic. Worth reading a couple of times over. The only true global reserve currency before the dollar was gold. And the US worker pays dearly for having replaced it (less so the consumer and the financier)
In my most recent Alphaville piece I argue that there is no "history of reserve currencies" to which we can appeal in our discussions about "replacing" the US dollar.
ft.com/content/c967ba48-f21b…
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In my view a US default is highly unlikely. Worse case Biden will use the 14th and instruct the treasury to continue holding auctions. If you were him, who would rather have a kerfuffle with, the supreme court of the entire financial system?
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Xi Jinping calls Zelensky in a bid to lure European capitals. He wants to show that China also considers Zelensky's views and works for peace. But most significantly, he seems to be concerned with nuclear war. Given the access he has to Putin this is scary stuff
This quoted post is unavailable.
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NIM getting hammered (and more to come), headcount reductions hurting service (their brand), shifting from originate & hold to originate & sale (less profitable)... Was it not for the FED these guys would be long kaput. But how long can they keep at it?
buff.ly/41zSWxE.
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1/3 The dollar might be under attack, but it's not going anywhere. @meyrickc has a very good point in that the dollar is more than just a currency. It's a system of trust, backed by centuries of legal and social norms.
buff.ly/40xDYHj
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3/3 The dollar is more than just a currency. It's a system of trust. As geopolitics becomes more fraught and contentious, the dollar and the legal system that defines it will only grow in influence and utility.
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