Cognitive Assonance

@DannyDayan5 @dampedspring But the assets have to go somewhere in the ROW until the US current account balances

@CAssonance @dampedspring I don't disagree with that, not sure if my responses implied that. Point I made is they can do whatever they want, and yes it impacts BOP back. Original point is: why own these assets given the relationship?

I don't know how many times the ROW needs to be told to fuck off before they start dumping US assets, but they own a lot of USTs and I don't understand why they own a single one.

@dampedspring @DannyDayan5 Think Andy is correct here fwiw - the eventual solution is enough people selling the USD that the US current account balances (b/c imports more expensive/exports more competitive) - until then it’s a game of hot potato on the USDs which are sold

@DannyDayan5 Of course. But the net flow is to a European or BOP doesnt balance. Anyway I can see we won't agree how BOP and currency flows work. Have a good day.

@dampedspring This would have been my choice

Many like 3, 1, 2. Only four slots. Sort of get that line of thinking

What's the most bullish scenario for stocks in order 1. Overwhelming attack 2. Escalation attack not overwhelming 3. Ceasefire

@PeterSchiff A bit of inflation is not the same as a full blown financial crisis, cmon

We are headed for a full-blown financial crisis. February import prices spiked 1.3% while export prices surged 1.5%, annualizing to inflation rates of 16.8%–19.6%. That's before oil rose 50%. Unless the Fed raises rates several hundred basis points now, inflation will skyrocket.

@macrokurd Fully agree, people will already be making arrangements to bypass the straits, this is their moment of max leverage they need to ‘monetize’ it (both literally and figuratively)

People need to understand, Iran although having lost materially, are also pragmatic and strategically very competent. The closure of Hormuz was their nuclear weapon. It is a one shot weapon that they used.

@JavierBlas I think you mean ¥¥¥

Tokyo and Tehran appear to be negotiating billaterally safe passage for Japanese-flagged oil tankers. One possilibity is that Iran emerges from the war keeping the keys of the Strait of Hormuz, deciding who crosses, when, and under what conditions ($$$).english.kyodonews.net/articles/-/727…

@macrokurd Including EUR and GBP

The podification of hedge funds had led to the Brazilification of all local rates markets

@macrokurd @james_f_burton Latest leg is combo of deleveraging and repricing the distribution

@CAssonance @james_f_burton Yes. Pricing out cuts is probably the right modal outcome here until time passes and clears the outlook. Switching from cuts straight to hikes in places like Poland, Czech Rep, Brazil etc... I would argue hurts credibility and is unlikely. At least till the clouds clear.

You can not hike your way out of a supply side shock led CPI jump. The recency bias is understandable after 2022. But in 2022 we had a crucial difference. We had a positive demand side shock alongside the supply side shock. Real rate policies were very negative, nominal rates

@tomicki @orrdavid Sorry wasn’t clear - what I meant is for an asset like EWZ, part of the return is from the underlying equity performance (in BRL) and part of the return is from the USDBRL performance, and I thought it might be interesting to decompose that

@CAssonance @orrdavid All assets on the site are USD denominated. For foreign stocks go here: azitrading.com/annual.returns…

A few small updates to factorstoday.com. The big one is that if you enter a ticker into the portfolio analysis or hedge tools that doesn't have any data in our system, it will be added to the next batch processing and updated within the next twenty-four hours.

@tomicki @orrdavid Great site. Just a suggestion - for the assets not denominated in USD you could consider a local return and a USD return to decompose how much of the move is coming from FX

@orrdavid I think now it works the way you would hope for: factorstoday.com/stock/BRK-B factorstoday.com/stock/EWJ

@KrisAbdelmessih @dampedspring Super helpful - thank you both

@dampedspring @CAssonance So if reference asset moves 10%: double levered needs to trade 20% of its AUM, triple levered needs to trade 60% of its AUM Practice a couple and you'll never forget how it works

Not only has $MSTR f*cked up BTC but it's levered ETF's "Amplify" the f*ck up On the close today 2600 whole Coins equivalent will be forced sold in the form of MSTR shares into the market to rebalance the leveraged ETF's

@donnelly_brent Well, you nailed the TACO in your note

Concepts of a plan for a framework for a possible future deal on which to renege with NATO at a forward date is now place we can all breathe easy.

@Citrini7 @GreenZenForest Buy EM equities where VC is less pervasive?

@GreenZenForest there’s no trade here I’m just ranting into the void

@allbullnobear8 As in, you get paid a higher yield because the currency is going to depreciate?

World is going to realize how cheap Treasury bonds are relative the RoW bc of currency risk

@PeterBerezinBCA Unless you instantaneously balance the US current account, foreigners have to buy some kind of US asset? Maybe the decline in the dollar is evidence that they are charging a higher price to finance these imbalances

It’s striking that the US dollar managed to weaken in 2025 despite significant foreign buying of US stocks. What will happen to the greenback if those equity inflows turn into outflows?

@donnelly_brent More like the central bank paying investors to help fix their macro imbalances (inflation etc)

Sharpe of FX carry in 2025 Turkey wins. Ignore RUB you can't trade it. The central bank handing out free money to specs.

@dampedspring Agree given the total lack of vol that implies - carry should rip - but that would be a historically extremely narrow yearly range

IMHO If the 10 year yield remains between 4-4.5% yield for the next year, risky assets of all sorts will outperform and the dollar will "depreciate" vs stuff and hard currencies. This is what the "riggers" need to do. If they fail on either side risky assets will suffer.

@ArmandDoma Didn’t @BillAckman write something on this a while back?

Genuinely curious if anyone has done any policy work on how you can tax these “loans” that the super rich live off to avoid paying any capital gains tax ever