Kyle

Day 1: it's going to take a couple of days Day 20: ok we need 200 billion dollars

these are real structures being bombed, structures which take months to even years to repair quite literal structural supply destruction

Equity bears are at the brink of insanity given resilience in the indices, but odds of a breakdown are increasing now. Equities top slowly as passive flows and rotational dynamics can hold up indices for a long time. There are many structural forces rigged to push them higher, and thus it takes a lot to make them go down. Over the course of an equity bull market, buy-the-dip behavior continually gets reinforced, and the majority of capital will be controlled by adherents to this mantra. In theory, the longer prices remain coiled, the larger the move once they exit the range. This nuke in gold suggests there are liquidity issues brewing under the surface. It feels like a preview of what is going to happen to crowded trades. My theory is the Middle East is selling gold to shore up capital, as they have lost their revenue, and have many expenses around defence. They will also need to rebuild lost energy infra, and eventually, new pipelines to reroute around Hormuz. The buyback window is starting to close, and the sugar rush of higher-than-usual tax refunds is starting to fade. Retail has been a key marginal buyer of equities in these past weeks, and the fading of the tax refund tailwind is critical. The market is gradually coming to terms with the fact that this conflict may last for a long time. On a conventional level, the US and Israel have completely dominated Iran, but Iran has an asymmetric edge when it comes to controlling world oil prices through Hormuz. Trump can still end it, but the issue is that the US cannot simply leave, a ceasefire with Iran must be struck in order to guarantee that Hormuz is reopened. In order to strike a ceasefire, Iran wants to see a guarantee that the US and Israel won't attack them again (at a bare minimum), and it will be difficult for the US to get Israel to agree to that. Trump is used to being able to quickly maneuver according to his whims, as he did with tariffs, but the complex interlocking physical realities of war are different. Oil shocks often contribute to the end of bull markets, since they constrain consumer spending, hit manufacturing, and lower the ability of central banks to offer support. Indeed, the Fed came out slightly hawkish yesterday, and Powell also hinted that he may stay in his Governor seat post his role as Chair ending, which would constrain Trump's plans to unleash liquidity. We have a stronger dollar and long duration bond yields are going up over the world, which tightens liquidity. The Middle East is tight on money now and they were the marginal bidder in many assets. In particular, they were a key funder for AI capex through their investments in the frontier labs. They've been 40-50% of recent big rounds. Remember other deep pockets like Softbank are close to being tapped out. Any dollar that goes into these rounds will have to come out of something else, like liquid stocks (look at my pinned post for this broader thesis). And if we have any signs of risk to AI capex expectations, this will be a major shift that the market needs to contemplate. I've said this before, but puts are a difficult way to express bearish equity views because timing is so uncertain. Equities can hold on for a long time, because they are structurally rigged to go higher. Easier expressions are simply being in cash, or gradually shorting cash stocks over time, which helps avoid getting chopped. This is a very difficult market, stay safe out there.

Think attacks have tripled or quadrupled since here and are nearing the levels in the first days of the war Brent is +20%, spot oil even more than that, with significant structural disruptions (stuff that will take a long time to fix has been broken)

I can’t really see the scenario where stocks don’t go lower in the near term. Maybe that’s s bull case? Market has been so desperate for a taco people have been making their own and forgot that in an actual war both sides have to agree to end it (or one has to surrender). They’re going to figure that out eventually. The Fed’s cutting cycle is on its way to being completely priced out. 2 weeks ago, SOFR Z7 was 75bps lower than March 2026. Now it’s down to 25bps and IOR is comfortably above 2yr (meaning reserve managers are not buying the dip on the expectation the cutting cycle continues). If NFP is strong, it’ll wreck rates (at a time when financing has become increasingly important for the largest companies in the world) while if it’s weak I don’t think equities respond positively either. And this all is coming at a time when AI is maybe not good enough to convince companies to replace workers with machines while business goes along as usual, but certainly is good enough to have companies attempt to use it for roles they had to cut because of economic pressure and potentially find out they don’t need to hire that role back. It’s one thing to see some bearish scenarios and brush them off as priced in, that’s been a good strategy (most years have drawdowns of 10-15% routinely). But SPX is ~5% off all time highs…

i missed the short term 30% move in semis after peak fear of SoH but the HTF consequences of the war has finally started to show while it would be nice to catch both, you really just need to catch either one

Stay away from the noise and focus on the math and the facts. What is this "Hormuz transit" the news headlines are talking about? What matters are the facts. What is the size of the tankers? Are they laden or in ballast? What type of cargo are they carrying? The reality is that only Iranian crude has passed through the strait, and for all intents and purposes, the strait remains effectively closed. Imagine what happens as each day passes. First, floating storage in the Middle East increases as they utilize ballast tankers. Next, they fill up the onshore tanks. Once it reaches this point, Oil In Transit drops sharply, and floating storage stops growing. Once the regional onshore tanks are full, they are forced into additional shut-ins. While the Middle East goes through this process, importing countries hold out by burning through their SPR and surplus waterborne crude. From the next stage, starting with Asia, importing countries begin drawing down their commercial crude inventories. Many buyers have been holding off on bidding, waiting for the situation to ease. Unless they are facing immediate force majeure, they are patient because the situation might stabilize and prices could crash. However in their onshore inventories, a significant portion consists of unavailable stocks (linefill and tank bottoms) and working stocks for operational flexibility. Eventually the actual usable inventory begins to be drawn down, and if there’s no change in the flow by then... they will rush to wherever crude is still available and bid out of pure desperation. That is all. And that is where we are headed. I’m telling you, there is a process and a setup that must be followed. If no change occurs while all those buffers are being burned, prices will skyrocket. Right now it’s just a process. Don’t get buried in provocative headlines and noise during this transition. I understand why retail investors or tourists trading with cute seed of $300k get impatient without understanding all this. But it’s honestly a bit pathetic to see even oil traders acting like mayflies. #oott #iran

"While there are times, usually around 2-4 times a year, where ‘the macro’ becomes so important in determining market outcomes that not only does it start to drive their portfolio, but it basically makes clear that, yes, after all there was a lot of macro risk embedded in their portfolio."

The only way markets stop this guy out of his trade is by sending prices to absurd levels, but nobody wants to defect early and be the sucker who misses a TACO. So every day we drift closer to the right tail all this financial engineering is trying to shove under the bed.

oh and lastly, this completely validates the ICM thesis

some thoughts on this: 1/ i think with this, you can make the argument to be interested in altcoins again. my clear line in the sand for when to look at altcoins again was REGULATION - when cost of creating a token wasn't free, and that there was clear demarcation of what a token was, and how it accrues value - clearly crypto participants are too jaded from buying into something that has value purely by being named after the protocol, and no real economic value 2/ obviously there's still a long way to go + some clear jurisdictions to draw. the biggest is outlining what is a digital security is. currently, it seems ambiguous - they're saying "oh a digital security = a traditional security (stock, bond, fund share) that's been put on-chain. - but that's totally useless in guiding a good amount of tokens that are transitioning into the "no equity, token only" structure that is really, the most important baseline of what we're pushing for 3/ from clauding a bit, i can see that they've defined it as: A) Digital commodities. Native, functional tokens on decentralized crypto systems. e.g BTC, ETH, SOL, XRP, ADAF B) Digital collectibles. NFTs, meme coins, art, in-game items. C) Digital tools. ENS names, event tickets, soulbound credentials. D) Stablecoins. Non-payment stablecoins may still be securities depending on the facts. E) Digital securities. Tokenized traditional securities. A security is a security regardless of format. 4/ and so for the case of altcoins, E) is what we have to focus on. Let's assume they improve on outlining what a digital security is - what would be a good definition? well you can look towards the gold standard of this industry - HYPE. A product, value accrual, and most importantly, no equity structure; that would be a good start. L1s shouldn't be considered digital securities, and under this they're not: "Native, functional tokens on decentralized crypto systems" 5/ so what does this all mean? like i said, if they outline it like how I imagine it should be outlined, you can make the case for altcoins again - in particular, those that already reflect the features of being equity-like; because ultimately, what we need are TOKENS THAT WE CAN BELIEVE IN so off the top of my head, HYPE would be the most obvious. and then maybe you have stuff like JUP / MET (also no equity, pure token) 6/ but what i think is extremely interesting, is that - assuming this definition, most "DAOs" are dead. Because frankly speaking, a "digital equity" would likely need a controlling structure, but in a "decentralized protocol", who's to call the shots? in fact you could probably make a fundamental trade idea to pick out all of these quasi-equity but would-fail-the-bar tokens, and short them 7/ and what i find even more interesting, is that if this passes, then the world of cheap token picking becomes interesting again. while HYPE is great, what i'm really interested in will be those sub 50m token projects who are building something cool, and can be considered equity. those will be the biggest beneficiaries of regulation, imo. right now, we have lots of cool projects launching, but since they're all just "tokens", we have no idea what's a scam and what isn't. by implementing this regulation, you make the hurdle higher, and so you can now buy some cheap projects that are basically equities. an example would be meteora - 150m MC, 193m in ttm fees. basically 1.X+ ttm p/e ; 8/ and this last point is why i believe you can make the argument to be interested in altcoins again. because there ARE good, cheap projects that make a ton of money, that are being incredibly discounted just because we don't know whether they're equities or not!

Built an in-house AI agent and training it on the war situation, here's what it says: Why 50% escalation: 1. Iran is widening, not containing. Fujairah struck twice (Mar 14, 16) — that's a Hormuz bypass route. They're not defending, they're systematically closing every alternative. Next logical targets: Saudi East-West pipeline, Yanbu, or Houthi activation at Bab el-Mandeb. 2. No one is coming to help. NATO refused. Japan, Australia, South Korea refused. Trump's response: "We don't need anyone." The US is fighting this alone with ~2,500 marines and burning $2B/day in interceptors. That's not sustainable without escalation — either the US commits ground troops to force Hormuz open, or it accepts the blockade. 3. Iran's stated position is ideological, not negotiable. FM Araghchi: "We do not want a ceasefire... this time this war must end so our enemies never again think of repeating these attacks." IRGC runs the country, not the FM. Khamenei hasn't signaled any willingness to deal. 4. The Pickaxe Mountain operation (5,000 marines to seize uranium at Fordow successor site) — if that's real, it's a ground invasion of Iranian territory. That's definitionally escalation. 5. Houthis haven't activated yet but have explicitly said "zero hour" is set. Bab el-Mandeb closure would double the crisis. Every day they don't activate is borrowed time, not de-escalation. Why not higher than 50%: • Trump is fundamentally transactional. He wants a "win" he can announce, not a 10-year war. The Pickaxe Mountain op could be the off-ramp trigger — seize the uranium, declare victory, negotiate from strength. • Physical-paper spread at $50-60 means demand destruction is already happening. The longer this drags, the more political pressure builds domestically. Midterm calculus favors resolution. • The 20% settlement probability captures the scenario where both sides are exhausted enough by Day 30-45 to accept a face-saving deal. The 50% isn't certainty of escalation — it's that the current trajectory, absent intervention, points to widening. Every day without a deal, the probability should tick higher.

never seen such huge discrepancies across so many areas: 1. oil futures & physical 2. market positioning, & stock prices 3. stock prices vs physical reality 4. FinTwit vs retail 5. what's expected to happen vs what's supposed to happen

It turns out factories can’t run on oil futures. They need… actual oil.

hot ball of money moving from kr to jp to tw names all in one month oh and we cant forget the hk degens too

the worst part about being a bear bc of demand destruction is that this takes time. this must be what michael burry felt like when he was short for a year + before cracks started to show. that's why i said L/S might be the optimum strat here, you win in all cases

this + the fact that the top leaders keep getting killed = no one left to negotiate with

biggest fumble so far was writing the crcl pitch at 70, watching it dump to 50, feeling good about not pulling the trigger yet, then basically 2x'ing everyone i sent the pitch to thought i was retarded for wanting to long crcl am retarded for not longing it lmeow

my first taste of communism came during the army when i was getting paid 1.2k/m and the leftist 750/m and he said i should pay for the entire meal because i earned more when i realised he was being 100% serious it dawned on me that this was a dangerous & ineffective ideology

the longer the war drags on the worse things get. the first few days you could make the argument its a nothing burger. but the longer a highly available commodity stays elevated, the more it works its way through the system. this is one of those events that time invalidation works against you - the longer it takes for the bull case to materialise, the greater the probability of the bear case