Ozark

$SPX to 5400 $IXIC to 17000

Putting the recent hawkish repricing into context...this sort of thing isn't normal!

@FirstSquawk $2M..?

Financial Times reports that an oil tanker company paid Iran $2 million for secure passage through the Strait of Hormuz.

@BenKizemchuk what does "structural adjustments were underway, as opposed to a quick reflexive digestion" mean?

The move higher in implied correlation looks largely complete. From here, the key question is whether the market can sustain a new vol regime. The choppy, uneven profile at the recent peak suggests that structural adjustments were underway, as opposed to a quick reflexive digestion. This suggests the possibility of a regime shift, and more downside to come, eventually.

GM @variational_io you need to list new asset ASAP you are left behind very much recently. $SKR & $EDGE are the most notable ones You need to move fast if you want to keep your users on your exchange

@gauravahuja public market is way smarter

One of these two groups is mispriced Private AI labs: OpenAI valued around $840B, Anthropic north of $600B on secondaries. Both at 30x+ ARR. Public giants: Microsoft at ~$3T on 23x forward earnings. Amazon at ~$2.3T on 28x. Microsoft likely owns ~25% of OpenAI. Amazon likely owns ~15% of Anthropic and ~5% of OpenAI If private investors are pricing these labs for a $5T+ venture-style outcome then… Microsoft’s implied stake in a $5T OpenAI is $1.25T embedded inside a $3T company. Amazon’s combined stakes embed roughly $1T inside a $2.3T company. Publics too cheap on Al exposure? Or privates/secondaries in bubble territory? Which breaks first?

@AnnaEconomist Shale production boom was driven by ZIRP of the FED, not by admin deregulation or something I don't think any administration policies can meaningfully move needle for shale producers here

Back in 2014-15, I recall that the the EIA administrator told me: Shale oil producers are like cockroaches in NYC apartments…you spray them (in that context, Saudi is the sprayer) and they just come back the next day. How fast the response of US producers were back then compared to now. The slow response in the industry today is by choice. I believe it is something that policies (carrots and sticks) can change.

@doppel_ichi 3y or 5y contract might show the change of fundamental supply & demand dynamics of memory industry. The changed dynamics (if it's sustained long enough) can support rerating argument but what I see rn is that people say it should be trading at 10x P/E bc they have 5y contracts

I can't understand the rerating argument backed by multi-year contract All the non-cyclical firms have high multiples bc their revenue stream is fundamentally stable, not bc they have multi-year contract Big Tech, etc. have or had high multiples bc they looked they have high quality income stream. Their revenue contract itself was normally just multi-month or just even only one month

@Dcpcooks negative GDP..?

I’m a decent rates trader I’ve seen a lot since my start in the mid 80’s The destruction of infrastructure is pretty wild here in the Middle East. I’m not an oil, nat gas, farmer, fertilizer or ag trader. But between all of those mentioned above and all the different markets impacted just bringing stuff back on line will take months to years if this all stops now, which it won’t. I find it hard to imagine a deliberate hike cycle to control inflation is an appropriate policy response. That doesn’t mean yields can’t go higher but it may be a tactical error to do anything here as a CB I’d think that some targeted special vehicles to address some hot spots is more prudent. I don’t have confidence in the leadership here unfortunately when we have the sec tres cutting sanctions on Russia and Iran oil to get a two week suppression window of oil price shocks which traders will look past We are already looking at the potential for negative GDP this year with a massive add to debt to fund this Excursion along with debt servicing Xi and Putin must be happy

maybe this is why Korean constructors starting parabola rn

@Evan_ss6 wow

Why hasn’t anyone thought of this?

@barneyxbt shut up

realizing that crypto was merely the introduction to tokenization and was never meant to have any real use case

@SenSanders wow tbc

I spoke to Anthropic’s AI agent Claude about AI collecting massive amounts of personal data and how that information is being used to violate our privacy rights. What an AI agent says about the dangers of AI is shocking and should wake us up.

@ZeMirch he is monitoring the situation on the Hormuz, just turned off AIS

do we start to talk about yield curve inversion again?

@tradfi ok need to dig this

*TRUMP CONVINCED VOTERS DON'T LIKE THE TERM 'MASS DEPORTATION' & HAS DIRECTED ADVISORS TO ADOPT A NEW APPROACH: WSJ *TRUMP ADMINISTRATION IS SHIFTING DEPORTATION STRATEGY, TARGETING CRIMINAL ARRESTS INSTEAD OF BROAD MASS DEPORTATIONS *ICE DAILY IMMIGRANT ARRESTS DECREASED TO APPROXIMATELY 1,200 FROM A PREVIOUS PEAK OF 1,500

it's not reconstruction theme on ME likely when small constructors are going much higher

Constructors are extremely strong, I have no clue on why And normally this is the best sign for beginning of the trend? Whether it’s reconstruction of ME (for big constructors), or massive deregulation for higher housing supply, or gigantic fiscal stimulus through infrastructure build This is the best stuff it seems

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.