Warrne Pise

The idea that markets will trade off "data" now rather than the Fed's reaction function is oddly circular. Less, or no, forward guidance obscures the reaction function and introduces a higher risk premium into asset pricing. But, the market will still interpret each incoming data point through its perception of the Fed's reaction function. (i.e. does this data move the Fed closer to a tightening or loosening of policy). For better or worse, the Fed is still at the center of the financial universe. That is the system we have. Getting rid of forward guidance does not decrease the Fed's influence on capital markets (Marty Zweig was saying "don't fight the fed" 55 years ago - long before the "dots"). From my perspective, the main benefit of removing forward guidance is increased responsiveness to changing conditions/data. Making a public forecast hinders your ability to stay flexible/react. If FOMC members hold their cards closer to the vest, then they will be able to change their minds more freely.

OIL Managed Money short positions >40% (third highest reading in 15 years + Record crack spreads = recipe for a solid bottom. The question is how big will the bounce be?

Matthew Smith has spent the last 18 months modeling every well, pipeline, storage facility, and power plant in the American natural gas system. His conclusion is that the US is heading toward a natural gas shortage with no precedent, beginning in 2028. By 2030, he believes we could exhaust our working natural gas storage entirely. The fuel everyone in AI is counting on, and that everyone assumes is abundant, is not there. And because gas sets the price of electricity in most of the country, he argues Americans will pay for the shortage in their power bills. Matthew has worked in energy markets for over 20 years and is the CIO of Chronometer Partners. This is his second time on the show, and he's one of my favorite people to talk to about energy. We discuss: - Why the bottleneck is moving from power to fuel - Why we can't just shut off exports - 2028 as the inflection point - Large-scale nuclear v. SMRs - Who wins, who loses, and what can still be done Enjoy! TIMESTAMPS 0:00 Intro 1:30 What Drives the Deficit 11:00 Why Supply Can’t Catch Up 20:35 The 2030 Gas Crisis 25:05 Winners and Losers 29:00 Nuclear and Solar 33:30 Consumers Pay the Bill 37:20 AI’s Next Shortage 45:25 Solutions and Global Stakes 51:15 The Coming Gas Knife Fight

One interesting change in market structure during the AI era has been the negative correlation that so many non-tech stocks have with semis. Purple line of the chart below plots the 10th percentile of non-Tech S&P 500 stocks correlation to semis. Most negative its ever been

One of the most important charts I'm watching: *Plus what it means for asset allocation today, and opportunities/risks. These are massive themes that could dominate the rest of 2026...