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ORDERED KAOS: Themes of the Week (3/12/23-3/17/23).
This has been an INSANE week, so I’m trying something new by making a Weekly Recap and putting a bit more effort into organizing all of my thoughts into THEMES.
This has been an INSANE week, so I’m trying something new by making a Weekly Recap and putting a bit more effort into organizing all of my thoughts into THEMES.
I will link each of my DAILY “stream-of-conscious” Musings of the Day and then tease out key THEMES that emerged from the week. I am doing this for my own mental hygiene to help organize my thoughts so I can make better investment/trading decisions, hence the name ORDERED KAOS.
If you like this, please let me know. Depending on the feedback, I may make it a weekly endeavor. Thank you!
3/12/23:
I spoke on 2 Twitter Spaces today, one hosted by Rahul and one hosted by Mario Nawfal:
3/13/23:

I spoke on 2 Twitter Spaces:
3/14/23: CPI Day


Interview on Forward Guidance with Jack Farley:
3/15/23:


I did a Twitter Space early in the am with Unusual Whales to discuss the CPI print and its implications on Fed Policy:
3/16/23:


I spoke on a Twitter Space early in the morning right after the ECB hiked 50 bps:
I did an Interview later in the day with WTFinance:
3/17/23:


I was the featured speaker on a Twitter Space hosted by Grizzle Media, covering everything macro, where I explain why this setup reminds me more of 1998 than 2008:
THEME 1:
SURGICAL ACTION WILL OBVIATE NEED FOR SHOTGUN ACTION AND ALLOWS FED TO STAY THE COURSE ON FIGHTING INFLATION.
BTFP = LIQUIDITY AT A RESTRICTIVE PRICE = “CONTROLLED BURN” / “FIREBREAK.”
AUTHORITIES MUST AVOID INCONSISTENT POLICIES.
SIVB IS MORE IDIOSYNCRATIC THAN SYSTEMIC.











SIVB WAS IDIOSYNCRATICALLY DEVOID OF RISK MANAGEMENT ON BOTH SIDES OF ITS BALANCE SHEET:

THEME 2:
I DON’T TRUST THE BTC/GOLD/YIELD CURVE MOVES AND THINK THE USD WRECKING BALL WILL STAY STRONG BECAUSE:
OTHER CB’S LIKELY TO OUT-DOVE FED FIRST.
INFLATION IS STRUCTURAL AND AFFECTS 100% OF PEOPLE.
FED WILL NOT PIVOT AS SOON AS PEOPLE THINK.
TRADEOFF BETWEEN PRICE STABILITY AND MAX EMPLOYMENT IS NOT HERE YET.













If the ECB doesn’t see the TRADEOFF yet, will the Fed?






THEME 3:
SAFETY FOR DEPOSITORS DOES NOT MEAN SAFETY FOR INVESTORS.
BTFP ≠ BTFD!
RING-FENCING CONTAGION DOES NOT HERALD A RETURN TO QE!
WATCH OUT FOR SHOTGUN MARRIAGES OF BANKS SPOOKING INVESTORS (BUT NOT NECESSARILY DEPOSITORS).








These “bailouts” are like the Pomegranate Seeds offered to Persephone from Hades; once accepted, she can no longer leave Hades at will.



THEME 4:
OIL COLLAPSE IS A TELL ON CHINA’S FLAILING RE-OPENING.
CHINA MAY NEED TO DEVALUE CNY TO BOOST ITS ECONOMY.
BUT CHINA DEBT BOMB COULD BE THE BIGGEST ICEBERG OF ALL.
China’s Re-Opening is proving to be a dud like Alex Stahel & I warned:
Why China could be the ELEPHANT IN THE ROOM — this is my detailed piece from last week about the CHINA DEBT BOMB:




Meanwhile, China is cutting the world off from its economic data. I wonder what it’s hiding?



I continue to think that China will have to DEVALUE CNY if it wants to revive its moribund economy:



Flog that Dead Horse:
THEME 5:
SUPPLY INELASTICITIES ACROSS MULTIPLE ASSET CLASSES MAKE FOR VIOLENT PRICE MOVES IN BOTH DIRECTIONS.
BTC HAS ARTIFICALLY INELASTIC SUPPLY DUE TO MATH/HODL’ERS.
EQUITIES HAVE INELASTIC SUPPLY DUE TO PASSIVE INVESTING.
BONDS/USD HAVE INELASTIC SUPPLY DUE TO COLLATERAL SHORTAGES.
INCREASINGLY INELASTIC SUPPLY OF OIL CAN MAKE FOR VIOLENT CRASHES WHEN DEMAND SHIFTS DOWN:
If you're wondering how Oil can collapse like this while in Backwardation, you did not read: urbankaoboy.substack.com/p/re-oil-forwa…I explained how this could happen back in September:
THEME 6:
THIS PERIOD REMINDS ME MORE OF 1998 THAN 2008:
STRONG USD BUTTERFLY EFFECTS TAKE A LONG TIME TO FULLY MATERIALIZE.
RISKS THIS TIME AROUND LIKELY IN SOVEREIGNS & SHADOW-BANKING SECTOR (1998) RATHER THAN BANKING SECTOR (2008).
Please review these old threads for details:


THEME 7:
RETURN OF CAPITAL VS. RETURN ON CAPITAL.
RISING RATE ENVIRONMENTS ARE NOT CONDUCIVE TO MAKING MONEY EASILY!




ORDERED KAOS: Themes of the Week (3/12/23-3/17/23).
Really liked this format. Thank you!
Please keep this going!