Trader Vic

I finally listened to the rest of the Trader Vic interview (see my weekend post). He is really very interesting. He talked about how interest on excess reserves suppresses inflation. (Actually, Warren Mosler sort of reveals this when he talks about his chat with the official from the Bank of Italy.) He really blames Obama for this, which is interesting. It certainly benefitted the big US banks hugely.

Interestingly, he is not only predicting inflation, but actual hyperinflation at some point as something the Fed deliberately lets rip to bail out the Treasury. As he points out, four months of 50% a month will bring the US total debt down to next to nothing.

Finally, when Vic was asked what he’d advise his younger self, he said that he’d tell the Young Vic to learn more about politics, because now the markets were driven much by politics than by company or macro economic fundamentals. Respect!

Altogether a great listen. Congrats to Kevin & Patrick (but especially Kevin).

China publishes fake stats? Surely not!

It’s been a few days since I posted a link to a page from WolfStreet. This one points out how devastating the panic has been in terms of world trade, but it extends to analysis to make a (to me) unrefutable case that the export numbers coming out of China are fake. We all know that reporting of global trade has always been flakey. The planet seems to have a huge deficit with itself, if you add up all the exports and compare the total with all the imports, as declared. But China is world class when it comes to the scale of its fakery, and this is yet another example.

How one can make a profit from this knowledge is, however, somewhat beyond me. $FXI has hardly budged, relatively.

random tickers

Quiz: what links the following?

$GSX, $GNUS, $DUO, $IQ, $QTT, $LK, $WINS

How to profit from today’s market

I have no real idea. A few ideas which the brave might try:

• write calls on index options,
• buy long-dated puts on the Nasdaq,
• buy copper,
• sell Brazilian Reals,
• buy the Brazilian bovespa, but only denominated in reals (or hedge, I guess),
• sell $MU,
• buy Brent crude, sell US frackers.

TBH, I wouldn’t really execute any of these, but they are food for thought. Remember wise old George Soros’s advice: don’t trade until you see the whites of their eyes.

Wrap

US Equities up, everything else down. Bonds down, commodities (especially $GC_F) up. $DXY flat. Individual currencies all over the place. RUR down 1.45%.

Best strategy probably to sell equity vol. For the moment.

Hostility to Fed on Twitter at all times high (Powell giving a speech?). Generally high anger over BLM, Covid, lockdown, statues, the UK leaving the EU.

The Science Bit

Great chapter summarizing an important theory about the rise of autoimmune diseases, such as multiple sclerosis and T2 diabetes, by Graham Rook. Basically, it’s because our immune systems go mad without a wide range of pathogens to develop themselves on.

from the conclusion:

… this chapter is not intending to suggest that the Old Friends hypothesis is the whole explanation for the rise in autoimmune diseases.But the genetic,molecular mimicry and viral hypotheses are incoherent without a major simultaneous environmental change to weaken background immunoregulation, so that certain genotypes, in the presence of certain triggers, can develop these diseases.