LEVER UP

“Negative negative real we're living in a negative real yield world now, which is, like, global flows talks about this too. But, like, this is the most important thing to realize is, like, if inflation's really at, you know, 5% and yields are at 3%, you should lever up and buy whatever is growing faster than that. And that's that's pretty much how they're gonna grow their way out of this.”

“Probably one of the worst things the Trump admin has done is just, you know, kinda disintegrated the integrity of capital markets in in The US and basically allowed white collar crime to be legal insider trading everything to to just an extreme extent. I mean, it's just not good for because short people shorting the markets and people long in the markets both do a do a deed by, you know, steering efficient allocation of capital.”

“But alas, we're not a golf podcast for Bitcoin slash. I think we're macro podcast now. I think I've gotten some feedback. Some of the brightest minds in macroeconomics globally have been listening week in, week out just to come and get your thoughts, John, because they're good thoughts, as you alluded to. Things are chaotic.”

“In my view, if you're looking around the world at which countries are better off now than they were before the war two months ago, the only one I would say with confidence as of now is Russia, and that Russia is just a lot wealthier than it was a few months ago because of the spike in oil prices and the risk premium to energy. With America bogged down in Iran, it has less time to think about Ukraine.”

“So, what President Trump has done is to significantly reduce his demands of Iran over the last six weeks. If you go back to the speech that he gave at the outset of the war, he had very grand ambitions to destroy Iran's nuclear program, destroy its missiles and drones, destroy its regional proxies, and potentially even bring down the regime. And now, six weeks later, the missiles and drones, as far as we know, are not even part of the negotiations.”

“The United States has some key advantages that most other countries don't. It is geographically blessed with no real adversaries nearby. It has become a true energy superpower, the world's biggest producer of oil and natural gas. It enjoys what is known as the exorbitant privilege of dollar supremacy. Ninety percent of all international commodities are traded in dollars. A strong dollar benefits US importers.”

“The market decided last week with the ceasefire announcement that everything was, was Gucci and we were heading back to all time highs. But as we mentioned last week too, let's not get immersed and succumb to the 24-hour news cycle and the changing of headlines and the ping-ponging of ceasefire, no ceasefire, deal, no deal.”

“And that is indeed what they've been trying to do, to normalize and formalize this new order in which the Strait of Hormuz is their Panama Canal. You know, something that they collect resources and revenue from and it's an enormous source of leverage for them. And that is something that is going to be difficult to totally reverse because they've seen, it's a more powerful tool than anything they've had before.”

“And so now we are definitively escalating and not only is the straight not going to be open, but we are going to make it even more closed than it was before. So an interesting, you know, reverse card being played here as always, you know, it's a bold strategy cotton. We'll see how it plays out, but yeah, big, big implications this week.”

“This is a really good one from the Fed a Fed research paper that came out last week, which answers the question that we've all been wondering, which is how much of tariffs is causing inflation, namely in core goods because that's mostly where you would see it. And so they came out with this one that just shows, like, before the Iran war, we were seeing core goods inflation accelerate pretty significantly. If we didn't have the tariffs, we would have had deflation in core goods. Instead, we have two and a half percent core PC core goods inflation.”

“I think you're absolutely right that what they perhaps have discovered over the last five weeks, that Hormuz enrichment is a far more potent tool for them than the uranium enrichment because most citizens around the world are not really impacted by Iran's nuclear program. But when the Strait of Hormuz is blocked, and as you said, a fifth of the world's oil and natural gas and fertilizer are locked up, then citizens all over the world feel that impact.”

“They have you can either make housing and mortgages more affordable by getting bond yields lower and therefore mortgage rates lower, but you can't do that at the same time as having stock markets higher because you need disinflation. You need to get a handle on inflation, which means some sort of hawkish reaction function, which means lower stock prices to get those lower mortgage rates. So you have to decide. And he you know, we don't wanna see housing prices go lower. So that doesn't matter as much. So they decide to pump the stock market instead.”

“The market's just a giant derivatives trade. It's what happens when everything gets so centralized and everyone everyone's asset management looks the same. If you have, you know, this beta neutral book, that's generally a lot of hedge funds. That's that's the guys moving the books around. And it's it's a lot of, like, you know, they they they do things in unison as much as they think they're original thinkers.”

“Obviously, the cost that we just talked about is inflation, but, like, who who cares about inflation if the stock market's going up? Right? The policy is pump stock market. That's what it is. And, like, every time they try to actually, like, target another pocket of the social, like, strata, that derails the stock market.”

“Allbirds, which basically went bankrupt, just decided to execute a $50,000,000 convertible financing facility to pivot from direct to consumer freaking shoes to becoming an I AI compute infrastructure company. Look. I've been I've been hitting the whole we need more compute thing and talking about, like, bidding the stuff that that is a tailwind to that. But, oh my god. Like, when I saw this this morning, I was like, this is, I mean, you know, the the the crypto crew knows all about this because back in 2019 or whatever it was, we started to see, like, you know, Kodak was gonna be a a crypto company.”

“I thought Iran as North Korea was the least likely outcome. Unfortunately right now, at least in the immediate term, that may be the most likely outcome of this war, that we have, and again, it depends somewhat on what is the health of Mostafa Khamenei. But as of right now, it looks like it's another hereditary, ideological dictatorship with nuclear ambitions. And they've proven themselves willing to kill potentially tens of thousands of people to stay in power.”

“As you know, the figure I show here is 50% of sulfuric acid exports are used for phosphate fertilizers. And it's important because the first market and the downstream kind of agricultural markets that globally that it depends on, that depend on it, are already very disrupted from everything that's gone on thus far out of the Gulf.”

“This is the put to call ratio. A lot of people have been calling calling this out. So, like, now everyone went balls along, puts previously at the Lowe's. This is what giving retail these products, it's really it's good in some ways, but it exacerbates things because they always you know, they push things in both directions. But now they went balls long puts, and now they unwind it. And now they're going long calls.”

“Asian economies account for 40 percent of the world's energy demand. Almost all of them are net importers. Pakistan, for example, gets 80 percent of its crude from the Gulf. Bangladesh imports 95 percent of its energy. Energy shocks are like a triple whammy for these countries. They are more dependent, so they have very few options. They have to buy energy in dollars that are more expensive, and they're already in economic trouble.”

“One shorthand way of thinking of them is that the principle is that they fear that if Iran reforms, it could end up like the Soviet Union. The pragmatists, I think the model in their head is China. When after Chairman Mao died and Deng Xiaoping came and, as I said, prioritize economic interests before the Cultural Revolution. And at the moment, given the profound mistrust between the United States and Iran, the cynicism of the principalists is difficult for anyone to disregard.”

“There does appear to be a large redirection of VLCCs, which are very large crude carriers to the Gulf here in the U.S. and that's in response to one of the main oil arteries and LNG arteries in the world, as we've discussed for the last month, getting closed off. So yeah, I think it's an interesting kind of illustration of something that we've been talking about.”