Beware the Doom Loop

Week Ahead April 14-18

I hope everyone is getting some rest this weekend. To my Jewish brethren, Happy Passover. It is also Easter this week, so I hope it’s a happy holiday for all.

Macro is not sexy during bull markets. When equity markets are posting 20-25% years, nobody wants to pay attention to the macro analysts warning about risks lurking on the horizon. When shit hits the fan, people suddenly realize that those warnings could have helped them. I am proud of helping clients during these turbulent times, just as I did during the August VAR shock period.

I have been warning repeatedly for the last year about inflation expectations getting unanchored → that risk is here.

I warned about the risks of capital flight from the trade policy and antagonistic approach with the whole world in the note Doomsday and the Demographic Time Bomb.

I have been warning in recent weeks that the bond market was pricing the growth side of stagflation but not the inflation side. On Sunday night, amidst the chaos, I warned it was imminent in Charts Galore → that risk slapped people hard last week and we also got a number of the other markets reversals indicated in the note.

I wrote a note piecing together a few clues as to what The End Goal of this policy might be. The below suggests I am on the right train of thought.

Last week, I outlined why the stagflation shock will likely have much more lasting consequences than the market appreciates Week Ahead - April 7-11.

When markets are this volatile, they get mispriced and provide so many amazing trading opportunities. Let’s continue to chase the moron risk premium together.