Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)
Macro Dragon: Trump Does Not Want To Win…
Top of Mind…
- We already highlighted this WK – Macro Dragon: WK # 43 – Tesla, Netflix, Intel, Daimler, Lockheed, IBM, RBA Mins, Turkey & Russia, US presidential debate…
- Finance & more specifically the world of investing – like any craft – has more than its fair share of structural flaws.
- The biggest is likely linked to incentives & alignments of the managers of capital with the owners of capital. To put it simply, a lot of crap is created, packaged & dressed to look like something new & innovative – with the undisclosed caveat being, the “investor” is paying an additional fee for that. Whether its smart-beat, CDOs, trendy strategies or/& investment vehicles – they are almost all to a fault, different methods of putting lipstick on a pig. And lets be clear, the industry is very good at it.
- The biggest AUM & allocation of capital does not actually go to the best performing money managers over-time, it goes to the best marketeers & branders in the space.
- The other large structural flaw, is a perpetual one that is wrapped around assumptions. Chiefly the assumption of the rational actor. And this is a classic mistake that KVP has seen the smartest, most experienced & best intentioned folks make in this business.
- “Everyone” implicitly assumes that Trump is rational & has a some form of a plan. When everything we have seen, since even before he was elected – remember despite whatever spin they put, according to Fear: Trump in the White House by Bob Woodward… it was a clear surprise, as it should be when you take three swing states by the skin of your teeth – suggests that there is no rationality here & there definitely is no consistent plan.
- On the Dragon & previously on the Macro Monday’s we have said the only thin consistent about Trump is his inconsistency. So there is this rational assumption that Trump wants to get re-elected, with no real entertainment of the pathway that he has zero interest in being elected.
- At the end of the day he is 74yrs old (sensational energy by the way at that age), a billionaire (as far as we know) & has a laundry list of evidence that suggests he is quite extreme in the sociopath spectrum. We’ve already seen him drop hints all year, that the election could be unfair, rigged, etc. And appreciate that’s his MO, yet what if all this is a set-up for what Trump wants to do next? Would he rather do 4 more years of being POTUS or 4 more years of The White House Apprentice &/or some media portal?
- Just saying, lets not jump to conclusions on Trump wanting to win. And with the year we have seen so far… anything is possible. From Pence being president for a week & pardoning Trump, to KVP being completely wrong on the US election results, upcoming colossal fiscal spend in the US, negative bond yields coming to ‘America, dollar dropping to -30% from the highs, etc.
- The problem with assuming that Trump is a rational player & wants to win, is our DNA & upbringing encodes us to fill in the blanks to explain things. Even if its complete hogwash & just another iteration of lipstick on a pig.
On The Radar Today…
- Earnings: China Mobile (941), Philip Morris (PM), Netflix (NFLX), Texas Instruments (TXN), P&G (PG), Lockheed (LMT)
- Macro: RBA minutes, German Current Account & PPI, US House data, CH CB Leading Index, NZ Milk Auction
- FOMC Williams @ 21:00 SGT, FOMC Quarles @ 22:50 SGT
Dragon’s Reads & Listens…
- Saxo’s US Election Cheat Sheet Which cuts into the three potential pathways into the elections, probabilities around them, as well as short & long-term positions across equities, bonds, commodities & currencies.
- Our Latest Quarterly Outlook
- U.S. Election Is Biggest Political Risk Seen In Several Decades, Saxo Markets Says
- Country 1.0 And How to Edit Inequality Out of the Equation with Kay Van-Petersen
Start-to-End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Idea
This is the way
Topics: Macro AUD JPY CHF EUR GBP NZD Bonds Gold Apple USDTRY USDNOK EURNOK USDMXN FX Technical US Election Elections