December week 4 - Best podcasts & articles
A new year beckons
What I’m thinking about
A week ago I published the article “Here's why Germany secretly loves bailing out Greece...” The idea for that article came to me after thinking about Chinese trade surpluses and currency flows. A few days ago I was reading an article from Peter Zeihan and it was exciting to hear ‘ol Petey echo the same sentiment.
Simultaneously, the rise of the euro fused the European space together under German economic leadership. Even the weakness of some of the euro’s members – most notably Italy – helped Germany. With Germany in the same currency zone as moribund economies, the price of the Euro was weaker than a purely German currency would have been. German exports no longer merely competed on quality, but also cost. A second Golden Age dawned.
Peter wrote those words in 2018 so I’m about four years late to the game but hey, better late than never. Turning to markets I’m a broken record: bearish. I remain mostly in cash and am still waiting for a big capitulation event.
One final thought; I recently published my article about South East Asia. One thing I didn’t mention in that piece is that real estate development is still a booming business where I live! In fact I’ll even use the word “frantic” to describe the rate of development here. No recession in sight, every day there’s less jungle and more parking lots. Make of that what you will.
Best of articles
What's Your Line In The Sand? The $25 Burger?
Theme: This short article makes an interesting point: what is a product or service that’s getting to be/gotten to be so expensive that you refuse to buy it? For me that’s ceviche. There’s a local restaurant here that makes a great plate of ceviche that used to cost $5, then in the course of two months it went to $9 and I refuse to pay it. What about you, what’s your inflation breaking point item?
Theme: The most obvious takeaway is that if you haven’t subscribed to the Last Bear Standing, now is the time. These articles are seriously outstanding.
December 2022 Newsletter: The World’s Money Problem
Theme: Lyn Alden’s latest newsletter is out, primarily about Bitcoin and how it’s getting used in third world countries with crappy financial infrastructure.
Bulls, Burst Bubbles And Bear Markets
Theme: An intriguing daily note from Gavekal research that can best be summed up as: go long and strong on energy & commodities. If you’re wondering where I got this, along with last week’s free note from Doomberg, I signed up for Idea Farm. They send out free sample research notes from big name newsletters. You can sign up here*.
*Not an affiliate link, not affiliated in any way with them.
Theme: This type of stuff is why I find macro so bloody fascinating. So the Fed is doing QT because they want to reduce liquidity in the system and they had hoped that some money would flow out of reverse repo to scoop up the bills they’re selling, but that’s not happening. Instead, households are buying up these bills in record numbers because bank savings rates are still crap. Why earn 0.5% in your bank account when you can buy a t-bill yielding 4.5%? Problem being that now money is flowing out of the banking system to buy these bills and banks are at risk of falling below advisable capital requirements. It’s a conundrum! Truly the financial system is a living, breathing organism. Final conclusion: QT can likely only go on for a few more months…
With ChatGPT, Education May Never Be the Same
Theme: I thought this was a really great article on ChatGPT. A fascinating technology that’s going to bring even more havoc to our society. Hooyah.
am/FX: Optimism Feels Crazy Right Now
Theme: Short article about why perhaps we’re being too bearish. Interesting because the author isn’t even necessarily saying we should be bullish, just rather saying that everyone is so bearish that we should take a look at the other side. What are the bear missing?
Best of YouTube
Hugh Hendry LIVE (Recession 2023 Deep Dive)
Theme: What an absolute pleasure this was. Just watch George during the interview. You can tell he’s focused and so engaged with what Hugh is saying.
How Much Prison Time Is FTX's Sam Bankman-Fried Facing? - Ep. 432
Theme: Excellent overview of the charges Sam could be facing, how much prison time he’s looking at (a lot), and how the case could play out. Only have to watch to the 26 minute mark, the rest of the episode is a news recap.
Ted Oakley/Oxbow Advisors Interview Series 2022 – Danielle DiMartino Booth
Theme: Danielle claims that J Pow Pow is fudging the numbers, making the economy seem more robust than it really is so that he can continue hiking and cement his grand legacy as Paul Volcker 2.0. All the data in this video suggests that things really are bad, and they’re only going to get worse. Heartwarming.
Why Did the Future Arrive First in Russia? | Peter Pomerantsev
Theme: The circle of life has been completed. I listened to this podcast ten months and I immediately bought the book. Last month I read and reviewed Peter’s book Nothing is True and Everything is Possible. Great read. Today I listened to the podcast again and wow! There is so much here that’s applicable to what’s happening in the west. As the central myth in society deteriorates, power takes over. Facts cease to matter. Corruption is no longer punished. If Watergate happened today would the president even be forced to resign?
History Shows Us That This Will End Within 5 Months. | SP500 Volatility Is at a Pivotal Moment
Theme: The premise of this video is that on balance of probabilities, the bear market will end within six months. Also, we’re rapidly approaching a point where the major capitulation event is to be expected.
Gold & Silver Being Drained! Here's What's Next - Gareth Soloway
Theme: Check out Gareth’s take on what’s going to happen in the next few months. Why he’s bullish on gold, BTC price target and so on. I like Gareth. He seems to strike a very good balance between bearish and bullish.
It’s time to go off topic
Marty is a handyman/mechanic from New Zealand and I love watching his videos. There will be a machine that’s been sitting for a decade and it looks like no way that thing will ever run again. Twenty minutes later Marty has it going, I can’t get enough.
