October Week 1 - Best podcasts & articles

Theme: cash is not trash

I’ve been posting my “best of” articles on a monthly basis, however, given how fast the markets move I think a weekly edition is more sensible. Each collation will now be shorter, but I hope that timeliness compensates for brevity.

What I’m thinking about

Tom Petty sang that, “waiting is the hardest part.” Boy can I relate. Based on everything we’re seeing in markets, it appears like a proper crash is just around the corner. Financial Armageddon is my base case, but it’s no easy task to sit on a bunch of cash while the prices flop around like a dying fish.

Valuations are already attractive for many assets, and each bear market rally/dead cat bounce is psychologically annoying because my brain says, this is it! Get in the markets before you lose your chance!

Thankfully, I know that my brain is a damp wad of cheap cheese and it’s not to be trusted. Within the next sixty days I expect that the markets will implode or the Fed will pivot. In either case it will be time to act. However, until one of those two scenarios comes to pass I will wait and I will listen to podcasts…

Best of articles

Trading Psychology: A Non-Cynical Primer

Theme: A rather short article on trading psychology and how it affects performance. Although I am concerned with investing not trading, psychology still matters.

Bringing Out the Inner Volcker

Theme: I listen to *everything* Mike Green says. That doesn’t mean I agree with it, but good God the man has proven himself to be one of the most important thinkers in the Macroverse. When Mike says the Fed is committing an error by raising rates, I listen to him. He makes a compelling point. The Fed can’t solve supply constraints and broken supply chains by raising interest rates.

Contagion

Theme: Arthur Hayes has perhaps deservedly caught a lot of flak for being a perma-bull on the crypto markets. I think he’s been at least somewhat nuanced in his take, but FinTwit hasn’t treated him well.

At any rate, think Arthur what you will, his articles are just bloody good fun to read! I love it. I was also intrigued by a point that Arthur makes near the end of the essay. He claims that the restoration of QE in Japanland and Euroland could drive up crypto and gold prices, even if the Fed keeps tightening. In other words, liquidity from these central banks could find its way into the markets. I liked this idea because it coincided so well with a point that Michael Howell has been making, namely that his liquidity index has started to gradually tick up as BOE and BOJ have dusted off their brrrr machines.

“As the non-Fed central banks get real serious about the task of printing money, even if the Fed continues QT — which I don’t believe they will be able to do for much longer than early 2023 — small sized stores of value like gold and Bitcoin could still rise.”

Interesting! Although to be clear, I’m not counting on it. I’m fully prepared for an extended bear market in risk assets.

Best of YouTube

John Hussman - Now Comes the Hard Part

Theme: if you only listen to one episode from this list, make it this one. Hussman is a financial gangster. He has decades of experience and an inquisitive mind. He doesn’t make a lot of media appearances either, so this is a real treat. The full episode is 2 hours but you can get 75% of the value by just listening to the first hour.

This Financial Crisis Will Be 10x Worse Than 2008

Theme: A non-technical explanation of liquidity and why this blowup could be so treacherous. I found it interesting.

Markets Can Stay Oversold Longer Than You Can Remain Solvent

Theme: Every conceivable reason why you should be bearish on these markets right now. This is a long one! If you’re short on time just listen to the first hour, excellent insights.

Russell Napier. The Slow Death of the Euro

Theme: If you’re a finance dork this is pure gold. Russel explains how disparate money creation rates in the Eurozone could fracture the Euro. His thesis is that for Europe to survive the Euro may need to die. Drier than a German wine but nonetheless a unique topic that is not often discussed.

Daniel Negreanu: Poker | Lex Fridman Podcast #324

Theme: this one blew my mind. Historically I haven’t considered Daniel to be one of best ever, but god almighty is he a good communicator! Daniel is so damn articulate, self-effacing and self-aware. I put this on, thought I would just watch 20 minutes or whatever then read my book. Like fuck. Watched the entire 140 minute podcast straight through. A banger.

Dan Steffens: Once Biden SPR Oil Dump Is Over, Oil Prices Quickly Back Above $100

Theme: A comprehensive overview of the energy situation in the western world. I liked this one because Dan spoke simply and the content is relatable to the layperson (me). Also, includes some good recommendations for company investments.

United Nation's Psychotic New Plan Exposed

Theme: I would argue that, in general, George Gammon’s whiteboard videos tend towards sensationalist. I really like George as a person, but I think it’s necessary to watch him with a critical mind. That being the case, I liked this video. It did a good job of highlighting the insanity of our dear central planners. We’ll solve rising inflation with price and capital controls. Windfall profits tax, that’s the ticket! Yeah OK, you unelected incompetent bureaucrats. In the words of one famous movie, that’ll do pig, that’ll do.

Michael Howell: Declining Global Liquidity | Dollar Wrecking Ball | Next Leg of the Bear Market

Theme: I’ve really been enjoying Michael Howell. I’m intrigued by his focus on money flows and global liquidity. I think I’m going to buy his book and read it. This conversation was excellent.