October Week 2 - Best podcasts & articles
Return free risk
What I’m thinking about
I’m going to have a heart attack if these markets keep behaving this way. Not to the downside, but the violent swings to the upside! I’m still sitting on lots of cash and waiting for the implosion. Each time it seems like we’re finally about to go limit down, the markets rally hard. Nonetheless, based on how markets closed on Friday, it does appear that a bloodbath might not be that far off.
I’m hearing a crescendoing chorus of commentators calling for a course correction in central bank conduct (the letter C is brought to you by Janet Yellen). I have no proprietary tools to analyze the health of the financial system, however, it does appear that we’re drawing increasingly close to the Fed breaking something. Stay frosty folks.
On a final note, yesterday I went to my neighbor’s barbecue. I ended up speaking with a woman who owns a small mortgage company that serves Americans (her entire company is online-based). I asked her what business is like. “Down 90%,” was her dreary reply… We all know that the housing market is suffering but my god, to hear those kind of numbers. Very drastic.
Best of articles
How Bad Will the German Recession Be?
Theme: A month ago I wrote an article speculating on how bad the European energy crisis could be. Generally, I said that the situation would probably be a lot worse than most imagined. This article from Spiegel comes to the same conclusion. In Saving Private Ryan I learned that there’s this great German word, Fubar, which describes what’s happening in Europe’s manufacturing center as gas and electricity prices skyrocket. The situation in Germany is not good.
Theme: Another excellent article from Kuppy. The Fed can only raise interest rates too high, eventually they’ll have to do a 180 and start up the money printer.
Theme: another nice article from Joseph Wang about some of the fundamental issues in the financial system that could force the Fed to pivot
October 2022 Newsletter: Energy vs Sovereign Bond Markets
Theme: Fantastic article from Lyn Alden about the state of the markets, especially energy and bond markets. Excellent.
Theme: The single best explanation of liquidity I’ve read in ages. Short, to the point, beautifully illustrated with a simple yet effective graphic. Give this post a read, it’s outstanding.
Best of YouTube
Ronald-Peter Stöeferle: The Biggest Wealth Destruction Event in History
Theme: Good overview of where we’re at with inflation, supply chains and the precious metals market. I like Ronnie because he seems to be data driven rather than ideologically driven, as some gold bugs and Bitcoiners can be.
Speculating on the Collapse of the System with Ben Hunt
Theme: I find Ben Hunt to be a polarizing figure. I sometimes violently agree with him and find his words prophetic, and other times find him to be a bit of an ass. In this case I really enjoyed this video. Ben makes some fantastic points about the nature of our system and understanding what environment you’re living in. Absolutely worth a listen.
Fistful of Dollars with Michael Green and Hugh Hendry
Theme: wear a helmet because this one will blow your brains. Mike and Hugh bring out the best in each other and the result is a quote-worthy discussion about the economic system and how it could be improved. Wow!
Dollar Milkshake Wrecking Ball | Brent Johnson & Michael Kao
Theme: I’m sure that like me, you’re already familiar with the dollar milkshake theory (fact? When does a theory become a fact?). So I went into this podcast thinking maybe I’d turn it off after 15 minutes, all things I already knew. Turned out to not be the case! Excellent discussion on the global financial system, how it could break, why it is unlikely to change, etc. I learned a lot.
David Brady: Metals are Close to a Bottom, Just Waiting on the Fed
Theme: good overview of how Brady trades the precious metals market. Also, thoughts on the Fed pivot, why it could happen sooner rather than later.
As dollar woes get worse, why don't the Fed's swap lines work? Let's answer that question
Theme: Jeff Snider is not given to hyperbole. If he says it’s bad, it’s bad. Those swap lines to the Swiss, no bueno.
Mad TV: Easy bake oven
Theme: Off topic, but given the state of things a good laugh is always in order. Some of these old Mad TV sketches are comedic brilliance. I’ve watched this one a dozen times and it still makes me crack up. The I-Rack sketch, John Madden popcorn machine sketch and pornstar name sketch are also gold.
