MAD Macro - Gambling, No Really?
I’m Shocked, People Are Cheating
CZ Pardoned, I’m Not Shocked
You’re getting paid $26 million a year to play basketball, yet you gamble and fix games for what, fun? Yes that is shocking. Houston, we have a problem. Everyone is gambling and some people are cheating. Greg Ip wrote about the gambling culture in the WSJ last week. It’s worth reading again in light of this new gambling story. It’s linked here. It’s titled, “From Sports to AI, America Is Awash in Speculative Fever. Washington Is Egging It On”. This week we have the Beyond Meat meme stock trade as another prime example of what Greg Ip is writing about. I guess this is one more thing the Democrats can blame on Trump.
I really wish Trump stayed away from what his sons and Witkoff’s son are doing in crypto. I was very critical of what Hunter Biden, Devon Archer, and Chris Heinz were doing with their investment firm, Rosemont Securities. What Don Trump Jr, Eric Trump, and Zach Witkoff are doing is now looking much worse, because yesterday Trump pardoned Changpeng Zhao (CZ) . CZ and the UAE state-backed investment fund helped out Don, Eric, and Zach’s crypto company, World Liberty Financial by owning $2 billion of USD1, the companies stablecoin. As a reminder, stablecoins do not pay interest so World Liberty Financial makes the float on $2 billion. Nice work if you can get it. CZ and the UAE might as well have put the money in a brown paper bag and handed it to the boys. World Liberty Financial also has a crypto currency, WLFI. I added a one day chart below. It did rally yesterday after the CZ pardon, but it’s at .14 down from .30 on its first day of trading. Karma probably means WLFI will go to zero someday. The WSJ has a front page article today on the CZ pardon, linked here. It’s titled, “Trump Pardons Convicted Binance Founder”.
O Canada, what did Trump do now? Actually, this one is very funny. Trump suspended trade talks with Canada late last night. Why? Because of an ad featuring Ronnie Reagan telling the truth about tariffs. “Tariffs are a bad idea and can lead to trade wars”. Bingo, now that’s funny. The WSJ article is linked here. It’s titled, “Trump Says He Is Terminating Trade Negotiations With Canada”. The ad is good and the link is in the article.
Markets rallied late yesterday and are stronger this morning because Trump confirmed the trade meeting with Xi will happen next Thursday. Scott Bessent meets today with the China trade team. I have been arguing that the China trade war is going to get worse and might lead to a complete decoupling. The WSJ has a good article today linked here. It’s titled, “China’s New Strategy for Trump: Punch Hard, Concede Little”. Gold is lower today. I think gold will find support at $4,000 to $3,900 level. Long term, I think the de-dollarization trend will continue and be reinforced by the Trump tariff wars. Near term, I think both the China trade war and the Russian-Ukraine war will continue to escalate. We get the important CPI inflation report this morning at 8 am. The report is more important because it’s the only one we are getting now that the government shutdown is a stalemate. It’s expected to be the same month-over-month, and up slightly year-over-year.
I added the one day chart of the World Liberty Financial crypto currency, WLFI, and updated the U.S. Dollar Index, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, spot gold, NYSE Arca Gold Miners Index, bitcoin, Strategy, S&P futures, NASDAQ 99 futures and DOW futures charts below.
The dollar and interest rates are slightly higher, the curve is unchanged.
Crude oil and copper are unchanged. Gold is lower and the NYSE Arca Gold Miners Index should open lower. Bitcoin is higher and Strategy is due to open higher.
S&P, NASDAQ 99 and DOW futures are all a little higher in front of the CPI inflation report.
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