MAD Macro - So Ran the Rich

AOC and Bernie Take Over NYC

So Ran the Rich from Zohran

Is too late to sell NYC real estate? Zohran Mamdani will be the next mayor of NYC. It’s actually amazing. I knew AOC and Bernie were a thing but apparently they now own NYC. A bloodless political coup d'état. But to elect a 33 year old who became a citizen 7 years ago is really amazing. By the way, his wife is 27 years old. Oh, and he is a Democratic Socialist Muslim. First question, what’s a Jewish capitalist do, move? Second question, what do all the other capitalists do, move? I have been thinking that Florida real estate was a bubble. Not anymore. The top 1% of NYC residents pay about half of all the taxes that NYC collects when you include real estate taxes. What happens if that 1% of NYC residents all move to Palm Beach or Miami? Not sure how to make the trade, but short NYC real estate and buy Florida real estate. According to the NYT, “Democratic Socialism is an ideology rooted in its opposition to capitalism and wanting to shift the power to workers from corporations”. Zohran wants to start with the grocery stores. Coming soon to NYC, city-owned grocery stores. Should be fun. I bet the residents of Manhattan can’t wait. The WSJ Editorial Board has a good article on the election in today’s paper, linked here. It’s titled, “The People’s Republic of New York City”.

Yesterday’s big international news was NATO’s agreement to raise defense spending to 5% of GDP. This is expected to equalize NATO members defense spending with the U.S. over time. This was a big victory for Trump and the safety of Western Democracy. Funny, I wanted to see how the NYT would cover the story, they didn’t. I wonder why? The NYT loved covering the NATO story when it looked like Trump was trying to destroy NATO. But when Trump saves NATO and strengthens the alliance, it’s not part of “All the News That’s Fit to Print”. Fortunately, the WSJ has a very good article of Trump’s foreign policy successes, linked here. It’s titled, “A Weakened Iran Poses an Alliance Test for China, Russia and North Korea”. Jake the Snake Sullivan and Obama should read the WSJ story.

I guess the big market story today is Trump’s plan to name the next Fed chairman soon, putting more pressure on Jay Powell to ease policy. Nick Timiraos, the official Fed whisperer, co-wrote the WSJ article breaking the story, linked here. It’s titled, “Trump Considers Naming Next Fed Chair Early in Bid to Undermine Powell”. It’s a very good article and worth reading. It’s also the reason the U.S. dollar is falling to new lows for the year this morning. I included a long-term monthly chart of the U.S. Dollar Index today. It looks like the dollar is about to break a 15 year bull trend on the chart.

Markets are a little higher this morning. The S&P is testing the highs, the NASDAQ 99 is making a marginal new high. The DOW is still below the old highs. We get weekly jobless claims this morning. A higher than expected number will put even more pressure on Jay Powell to ease than Trump naming Scott Bessent the next Fed chair.

I updated the U.S. Dollar Index, U.S Dollar Index monthly, 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 is making new lows for the year and interest rates are slightly lower.

Crude oil is trading near the $65 support level. I think crude oil will hold near this support level and will trade in a $65 to $80 trading range. Copper is back above the $5 level this morning. Gold is a little higher and the NYSE Arca Gold Miners Index should also open higher. Bitcoin is a little lower and Strategy is also due to open lower.

The S&P, NASDAQ 99 and DOW futures are all slightly higher.

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S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors. Index performance is not illustrative of fund performance. It is not possible to invest directly in an index.

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