MAD Macro - The Orange Mad King I Finds the Golden Truth
You Want to Take My Buildings? You Can’t Have Them.
Faster Than a Speeding Bullet, Truth Social to the $3 Billion Rescue
Letitia James thought the Orange Mad King I inflated the valuations of his real estate properties to borrow money. Can you imagine what she was thinking this weekend about how the market is going to value Truth Social? The Orange Mad King I owns 60% of Truth Social which is expected to start trading this week as a public company with a valuation of $5 billion. So the crazy guy who is guilty of inflating the value of his real estate holdings, now has holdings in a media company valued at $3 billion. Letitia, who is crazy now? Answer, the market. Truth Social’s total revenue for the first 9 months of 2023 was $3.3 million. Very funny Letitia, you thought he overvalued a golf course in Westchester, NY, who’s only member was Rudy. I am guessing that golf course in Westchester generates much more revenue than Truth Social and actually makes money. By the way, that golf course has the largest man-made waterfall of any golf course in the world. Or at least that’s what the Orange Mad King I says. The Democrats keep trying to kill the Orange Mad King I with lawfare. They actually keep helping him in so many ways. First, in the polls and now with more money than he made in a lifetime of overvaluing real estate in New York City.
Turns out the enemy of your enemy might also be your enemy. ISIS has decided that everyone is their enemy except maybe Muhammad and his cousin Ali. Things were starting to make some sense. Russia, China, Iran and North Korea vs the West. Then ISIS-K decides to attack both Iran and Russia. Who’s next? Probably the U.S. I guess these deep-seated religious conflicts last forever. Ronna McDaniel found out about deep-seated political conflicts the hard way. She was hired by the Democratic press, NBC and MSNBC, to provide some Republican viewpoints during the upcoming long and crazy election cycle. Chuck Todd, the progressive high priest, decided it was a bad idea so she only lasted one day. Remember, there is only one god, the progressive god.
There are two WSJ articles worth reading today. One on the growth of the U.S. Treasury market, linked here. Now that the Tin Man and the Orange Mad King I are our only choices for the next U.S. president, U.S. deficits are only going to get worse and the possibility of a debt crisis is growing. When the Fed starts easing in June we might see the U.S. yield curve steepen sharply. Not just because the Fed will be lowering rates in the short end of the curve, but also because overall supply could start to overwhelm demand. By the way, Atlanta Fed President, Raphael Bostic, did not get the memo from the Tin Man and Janet Yellen. He thinks there will only be one Fed rate cut this year. Wrong, there will be three starting in June. I wonder, did Raphael not listen to Jay’s press conference? Jay told us he is starting in June and there will be three rate cuts. Why? To stop the Orange Mad King I from winning in November. That’s much more important than any silly little inflation problem.
The other WSJ article worth reading is on AI’s demand for electricity, linked here. First, energy transition will demand more electricity. Then, crypto demands more electricity and now, AI demands more electricity. It’s always amazed me that Washington never embraced U.S. natural gas as the best and cleanest transition fuel. Now they will be forced to embrace natural gas because of AI’s power needs. John Arnold, the best U.S. natural gas trader in history, just joined the board of Meta. I don’t think it’s because of his AI expertise. It’s because of his U.S. natural gas expertise. Maybe Meta is going to build natural gas power plants. That will make Mark even less popular in Washington.
Markets are a little lower today because interest rates are a little higher. Also remember Saturday was the 24 year anniversary of the 2000 dotcom bubble top. The big economic number of the week, the PCE deflator, comes out on Friday. This is a little strange because Friday is a partial market holiday. Like CPI and PPI, it’s expected to be unchanged to slightly higher. But no worries, inflation does not matter.
I updated the U.S. Dollar Index, U.S. 10yr yield, WTI crude oil, spot gold, bitcoin, S&P futures and NASDAQ 100 futures charts below.
The dollar is unchanged after rallying last week. Interest rates are a little higher.
Crude oil, gold and bitcoin are all slightly higher.
S&P and NASDAQ 100 futures are both lower this morning.
IMPORTANT DISCLOSURES AND DEFINITIONS
Unless otherwise stated, Bloomberg is the source of all data and charts.
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.
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