MAD Macro - The Three Amigos
Would You Do Business with the Three Amigos?
The Three Amigos, It’s a Stick Up
Hunter’s tax problems got me thinking about the three amigos: Devon Archer, Hunter Biden and Chris Heinz. Hunter stopped paying taxes in 2014. It is very funny because that’s actually when Hunter and Devon finally started to cash in on the funny money, Bank of China and Burisma deals. So Hunter was ok paying taxes when he was not making a lot money but not so when he started making a lot of money. Chris Heinz, one of the three amigos, quit riding with the gang in 2014. I am guessing Chris’s stepdad John Kerry had a talk with him after windsurfing together one day in Nantucket. In 2014, John still looked ripped on a windsurfer. John must have told Chris to not just walk away from the gang, but to run away. It seems like that St. Paul’s School education they both had, gave John and Chris some solid moral values even if John Kerry was known as a puck hog when he played hockey at St. Paul’s. Chris is now in hiding, living quietly as a “private investor”. Devon Archer, who was Chris’s roommate at Yale has managed to get himself into even more trouble than Hunter. In 2018 Devon was found guilty of defrauding the Oglala Lakota Nation, a Native American tribe out of $60 million. I bet Chris wakes up every day praying he does not see any stories about the three amigos in the NYT. The gang, when they were riding together, called themselves the Rosemont Seneca gang. That’s unfortunate for Chris because they named the gang after his family’s estate, Rosemont Farm, in Fox Chapel, Pennsylvania, just outside of Pittsburg. It’s hard for Chris to hide from his old gang because all of the shady dealings in China and Ukraine are in the name, Rosemont Seneca Partners and Chris was one of the original three amigos.
The bond market has been a little manic the last six months. First, yields were rising rapidly in a bear steepening on the Taylor Swift, stronger-than-expected economy and concerns about the growing U.S. deficits. Then, all of a sudden, yields started falling sharply, which was even more surprising. Only Bill Ackman saw that one coming. James Mackintosh has a good article in today’s WSJ on the manic bond market, linked here. It’s titled “Double Trouble: Investors Fight the Fed on Two Fronts”. The Fed meets this week and we have some important inflation reports. Tomorrow we get the CPI report and on Wednesday PPI and the Fed rate decision. Markets are expecting inflation to continue falling and for the Fed to leave rates unchanged and possibly signal that the rate tightening cycle is over and the easing cycle will start next year.
Markets are quiet overnight with the exception of the crypto markets. Bitcoin sold off sharply from 44,000 to below 41,000 in early Asian trading. Not sure why, but there was one article saying it was on a relatively small $300 million sell order. Markets do get a little thin and unpredictable at this time of year. What am I saying? Markets are always unpredictable.
I added a chart of the bearish money manager positioning in the WTI crude oil market. 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 U.S. dollar is unchanged this morning and 10yr yields are a little higher.
WTI crude oil and gold are both a little lower. I continue to believe this is a good place to buy crude oil and today’s chart of bearish money manager positioning supports that view. Bitcoin is down about 4% this morning after falling sharply in early Asian trading.
S&P and NASDAQ 100 futures are close to unchanged this morning.
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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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