Yeah, I doubt this will age very well. We’re comparing a situation where the world still had lots of strategic reserves to draw down. That’s done and still no SoH. In fact, it’s worse than that with the Houthis at Bab El-Mandeb keeping the Saudis from selling oil that way and the Ukrainians keeping up pressure on Russia.
Even if oil export routes opened up, Russia and the Middle East have lost a significant amount of refinery capacity, which will keep the pressure up on diesel and gas prices. The diesel price of almost $6 right now would ordinarily reflect a $100+ oil price since the crack spreads have gone wild, so to some extent we should instead look to the price of diesel to extrapolate economically and such looks like pernicious inflation is well on the way.
Also, I don’t see how we can continue to claim that the blockade is working to make Iran desperate if they say they’re ok to wait until ‘29 to negotiate the SoH. That was always as optimistic as someone yelling, “hey y’all, watch this!”, just before a self-inflicted trip to the ER.
If you disregarded all warning signs you’d still be stuck holding cash / bills / treasuries. No one truly believes in the inflation figures the Bureau is pumping out and neither does the bond market. There is absolutely a cause for alarm.
If you closed your eyes to where America is heading which to be specific: higher insidious inflation for longer, higher deficits, even more debt: you’d have missed Gold and the debasement trade which will only get louder as term premia continue to blow out. Further, no reasonably sane person would sell mega cap inflation resistant SPX in the face of a mechanically higher deficit, a valueless dollar and AI dynamism which only seems to be investable in the US.
The fact is Trump and his cronies are gutting all American institutions and there is ZERO credibility to what he does and him slapping some sanctions on Russia don’t absolve his sins (I know Ukraine is close to your heart despite the fact the UK having wasted billions of £ that it does not have on the lowest ROI cause).
I have not much to comment on the Oil to $200 narrative. I enjoyed your piece on its demand elasticity back in April, even though i did not put a trade on.
Wait about the 200 dollar oil. It may be true that demand could be elastic for some time. But not forever. Look at the elasticity in supply markets. The party is not over yet
I really appreciate your steadfast interpretation of the data Robin. You have been spot on in oil, Fx, and rates. I like the doubters because I have someone to trade with.
Does 'hyperbolic alarmism' spread to the AI trade - should we ignore Burry's shorts, vendor financing, mark-to-market gains, Chinese competition etc? I wish I knew but it feels like a put option or two would be sensible. It would be interesting to hear Robin's views on this as well as on oil & the yen.
Yeah, I doubt this will age very well. We’re comparing a situation where the world still had lots of strategic reserves to draw down. That’s done and still no SoH. In fact, it’s worse than that with the Houthis at Bab El-Mandeb keeping the Saudis from selling oil that way and the Ukrainians keeping up pressure on Russia.
Even if oil export routes opened up, Russia and the Middle East have lost a significant amount of refinery capacity, which will keep the pressure up on diesel and gas prices. The diesel price of almost $6 right now would ordinarily reflect a $100+ oil price since the crack spreads have gone wild, so to some extent we should instead look to the price of diesel to extrapolate economically and such looks like pernicious inflation is well on the way.
Also, I don’t see how we can continue to claim that the blockade is working to make Iran desperate if they say they’re ok to wait until ‘29 to negotiate the SoH. That was always as optimistic as someone yelling, “hey y’all, watch this!”, just before a self-inflicted trip to the ER.
Completely disagree with this piece.
If you disregarded all warning signs you’d still be stuck holding cash / bills / treasuries. No one truly believes in the inflation figures the Bureau is pumping out and neither does the bond market. There is absolutely a cause for alarm.
If you closed your eyes to where America is heading which to be specific: higher insidious inflation for longer, higher deficits, even more debt: you’d have missed Gold and the debasement trade which will only get louder as term premia continue to blow out. Further, no reasonably sane person would sell mega cap inflation resistant SPX in the face of a mechanically higher deficit, a valueless dollar and AI dynamism which only seems to be investable in the US.
The fact is Trump and his cronies are gutting all American institutions and there is ZERO credibility to what he does and him slapping some sanctions on Russia don’t absolve his sins (I know Ukraine is close to your heart despite the fact the UK having wasted billions of £ that it does not have on the lowest ROI cause).
I have not much to comment on the Oil to $200 narrative. I enjoyed your piece on its demand elasticity back in April, even though i did not put a trade on.
Wait about the 200 dollar oil. It may be true that demand could be elastic for some time. But not forever. Look at the elasticity in supply markets. The party is not over yet
I really appreciate your steadfast interpretation of the data Robin. You have been spot on in oil, Fx, and rates. I like the doubters because I have someone to trade with.
it’s great to have someone short gold short stocks and long bonds
keep donating money joel we all thank you
These posts increasingly read like a broken record - all moaning and no substance!
Does 'hyperbolic alarmism' spread to the AI trade - should we ignore Burry's shorts, vendor financing, mark-to-market gains, Chinese competition etc? I wish I knew but it feels like a put option or two would be sensible. It would be interesting to hear Robin's views on this as well as on oil & the yen.