Stating the obvious NGDP growth like you read about  That's what's happening we all know the reasons  Massive AI investment Easy monetary conditions Fiscal spending  Low private sector leverage at low costs Massive wealth fueling consumption Without regard to pricing Good for assets but really bad for nominal bonds and bad for tips and cash. Awesome for commodities and stocks and okay for gold and crypto/BTC That's what's happening. That's the trend.   Policymakers can kill it but aren't trying. Fiscal/Treasury is tweaking the trend and supporting bonds which is turning already bad environment for cash to truly awful for cash and good for inflation. As long as that trend continues  Dips are bought in commodities (even oil even if peace) stocks, and gold. Rallies are sold in bonds  When does it end?  How does it end? Different ways.  Hike until it ends Let long end do what it needs to do instead of actively suppressing  Ai takes longer to work than expected Private sector financing capacity gets exhausted  Prices become extreme and can't breath in the thin air.  Inflation forces fiscal austerity and consolidation to assuage the populous.  Some or all of this at once Always own beta is always true.

Today in Washington, Vice Premier He Lifeng and I held substantive discussions on the U.S.-China economic relationship ahead of President Trump’s meeting with President Xi. Our discussions continued to focus on securing meaningful commitments that protect American workers, farmers, and businesses while advancing U.S. economic and national security interests.

My wife and I are having our biggest disagreement in a while. Our son has his first Halloween next month and I want him to go as Muse in honor of $META being our top family portfolio position. She says we are not making our child a walking brand partnership while I want him in a onesie with a chat bubble that says “I can book that for you.” We've reached a settlement and she said if this post hits 1M impressions then he can go as Muse. I appreciate your attention on this important matter.

Vol at the index level is a joint function of the vol of the stocks in the index and the correlation among them. It's the incredibly low level of the latter that has been Ozempic for index volatility. "Low correlation each day keeps index vol at bay" Here's a chart that shows it. Assume 35 for the vol of the average stock in the $SPX. With the $VIXEQ at 38, that's a reasonable assumption. Now choose different correlation levels (horizontal) to yield different index vol outcomes (vertical). Actual 3m realized correlation of the stocks in the SPX is (wait for it) 3%. One year is 7.5%. Let's move correl from 7.5% up to 30%. SPX vol essentially doubles, up from roughly 10 to 20. And that assumes no change in average single stock vol. We know, empirically, that stocks become more volatile and more correlated at the same time. A joint shock higher to both will seriously boost realized vol at the index level and take the $VIX much higher in the process.

Major themes 1. SPX earnings expectations are in an epic bubble which won't deliver as there is not enough "GDP pie" and valuations are highish 2. In order to stand a chance of delivering these epic bubble like earnings massive issuance will be required to pay for capex while borrowing by the government remains high. That is a headwind on all assets and limits wealth effect consumption as well 3. Long term interest rates have V topped and fallen rapidly 6 times post COVID. This time despite suppression attempts by the administration a V top in yields is unlikely and higher for longer long term yields will over time tighten financial conditions and slow the economy Positioning. In a bubble regime with larger tails in both directions and apparent low expected volatility supported by low realized volatility it's tempting to leverage up above your risk target in your long term long only portfolio. Do not do that. Maintain your risk target. That's my beta positioning today. At risk target in a long stocks, bonds, tips, commodities, and gold balance and diversified across dm As for market timing alpha I am currently running a small bet that the market climbs through 9/30 while opportunistically adding November equity puts. My delta is slightly long but will be max short by 9/30. Max short risks 4% of AUM on put premiums for a 20-25% payoff if market corrects 5-10%. I am not positioned for a crash and you shouldn't be either STIR i am building a long in SFRH7 for two reasons. 1. A growth slowdown in Q4/Q1 for my big macro themes which may not pay as soon but is well priced if it doesnt and 2. A hedge for an equity short in case Warsh does what every central bank does which is pivot dovish on any weakness Bonds My central case is a drift higher in bond yields and i have a credit 1x2 in ZB which will make money in all scenarios besides a true bond puke. In such a puke my most 9/30 max short equity will work Oil would short a rally but far away. Own a bunch in commodity beta but no alpha Gold meh. No view here. Own 10% in beta but no alpha bet I favor ROW equity's and bonds. I favor ROW currency markets Always own beta but not above risk targets in this environment