China commodities S&P 500

In Your Own Little “Bubble”

All I know is that things are looking choppy here on the island...

Here’s the thing: I don’t have any “skin in the game,” so to speak.

And if I did, I wouldn’t slap a big disclaimer at the bottom of what I write because, as a former colleague of mine correctly noted a long time ago, you should probably just go ahead and assume that if someone is weighing in on something, they’ve got a vested interest in it one way or another.

But again, I’m not long or short anything you’re likely to be trading. There are some caveats. I’m long boat shoes, cigars, polos with the collar popped, and also arrogance. And I’m massively short stress.

Other than that, I’m “skinless” in this “game”.

Which either makes me an “impartial observer” or “someone you can’t trust,” depending on which side of the “skin in the game” argument you want to take.

If, however, I did have “skin in the game” where that means “long risk,” one headline I would not want to wake up to at 4:30 a.m. EST is this one: “iron ore limit-down in China. Another bad one is: “entire metals complex plunges on China worries.

That’s a fucked up way to start the day if you’re buying (figuratively and literally) the now ubiquitous reflation meme.

And it gets even more fucked up when it dawns on you that it’s predicated on bearish signaling on both the demand and the supply side of the equation.

And it gets even more fucked up still when you notice that money market rates in China are jumping on concerns about the PBoC’s willingness to keep the market awash in liquidity.

I guess my question to those who are long something other than beach accessories and rolled tobacco would be this: is it realistic to think that headlines like “entire metals complex falls off a fucking cliff,” can continue to exist in a vacuum?

Or, put differently: how long can you exist, as someone who is long stocks but oblivious to everything else, in your own little bubble (did you get the double “bubble” entendre there?).

Who knows. Maybe if vol stays glued to the flatline thanks to outrageously irresponsible prudent central bank mismanagement, entire narratives can break without killing the sacred cow that is US equities.

All I know is that things are looking choppy here on the island…





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