Zoltan Pozsar, Humble Plumber

“After all, I am just a ‘plumber,’ not a geostrategic expert.”

So said Zoltan Pozsar, in a note dated December 29, 2022. I’d call the nod to humility tongue-in-cheek, but half of Pozsar seems genuinely convinced of the humble shtick the other half is selling. Suffice to say not everyone’s buying it.

The idea of Zoltan the unassuming plumber is impossible to square with what, to me anyway, comes across as an overtly pretentious cadence. I can’t call it an editorial voice because, frankly, he can’t write, a point I’ll return to shortly.

Even if part of Pozsar wants to be modest, the other part seems too lost in financial media aggrandizing to make humble possible. Between a preposterously overwrought Bloomberg profile, copycat coverage from competing outlets feigning familiarity to generate web traffic and the gleeful co-opting of Pozsar’s recent work by portals peddling geopolitical counter-narrative for questionable purposes, Zoltan can, I suppose, be forgiven for any delusions of grandeur he might be harboring.

All that media exaltation may help explain why Pozsar comes across as blissfully unaware of the extent to which his “war dispatches” (as he calls his post-Ukraine invasion geopolitical missives) increasingly read like disjointed collages of books he’s reading, news clippings and propaganda of various sorts.

Less generously, reading Zoltan these days is a bit like watching someone who’s been awake for a month try to explain a cork board conspiracy — he’s talking very fast and gesticulating wildly at pictures and maps strung together with thumbtacks and different colored string.

Pozsar appears to alternate between style manuals at random. Like Donald Trump, he’s loose with quotation marks and proper nouns. His liberal deployment of italics is cumbersome, to put it politely, and if there’s a system behind his multicolored underlining, it’s not obvious. Spelling mishaps are sometimes forgivable (Warren “Buffet”), other times not (“artic” twice in one paragraph). And there are hundreds of links pointing readers to everything from mundane Reuters articles to his own writings to blogs to Wikipedia to the official websites of autocratic governments.

His goal — rather nakedly — is to make a point about how much he’s read in the course of connecting various dots. The following passage is from Zoltan’s December 29 note, mentioned here at the outset:

Almost as a rule: The more you read, the better you write. Exceptions to that rule are exceedingly rare. Exceptions among intelligent people are virtually unheard of. Pozsar, improbably, seems to be just such an exception.

Even if you’re intimately familiar with all of the dynamics referenced in the torturous excerpt shown above, that passage borders on incomprehensible. If it were written by hand, it’d be illegible.

It’s not that Pozsar isn’t making sense, although if he keeps at this, that’s where it’s going. Zoltan is determined that the style he employed to pen compelling commentary about funding markets is transferable. But it isn’t. Forgetting about the arcana, Pozsar’s pre-Ukraine formula was simple: He artfully wielded analogies to animate otherwise esoteric discussions. Tellingly, any charts were almost always appended to the end of his notes, like the afterthoughts they were. Whereas every other “plumber” needed visuals to liven up hopelessly tedious discussions, Zoltan’s analogies were enough to inject life into topics about which almost no one cared, and on which even fewer were experts. His masterstroke was preserving the mystique of impenetrability that surrounds his area of expertise even as he occasionally lifted the curtain.

By contrast, there’s no shortage of experts on geopolitics. And everyone has an opinion. By his own admission, Pozsar has no special expertise in the area. So, this is the polar opposite of the conjuncture that made Zoltan famous. He made a name for himself by claiming (implicitly) to be the world’s foremost insider on something almost nobody understood, let alone understood as well as him.

His claim now seems to be that he can leverage his unparalleled understanding of money markets to divine unique insights into geopolitics. “I’ll take you to places that a geostrategic expert won’t: To the deepest depths of the global financial system,” he declared late last month, in a cringeworthy plug that could’ve walked right out of an elevator pitch for an overpriced Substack letter.

You can’t “download” a career’s worth of expertise in geopolitics. Reading Kissinger won’t make Pozsar Henry any more than reading Pozsar would make Kissinger Zoltan. Because Pozsar lacks the academic background (to say nothing of the hands-on foreign policy experience) he’d need to write as effortlessly about geopolitics as he does about funding markets, his only analogy is… well, funding markets.

When Pozsar compared money markets to a layer cake a few years back, that made immediate sense and the accompanying color was characteristically brilliant — vintage Zoltan, if you like. Now, he’s comparing central bank digital currencies issued by emerging markets to kudzu, abandoned homes to sanctioned nations and telephone poles to PBoC swap lines. To be fair, he usually steers the discussion back on track (e.g., “Today, CBDCs are interweaving BRICS central banks to replicate the global correspondent banking system that the US dollar system runs on”) but in addition to being nonsensical, many of the detours are wholly extraneous.

Unfortunately, very few people seem willing to call Pozsar’s “war dispatches” what they are: 101-level term papers. Zoltan escapes with his genius reputation intact by overloading readers with information, most of which is just paraphrased copy from wire stories, media outlets and Wikipedia. The elegant analogies which work so well for him when he’s comfortably in his wheelhouse are clumsy to the point of being non sequiturs when he’s not, and often function as hastily-built bridges back to what he knows best. Those bridges sometimes collapse when you try to cross them, and even when they don’t, they often lead to straw men. For example, in the same note cited above, Pozsar declared that, “China is proactively writing a new set of rules [and] you should stop pretending that this means nothing for the US dollar or demand for Treasury securities.” Who, exactly, is pretending that? Nobody, really, but if you assume everyone is, you have a great premise for your term paper.

Last month, Pozsar promised to write more “long, thematic dispatches” in 2023 “explor[ing] geopolitics, commodities and inflation,” all in the service of “defin[ing] what Bretton Woods III means.” He also said he’s going to “launch a new series of dispatches, the Bretton Woods III Dispatches, a series that will track the BRICS’ progress to build a new financial order.”

In preparation for this coming deluge, I’m going to write quite a bit more about Pozsar’s pretentious pretensions over the next several days. I’ve generally eschewed the temptation to critique Zoltan recently, but this is akin to that dreadful scenario when a legendary musician decides to release an album outside of his or her genre and it falls flat. Typically, such missteps are afforded the benefit of the doubt by reviewers on the assumption the artist will get back to his or her roots next time around.

Although Pozsar also promised to “return to past habits [and] resume writing Global Money Dispatches” in 2023, he plainly intends to stay out-of-genre (if you will) for the foreseeable future. Given his profile among market participants, and my own raison d’être, I can’t ignore that. So, I’ll need to set aside time to review Zoltan’s music. As he put it, “to better serve, I’m going to adapt.”