Futures dumped out last night thanks to a comment by the CEO of MRNA who said the current vaccine might not be effective against Omicron. MRNA skeptics have stated from day 1 these jabs might lead us down a perilous road of vaccine failure, whereby the vaccinated are in fact causing the variants in a never ending loop that will never end, keeping immune responses suppressed and dependent upon boosters forever. Such a craze theory isn’t looking so conspiratorial anymore.
I sold everything but my BITO calls, including my 15% position in TZA. On the last trading day of November, I’m not interested in risk. I know it sounds silly, since it’s just another day on the calendar — but I’m goal oriented and prefer to lock in my 7.5% gains for November rather than risk too much in a tape that can go either way. We might dump out here or rally furiously rally on any news that Omicron is weak and/or the present array of vaccines work.
(Insert laugh track)
I’m up 25bps early on and might nibble to a small degree later on.
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Brandon says: follow the big guy..er, I mean follow the science!
I reevaluated things and sold my TBT for a -13% loss. Powell confirms inflation is definitely not transitory. At this point the way things are developing, I think the most likely outcome is a policy failure at the Fed occurring concurrently with supply chain disruptions and now demand destruction from more draconian COVID response overseas.
Powell is being forced to taper to get monetary policy to bring supply and demand inline. Higher short term bond yields are on the immediate horizon and this will crush PE multiples even as earnings come back under pressure from margin compression and now demand destruction. But in a weird way I think this will save the long bonds because after the mess Powell is going to have to step back in. We’re all just waiting for enough damage at this point to get inflation back under control.
In summary, fuck your stonks.
Simple solution.
The Fed should follow the CDC’s example. Simply force Merriam-Webster and other dictionaries to change the definition of the word “transitory”
Problem solved. The Fed is always right.