I wanted you to watch Mr. Hugh Hendry wax poetic over the current crisis, a viewpoint that I share with him almost identically. Although in recent years he’s debased himself marooned on an island tripping on acid, back during the financial crisis of 2008 — no one had been better.
— The_Real_Fly (@The_Real_Fly) May 5, 2023
The gist of his argument is that the current crisis is Fed managed and there is nothing they can do to stop it — because people will not leave money at banks for 1% and would prefer t-bills at 5%. This is called “cash sorting” and this is why SCHW will trade to zero when this is all said and done.
The unrealized treasury losses on bank balance sheets will need to be realized once capital flies, forcing them to take losses they never needed to take. The only way to stop it — they’ll FORCE you to keep your money at your bank.
If you like your bank, you can keep your bank.
I traded shitty today — yet still managed +245bps. I took a 20% hedge via TZA at the close, in spite of being bullish. I did this because I know, at some point, it’s gonna end and when it does — ALL STOCKS will hit rockbottom and there won’t be anywhere for you to hide. You’ll try to hide underneath a rock or perhaps wedged in between a crevasse — but the market will find you and rip your arms and legs from your torso — kicking you into the pits of hell to repent for a life of waste and greed.
I depart for Europe next week for two weeks. I remind you of this because I will sparsely update the blog for the next 2 weeks or so. You are welcomed to join Stocklabs and talk to my fellow traders in there if bored, or you can fuck off for a fortnight and check in with me towards the end of May.If you enjoy the content at iBankCoin, please follow us on Twitter