“Buy when there's blood in the streets, even if the blood is your own.”
Baron Nathan Rothschild
Following the US Federal Reserve’s decision to increase its key interest rate by 50bps on Wednesday, the stock market initially rallied, with major US indices up 3% on Wednesday, but then tanked heavily on Thursday (NASDAQ down 5%) and Friday. The situation is even worse in the bond market, where bond prices are crashing across the board at an unprecedented pace. Saying that the Fed is in a difficult position would be an understatement.
The week in a few tweets
If you think the Fed can go ahead and increase rates meaningfully, keep this chart in mind:
Listen to what billionaire hedge fund manager Paul Tudor Jones has to say about the current macroeconomic environment. I’m warning you: He isn’t optimistic and says it’s not a good time to hold neither stocks or bonds.
But there is a silver lining:
Interview of the Week
On Wednesday, Jim Bianco from Bianco Research gave an interview in which he reacted to the Fed’s decision to raise its key interest rate by 50bps. Bianco explained why the market initially rallied, but why it was likely to be short-lived (he was proven right quickly) because his view is that the Fed wants the stock market to go down. He also talks about why he thinks the economy is never going back to what it was before Covid, the impact of work-from-home, and the historical crash in the bond market.
Macro Corner
On the Margin | US Dollar “Wrecking Ball” Will Fracture the Global Economy | Michael Nicoletos
Founder and managing director of DeFi Advisors Michael Nicoletos shares the macro forces driving the dollar higher. With an expertise in FX markets, Michael shares how the dollar wrecking ball will impact the global economy, particularly emerging markets, as growth continues to slow and the world scrambles for greenbacks.
Odd Lots | Javier Blas Explains How Commodity Trading Shops Really Work
On this episode, commodities journalist Javier Blas explains how commodity trading firms operate, and how they're dealing with this environment of surging commodity prices and extreme volatility. He is also the co-author of 'The World For Sale: Money, Power, and the Traders Who Barter the Earth's Resources,' a book I read a year ago and that I recommend for those who want to understand how companies like Glencore or Vitol move hundreds of billions of dollars of commodities every year.
Crypto Corner
The What is Money Show | Bitcoin as an Incorruptible System of Value with Jordan Peterson (WiM168)
Canadian clinical psychologist Jordan Peterson talks about human psychology, money, capitalism and how the fiat system is like a game where the rules change all the time. I highly recommend this episode. The first part starts at 31:52 and the second part at 1:29:35.
What Bitcoin Did Bitcoin | The Greatest Money System with Darin Feinstein
Darin Feinstein is an early investor in Bitcoin and co-founder of Core Scientific, one of the largest Bitcoin mining operations. In this interview, he discusses what brought him to Bitcoin ten years ago, the revolution of triple-entry accounting and how the environmental argument has always been used to try and discredit new technologies such as internet, email and now Bitcoin.
