Excellent newsletter, Steve. Easy to follow commentary.
I'm wondering if either you or Matt could flush out thoughts
around the debt ceiling fight. Given the political backdrop,
I'm not sure this time around it will resolve prior to a crisis.
Is there a way to protect investment assets or hedge short
term as the deadline rapidly approaches (as you imply, quicker than
most realize)? Is there a play linked to the US dollar,
interest rates (TLT?) gold or something else to consider if one is
skeptical that a solution is upon us?
Thanks Richie - the debt debacle is nearly impossible to
flush out at this time - expect that situation to be very fluid as
the looming default approaches (no set date)
Posted by jackbnimble on 1st of May 2023 at 08:50 am
The House Freedom Caucus has lots of power over McCarthy, so the
most likely resolution that avoids a crisis is for the adults in
the Senate (Rs and Ds alike) to negotiate a deal. That seems pretty
likely, given Senate Rs don't have an HFC-like wing holding
everything up and that many Senators are playing the long game
(decades in office and/or a presidential run). It is worth noting
that even after a successful albeit dramatic debt limit increase in
2011, our credit rating decreased, and SPY dropped 6.5% the next
trading day
The implication being that either way (debt ceiling increase OR
default) the SPY is likely to drop...and positions in the inverse
ETFs (SDS, SH, SPXU, SSO or UPRO) would do well? Of course timing
is everything.
Excellent newsletter, Steve. Easy to
Posted by RichieD on 1st of May 2023 at 08:28 am
Excellent newsletter, Steve. Easy to follow commentary.
I'm wondering if either you or Matt could flush out thoughts around the debt ceiling fight. Given the political backdrop, I'm not sure this time around it will resolve prior to a crisis. Is there a way to protect investment assets or hedge short term as the deadline rapidly approaches (as you imply, quicker than most realize)? Is there a play linked to the US dollar, interest rates (TLT?) gold or something else to consider if one is skeptical that a solution is upon us?
Thanks Richie - the debt
Posted by steve on 1st of May 2023 at 08:33 am
Thanks Richie - the debt debacle is nearly impossible to flush out at this time - expect that situation to be very fluid as the looming default approaches (no set date)
The House Freedom Caucus has
Posted by jackbnimble on 1st of May 2023 at 08:50 am
The House Freedom Caucus has lots of power over McCarthy, so the most likely resolution that avoids a crisis is for the adults in the Senate (Rs and Ds alike) to negotiate a deal. That seems pretty likely, given Senate Rs don't have an HFC-like wing holding everything up and that many Senators are playing the long game (decades in office and/or a presidential run). It is worth noting that even after a successful albeit dramatic debt limit increase in 2011, our credit rating decreased, and SPY dropped 6.5% the next trading day
The implication being that either
Posted by RichieD on 1st of May 2023 at 09:54 am
The implication being that either way (debt ceiling increase OR default) the SPY is likely to drop...and positions in the inverse ETFs (SDS, SH, SPXU, SSO or UPRO) would do well? Of course timing is everything.
That is the conclusion I
Posted by jackbnimble on 1st of May 2023 at 10:39 am
That is the conclusion I am seeing. It might at least be a good year to follow "Sell in May and go away"