Three macro headwinds converging:
1. $SPX earnings expectations detached from reality — not enough GDP to deliver, multiples already elevated
2. Capex tsunami meets sticky deficit spending = supply wall that caps wealth effect and tightens conditions
3. Long-end yields have V-topped 6x post-COVID. This time feels different — higher for longer despite Fed suppression attempts
Positioning discipline matters more than ever in a bubble regime with fat tails both ways. DO NOT overleverage your long-only book just because realized vol is sleepy. Stick to risk target across stocks/bonds/TIPS/commodities/gold, diversified DM.
Alpha book:
• Small long bias into 9/30, layering Nov puts opportunistically. Max short by month-end risking 4% AUM for 20-25% payoff on 5-10% correction. Not positioned for crash — you shouldn't be either
• Building SFRH7 long for Q4/Q1 slowdown + hedge against dovish pivot if Warsh follows the playbook
• Bonds: central case is drift higher in yields. Running credit 1x2 in ZB — profitable unless true puke, which would trigger equity short
• Oil: would short a rally but not here. Own commodity beta, no alpha
• Gold: 10% beta, no conviction
• Favor ROW equities, bonds, FX over US
Always own beta. Never above risk target in this setup.
1. $SPX earnings expectations detached from reality — not enough GDP to deliver, multiples already elevated
2. Capex tsunami meets sticky deficit spending = supply wall that caps wealth effect and tightens conditions
3. Long-end yields have V-topped 6x post-COVID. This time feels different — higher for longer despite Fed suppression attempts
Positioning discipline matters more than ever in a bubble regime with fat tails both ways. DO NOT overleverage your long-only book just because realized vol is sleepy. Stick to risk target across stocks/bonds/TIPS/commodities/gold, diversified DM.
Alpha book:
• Small long bias into 9/30, layering Nov puts opportunistically. Max short by month-end risking 4% AUM for 20-25% payoff on 5-10% correction. Not positioned for crash — you shouldn't be either
• Building SFRH7 long for Q4/Q1 slowdown + hedge against dovish pivot if Warsh follows the playbook
• Bonds: central case is drift higher in yields. Running credit 1x2 in ZB — profitable unless true puke, which would trigger equity short
• Oil: would short a rally but not here. Own commodity beta, no alpha
• Gold: 10% beta, no conviction
• Favor ROW equities, bonds, FX over US
Always own beta. Never above risk target in this setup.