Trading Outside the Box with Brent

It hasn't been the asset class, Brent, but what has been the most important thing, how are you looking at the Iran war and the Strait of Hormuz being closed since March 1st? Just what's your general thoughts about how to eyeball the markets with that going on?

So I think, like, a mistake that maybe the market's made and l- and I made for a bit is not understanding, like, the, the transmission to the real world and to the markets.

Like, essentially it's obviously oil first, and then maybe, like, c- other commodities, and then rates, and then FX, and then equities.

And it's like in the end, does AI CapEx or, you know, super hyperscaler earnings, are they affected by Hormuz? Not really.

But then if you look at rates, like people that, that were the wrong way in rates never made their money back, right? Like, if you were the wrong way in equities and you held on, obviously it's all new all-time highs.

But, you know, you have RBNZ last night saying they're gonna hike, ECB's hiking in June.

Rates haven't backed off at all.

So I feel like the first thing is to kind of understand the transmission, and obviously I, I just described how I see it.

I don't think it's really a big deal for equities given all the charts that go around about...

If you think about the K-shaped economy, and then you think about the real cost of oil for people at the top of the K, it's, I don't know, it's just basically a nothing burger.

Like, oil's the same price now as it was in 2006, inflation adjusted.

So, but, you know, I guess...

And then the sort of like overarching theme I think of the last four years is that the US economy is anti-fragile and...

But it's not in- not indestructible, I guess.

So, like, I guess that's the thing that I'm trying to figure out.

Is there a point ever where the US economy actually can't t- handle the stress? And I mean, obviously the base case has to be no.

We've been, like, in this soft landing for years now, I guess four or five years.

But I mean, is there a point where the bottom end consumer falls so far, uh, that it actually matters? I don't know.

I, I would say my base case is no, and, and I kind of go from there.

Very interesting.