crestfallen
#wordoftheday

There are mistakes, and then there are mistakes that should end one's political career.

The 2016 presidential election crystallized a negative selection algorithm. The basic idea is not to vote for a candidate who, by admission or omission, managed to execute a serious mistake of enormous proportions.

In September 2012, Hillary Clinton was the Secretary of State. During her tenure, the US Ambassador to Libya, Christopher Stevens, along with three other US citizens were killed by local terrorists. Despite the growing hostilities, she didn't act on the intelligence information and instructed the US mission to remain in place. That decision resulted in a tragedy, followed by the humiliation of dragging the ambassador through the streets of Benghazi attached to a car. Later, she took her time to acknowledge the responsibility, while initially trying to distance herself from the ordeal. This alone sealed her faith in the eyes of this voter.

Fast forward to Trump's presidency, and two equally colossal misdeeds could be recognized. First, was his handling of and posturing to the attackers on the US Capitol Building during January 6th, 2021. Luckily, that dark episode remained mostly symbolic, albeit psychologically damaging. The second unforgettable mistake deserves more scrutiny. It was the mismanagement of the COVID-19 pandemic.

Bypassing the specific details, my main beef is the flagrant number of deaths. Be it by the absolute count, by the number of deaths per 1M of the population, or by any other metric, the numbers are staggering. More than 1.2M people died. That's a number-one spot worldwide. India, a poor and underdeveloped country with a population four times greater had 533K deaths. It's 2.28 times less for those keeping score. It's a shame, especially since the gravity of the impact was preventable.

Over the years, I've heard a number of counter arguments downplaying Trump's responsibility. A distributed political system in which individual states make their own decisions. The extremely liberal nature of American citizenry with an eye towards the government's defiance. Are among the most common ones.

These claims are weak and missing the point. Which of these accurate descriptions was news to the commander-in-chief when he took office? None. At least they shouldn't be. Furthermore, the federal government can act with a heavy hand during times of crisis. Look no further than the draft during the Vietnam War or the powers of the War Production Board during WW2. It is that very leadership and guidance from Washington states were looking for. Unfortunately, it didn't occur in time due to extreme chaos in Trump's cabinet and the normalcy bias from the Fox News circus.

CEOs are routinely fired for significantly smaller errors.

#politics
October 2024

$7.75 trillion - the increase in federal government debt over 10 years as estimated by the Committee for a Responsible Federal Budget under plans floated by Presidential candidate Donald Trump.
$3.95 trillion for the other candidate.

#factoftheday #AmericanDynamism

There are two types of people. First, will endlessly debate the merits of their candidate and vote accordingly, hoping to see improvements in their lives and be associated with a winning team. Second, is expecting a 5-handle on a 10-year treasury within the next 9 months. With Trump in office, the yield will slope higher and faster. Absent of any exogenous shock of course.

#twotypesofpeople  #finance

infinitesimal
#wordoftheday

misbegotten
#wordoftheday

reclusive
#wordoftheday

accretive
#wordoftheday

Издание Bloomberg, 1го ноября, опубликовало занимательную инфографику с анализом финансирования предвыборной кампании. Доступ платный. Данные получены от Federal Election Commission.

Основные тезисы:
- Представленные в анализе $14.7 лярдов составляют 92% от ожидаемых трат по версии OpenSecrets.

- Выборка из более 11,000 политических групп. Минимальный вклад свыше $100K, это 99% от всех расходов. Каждая группа представлена цветным кружком. Размер и цвет зависит от партийной принадлежности и суммы взноса.

- Топ 100 групп внесли 64.6% от общих трат. Минимальный вклад составил $18,822K (почти 19 лям). В этой категории все данные интерактивны. Наводя мышью видно название группы и сумму взноса.

- Кампания Трампа получила больше денег от трёх человек (Elon Musk, Miriam Adelson and Timothy Mellon) чем суммарно вместе с партийными взносами от доноров с порогом ниже $200.

- Кампания Камалы потратила $875 лям, против $355 лям оппонента.

Данная статься отчётливо демонстрирует глубину и разброс финансовой поддержки кандидатов в президенты и основных партий. И наоборот, фиксирует уменьшение значимости отдельно взятого донора.

#politics #AmericanDynamism
November 2024

This election cycle has its share of market craziness.

How would you value a publicly traded company with income (Q2 2024) of negative $16.36M, $311M in assets against $66.24M in liabilities, and negative $21M cash flow from operations? What would be your reaction if you'd learned the market cap of said company is $6.87 billion? Insanity is probably the word that comes to mind. Yet, today alone it jumped 15%.

Meet Trump Media & Technology Group Corp, ticker DJT. It trades around $39 as I write this. However, this crazy overhyped overvalued price only tells part of the story.

With three days left until this week's expiry, options prices imply an almost $20 move up or down. Selling a 39 strangle will bring about $2K in premium and require approximately $8K of capital. This level of implied volatility is rarely observed.

An interesting trading thesis I heard a day ago is this. If Trump wins, it'll be "sell the news" dynamics. If he loses the stock will go to zero. This logic appears to be reflected by options prices.

Happy trading!

#ЖадностьПорождаетБедность #finance
November 2024

The next day, after the election smoke has cleared, Trump was declared victorious and any asset class associated with a Trump-trade spiked, DJT was briefly halted. The very same strangle that sold for $20 a day earlier is now trading below $9 and loosing value.
That's what an Implied Volatility (IV) collapse looks like. Those with balls who sold it earlier, are sitting at cool one-day profit.

Making predictions means that sometimes they'll happen. Even a broken clock shows correct time twice a day.
Unfortunately this was not the one were money were made, for none were wagered.

Старая тема в новой подаче. Какие штаны соотносятся с какими странами по ВВП.
Найди свою страну.

#economics #AmericanDynamism

Краткий перечень экономических ожиданий от новой администрации:
- Дерегуляция бизнеса
- Тарифы
- Снижение налогов
- Как минимум сохранение федеральных расходов на нынешнем уровне. Напоминаю, дефицит бюджета $1.8 триллиона.

Не трудно догадаться к чему это приведет. Правильно, к усилению инфляции. Конечно, это не будет Зимбабве, но 3-4% вполне себе. Естественно, рост процентных ставок. Вчера, когда стало понятно имя победителя, доходность(yield) по 10ти и 30ти летним гос. облигациям(treasuries) прыгнулa на 20 базовых пунктов (bps). Это много. Напоминаю, доходность обратно пропорциональна цене. Если вы раньте, поздравляю. Для остальных, MAGA скоро приобретет чёткую цены.

А как вы хотели, за всё нужно платить, или расплачиваться.

#economics
November 2024

valorize
#wordoftheday

One probably heard of Palantir. Possibly in a negative tone. For what's it worth here is a reflection on the company from a former employee. TL;DR.

If you're an investor, congrats. The post election move is especially impressive.
Otherwise, the nitty gritty details of company's structure and operational philosophy are interesting in and of themselves.

#AmericanDynamism