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Daily Insights

21 Oct 2021

For those into conspiracy theories you may be excused for thinking that Vlad Putin is behind the shortage in natural gas supply the northern hemisphere is encountering right now. This will certainly help play into his hand for getting the Nord Stream Pipeline approved pronto after all the stone walling. Gee I wouldn't like to play chess against him, he would be 10 steps ahead of me. 

Its Bitcoins day with another new all time high, somewhere just above $67,000. 

Good news I survived option close out yesterday and got back into it at the highs today writing short duration calls at 70k. Please don't try this at home if you don't know what you are doing.

Sitting here in Australia there is good news that a bill is being put forward to go to the senate that will enshrine some of the most forward thinking crypto legislation which will make Australia a sort after destination for crypto related businesses. A provision that caught my eye was the incorporating of DOA (decentralised autonomous organisation) into the corporate act. What this means is that a group of people on the internet can run a business/token / ....etc.  I keep telling people who dismiss crypto, it is too big to ignore. Regulators have woken up to this and are scrambling to bring it into the fold. Here I must say that regulators are more on the ball than many of my friends and outer circle.

By the way for anyone reading these letters, I am in the pre launch phase and trying to figure out what is a preferred format. I like informal and kind of like this conversation or journaling type of style. I hate formality so if it works for you please let me know it will encourage me to be more myself - oi vey.

Mike Cannon-Brookes just pledged with his wife $1.5 billion to climate change investment and philanthropy, that on top of the $1 billion he has already dropped. For those who don't know he is the co-founder of Atlassian a tech juggernaut. How can I bring this guys name up without name dropping. I was flying to the USA for a 2 month family holiday when he and Scott F..... can never remember that surname were flying to the US to begin their roadshow for their Nasdaq listing. I snapped a picture of them collecting their luggage like 2 average Joe's I told my kids who they were and how laid back and normal they were, I said watch this space (I was a user of their software and thought how cool it was - truth be told I had no clue how successful they would be).  Excuse the rambling I was really just trying to say that this saving the planet stuff is getting real. We used to talk a million here and there now we talk billions, pretty soon we will be talking real money 😁.

Anyone who thinks this Evergrande story is going away anytime soon should rethink it. This has the potential to be a major catalyst for a global debt implosion so lets keep it on our radar. The stock was down 80% this year before being suspended on the Hong Kong exchange. What is interesting is that talks to sell the companies stake in the management company have fallen through. This would have brought a cool $2.6 billion cashflow into the system, take note: a 30-day grace period expires this weekend for an $83.5 million interest payment on a bond that Evergrande missed last month. Creditors could seek to demand the company immediately repay the debt, which would trigger a default on other Evergrande debt.

The Australian bond market is having nothing of what the tone deaf central bank governors have to say. The likelihood of an early than anticipated hike is now becoming more and more likely. A word of caution for those buying homes at the FOMO enhanced record prices. If you have factored record low interest rates into your 20yr amortization numbers then you may need to think a little more prudently because clearly the prudential regulators APRA are not doing it for you. 




I said in yesterdays letter that the Bitcoin price movement is largely a reaction to the excessive debt in the system. For the last decade+ bond yields ignored the mass debt issuance but it seems now they are joined at the hip. Hat tip to TME.



The S&P 500 is very close to making a new all time high, it has just gapped up 3 days in a row. I have included a chart on the seasonality season we are about to enter. It seems like we are running a little hot and ahead of the 70 years of data. I am short and getting hurt with this rally but I am not going to fold my cards. I am banking on an early Christmas