US IS NO LONGER THE SAFE HAVEN
Focus on Section 899 - “Enforcement of Remedies Against Unfair Foreign Taxes”
There Is So Much To Rebalance!
Market is near all-time-highs and GDP is just starting to contract.
It bears repeating, I am still TACTICALLY BULLISH, MACRO BEARISH.
And here is some of the latest data to support the macro concerns:
Global economic growth is set for weakest growth since Covid, OECD warns.
The global economy is on course to slow from 3.3% last year to 3.1% in 2025 and 2.9% in 2026.
Apollo.
"The consensus is forecasting a sharp slowdown in nonfarm payrolls over the coming quarters"
And then there is the Musk rant today putting the GOP on notice as Trump's reconciliation bill sits in front of the Senate:
"I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it."
Renewing Trump's tax cuts, without cutting spending, will greatly impact debt and debt servicing - hence why it makes a lot of sense to stay TREND LONG GOLD.
And why DoubleLine Capital, Pimco and others favor shorter maturities that carry less interest-rate risk but still offer a decent yield.... Because few are owning the the 30Y bond.
Geoffrey reminds us of the risks:
"The problem is a shock on sovereign debt curve that Dimon along with Gross, Gundlach, Dalio are seeing as a real possibility.
In that context allocation to bonds should probably be negative - like Drunkenmiller."
And the Sovereign debt curve going higher is going to hurt a lot of refinancing.
Apollo again with their Credit Outlook by highlighting the risks of Low Liquidity & Rising Yields…
"Seventy-three percent of bonds in the world trade at a yield of less than 5%, see chart below. There is no beta in public credit markets, and with the total amount of public credit outstanding at $12 trillion and only $15 billion in dealer inventory, there is little liquidity in public credit markets."
Long story short, these are but a few reasons why I continue to be MACRO BEARISH.Here's another really good reason...