Markets with May analysis

While I usually stay in my lane, this week I’ve been compelled to comment on posts by FinXers & bearish economists. The half-baked analysis of their posts reek of condescension. Ironically, many of the people they criticize had better résumés by 30 than their critics will have in a lifetime.

Let’s start with Powell. Before becoming Fed Chair, he was a Carlyle partner—yet I keep seeing takes suggesting he’s too dumb to understand the yield curve. Meanwhile, these same analysts fail to grasp that shape matters more than absolute rate. Even worse, they have no clue why rates couldn’t have been lowered in past cycles given the realities of reserve currency dynamics, FX constraints, and the structural flaws in our trade agreements. They seem completely unaware that the primary job of these institutions is to preserve U.S. hegemony—not just toggle interest rates. And don’t even get me started on how they don’t understand the specifics of how rate changes will change liquidity given the state of the banks.

Then there’s inflation. The obsession with CPI and PCE—both lagging indicators—is absurd. This is even more so b/c these so-called experts won’t break down the components that MIGHT matter if you’re really being honest about your analysis. They focus on eggs – one of the fastest regenerating food sources (chick to egg-laying hen in 18m) – and ignore shelter costs, which make up 40% of CPI and are 100% leveraged to rates. Strip that out, and CPI has been below 2% for most of the last 18 months. Yet their only take on rates is: “It can’t be lowered because of debt.”

And about that debt—when was the last time an economist actually understood the balance sheet? I mean truly, liabilities aren’t the only side of the ledger. I’ve seen zero understanding of the U.S.’s true assets—beyond gold and whatever’s on Treasury’s balance sheet. No acknowledgment that federal land might be undervalued. No thought that citizenship, governmental stability, or natural resources could be assets. They don’t even approach the kind of conversations you’d hear in a basic-level boardroom. Just endless, mindless debt talk. Take an accounting class, for goodness’ sake! Read a case study now and again. Plz. I can’t take it.

And the tariff fearmongering? No acknowledgment that Industrials and Materials have been running lower volumes or that their efficiency gains over the last four years were driven by automation—not labor arbitrage. Instead of digging into PPI intermediates or industry reports, they just regurgitate PMI headlines—which are 100% subjective. I NEVER see them break down actual PPI, which—unlike PMI—gives line-by-line detail on the U.S. economy. But even if you’re too lazy to do that, just listening to a couple of one-hour earnings calls—like $ROK or $URI—would have told you something is wrong with your thesis.

Instead of doing the work, they double down on fearmongering—displaying zero nuance about how COVID supply chain disruptions reshaped U.S. production. They ignore how port closures, canal issues, and supply chain diversification muted 2023 earnings but are starting to pay off in 2024. They pretend Industrials haven’t been derisking U.S. tariffs for nearly two years—because they assume CEOs are as shortsighted as they are.

Nope—just more deficit and bond talk. At this point, you’re not an economist. You’re just a bond trader.

Disappointing if not painful. And honestly? I’d love to outsource economic analysis to someone. I listen to 400 companies per quarter. But I just can’t—not with the nonsense I’m seeing.