"Everyone to the other side of the boat"
What we witnessed this week was a global mad scramble into cyclical "reflation" trades, specifically Oil, Energy stocks, stock brokerages, and short Treasuries, as the global hypersynchronicity of "inflation" went viral...
Again.
Any questions?
The worst thing any gambler can do is load up on cyclicals at the end of the cycle. That's why it's called "the cycle", because it's cyclical. Holy fuck. We're doomed.
"At a minimum, the risk of another inflation undershoot has diminished. All the near-term risk is to the upside."
Meaning that gamblers are all on the same side of the boat. Record margin-leveraged to record oil speculative futures positioning. Unfortunately, higher interest rates and higher gas prices are momentarily "inflationary", but then they quickly turn back into a deflationary pumpkin. True inflation is a sustained increase in the money supply that lifts all prices throughout the economy most importantly wages. True inflation is not a zero sum game wherein higher gas prices take purchasing power away from other sectors.
I think they are starting to figure this out. They have correlation figured out, they just haven't made the connection to causation:
Which means, they are starting to figure out Ponzi reflation:
In the meantime, the true cost of this fake inflationary hysteria has been inflicted on recessionary safe havens:
"And did we mention that consumer staples are [still] expensive? The sector has been trading at 19 times earnings, while the S&P 500 only at 16 times...
If a wider rerating is occurring, there is a long way to go before value buyers begin to kick the tires."
In summary, as long as frackers don't roll over, this latest delusion will all be fine.
