I thought this email captured my views pretty succinctly, so I decided I’d share it. Please ask questions if you have them in the @BehavioralMacro stream and I will answer them as best I can during jury breaks. Good luck.
“Hey X. Sorry again about the slow response. Still terrible with email and on top of that have been (and still am) on jury duty. I posted this on my blog back in April.
I still think, amid all the tape bombs and geopolitical noise, that this is the operating environment until roughly end of summer. If we get into a full blown trade war, it will of course get uglier, but whether we do is still too path dependent for us to know. I have been in ‘keeping P&L mode’ more than ‘making P&L mode’ since I posted that piece. I had a ridiculously good Q1 in my Trading style and don’t want to mess it up. In my Investment style I have been waiting for us to finish the consolidation pattern to deploy more cash. Not too worried about the Fed, about overheating, or about a recession for the foreseeable future. I think EM continues to underperform until the market begins to think it has some clarity on where the Fed’s terminal rate will be and when we are likely to get there. At least this is my working hypothesis. Hope all is well out there in the Hamptons.