Key insights
- The author expresses strong bearish sentiment, citing geopolitical risks (Strait of Hormuz), potential dollar challenges (Iranian oil in Yuan), high oil prices, a potentially weak jobs report, and tariff impacts. The confluence of these factors is seen as unsustainable, leading to a negative outlook for the US economy and a suggestion to consider put options.
I don’t see why the markets ripped yesterday (3/31). We still don’t have a solution to the Strait of Hormuz, and reports indicate that Trump doesn’t care if it fully reopens. If that’s true, we’re looking at a permanent tax on the Strait for the foreseeable future.
The Iranian regime is even more hardline than before, and they’ve indicated they want to start selling oil in Yuan. If that happens, our debt becomes unsustainable and the dollar finally faces a real competitor. This is not even mentioning that oil remains at $100 and gas prices are predicted to hit $5+ this month.
Then there’s the smoking gun: the jobs report this Friday while the markets are closed. If it’s terrible, what happens? On top the TARIFFS and that whole mess, Oh, forgot to mention that Kevin Warsh’s confirmation hearing begins on April 13th, thinning the walls even more. My question is: how much strain can the economy handle?
TL;DR: The economy is being stabbed from every side left, right, center, top, and bottom. How much longer before it becomes unsustainable? And what are the moves calls? Puts?