Matein KhalidThe chickens have finally come home to roost at Goldman Sachs after CEO David Solomon’s succession of strategic blunders triggered a 33% slump in Q3 earnings. This is the 8th successive quarter of profit decline at the fabled Wall Street investment bank that was once known as the planet’s most profitable hedge fund that just happened to have an NYSE listing.In essence, Goldman took the hit […]
Matein KhalidAnguished at the atrocities in Israel/Gaza, I turn to a happier and happening EM, my obsession du jour in deal heat. Mel Gibson, Sigourney Weaver and Billy Kwan’s tale of love and betrayal in the twilight of Sukarno’s Jakarta, the year of living dangerously. My interest is now beyond hanging out in the beach clubs of Uluwatu and Kota amid the mysticism and Aussie sheilas of […]
Matein KhalidOnce again, the gun has vanquished the olive branch in the Middle East. The dawn assault by masked Hamas gunmen who infiltrated Israeli towns, villages and kibbutzim across the Gaza border and went on a rampage of indiscriminate killing against civilians asleep in their homes and farms. Any act of calculated violence against an unarmed civilian population is an act of terror, whether it was committed […]
By Matein KhalidSomething is dangerously wrong in a world where the price of crude oil can drop 5.6% in a single session, as it did last night in New York. My short idea on crude oil three days ago and the dissection of the Dubai property cycle was savaged by critics who assured me that I did not understand that Saudi Arabia’s command is Biden’s demand and […]
By Matein KhalidCongress has averted a government shutdown in October but the political circus will resume in mid November. The risk of a US and thus global recession has never been higher, this time the wolf is here. Why?One, every major US recession since 1974 has been preceded by a sharp rise in oil prices. Brent crude was $70 in early June and is near $95 now. […]
Matein KhalidMy short idea on Mr. Market was a beauty in Sept, with the S&P 500 down 4.9% and Nasdaq down 5.8%. Even though Street folklore, sentiment U-turn and seasonals argue that the index will mean revert now, I believe we will drop to 4200 level and violate the 200 DMA trendline. If so, all hell will break loose. There are too many matador swords dipping into […]
By Matein KhalidIndia is the crown jewel in the MSCI EM index, just as it once was for the British Empire. Yet Nifty now trades at the same stratospheric valuation as it did in December 2007, not exactly the best month in Vedic history to go long Bharati equities. Two metrics make me go gaga on Modinomics. One, the free distribution of sanitary pads to millions of […]
Matein KhalidLord Rothschild’s advice to “buy when there is blood on the street” is perfectly apt in the bombed out carnage of US office REITs, where stocks have fallen on a quantum scale more than the value of the underlying brick and mortar. Vacancy rates have spiked in the post pandemic, remote/hybrid work zeitgeist of 2023, the Fed’s draconian monetary tightening has gutted valuations and the sector […]
Matein KhalidIt was a mini Black Thursday for debt/equities last night but it was macro nirvana for me as four trade ideas I have rhapsodized ad nauseum in the past three months have now proved, “the mettle of their pasture”, to borrow from King Hal’s speech to his English archers on the eve of Agincourt. With Taiwan Semi and AMD down 25% from recent peaks and even […]
Matein KhalidThe retail sales and PPI data bombshells only reinforces my view that a pause at the September FOMC only means that the Powell Fed is certain to raise the Fed funds rate to 5.75% in November. The terminal overnight borrowing rate in this cycle could well be 6.5%. The parabolic rise in Brent crude prices from $70 in early June to $93.4 demonstrates that the US […]
Matein KhalidBlackstone (BX) was founded with $500,000 in 1985 by two Lehman partners after a civil war at the I-bank forced its sale to American Express. BX had a meteoric rise from a small LBO boutique in Manhattan to the world’s first true alternative asset management colossus with $1 trillion in AUM.I have rhapsodized about Blackstone in the Gulf/UK media ever since its shares fell from its […]
Matein KhalidThere is now no doubt in my mind that we are witnessing a replay of the inflection point in the global liquidity cycle that culminated in the Asian currency meltdown in 1997, the TMT debacle in 2000 and the subprime mortgage crisis/credit market contagion in September 2008.China’s $5 trillion deflation nightmare has only just begun, a replay of Japan’s two lost decades with a property collapse, […]
Matein KhalidIn my late 1970’s boyhood, I was mesmerized by the Shah of Iran’s regal hauteur and magnificent uniforms as he made periodic state visits to Larkana, the then de facto capital of Pakistan. Sadly, the party ended for the Shah in January 1979 as he piloted his Imperial Boeing 707 out of Tehran while a million Islamist revolutionaries screamed for his blood and welcomed a 80 […]
Matein KhalidDubai’s royal and merchant elite has always had a significant financial exposure to UK PLC, and thus sterling.The historical umbilical cord between Britain and Dubai goes back to even before the birth of the UAE Federation in December 1971.The late Sheikh Rashid al Maktoum, the father of the current ruler of Dubai, was a frequent guest at Buckingham Palace, Windsor Castle and Sandringham.At his request, the […]
Matein KhalidThree generations of Gulf Arabs have been enraptured with German luxury auto brands like Mercedes, BMW, Porsche and Audi.But please, please, do not fall in love with German homes or CRE as the Fatherland faces the mother/mutti of all property meltdowns.New construction starts have plunged a ghastly 50% in H1 2023. Hundreds of property developers, squeezed by the sharp spike in borrowing costs, and a collapse […]
Matein KhalidI expected a bond market bloodbath ever since the yield on the 10 year US Treasury note rose above 3.50%. Why? One, the neutral rate of interest, called R* in the vocabulary of the Federal Reserve monetary economists and the bond trading desk of Wall Street. This is the rate of interest where the economy is in neither growth or recession mode and R* neither stimulates […]
Matein KhalidLiterature is often a better guide to navigate the emerging markets than the cold algorithms of modern finance. This is definitely true with the magic realism genre of Latin American writers like Argentina’s Borges, Colombia’s García Márquez and Mexico’s Carlos Fuentes, the three men for whom I have struggled to achieve fluency (without success) in Spanish/Castellano. So when I think of emerging market equities in 2023, […]
Matein KhalidSaudi Arabia’s unilateral 1 MBD output cut in Vienna last week did not trigger a credible rally in crude oil prices. Au contraire, Brent ended the week at $74.80 and West Texas a tad above $70, down 2%.Prince Abdulaziz’s warning to the oil bears to “watch out” has failed for the second time since April’s shock OPEC+ supply cut. It is obvious that both the wet […]
Matein KhalidThe $7 trillion foreign exchange market can be merciless if you read its macro smoke signals wrong or ignore the hoofbeats of the leveraged herds who determine its positioning, politics of central banks, government policy and above all the psychology that shapes sentiment.The biggest consensus trade for 2023 was supposed to be the dethronement of King Dollar amid a robust Chinese reopening recovery and an inflation […]
Matein KhalidPresident Erdoğan recalled his pro-markets ex-Wall Streeter Mehmet Şimşek as Finance Vizier and the head of MIT who negotiated his diplomatic rapprochement with Egypt, Israel, Saudi Arabia and the UAE as Foreign Minister but all hell has broken loose in the money markets of Istanbul as I write. The Turkish lira has plunged 7% this AM as state owned banks have stopped the dollar sales they […]
Matein KhalidMy muse is the Kingdom tonight – not the kingdom of heaven but the Kingdom of Saudi Arabia. Prince Abdulaziz reinforced Saudi Arabia’s role as the swing producer of OPEC+ at Vienna with a voluntary 1MBD output cut and his energy diplomacy gave UAE a 200,000 barrel a day quota increase. The impact on oil prices has not been dramatic as Brent is now $77 and […]
By Matein KhalidBubbles are a recurrent phenomenon in financial markets, from Dutch Tulips in Rembrandt’s Amsterdam to Kuwait’s Souk al Manak, Japan’s Nikkei Dow to the dotcom debacle in 2000, the credit bubble in 2007 to the crypto SPAC roller coaster in 2021 and now the global hype over artificial intelligence (AI).Is there a bubble in AI stocks even though some have been blowout winners in my […]
Matein KhalidI have been fascinated by the global commodities markets ever since I lost a semester’s tuition at Penn trading silver futures at EF Hutton. Family folklore tells me that my ancestral clan traded physical commodities in British India for generations and the Great Depression plus General Yamashita’s assault of Fortress Singapore devastated my paternal grandfather’s godown/inventory, though cousins in Paris and Dubai are still among the […]
By Matein KhalidThe global EV market has entered a cutthroat, even Darwinian competitive dimension now that Tesla (TSLA) has initiated a price war to capture market share, though a plunge in gross margins is the blood sacrifice for market dominance. So TSLA’s Q1 earnings were a predictable horror, with a fall in operating income/margins after successive price cuts. Tesla can succeed in this strategy in the US […]
