Matein Khalid
Two tragic plane crashes in Azerbaijan/South Korea and now terrorist outrages in Las Vegas and New Orleans take the joy out of New Year’s Day but all we can hope that the world will be reinvented with a modicum of rationality when Donald Trump swears the oath to uphold the US Constitution on January 20th. The political messiah of MAGA is also a geopolitical/trade time bomb who nominated a Gates for Attorney General and could, like Caligula, make a horse a Senator. Trump has appointed loyalists to run the CIA, DOD, NSA, DNI, FBI and all the intel/security agencies needed to run any self respecting autocracy. In the global markets, Trump 2.0 will suffuse every major asset class. My calls?
One, American assets and King Dollar will be the focus of global smart money in 2025 despite nosebleed vals. The politics of tariffs, the logistics of mass deportations and the megalomania of DOGE are being crafted by MAGA’s billionaire éminence grise and POTUS 47’s nickname is no longer Donny T as it was in my Wall Street salad days in the 1990’s when Trump’s Taj Mahal casino junk bonds went bankrupt but the New Delhi deli had the yummiest frankfurters in Atlantic City, but Elonia. The hunger games will begin on inauguration day.
Two, Trump and Uncle Jay have locked horns again and the bond market is scared stiff. This is the reason the 10 year Uncle Sam note yield is 4.6% and inflation/deficit/auction risk angst takes Bondola to above 5% or below 80 on TLT. Uncle Jay will not bend his knee to kiss the emperor’s ring, unlike all the world leaders who are honing their golf game for that coveted invitation to Mar-a-Lago/Bedminster. In 2025 the Fed is not my friend and my bond strategy since October remains: don’t worry, be happy, get shorty.
Three, will the AI trade that gave us 800% paydirt in Nvidia blowup in 2025 as the dotcom bubble did in 2001 and Dutch Tulip did in Rembrandt’s Amsterdam four centuries ago? No coincidence that the US stock market trades in a valuation twilight zone reminiscent of 1929 and 2007 on most metrics, thanks to Mag-7. Now that Bitcoin hit a $2 trillion market cap during its own mother of all speculative tsunamis, IBIT is Mag-8. When risk-off comes, this puppy can plunge to $40000 pronto.
Four, Trump hates King Dollar as it hurts American exports. Read up on the 1985 Plaza and the 1997 Louvre Accords. Soros and his London FX capo Scott Bessant made billions for the quantum fund playing the alchemy of finance.
Five, Trump will pressure OPEC+ and Saudi Arabia to lower oil prices even as drill baby drill triggers a surge in US output while Chinese demand growth is iffy. Maximum pressure on Iran will lead to a pop in Brent but the subsequent oil shock will be bearish.
Six, as in 2024, I remain obsessed by nuclear energy/AI convergence and the electrification of goldilocks.
Seven, as in 2024, EM remains the domain of the good, the bad, the ugly/fugly. Ola Argentina, salaam Pakistan!
Also published on Medium.
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