The Big Hedge

Postcards from the florida republic

An independent and profitable state of mind.

 

 

I’m traveling to Jacksonville today.

It’s the largest city by land area in the Continental 48 states. It feels like its own small nation. While on a fact-finding mission for the Republic, I’ve decided this would make a fine port of entry.

Since I’m on the road, I’ll be quick.

China’s property market could drop a hammer on global liquidity as lenders scramble worldwide, looking for additional capital.

The bond markets are about to face stress in the coming weeks. It’s palpable right now. I told you that a Senator on the U.S. Senate Finance Committee bought an inverse fund on the Nasdaq 100 (QQQ) called the PSQ on July 13. That was a well-timed bet.

Well… let’s look at an EVEN BIGGER bet against the Nasdaq 100.

Here’s Michael Burry – famed investor from the book and film The Big Short – reporting on his Q2 2023 13F that he’s hedged. VERY HEDGED. He bought 20,000 put contracts on the SPDR S&P 500 ETF (SPY) at $2.75 each and another 20,000 contracts on the Nasdaq 100 ETF (QQQ) at $2.70 per contract. Interesting times ahead.

One can view this as a hedge… or as a bet against the market. Either way, if the market does fall sharply, he’ll make some money. Now that momentum is negative, we’ll see how it goes.

Stay positive,

Garrett Baldwin

Secretary of Finance