US Election - Part 3

Macro D Guest Article: Socio-Geo-Political is the new Macro

This is the third and last post on the US election. We are less than a week away, so polish up on your scenarios and likely outcomes. As for me, I have a plan. I will do precisely nothing to my portfolio and keep it as it is. Politicians don’t change the macro. Tariffs and deficits are so much talked about that I think most if its already reflected. Besides, and as stated before if implied volatilities really are going to be realised, then there are plenty of opportunities knocking once we have more clarity.

If you have missed the first 2 instalments of these excellent Macro D thought pieces. You can find them here and here.

Let’s now leave Macro D the room. Enjoy.

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So, what historical series can show me the psychological traits of Ayatollah Seyyed ʿAlī Ḥoseynī Khāmeneī? What graph can tell me if this man is about to cross the line or take a step back? This is not about staging a view inside a jpg format or a McKinsey-style presentation, this is about listening to interviews, reading between the lines, observing eyelid movements, taking long walks and imagining the bowels of the world and its most visible creatures, this is about setting out on a journey in search of the inexpressible, observing everything and the opposite of everything and then letting ourselves go to a trading vision: ours. We could review any data by relying on the most reliable sources, but what will we get from it? Will we open a position on the markets because we looked at a graph created with obsessive care by the research department of Goldman Sachs rather than JP Morgan? Honestly, I wouldn't do it. Not because I don't respect the conclusions reached by the professionals of these banks but because I remain convinced that a macro trader must rely on the findings that only his instinct can reach.

The geopolitical context is becoming increasingly vicious, and the protagonists of the various global disputes look askant at each other and leverage their cultural peculiarities to intimidate the adversary. I always feel fear in the face of a State that highlights the less noble part of its past: "Hey you, remember that in the past I was capable of committing this action against Tizio. Be careful because the next Tizio could be you". To bestow (with ever greater frequency) a threat of this kind on the living context in which one lives means to have reached the point where one is scraping the bottom of the barrel until one has no other choice than to take action on one's thirst for revenge, in order not to be unmasked.

I believe in the imminent arrival of phenomenal macro opportunities because I trust that the sparks capable of setting change in motion are, first and foremost, the fruit of a triggering geopolitical event that sets the movement in motion and not of a political choice.

Let’s unpack this in more detail …