Postcards: Two Ears and a Heart (Things I Think I Think)

It's a good day for crab soup. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Two Ears and a Heart (Things I Think I Think)]( It's a good day for crab soup. [Garrett {NAME}](floridarepublic) Jul 8 floridarepublic   [READ IN APP](   Dear Fellow Expat: We’re red. But we’ve been Red, Green, Red, Green, Red… for like a month. The challenge right now… liquidity ain’t pretty, but we can largely blame China. Bitcoin has been our clue to the state of the financial markets. It’s been under a lot of pressure in the last four weeks, and just hit $54,000 the other day. I can see a push down to around $48,000, which would be oversold. I’d back up the truck there for a squeeze back to the $55,000 level. There’s a causal relationship between the global liquidity cycle and Bitcoin. It’s a hedge against monetary inflation. And the inflation rate - for now - appears to not be as hellish as it was a year ago. That said, Jerome Powell openly admitted that inflation likely won’t hit 2% next year. What does that mean? Higher for longer… even if that means one cut and then NOTHING for a year. I continue to focus on the energy midstream and alternative income via Business Development Corporations. But I know I’m playing with fire on the latter… and I’m getting VERY close to moving toward 85% cash and money markets. My portfolio is basically gold, Bitcoin ($32k average in this cycle), cigarette stocks, and private-capital closed-end funds. I think gold has peaked for the cycle, but silver and copper have legs. About 50% of my money is now in money markets. It’s Not Called a North-South I asked for half crab soup and half cream of crab soup. I thought it was called a North-South. It’s not. It’s called a Half and Half. A North-South is reportedly some sort of soup involving Black Eyed Peas. Hard pass… I’ve had a bad week of not knowing simple things. Over the weekend, I openly admitted (sober too) that I thought the lyrics to Don Henley’s “Boys of Summer” went … “I can tell you, my love for you will still be strong After the poison summer is gone.” It’s this instead… I can tell you, my love for you will still be strong the boys of summer have gone You tell me that you don’t hear that… My wife immediately decided to text her friends to tell them that I’m fallible. I’m telling you this now so that you don’t hear it from her… The Pain Trade Bloomberg writes: “August is poised to kick off a painful two-week stretch for US stocks as money pours out of equities, according to Goldman Sachs Group Inc.’s Scott Rubner.” I don’t buy into forecasts that are longer than the weather predictions. But I will say that something painful is on the way. We’re in the back half of the year, and historically, volatility DOES pick up in election years. I expect Trump to win. I don’t see any pathway for Biden now, and Kamala Harris would lose 45 states. People have to understand—if they are Trump supporters—that the market will probably do the opposite of what they expect. Because the purpose of a market… is to sell. U.S. Treasury supply will expand next year - and that will likely push rates UP… Higher rates create collateral issues. Collateral issues impact liquidity. Liquidity impacts risk assets. It seems that the liquidity cycle will peak faster than Michael Howell is projecting, which puts us in a difficult position heading into… March 2025. The market will likely rally on the back end of the election, regardless of who wins. But January will come quick. I’m bullish on the final three months of the year… and bearish in 2025. The market will still likely go up… but the bottom half and the Russell are showing us what we should expect in the next two years. You HAVE to be honest with yourself. You might like this message or not like it… but the reality is that the expansion of capital and liquidity has driven the global markets since the early 1990s. That’s it. Thank the Fed. They’re crack addicts. If you’re a momentum investor… prepare for the liquidity reckoning. If you’re a value investor… prepare for a buying opportunity every six years. The thing is… you need to ignore PE ratios. They aren’t telling you anything in this environment. It’s antiquated… like having a pitcher bat. Two Ears and a Heart One of my favorite television characters of all time is Jack Donaghy the faux General Electric executive who runs the microwave and television arm. He’s portrayed by Alec {NAME}. While at lunch, One More Night by Phil Collins came on. The song reminded me of this… Tracy Jorden: I’m going to make you a mixtape. Do you like Phil Collins? Jack Donaghy: I have two ears and a heart, don't I? I’m Glad I Got to See France I must say that I’m shocked by the French election. Emmanuel Macron, the only Western politician I dislike more than Justin Trudeau, just set his nation back in ways that will be fascinating to watch. Centrists abandoned their posts, allowing Socialists, Communists, and Trotskeyists to run against the “Far Right.” Keep in mind that France’s far-right still LOVES government spending and programs. But this is unique. Macron was so busy fear-mongering and implying that Le Pen “Hitler” that he conceded to people with the ideology of Stalin. Great work. The first thing the leftist coalition did was propose a 90% tax rate on anyone in France making more than 411,000 Euros. This is a very easy way to predict that anyone making over 411,000 Euros will take up residency in Dubai by 2025. People laughed at 75% a decade ago. Will Smith thought 75% was insane,]( and that man slapped another man on live television. (It’s always fun to watch people say they’ll do anything for their country… except pay ALL of the taxes.) The only good news about France today is no party has the votes to reach a majority. The nation is in such disarray that it might not have a Prime Minister—the person responsible for pitching new legislation in France. My recommendation? Let this country sit out on the roof of a car like a sheep carcass as a warning to the other sheep. The West is falling apart… and the West is doing it to themselves. Nice was nice. I won’t be going back. Is This Real Life? Twitter gave us this… I don’t even have a joke for this… so I’ll fall back to one of my favorite comedians. [Maria Bamford once said:]( “You guys, some people love life. I’ve always been on the fence about the whole thing. I could … go … at … any time. What I would really like is a sharp blow to the head. Surprise me…” We’re 120 days from the election! I’ll be in Italy that week… you can’t pay me to stay here and cover it… Stay positive, Garrett {NAME} Secretary of Crab Soup Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()