Sam Kovacs

Macro hedge fund PM | EM policy advisor | 46K on SeekingAlpa

Outrun debasement in multipolar world. Macro threads & charts.

Babylon Burns Substack COMING SOON

[Sam Kovacs @SamKovX]

@TheIranianzg3z Iran gets to express its stated objective of being a counterweight to the Western model by being in the limelight. No conflict, no limelight. Their mosaic system is meant to endure. Their value systems put martyrdom super high.
There will be no deal.

[Sam Kovacs @SamKovX]

@staunovo How do you only get backwardation of $10 between now and year end?
I think the front of the curve is very confused rn.

[Sam Kovacs @SamKovX]

@GavMcCracken Right, What's your view on Cushing reaching the floor?

[Sam Kovacs @SamKovX]

@StealthQE4 No shit Sherlock!

[Sam Kovacs @SamKovX]

@nicrypto Trump doesn't do performative media antics 🙄🙄🙄

[Sam Kovacs @SamKovX]

There are two threads: debasement and multipolar fractioning.

1. When the US sanctioned Russian assets in 2022 it became clear: The US dollar came with political strings attached.

2. Debasement: The fiscal writing is on the wall, the currency has been massively debased this century and will invariably continue to be, with the worst happening in periods of stress.

[Sam Kovacs @SamKovX]

@Barchart I truly wonder if these circuit breakers actually help, or if they just exacerbate the pain and panic on subsequent days?

[Sam Kovacs @SamKovX]

@nicrypto You think spillover into Nasdaq at open? futures holding up.

[Sam Kovacs @SamKovX]

@GlobalMktObserv Now what's interesting is Nasdaq Futures are for now, very flat. Will be interesting to see what happens at open.

[Sam Kovacs @SamKovX]

@GavMcCracken Cushing hitting the op floor likely to be the butterfly effect of a little oily butterfly batting its wings in Cushing, Oklahoma, and the whole oil complex seeing prices surge.

[Sam Kovacs @SamKovX]

On what timeline?
The weekly chart suggests that gold's trajectory since the turn of this century is still clearly UP. The channel has held.

We also hit the top and rolled over.

The daily chart suggests we've broken down from the trend.

Gold can be $10K by 2031 and $3.5K by 2027. Both can be true.

[Sam Kovacs @SamKovX]

@dtarian04 If you hate money, for sure avoid oil longs.

[Sam Kovacs @SamKovX]

@HFI_Research Hurling missiles is never funny, sir.

[Sam Kovacs @SamKovX]

@zerohedge What is interesting is that for the BTC thesis to actually hold, we needed it to decouple from just being tech beta.
That seems to be happening.

[Sam Kovacs @SamKovX]

@AllVentured And the GCC tanks have never been so full!

[Sam Kovacs @SamKovX]

@HFI_Research There is no way this ends well. A great pair trade rn is long VLO short CVI

[Sam Kovacs @SamKovX]

@alifarhat79 Even google news is trolling with the placement

[George Noble @gnoble79]

https://t.co/kYZv3LsW3Q

[Sam Kovacs @SamKovX]

@MetalMoney1977 Well let’s see, demand destroys pretty quickly $150 already, making it hard to pinpoint a number. But $140-$180 definitely in play

[Sam Kovacs @SamKovX]

WTF?

The CEOs of Chevron and Exxon have told us oil is heading for $150.

Yet everyone is ignoring them?

Here are 4 charts which explain what they see.

The price of oil says calm times lie ahead. The inventory in tanks say we have a countdown, and every buffer holding this market together drains this summer.

Read the charts:

1. Cushing, where WTI is priced, has drained from 31mb to 22mb since March. The floor is ~20mb. We hit it by end of June, the most aggressive drawdown in five years. We'll be at the floor by EOM, only a price spike can clear the market.

2. Refiners are pinned at 95-96%, exporting product into a global shortage at the fattest margins in years. They will not ease off into peak summer demand.

3. Commercial crude is at 434mb, on route to 400mb by mid-July, where the system starts to break.

4. The backstop, the SPR, is already near Biden-era lows, authorized to drain to 243mb. That runs out in early September.

Unless Hormuz reopens (which it won't) the price will spike.

You gonna listen to the CEOs of oil majors, or some outdated Goldman report that says Hormuz opens end of last month?

@gnoble79

[Sam Kovacs @SamKovX]

If the deal were really happening, he wouldn't need to talk about what he'll do if it doesn't. You don't bring a backup plan to a sure thing. And "one way or the other" is vague on purpose, so you can't tell if he actually has a plan B or is just bluffing because he doesn't. Translation: the deal probably isn't coming.