Talkot

Bond geek that utilizes equity investments to express interest rate and macroeconomic inefficiencies. Still enjoys a good high risk venture investment as well.

[Talkot @Talkot]

“You can avoid reality, but you can’t avoid the consequences of avoiding reality”—-Ayn Rand

[Talkot @Talkot]

Seminal thought in the argument whether socialism can work. Without proper pricing, efficient economic activities are essentially impossible.

[Rothmus 🏴 @Rothmus]

As a young socialist, Hayek read Ludwig von Mises’ 1920 paper “Economic Calculation in the Socialist Commonwealth.”

Mises showed that socialist central planning isn’t merely inefficient, it’s impossible.

Without private property and genuine market prices, planners lack any rational way to allocate scarce resources or determine real costs and needs.

Even Oskar Lange, a leading socialist in the calculation debate, effectively conceded the point.
While he promoted “market socialism” with trial-and-error pricing by a central board, real-world socialist planners in Eastern Europe quietly relied on world capitalist market prices as a guide.

Without external free-market price signals, pure socialism would be economically blind and coordination would collapse.

Mises went further, arguing that interventionism, the “middle way” of government meddling, is inherently unstable.
Each intervention creates problems that invite more interventions, eventually leading to full socialization.
Price controls cause shortages, subsidies distort production, and the cycle continues until the economy is fully planned.

The lesson is clear.
Rational economics requires genuine market prices emerging from voluntary exchange and private property.
Half-measures don’t stabilize the system. They accelerate the drift into central planning.

The Austrian School understood this decades before the collapse of the Soviet bloc proved it in practice.

[Talkot @Talkot]

$DX just finished a 1/3 position purchase. This yield backup above 4.57% on the 10 year $UST has me worried. Caveat emptor.

[Talkot @Talkot]

$FNKO price target raised by Goldman from $4 to $6. $GS continues to lag behind price movements. New $Grogu character in $DIS movie will move the revenue needle. Haven’t sold a share.

[Talkot @Talkot]

Going to be a great year for $FNKO and just getting started. Q1 showed that the new CEO has the company under control in a short period of time! Looking for analyst upgrades next week.

[Talkot @Talkot]

$FNKO news that the "Baby Yoda" preorder will create substantial demand for the $30 collectible has the stock moving. Should help both REVS and NIM for the year. Should move the stock above old highs of $5.50

[Talkot @Talkot]

https://t.co/MPX8Fr2FRu

[Geiger Capital @Geiger_Capital]

The California wealth tax is not on income…

It’s 5% of your net worth.
It’s state seizure of private assets.

This is now on the ballot and likely to pass.
Realize where we are.

[Talkot @Talkot]

CA is out of hand.

[Wall Street Apes @WallStreetApes]

Ohh my god it’s true

California Democrats wrote in the Billionaires Tax Bill they can amend the tax to apply to all California residents by a simply 2/3 majority with no votes needed from residents

The legislative authority clause allows future 2/3 majority amendments by the Legislature (no voter approval needed) if they further the Act’s purposes

This enables broadening, like lowering thresholds to include more people or making it recurring. This turns the “Billionaire Tax” into something substantially wider

Section 50308 defines the scope (who qualifies as an “applicable individual”)

Meaning everyone

This bill is a Trojan horse

[Rothmus 🏴 @Rothmus]

This is the federal income tax play all over again.

It started in 1913 as a “class tax” on the rich, hitting less than 1% of the population with a 1% rate above $3,000.

It expanded during WWII into a mass tax on most workers through withholding, skyrocketing rates, base broadening, and bracket creep to fund wars and spending.

The wealth tax will follow the same trajectory.

[Talkot @Talkot]

$DX released earnings this morning and book value (BV)came at $12.60 on 3/31 much lower than expected due to spread widening. Since then book has improved to $13.31. The portfolio grew from $16.2B to $22.2B or almost 40%. Leverage increased from 7.3X to 8.2X. The ATM was busy as well raising $440M in new capital. Clearly $DX is growing very agressively. The G&A expense was very high @ 2.1% vs capital for the quarter. It's now trading at a premium to book. Let's hope they can grow without a hiccup but I'm on the sidelines watching.

[Talkot @Talkot]

$FNKO news that the "Baby Yoda" preorder will create substantial demand for the $30 collectible has the stock moving. Should help both REVS and NIM for the year. Should move the stock above old highs of $5.50

[Talkot @Talkot]

Credit quality continues a slow and steady climb. I feel like we are in a “Sam Peckinpah” movie; slow motion destruction.

[Maria Davidson @MariaDavidson]

California's population grew 0.4% in the last decade.

The number of state employees grew 24.5%.

Total state spending grew 48%, inflation adjusted.

You have to ask - where did all the money go?

[Talkot @Talkot]

Here is the CDX High Yield spread chart over the last five years. While not excessive, it's clear that the trend is NOT our friend. Today the spread widened over 30 basis points as well. Toto we aren't in Kansas anymore!

[Talkot @Talkot]

Agency $MREIT stocks are getting whacked and the chart below shows the spread widening is starting to be of concern. High Yield spreads are now above 400 bps and even look scarier.

[Talkot @Talkot]

I’m prejudice by listening to the bond market!

[Danielle DiMartino Booth @DiMartinoBooth]

Repeat after me: There is NO housing shortage.

There IS a yawning housing DISCONNECT between Boomers (avg # children=3.2) & Millennials (avg # children=2.0) & Gen Z (TBD but much lower).

WHO will buy Boomers’ homes as they die?

Multigenerational HH formation to keep rising.

[Talkot @Talkot]

@ValyeAI Great back window analysis. Unfortunately, investing involves analyzing future activities.

[Talkot @Talkot]

I feel like we're watching a "Sam Peckinpah" movie. Very slow motion with tons of carnage being created. Caveat Emptor.

A fund holding consumer and small-business loans made by companies including Affirm and Block is the latest corner of the private-credit market to come under stress https://t.co/amJ6lmcR9h via @WSJ