James Falkiner

L/S mgr, banks specialist. ExSBCWarburg/UBS. Securities industry since March1987. BSc(Syd, Biology) Skier. Cyclist. General advice only for wholesale investors.

[Eric Balchunas @EricBalchunas]

Is private credit worth it? What do you really get that's so great it's worth a 4% expense ratio? Yes, there's a 9% yield but the total return is more like 4%, meh, trails multi-sector bond funds, bank loans, junk bonds (which you can get for near free nowadays). Good note today from @DavidCohne questioning this whole asset class (or at least the interval funds that offer it)

[James Falkiner @foxlow]

Well, if that isn't a walkaway, I don't know what is. I hope he is right, but the key issue remains. The Iranian regime wants to wipe Israel off the map, and nukes are evidently their chosen way of doing it. Strikes me as a work in progress for the US.

[zerohedge @zerohedge]

*TRUMP: NO REASON TO GET IRAN NUCLEAR DUST, IT'S ENTOMBED

*TRUMP: NOT CONSIDERING COVERT OPERATION TO SEIZE IRAN URANIUM

*TRUMP: WE HAVE POWERFUL CAMERAS WATCHING IRAN'S URANIUM

[James Falkiner @foxlow]

@ThredboResort Three deer hiking Ballroom to get some early turns!

[Greg @GS_CapSF]

People keep pointing out the unprecedented level of investment in AI and ignore the fact the frontier labs that get to recursive self-improvement first will pull away from the competition. Essentially the ‘fast take-off’ scenario to AGI is unfolding.

[James Falkiner @foxlow]

@TheFlowHorse 15yo daughter to dad: Dad, I cant believe how little you know.
18yo daughter to dad: Dad, I cant believe how much you have learnt in just the last 3 years.

[Angelica 🌐⚛️🇹🇼🇨🇳🇺🇸 @AngelicaOung]

GETTING TO THE BOTTOM OF THE OIL CONUNDRUM: I got @Rory_Johnston oil analyst extraordinaire to try and explain to me...how is it possible that the Strait of Hormuz has been closed for three months but oil is still at under $100 a barrel? This was not what the experts (including Rory) would have predicted!

Well, China is a big part of the puzzle. The amount of oil that China usually imports almost the same as the number of "missing barrels" on the world market due to the strait of Hormuz closure.

"China managed to cut their import in half," said Rory, "the rest is made up by releases from other strategic petroleum reserves."

Rory described the Chinese cut in barrels purchased as "altruistic", not because the intention was necessarily charitable, but because the effect of Chinese import decrease is to create slack in an Asian market that would otherwise be very tight.

However, it is of course not a positive for...say...Iran. Supposedly China's buddies. But the stabilizing effects of China's reserves is in a way stripping the potency of Iran's "Hormuz weapon."

So China is not the most transparent about their operations. But it's possible to observe their usage through satellite images etc. Planes are still flying, cars are still driving. But refineries are not refining in the same kind of volumes. The logical conclusion is that in addition to their crude reserves (which has not fallen as much as you might have though), they also have reserves of finished fuel products like jetfuel and diesel.

This can't go on forever, but it can go on for a heck of a lot longer than you might expect.

Trump can open Hormuz at any time by signing a deal that's agreeable with the Iranians, so the traders trust that he'll pull back from the edge. But the THING that would make Trump pull back from the edge is HIGH PRICES and that signal is missing because traders trust that he'll pull back from the edge! He keeps delaying the decision, hoping Iranians would accept a worse deal.

Meanwhile, he must feel tremendously powerful...like he can absolutely move the markets at will. What a fascinating yet horrifying time we're living in!

Watch the whole thing and you will surely learn! Link in the comments below👇

[James Falkiner @foxlow]

Another one. To go with Partners Group earlier today. Then there was the DOJ PE/PC investigation news.

[Nishant Kumar @nishantkumar07]

𝐄𝐗𝐂𝐋𝐔𝐒𝐈𝐕𝐄: D.E. Shaw just communicated four very significant moves to clients:
1. Longer lockups — Starting Jan. 1, clients in flagship Composite hedge fund will need four years to fully exit (6.25%/quarter), while Oculus clients will need three years (8.3%/quarter). 1/6

[James Falkiner @foxlow]

If the US r* is say 1.5-2%, then the much earlier r* estimate from the #RBA for Australia of 1% seems modest. If we assume 2%, then the Taylor Rule suggests an appropriate cash rate is 6%, giving a mortgage rate of 7.7%. Now that would make things interesting.

[Jon Turek @jturek18]

Pretty interesting that r* estimates are going up in the US.

[The Long View @HayekAndKeynes]

Excel is starting to feel like a slide rule

[James Falkiner @foxlow]

@macrocephalopod also fully integrates with power meters etc.

[James Falkiner @foxlow]

@macrocephalopod its the one i have. i dont listen to music, but for run/bike/strava/etc indoor/outdoor good. battery 5 days. Keep charge port on back of watch clean.

[James Falkiner @foxlow]

This is a positive development in my view, but much will depend on how many they buy at at what discount to the price the sellers are long and wrong at. I've always felt the Chinese government needs to stand in the market and take all comers. The size of the problem/overhang should not be underestimated. I reckon its about 25% of GDP. So it's really only a job for the national government as the ultimate backstop, funded with low rate sovereign bonds. What we need to watch out for is whether the SOE banks buy the bonds using H/H deposits. That wouldn't be a good look. As the overhang is liquidated the vendors solvency will be dramatically enhanced. Yes, its a wealth transfer from the government to the H/H sector, but in my view there will be no sustained reversal in the consumption slowdown without this matter being addressed. So far as who might then inhabit the acquired surplus apartments? Well maybe they need to accelerate urbanization and relax some of their restrictive residency laws. Anyway at least its step in the right direction. I remain skeptical the CCP will have sufficient appetite for the project once the enormity of the task becomes clearer. How to do it? Just stand in the market at say a 20% discount to current prices. Gradually increase the price and see how the selling behaves and how consequent consumption improves. Maybe it wont take 25% of GDP. As the buyback continues H/H confidence should rise and we should also see a pickup in mortgage credit outstanding form the current near zero levels. If the CCP knows what's good for it, it will get on and do this.

[FinancialJuice @financialjuice]

Goldman now sees RBNZ rate hike in July and September

[James Falkiner @foxlow]

@rdd147 Evergreening.

[James Falkiner @foxlow]

The issue of @albomp's tenure came up over lunch. It was surprising that the unanimous, considered opinion, was that he would no longer be PM by the time the next Federal election is called.

[James Falkiner @foxlow]

To the extent we can determine the #RBA probably has a 1% r*. Taylor rule says cash rate should be about 5.0%, targeting TM of 2.5%, with an output gap of 0.4.

[James Falkiner @foxlow]

Trimmed Mean yoy for April 3.4%, up from March 3.3%, and the low back in June'25 of 2.8%. #RBA real cash rate now 95bp, up from 30bp low in Dec'25, but well down on the 180bp it hit in late '24. Since TM bottomed cash rate has risen 75bp, where as TM CPI is up 60bp. Dovish, split RBA board probably sit pat on 15 June.

[James Falkiner @foxlow]

Trimmed Mean yoy for April 3.4%, up from March 3.3%, and the low back in June'25 of 2.8%. #RBA real cash rate now 95bp, up from 30bp low in Dec'25, but well down on the 180bp it hit in late '24. Since TM bottomed cash rate has risen 75bp, where as TM CPI is up 60bp. Dovish, split RBA board probably sit pat on 15 June.

[James Falkiner @foxlow]

@_warrenhogan The approach was fine, it's then flared ok, but the sink just stopped, and it floated for 5-7 seconds (350-500m), to well past the touchdown zone and tad unstable. Maybe the problem was variable surface wind.

[James Falkiner @foxlow]

Recent trends in Federal polling:
Taylor has stopped the Ley downtrend and established an uptrend.
Post the Labor budget, the ALP primary vote bleed to ON, which had previously slowed, has exploded. Hardly surprising now that @ALBOMP has began to flag a backflip. Data from @AusPoll6 #auspol