Hilmi

Macro Strategy, Global and EM
Wharton'10 INSEAD '24J

[Hilmi @hyavas]

@origoinvest Hakkwden

[Hilmi @hyavas]

A late-cycle world with a stagflationary tail https://t.co/YHNXxzZ8Ls

[Hilmi @hyavas]

Long-End Yields Surge as the Savings Demand Shock Meets Actual Inflation https://t.co/ZtpjiB8WMg

[Hilmi @hyavas]

This is how I read the recent developments https://t.co/MXiWqEj6SU

The long industrials / short consumers trade has worked.

PMI data, AI capex, East Asian semiconductor strength, and hard-asset demand all support the thesis.

But markets are now armed with machines, fueled by retail frenzy, and buttressed by passive investing and share buybacks.

Sometimes, the right move is not to abandon the thesis — but to cash in part of the gains.

This is not trade advice, but a macro narrative for investors thinking through the interaction between AI capex, consumer weakness, Fed easing, real rates, and hard assets.

[Hilmi @hyavas]

A Strong Economy, a Fragile Consumer? https://t.co/rnDDobo82J

The U.S. economy is still running on full employment, fiscal support, easy financial conditions, and a powerful capex cycle.

But beneath the surface, the median consumer looks increasingly fragile.

In my latest note, I explore why Wall Street remains obsessed with the labor market, why the Fed wants to return to a zero-real-rate world, and why the real constraint may be the long end of the curve rather than the Fed itself.

[stewart hampton @stewhampton]

Ghalibaf prob been picked up by GS or Pimco.

[Hilmi @hyavas]

@ali_hakan_kara Hocam, o çukur tabii ki çok büyük bir makro dengesizliğin sonucuydu; ama Mayıs 2023–Mart 2024 arasındaki geçiş sürecinde yapılan tercihler de bence tartışılmalı.

[Hilmi @hyavas]

@ali_hakan_kara Daha önce paylaştığınız istihdama katılım oranı, para piyasası OIS eğrisindeki paralel değişim ve daha önce yayımladığınız Big Mac Alım Gücü Endeksi’ne birlikte bakınca...

[Hilmi @hyavas]

US Rates - Tell me you are not intrigued! https://t.co/2golzL1qOg

[Hilmi @hyavas]

Paulson’s Warning and What Rising Forward Rates Are Telling Us https://t.co/a9BglTyLO4

Paulson warns on U.S. debt.

5y-forward rates keep grinding higher.

That is not a market that believes everything is fine.

Household savings are weak.
Government dissaving is entrenched.
Private capex is still running hot.
Foreign recycling into Treasuries is getting more indirect and more friction-filled.
The U.S. can extend the cycle because it is energy independent and still sits at the top of the tech stack.
But none of that changes the direction of travel.
My bias remains:
less expensive U.S. paper wealth,
more real assets.

[Hilmi @hyavas]

@ali_hakan_kara Boyle yardiminiz oluyor iste Hocam

[Hilmi @hyavas]

Why Didn’t 50% Rates Break the Turkish Economy? https://t.co/60tdDq5VTS

I just published a new piece on the unexpected resilience of the Turkish economy. The core question is simple: after years of deeply negative real rates, why didn’t the move to 50% interest rates create a meaningful demand shock? In the piece, I argue that the answer lies in inflation-driven balance-sheet repair, prior corporate deleveraging, fiscal support, credit rollover, and a strong wealth effect.

[Hilmi @hyavas]

@ali_hakan_kara Hocam, ayrıca kısa ve öz analizlerinizden gerçekten çok faydalanıyoruz. Bizi ciddi bir zahmetten kurtarıyorsunuz.

[Hilmi @hyavas]

Hocam, burada anomali gibi görünen şey, aslında çok eski bir editoryal refleks: en dikkat çekici ifadeyi öne çıkarıp başlığa taşımak. Bunun gazetecilikte çok uzun zamandır kullanılan doğal bir tercih olduğunu düşünüyorum; hatta gazetecilerin bu sezgisi olmasa, basın (4th estate) bugünkü şeklini kolay kolay almazdı.

[Hilmi @hyavas]

Ceasefire Relief, but the Energy Case Remains Intact https://t.co/c136xZdZs5

Bottom line: The ceasefire may hold for now, but it rests on fragile foundations. An imminent return to full normality is unlikely, which aruges for preserving portfolio hedges and maintaining meaningful exposure to energy-related names.

[Hilmi @hyavas]

I agree that the CBRT is doubling down on its existing strategy by burning reserves and trying to sit through the shock.

The longer this lasts, the greater the risk that defending the current FX path leads to reserve depletion and increases not only the probability of a fat-tail, but also the shape of it. It also raises the likelihood that high real and nominal rates become even more entrenched and get priced across the curve.

Turkey’s high-inflation, high-interest-rate regime cannot easily tolerate a rise in the right tail of inflation, rates, and FX. I do not think sitting this one through is a wise strategic decision.

Also, there is a certain irony here. Turkey’s chronically high inflation was, in many ways, born out of the oil shocks of the 1970s. Much of the world eventually managed to break that cycle; Turkey largely did not, apart from a promising chapter in the 2000s.

That is precisely why I do not think the CBRT has the luxury of being a passive watcher here.

[Hilmi @hyavas]

Gold Sell-off Through the Lens of Moves in the Real Rate Forward Curve https://t.co/bkfxsQV6f9

Gold’s volatility remains elevated. The outlook for inflation, growth, and real rates is becoming more uncertain as the Hormuz crisis continues. That is adding to volatility in gold. I tried to take a different approach to explaining gold’s move, which is not easy to account for with a single factor. Still, it is an effort.

[Hilmi @hyavas]

The Gulf’s Landward Escalation Risk and the Prospect of a Protracted Conflict https://t.co/C6Zrv2M2Vh

As Trump appears increasingly nervous and inconsistent, markets are moving away from pricing a protracted conflict. In the note previously dispatched, I had already laid out the contours of the strategic calculation: a protracted conflict would be a low-benefit, high-risk proposition for the U.S. That said, Washington had come close to making precisely that mistake. Now, given the strength of the risk-on rebound, there seems to be growing conviction that the U.S. is backing away from an ambitious assault that could have triggered broader complications. Judging by market pricing, that strategic calculation appears to have prevailed.

[Hilmi @hyavas]

@GTCost Nice chart. If only it were easier to tell which time series corresponds to which year.

[Hilmi @hyavas]

@Brad_Setser In which jurisdictions, and in which currencies, are they increasing their exposure to equity and debt? My understanding is that, on the debt side, this mainly reflects international bank deposits denominated in USD.