Capital Flows and Asset Markets

Whatever I commit to, I try and commit to until you reach a natural end. I learnt how markets worked in the 1990s and 2000s, which is an era I would call the pro-capital era. And I committed this theory until 2021, when it became clear we were entering a new era. This was an era that was good for bonds, as many of the free market policies were deflationary. Long dated bond yields began falling fro...

I see a lot of chat about getting bearish on AI - with exhibit A being Oracle CDS. Borrowing from a Doubleline presentation, you can see the interesting price action in Oracle CDS relative to the market. But as can be seen above, the market is sceptical more of Oracle’s financing plan, rather than AI itself. Huge capex, that will be much larger than cashflow implies heavy borrowing. Heavy capex ca...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com With school finishing soon, and markets winding down I feel like its a good time to do an end of year review, and outlook for 2026. A quick summary would be that 2025 was very good given what the equity markets did, and I think we are well positioned for 2026.

I, like almost everyone else it seems, thought the Trump Presidency would be extremely good for crypto assets. Certainly, when Trump won for the second time we saw a surge in the crypto space, but it has been pretty poor since then. The bullishness that President Trump created for Bitcoin in some ways has created problems for Bitcoin. For years the market has tended to be very bearish on Bitcoin....

Of all the years to get 67 entries - it had to be 2025. Before we get to the winner - a special shout out to the two funniest haikus of 2025. We have this one from Tom O’Hara. My forecast correct Wealth blossoms, though joy eludes My wife still hates me Apparently money cannot buy love. But maybe a haiku can and I hope you are okay Tom. And then we have this clever one from MM This is a Haiku I’m...

We have 43 submissions so far. I asked ChatGPT to do a word analysis. Unsurprisingly, gold , Japan and bearish terms (winter, cold etc) dominate. Feel free to submit more than one entry. I will announce a winner on Monday next week. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.russell-clark.com/subscribe

When Russia invaded Ukraine in 2021, we also saw Russian natural gas flows to Europe become curtailed, and sanctions placed on Russian oil producers. There was a huge shock to the energy system, which saw European natural gas prices surge 6000% from 2020 lows. But since the highs of 2022, energy markets have been very weak, even as the Ukraine/Russian was has dragged on. The oil market has been pa...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com In a previous note, I described how the economic policies implemented from 1980 to 2016, tended to lead to the same action and reaction in currency markets. And it was possible to trade the reaction in currency markets more cheaply via equities. Now, in the new era that we live in, the “pro-labour” era, where polic...

Markets are efficient. I know that there are thousand Substacks claiming the opposite, how everything is a bubble, and we are moments away from collapse. But the fact is that markets are very good at pricing in information in a logical and timely way. The inevitable comeback to the above statement will then be, if markets are efficient, then why did we have the dot com bubble, or the GFC or the Eu...

I ran a competition to find the best finance haiku last year and was overwhelmed by the response. From over 50 submissions last year our winner was this beauty from Kevin: Bull slips on black ice— Frantic dance of hope and fear Fortune rolls her dice I give you this haiku as my 2025 offering: The majestic Brumby Far from the stampeding herd Fearing coming cold Think you can do better?!? (I really...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com (Due to client demand, we will be launching a Yen version of the fund on January 1 - please get in touch if of interest) For a brief period in November, competition and potentially lower prices threatened to break out in the tech world, as finally some sort of competition to Nvidia’s GPU emerged in the form of the...

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Just a very short note. Michael Green has written a very good note on how the poverty line has failed in the US. You can read it here. There is no way to sugar coat this - Michael works far harder than me. He has systematically broken down all costs, and then adjusted them over time to show that the official poverty line is too low in the US, especially compared to the pinnacle of US worker focuse...

Just for a change, I am doing a video update - enjoy. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.russell-clark.com/subscribe

Long time readers will know that I have become more closely focuses on politics - as that is where I think markets are constantly getting surprised. For me, politics is relentless shifting to the left. In the UK, Nigel Farage’s Reform party is outpolling Margaret Thatcher’s Conservatives (and outpolling the Labour party as well) I see their core pledges in the most recent manifesto as pro labour -...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com In the original pro-labour thesis, the idea was that markets would be okay, but that higher yields on bonds would act as a dampener on financial assets. The reality was that we saw equities do very well. I wondered if my original thesis was wrong, and then suddenly markets are trading like I expected again. Strange...

When I first set up Brumby, I had an idea that once it was set up, I would like to tokenise it. I mentioned it in a few meetings in NY, and was surprised by the positive response. In essence, the feedback is that clients want it, and it was already happening with a few money market funds. The big driver is that it would allow investors in a hedge fund to easily sell their position to another inves...

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The way I work is pretty simple. I look at the where we are today, look at when was similar in the past, and then position my portfolio to make money if past repeats itself. I looked at the current politics of tariffs, and anti immigration, and thought that we would see wage rise significantly. In my mind this would drive inflation unless central banks raised interest rates significantly. This led...

Since launching my new fund, Brumby Capital, markets have rallied strongly and yet oddly the short book has not been much of a problem. Why? I don’t short indices, and most of my shorts are in the US. The equal weighted S&P 500 have been pretty flat over the last year. This has been in line with my pro-labour view of markets. Or in other words, the average company in the US has been okay, which it...

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A friend of mine said I should take a look at the most recent Strategy preferred issuance. The headline is that it pays 10% annually, which sounds attractive, but made me think, where is Strategy going to get the cash to pay that dividend? Their Bitcoin holding generates no cash. Looking at the Term Sheet, it seems likely they will never pay any dividends. The key point here is the dividend defera...

Halloween was last Friday, and my youngest went of trick or treating with his friends, I was left at home all alone. After doling out a mountain of sweets (Halloween is a big thing in my part of London), I decided to go to the local pub in my go to costume - Hannibal Lecter. As I drank my chianti, chewed my fava beans while I waited for liver to be cooked (I was having a friend for dinner) - I got...

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My niece, who now lives in San Francisco, was getting married, so I made a flying five day visit to the Bay Area. Its been nearly 10 years since I spent time on the West Coast of the USA. But it had been nearly 20 years since the last family wedding, which was my own. At that time, my niece must have been 11 and a bridesmaid for us, and now here I was watching her get married. Never have I felt th...