Blind Squirrel Macro is back to its regular publishing cadence. The weekend flagship note focused on the challenge of underwriting the industrials sleeve of the ‘20-fo-20’ portfolio. Cycle-high multiples for the cyclicals is the issue. Report here 👇:

BUSHY™ held up well in the context of a tough week for global risk assets. Energy and the RSP/QQQ position in US equities provided the buffer. 2 new positions added during the week. Full report below.

A quick reminder that the BUSHY™ portfolio is investable via a single click on the Plutus platform (as will the ‘20-for-20’ when launched) - full details in my July launch note linked below or the website via the button underneath.

Check out BUSHY™ on Plutus

Weekend Tape Bombs

Am writing this note on Monday morning (Australia time) as overnight markets absorb a number of the weekend’s market-moving events:

• The shock win for Lula in Brazil’s Presidential run off. A nasty unwind of BRL and longs will be a tough start to the week for hot money pools and carry traders. Regular readers will know that the 🐿️ believes that the key driver of Brazilian equities is commodity prices, not politics. I remain a commodity bull and will be in the hunt for bargains if the sell-off gets overdone.

• More anticipated news was the Conservative party’s first election win in nearly a century in British Columbia. This is another piece in the jigsaw that underwrites our overweight position in #COM (the Canadian Oil Mafia) - another win for the diversification of Canada’s energy export markets.

• Anthropic’s IPO S-1 filing failed to materialize as anticipated on Friday. I cannot decide if this is a good or bad sign for the overall AI narrative. Is this a delay driven by investor feedback to the underwriting syndicate or by recent AI safety / rogue agent scares? Neither good.

My sense is that the market is not ready to see Anthropic’s audited financial statements in their ‘full glory’. We have been teased various ARR numbers from the model labs in the past year. It is these numbers that have been the backbone of the AI capex narrative.

Concerns around this narrative have finally come for the copper stocks in the past couple of months. Our preferred play on the copper theme (plus seaborne coal and multi-polar world arbitrage) is Glencore - which has under-performed the (very pricey) pure play copper stocks and which is now flirting with its 200-day SMA for the first time since last summer.

Glencore remains a core Acorn position for now. It would be naive, however, to assume that cyclical miners can be immune from a nasty drawdown if the AI-driven global growth narrative gets punctured beneath the water line.

I completely understand the arguments around ‘unlimited compute demand’ from the AI bulls. However, the more important question relating to who ultimately pays for it remains unanswered. Am not sure that Torsten Slok has a queue of colleagues joining his table at the Apollo staff canteen after this missive (‘No Signs of AI Payoff Outside the Tech Sector’) from Saturday…

On this point, Paul Kedrosky has put together an excellent AI capex revenue hurdle calculator. It translates AI capital expenditure into a required level of supporting external revenue. It then expresses that requirement relative to GDP, global software revenue and the US white-collar salary pool.

The calculator poses some tough questions.

BUSHY™ Review and Acorn Update

We added 2 new positions to the beta portfolio last week:

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BUSHY™ enjoyed a solid week last week amid the general turmoil in equity markets. Full report below.

A quick reminder that the BUSHY™ portfolio is investable via a single click on the Plutus platform (as will the ‘20-for-20’ when launched) - full details in my July launch note linked below or the website via the button underneath.

Check out BUSHY™ on Plutus

History Needs Hardware

For newer subscribers, a quick reminder as to the background and thesis for the ‘🐿️-20-for-20’ project.

Report 2 covered the financials sector, focused on the plumbing of the world in two decades’ time - shortlisting only one commercial bank globally, 3 insurers, 2 exchanges and 3 other asset light intermediaries.

… while Report 3 took on the resources sector, shortlisting 4 energy stocks, 4 precious metal pure plays and our preferred 2 copper plays:

Now we turn to the sector that helps convert those resource atoms into real stuff - the global (military and commercial) industrials complex. I currently have 61 candidates in the long list - names straddling multiple GICS industry sectors.

I have broken the long list down into 5 sub-groups (several companies crop up in multiple groups). The semiconductor supply chain will be handled separately.

• Power & Grid (including energy storage)

• Aerospace & Space

• Defense & Security

• Machinery & Automation

• Infrastructure & Logistics

No changes to the framework. Long list names are screened against our mosaic of ten potential world-states for 2046 (remember these are lenses, not forecasts and can contradict / overlap). Shortlisted names will be companies that can thrive in multiple scenarios.

For industrials, the theme mosaic hits differently. In resources, the themes pointed us towards particular commodities and sub-sectors. Here, almost every theme creates an industrial shopping list. The harder question is which on the list can generate durable shareholder returns - and how much we are already being asked to pay for them.

Even Longevity (T9), which I saw primarily as a healthcare / insurance theme before, becomes an important theme for the industrials. Larger, aged societies will of course compete for resources and services and we need to think about a world of robo-nurses!

T2 (Constrained Physical Capacity) the theme that dominated the resources report will clearly be critical with respect to all industrials segments - the problem will be underwriting some full valuations.

Two big tensions stand out from the broader industrials debate.

Expensive Plumbing

First, the electrification wager. Everyone with a pulse now knows that the world needs more electrons. However the market has taken a multi-decade infrastructure build story and priced it like software stocks in their glory days!

Gas turbine and even humble cable makers trade as data-center / AI derivatives. Somewhere along the chain from a GE turbine via Prysmian submarine cable to a Vertiv chiller, the well-defined need to move kilowatts has become a pricy bet on sustained capex enthusiasm.

This summer has seen some of the heat taken out of multiples but they continue to trade at levels that could easily halve again with any further market questioning of the AI capex narrative.

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The Spend Stays even if Fukuyama was Correct

The second tension relates to history, or rather about what it costs to be wrong about it! Defense spending gets lazily talked about as a bet on conflict continuing. I think this framing is wrong. Rearmament is a bill that Europe deferred for thirty years. The past five years have finally focused political minds.

The defense thesis does not require an endless escalation of conflict. Stockpile replenishment, replacement programs and the rebuilding of industrial capacity provide a demand case even in a less hostile world. That is not a guarantee against budget reversals or against overpaying for the contractors.

Civilian aerospace offers a different route through the mosaic. Under T8, growing emerging-market traffic and higher aircraft utilization would work the installed fleet harder, supporting the engine aftermarket and its recurring service revenues.

The Elephant in the Room

When it comes to industrials, China sits above our theme mosaic. It is the customer, supplier and competitor sitting behind almost every global industrial business. You can buy a Japanese robot maker, a European electrical-equipment company or a Korean shipyard. But none offers an escape from the China question.

As my pals and like to say “When China enters the room, margins leave” - this is is a useful starting point for industrial underwriting and a warning against extrapolating today’s profitability twenty years into the future.

The European Parliament’s March study on China’s industrial overcapacity (linked to via the image above) describes the problem - formidable manufacturing capacity competing for demand, with consequences for prices and returns both inside China and overseas.

It would be comforting to dismiss all of this as subsidies and wasteful excess capacity. Also a suboptimal process for picking stocks. A business that can defend its margins against an inferior product is one thing - but in many cases, Chinese high tech products are already both better and cheaper.

Nor does Chinese industrial success necessarily translate into attractive returns for shareholders in Chinese manufacturers. For example, I think there are strong arguments that BYD is the world’s most impressive industrial company. Does that make it ‘a lock’ for the ‘20-for-20’ book? Not necessarily. As a tool of China’s national industrial policy, this great business may not necessarily end up being a great stock.

In a deglobalizing world, are margin structures being created outside of China that are truly unsustainable? A reshoring beneficiary operating behind trade barriers may report excellent returns on capital, strong pricing and a reassuring order book. But we have to distinguish between earned margins and those that are granted by policy.

Protectionism can be durable. Sovereign resilience is one of the reasons we are looking at these businesses in the first place. But we can’t pay up for a favorable local procurement setup masquerading as a permanent competitive advantage. Over twenty years, the rules and the governments writing them can all change.

Each short-listed industrial stock for ‘20-for-20’ needs to clear a specific China screen: has China entered their market and what stops Chinese competition from arriving ahead of 2046? What would a business earn without its current or expected protection? We cannot calculate this scientifically but we can certainly try to stress test it.

The Long List

In the next report, we run the 61 names on the long list below through this stress test plus our 3 systematic screens - theme mosaic score, quality score and valuation score.

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Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

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BUSHY™ Review and Acorn Update

Another decent week for the beta portfolio. Most asset sleeves were positive and (partially crystalized) gains in the hedge book drove solid outperformance versus the Vanguard benchmark and the S&P 500.

BUSHY™ is keeping pace with US equities year-to-date with very limited exposure to the central AI trade outside of general equity index length within the CTA sleeve. The portfolio is running at 8.43% weekly annualized volatility, a Sharpe ratio of 1.51 and Sortino ratio of 3.09.

The portfolio has clawed back the bulk of its September drawdown but matching 2025 total returns will require some heavy lifting in Q4. I do not plan on taking any excessive risks to achieve that end. Risk management is front of mind. It feels like steam is coming out of the AI trade and I am not convinced that that trade can unwind without collateral damage in other risk assets.

Check out BUSHY™ on Plutus

Let’s dig into the numbers and last week’s portfolio changes…

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This week the 🐿️ answers the (perfectly reasonable!) question as to why almost 8% of his beta portfolio (BUSHY™) is sitting in emerging market local currency fixed income paper (with over half of that exposure in Africa!). September was a tough month for carry traders. It’s time to re-underwrite.

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The Global Bond Headache

2 decade highs in US Treasury yields and stress in the French OATs market have made all of the recent headlines and the US dollar index looks to be finally following through on that long-threatened breakout. BUSHY™’s EURUSD puts well and truly earned their keep in the past week...

With this backdrop, less column inches have been dedicated to the pain in emerging market bonds. As such, you need to keep an eye on the experts. The ‘Hunger Games’ appear to have come for EM borrowers.

, the Templeton Emerging Markets Income Fund - an unconstrained closed-end fund invested in local currency EM paper - has been a bedrock of my BUSHY™ beta portfolio since 2023.

With a near double-digit (non-manufactured) dividend yield (I always re-invest the monthly payout) TEI has been a steady performer throughout that period. I even added to the position in mid June. Then came September…

Bond bulls and carry traders got smashed last month. MXN and ZAR - the two currencies doing much of the recent performance heavy lifting inside TEI’s book - gave back, between them, most of their year.

The 2 charts below illustrate the impact on JPY-funded Mexican Peso…

… and South African Rand carry traders:

$CEW - The WisdomTree EM Currency ETF gave back 50% of its year in September:

TEI’s NAV total return was running at +11% at the end of August. The closed end fund just lost 9% in price (not NAV - more on that later) over the course of September.

EM local currency paper has bounced back well from carry shocks of the past (summer of 2023, ‘Liberation Week’ and the outset of the Iran War). Will it do so again?

Decomposing TEI’s Year

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Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

This week we are reviewing our energy positions, our US equity factor bet, BUSHY™ FX hedge, defending a recent fixed income addition and laying out a reshuffle in EM equity exposure.

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The 🐿️’s beta portfolio has given back ground versus its Vanguard Target Date fund benchmark (VTTHX) and the S&P (SPY) over the past fortnight but closed on Friday up 12.45% YTD with a realized annualized weekly volatility of 8.53% (vs 13.6% for SPY and 16.5% for VTTHX).

BUSHY™ has now returned 38.16% since public launch at the beginning of 2025:

Current positioning:

A quick reminder that the BUSHY™ portfolio is available via a single click on the Plutus platform - full details in my July launch note linked below.

Check out BUSHY™ on Plutus

BUSHY™ Review and Acorn Update

Let’s dig into the numbers and the portfolio changes…

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Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

While you are here please ensure that you are signed up directly for Benny & The Squirrel - some exciting developments in the making!

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In the weekend flagship note, we consider whether or not it is time to look through the ASEAN energy shock. Check it out via the link below 👇:

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Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

This week’s edition focuses on the portfolio’s rates positioning ahead of the FOMC (and after an exhausting weekend of AI Psy-Ops!).

While you are here please ensure that you are signed up directly for Benny & The Squirrel - some exciting developments in the making!

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In the weekend flagship note, we returned to the topic US power utilities, where political pressures may be creating a convex opportunity on the short side of and certain single power names. Check it out via the link below 👇:

Nose Clip and Chain Mail Glove

BUSHY™, the 🐿️’s beta portfolio had a strong week - driven largely by energy-related assets (which we have now started to trim) - and we are now back ahead of the S&P for the year with only 60% of the realized volatility.

Before we get to the full portfolio reviews (in which there are some recent and upcoming changes to report) we need to consider how to respond to the AI psy-op that took hold of our social feeds over the weekend…

RSP/QQQ

The RSP/QQQ pair trade has pulled back meaningfully since peaking at the end of July. Any slowdown in AI capex should favor the equal-weight S&P over the Nasdaq (RSP/QQQ is +1.75% in overnight markets. This looks like a decent entry level to anyone that did not get into the trade in late June.

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‘Start the Week’ is coming to you slightly late given the long weekend in the US.

Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas. This week’s edition will focus on risk management and hedging as we make plans to navigate a seasonally tough time of year.

While you are here please ensure that you are signed up directly for Benny & The Squirrel - some exciting developments in the making!

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In the weekend flagship note, the ‘🐿️20-for-20’ portfolio journey continued as we assembled our shortlist picks in the resources sector. Check it out via the link below 👇:

Autumn Hedging Plans

During my time on the sell side, the week following the Labor Day weekend in the US was one of the busiest of the year, as corporates raced to catch the post-summer capital markets issuance window before their June 30th financial statements went ‘stale’ in the second week of November.

I always found it ironic that auditing calendars and holiday plans forced issuers into one of the most seasonally choppy windows of the year from a risk perspective. Aside from seasonality, the Fall of 2026 gives us some extra risk juice in the form of a couple of ‘live’ Fed meetings, the mid-terms and the Anthropic IPO (which - the 🐿️’s astonishment - appears to be growing by the day).

Yet markets feel remarkably complacent - the dispersion trade (traders long single stock volatility against short positions at index level vol) dominates leaving the VIX and VIX (vol of vol) bumping along the floor.

Notwithstanding the kabuki theater of the ‘Three Soros Amigos’ (Bessent, Warsh and Druckenmiller) publicly squabbling about monetary policy, US Treasury volatility remains remarkable subdued.

Notwithstanding all the jumpiness about seasonality above, this window last year turned out to be a decent performance period for the BUSHY™ portfolio in 2025. It was not until closer to Halloween that we started to chop.

BUSHY™ closed on Friday exactly 150bps behind where the portfolio was in terms of YTD performance at this time in 2025.

The portfolio has clambered back out of the drawdown that started at the outset of the Iran war and accelerated after a premature call of the bottom in front month crude in early June. This drawdown maxed out at -6.43% at the end of June )(steeper than the 4.86% ‘Liberation Week’ drawdown of last year).

BUSHY™ is currently sitting with the following allocation:

So how are we planning to protect ourselves:

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Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

This note is also home to new trade ideas that may have been highlighted in The Drey (our member channel on Discord) or do not justify a full write-up via one of the weekly ‘flagship’ notes. For example, last week’s ‘STW’ involve a new ideas in the grains complex - those wheat calls are already +129%! This week, we look at yield sensitive exposures post Jackson Hole and ponder whether or not it may be time to get back into the uranium trade.

The ‘STW’ is delivered to inboxes at 7.30am EST on Mondays. Last week’s introduction report for the 🐿️ 20-for-20 was free for all readers. If you would like to join us on the rest of the journey, please consider becoming a paid subscriber. Click the button below to claim a 30% discount (worth $135) on an annual subscription. OFFER MUST BE CLAIMED THIS WEEK!

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In the weekend flagship note, the ‘🐿️20-for-20’ portfolio journey continued as we assembled our shortlist picks among global financials. Check it out via the link below 👇:

Post Jackson Hole

Aside from some top level trolling (🎩!) of the robots by Warsh with the opening lines of his remarks…

… I think the new Fed Chair did just about enough to settle the bond vigilantes on Friday. As unlikely as it seems from a political perspective, the market seems to be happy pricing the remaining FOMC decisions of the year as ‘live’.

The words were not enough to snap the 10-year note out of their now well established downtrend. I think that long-dated yields need to see an actual hike before they start to behave.

I have no particular desire to either try and fight that trend or indeed to try and press it. I have plenty of exposure to higher yields via my allocation to CTAs within BUSHY™. Positioning within - the SocGen Trend Index replicator - feels representative. We will let the CTAs carry on doing their thing.

The Jackson Hole speech was however enough to check some of the dollar weakness we have seen since Bessent’s ‘inventory management’ announcement and subsequent ‘mini twist’ the other day.

Uranium?

The 🐿️ is a long-term uranium bull but we exited the trade in February (‘Time for a Glowing Hedge’) and entered the short position in Sam Altman’s SMR science project, .

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Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

This note is also home to new trade ideas that may have been highlighted in The Drey (our member channel on Discord) or do not justify a full write-up via one of the weekly ‘flagship’ notes. For example, this week’s ‘STW’ involves a couple of new ideas in the grains and energy complex.

The ‘STW’ is delivered to inboxes at 7.30am EST on Mondays. If you are interested in a trial of the 🐿️’s full service, please get in touch via the button below or by replying to this email.

In the weekend flagship note, the 🐿️ launched an exciting new project - an experiment in futurism. Check it out via the link below 👇 (there was no paywall on the note - any one can read it so please do share it widely):

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Another strong week for BUSHY™. The beta portfolio has now finally back at new highs for the year after having been in a drawdown since late February.

It is now over 1000 bps ahead of benchmark and 678 bps ahead of the since inception at the beginning of 2025…

…while realizing a fraction of the volatility. BUSHY™ is at YTD annualized weekly vol of 8.63% (roughly in line with the level for the full year in 2025).

Before we get to the full run down on the portfolio, I wanted to go through a couple of fresh ideas on the commodity front…

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In the weekend flagship note, the 🐿️ attempts to make amends for the worst macro call of his career. Check it out via the link below 👇:

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Q3 continues to be kind to the BUSHY™ portfolio. Last week was the 5th strongest of the year - 3 out of the other 4 were back in January - and we are now closing back in on the high water mark hit at the end of February.

The 🐿️’s beta portfolio remains behind S&P year-to-date returns (but ahead since inception at the beginning of last year. YTD annualized weekly volatility is sitting at 8.54% versus 14.5% for the S&P 500 and 21.6% for VTTHX, our Vanguard Target Date benchmark.

Before we get to the portfolio reviews, a quick rant about Gavin Baker from the 🐿️ as well as a couple of related ideas.

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In the weekend flagship note, the 🐿️ had a crack at valuing Anthropic and OpenAI. Check it out via the link below 👇:

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Before we get to the portfolio review (brief this week), I want to touch on gold. Last week (‘Waving in the ‘Yella Fella’), we were feeling good enough about the metals to write some cash covered puts in BUSHY™’s hedge book. I did not expect the options to decay by almost 50% in a week.

‘Hindsight Capital LLC’ would have obviously strapped on something a bit more aggressive - but I am categorically not complaining. Risk asset markets are in the grip of some wild summer narratives at the moment. Getting my gold weight back to (a much higher) long-term target weight will require a full recovery of the chart.

The more remarkable move last week was of course the gold miners. ripped through all of its major moving averages with a 20% ripper for the week - an epic feat of chart repair.

I have had several questions from readers as to when I would be comfortable adding to the ShinyAcorns™ basket from February.

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In the weekend flagship note, the 🐿️ conducted a ‘red team’ exercise on his long-term ‘passive aggressive indifference’ to the long bond. Check it out via the link below 👇:

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Before we get to the portfolio reviews, I want to follow up on the idea that I teased at the end of the weekend note.

Quick housekeeping note. Several subscribers are not YouTube fans and have asked for an audio edition of Benny & The Squirrel to be available on the podcast apps. This is now possible, please sign up for free (will always be free for Ben and my paid subs) at ⭐ Benny & The Squirrel | Substack ⭐and then connect your favorite podcast app in ‘Manage Settings’ (see below).

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Full show notes (containing the slide deck and pod summary) will continue to come to your inbox from the Blind Squirrel Macro feed. You can disable the ‘extra’ email - again via the ‘Benny & The Squirrel’ ‘Manage Settings’ page.

For now, I do not see great risk/reward in chasing bonds on the short side. 🐿️’s favorite weapon of choice here is Simplify’s ETF. Too much too quickly in my opinion.

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This week’s Benny & The Squirrel Sunday Show covered ‘The Death Shot’. Today’s ‘Start the Week’ note focuses on the implications of such a move for our portfolios.

In the weekend flagship note, the 🐿️ took a look at the opportunity in Turkish equities. Check it out via the link below 👇:

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So far, the month of July has been kind to the BUSHY™ portfolio - last week saw solid outperformance versus the ‘target date’ benchmark and the S&P.

Performance so far in July has been carried by the physical commodity sleeve (mainly oil - let’s see what the latest ‘Sunday night dump’ does), energy equities and by the managed futures / trend-following allocation.

Managing The Death Shot

Before we go to the portfolio reviews, we have a Fed meeting this week and I want to review our exposure to ‘surprise’ hike.

On fixed income, outside of the allocation to EM local currency bonds, BUSHY™’s only exposure to sovereign rates comes via the trend allocation.

Aside from WTMF with a small long Treasury position, the other 5 funds that trade fixed income markets (AHLT, KMLM, DBMF, TFPN and MFTFX) have significant short positions across the curve. This does not come as a huge surprise given the path of yields over the past 3 months.

STIR pricing is currently indicating a 34% chance of a 25bps hike at this week’s FOMC meeting. My base case is still ‘no move’. But reputational incentives for Warsh mean we can’t dismiss the risk of a surprise hike entirely.

My starting point here is that financial conditions have already tightened significantly since mid June - driven primarily by long rates and FX.

More recently softer equities and widening hyperscaler credit spreads have helped to tighten the market further. The sheer volume of paper hitting the credit market from the AI spenders is almost operating like a form of quantitative tightening.

I am on the record with a view that Kevin Warsh is in a tough spot. Like every new Fed Chair, he is keen to burnish his inflation-busting credentials. But with the government and so much of the economy financed at the front of the curve I am not sure how much scope he has to hike without breaking things.

But the table below (h/t ) still bothers me. With an annual salary of $253,100, the husband of the Estée Lauder heiress is hardly doing the job for the money. It is all about reputation for these guys - my guess is that he does not want to join Arthur Burns with a green box against his name.

If he thinks he has a hike in him, arguably he gets more reputation value for being ‘brave and early’ - although I am not convinced that he would get much of a reward from the bond vigilantes in terms of reduced term premium.

Or, in hiking would Warsh be administering what my podcasting partner Benny likes to call the ‘Death Shot’ - i.e., the hike that ends the business cycle?

The Central Bank ‘Death Shot’ Hall of Fame

So what does a ‘Death Shot’ look like in practice? A few central bankers have already written themselves into the Hall of Fame:

🎯#5 - Japan (1989-1990): The BOJ began its aggressive rate hiking cycle in May 1989 under Satoshi Sumita. The final ‘death shot’ came from his successor Yasushi Mieno who continued to hike aggressively into August 1990, finishing the job and fully puncturing the Japanese asset bubble.

🎯#4 - US (2006): Greenspan may have started the 2004–2006 hiking cycle, but Ben Bernanke took over in February 2006 administered the ‘death shot with the rate increase to 5.25% in June 2006 as the housing market was already beginning to unravel.

🎯#3 - Australia (2008): Glenn Stevens presided over the RBA that hiked the cash rate to 7.25% in March 2008 just as global liquidity was freezing up ahead of the GFC.

🎯#2 & #1 - ECB (2008 & 2011): Jean-Claude Trichet is the all-timer with the top 2 slots on the leaderboard! In July 2008, he infamously raised rates into a slowing economy and rising commodity prices just weeks before the collapse of Lehman Brothers. In 2011, Trichet double-dipped on policy errors, hiking rates twice in 2011 as the European sovereign debt crisis was intensifying.

In every case, the kill shot came after policy had already done most of the tightening. The last hike was the one that tipped risk asset markets over the edge.

How would a Death Shot hit my book?

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Back in the Straddle - the 2026 Edition

Another strong week for BUSHY™ - the energy headwind from June has become, for now, a solid tailwind. But before get to the portfolio reviews, I wanted to take you through why (and how) the 🐿️ decided to strap back on some volatility exposure last week.

As of last Tuesday we are back in the straddle. Newer subscribers should read the old notes on the strategy - start with the one linked below.

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In case you missed it, the weekend flagship was a deep dive into our energy positioning. Check it out via the link below 👇:

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Refining the ‘Straya Ruggedization Basket

Those of you that made it to the end of the weekend note will know that the 🐿️ is 3 weeks away from becoming an Australian citizen. In late March I wrote about the need for my new home to reinvest in sovereign resilience.

I put together a basket of stocks - yet to be implemented - that I felt stood to benefit from political focus on the topic. There have been promising developments on the political front but we need to make some refinements.

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In this week’s ‘Start the Week’ note we start with ‘Part 2’ of the 🐿️’s annual ‘Stock Take’ - covering China and other EM equity exposure - ahead of the usual portfolio reviews. An important BUSHY™-related email will be hitting inboxes in about an hour.

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In case you missed it, the weekend flagship note contains Part 1 of the ‘Stock Take’. Check it out via the link below 👇:

Stock Take Pt 2 - EM Edition

2026 has been an unusual year for Emerging Markets as the main benchmark - driven by the chip giants of Seoul and Taipei - got swept into the AI capex trade.

China

China has been having its own AI party. The chip stack on the domestic SSE STAR Market has been going a valiant job trying to keep pace with the memory giants in Korea and also outrunning the broader EM index.

Offshore however, China’s traditional tech giants have acted as dead weight for the MSCI China.

We took action in early March to part company with EM tech laggards (‘Doc, my EM Tech is Sick’). By then, we in ‘sell only’ mode when it came to risk. As such when it came time to rethink the 🐿️’s Concentrated China portfolio at the beginning of May, we were in ‘window shopping mode’ only.

We exited 7 (mainly consumer) names and trimmed the names that we were sticking with (but at a lower weight). The ‘top-ups’ and the new adds were left in the post-Hormuz ‘pending trades’ bucket. Now what?

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Quick reminder that the cost of annual subscriptions will be rising from $360 to $450 TOMORROW! Monthly subscriptions will remain at $45. As ever, all existing subscribers are grandfathered at their original rates.

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In case you missed it, the weekend flagship note drilled down on the recent strength of the USD. Check it out via the link below 👇:

ATS is not a K-pop Band

Before we get to the portfolio review, I owe you some background to the newest edition to BUSHY™’s ETF line up - - Cambria’s Global Value ETF. I have been aware of GVAL for quite some time but my traditional weapon of choice for EM value equity beta has been the iShares EM High Dividend ETF.

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Quick reminder that the cost of annual subscriptions will be rising from $360 to $450 at the end of this month. Monthly subscriptions will remain at $45. As ever, all existing subscribers are grandfathered at their original rates.

Subscribe now via Website

In case you missed it, the weekend flagship note covered the opportunity created by ‘Reverse De-Equitization’ in US equity markets. Check it out via the link below 👇:

Now What?

The 🐿️ has had one paw tied behind his back on the risk front since the start of a war that the markets - rightly or wrongly - appear to have moved on from. Or have they? The mood music from Switzerland over the weekend suggests that we just going to have to live with a high degree of Hormuz ambiguity for some time to come.

Does that make it the right time to add back risk to our portfolios? Frankly, does not feel great. We are far from having clarity, but it feels like time to (at least partially) get back on the horse. Some significant changes…

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In case you missed it, the weekend flagship revisited my basket of global financial exchanges. Check it out via the link below 👇:

The Brent Bleed

Before we get to the portfolio reviews, an urgent word on oil…

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