Saturday, October 31, 2020

My latest unit of economics

 The TWEC, the Tax Wile E Coyote moment. 

Comes every eight to ten years. There is a moment of congruence when all the tax issues pile up into one election. The following quarter we suffer random and severe episodes of TWEC.  Depending upon the severity of the TWEC pandemic we may have various sudden stops in the Swamp, or in California. I expect Q1 to be TWEC season, get your TWEC vaccine today.

Traders have to connect a bunch of dots in terms of overlapping tax changes. In essence it is about reshaping the tax dodge value chain to match the new tax distribution, another portfolio rebalance and we will be throwing coin tosses to the tax accountants.   A market requant, but they are good at it. This is not free entry and exit.

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