Volume: 5 Issue: 84 www.tgmacro.com March 31, 2021

Hugh McCracken

Today is one of those Wild Card days where anything can happen. The Kill Bill order is

rippling across markets. The Biden stimulus plan is still roiling the Treasury market. France may announce a 2nd national lockdown due to a covid spike which the rested

up Yellow Vests are going to lose their minds over. Cathie Wood’s ARK redemptions have taken a way-back seat to the crossfire. The trading landscape is treacherous.

Today is month-end and quarter-end which bookends performance that I’ll be studying closely. EVERYONE has a skin in the game today, then portfolio managers will have one more session before the holiday weekend to square up. It sets the stage for madness so I’m sitting here in my hockey helmet ready to trade.

If you caught the Real Vision Daily Briefing, which is suddenly appearing on ZeroHedge again, I laid out my whole case for preferring to raise some cash in the wake of the Archegos blowup. Luckily we’ve got Ben Hunt to cover the story better than anyone could and we’ve also got some muted fallout in the affected names. The risk is still out there which is why I like to stare at a little more cash than usual.

I was alerted to a high-level investor that has a similar view this morning – Rick Rieder at BlackRock. He mentioned the Turkey blowup last week as something to note and respect. He mentions the regime of easy money we’ve been living in building up massive leverage so you’ve got to keep a close eye on your equity portfolios with these dislocations taking place. If you read Ben Hunt’s version – Goldman liquidated the stocks ‘sloppily’ because it's easier to sell a HUGE block on a HUGE firesale to the current market price. So you take advantage of that but also:

“You’ve gotta keep an eye on it because there’s more of this to come.” – Rick Reider, BlackRock

He talks about running cash and also generating returns. They’re running the highest level of cash in years. The pressure it puts on other asset classes is where the opportunity set is. He talks about going up the credit quality spectrum with the cash they DO have invested and he thinks that U.S. growth is going to WAY outperform current expectations. Yet he’s still not as excited about S&P 4K as he has been in prior appearances on Bloomberg news.

Scatter Patterns - When the bull market is working – we get visible rotations. Who will forget lockdown rotation where Big Tech and every sub-sector went haywire on the upside and everything transport, energy, entertainment, and materials got WHALLOPED? Who will forget Miracle Monday when we announced a Biden Presidency and 3 vaccines and went into reopening rotation where natural resources exploded, transports followed, airlines went vertical, and stocks like Live Nation (LYV) came to life? Recall that the net result of both those rotations was higher equity prices. 1

Volume: 5 Issue: 84 www.tgmacro.com March 31, 2021

This rotation could do the same – but it means very little to me. When I look at the rotation on the screens I see a target off in the distance getting blown apart.

The blowup names are still placing risk across the street.

There are a few sectors in STRAIGHT SELL mode right now with higher yields. The gold market seems to be one of them – with the endless exodus from ETF holdings. The cannabis market has joined in full force. Multi-State Operators broke their neckline yesterday and bled out another 3.5%. Just as the SAFE banking act appears on the horizon, cannabis operators are seeing their cost of capital spike with yields rising and the stocks are retreating in force. Tech sectors are still weak in a wide range of magnitude. The undisputed leader of the tech pack – software (IGV) has retreated to its 200dma and – so far - looks scary to buy.

Then you’ve got sectors like transports (IYT) which didn’t make much of a splash yesterday with their 1.4% rally to a NEW ALL-TIME HIGH. As I’ve mentioned – there’s nothing more fun than being long securities into prices never seen before because the sky’s the limit. Similarly, the homebuilders (XHB) just keep grinding higher – even with higher yields. Banks are starting to join the rally chorus on those higher yields and widening curve – but they’ve been set back a bit on this divot that the

Archegos liquidation put into Credit Suisse and likely Nomura who have already alerted the street to material losses.

So, with so much already said about all of it in yesterday’s Real Vision Daily Briefing. We’re going to hawk our View Matrix, study the month-end closes in tomorrow’s Navigator, and stick around for a Thursday Icebreaker to wrap it all up. One thing is for sure – the prices of some securities are going to be a LONG WAY from the price they left on the screens last night.

Let’s have our eyes peeled for those opportunities Rick Rieder spoke about. Head on a swivel

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Volume: 5 Issue: 84 www.tgmacro.com March 31, 2021

Hugh McCracken was so busy in the 70’s that he turned down a spot in Paul McCartney’s band Wings in 1971. He had as massive, powerful, and understated body of work as anybody in the music business. I’d bet 100% of my subscriber base has heard him play the guitar. I wouldn’t mind having a resume like Hugh McCracken’s music career. Under the radar, grand slams off the fingertips with class.

“Love is life. And if you miss love, you miss life.”

Leo Buscaglia, born March 31, 2021

“If you could do an interview with Hughie it will turn out to be very amusing and informative. He is renown to his fellow players for his sense of humor. If you ever see one of Hughie McCracken’s picks it says on it ‘this pick stolen

from Hugh McCracken.’” – Walter Becker, Steely Dan

“We all need each other.” – Leo Buscaglia

Has credits on over 500 recordings beginning in the mid 1960’s including James Taylor, Carly Simon, Graham Parker, Aretha Franklin, Bob Dylan, the Four Seasons, Dr. John, Gordon Lightfoot, and many more.

Hear this opening guitar riff? That’s Hugh McCracken. Of course Paul Simon played acoustic guitar in 50 Ways to Leave Your Lover but the electric guitar in this recording is none other than Hugh McCracken. His cousin Phil is a comedian.

“Change is the end result of all true learning.” - Leo Buscaglia

Guitar accompaniment on Steely Dan’s Hey 19? Hugh McCracken Acoustic guitar on She’s Always’s a Woman? *shakes head* yep. Hugh McCracken

Hugh Carmine McCracken – born March 31, 1942 - died March 28, 2013.

“Love is always open arms. If you close your arms about love you will find that you are left holding only yourself.” - Leo Buscaglia was the man.

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Volume: 5 Issue: 84 www.tgmacro.com March 31, 2021

View Matrix

Happy as a clam.

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Volume: 5 Issue: 84 www.tgmacro.com March 31, 2021

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