"Those who cannot remember the past are condemned to repeat it" -George Santayana, The Life of Reason 1905 The parallels between the recent Abaxx Technologies $ABXX developments and the Fairfax Financial Holdings Limited $FFH.to in the early 2000s are eerie — an esoteric company, an illiquid stock, a short attack as described by the company and an unconventional CEO. There are lessons to be learned here. Let's drive right in. 🧵

$IEV Europe is escalating the trade war. $STOXX France and Germany want a switch to cut China out of the EU market. Named industries include aerospace, automotive, machine tools, pharmaceuticals, and chemicals. This national resilience drive needs to be included in company analysis. How many have thought about it? China will respond. The question is how.

$CPRT is looking to form a double bottom on the weekly chart after a massive drawdown. Good to see Jay Adair back captaining the ship. The ACV deal looks shrewd. It brings credibility to the whole-car business, and offers a level of strategic fit that is uncommon. I trust the captain will execute. The market has not agreed, and that's the opportunity. This is a very high quality business at a reasonable price. I recently initiated a long position.

Lindy is not a vibe. It is a survival function. A concept that suggest that remaining life expectancy of certain non-perishable things scales with how long they have already survived. Corporate mortality is front-loaded, but compounding only happens if the entity is still there. Ask if the company can survive through credit cycles, technology shifts, trade wars, geopolitical conflicts, etc. Markets invert this. They pay a novelty premium and a durability discount. The economics still need to be there to recapitalize earnings and the company must be able to adapt. Otherwise you might be looking at another Kodak. Age is not a virtue. Survival through selection is. My congratulations.

Fed raised the benchmark rate 25 bps to 3.75%-4% range. Chairman Warsh implied that shadow r-star is still above the funds rate. He denied that natural rate has any operational effect, but clearly he has been thinking about it and admitted that there's competition for capital. Rising bond yields are a reflection of investments exceeding savings which means capital is scarce. If he's thinking about a rate that clears the supply and demand for global savings, inflation is political license. The rate hike is the U.S. bidding for scarce global savings. Hunger Games.

USD/JPY is still under 155. Bessent just told shorts he is the other side of the trade. “I am the house now,” he said at SMU in Texas, Tuesday. “You can bet against me if you want.” The US Treasury is coordinating with the BoJ and Japanese authorities on stronger yen policy. This is the same official bid as 31st of July and the 155 break. The policy makers are taking the other side of the yen carry trade. That's the trade Japanese retail just sized up last week. BoJ is 17–18 September. Fade the house into that meeting at your own peril.

USD/JPY sliced through 155 and tagged 152.89. That’s the strongest yen since February. Japan spent ¥15.4tn buying yen from late July through August. Japan's foreign currency reserves still stand at $995 billion at the end of August. That's plenty more, if they need to intervene again. The US Treasury is aligned and even helped to intervene in late July. Treasury Secretary Scott Bessent has been publicly pressuring the Bank of Japan to raise interest rates, arguing that Abenomics has reached its end and that monetary policy normalization is necessary to stabilize the yen. If Washington and Tokyo want a stronger yen, fade them at your own peril. What does the world look like when the yen carry trade unwinds?

$AME A director bought 4,000 shares at $255.85 for just over a million dollars on August 11th. Insiders are usually good at timing their buys. They sell for a myriad of reasons, but they buy for only one. The chart looks very bearish here. The insider bought on a weekly trend-exhaustion 12 and a daily trend-exhaustion 13 signal. There is also a negative divergence between price and the weekly RSI, and the weekly formed an Evening Doji Star candlestick pattern. The valuation also seems expensive. To be fair, there has been a lot of insider selling over the past year. I’d like to know what this one sees. Any ideas?

Fifty-five years ago today, President Richard Nixon decided the fate of the dollar. The greenback was floated, and it changed the course of history. Convertibility into gold at the fixed 35$-per-ounce rate ceased. The gold window closed. An era ended. The dollar has since lost more than 99% of its value against gold. What forced the monumental decision? Gold was flowing out of U.S. vaults to trade partners and allies. The budget deficit was spiraling, inflation was running rampant, and America’s competitive position in international trade was eroding. By spring 1971 the wolf was already at the door. Treasury Secretary John Connally told the Washington Post: “We can’t continue to hold a military, economic and political umbrella over the free world ourselves as we have been doing. We need a radical change in our trade position.” Connally threatened to pull U.S. military assets and leave the Europeans to arrange their own defense if trade concessions were not forthcoming. Does that sound familiar? Mere days before the fateful weekend at Camp David in August 1971, the Nixon administration was still publicly committed to defending the integrity and strength of the dollar. The actual plan that emerged was different: float the dollar, let it weaken against other currencies, and deploy a 10 percent import surcharge as a negotiation weapon to force a return to fixed rates at newly realigned values. Price, wage, and rent controls formed part of the package—a questionable gift from an administration that claimed to believe in free markets. Nixon informed the world in a Sunday-night television address and received a favorable domestic response. The political slogan was “prosperity without war.” Not everything went according to plan. Gold convertibility was never restored. Closing the gold window removed the external constraint that had disciplined U.S. monetary expansion. Some expected the gold price to fall once the monetary demand for the metal disappeared. Instead it rose dramatically through the 1970s. Paul Volcker restored the dollar’s credibility in the early 1980s through tight money — that episode marked the beginning of the Great Moderation. The talk around trade and deficits today is eerily similar to the run-up to the Nixon Shock. The window for change in the monetary system is open once again. If we ever return to a gold standard it will be out of necessity. No politician voluntarily constrains his own power. With gold now trading in the four thousands, a fraction of the dollar's value against the barbaric metal is left. Happy Nixon Shock Memorial Day. Where do you place your trust with your savings?

474 gigawatts of proposed new electricity demand is the current backlog for Electric Reliability Council of Texas (ERCOT) grid connection requests — most of it from data centers. That is five times the state’s record peak load. If all of it were produced by modern combined-cycle natural gas turbines, they would require something like 75–80 Bcf/d of natural gas. The behind-the-meter solutions come on top of that. Not all of it will come to fruition. Greg Abbott, the Governor of Texas, has commenced an audit of all planned data centers seeking grid connections, that tells all you need to know about the demand side. Solar and wind power can't solely meet that demand — data centers need a reliable supply of power, not only intermittent one when the two decide to show up for work. Nuclear could fit the bill but building the facilities might take almost a decade. The medium term answer will be natural gas and there's plenty of it in Texas. Natural gas has been subject to the co-production economics of crude oil and NGLs. High enough prices for the rest of the product mix have kept drilling operations economic, while natural gas itself has been an expensive nuisance. Natural gas egress capacity out of the Permian Basin has been constrained for several years, to put it mildly. But that hasn't mattered and now the demand is coming to meet the supply. The Henry Hub benchmark for natural gas has mostly traded between two and four dollars per thousand cubic feet (Mcf). It has therefore traded in a range of roughly twelve to twenty-four dollars per barrel of oil equivalent. The local Permian Basin natural gas reference in Waha, Texas has traded at a negative basis, i.e., at a discount even to Henry Hub. At times operators have had to pay someone to take the gas. Said another way, the Permian Basin hasn’t even tried to produce natural gas yet. That is an arbitrage waiting to be closed, and it is actively being closed through the construction of pipelines, liquefied natural gas (LNG) export terminals, petrochemical facilities, data-center-driven power generation, and other demand outlets. A giant wave of egress capacity is coming. It is spearheaded by the Blackcomb and Hugh Brinson Phase One pipelines, which enter service late this year with 2.5 and 1.5 Bcf/d of capacity respectively. These combined additions are expected to amount to roughly 11 Bcf/d by the end of the decade. Some of these projects will help feed the new LNG terminals that will add well over 10 Bcf/d of nominal capacity by the early 2030s. The infrastructure needed to efficiently utilize Permian and broader U.S. natural gas production is being built at breathtaking speed. The Permian is expected to produce roughly 28 Bcf/d of natural gas this year. The Permian natural gas production might have to double to meet the potential demand. What will the power prices for running the data centers look like in three to five years?

Outstanding quarter from $VNOM with 1.37 dollars available for distribution per common share. The suggestion that $FANG could buy Viper shares was the catch of the earnings call. I have tremendous respect for CEO Kaes Van’t Hof for his clear commitment to shareholder value creation and for having the courage to execute on it by every mean available. The updated capital allocation framework gives him more freedom to fill the boat. It moves the center of gravity from distribution towards per-share compounding. My thoughts on the opportunity below. nitter.cf/AddledAngler/status/20…