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The Travel Advisor

I will do a Fed preview with @Livesquawk Wednesday morning. https://x.com/LiveSquawk

It’s nice to be back! Despite all my big talk about wanting to get back into working on trading, the first thing I did when I got home was… to open a couple of new credit card accounts. You may or may not know this about me, but I carry over thinking about trading “relative value” from my work into my everyday life. Whether it’s arbing the offerings at the local Raising Cane’s, refusing to pay 8x for business class for 2x the square footage, or having a barbell strategy to steaks (only really cheap or expensive restaurants, which provide the best value IMO), I embrace the relative value lifestyle.

I am the guy on the right – except I can’t remember the last time I spent more than $30 on pants, I’m pretty sure most of my shirts cost less than $20 from Costco and my current pair of Adidas cost $35. A $20 shirt accomplishes 99% of the functionality of a $2,000 shirt. Shirts are a consumable and not an investment! Yeah… it’s not going to impress the ladies, but I’m happily married and self-employed, so I have no one to impress. I’m not saying I don’t have decent suits and shoes from my JPM days (back when I was young and had people to impress), but that was decades ago.

On our Asia trip, we met up with some friends, and I was surprised that they weren’t optimizing their credit card rewards. They had enough points to travel to five Asian countries. Wouldn’t they rather have enough points to travel to 10? If they weren’t aware, I was thinking that some of you may not be aware either.

TBH, it was only the past year where I stumbled upon credit card travel rewards - previously, I focused just on cash back since we only took a few trips a year. Some of you may not care if you get only one free airline ticket (business, if you prefer) instead of two or three. But it’s somewhat effortless to get 2+x the number of points – you just have to pull out a different card to pay. My “GTO”ing (game theory optimizing) inner nature makes maximizing credit card rewards an entertaining hobby. I’m not getting rich off of it, but it’s satisfying to get many travel rewards for “free.” I know people who prefer the bougieness of paying with their Amex Platinum or Black cards (and getting the minimal amount of points). If they enjoy lighting money on fire, who am I to interject? For the rest of you, I have some tips that should help you with your travel endeavors.

But first the week in news. We got some more clarity on a number of items affecting the curve distributions.

· Rieder is now in the lead (52%) as the next Fed Chair. First I mentioned why Hassett would be a terrible pick and he went to zero. Next I mentioned why I hated Warsh, and he is now 28%. I like Rieder. I was saying to some people on Friday that I didn’t understand why Rieder would take the job when he has to: (1) take a 99% pay cut, (2) take most of the blame if the economy underperforms, AND (3) talk to Trump on a regular basis. Then I said, “I wonder if Blackrock is more of a shit-show than we would have thought.” And less than an hour later, we get the headline that Blackrock Private Debt Fund expects a 19% NAV cut. We all know private equity can be a shit-show, but the timing was funny. I can see into your soul! Or more likely, even a blind squirrel gets a nut once in a while. Anyway, I always thought Rieder’s views were reasonable, he seemed like an amiable leader and he is the least shill-like of all the candidates.

· That was a crazy TACO that Trump did on Greenland. We went from possibly using force in taking Greenland to going back to the status quo. WTF? At least get something substantial out of it! We always had the right to build up the military and other activities on Greenland. So we got nothing (or very close to it). Whenever you hear Trump say “concept of a plan,” that is code for “nothing” (see Trump’s healthcare plan, which we are still waiting on). Apparently Trump was polling worse on Greenland than he was on Epstein (!), so that was probably the main driver of the TACO. Generalissimo Choi thought Greenland was acquirable by peaceful means. Trump’s approach was all wrong. Pro tip: if you find a girl you want to marry, don’t grab ‘em by the pu**y. Try wining and dining instead. I mean how the “heck” do you get 85% of the Greenlanders hate you in such a short period of time? Aren’t Greenlanders generally happy people, like the other Scandinavians and Santa’s elves?

· I was hoping to hear from the Supreme Court on tariffs, given that Trump seems to be adding new tariffs all the time. But now we won’t hear from them for another month, since they went on recess. Kalshi thinks there is now a 36% chance Trump wins (up from a low of 20% in November). I’m not sure what this means for refunds, but we will have some uncertainty for some time. Interestingly the uncertainty in the markets now is surprisingly associated with lower volatility.

· The government shutdown was 9%, but now it seems to have shot up to 77%, from the shooting. It appears Trump is trying to get 85% of Minnesotans to hate him too. I’m not saying this because I am an immigrant, but Trump’s overly aggressive immigration policy is asinine. Okay… go get the criminals and maybe an occasional law-abiding illegal immigrant that you find along the way. I get that the blue states are probably using illegals to get votes and there is bleeding of finances from giving them benefits and other related fraud/waste. But he can do this without causing rioting. There he goes grabbing again when he should be finding a better way.

· Lisa Cook is only 2% to be out by March and 11% to be out by end of year. Trump is going to lose this one. People should be able to sue Trump personally for 3x damages on these frivolous lawsuits. It is absurd how much of our taxpayer dollars he is wasting on dumb lawsuits. Cook winning, plus Powell being 40% likely to stay on as Governor, makes it highly improbable for Trump to stack the Fed.