Asymmetric risk in the US economy: what is it and how to benefit from it?

From risk to opportunity

On the surface the US economy is doing well. But it is running in an unstable equilibrium. 

The problem is that the market is taking the possibility of a soft landing as the default scenario, the one that is priced in. 

If the something dramatic changes, risk assets are in for a rude awakening. So how to think about that and what are the options to work around this risk?

---

The Ecoinometrics newsletter gives you insights from crypto and macro data to help you make better investment decisions. 

We spend hours every day gathering data, creating metrics and bringing them to life with data visualizations that allow you to quickly get to the heart of things.

We then distill all that knowledge in each issue of the newsletter with less words and more charts so that you get insights, direct to the point, in five minutes or less.

Join more than 21,000 investors here:

Done? Thanks! That’s great! Now let’s dive in.

P.S. we have just released a new dashboard on the Bitcoin miners. The purpose of this dashboard is to track if the Bitcoin miners stocks are over priced or under priced relative to Bitcoin. Paid subscribers can check it out here.

---

Asymmetric risk in the US economy: what is it and how to benefit from it?

The takeaway

Rate cuts leading to a soft landing are baked into risk assets. They have been since the Federal Reserve stopped hiking rates and the financial conditions drifted looser.

The problem with the soft landing becoming the default options is the risks of a recession are still higher than normal. The result is that any bad surprise will likely result in a big correction.

But there is way too much uncertainty to try to short risk assets while waiting for this to maybe happen. The only thing that makes sense is to keep some capital reserves to buy more Bitcoin (or Ethereum) if there was ever a liquidity event.

Details below.

A market pivot without a Fed pivot