“Despite overleveraged households, uncertainties, and nervousness, it has been tremendously difficult to benefit by being short risk assets. Central banks around the world (including, unfortunately, the Reserve Bank of Australia) once again pivot to accommodative monetary policy, seemingly unwilling to allow any pain in capital markets. The danger builds over time, and as short positions become increasingly difficult to maintain, we may all be caught swimming naked when the tide inevitably goes out. We look forward to re-entering this position as the global context changes.”

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