Dusted off an old memorial for Memorial Day (see below). Back next Sunday with full weekend notes. All the best, E

Week-in-Review (expressed in YoY terms): Mon: Belarus grounded RyanAir flight from Greece to Lithuania to arrest a journalist on board, digital asset volatility continues to surge with a volatile weekend, Chinese gov’t says would “severely punish” any monopolies manipulating commodity markets, India covid deaths (officially) surpass 300k, US Chicago Fed 0.24 (1.2e), S&P +1.0%; Tue: Erdogan replaces CBT deputy governor (Ozbas), Bank of Hungary unch but hawkish, EU imposes flight blockade on Belarus and demands journalist released, Russia dismisses involvement in Belarus kidnapping, Spain PPI 12.8% (6.3%p), German IFO 102.9 (101e), Russia unemp 5.2% (5.4%e), Russia IP 7.2% (6.5%e), Brazil IPCA 7.27% (7.38%e), US Case Shiller HPI 13.19% (11.97%p), US cons conf 117.2 (118.8e), US richmond Fed 18 (19e), S&P -0.2%; Wed: RBNZ unch but forecast rate hike 2H 2022 (unexp), Biden asks intelligence officials to redouble efforts to discover the origins of covid, US republicans propose $1T infrastructure bill (vs Biden’s $1.7T), Amazon acquires MGM studio ($8.5b), EU demands AZ pay 10EUR per undelivered vaccine, Turkey urges NATO to soften response to Belarus, France cons conf 97 as exp, Sweden unemp 9.1% (9%e), Mexico GDP -3.6% (-3.5%e), S&P +0.2%; Thur: China/US trade reps hold “constructive” talks, CSU/CDU take lead in German election polls (over Greens), Germany to start vaccinating kids 12yo +, SK retail sales 13.7% (18.5%p), German cons conf -7 (-5.2e), Italy cons conf 110.6 (104e), S. Africa PPI 6.7% as exp, Mexico unemp 4.65% (4.2%e), Brazil unemp 14.7% (14.6%e), US durable goods (ex-transportation) 1% MoM (0.7%e), US initial claims 406k (425k exp), US 1Q GDP 6.4% (6.5%e), S&P +0.1%; Fri: Biden proposes $6T spending in budget, Russia refuses to European airlines because they planned to skirt Belarusian airspace, Bashar al-Assad “won” the Syrian presidential election, senate republicans block bipartisan probe of Jan 6th capital riot, Boeing halts delivery of 787 (again) amid quality issues, NZ cons conf 114 (115.4p), France PPI 7.3% (4.5%p) / CPI 1.8% as exp, Spain ret sales 41% (29.1%e), Sweden 1Q GDP 0% as exp, Norway unemp 3.3% (3.4%e), EU cons conf -5.1 (-5.1p), US personal income -13.1% (-14.2%e) / spending 0.5% as exp, US PCE deflator 3.6% (3.5%e), US UofM sentiment 82.9 (83e), S&P +0.1%.

Weekly Close: S&P 500 +1.2% and VIX -3.39 at +16.76. Nikkei +2.9%, Shanghai +3.3%, Euro Stoxx +1.0%, Bovespa +2.4%, MSCI World +0.9%, and MSCI Emerging +1.8%. USD rose +5.8% vs Bitcoin, +1.7% vs Turkey, +0.8% vs Yen, +0.7% vs Chile, +0.5% vs Ethereum, +0.3% vs Australia, and +0.1% vs Canada. USD fell -2.6% vs Brazil, -1.4% vs South Africa, -1.0% vs China, -0.6% vs Russia, -0.6% vs India, -0.5% vs Indonesia, -0.3% vs Sterling, -0.2% vs Sweden, -0.1% vs Mexico, and -0.1% vs Euro. Gold +1.2%, Silver +1.4%, Oil +4.3%, Copper +3.6%, Iron Ore -2.9%, Corn -0.1%. 5y5y inflation swaps (EU flat at 1.59%, US -1bps at 2.43%, JP -9bps at 0.29%, and UK -5bps at 3.72%). 2yr Notes -1bps at 0.14% and 10yr Notes -3bps at 1.60%.

May Mthly Close: S&P 500 +0.5% and VIX -1.85 at +16.76. Nikkei +1.2%, Shanghai +4.5%, Euro Stoxx +2.6%, Bovespa +5.6%, MSCI World +1.1%, and MSCI Emerging +0.5%. USD rose +52.3% vs Bitcoin, +7.2% vs Ethereum, +3.2% vs Turkey, +1.8% vs Chile, +0.5% vs Yen, and +0.1% vs Australia. USD fell -5.0% vs South Africa, -3.9% vs Brazil, -2.8% vs Russia, -2.6% vs Sterling, -2.2% vs India, -1.9% vs Sweden, -1.7% vs Canada, -1.6% vs China, -1.5% vs Mexico, -1.4% vs Euro, and -1.1% vs Indonesia. Gold +7.7%, Silver +7.9%, Oil +5.2%, Copper +4.9%, Iron Ore -1.5%, Corn -2.6%. 5y5y inflation swaps (EU +5bps at 1.59%, US flat at 2.43%, JP -3bps at 0.29%, and UK -4bps at 3.72%). 2yr Notes -2bps at 0.14% and 10yr Notes -3bps at 1.60%.

YTD Equity Indexes (high-to-low): Venezuela +51.3% priced in US dollars (+307.7% priced in bolivars), UAE +29.8% priced in dollars (+29.8% in dirham), Austria +23.7% in dollars (+24.6% in euros), Saudi Arabia +21.1% (+21.1%), South Africa +20.3% (+12.8%), Canada +20.3% (+13.9%), Sweden +18.9% (+20.3%), Norway +18.2% (+14.9%), Poland +17.7% (+16.1%), France +16.6% (+16.8%), Taiwan +16.1% (+14.5%), Czech Republic +15.8% (+13.3%), Russia +15.4% (+13.4%), Russell +14.9%, Hungary +14.5% (+10%), Euro Stoxx 50 +14.4% (+14.6%), Spain +14% (+14.3%), Netherlands +14% (+14.2%), Mexico +13.8% (+13.6%), UK +13% (+8.7%), Belgium +12.6% (+12.9%), Italy +12.4% (+13.2%), Germany +12.3% (+13.1%), Israel +12.1% (+13.2%), Ireland +12.1% (+12.3%), S&P 500 +11.9%, Singapore +11.7% (+11.8%), Finland +11.6% (+12.4%), India +11.4% (+10.4%), MSCI World +10.4% (+10.4%), Greece +9.5% (+9.7%), Australia +9.3% (+9%), Korea +8.4% (+11%), Denmark +7.6% (+8.3%), HK +6.8% (+7%), NASDAQ +6.7%, China +6.3% (+3.7%), Switzerland +4.8% (+6.8%), Thailand +4.7% (+9.2%), Brazil +4.3% (+5.5%), Argentina +2.9% (+15.6%), Portugal +2.6% (+2.8%), Chile +0.3% (+1.9%), Japan -0.1% (+6.2%), Indonesia -4% (-2.2%), Malaysia -4.7% (-2%), Philippines -6% (-6.5%), New Zealand -6% (-6.9%), Turkey -16.5% (-3.7%), Colombia -22.6% (-16.1%).

Anecdote (Aug 2011): “Never hire a Harvard Business School grad until they fail at least once,” he advised me. You see, he taught there. Filled his life with books, movies. Jewish intellectual, author, psychiatrist to rock-stars, advisor to top CEOs. Atheist. And you know, when staring into the abyss, that is a damn hard thing to admit. But he did. Proud. Self-made. Stubbornly independent to a fault. A lover of puzzles, excelling in War Game theory while serving in the Army. People were his passion, the ultimate puzzles. We would walk, talk. That was 2005. I described the tragic long-term consequences of Alan Greenspan’s morally hazardous Put. A core weakness in our system; namely that politicians are rewarded for profligate deficit spending, punished for prudence. And the ultimate cost; the loss of our economic dominance, compromised global leadership, downward spiral in the Dollar, rising interest rates, deep recession, depression perhaps. The wise old man considered it all, “This will be China’s century, I’m sure of that. What you describe, perhaps it will happen. Yes, it’s even likely. But not in my lifetime. No, these things take time, not in my lifetime, but in yours.” He knew little of economics except for the basics; if you owe someone money, they own you. So he took on debt as a young man – needed to – but lived frugally, paid it all back. Left his family asset rich. And I will always hold on to our walks, talks. Mara and I went to see him last week. His brilliant mind lost, dignity stolen, frail, skeletal. Alzheimer’s. Life holds far greater horrors than death. I quietly prayed for mercy – for both of them. And driving home, Mara gazed out the window, in tears, “I think that’s the last time I’ll ever see my Dad.”

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, drink with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.