(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Come eat some of these ‘member berries with me.

‘Member when folks used to travel hours per day to plop their tush into a seat in a steel cage called an “office”?

‘Member when traders used to congregate on a trading floor 5 days a week and shout at each other?

‘Member when degens on the trading floor used to haze interns and fresh graduates?

‘Member??

I have regaled readers with many stories from my early years as an analyst in Deutsche Bank’s Hong Kong office. It truly was a special place, filled with some of the most interesting and aggressive individuals I have ever met. Today we shall talk about a teammate of mine and fellow graduate classmate who, in my crew, went by the nickname Killah. Don’t worry how or why she acquired said name– just know she is a gangsta.

Killah and my team worked very closely together. She traded a variety of equity index swaps. Her team worked quite late into the evening due to poor middle-office tech, and the fact that they covered the India close from Hong Kong. Anyone who trades or traded Indian equities knows how much of a pain in the ass booking trades is. While I thankfully exited stage left circa 5:30pm each day (when Singapore closed), Killah and her team routinely left the office later than 8:00pm.

In pre-COVID Hong Kong, post-work jaunts into Lan Kwai Fong were the norm. One particular evening after work, Killah informed her team that she could eat 10 Big Macs in under 2 hours.

There is nothing that excites the animal spirits of a trading floor like a good old-fashioned eating contest. Depending on the difficulty of the challenge, the whole Street might drop what they are doing to gamble on the outcome. Sadly, as I am told by current bankster compadres, these sorts of activities are now forbidden by the woke-inatti.

But things were looser back then, and we couldn’t let such a bold claim go unchallenged. The next day at work, we decided to put Killah’s appetite to the test. In the morning, chatter began as to whether the alcohol had given her unwarranted confidence in her ability to consume Big Macs. She doubled down, and said she would show us.

A palpable feeling of giddy excitement quickly spread across the trading floor and throughout the Hong Kong trading community at large. Bloomies lit up as clients and friends across the city started placing wages on whether or not she could complete the challenge.

An intern was tasked with procuring the victuals, and at twelve noon, the contest began.

All activity on the floor ceased, and people crowded around her desk. Her strategy was sound — she separated the meat and bun, chowed down the patties first, and then finished off the bun and toppings separately.

About 20 minutes into the event, one of the senior MD’s walked over to the battlefield. I can imagine he probably had heart palpitations as he watched a junior female trader scarfing down burgers surrounded by a bunch of cheering dudes. It just wasn’t a good look for the bank. And as the most senior person on the floor that day, he quickly and sternly shouted “SHUT IT DOWN!” — and that was the end of the spectacle. To this day, Killah maintains that she could have done it.

The Fed believes it can eat Big Macs made of 50bps rate hikes without the US and global economy violently vomiting. We are just a few minutes into the competition, and already risk asset markets are begging some senior politician to SHUT IT DOWN!

Everyone who owns risk assets globally is watching the Fed and its tolerance for pain. This pain is purely political. There are no easy outs when you combine the most levered domestic US and global economy in history, interest rates that are already at their lowest in recorded human history, the disruption of the world’s largest energy and food exporters (Russia + Ukraine), and inflation that was already at its highest in 40 years even before the Russia / Ukraine war.

The Real Question