Otavio (Tavi) Costa
Denver, Colorado, United States
48K followers
500+ connections
About
Tavi is a Macro Strategist at Crescat Capital and has been with the firm since 2013. He…
Articles by Otavio (Tavi)
Activity
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The 2 vs. 10-year yield spread turning positive this week is likely one of the most critical macro events we are experiencing. Historically, these…
The 2 vs. 10-year yield spread turning positive this week is likely one of the most critical macro events we are experiencing. Historically, these…
Shared by Otavio (Tavi) Costa
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The Australian dollar has just had its first candle above a significant resistance level, likely signaling the start of a new upward trend. To be…
The Australian dollar has just had its first candle above a significant resistance level, likely signaling the start of a new upward trend. To be…
Shared by Otavio (Tavi) Costa
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It’s fascinating to see the recent declines in equity markets alongside the weakening of the US dollar against other fiat currencies — an…
It’s fascinating to see the recent declines in equity markets alongside the weakening of the US dollar against other fiat currencies — an…
Shared by Otavio (Tavi) Costa
Experience
Education
Publications
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The Daily Shot: Mexican Remittances Spike as U.S.-Based Workers Take Advantage of Weak Peso
The Wall Street Journal
Precious metals mining shares had a good month.
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Despite China's "Reopening", Global Smartphone Market Suffers Record Crash In Shipments
ZeroHedge
Crescat Capital's Otavio Costa sums this up pretty well in a past tweet where he notes how consumer confidence has crashed among the Asia Pacific community but somehow not in China? He notes, "Fabricated data.…. CCP at its finest."
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Petróleo pode sustentar patamar mais elevado de preços com ajuda americana
Exame
Petróleo pode sustentar patamar mais elevado de preços com ajuda americana
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The Daily Shot: China’s Business Activity Plummets in February
The Wall Street Journal
Here is Singapore's air freight volume (year-over-year).
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The Daily Shot: Recent College Graduates Are Having a Tougher Time Finding Work
https://blogs.wsj.com/dailyshot/2020/02/18/the-daily-shot-recent-college-graduates-are-having-a-tougher-time-finding-work/
A high school degree or less:
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The Daily Shot: Stock Market Gains Pumping up Consumer Confidence
The Wall Street Journal
The entire Treasury curve is below inflation for the second time in history.
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Do NOT buy the dip, warns investor who says a ‘brutal bear market’ looms
Yahoo Finance
Do NOT buy the dip, warns investor who says a ‘brutal bear market’ looms
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Don’t Trust the Bounce: Brutal S&P 500 Selloff Will Continue, Says Popular Trader
CCN
Don’t Trust the Bounce: Brutal S&P 500 Selloff Will Continue, Says Popular Trader
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Stocks Will Follow Oil’s Bear Market Decline: Former Goldman Sachs Analyst
CCN
Stocks Will Follow Oil’s Bear Market Decline: Former Goldman Sachs Analyst
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Do NOT buy the dip, warns investor who says a ‘brutal bear market’ looms
MarketWatch
Do NOT buy the dip, warns investor who says a ‘brutal bear market’ looms
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The Daily Shot: No Significant Price Increase at the Pump from the Recent Oil Spike
The Wall Street Journal
Is the underperformance of energy services stocks over?
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Energy ETFs Could Gain Momentum in 2020
Yahoo Finance
Other investment firms are also looking closely at oil services companies for a potential breakout next year. Crescat Capital’s global macro analyst Octavio ‘Tavi’ Costa also believed that there is opportunity for the segment ahead, adding that oil-service stocks have “never looked so cheap” in a tweet, MarketWatch reports.
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The Fed's Excessive Money-Pump Is "Reinforcing The Inevitable Unraveling Of Imbalances"
ZeroHedge
The Fed's Excessive Money-Pump Is "Reinforcing The Inevitable Unraveling Of Imbalances"
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Here's why a rough patch for battered oil stocks may be about to come to an end in 2020
Morningstar
Here's why a rough patch for battered oil stocks may be about to come to an end in 2020
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Here’s why a rough patch for battered oil stocks may be about to come to an end in 2020
MarketWatch
Here’s why a rough patch for battered oil stocks may be about to come to an end in 2020
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If Boeing stock takes flight, this ETF could go along for the ride
Fidelity
If Boeing stock takes flight, this ETF could go along for the ride
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Stocks Look Ready to Rise as Investors Return to Finish a Holiday-Shortened Week
Barrons
Stocks Look Ready to Rise as Investors Return to Finish a Holiday-Shortened Week
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The Dow Is Up and So Is Tesla Stock in Post-Christmas Trading
Nasdaq
The Dow Is Up and So Is Tesla Stock in Post-Christmas Trading
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The Daily Shot: 13 of the 17 FOMC Members Expect Rates to Remain Unchanged Next Year
The Wall Street Journal
The ratio of gold miners' share price to gold has broken through resistance.
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The Daily Shot: Have Persistently Low Rates Depressed Productivity Growth?
The Wall Street Journal
This chart shows the gold-to-S&P 500 ratio historical trajectory after yield curve inversions.
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This 70% Yield Curve Signal Says Buy Gold & Bitcoin, Sell Stocks
CCN
This 70% Yield Curve Signal Says Buy Gold & Bitcoin, Sell Stocks
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Gold Suffers Worst Week In 3 Years As Fed Balance Sheet Explodes
ZeroHedge
Fresh 50-year low in the commodities-to-equities ratio. The next monetary & fiscal experiment will come at a cost. Major cyclical turn in this ratio likely ahead.
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The Daily Shot: The Treasury Curve ‘Kink’ is Gone
The Wall Street Journal
This chart shows inflation-adjusted earnings per share for the Russell 3000 (broad US market).
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Recent Trends in U.S. Household Credit
The Wall Street Journal
Auto loan spreads to Treasuries have been rising as investors demand better returns to compensate for loan losses.
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Bloomberg’s Buying Climate Index Signals a Strong Holiday Season for Retailers
The Wall Street Journal
- The divergence between the CPI and consumer inflation expectations is near multi-year highs.
- US microcap stocks continue to underperform large caps.
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New S&P 500 highs are riding on blockbuster results from Amazon
MarketWatch
They tend to be domestic-oriented businesses that have correlated strongly with the overall market throughout history. The S&P 500 looks like it is poised to play catch-up
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The U.S. Government Just Admitted That It Is Short By $720 Billion Per Year
CCN
There is a chance that excessive Treasury issuance could be causing the turmoil in the repo market. If so, one could argue this Fed intervention is in a way helping to finance the government deficits. This policy already expanded the balance sheet by $196 billion since August, and should be perceived as an acknowledgement of weakening economic conditions.
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S&P 500 Shows Signs of a Business Cycle Ending, Says Portfolio Manager
CCN
S&P 500 Shows Signs of a Business Cycle Ending, Says Portfolio Manager
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The spike in Hong Kong's pork prices suggests further upside for China's food CPI.
The Wall Street Journal
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The whole Canadian yield curve is now below the BoC's overnight rate.
The Wall Street Journal
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The Daily Shot: Business Investment Was a Drag on Growth for the First Time in Three Years
The Wall Street Journal
Micro-caps have underperformed dramatically this year.
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"The Downturn Could Be Particularly Brutal" - 'First' Fed Cuts Are Not Bullish
ZeroHedge
Precious metals are one of the few pockets of this market offering tremendous value to hedge against extreme monetary policies, bursting asset bubbles, and record global leverage. We see this opportunity playing out across gold, silver and related mining stocks. Gold is the ultimate form of money with a long history of storing value for investors and outperforming risk assets during market downturns. In our view, a new wave of global fiat currency debasement polices is now in its early stages…
Precious metals are one of the few pockets of this market offering tremendous value to hedge against extreme monetary policies, bursting asset bubbles, and record global leverage. We see this opportunity playing out across gold, silver and related mining stocks. Gold is the ultimate form of money with a long history of storing value for investors and outperforming risk assets during market downturns. In our view, a new wave of global fiat currency debasement polices is now in its early stages. Gold should become a core asset for those who believe in this macro development, but it is still widely under-owned today.
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Plethora of Warning Signs Of The Looming Global Economic Meltdown
ZeroHedge
Otavio Costa, Global Macro Analyst at Crescat Capital, joins us on SBTV and shocked us with a plethora of warning signs he has found from his research that the bubble economy has peaked and the next economic meltdown is nearing.
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The Daily Shot: Partisan Gap in Economic Assessment Widest Since the 2016 Elections
The Wall Street Journal
Let's begin with some updates on the equity markets.
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Fuja da bolsa americana e compre ouro, diz analista da Crescat
Seu Dinheiro
Costa vai além na sua análise e considera diversas relações de juros longos e curtos e afirma que 60% das curvas estão invertidas nos EUA. Tal evento antecedeu o estouro da bolha de tecnologia no começo dos anos 2000 e foi visto pouco antes da crise de 2008.
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This S&P 500 Data Should Startle You – Analyst Reveals Stark Warning
CCN
When the rate cut euphoria wears off, the stock market may settle into a channel that’s justified by the underlying economy’s fundamentals. Crescat Capital global macro analyst Otavio Costa pointed out Saturday that technical indicators presage a recession. Or at least a “soft landing” ahead:
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El Mercado de Bonos da Otra Señal de Peligro
Capital Bolsa
Tavi Costa, un analista macro global de Crescat Capital, notó esa tendencia histórica en un tweet la semana pasada. La única vez en las últimas cuatro décadas en que el rendimiento a 30 años cayó por debajo de la tasa de los fondos federales y no fue seguida por una crisis inmediata fue en 1986, agregó.
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The Consumer Satisfaction Index is near record highs. Can it be trusted?
The Wall Street Journal
The Consumer Satisfaction Index is near record highs. Can it be trusted?
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Here's another scary sign from the bond market
NBC TV Network
"We are very late in the business cycle. It's compelling to bet against stocks," Costa said. "It's a Goldilocks scenario with low inflation but that tends to happen towards a peak for the markets."
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Here's another scary sign from the bond market
CNN
"We are very late in the business cycle. It's compelling to bet against stocks," Costa said. "It's a Goldilocks scenario with low inflation but that tends to happen towards a peak for the markets."
Costa conceded that stock market pullbacks don't always go hand in hand with economic downturns.
But he said the S&P 500 may be overvalued by as much as 40%. If stocks were to lose that much in value over a short period of time, it's hard not to imagine how the United States could avoid a…"We are very late in the business cycle. It's compelling to bet against stocks," Costa said. "It's a Goldilocks scenario with low inflation but that tends to happen towards a peak for the markets."
Costa conceded that stock market pullbacks don't always go hand in hand with economic downturns.
But he said the S&P 500 may be overvalued by as much as 40%. If stocks were to lose that much in value over a short period of time, it's hard not to imagine how the United States could avoid a recession, Costa added. -
Ten Big Steps down the Road to Recession
ZeroHedge
It’s official. US 30-year yield just inverted vs. the Fed funds rate!
Same warning ahead of the GFC, tech bust, Asian crisis, S&L crisis, and 1980’s double dip recessions.
The only false signal, 1986.
We now have the entire US Treasury curve below the Fed overnight rate. -
30-Year Treasury Bonds Flash Economic Warning Signal
Yahoo Finance
The bond market flashed yet another warning signal for investors on Wednesday that a downturn for the economy may be coming. Despite the S&P 500 hitting new all-time highs, the yield on 30-year U.S. Treasury bonds briefly dipped below the overnight fed funds rate, a signal that has preceded the past five U.S. recessions.
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On The Precipice
ZeroHedge
The US stock market is retesting its all-time highs at record valuations yet again. We strongly believe it is poised to fail. The problem for bullish late-cycle momentum investors trying to play a breakout to new highs here is the oncoming freight train of deteriorating macro-economic conditions.
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High-yield bonds are holding in there despite lower oil prices.
The Wall Street Journal
High-yield bonds are holding in there despite lower oil prices.
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Buckle Up! Oil and Gold Flashing Recession Warning Signs
SchiffGold
Only three other times in history precious metals surged while oil plunged! All of them happened during severe bear markets and recessions. Buckle up, folks.”
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‘Buckle up!’ When oil and gold trade like this, it usually spells doom for the market
MarketWatch
‘Buckle up!’ When oil and gold trade like this, it usually spells doom for the market
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Should investors pay attention to Dr. Copper?
The Wall Street Journal
Should investors pay attention to Dr. Copper?
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Tavi Costa: Excited for Gold & Mining Stocks Right Now
Palisade Radio
Tavi discusses his bullish thesis for gold. Their strategy is to look at historical trends for value-opportunities and to find a contrarian position. He feels that the United States is close to the top of the economic cycle and that gold will do well in the coming period. He cautions that inflationary issues could begin to play out as we move into the next election cycle.
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US Consumer Confidence
The Wall Street Journal
Consumers' assessment of the current situation hit a multi-year high. This index tends to peak near the end of economic cycles.
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The Macro View On Gold
Real Vision
Tavi Costa, global macro analyst at Crescat Capital, makes his Real Vision debut in style — with a bullish trade idea on precious metals. He highlights why it’s finally time for gold to start outperforming, supports his thesis by examining a variety of macro indicators, and discusses how to play the current setup, in this interview with Jake Merl. Filmed on April 24, 2019.
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China consumer confidence now at its highest level in history!
The Wall Street Journal
China consumer confidence now at its highest level in history!
It’s a contrarian indicator.
Confidence tends to be highest at market tops.
One thing is true:
Every time it reached a prior cyclical high it preceded a major crash. -
US vs. German 5-year yield spread just broke down from a multi-year support line!
The Wall Street Journal
US vs. German 5-year yield spread just broke down from a multi-year support line!
Previous breakdowns timed the market top in 2000 & 2007.
It’s another critical macro timing indicator.
For more, watch our latest video:
https://www.youtube.com/watch?v=8N4tir0xIrs&t=158s -
Are Commodities In Crisis?
OilPrice
- A top-performing hedge fund said that buying gold while selling stocks is the “trade of the century” because another meltdown could be coming, according to Bloomberg.
- Crescat Capital LLC, a small fund with only $50 million under management, warns that a recession is coming in 2020 or 2021.
- The fund is betting long on gold in Chinese yuan, while shorting global equities.
- Crescat also said that prominent corporate insiders have been selling equities, another sign that trouble is…- A top-performing hedge fund said that buying gold while selling stocks is the “trade of the century” because another meltdown could be coming, according to Bloomberg.
- Crescat Capital LLC, a small fund with only $50 million under management, warns that a recession is coming in 2020 or 2021.
- The fund is betting long on gold in Chinese yuan, while shorting global equities.
- Crescat also said that prominent corporate insiders have been selling equities, another sign that trouble is on the way.
- “We’re not perma-bears by any means,” Tavi Costa, a global macro analyst at Crescat, told Bloomberg. “This is a very tactical bearish view right now, and hopefully when the market turns, we want to also time the bull market at some point.” -
Mark These Words: Buy Gold, Sell Stocks Says This US Fund
Economic Times
The consensus is pointing to a recession in 2020 or 2021, Tavi Costa, a global macro analyst at Crescat, said on telephone. “We think it’s a lot closer than that and we have a number of macro timing indicators that we look at.”
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Buy Gold, Sell Stocks Is the ‘Trade of Century’ Says One Hedge Fund
Bloomberg
“We’re not perma-bears by any means,” Costa said. “This is a very tactical bearish view right now, and hopefully when the market turns, we want to also time the bull market at some point.”
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Bear market for stocks already underway, recession coming, says Crescat Capital
MarketWatch
“In our view, September of 2018 marked the peak of the U.S. economic cycle. We are now seeing a typical bear market rally, and the next downward leg is likely to be just as abrupt as the first one,” Costa told MarketWatch in an interview. “It’s hard to pinpoint when exactly, but my best guess is between now and April.”
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Recession. Revolution. Recovery.
ZeroHedge
As usual, the bond market tends to give us signals before more obvious evidence emerges.
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January's dead-cat bounce fails to convince bearish investors, who say 2018 plunge is 'just the beginning'
Financial Post
“I think this is just a bear market rally that we’re having,” Costa said. “Sure it hurts the portfolio … but on the long-term those (stocks that made gains) should be trading a lot lower."
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Canadian Housing Bubble
Financial Post
We think the housing sector is the poster child for all the problems and imbalances we see in Canada today.
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Fed pause validates market fears about U.S. growth
Reuters
Three- and 5-year yields are poised to dip below the 2.4 percent effective Fed funds rate for the first time since 2006, before the global financial crisis.
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The ‘dangerous’ game investors are playing in this wild earnings season
MarketWatch
The ‘dangerous’ game investors are playing in this wild earnings season
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A Top-Performing Hedge Fund Is Shorting Canada Banks on Housing
Bloomberg
Canadian banks will be left holding the bag and the ones to suffer from what is likely to be a major economic recession.
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Brazil's Record Stock Market Prices Are Inconsistent With the Nation's Weak Industrial Production Growth.
The Wall Street Journal
My chart was featured on Wall Street Journal highlighting an inconsistent divergence between Brazilian stocks and the nation’s weak industrial production.
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The Rally in Treasuries and Stocks Was a Continuation of Last Week's Trend.
The Wall Street Journal
Rallies in the S&P 500 as big or greater than last week accompanied by a rise in US Treasuries only happened 3 other times since 2000. All of them proved to be bear market rallies.
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U.S. Dollar Libor Spread Versus Euribor Approaches Record
Bloomberg
Bloomberg just published my analysis on the divergence in monetary policies between the Fed and European Central Bank being unsustainable.
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Oil Prices Outlook
Bloomberg
Bloomberg TV shared my views on oil prices (starting at 43:40).
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Asset Prices in Brazil and Mexico Have Diverged Sharply.
Wall Street Journal
Asset prices in Brazil and Mexico have diverged sharply. The market usually prefers right-wing populists to left-leaning ones.
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The Phillips Curve Is "Functioning" Now.
Wall Street Journal
The US CPI and the unemployment rate are inversely correlated again, which suggests that the Phillips Curve is "functioning" now.
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"How Long Til All Hell Breaks Loose": This Is Now The Strongest Ever Rally During A Fed Tightening Cycle
ZeroHedge
According to an analysis by Crescat Capital's Tavi Costa, since the first rate hike by the Fed in December 2015, some 34 months ago, the S&P has risen by 41%: that puts this post-hike rally in the top spot of all previous market advances in a time when the Fed has been tightening financial conditions.
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S&P 500's Rally Is Strongest Ever During a Fed Tightening Cycle
Bloomberg
“This is the strongest rally ever during a Fed tightening period, and now we are at record valuations,” Otavio Costa, a global macro analyst at the Denver, Colorado-based firm, wrote on Twitter. “How long until all hell breaks loose?”
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Moonshot Bitcoin Price Trigger Needs Halving and 2020 Global Recession
CCN
Moonshot Bitcoin Price Trigger Needs Halving and 2020 Global Recession
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The Daily Shot: U.S. Firms Are Losing Market Share in China
The Wall Street Journal
This chart shows the ratio of consumer confidence to the unemployment rate. Are we near the peak?
Honors & Awards
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Honors Scholar Recognition
Lindenwood Business School
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All American Scholar Athlete
Lindenwood Athetic Program
Languages
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English
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Portuguese
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More activity by Otavio (Tavi)
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📣 IN A MARKET RULED BY BEARS 🧸, YOU’VE SHOWN THE STRENGTH OF A BULL 🐂 I’m excited to reveal that WEALTH (WCPD Inc) is the leading sponsor for…
📣 IN A MARKET RULED BY BEARS 🧸, YOU’VE SHOWN THE STRENGTH OF A BULL 🐂 I’m excited to reveal that WEALTH (WCPD Inc) is the leading sponsor for…
Liked by Otavio (Tavi) Costa
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Meanwhile: The Baltic Dry Index is inflecting higher again, much like it did during the initial wave of inflation following the COVID-19 lockdowns.…
Meanwhile: The Baltic Dry Index is inflecting higher again, much like it did during the initial wave of inflation following the COVID-19 lockdowns.…
Shared by Otavio (Tavi) Costa
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Venture capital is likely in the typical "return to normal" phase.
Venture capital is likely in the typical "return to normal" phase.
Shared by Otavio (Tavi) Costa
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Wouldn’t it be interesting if inflation bottoms out, but the Fed still has to cut rates to alleviate the government’s debt burden? Two words come…
Wouldn’t it be interesting if inflation bottoms out, but the Fed still has to cut rates to alleviate the government’s debt burden? Two words come…
Shared by Otavio (Tavi) Costa
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“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria” – John Templeton This quote perfectly captures…
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria” – John Templeton This quote perfectly captures…
Shared by Otavio (Tavi) Costa
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Even as risk-free rates decline, auto loan rates stay significantly higher, a common trend during major economic downturns. This widening gap serves…
Even as risk-free rates decline, auto loan rates stay significantly higher, a common trend during major economic downturns. This widening gap serves…
Shared by Otavio (Tavi) Costa
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Yet another significant decline in goods trade balance data, and the US government continues to bleed on both the fiscal and current account fronts.…
Yet another significant decline in goods trade balance data, and the US government continues to bleed on both the fiscal and current account fronts.…
Shared by Otavio (Tavi) Costa
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Value investing 101. Brazilian equities are currently as undervalued as they were before the secular bull market of the early 2000s. If you ask…
Value investing 101. Brazilian equities are currently as undervalued as they were before the secular bull market of the early 2000s. If you ask…
Shared by Otavio (Tavi) Costa
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