Two Plus Two Equals Fish

When you’re right, and the market says you’re wrong anyway.

The Big Short Moment

One of my favorite scenes in The Big Short is when Jamie and Charlie at “Brownfield Capital” are finally being proven right — the mortgage market is collapsing, everything they predicted is happening — and yet the value of the things they’re shorting keeps going up. Their models were right but nobody cared. And for a while, it didn’t matter.

The market can stay irrational longer than you can stay liquid. Two plus two equals fish.

That’s how I feel about the Civitas–SM Energy merger! I called it ages ago. I own both stocks to play the synergies of the combined entity which combined with $80 oil and $4.50 gas rips! (Not investment advice). And yet, I’m badly underperforming Coterra — who’s stock was partially the source of funds for my Civitas-SM idea. Apparently, Kimmeridge is a much better activist investor than me!

But this isn’t really about oil stocks. This post is instead about what continues to happen as reality refuses to price in truth.

Trump, Tariffs, and Stimmy 2.0

As we discussed earlier this week, President Trump is facing a potential Supreme Court ruling that will limit his tariff power and possibly even lead to refunds of all of them. Instead of, oh, I don’t know, just passing them through Congress he tweets “this.”

Politically? Probably brilliant. Economically? Insane. When (my real prediction) he loses the Supreme Court case, he can tell the potential recipients it’s not is fault that they took away their stimmy 2.0 check.

But the bigger point is that we already tried this already in 2020 to bribe the masses. We mailed out free money and pretended it didn’t matter that we were already $28-trillion-plus in debt.

Now it’s $38 trillion, and the people in Washington are still nodding along like this is normal.

Here’s what those checks actually did: in March 2020, Bitcoin was $6,800. Eighteen months later, it hit $60,000. Gold ripped. Silver surged. Every asset ballooned. None of that was productivity. It was currency debasement. Kids thought crypto and meme stocks were the only way to prosperity. For some of them, they were right. So now we’re about to do it again.

The Third-World Employment Trap

Meanwhile, under the surface, the real economy is eroding. Unemployment among 20- to 25-year-olds is north of 9%. That’s not a first-world metric. That’s the number you see in places where hope leaves before the lights do. I worry greatly for my almost 21-year old and his nearly 19-year old brother.

We’ve built an economy where kids are still told that college is the ticket to stability — but I believe more everyday that the real future is in the trades. Something that can’t be replaced with AI.

When I visit one of the houses my partners and I are building, I can’t tell you how much I enjoy watching the plumbers, the electricians, the framers, and the guys setting the nano doors — it’s artistry. It’s real. And it’s necessary. A degree in “women’s studies….” is not.

The 50-Year Mortgage and the Death of Ownership

To make matters worse this weekend, to “fix” housing affordability, President Trump proposed a 50-year mortgage. Great! Now you can pay double the lifetime interest for the privilege of pretending you own something. Best news for banks. Ever.

Sadly, the housing market has been a currency illusion for decades. We call it “appreciation,” but it’s really just inflation with better marketing. When your house rises 3% a year while the money supply rises 10%, you didn’t make anything. You didn’t even keep up. Track the S&P vs. any time period of house price appreciation and you’ll see it’s 4-6x the performance.

The hard truth? If you locked in a sub-4% mortgage between 2020 and 2023, the smart move isn’t to sell — it’s to renovate. Expand. Upgrade. Which is why the real upside in this economy is in tangible work — the plumbers, the drywallers, the tilers, the people still building things the world actually needs.

AI and the Death of Credentialism

I know my legal friends hate this take, but I see it every day: the most disrupted industry of the next five years will be law.

AI can already draft contracts, form LLCs, write employment agreements, and review terms better than most junior associates — and it doesn’t bill by the hour. The only reason we still need “Big Law” is because the system is built around writing agreements that screw you in every possible way.

If you’re starting a business, loaning money, buying property, or writing an operating agreement, AI plus a 15-minute legal review is enough. The moat is gone. The future of work is tangible and technological — not bureaucratic.

And my law student peers will have $185,000 of debt to go with that new reality.

Currency Debasement Is the Only Real Growth Left

When you can’t grow output, you grow the illusion of wealth instead. $10 million is the new millionaire because $1,000,000 doesn’t buy what it used to.

Gold is over $4,000. Silver is above $45. Bitcoin’s $100,000. None of that is the sign of a strong economy. Mr. Market is quietly screaming that dollars are dying. Sadly, the only President I thought that had the balls to address it is instead planning another $2,000 send out, instead of cutting defense spending $500 billion a year and raising the social security age to 75. Because the political class can’t care: the only thing worse than pain now is blame now.

The Permabear’s Dilemma

I’m a permabear by nature. But reading the tea leaves, it feels reckless not say YOLO and go even longer on the currency debasement trade.

If the system insists on burning the dollar to prop up the illusion, then the only response is own the things that survive — real assets, labor skills, commodities, and even crypto.

Because two plus two might continue to equal fish but eventually, math wins. And when it does, I’d rather be holding something real. I’m just not sure what “real” is anymore.