David Einhorn Lays Out The Blindingly Simple Reason Why Soaring Inflation Can Not Be Transitory | WHAT REALLY HAPPENED

David Einhorn Lays Out The Blindingly Simple Reason Why Soaring Inflation Can Not Be Transitory

For much of the past year, it looked like it would finally be David Einhorn's year: his Greenlight, heavy invested in the reflation trade while still shorting the infamous "bubble basket" which notably includes Tesla, was rising by single-digits every month and seeking to put an end to the fund's dismal performance in recent years. And then everything reversed when during the second quarter, value stocks stumbled and growth/tech names surged amid a broad-based backup in the reflation trade, hammering the fund's P&L so much so that in his latest letter to client, David Einhorn writes that his fund dropped 2.9% in Q2 (vs 8.5% for the S&P), as "longs contributed 5.3% in the quarter while shorts detracted 4.6% and macro detracted 3.3%."

So what happened, and does Einhorn agree with the prevailing central banker consensus that inflation is transitory?

Naturally, for a fund which in the past decade has been pressing its reflationary bets - and betting heavily on such assets as gold - the answer is no, and as Einhorn explains there continues to be “too many dollars chasing too few good and services”, sharing the following blindingly obvious reason to reject the false chorus of "transitory inflation" cries: "we believe we have reached a structural change in inflation. Part of that is driven by public policy, but part of it has been driven by capital markets and ESG mandates." (For more on this. please see "Why One Bank Thinks ESG Could Trigger Hyperinflation"). He goes on:

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