High Impact in the Gulf

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Gulf Disruption, Where is the Trade?

“Over the last decade, at certain inflection points each year we listen to our best relationships in the advanced weather forecasting space and believe a hyperactive hurricane season is on the
way. A possible 18-22 “named” storms/hurricanes compared to the 30-year average of a 13 storm season. The primary reason? Significantly warmer-than-normal Atlantic surface temperatures are with us. This balmy water is pure lighter fluid, propelling storms all the way from the African Sahel toward the Caribbean and beyond. Hurricanes often cause immense property damage; loss of human life and we hope none of these events transpire. However, for market participants, we offer three scenarios and strategies to hedge against encroaching hurricane risk. Should a hurricane enter the Gulf of Mexico, we believe a strategy of long refiners and short (re)insurers presents the best hedge. However, if the beast aims for the Eastern Seaboard, a combination of long natural gas and short (re)insurers provides the best plan of action.”

Bear Traps Report, August 19, 2020, institutional investors, FAs, RIAs, CIOs, and investment professionals, email tatiana@thebeartrapsreport.com for a copy of the investment thesis and the FULL report.

Here Comes the Story of the Hurricane
“The models are showing something unprecedented this morning, two storms make landfall within 24 to 36 hours in essentially the same spot.”

Aaron Carmichael, a meteorologist with the commercial forecaster Maxar.

The Fujiwhara Effect

If both cyclones perform an elegant dance and slip around each other. They would orbit a common center, with Laura likely propelled west-northwest while Marco’s northward progress could be slowed. – WP




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