We continue to believe the Trump administration will be successful in removing the friction holding back the US economy. The removal of burdensome regulations will help the banking system to lend out over $2 trillion in excess bank reserves. Combined with the repatriation of over $1 trillion, this capital will be the foundation for stronger US growth in 2018. Working against the President is Congress who are unsure about how to reach these goals. Combined with the Federal Open Market Committee operating in pre crisis mode, the policy makers are keeping the US economy at 2% GDP growth. This battle between the President and policy makers are being tested for the first time in the passage of the American Health Care Act, considered by some as a bellwether for the President’s ability to deliver on tax reform and infrastructure spending plans. Repeal of the Affordable Care Act, though with much assistance from the President, is Speaker Paul Ryan’s responsibility to pass or redesign. If the American Health Care Act is not passed we do not expect the President to maintain a linear path in governing but rather seek out those regulatory and tax policies solutions to get the US economy back on track.

The greatest challenge for the US economy is the inertia of Congress and the Federal Open Market Committee ignoring the historic excess bank reserves not seen since the Great Depression. The FOMC is operating as if the economy were in a pre-crisis period when excess bank reserves 0 and demand is greater than supply for cash. We are seeing leadership out voting member Minneapolis President Neel Kashkari who is insisting on a plan to unwind the $4.5 trillion Fed balance sheet before raising rates any further. Now, if the Fed would stop paying interest on the $2 trillion of excess bank reserves, the US economy would have a far better chance at 3 - 4% GDP growth.

On Friday March 17th, we sold our position in $Yen at 112.72 for a loss as Eur/Yen fell and the US$ came under pressure from a less hawkish FOMC. On Monday, March 20th we bought back our short in the US 10yr at 2.48% for a loss, yields move in opposite direction of price, as the long end of the market became concerned the Fed tightening was slowing down the US economy. Today, we bought the S&P at an equivalent index price of 2058 as the markets equity markets sold off as concerns for passage of the health care act came under question. Currently, we are long the S&P and short the DJI bias long.

In 2012 modeled performance (7 ˝ mo.) net of all fees was +12.46% with a 10% Hurdle rate
In 2013, modeled performance net of all fees was +19.73% with a 10% Hurdle rate
In 2014, modeled performance net of all fees was +56.42% with a 10% Hurdle rate
In 2015, modeled performance net of all fees is +72.68% with an 8% Hurdle rate
In 2016, modeled performance net of all fees is +52.12% with a Graduated 10% Hurdle Rate
In 2017, Fund performance net of all fees is -4.11% with a Graduated 10% Hurdle Rate

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Disclaimer:

The Unicorn Macro Fund, LP (“Fund”) operates under the SEC rules of 506(c) of Regulation D. This rule allows general solicitation as long as all purchasers of the Fund are accredited investors and the Fund takes reasonable steps to verify that purchasers are accredited investors. The 506(c) rule benefits funds that perform better than their peers, because for the first time, Regulation D funds can post their results publicly.

The Fund trades both long and short positions in a variety of global markets and its performance is not correlated to any one market. Performance of the model of the Fund is measured by Net Asset Value (NAV) which is net of all fees, is unaudited, and may include the use of estimates. Individual results will vary based on the timing of an investment and past performance is no guarantee of future results and there is a possibility of loss.

The modeled results are based only on capital appreciation from macro style trades. The results do not include dividend reinvestment or any other form of cash flow and are taxed as ordinary income. All trades have a risk/reward objective of at least 3 to 1 and each full position risks no more than 2% of assets. There will be times when market conditions may alter these objectives. Since the inception of the model our trading of the methodology has become more precise.