The fact that bond yields are UP today is the most noteworthy thing, imo.
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But bond yield if getting higher?
It fell sixty basis points over last week .. some profit taking going on .. small recovery this morning .. I am expecting Bessent would bring it down to 2 percent and force the hands of Powell ...to bring short term fed rates down to 3 percent ..
That is when growth stocks ( including #bitcoin ) kick back in ..
Powell is not acting right !
Indeed
So more printing, brilliant.
Yes .. you can't bring manufacturing back to US if dollar gets stronger .. that is simple arithmetic given China and India are in race to devalue their currencies ..
Good for asset holders .. socialism for the poor !
Nobody stops this train?!?!
Good evening #nostr
I thought we're killing the stock market to bring down the yield?!?
Luke Growman has some great tweets about this recently. Including ones laced with dank memes. He started calling the flip to rising 10 year a week or so ago. You and him should just team up and be like a science fiction duo called “The Enlightenment Tribunal” those who all other federal reserve demi gods answer to at the end of time and space.
I know advisors. This isn't panicking their clients like something like this usually does. Maybe because they realize the Fed putt will make everything OK and Covid triggering the Fed putt so recently they aren't panicking selling they are calling and saying what bonds should I sell to rotate into equities.
I think this is saying. People are just loading up. Which in my mind means people think trump will negotiate his way out of this and we will be in a better place in the next few months.
Selling bonds that didn't get crushed with the markets and loading up for the rebound. We went positive with one fake news tweet about a pause on tariffs. Imagine what happens when a handful of countries see this as an opportunity to become the US's largest trading partner and says hey tariffs us 5% we will put no tariffs on you, let's do this.
The world is a freemarket more than the stockmarket is a freemarket. Countries will come crawling in trying to ink the best deal with the US. Markets will explode and we will have brought working class jobs home and flipped the perpetual get fucked on tariffs perpetually market on its head.
Your not bullish enough. 😘
I believe this, but I also worry I believe this sometimes.
I’m a risk averse lawyer who is always looking for the worst case scenario. Winning is hard to appreciate.
Everyone keeps saying that's telling us something. But, I'm not smart enough to know what that is.
Meaning: Bonds are less of a hedge for Stocks?
J Pow is still the conductor on the Mortgage Rate Train?
Isreal and US 0 for 0 tarrifs starting immediately. 1 down few 100 more to go.
Many many countries coming to negotiate. Japan coming and they are going to have to open up their country.
Interesting
Is the market expecting a shortage of dollars in the near term?
All assets (equities, bonds, bitcoin, even gold) are selling off now so there’s a flight to cash.
What breaks next?
Very unexpected.
What do you suspect is happening oh wise one?
Explain to me why like I’m a retarded middle schooler
Inflation was priced much lower than expected, interest rate should have started at 5-6%, the plan aims to devalue the dollar by up to -20% over the years. Soft increase I guess.
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You mean because not considered a safe haven?
Where is all the cash going?
Stocks down
Bonds down
Gold down
Bitcoin flat
People just selling into cash and holding it??
I’ve been kind of teamed up with Luke in the macro sense since like 2019.
Many people ask why.
The short answer is because nothing stops this train.
The longer answer is that 1) the rest of the world isn’t buying as many Treasuries anymore, 2) investors prefer cash to Treasuries, and 3) there are now balance of payments issues and so the United Stated has EM-like characteristics where stocks and bonds can struggle together due to capital outflows.
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Most of what he talks about is not what should happen but how things will happen based on prior decisions.
I have about 80% agreement with him and differ on the other 20%. But he’s the best macro analyst at describing these incoming trade and deficit issues for years and how to position.
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China dumping treasuries?
Watch the context of those statements.
Post nudes
I did - that's why I linked the video
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That's gay
You might want to understand the context. He's talking about how things are. Not how he would like them to be.
His understanding of how things are is wrong.
Frauduluent government spending does not help the government pay down its debts.
If the government cut 2% of GDP worth of spending the result would not be to impoverish the country by 10%.
This is all just Keynesian batshit crazy stuff. If you understand the Seen and the Unseen (see my comment in the post linking the video) this is very obvious. The Seen & Unseen is the key idea of economics; it's practically the entire discipline. So if Gromen doesn't understand that, he has zero credibility for me as a macro-economic predictor.
No He's saying in the current situation cutting spending lowers asset prices. Which lowers tax revenue.
If you lower the revenue before renegotiating the debt you fall into the debt spiral faster
That logic is absurd, which can be seen by re-framing it in the other direction.
"cutting spending... lowers tax revenue"
So if you *increase* spending it will *raise* tax revenue by more than enough to make up for it. The US government can spend its way to a balanced budget!
No you're confusing long term effects and short term effects. Things in in the economy don't work linearly. A little bit of something doesn't always have the same effects as a lot of it.
In this case: the effects of cutting spending on asset prices is fairly immediate (look at the stock market) while the savings you get from fixing mal investment has to actually cycle through the economy.
The effect of cutting spending on government expenditure is even more immediate
Curious if you have theories as to who is selling. Tom Luongo suspects the UK, which tracks with their response that caused the panic of 1837.
Not on tax revenue
So how is it looking now with the treasuries?
It is great time for treasuries .. instead of US , investors are checking out Germany.. it is a process ..
I thought your thesis was yield has to go down, when it's clearly quite the opposite
Yes .. nothing ever goes down in a line .. besides Gold is always a better hedge in turbulent times .. that's is why my portfolio is always
30 : 30 : 30 :: BTC : GLD : VTI ..
Coming from Jack Bogle class of investing , I used to be 60 : 40 .. but I gave up on bonds in favor of BTC and Gold .. cuz Gold is ultimate hedge and BTC is good Karma !
Despite my own investments ( and temporary losses ) I still like Trump Bessant stgy .. someone is atleast trying to cover main street ..
Besides ..that is exactly why it is called reverse repo .. people who were long are selling to cover their losses ... It will fall sharper tomorrow..
Well, your thesis might have been right but reality ended up being drastically different
Yes .. you are right .. but look at the results ..
Trump got ten percent across the board ..that are good enough to fund the tax cuts ( including those on tips and Social security) .. he claims to have seventy countries for bilateral talks .. I would give him 35 :-) .. and he has China in the corner with 125 percent .. let say effectively half cuz Apple and Tesla would obviously get a pass ..
And markets are back ..roaring
What is lost is the idea that reputation is under question ... Well , in international relations , no one gives a flip .. it is all transactional .. politics is never an assumption!