Founder & President, Forest for the Trees (FFTT). Author of "The Mr. X Interviews, Volumes I & II.” I never solicit via DM's. RT not endorsements.

Joined December 2014
The signals lined up before — they’re lining up again. Here’s what we forecasted, and what happened next. Get “What we said and how it played out”, Vol. II here. 👉 fftt-treerings.com/what-we-s…
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Hedge funds own ~8.5% of UST mkt as of late last yr Many HF"s manage to monthly mandates with a max allowable monthly drawdown When equity vol gets "too high", HF's de-gross their positions, incl USTs This is partly why USTs have traded more like "risk on" assets in recent yrs
Bloomberg: Hedge funds' "absorption of US government debt has outpaced other US creditors, leaving the funds with roughly 8.5% — or about $2.7 trillion — of outstanding Treasuries as of late last year. It’s a noteworthy sum given hedge funds’ ability to move rapidly, leverage their trades and their flexibility in selling a Treasury security." #economy #markets #hedgefunds #bonds #yields
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MASSIVE potential implications for macro. Big non-sequitur for many narratives. “In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.” -Eric Hoffer via @hummusboi17
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1/ I’m recording a 5-10 min YouTube video to be released later this week; pls drop some questions below & I’ll touch on as many as I can on a best efforts basis. Thx! (Also, pls feel free to subscribe to my YouTube channel.)
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"If Iran gets nuclear weapons, you will not have a house to live in at all because Iran will nuke us, so if you think about it that way, the Iran war has not hurt the housing market at all." -Someone in the Trump Administration, probably, if asked about this headline
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Oil markets appear to be calling "bullsh*t" on both the Administration's "We control the Strait" narrative and its "Prices will be coming down after US midterms" narrative.
Oil traders are increasingly pricing the battle over the Strait of Hormuz as the new normal. Futures contracts for brent crude in December 2027 are now close to $90 a barrel, the highest ever and a sharp departure from even a month ago.
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Many western financial commentators & policymakers want to "decouple" v. China. But none of them want the UST market & western bond markets to blow up (which they will if the US "decouples" from China.) Decoupling from China cannot happen without Fed monetization of the debt.
Right now i am shocked that the EU isn't just totally shutting down China with what will be a $1.2 trillion surplus given that it has become an export behemoth on the backs of the workers in the EU.
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This was in my hometown, downtown Cleveland, right next to the theater district. The sound of racking a shotgun remains universally understood in every language.
Todo esto me hizo acordar cuando los de BLM quisieron saquear una panadería italiana en Ohio. Qué maravilla la 2da enmienda
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Luke Gromen retweeted
Interest + Interest-like obligations are >100% of receipts, & growing 2.5x receipts...& further Warsh hikes will increase interest & lower receipts (financialized economy). Asia doesn't need to get the timing right, just the event, which is crystal clear: /end
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Important observation given that Warsh said he wants to "stay in his lane" regarding fiscal...but👇 proves THE single biggest swing factor in fiscal is Warsh's rate hike decisions. Warsh is either operating under a misapprehension or lying to himself (& therefore to all of us):
A more useful observation is that rate hikes now have a large, direct fiscal price tag. This does not reduce "fiscal capacity" (which is about the ability to meet payment obligations of any size) but "fiscal space" (which is about inflation risk associated with making those payments). The right question: Is the stream of interest payments inflationary, given who receives the interest as income?
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Luke Gromen retweeted
Replying to @johnarnold
JPM CEO Jamie Dimon warned in 2016 that we had 5-10 years until Entitlements would become "a tragedy we can see coming", "creating intergenerational warfare & scapegoating [that] will make for very difficult & bad politics." Our cowardly leaders did nothing, so now here we are.
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10% price increase starting next month
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Some people thought they knew ‘what GDP was for’ - or rather what it *wasn’t* for. Then their utopian, ahistorical, we-misread-early-Fukuyama, self-serving stance was demolished by ‘history returning’. Which was always inevitable, as some of us have been trying to say for 25 years or more. The world system the BIS lorded over was ONLY built by U.S. military strength in WW2 and the Cold War - and then the global U.S. dollar they allowed to develop. But that global U.S. dollar meant fewer and fewer U.S., then Western, factories over time; so a weaker U.S. and Western military. And guess what? Everybody else didn’t get the message that history had ended and that was that and we could all drink champagne and toast the future. They had other ideas about what GDP is for. So, now the old global order is over and the U.S., and some of the West some of the time, is trying to rebuild something new yet far more Old School: Neomercantilism will replace neoliberalism, even if it will take the likes of The Economist years to be able to fully understand and then summarise it like that. Logically, one way or another, that is going to mean the inverse of what Craig describes below - lending for manufacturing being incentivised over finance and function over frivolity. Or, the U.S. and West can make even less stuff, be weaker and poorer, and end up severing drinks to those who understand the dynamic described above and below. All else is commentary.
I spent 35 years building banking systems for banks worldwide, including central banks. I know how banks decide where their money goes. When you build systems, you have to make them work, so you have to know how they work. The Basel Committee de-industrialised the countries that adopted its rules. It's that simple: I explain the whole complicated mechanism in my essay. They simply regulated it away because that was the most profitable thing to do. It was implemented in such a systemic global way, and nobody seemed to notice Capital is what a bank must hold before it can lend, the way a manufacturer or miner must hold supplies before it can sell. No miner doubles their costs to serve one group of customers. But that's what the banking system does to miners and manufacturers. Since 1988, the Basel rules have required banks to hold twice the capital against a factory loan as against a home loan, and under Basel III the gap reaches five times. So banks lend less to industry and more against houses. It should be stopped tomorrow. Manufacturing's share of GDP fell in ten of the eleven countries I examined. In Australia it fell from 13.7% to 5.4%. Every other country that followed fell as well. The only truly crafty ones were the Koreans, who did a good job of offsetting it. Regulators were warned in writing that the rule would steer credit, and they adopted it anyway. No parliament voted for it, and it's simply too dumb to keep doing, but we do . Not today; there is no justification. Yet from India, across Europe, across the US, including Australia, sanctions against industrial capacity. Financialization has gone too far it needs to be reviewed . The charge is manslaughter by gross negligence. The mechanism is proven. Same Rules, Different Ruins:ctindale.substack.com/p/same…
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Thanks for having me on the podcast, @Crowded_Mkt_Rpt! I enjoyed our conversation.
Decided to publish the discussion with @LukeGromen a day early! If you are still confused about what is happening with rates and fixed income, this should help. Can Gold Save Bonds If The Fed Fails? Luke Gromen Details His Solution! youtu.be/EpQfO4YVM90?si=eLDe…
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Suggests US either: -Didn't want to defend these sites -Couldn't defend these sites, or -Ran low on AD missiles to defend these sites ...none of which match consensus views. Also suggests Russian & Chinese satellite targeting help, which suggests an ability to strike again.
Iran’s missiles and drones have hit Gulf infrastructure sites at least 135 times, causing cascading failures that governments have often concealed. Reuters found the equipment struck was, time and again, exactly what mattered most reut.rs/4ioTXT5
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Ladies and gentlemen, THIS is how you pimp a home run... 😂
Petey Halpin just flipped his bat to the clouds
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“My name is Petey, and I hit gigantic balls!!”
PETEY HALPIN ERUPTS CLEVELAND
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