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Joe Weisenthal’s Take Down Of The ‘Debasement’ Trade
Bloomberg’s Joe Weisenthal wrote an interesting article (Maybe ‘Debasement’ Isn’t The Best Way To Put it), sharing his opinion on the rising popularity of the so-called debasement trade. The debasement trade logic that Joe generally debunks is growing very popular in the media, per the Bloomberg graph below. While Joe thinks the debasement trade logic […]
Oct 21, 2025
SRF: The Fed’s Newest Liquidity Backstop In Action
In July of 2021, after the pandemic and the liquidity issues that arose in 2019, the Fed established a new liquidity backstop. This program, the Standing Repo Facility (SRF), allows financial institutions to borrow on a collateralized basis from the Fed. Unlike the Overnight Reverse Repurchase facility (ON RRP), which allows financial institutions to park […]
Oct 20, 2025
Liquidity Warning: SOFR Raises The Red Flag
In our Daily Commentary from October 9th, we alerted readers to the fact that the Fed’s Overnight Repurchase Program was warning that the financial system was running out of a reliable store of excess liquidity. While not a concern, as we share in our quote below, it was worth monitoring. Said differently, after years of […]
Oct 17, 2025
Is QT On Its Last Lap?
Chairman Powell spoke on Tuesday, addressing several topics. Of note was the following quote: “We may be approaching the end of our balance sheet contraction in the coming months.” The market interpretation is that QT is ending soon. As a reminder, QT, also known as quantitative tightening, has been in effect for over three years. […]
Oct 16, 2025
Dollar Correlation: Implications For Foreign Stock Indexes
On Tuesday morning, Bloomberg published an article titled “The Great Debasement Is Rippling Across Markets.” From the start of the year until its low in the middle of September, the US dollar index fell by nearly 15%. The weak dollar seems to fuel the debasement narrative, benefiting a few asset classes. The most obvious assets benefiting […]
Oct 15, 2025
The AltCoin Liquidity Bloodbath
Last Friday, the cryptocurrency market experienced a violent crash. The trigger was President Trump’s announcement of a 100% additional tariff on Chinese imports. The sudden and unexpected action reignited fears of a full-blown trade war. Global risk assets fell sharply. Of these, the most notable declines occurred in the cryptocurrency markets, particularly the altcoin market. […]
Oct 14, 2025
First Brands: Canary In The Rehypothecation Coal Mine?
The First Brands Group, manufacturer of auto parts, including Raybestos brakes and FRAM, filed for bankruptcy on September 29th. This bankruptcy is troubling in two ways. First, per the ZeroHedge chart below, the price of First Brands loans fell by 80% in a day. In other words, the loan market had no clue of financial […]
Oct 13, 2025
The AI Trillion Dollar Question
According to The Wall Street Journal, on an inflation-adjusted basis, technology companies have spent more in the last three years on data centers, chips, and energy than has been spent over the past forty years building out the nation’s interstate system. The massive amount of investments being put to work is stunning. But the Wall […]
Oct 10, 2025
Excess Liquidity: Where Art Thou?
The graph below, courtesy of the St. Louis Fed, charts the amount of money in the Fed’s overnight reverse repurchase agreement (ON RRP) facility. To understand why the current lack of a meaningful balance in the program could become concerning, let’s revisit the Fed’s response to the Pandemic. During the pandemic and global economic shutdown, […]
Oct 9, 2025
OpenAI: Fueling Massive AI Stock Gains
As we led in yesterday’s Commentary, AMD rose 25% on the news that OpenAI would purchase 10% of AMD. In exchange, OpenAI will become a significant customer of AMD. This symbiotic relationship is just one of many that OpenAI is forming with companies at the forefront of the AI revolution. The bullet points and graphic […]
Oct 8, 2025
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