Konstantin @Zolding_Man

Tomorrow, one possible outcome after the Fed hiked, is that we may discover that tightening doesn’t lower long-term yields. If that happens, it would confirm that fiscal is the culprit in the whodunnit saga. By raising the government’s marginal funding cost, a rate hike enlarges future interest deficits and increases the amount of debt Treasury must place with private investors. If investors doubt that fiscal policy will offset those costs, the term premium could rise, pushing long yields higher and reinforcing the deterioration in debt service.

Latest Treasury TIC Foreign Holdings report. Since Iran war started in Feb... -Japan sold $123b (1st red arrow) -China sold $61b (2nd) -Foreigners sold $190b in total (ie mostly Japan & China) -Foreign Central Banks sold $233b (4th) 10y UST yields now up 80 bps since Feb 27th.

While commentators are losing their shit over the guy backing down, he’s out here pulling in $100 million like berries off a bush, running his wife a bath of Cristal, and washing it all down with a Diet Coke. Meanwhile, we’re still jerking off to the geopolitical chessboard.

If even Chuck Norris can die, what hope is there for the rest of us?

Nice

Jeffrey Gundlach @TruthGundlach

7 months ago

“Our fund’s performance remains strong”, but we can’t meet the redemption requests. Wow.

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Bloomberg: “Blackrock Inc. slashed the value of a private loan to zero just three months after assessing it at 100 cents on the dollar, marking the second sudden wipeout to recently hit its private-credit division.” Maybe it’s a trend.

@McFaul Michael McFaul, aren't you ashamed?

!

Wasteland Capital @ecommerceshares

8 months ago

Korean investors getting margin called doesn’t bode well short term, as they have large holdings in US growth stocks. They went from holding $44bn in US stocks in 2022 to $172bn in January this year, especially heavy loaded in story stocks.

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The question is NOT "Will AI take all the white-collar jobs or not?" (It won't.) The questions are: 1. "How many white-collar jobs does AI have to take to trigger a consumer credit, & then government receipt & global sovereign debt crisis?" 2. "How fast will that happen?"

*Walter Bloomberg @DeItaone

8 months ago

S&P 500 BANKS INDEX FALLS 3.6%

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Fucking legend!

Cassandra Unchained @michaeljburry

8 months ago

@aakashgupta Well, I have called just about everything significant that has happened the last 26 years. It's hard to say I've never had the timing right. I was short Amazon at the top in 2000. I went way long small cap value in late 2000. I bought AAPL in 1998 and then again in 2002. In

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Well, I have called just about everything significant that has happened the last 26 years. It's hard to say I've never had the timing right. I was short Amazon at the top in 2000. I went way long small cap value in late 2000. I bought AAPL in 1998 and then again in 2002. In 2003, I got into Korea stocks before a big run. In 2004, I got into China stocks before a big run. In 2004, I got into oil before a big run. I bought gold in 2005 and still 20 years later... In summer 2005, I figured I was buying 5 years swaps on something would print within 2, and it did. In 2008, October, I told my investors it was time to buy. More stocks bottomed then than in March 2009. In 2009, I invested in Almonds/Water, it worked ok. In 2013, I moved to buy Bitcoin after meeting with a friend at Lightspeed. I should have. Slept on it and did not. In 2015, I bought NVDA. The CFO knows. In 2018, I started pounding the table on Japan and opened a Japan fund, which I had to close for COVID. In late 2019, I warned indexing and passive investing would make for very corrlated severe drawdowns in the market, and COVID hit 6 months later, we got the most correlatedl, sharp decline in modern history. Early 2020, I entered 2020 very short. Which worked. During early COVID I loaded up on stocks and had nearly a 100% year for the fund. In 2020, I called lockdowns would be disastrous for women and children, and went on Twitter to say it. IN 2020, I got GME to buy back 1/3 of its stock and change its board. Did ok. July 2021, I gave Barron's an interview to warn on specific meme stocks at the top, and they crashed through Dec 2023. 2021, I warned about very high inflation from the policies that were being undertaken. 2023, I warned people to sell because I saw the banking crisis coming. I told them all was clear at the bottom in March as I could see it wouldn't be contagious. 2020s, I shorted Tesla, but these were trades, and it was volatile. I did not lose money overall shorting Tesla. Had some really big quick wins. Plus Tesla is only worth about $120. I am not perfect, I did not hold AAPL or NVDA long enough, in 2025 we were up almost 100% again by Liberation Day, and I lost most of the gain (still up about double digits for the year at closing) but I would put the calls I've made over these decades up against anyone. I would add visual proof for all this, but it is too much for this medium.

The channel is the multiplier: the wider the reach and the higher the trust, the more people it will «infect».

It’s sad and paradoxical, but no matter how absurd and detached from reality your nonsense is, if you deliver it with absolute confidence and a straight face, someone will buy it.

Something to ponder: The "Sovereignty Spread" is the difference between the market price of a commodity and the system-level cost a state is willing to bear to suppress that price. In traditional company accounting, a mine that costs $50 per ton to operate and sells at $45 is a failure. It shuts down. But at the system level, that same mine is rational if its output reduces input costs across a much larger industrial base. The new Simandou iron ore mine in Guinea is the perfect proof of this mechanism. Think of Simandou not as a mine, but as a deflation machine. It is the world’s largest high-grade reserve, unlocked by a $20B railway financed by China (Baowu). To a Western miner, that $20B capital cost demands a 5-6 year return on investment based on selling ore. But China imports roughly 1B tons of iron ore annually. By introducing 100M tons of new supply, they don't need to make a profit on the ore; they just need to crash the global price. A mere $10-per-ton reduction yields annual savings of $10B across their remaining import volume. Simandou pays for itself in 24 months simply by forcing Rio Tinto and BHP to lower their prices. But the mechanics get worse for the incumbents when you look at the physics of the ore itself. Comparing a 100M ton order for Simandou’s 65.5% grade against Fortescue’s 57% grade reveals a double penalty. Processing the lower grade dirt yields 8.5 M tons less steel. To get the same amount of metal, the mill must purchase an additional 15M tons of Fortescue ore. At $100 a ton, that is a $1.5B surcharge just to stand still. Then comes the energy penalty. The impurities in that low-grade ore force the blast furnace to burn significantly more fuel .. That is an extra $1.1 B coal bill. On a nominal 100M ton contract, the steelmaker using Simandou effectively saves $2.6B compared to the rival using Fortescue. This renders the competitor’s product mathematically obsolete. Fortescue is not selling a cheaper alternative; they are selling a liability that requires a multibillion-dollar subsidy from the customer just to process. The final nail in the coffin is the carbon profile. That $1.1B in extra coal is a carbon bomb, releasing 20 M tons of additional CO2, roughly equivalent to putting 4M cars on the road. If you price that carbon at $50 a ton, you add another $1B to the bill. We have reached a point of tragic irony where Simandou’s high-grade ore, dug by diesel trucks, is greener than Fortescue’s low-grade ore, dug by battery trucks, simply because the emissions occur at the smelter, not the mine. FMG looks like the Blackberry phone of Iron Ore producers The precise magnitude and timing of this effect are not fixed. The price response depends on global steel demand, Brazilian supply elasticity, scrap substitution, freight spreads, and inventory cycles. But the asymmetry is structural, not cyclical. At China’s import scale, even a partial and temporary suppression of the clearing price generates multi-billion-dollar annual savings that overwhelm project-level losses. Therefore, the model is robust across a wide range of market conditions, because it is driven by volume dominance and grade physics, not by assumptions of perfect execution or static demand. This is how State Capitalism competes with Western Stateless Capitalism. The project’s payoff does not depend on the mine's profitability; it depends on eroding external pricing power. If you project this model across Copper and Nickel, you see the future. The entity that focuses on the quarterly profit of the mine will always lose to the entity that monetizes the efficiency of the factory. It changes mining valuations across the board.

You guys realize that all software is about to be free, right? And software is presently the most valuable capital asset, right? Guys?

It would have gone like this: "oil, oil, oil" Oil was the chokepoint that determined who controlled industrial capitalism itself at the time. Rockefeller understood something fundamental: whoever controlled oil controlled transportation costs, manufacturing inputs, and illumination - the three pillars of economic activity in the late 19th century. Standard Oil wasn't just an oil company; it was a tax on every railroad mile, every factory hour, every lit room in America. He built horizontal integration so complete that by the 1880s, Standard Oil refined 90% of America's oil and controlled the pipeline infrastructure that moved it. Morgan understood the same principle from the opposite direction. He controlled the railroads, but railroads ran on customers who needed to move goods produced by factories. Those factories needed power and lubrication. Those goods needed to reach markets lit by kerosene lamps. Every component of Morgan's industrial empire, U.S. Steel, his railroad network, his equipment manufacturers - depended on affordable, reliable energy inputs. Oil wasn't just another commodity to finance; it was the metabolic rate of the entire industrial system he was assembling. So when those two sat in a room, they likely were discussing the fundamental architecture of industrial power. Rockefeller had monopoly control over the energy substrate. Morgan had monopoly control over the transportation and manufacturing infrastructure. Each was the other's critical dependency and potential bottleneck. The question wasn't whether to collaborate, it was how to structure the terms so neither could weaponize their chokepoint against the other. This is why oil matters strategically in a way salt or timber never could: it's the commodity that sits at the intersection of transportation, manufacturing, and agriculture (later, petrochemical inputs). Control oil, and you set the terms for everyone else's cost structure. That's not a business - that's geopolitical leverage embedded in market mechanics.

Anthony Pompliano 🌪 @APompliano

11 months ago

I would have done anything to sit in a room and listen to John D. Rockefeller and J.P. Morgan discuss their businesses.

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A Slow Burn Crisis Is Finally Showing Up in the Data 655 large U.S. companies have gone bankrupt through October, more than any full year since 2010, and the year isn’t even over yet. And these aren’t corner stores or tiny startups. They’re big, asset heavy firms: industrials, consumer discretionary names, healthcare operators. When the top of the corporate stack starts cracking, it tells you the stress is broadening. The pattern is straightforward: stimulus and zero rates held everything together in 2020–2021, things looked deceptively calm in 2022, and then the pressure started building in 2023 and 2024. Now the adjustment is here. Companies that refinanced at 3% money back then are staring at 7–10% today. Some can handle that shift. A lot can’t. What’s Driving the Spike A few forces hit at once. Higher rates are the obvious one: the refinancing window that looked miles away in 2021 is now on top of companies with weaker balance sheets. Costs never really rolled back either…wages, inputs, insurance, transportation all of it stayed sticky. And demand isn’t as strong as the headline numbers suggest. Lower income consumers are stretched, inventory cycles are uneven, and certain sectors just don’t have the pricing power they used to. Credit hasn’t disappeared, but it’s gotten selective. Good credits can refinance. Everyone else pays up or ends up in court. And that’s what you’re seeing here: restructuring, not liquidation. It’s a sign of a stressed system. How This Fits Into the Bigger Macro Picture At the same time this wave of bankruptcies is building, the Fed is quietly shifting gears. QT ends on December 1. All maturing Treasuries will be rolled over. MBS runoff gets steered into T-bills. So the front end of the system is getting easier while the long tail of corporate debt is still adjusting to a higher rate world. Liquidity is improving where markets feel it first…repo, bills, cash instruments but that doesn’t erase the damage already baked into corporate balance sheets. This is why you can have smoother funding markets on one hand and the highest bankruptcy count in 15 years on the other. One reflects what the Fed can influence today. The other reflects decisions made five or ten years ago. My Take This is the credit cycle playing out…the slow, grinding kind where weak companies restructure, strong companies survive, and the market pretends everything is fine until suddenly it isn’t. Defaults aren’t a surprise; they’re the cleanup phase. And that’s exactly where we are. So the way I’d frame this chart is simple. The adjustment didn’t happen when rates went up…it’s happening now, as those old debts finally come due. The Fed can smooth the plumbing, but it can’t rewrite the math.

The Kobeissi Letter @KobeissiLetter

11 months ago

BREAKING: 655 US large companies have gone bankrupt year-to-date, the highest number in 15 years. This has already surpassed all previous full-year totals since 2011, except for 2024. Since 2022, bankruptcies have risen nearly +100%. This comes as 68 companies filed in

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Michael Burry shutting down his hedge fund and opening a blog is the best thing to happen. Now we may get to see more in-depth thoughts and market commentary instead of just surface-level news. One of my favorite lines from his earlier letters: "A wildly fluctuating dollar selling for 40 or 50 or 60 cents" is far less risky and more attractive than a dollar that consistently sells at 1.1X face value" Another great one: "It is a tenet of my investment style that, on the subject of common stock investment, maximizing the upside means first and foremost minimizing the downside. The deleterious effect of permanent capital loss on portfolio returns cannot be overstated."

looks reasonable

EndGame Macro @onechancefreedm

11 months ago

Why I Think Michael Burry Is Shutting Down Scion Now Let’s put a few things together…Burry’s liquidation letter, his depreciation thread on the hyperscalers, and his “me then, me now” Big Short meme and he’s basically spelling out one story. He thinks we’re in an earnings

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This chart = reshoring industrials and rebuilding the grid will be much more inflationary than expected = we will need YCC or we won’t succeed in reshoring bc the bond market will blow up due to inflation first.

Javier Blas @JavierBlas

11 months ago

CHART OF THE DAY: While most of the critical minerals talk in the US is about rare earths, something far more important is happening: US aluminum all-in costs have surged to a record as traders/smelters demand huge physical premia on top of LME prices due to Trump’s tariffs.

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