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The only reason I do not allow my children to play in the middle of the highway is the cars speeding at 70 MPH. Otherwise, the highway is open as a playground.

Something has broken tonight in the bond market. We are seeing a disorderly liquidation. If I had to GUESS, the basis trade is in full unwind. Since Friday's close to now ... the 30-year yield is up 56 bps, in three trading days. The last time this yield rose this much in 3 days (close to close) was January 7, 1982, when the yield was 14%. This kind of historic move is caused by a forced liquidation, not human managers make decisions about the outlook for rates at midnight ET.

July 19 MetLife Stadium East Rutherford, New Jersey Might be the most expensive tickets ever sold in North America.

Cook refusing to leave puts the Fed in a difficult position. If they allow her to continue with her duties as Fed Governor, starting this morning, and the courts find that the President does have the authority to fire her, even if it's months later during an appeal, anything she does on behalf of the Fed as a Governor starting today will not be valid. And the Fed could be held responsible for allowing a non-employee to continue to act like an employee. Restated, if the Fed allows her to stay and continue to be a Governor, and the court rules that Trump can fire her (again, even if it is later in an appeal), then Jay Powell has potentially committed a "for-cause" offense for which he could be fired. (allowing a non-Fed employee to make decisions and policy on behalf of the Federal Reserve.)

Lots of really bad takes about SVB. Let’s try and correct This is not a solvency crisis like 2008. Bad loans or poor investments were not made. Money was not lost. So, everyone is going to get their money back. (And please no takes about no interest rate hedging. Asset/liability mismatches are how banking works.) Instead this is an old fashion 1930s liquidity crisis. Too many depositors demanded cash at once (as in right now) and SVB (and SI) could not convert loans and securities (and crypto) to cash that quickly. So, everyone is getting their money back from SVB (and SI), just not at 8AM Monday. And, yes this is a big problem as this is working capital for a lot of companies. They have payrolls to meet and vendors to pay next week. And if they don’t pay bills and employees, they in turn don’t pay their bills and this can quickly cascade into a major economic problem. The important question is why so many demanded their money back at once. And I’m not referring to the last two days. I’m asking about the days/weeks leading up to this last two days forcing SVB to sell securities and realize a $1.8B loss, necessitating a capital raise. Why were depositors withdrawing in big enough amounts before Thursday/Friday? First, welcome to the world of mobile banking. Gone are the frictions of standing in line with tellers instructed to count money slowly. (Media images of lines Friday were largely gawkers) How did $42 billion get withdrawn Friday alone without thousands in line? Answer, your phone! This is not the Bailey Savings and Loan anymore. This should scare the hell of bankers and regulators worldwide. The entire $17 trillion deposit base is now on a hair trigger expecting instant liquidity. Add in social media and millions get a message, like Peter Thiel telling Founders companies to pull out, or Senator Warren gloating that SI went under, and pick up their phone open a Chase account and Venmo-ed their life savings into it in 10 minutes. Instant liquidity (not solvency) crisis with everyone still in bed. Banking will never be the same. The second, and I did a long thread on this on Friday … banks are over-reserved, after 14 years of QE, and are still paying 0.50% on accounts when T-bills are yielding 5.00%. They don’t need to compete for deposits. Initially as rates passed 2%, 3% and 4%, the public did not notice. So bankers thought deposits were well anchored at their bank and not moving regardless of the interest rate paid. But at 5% the public finally noticed, and millions reached for the phone at once and transferred to a money market account or Treasury direct to buy T-bills. Banks were squeezed to convert loans and securities to cash instantly so depositors could leave for better rates. Add in the bleed out from tech firms struggling, and Senator Warrens tweeting with glee about SI going out of business, and depositors at SVB got the message and picked up their phones and acted. This is why I have been tweeting that this has to stop now. The Fed is meeting Monday at 11:30. Too late! They need to meet today (Sunday) at 11:30. What needs to be done? Two things. The FDIC needs to raise the deposit insurance ceiling to unlimited as they did this in 2008. Besides $250k is a made up number anyway. So make up a bigger number. Banks need to get their deposit base to stop figuring out how to buy a 4.5% money market fund. They need to raise the interest rates they pay 3.00% - 3.50%, from 0.50%, immediately. Yes, this will kill bank profitability so expect Bank Execs to balk at doing this. This way the public gets the message that you money is safe, no matter the bank, or the amount, and the rate paid on your money is at least competitive with other alternatives. So, do nothing. Otherwise, if we are all waiting for the Fed to START a meeting at 11:30 Monday, hundreds of billions of deposits will have moved by phone and it will be far worse.

The world needs an inverse Cramer ETF more than it needs a spot BTC ETF.

The Fed updated their balance sheet ... now ~two-thirds of QT has been reversed.

1/6 Bonds are getting crushed again today. Now it looks like selling is coming from foreigners, especially Europe. China is believed to hold several hundred billion of US Treasuries in legal entities in Belgium and Luxembourg. 🧵

Exactly one month ago. $MSTR - 32%

Let me offer discussion points on why they decided to bomb Kharg Island. The administration and military planners likely concluded that it would take weeks, if not months, to secure the Strait of Hormuz. During that time, oil prices could rise to levels that would suffocate the global economy. This was unacceptable. They are desperate for immediate action. So, they needed a bold, decisive move to force Iran to relent quickly. Trump was clear. They bombed Iranian military structures on Kharg but left the oil infrastructure unharmed (assuming this is accurate). Recognizing that this could freak out oil markets, they announced it on Friday evening to give markets 48 hours to digest the news. Trump also made it explicit that oil infrastructure would be next if Iran did not allow ships to pass freely through the Strait of Hormuz. In football terms, they're throwing a Hail Mary pass now, hoping it works. They don't have any more time on the clock. Oil markets and the world economy cannot wait weeks or months for the military to open the Strait. Further, I could envision political advisors suggesting that if oil prices are destined to hit $200 without this action, it might as well happen next week, giving six months to bring them down before the midterm elections. As I've argued in many other posts, Trump cannot simply declare victory and pull out (TACO). That would be worse. It would leave Iran in control of the world's economic jugular, allowing it to punish everyone by permanently holding oil at $200. So, they must force Iran to relent. Again, these are just the thoughts running through my head as I try to explain to myself why they took this step.

Not every recession is led by a 50% rise in crude. But every 50% rise in crude has led a recession.

It’s a 3% correction!

US TREASURY SECRETARY YELLEN: I HOPE THE NEW ADMINISTRATION WILL TAKE THE DEFICIT SERIOUSLY. Like she did?

Is anything inaccurate here?

Lots of really bad takes about SVB. Let’s try and correct This is not a solvency crisis like 2008. Bad loans or poor investments were not made. Money was not lost. So, everyone is going to get their money back. (And please no takes about no interest rate hedging. Asset/liability mismatches are how banking works.) Instead this is an old fashion 1930s liquidity crisis. Too many depositors demanded cash at once (as in right now) and SVB (and SI) could not convert loans and securities (and crypto) to cash that quickly. So, everyone is getting their money back from SVB (and SI), just not at 8AM Monday. And, yes this is a big problem as this is working capital for a lot of companies. They have payrolls to meet and vendors to pay next week. And if they don’t pay bills and employees, they in turn don’t pay their bills and this can quickly cascade into a major economic problem. The important question is why so many demanded their money back at once. And I’m not referring to the last two days. I’m asking about the days/weeks leading up to this last two days forcing SVB to sell securities and realize a $1.8B loss, necessitating a capital raise. Why were depositors withdrawing in big enough amounts before Thursday/Friday? First, welcome to the world of mobile banking. Gone are the frictions of standing in line with tellers instructed to count money slowly. (Media images of lines Friday were largely gawkers) How did $42 billion get withdrawn Friday alone without thousands in line? Answer, your phone! This is not the Bailey Savings and Loan anymore. This should scare the hell of bankers and regulators worldwide. The entire $17 trillion deposit base is now on a hair trigger expecting instant liquidity. Add in social media and millions get a message, like Peter Thiel telling Founders companies to pull out, or Senator Warren gloating that SI went under, and pick up their phone open a Chase account and Venmo-ed their life savings into it in 10 minutes. Instant liquidity (not solvency) crisis with everyone still in bed. Banking will never be the same. The second, and I did a long thread on this on Friday … banks are over-reserved, after 14 years of QE, and are still paying 0.50% on accounts when T-bills are yielding 5.00%. They don’t need to compete for deposits. Initially as rates passed 2%, 3% and 4%, the public did not notice. So bankers thought deposits were well anchored at their bank and not moving regardless of the interest rate paid. But at 5% the public finally noticed, and millions reached for the phone at once and transferred to a money market account or Treasury direct to buy T-bills. Banks were squeezed to convert loans and securities to cash instantly so depositors could leave for better rates. Add in the bleed out from tech firms struggling, and Senator Warrens tweeting with glee about SI going out of business, and depositors at SVB got the message and picked up their phones and acted. This is why I have been tweeting that this has to stop now. The Fed is meeting Monday at 11:30. Too late! They need to meet today (Sunday) at 11:30. What needs to be done? Two things. The FDIC needs to raise the deposit insurance ceiling to unlimited as they did this in 2008. Besides $250k is a made up number anyway. So make up a bigger number. Banks need to get their deposit base to stop figuring out how to buy a 4.5% money market fund. They need to raise the interest rates they pay 3.00% - 3.50%, from 0.50%, immediately. Yes, this will kill bank profitability so expect Bank Execs to balk at doing this. This way the public gets the message that you money is safe, no matter the bank, or the amount, and the rate paid on your money is at least competitive with other alternatives. So, do nothing. Otherwise, if we are all waiting for the Fed to START a meeting at 11:30 Monday, hundreds of billions of deposits will have moved by phone and it will be far worse.

July 19 MetLife Stadium East Rutherford, New Jersey Might be the most expensive tickets ever sold in North America.

Let me offer discussion points on why they decided to bomb Kharg Island. The administration and military planners likely concluded that it would take weeks, if not months, to secure the Strait of Hormuz. During that time, oil prices could rise to levels that would suffocate the global economy. This was unacceptable. They are desperate for immediate action. So, they needed a bold, decisive move to force Iran to relent quickly. Trump was clear. They bombed Iranian military structures on Kharg but left the oil infrastructure unharmed (assuming this is accurate). Recognizing that this could freak out oil markets, they announced it on Friday evening to give markets 48 hours to digest the news. Trump also made it explicit that oil infrastructure would be next if Iran did not allow ships to pass freely through the Strait of Hormuz. In football terms, they're throwing a Hail Mary pass now, hoping it works. They don't have any more time on the clock. Oil markets and the world economy cannot wait weeks or months for the military to open the Strait. Further, I could envision political advisors suggesting that if oil prices are destined to hit $200 without this action, it might as well happen next week, giving six months to bring them down before the midterm elections. As I've argued in many other posts, Trump cannot simply declare victory and pull out (TACO). That would be worse. It would leave Iran in control of the world's economic jugular, allowing it to punish everyone by permanently holding oil at $200. So, they must force Iran to relent. Again, these are just the thoughts running through my head as I try to explain to myself why they took this step.

Cook refusing to leave puts the Fed in a difficult position. If they allow her to continue with her duties as Fed Governor, starting this morning, and the courts find that the President does have the authority to fire her, even if it's months later during an appeal, anything she does on behalf of the Fed as a Governor starting today will not be valid. And the Fed could be held responsible for allowing a non-employee to continue to act like an employee. Restated, if the Fed allows her to stay and continue to be a Governor, and the court rules that Trump can fire her (again, even if it is later in an appeal), then Jay Powell has potentially committed a "for-cause" offense for which he could be fired. (allowing a non-Fed employee to make decisions and policy on behalf of the Federal Reserve.)

Something has broken tonight in the bond market. We are seeing a disorderly liquidation. If I had to GUESS, the basis trade is in full unwind. Since Friday's close to now ... the 30-year yield is up 56 bps, in three trading days. The last time this yield rose this much in 3 days (close to close) was January 7, 1982, when the yield was 14%. This kind of historic move is caused by a forced liquidation, not human managers make decisions about the outlook for rates at midnight ET.

Please caption this ... wrong answers only

BTC since Friday's announcement that tariffs were coming.

Five minutes ago on Truth Social

Michael Saylor, March 21, 2000 as the tech bubble was exploding. There is an old saying on Wall Street ... what is the best indicator that a trader will "blow up?" Answer: they have blown up before. Just saying

The Fed updated their balance sheet ... now ~two-thirds of QT has been reversed.

If BTC is going to $1 million, does that mean the NDX is going to 500k,and I assume the SPX is going to 60k. If yes, what happens to inflation when financial assets approach one quadrillion dollars?

Here is my nomination for the most interesting chart of the week. * Arguably, the stock market crashed this week * JP Morgan is saying 60% probability of a recession * Record uncertainty * Unprecedented Government policy on tariffs. So, given the list above, what is 10-year yield signaling that is still 40 bps higher than its September low?

$TRUMP's meme coin just traded at $74. The total Supply is 1B, and 200M is in circulation. Total mktcap is $74B. Trump's paper profit is ~$60B (80% of which is not in circulation). Does this make him the greatest crypto billionaire in history? And it took just 36 hours! Consider: * SBF's peak crypto paper profit was ~$30B. * Satoshi's wallet had a paper profit of ~$50B in October, now ~$110B. But this took 15 years, not part of a weekend. Trump is now likely the greatest LIVING crypto billionaire in history. Trump's gains are now more than the S&P 500 back to 1947 Friday afternoon, Trump's net worth was estimated at ~$9.2B (half of that was the meme stock $DJT). Sunday morning, it is ~$70B.

The only reason I do not allow my children to play in the middle of the highway is the cars speeding at 70 MPH. Otherwise, the highway is open as a playground.

Why isn’t this money leaving the sidelines as seemingly everybody constantly predicts. The Fed started cutting rates 14 months ago. What are they getting wrong?