Anger about the 2008 bailout makes sense. Yen carry unwind deserves attention. However, the trading call to action fails on market structure.
Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
That $9.6T is mostly back and forth non-directional HFT.
Otherwise it would not take a day to swap $500 mil for commercial reasons (think buying a couple Boeing plane with Euros) to avoid too much market impact as documented in multiple interviews with currency dealers stating it takes them 1 day to "work" a $500 mil order.
Retail can move FX, if it piles into one pair. But unlike the Boeing order they will also need to exit the trade at some point, which makes them vulnerable.
It cost the taxpayers nothing (in fact it made us money), it destroyed 4 of the 5 largest investment banks in the US, and it sent over 200 bankers, brokers, and auditors to jail.
The people angry about the 2008 bailout usually have little interest in the facts. I’ve had countless conversations where I’ve tried to tell people that the bailouts were a net positive or that people were, in fact, sent to jail. Outside of people familiar with finance, most people refuse to believe it.
A lot of people I’ve talked to about it weren’t even adults when the bailout happened. They weren’t watching the news and didn’t care at the time. They only know it through pop culture and from fiery speeches from politicians and influencers.
The idea of a bailout has become synonymous with the government handing hard-earned tax dollars over to banks, no strings attached. The facts don’t really matter.
And caused a global recession along the way. The loan repayment interest didn't (and couldn't possibly) cover even a fraction of the backlash, which includes lives destroyed world-wide.
> It cost the taxpayers nothing (in fact it made us money)
Pull the other one, it has bells on it. If the government is involved in a financial transaction it is because nobody in the private sphere with money wants to be involved. That means either the return wasn't commensurate to the risk or there was dodgy accounting going on that nobody would actually thought represented a reasonable real return. If there was actually a prospect of making a reasonable return, money would have been found. Even the creditors might have been willing to make deals.
I bet the average taxpayer would much rather have the money given to them in their capacity as an individual and would have profited off it more than the hypothetical return the US government may claim it made.
> What part of that are people mad about, and why?
The gross unfairness of it all. I mean, it is bad enough that the failures in charge of the banking system got bailed out despite being incompetent at their jobs, but the average person had to guarantee them their high status role in society? It is a sick joke.
It is a terrible idea to be printing money to prop up asset owners. If that is the basic plan anyway, it shouldn't be mandatory to have incompetents mediating the handout process.
And it isn't like bankruptcy is that terrible. All the physical assets still exist. There is still food. Maybe set up a special welfare system for people who lost their life savings if something has to be done, but for heavens sake, taking (and I repeat myself) known, verified incompetents and guaranteeing them ongoing control of the financial system is wildly stupid. It is on par with a scheme like mandating people all buy in to cryptocurrencies.
People are mad because the government bailed out banks over people, the last time this happened FDR bailed out people over the banks.
If you can't understand why people are angry that the government continues to give away large amounts of corporate welfare without protecting people, then I'd definitely read up on people movements because a few are brewing across the country and all of them want blood.
> It cost the taxpayers nothing (in fact it made us money)
I was surprised to learn that the "bailout" was in fact a loan that was repaid with interest for a "net profit of $121 billion" [1] rather than just giving the banks money. After learning this, I polled many people around me and few had understood the terms of the transaction. So I think there may be significant public misunderstanding there.
Even if people do understand it was a loan, there's an argument to be made that the money could have been spent in better ways (e.g. early education improvement, preventative healthcare etc. that also give long term returns in preventing crime and reducing healthcare costs). If you believe not giving the loans would have caused the total collapse of the economy and worsened of all of those things (crime, healthcare, education etc.), then it seems a worthwhile investment. But not everyone may share that perspective.
> What part of that are people mad about, and why?
Another element of the controversy was the payment of $218 million of bonuses to the executives of AIG which was being bailed out and effectively run by the federal government [2]. Apparently the government allowed the bonuses because Geithner said there was no legal basis for voiding the bonus contracts.[3]
Some people think controversy over government mortgage relief spawned the Tea Party movement based on this speech by Rick Santelli [4] about his dissatisfaction with the government's bailing out the "losers" who couldn't afford their mortgages.
Some people also feel there could have been more regulation of the financial sector or breakup of big banks [5] or more stipulations attached to the loans.
Just some suggestions based on my understanding of the history.
This is one of the most sustained bad-faith arguments I’ve seen on HN.
The idea that 4 of the largest investment banks in the US were destroyed is not just utterly false, it’s hard to imagine how one could interpret the outcome in this manner.
Why would anyone be happy that the government offered handouts that were stolen, low-level criminals prosecuted, meanwhile every single principal who was culpable went unpunished?
I don’t need to hear from you how this is off-base or I’m misunderstanding. I’m close to principals involved in the crisis and worked for years in the response to it, and have heard what went on in the meetings dramatized afterwards.
More generally, be very suspicious when someone offers you investing advice dressed up as a call for solidarity and revolution. It’s intellectually dishonest and emotionally manipulative.
What a lot of people seem to not understand about the stock market, is that at it's basis it's just a supply/demand ratio. When it goes down it means someone is selling a lot, someone is cashing in, at least converting it into cash.
For me it was obvious something was afoot with earnings and performance not matching the prices, I finally understand why now thanks to this article.
The fact that there are rules for institutional investors and retail investors and us in retail have so little visibility and time to keep up, just shows more and more the game is a david vs a goliath, and we are all slingless david.
It's more than just supply and demand. It's the price discovery. So I guess you can say supply and demand curves. The curves change with the market psychology and with future expectations.
Most institutional investors are not going to outperform your diversified portfolio. It's not like professionally managed funds are killing it while individual investors are losing. There are some specific examples of funds/people who do well but on average most do ... average.
Fully agree market psychology has a big influence in prices, TESLA is a great example of this.
My main point is that most people, including the media, whenever there is a big crash in prices, like silver going down double digits, they act like the money evaporated and everyone that invested lost money.
My point is that it's not the case, it dropped because there was a huge volume of people selling, making it cheaper. The people selling converted it all for liquidity, they just 'got' a lot of money in cash to spend, and they needed it or will use it for one reason to another.
Retail investors don't have the time (unless you work in finance) to read all the news and information to be aware of situations that will trigger liquidity crunches like these past few months, while institutional investors will.
My point here is you could have performed all of the value investing in the world and you are still eating losses, standard diversification theory is to put in gold when the markets are unstable, as it appreciates in time of high volatility, we are in times of extreme volatility and gold crashed, it makes no sense unless you have visibility in the institutional investing trends.
I've never understood why people separate some mystical magical "market psychology" from the traditional supply and demand model.
Like...what do y'all think demand is? From tulips and cabbage patch kids to meme coins and nfts, the price fluctuates based on semi flexible supply and highly flexible demand.
You could say "ah well, according to my analysis of the market psychology of this asset, I believe price will collapse in the medium term." but I just don't see how that's any more useful than saying "I believe demand will decrease soon" or "People aren't going to want this thing forever"
Those of us calling ourselves value investors love perturbations in the market out of line with the underlying business. That’s called opportunity. Eventually the market recognizes the value. So long as you’re not playing with options or trying to get quick rich you can get rich slowly.
Speaking as a quant that has followed this story closely for months (and was educated about the yen carry trade in my degree), this narrative is somewhat wrong and also very obviously LLM slop.
It is true that the yen carry trade is currently being unwound and that it has significant implications for nearly all holders of treasuries. But claiming that ALL of the recent volatility is due to this one event is ludicrous. There are some blatant falsities, like saying that gold and silver are historically uncorrelated??? And it’s clear that the author has a bias against the financial establishment (“monopoly money”), coloring the output.
That said, there are legitimately interesting bits here I didn’t know about, like the Japanese institutional liquidation of US treasuries. I would not repeat this information to others without fact checking it, but if accurately described it’s an important space to watch. It’s not surprising that the LLM would get some things right, of course.
One big problem with this article is the clear prompt given to connect x current event to the yen carry trade, like Warsh’s nomination and the Greenland nonsense. This creates a lot of noise. It’s basically the LLM looking for a pattern between these things instead of identifying a structural flow. It might not even be wrong, but it’s horribly biased towards finding a fake pattern, so I would never trust it.
For the tech heads in HN that are excited to see a Justine Tunney post: don’t go crazy. If you’re really interested in learning about the unwinding of the yen carry trade, there’s plenty of information from actual experts to read about, not this slop.
We're deep in an era where "finance cosplay" is a thing. Wallstreetbets, zerohedge, the memestock subreddits. And daytrading apps to go along with that, like Robinhood. The trick is to realize that most market discussion you're not paying for is itself marketing at best and cosplay at worst. People doing this stuff professionally have Bloomberg terminals. Do not attempt to compete with Bloomberg Chat.
I am also veeery suspicious of monocausal finance explanations. There's simply a lot going on. The Greenland nonsense will definitely have moved the needle somehow; while a token deal was made to get it out of the media and allow all the insiders to front-run it, some very real changes are now going to happen over a longer period in order to decouple from US risk.
> The trick is to realize that most market discussion you're not paying for is itself marketing at best and cosplay at worst.
There was a leak posted on Wallstreetbets of some paid analysis (https://www.reddit.com/r/wallstreetbets/comments/1qpwyqz/dbs...), and it was basically follow the hype with a layer of sophisticated post rationalisation on top. I fail to see the difference between these and the average "DD" on an investing subreddit.
> Leading EV manufacturer. Tesla is a leading global EV manufacturer, backed
by its firm market leadership and healthy automotive margins. Tesla's leading
share is backed by its economic MOAT in EV charging infrastructure and
supercharger network, autonomous driving and other software (e.g., full self-
driving aka FSD) (...) Tesla’s pivot toward AI provides a long-
term growth foundation, but near-term performance will remain sensitive to
progress on AI-driven execution milestones.
>We're deep in an era where "finance cosplay" is a thing.
I feel the same way. It's so frustrating. I try to read and learn and then just hit one of "wait those numbers don't add up", or "this reads like the author just learned about this thing too" and other strange logical leaps time and again.
Also, while I’m not an expert on Japan, I’ve been following Gearoid Reidy’s commentary on Takaichi and the new Japanese economy and I think the fears expressed are significantly overblown. But this is also characteristic of many other market participants so I wouldn’t categorize this as something obviously wrong, just a disagreement.
I’m not finding a single article with a good summary, but you can find coverage on Bloomberg of all the twists and turns. FX markets are complicated, so you’ll need to do some research on how they operate as well. It’s not too hard to plug the keywords and concepts from these articles into AI and get a reasonably good background, though.
Tbf, they are not far from a Truss-squared moment. And doesn’t help that CCP is gaining momentum with US leaving a vacuum while Sino-Japanese relation is going down the toilet.
Takaichi is much more popular than Truss was, and Japan is in a much better situation right now than post-Brexit post-COVID UK. And absolutely nobody is seeking a better relationship with the US right now other than satisfying short-term needs. Japan is not in a good spot long term (population slowdown, debt, slow economy) but there’s no reason to panic right now.
Purposefully devaluing the dollar to make US goods more globally marketable and hide the Japanese debt crisis is an interesting but risky strategy.
Currently, I'm glad to see a correction without panic, but it's too early to make a call on the effect on the overall global economy. Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.
It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
> It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
I really wish that people would wake up to the danger posed by meme stock BS “leaking” into the general markets.
Just as voters are responsible for changes in society, uninformed investors can impact society too, especially when they’re amplifying their purchasing power via leverage.
For instance, I’ve been buying real estate forever, and I’ve enjoyed the Reventure app.
But I’ve REALLY noticed that his YT videos are exclusively doom and gloom.
This ceaseless negativity moves markets, just as the irrational exuberance for real estate in 2005 moved markets.
But the exuberance for real estate was driven by people who were buying real estate.
The endless doom and gloom of YT finance videos is for a much different reason:
It drives page views.
That’s not a good thing. Because it’s really easy to get swept up in the negativity. And that negativity has a downstream effect, where it’s often used to convince people to invest in things that the YouTuber is promoting.
Basically, I don’t know if we need an “SEC for YouTube,” but we might.
Yes, I know we already have an SEC for YouTube (it’s the SEC), but nearly none of the people doling out financial advice on YT are trained professionals. It’s the fundamental defect of internet advice; who to trust?
The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.
Reminds me of ZeroHedge. They've been shouting that the depresssion-level market crash is near now since 2009. Every single day. For 17 years.
I can only personally speak for myself and I'm not giving financial advice here. I use the Bolgehead strategy of the 3 fund portfolio is still the tried and true I follow, and I have yet to not benefit from doing so, even in economic downturns[0]
I'm immediately concerned with the note about silver dropping so much. Yes, that happened, and was a historic drop. But it followed a historic run up to its prior price, so the drop is still net positive for even a 1 month period.
I'm not saying the article's thesis is incorrect, but its providing some data without context. I'm always leery of data presented without context.
I take “not financial advice” articles like this at best as entertainment. How can anyone seriously talk about metals for example without mentioning that gold was $1900 and silver $20 a few years ago. Today they sit at $5000 and $80. It’s completely absurd to write about the “drop” as a proof of anything
The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.
DO NOT make financial decisions based on the advice of a youtube channel.
DO NOT make financial decisions based of of the advice of an an article written by a know associate of Curtis Yarvin.
You saw the video yesterday because this is a marketing exercise.
They hold a stake in the outcome, you are the greater fool.
Christ.
Find a professional fiduciary that doesn't have a youtube channel and never speculate more than you can afford to lose.
> Curtis Guy Yarvin (born 1973), also known by the pen name Mencius Moldbug, is an American far-right political blogger and software developer. He is known, along with accelerationist philosopher Nick Land, for founding the anti-egalitarian and anti-democratic philosophical movement known as the Dark Enlightenment or neo-reactionary movement (NRx).
This really should be pinned to the top of the thread. Finance-as-entertainment is the world's worst gatcha game. For some reason people love getting suckered by these far right idols, both financially and "intellectually", who in turn are playing three-card-monte with them.
Everyone forgetting the more likely, more rule-of-law based fallback option for a reserve currency and international payments system (which is the important bit!): the Euro. Digital or otherwise.
> Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
I wonder why you’re worried. Regime’s change all the time. From a third party perspective, China is no better or worse than the US. Also, given how literally every country under the sun despises US now, this might just happen.
The way China manages it's currency is very different to how the US manages theirs.
China maintains strict controls on capital flows in/out. A reserve currency requires free convertibility. Holders need to move large sums instantly without permission. China has repeatedly tightened these controls during stress periods (2015-16 devaluation fears, for example).
Limited access to Chinese bond markets and equities for foreign institutions. Reserve currency status requires deep, liquid markets where central banks can park hundreds of billions. US Treasury market is $26T and extremely liquid. Chinese government bond market is smaller and less accessible.
Reserve currency issuer must run persistent current account deficits to supply the world with currency. China's economic model is built on export surpluses. They'd need to fundamentally restructure their economy.
I spoke with a silver expert a week ago before the crash and he said half the flow is speculative, structural flow will remain. Looks like he was right.
Aww, then you missed the best part! Who wouldn't be head over heels for the opportunity to follow this financial advice and lose all of their "monopoly money" (funsie term for real cash!)?
Call To Action
This won't just be the big one. This could be the last one. If you've been preparing your whole life, knowing that something's coming, then this could be the thing you've been preparing for. One final opportunity to get the guys who did this. [...] The worst that can happen is you lose your monopoly money, but that's been happening anyway.
This is a good analysis of the yen carry trade but i'd argue the causality is backwards. Record high margin debt in the U.S. is the root cause as it's a powder keg. The yen is just the fuse being lit. When system-wide leverage is this extreme, any funding sock (whether it's the BOJ rate hikes, hawish fed, or geopolitical event) can initiate the liquidation cascade. The yen carry trade is one source of that leverage but the fragility was baked in. If Japan didn't do anything something else would have cause the liquidation cascade, only a matter of time.
The real story isn't Tokyo, it's that Wall Street built a house of cards and ran out of steady hands.
I have a public ThetaEdge card that monitors margin debt and calculates the correlation with the S&P here:
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
You're right that $566B alone isn't a black swan. That FINRA figure only captures retail and small institutional margin at broker-dealers. It excludes prime brokerage (hedge funds), securities-based lending, and repo markets. Conservative estimates put total leveraged exposure at $10-15 trillion. The $566B is maybe 5% of the iceberg.
I see visible margin debt as both a canary and a proxy. It's a canary because retail cracks first (less sophisticated risk management, stricter regulatory margin). It's a proxy because when visible leverage contracts, it usually means hidden leverage is contracting too. They're exposed to the same assets. When FINRA margin debt starts falling, it's not just a warning, it's confirmation that system-wide deleveraging is already underway.
This is such a weird use of the domain, and kind of sad. I know the original movement was very diverse and had different ideas, but I'm not sure dispensing what ultimately amounts to financial advice from within the system really fits.
From Wikipedia: "In March 2014, Tunney petitioned the US government on We the People to hold a referendum asking for support to retire all government employees with full pensions, transfer administrative authority to the technology industry, and appoint the executive chairman of Google Eric Schmidt as CEO of America"
Basically, when currency is scarce, its value goes UP.
When currency is plentiful, its value goes DOWN.
The first scenario lowers inflation, the second raises it.
After Japans bubble economy popped in the early 90s, they had asset values FALL.
So the BoJ began stimulating the economy - trying to push UP inflation - by adding currency to the markets.
The Carry Trade illustrates one of the dangers:
Japan was trying to stimulate their own economy, to counteract the deflation caused by their bubble popping.
But money doesn’t know borders, and though the money was intended to stimulate JAPANS economy, there was nothing stopping ANYONE from purchasing that currency. It’s not like you have to live in Japan to buy Yen.
So the money (yen) was created in Japan, but ended up all over the world.
This has consequences:
* Japan ended up with mountains of US dollars. This is one of the reasons that Japan has more US Treasuries than China. This mountain of dollars lowers YOUR cost of living. Because USD is being acquired for The Carry Trade. This creates artificial demand for USD.
* Because the yen is created in Japan but is then used for international commerce, it dramatically reduces the inflation that “printing money” would normally create. This is why Japan has more debt per capita than any country by far, by a factor of over 2X
I am just an I.T. dude who invests in real estate. So what I just posted may be completely wrong.
The carry trade has existed for about four decades; that’s my summary of how it affects us, from the perspective of a small time real estate guy.
We're a bit far down in the thread, but I'd be interested in knowing why this alleged outflow of cheap yen didn't keep pushing the currency down. It's been flattish in the 100-150 band for decades.
It is a shame that jart got control of @OccupyWallSt and occupywallst.com and never gave it up. It seems like her politics and views are very out of line with many of the people who were originally involved in that movement. Repurposing occupywallst.com for something like this compared to it's origin is a big disappointing contrast. https://web.archive.org/web/20111021162924/http://www.occupy...
I was the one who registered it. Occupy as a movement has always been inclusive of people with different points of view. My job running the website and twitter has always been to give the people a voice. I think that's important, don't you? The only guy with more credibility than me in Occupy is Micah White but he's been growing vegetables in Oregon ever since he visited Davos a few years back. So I'm the best you've got.
> My job running the website and twitter has always been to give the people a voice. I think that's important, don't you?
Do you truly believe in your heart of hearts that people posting neo-MOASS wish fulfillment suffer from a lack of a voice, and no place for them to be heard? Take this seriously. More important than "a voice" is consistency and clarity of communication. The people involved in occupy wall street in 2011 weren't occupying it because they wanted to eventually join it, and I don't think that their form of economic justice would be for Wall Street to lose money in a gigantic market crash that again would result in taxpayer-funded bailouts that spurred the first protests. For transparency's sake, what are your market positions today?
> The only guy with more credibility than me in Occupy is Micah White but he's been growing vegetables in Oregon ever since he visited Davos a few years back. So I'm the best you've got.
As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
You have X complaint against an institution. Let's say the institution accepts and reforms somewhat. It's pretty rare that the complainant will pat themselves on the back and say job well done. It's ultimately a game of diminishing returns.
If you have a hammer, it's not just that everything is a nail - you must find enough nails to justify continuing to use the hammer.
Justine, do you think that readers here don't have eyes? The page linked is a call to financial action that, if the advice is followed, will result in yet another unsophisticated ETF pump and dump at best and a call to financial suicide at worst.
You are personally underwriting propaganda for something you are very likely invested in, targeting the most credulous. For it to appear on a site called 'Occupy Wall Street' is deliciously ironic.
Here's my disclosure: I am completely divested for both the US and Japanese market, except for transient USD cash holdings. I don't have a horse in this race. Will you follow suit?
I know very little of what happened in NYC years ago, but I would tell anyone reading the site now that it is run by actively malevolent speculators.
I do, however, know a few of your associates. Stop hanging out with grungy, unwashed sex pests, they aren't as smart as they pretend to be, and you should know that by now. It's unbecoming and frankly sad. You have the means to start life anew elsewhere, and you should take that opportunity now.
You in particular are my main criticism of Occupy as a movement. They lacked any sort of structure, shunned it in fact, that would have ripped control of these resources away from you once it became clear that you disagreed politically with the vast majority of the people involved. That you were allowed to keep control of those resources is emblematic of how Occupy could let all that energy dissipate into nothing.
Anyone attempting to build a movement might find it interesting how Pumping Station One in Chicago is governed. It's a maker space but run by people who care (at least from my experience when I was a member back in 2015/2016). The process for electing leadership and holding members accountable was very democratic and fair, from my experience. They open-source as much as they can about how they organize:
> This #ows movement empowers real people to create real change from the bottom up. We want to see a general assembly in every backyard, on every street corner because we don't need Wall Street and we don't need politicians to build a better society.
Maybe at some point those people will understand that high-school approach doesn't work in the real world.
Look at the amount of change they brought, look at the amount of change that a single person like Donald Trump has brought (for better or worse, this is not an endorsement).
Whenever a government offers loans at an interest rate which is below the risk premium, that difference essentially represents the government giving the borrower free money paid for by all citizens through loss of buying power.
So when Japan offered 0% interest loans to traders who used it to buy USD bonds, it represents the Japan government offloading the cost of the risk premium to its citizens and giving the difference to the traders for free... But then the traders give that free money to the US government where it helps to inflate the USD currency supply to make American asset-holders richer.
The traders aren't actually profiting from the carry trade because the 4% return on US bonds doesn't cover the real inflation (loss of buying power) of the US dollar; their net worth in terms of buying power is actually the same or dropping. US asset holders are the ones actually reaping the benefit.
Utter rubbish from an extremely biased source. Every time they say something like "didn't you notice X" or "your portfolio must look like Y" the answer is nope, you're completely wrong. Every time they talk about some major "crash" you can just go look at it and see that it recovered within 48 hours and looked identical to dozens of other events through recent history. The outright calls for violence + intentionally destroying our own economy to "stick it to the man" at the end surely make me believe this is some rational analysis.
It‘s really hard to read this article, it smells of LLM generated slop once you get past the first couple of paragraphs - lots of negative parallelisms and lots of words without adding value to the sentence:
> To validate the thesis that the Yen unwind is the primary driver of volatility, we must examine the sequence of events. The crash did not happen in a vacuum; it followed a precise timeline …
> It wasn't just about rates anymore; it was about the stability of the U.S.-led global order
> The unwinding of a carry trade is not a monolithic event; it is a cascade that ripples outward
It‘s like almost in every paragraph. I don’t understand why this gets to be on the frontpage to be honest. It just reads horrible even if some of the points may be true (or hallucinated, who knows)
I have a sense that were in a moment of mass hysteria.
You dot even understand what your reading anymore. Cant tell whether you're reading a hallucination or someones thoughts.
"I don't agree / understand this, it must not be real!"
Now, you have to wonder: is my grammar just poor? Or did I intentionally inject spelling and grammar errors into the output or an llm? Is it in my system prompt to do this?
Can anyone recommend a good source to ramp up one's understanding of macroeconomics/monetary policy to a point where they can make sense of this? Starting from more or less a layman's understanding. Could be a book or course, but doesn't have to be university quality, a good blog or youtube channel could do.
Creating money out of thin air generally creates inflation, because theirs is more currency chasing the same amount of assets.
But the Devil is in the details, because there are hundreds of currencies, one currency can be exchanged for another, and interest rates vary all over the world.
Then once that starts to make sense, you open up a box called “derivatives,” and now the complexity just went off the charts.
I only need to understand it in the context of loans on assets, so I can do the math in my head or in excel. Occasionally I’ll vibe code this stuff in Python.
Because I’m not diving into the deep end of complexity, the books I absolutely LOVE are the cautionary tales of when it all blows up.
In that respect, I think “when genius fails” is an all timer.
Nearly everyone knows about the Great Recession, and the depression and the dot com bubble.
But the collapse of Long Term Capital Management was the canary in the coal mine.
LTCM blew up for all of the most predictable reasons, and as the name implies, nearly everyone involved in LTCM were at the top of their game.
Another book that is more folksy is “a man for all markets“, a book about the dude who revolutionized stock options, largely due to a fascination with Blackjack!
Anyone doing any attempt at market analysis should lay out the trades they've made and the time frames they're talking about. So we can come back later and point a finger at them and laugh.
It seems like their conclusion is "hold lots of yen"? We'll see I guess.
Japan is interesting because it has the highest debt-to-GDP ratio of any developed country and most other countries in the world are increasing their debt-to-GDP ratio; in effect, they're all moving towards a Japanese reality due to the fiat system's lack of hard monetary constraints.
If you look at Japan, the aspects of its economy and society which stand out the most are:
- Rigid economic structure and processes.
- Economy dominated by huge corporations, without much room for startups.
- Highly concentrated urban population.
- Population decline. Many young people are not dating and not getting married, can't afford much on their salaries working in the city.
The author is implying that BoJ can/might/will cause appreciation of the Yen, which will force folks who are short(borrowing Yen) to buy USD assets to go underwater, forcing liquidation to pay back the Yen, and appreciating the Yen more. It's possible but there is no guarantee it would be a disruptive feedback loop or this year or etc.
If you believe them, then you can hedge buy either shorting TLT(betting treasury yields will rise), or going long Yen (e.g. FXY shares/calls).
I bought some FXY calls but just enough to hedge the Yen prices of my upcoming Tokyo trip in case they're right.
Only through the first two paragraphs but a little turned off by the "everybody else is wrong, we are right and it's this one specific thing" attitude when it the topic is understanding something as complex and opaque as the global economy
It reads exactly like a WallStreetBets "effort post" where someone has some pet theory that somehow explains the market in a way that nobody else understands, but is almost always either completely wrong, or a vast oversimplification
Yeah that part is a bit red string but the analysis further down is more reasonable. I have no idea whether it is an opportunity or someone grabbed the domain and going for a pump-and-dump, either seems plausible.
Personally I think Microsoft's stock is crashing less about any of this (though it is a hell of a theory IMO) and more to do with the fact that:
* They are investing in AI, both financially and by corporate communication, over and above everything else and pissing off damn near everyone in the process
* The XBox brand is tanking
* Windows is an utter disaster, according to Microsoft themselves, and Valve is so dispirited with it as the future for gaming that they've invested millions into a linux-based framework to run Windows games
I’m a little impressed at how a company whose business model is to sell a product they developed in the 1990s over and over again while making inconsequential and non-breaking changes from year to year somehow still manage to screw that up. In my own opinion, they have always been a diabolical company. I’m glad to see them fail.
Love the last line, what Valve has done on Windows emulation is herculean, I don't know (it would be great to know) other businesses creating/investing in incredible and risky third-party compatible technologies to run their real business on top of it.
I worked in what other calls "Adversarial Interoperability" [1] but the scale of Valve is on another level.
The Yen Carry Trade isn't some big secret... it's caused enough turmoil that it hit the front pages of the WSJ a few times in last few years (Aug 2024 was a big one iirc)
Finance bros will make their way in here soon to give a better peanut gallery, but I think "is there something here" comes down to do you believe the final bit of the articles opening act:
> When correlations between historically uncorrelated assets (e.g. Gold, Bitcoin, Microsoft, and Silver) approach 1.0 during a sell-off, it serves as a distinct indicator that traders are not selling what they want to sell, but rather what they must sell in order to meet margin calls in a funding currency that is rapidly appreciating against their liabilities.
>Following the Martin Luther King Jr. holiday, U.S. markets opened on January 20 to a bloodbath. The S&P 500 fell 2.1%, the Nasdaq composite dropped 2.4%,
Should someone that calls 2.4 percent movement bloodbath be taken seriously?
>By anchoring borrowing costs at or near zero, the BOJ enabled Wall Street to borrow Yen cheaply and invest it with leverage into higher yielding instruments globally, such as U.S. treasuries, equities, and cryptography
They got the word wrong, but I don't believe cryptocurrency would count either: The interest rates at BoJ _are_ low, but to borrow anywhere near that low they have to have high quality collateral like treasuries.
Sounds good, too bad I only have $5k available. Even if I spend all on FXY it won't gain that much from the current $58.6 in the forseeable future. Rich get richer I guess so nothing changes just the location.
A lot of the financial jargon makes the article hard to follow. I know I'm not the target audience, but I wish at times there were some plain English summaries of terms.
The Japanese central bank arrived in zero effective interest rates in the 90s, and has been practicing negative effective rates (I.E. smaller than inflation) for a while.
That had the effect that their banks took huge amounts of government loans and used it to buy foreign assets. As returns are higher in countries with higher interest rates, and lots of assets are practically safe, like government bonds, that is close to free money for them, and a very cheap loan to the receiving country.
But last year their central bank made the interest rate positive. And investors are acting on the expected way, selling the foreign assets and paying off their government. The article is claiming that this is the cause of the recent turbulence in the investment markets.
Thanks, that was generally how I interpreted the article.
The issue was the terms. There was a lot of logic inversion that someone who's much more familiar with the terms could probably follow, especially when trying to understand how an investment in Microsoft was loosing value when the investment was from a loan in yen.
Likewise, the end of the article uses a lot of abbreviations, especially when referring to Australian currency, which I just don't understand at all.
I'll bite. Isn't as obvious to me as it is to you, I'm just a programmer, I don't know how the economy works. This is literally the first time in my life I heard anything about governments borrowing Yen like this and that this would become an issue.
I'm aware of an "AI bubble" and the over-concentration on the "Magnificent 7".
What else is obvious to people and why is the timeframe (next 4 years) so obvious?
Well, investment markets all over the world are not reflecting the real economy right now. You can see that on how stock prices don't reflect how wealthy you feel and maybe more clearly in how house prices are completely unrelated to the amounts people can pay.
That's the obvious part. The consequences of that are anyone's guess, as is the timeframe. But it's not a sustainable situation, so something is bound to happen to change it eventually.
It’s not as obvious as they claim. If it was, if the future was somehow predictable, there would be software that did it; there isn’t.
People have been claiming the end is near since forever; economists have been saying for months now that stocks should already be falling, but they are going up. And also, it feels good to be part of the in-group that just knows more than everyone else. Just ask a prepper: they will be equally convinced.
So in summary, even if we’re headed for another crisis, unless you’re only a few years from pension, you’ll just sit this one out calmly, just like all crises before. Unless the global economy breaks down for good (in which case you’ve got other things to worry about), your ETF will recover. Don’t let the fear mongers get into your head.
The entire stock market basically functions as a funnel of wealth from the middle class to the rich right now. When OpenAI and Anthropic IPO, they'll be megacap stocks and 401ks and pension funds the world over will invest in them. Then insiders will cash out, and the AI bubble will collapse. USD will have transferred from the retirement accounts of middle-class people to the rich. This is how all stock market crashes work. This one is especially interesting because the middle class is already so squeezed - how many more times can they pull this trick off? Seems like it can't go on many more times.
> In short, occupywallst.org is a living archive and occasional update point for a landmark left-wing protest movement that put economic inequality and corporate power at the center of national conversation starting in 2011.
Dunno about the website or corp, but the occupy wall st movement was/is true. Happened right after 2008 stock market crash and people camped out on Wall Street in protest of bailing out the banks.
I would make the correction that the protest movement was not left wing. I think he’s trying to take credit for his favorite team. TARP was opposed by 80% of Americans. It passed legislation anyway. I think there’s a good lesson to be learned in how performative and inconsequential the electoral process is.
Well duh. That's obviously what everyone should try to do, but it's nice to engage in a bit of flight of fancy. I like imaging a rogue group of retail investors buying up the yen, short squeezing carry traders and sticking it to the billionaires. Real life is much more boring, and involves habitual, long term good choices.
This reads like LLM slop. The "carry trade blowing up" has been written about hundreds of time before, so it's not surprising it's so prevalent in LLM training data.
The assertion that metals tanked because of Warsh being picked, is particularly telling. Warsh is not a hawk, despite some media narratives. The Fed is stuck behind not raising rates while the debt is coming down on banking while POTUS is crazier than ever and lowering rates to raise inflation/debase the currency and debt. It's not going to take long to see where this path leads.
It is most certainly LLM generated. Nobody but an AI prompted with “connect the unwind of the yen carry trade with Trump’s threats to acquire Greenland” would have ever written something like that.
My guess is that she did a lot of research on the topic with AI then created this article partially with AI generated text.
Anger about the 2008 bailout makes sense. Yen carry unwind deserves attention. However, the trading call to action fails on market structure.
Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
That $9.6T is mostly back and forth non-directional HFT.
Otherwise it would not take a day to swap $500 mil for commercial reasons (think buying a couple Boeing plane with Euros) to avoid too much market impact as documented in multiple interviews with currency dealers stating it takes them 1 day to "work" a $500 mil order.
Retail can move FX, if it piles into one pair. But unlike the Boeing order they will also need to exit the trade at some point, which makes them vulnerable.
> Anger about the 2008 bailout makes sense
Does it?
It cost the taxpayers nothing (in fact it made us money), it destroyed 4 of the 5 largest investment banks in the US, and it sent over 200 bankers, brokers, and auditors to jail.
What part of that are people mad about, and why?
The people angry about the 2008 bailout usually have little interest in the facts. I’ve had countless conversations where I’ve tried to tell people that the bailouts were a net positive or that people were, in fact, sent to jail. Outside of people familiar with finance, most people refuse to believe it.
A lot of people I’ve talked to about it weren’t even adults when the bailout happened. They weren’t watching the news and didn’t care at the time. They only know it through pop culture and from fiery speeches from politicians and influencers.
The idea of a bailout has become synonymous with the government handing hard-earned tax dollars over to banks, no strings attached. The facts don’t really matter.
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If I had to guess, Americans say they dislike the 2008 bailouts to mean they dislike how Wall Street banks caused a recession.
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> (in fact it made us money)
And caused a global recession along the way. The loan repayment interest didn't (and couldn't possibly) cover even a fraction of the backlash, which includes lives destroyed world-wide.
Externalities?
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When you lend money at 1% but market rates are 30% then you are, in fact, losing money. Except under your definition you are not losing money.
> It cost the taxpayers nothing (in fact it made us money)
Pull the other one, it has bells on it. If the government is involved in a financial transaction it is because nobody in the private sphere with money wants to be involved. That means either the return wasn't commensurate to the risk or there was dodgy accounting going on that nobody would actually thought represented a reasonable real return. If there was actually a prospect of making a reasonable return, money would have been found. Even the creditors might have been willing to make deals.
I bet the average taxpayer would much rather have the money given to them in their capacity as an individual and would have profited off it more than the hypothetical return the US government may claim it made.
> What part of that are people mad about, and why?
The gross unfairness of it all. I mean, it is bad enough that the failures in charge of the banking system got bailed out despite being incompetent at their jobs, but the average person had to guarantee them their high status role in society? It is a sick joke.
It is a terrible idea to be printing money to prop up asset owners. If that is the basic plan anyway, it shouldn't be mandatory to have incompetents mediating the handout process.
And it isn't like bankruptcy is that terrible. All the physical assets still exist. There is still food. Maybe set up a special welfare system for people who lost their life savings if something has to be done, but for heavens sake, taking (and I repeat myself) known, verified incompetents and guaranteeing them ongoing control of the financial system is wildly stupid. It is on par with a scheme like mandating people all buy in to cryptocurrencies.
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That "special" people got access to credit while normal people have their lives destroyed duh
People are mad because the government bailed out banks over people, the last time this happened FDR bailed out people over the banks.
If you can't understand why people are angry that the government continues to give away large amounts of corporate welfare without protecting people, then I'd definitely read up on people movements because a few are brewing across the country and all of them want blood.
> It cost the taxpayers nothing (in fact it made us money)
I was surprised to learn that the "bailout" was in fact a loan that was repaid with interest for a "net profit of $121 billion" [1] rather than just giving the banks money. After learning this, I polled many people around me and few had understood the terms of the transaction. So I think there may be significant public misunderstanding there.
Even if people do understand it was a loan, there's an argument to be made that the money could have been spent in better ways (e.g. early education improvement, preventative healthcare etc. that also give long term returns in preventing crime and reducing healthcare costs). If you believe not giving the loans would have caused the total collapse of the economy and worsened of all of those things (crime, healthcare, education etc.), then it seems a worthwhile investment. But not everyone may share that perspective.
> What part of that are people mad about, and why?
Another element of the controversy was the payment of $218 million of bonuses to the executives of AIG which was being bailed out and effectively run by the federal government [2]. Apparently the government allowed the bonuses because Geithner said there was no legal basis for voiding the bonus contracts.[3]
Some people think controversy over government mortgage relief spawned the Tea Party movement based on this speech by Rick Santelli [4] about his dissatisfaction with the government's bailing out the "losers" who couldn't afford their mortgages.
Some people also feel there could have been more regulation of the financial sector or breakup of big banks [5] or more stipulations attached to the loans.
Just some suggestions based on my understanding of the history.
[1] https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#...
[2] https://en.wikipedia.org/wiki/AIG_bonus_payments_controversy
[3] https://youtu.be/uYJLyGoWbzY?si=geM87strQlH7EURN&t=1079
[4] https://youtu.be/5v1EtiEuSEY?si=055bAuiZiIq-YHXy&t=3023
[5] https://en.wikipedia.org/wiki/Brown%E2%80%93Kaufman_amendmen...
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This is one of the most sustained bad-faith arguments I’ve seen on HN.
The idea that 4 of the largest investment banks in the US were destroyed is not just utterly false, it’s hard to imagine how one could interpret the outcome in this manner.
Why would anyone be happy that the government offered handouts that were stolen, low-level criminals prosecuted, meanwhile every single principal who was culpable went unpunished?
I don’t need to hear from you how this is off-base or I’m misunderstanding. I’m close to principals involved in the crisis and worked for years in the response to it, and have heard what went on in the meetings dramatized afterwards.
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What about the car companies bailed out…
Now they act like they’re doing us a favor by negotiating to sell a vehicle only a little above sticker price.
Excuse me while I vomit…
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More generally, be very suspicious when someone offers you investing advice dressed up as a call for solidarity and revolution. It’s intellectually dishonest and emotionally manipulative.
What a lot of people seem to not understand about the stock market, is that at it's basis it's just a supply/demand ratio. When it goes down it means someone is selling a lot, someone is cashing in, at least converting it into cash.
For me it was obvious something was afoot with earnings and performance not matching the prices, I finally understand why now thanks to this article.
The fact that there are rules for institutional investors and retail investors and us in retail have so little visibility and time to keep up, just shows more and more the game is a david vs a goliath, and we are all slingless david.
It's more than just supply and demand. It's the price discovery. So I guess you can say supply and demand curves. The curves change with the market psychology and with future expectations.
Most institutional investors are not going to outperform your diversified portfolio. It's not like professionally managed funds are killing it while individual investors are losing. There are some specific examples of funds/people who do well but on average most do ... average.
Fully agree market psychology has a big influence in prices, TESLA is a great example of this.
My main point is that most people, including the media, whenever there is a big crash in prices, like silver going down double digits, they act like the money evaporated and everyone that invested lost money.
My point is that it's not the case, it dropped because there was a huge volume of people selling, making it cheaper. The people selling converted it all for liquidity, they just 'got' a lot of money in cash to spend, and they needed it or will use it for one reason to another.
Retail investors don't have the time (unless you work in finance) to read all the news and information to be aware of situations that will trigger liquidity crunches like these past few months, while institutional investors will.
My point here is you could have performed all of the value investing in the world and you are still eating losses, standard diversification theory is to put in gold when the markets are unstable, as it appreciates in time of high volatility, we are in times of extreme volatility and gold crashed, it makes no sense unless you have visibility in the institutional investing trends.
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I've never understood why people separate some mystical magical "market psychology" from the traditional supply and demand model.
Like...what do y'all think demand is? From tulips and cabbage patch kids to meme coins and nfts, the price fluctuates based on semi flexible supply and highly flexible demand.
You could say "ah well, according to my analysis of the market psychology of this asset, I believe price will collapse in the medium term." but I just don't see how that's any more useful than saying "I believe demand will decrease soon" or "People aren't going to want this thing forever"
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Those of us calling ourselves value investors love perturbations in the market out of line with the underlying business. That’s called opportunity. Eventually the market recognizes the value. So long as you’re not playing with options or trying to get quick rich you can get rich slowly.
Speaking as a quant that has followed this story closely for months (and was educated about the yen carry trade in my degree), this narrative is somewhat wrong and also very obviously LLM slop.
It is true that the yen carry trade is currently being unwound and that it has significant implications for nearly all holders of treasuries. But claiming that ALL of the recent volatility is due to this one event is ludicrous. There are some blatant falsities, like saying that gold and silver are historically uncorrelated??? And it’s clear that the author has a bias against the financial establishment (“monopoly money”), coloring the output.
That said, there are legitimately interesting bits here I didn’t know about, like the Japanese institutional liquidation of US treasuries. I would not repeat this information to others without fact checking it, but if accurately described it’s an important space to watch. It’s not surprising that the LLM would get some things right, of course.
One big problem with this article is the clear prompt given to connect x current event to the yen carry trade, like Warsh’s nomination and the Greenland nonsense. This creates a lot of noise. It’s basically the LLM looking for a pattern between these things instead of identifying a structural flow. It might not even be wrong, but it’s horribly biased towards finding a fake pattern, so I would never trust it.
For the tech heads in HN that are excited to see a Justine Tunney post: don’t go crazy. If you’re really interested in learning about the unwinding of the yen carry trade, there’s plenty of information from actual experts to read about, not this slop.
We're deep in an era where "finance cosplay" is a thing. Wallstreetbets, zerohedge, the memestock subreddits. And daytrading apps to go along with that, like Robinhood. The trick is to realize that most market discussion you're not paying for is itself marketing at best and cosplay at worst. People doing this stuff professionally have Bloomberg terminals. Do not attempt to compete with Bloomberg Chat.
I am also veeery suspicious of monocausal finance explanations. There's simply a lot going on. The Greenland nonsense will definitely have moved the needle somehow; while a token deal was made to get it out of the media and allow all the insiders to front-run it, some very real changes are now going to happen over a longer period in order to decouple from US risk.
> The trick is to realize that most market discussion you're not paying for is itself marketing at best and cosplay at worst.
There was a leak posted on Wallstreetbets of some paid analysis (https://www.reddit.com/r/wallstreetbets/comments/1qpwyqz/dbs...), and it was basically follow the hype with a layer of sophisticated post rationalisation on top. I fail to see the difference between these and the average "DD" on an investing subreddit.
Excerpt from the Tesla one (https://www.dbs.com/content/article/pdf/US_clover/Tesla.pdf):
> Leading EV manufacturer. Tesla is a leading global EV manufacturer, backed by its firm market leadership and healthy automotive margins. Tesla's leading share is backed by its economic MOAT in EV charging infrastructure and supercharger network, autonomous driving and other software (e.g., full self- driving aka FSD) (...) Tesla’s pivot toward AI provides a long- term growth foundation, but near-term performance will remain sensitive to progress on AI-driven execution milestones.
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>We're deep in an era where "finance cosplay" is a thing.
I feel the same way. It's so frustrating. I try to read and learn and then just hit one of "wait those numbers don't add up", or "this reads like the author just learned about this thing too" and other strange logical leaps time and again.
It is hard to really learn anything.
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Also, while I’m not an expert on Japan, I’ve been following Gearoid Reidy’s commentary on Takaichi and the new Japanese economy and I think the fears expressed are significantly overblown. But this is also characteristic of many other market participants so I wouldn’t categorize this as something obviously wrong, just a disagreement.
> If you’re really interested in learning about the unwinding of the yen carry trade, there’s plenty of information from actual experts to read about,
Ok I’ll bite. Where ?
I’m not finding a single article with a good summary, but you can find coverage on Bloomberg of all the twists and turns. FX markets are complicated, so you’ll need to do some research on how they operate as well. It’s not too hard to plug the keywords and concepts from these articles into AI and get a reasonably good background, though.
You can start here: https://www.bloomberg.com/news/articles/2024-12-02/yen-carry...
> like the Japanese institutional liquidation of US treasuries
There were news articles about this "happening" but this event never realized.
Good to know. Thanks.
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> And it’s clear that the author has a bias against the financial establishment (“monopoly money”), coloring the output.
That should have been more than obvious from the domain name and the logo at the top already.
Tbf, they are not far from a Truss-squared moment. And doesn’t help that CCP is gaining momentum with US leaving a vacuum while Sino-Japanese relation is going down the toilet.
Takaichi is much more popular than Truss was, and Japan is in a much better situation right now than post-Brexit post-COVID UK. And absolutely nobody is seeking a better relationship with the US right now other than satisfying short-term needs. Japan is not in a good spot long term (population slowdown, debt, slow economy) but there’s no reason to panic right now.
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I watched this video yesterday corroborating this story and I gotta say the evidence is pretty hard to refute:
https://www.youtube.com/watch?v=7ws8Grsc4jU
Purposefully devaluing the dollar to make US goods more globally marketable and hide the Japanese debt crisis is an interesting but risky strategy.
Currently, I'm glad to see a correction without panic, but it's too early to make a call on the effect on the overall global economy. Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.
It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
> It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
I really wish that people would wake up to the danger posed by meme stock BS “leaking” into the general markets.
Just as voters are responsible for changes in society, uninformed investors can impact society too, especially when they’re amplifying their purchasing power via leverage.
For instance, I’ve been buying real estate forever, and I’ve enjoyed the Reventure app.
But I’ve REALLY noticed that his YT videos are exclusively doom and gloom.
This ceaseless negativity moves markets, just as the irrational exuberance for real estate in 2005 moved markets.
But the exuberance for real estate was driven by people who were buying real estate.
The endless doom and gloom of YT finance videos is for a much different reason:
It drives page views.
That’s not a good thing. Because it’s really easy to get swept up in the negativity. And that negativity has a downstream effect, where it’s often used to convince people to invest in things that the YouTuber is promoting.
Basically, I don’t know if we need an “SEC for YouTube,” but we might.
Yes, I know we already have an SEC for YouTube (it’s the SEC), but nearly none of the people doling out financial advice on YT are trained professionals. It’s the fundamental defect of internet advice; who to trust?
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Reminds me of ZeroHedge. They've been shouting that the depresssion-level market crash is near now since 2009. Every single day. For 17 years.
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I can only personally speak for myself and I'm not giving financial advice here. I use the Bolgehead strategy of the 3 fund portfolio is still the tried and true I follow, and I have yet to not benefit from doing so, even in economic downturns[0]
[0]: https://www.bogleheads.org
I'm immediately concerned with the note about silver dropping so much. Yes, that happened, and was a historic drop. But it followed a historic run up to its prior price, so the drop is still net positive for even a 1 month period.
I'm not saying the article's thesis is incorrect, but its providing some data without context. I'm always leery of data presented without context.
I take “not financial advice” articles like this at best as entertainment. How can anyone seriously talk about metals for example without mentioning that gold was $1900 and silver $20 a few years ago. Today they sit at $5000 and $80. It’s completely absurd to write about the “drop” as a proof of anything
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The Yuan is never going to be a global reserve currency with how opaque the CCP is.
The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.
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The Yuan already is a popular reserve currency.
What is this crazy idea that every single country must act all the time in the same simplified way?
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The first currency to be gold backed will take the crown. China appears to be building towards that end.
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DO NOT make financial decisions based on the advice of a youtube channel. DO NOT make financial decisions based of of the advice of an an article written by a know associate of Curtis Yarvin. You saw the video yesterday because this is a marketing exercise. They hold a stake in the outcome, you are the greater fool.
Christ.
Find a professional fiduciary that doesn't have a youtube channel and never speculate more than you can afford to lose.
For the unaware:
> Curtis Guy Yarvin (born 1973), also known by the pen name Mencius Moldbug, is an American far-right political blogger and software developer. He is known, along with accelerationist philosopher Nick Land, for founding the anti-egalitarian and anti-democratic philosophical movement known as the Dark Enlightenment or neo-reactionary movement (NRx).
The author (jart, Justine Tunney) has openly supported these ideas: https://thebaffler.com/latest/mouthbreathing-machiavellis
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This really should be pinned to the top of the thread. Finance-as-entertainment is the world's worst gatcha game. For some reason people love getting suckered by these far right idols, both financially and "intellectually", who in turn are playing three-card-monte with them.
Everyone forgetting the more likely, more rule-of-law based fallback option for a reserve currency and international payments system (which is the important bit!): the Euro. Digital or otherwise.
> Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
I wonder why you’re worried. Regime’s change all the time. From a third party perspective, China is no better or worse than the US. Also, given how literally every country under the sun despises US now, this might just happen.
The way China manages it's currency is very different to how the US manages theirs.
China maintains strict controls on capital flows in/out. A reserve currency requires free convertibility. Holders need to move large sums instantly without permission. China has repeatedly tightened these controls during stress periods (2015-16 devaluation fears, for example).
Limited access to Chinese bond markets and equities for foreign institutions. Reserve currency status requires deep, liquid markets where central banks can park hundreds of billions. US Treasury market is $26T and extremely liquid. Chinese government bond market is smaller and less accessible.
Reserve currency issuer must run persistent current account deficits to supply the world with currency. China's economic model is built on export surpluses. They'd need to fundamentally restructure their economy.
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> We saw silver drop 40% which hasn't happened since 1980
40% pullback but still up 150% over the past year..
It was the same on Silver Thursday in 1980 too. And then it went sideways for a couple decades.
I spoke with a silver expert a week ago before the crash and he said half the flow is speculative, structural flow will remain. Looks like he was right.
Bitcoin is crashing hard too.
yeah, I stopped reading there
Aww, then you missed the best part! Who wouldn't be head over heels for the opportunity to follow this financial advice and lose all of their "monopoly money" (funsie term for real cash!)?
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This is a good analysis of the yen carry trade but i'd argue the causality is backwards. Record high margin debt in the U.S. is the root cause as it's a powder keg. The yen is just the fuse being lit. When system-wide leverage is this extreme, any funding sock (whether it's the BOJ rate hikes, hawish fed, or geopolitical event) can initiate the liquidation cascade. The yen carry trade is one source of that leverage but the fragility was baked in. If Japan didn't do anything something else would have cause the liquidation cascade, only a matter of time.
The real story isn't Tokyo, it's that Wall Street built a house of cards and ran out of steady hands.
I have a public ThetaEdge card that monitors margin debt and calculates the correlation with the S&P here:
https://thetaedge.ai/public/thetix-card/42d9c6de-218d-4627-a...
> Record high margin debt
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
You're right that $566B alone isn't a black swan. That FINRA figure only captures retail and small institutional margin at broker-dealers. It excludes prime brokerage (hedge funds), securities-based lending, and repo markets. Conservative estimates put total leveraged exposure at $10-15 trillion. The $566B is maybe 5% of the iceberg.
I see visible margin debt as both a canary and a proxy. It's a canary because retail cracks first (less sophisticated risk management, stricter regulatory margin). It's a proxy because when visible leverage contracts, it usually means hidden leverage is contracting too. They're exposed to the same assets. When FINRA margin debt starts falling, it's not just a warning, it's confirmation that system-wide deleveraging is already underway.
That's my 2c. Does that make sense?
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This is such a weird use of the domain, and kind of sad. I know the original movement was very diverse and had different ideas, but I'm not sure dispensing what ultimately amounts to financial advice from within the system really fits.
It doesn’t. The author is a Yarvinite and Musk worshipper
From Wikipedia: "In March 2014, Tunney petitioned the US government on We the People to hold a referendum asking for support to retire all government employees with full pensions, transfer administrative authority to the technology industry, and appoint the executive chairman of Google Eric Schmidt as CEO of America"
LMFAO
Being trans and a Musk worshipper is wild
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who is the author?
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I don't understand one thing: why would the Japanese government maintain a ZIRP or a NIRP ? What do they have to gain by doing so?
It’s to control inflation.
Basically, when currency is scarce, its value goes UP.
When currency is plentiful, its value goes DOWN.
The first scenario lowers inflation, the second raises it.
After Japans bubble economy popped in the early 90s, they had asset values FALL.
So the BoJ began stimulating the economy - trying to push UP inflation - by adding currency to the markets.
The Carry Trade illustrates one of the dangers:
Japan was trying to stimulate their own economy, to counteract the deflation caused by their bubble popping.
But money doesn’t know borders, and though the money was intended to stimulate JAPANS economy, there was nothing stopping ANYONE from purchasing that currency. It’s not like you have to live in Japan to buy Yen.
So the money (yen) was created in Japan, but ended up all over the world.
This has consequences:
* Japan ended up with mountains of US dollars. This is one of the reasons that Japan has more US Treasuries than China. This mountain of dollars lowers YOUR cost of living. Because USD is being acquired for The Carry Trade. This creates artificial demand for USD.
* Because the yen is created in Japan but is then used for international commerce, it dramatically reduces the inflation that “printing money” would normally create. This is why Japan has more debt per capita than any country by far, by a factor of over 2X
I am just an I.T. dude who invests in real estate. So what I just posted may be completely wrong.
The carry trade has existed for about four decades; that’s my summary of how it affects us, from the perspective of a small time real estate guy.
We're a bit far down in the thread, but I'd be interested in knowing why this alleged outflow of cheap yen didn't keep pushing the currency down. It's been flattish in the 100-150 band for decades.
I had to fact check the Japan having most treasuries, it's true, see this chart: https://economicsinsider.com/top-15-largest-us-treasury-hold...
As an aside, the presence of "Luxembourg" and "Grand Cayman" on that chart is a bit of a tipoff as to how the global economy works.
Probably to stimulate the economy which has been stagnant in terms of GDP since the 90s
Because it means they can borrow for free
Everything has consequences.
Free money is never free.
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Deflation.
It is a shame that jart got control of @OccupyWallSt and occupywallst.com and never gave it up. It seems like her politics and views are very out of line with many of the people who were originally involved in that movement. Repurposing occupywallst.com for something like this compared to it's origin is a big disappointing contrast. https://web.archive.org/web/20111021162924/http://www.occupy...
I was the one who registered it. Occupy as a movement has always been inclusive of people with different points of view. My job running the website and twitter has always been to give the people a voice. I think that's important, don't you? The only guy with more credibility than me in Occupy is Micah White but he's been growing vegetables in Oregon ever since he visited Davos a few years back. So I'm the best you've got.
> My job running the website and twitter has always been to give the people a voice. I think that's important, don't you?
Do you truly believe in your heart of hearts that people posting neo-MOASS wish fulfillment suffer from a lack of a voice, and no place for them to be heard? Take this seriously. More important than "a voice" is consistency and clarity of communication. The people involved in occupy wall street in 2011 weren't occupying it because they wanted to eventually join it, and I don't think that their form of economic justice would be for Wall Street to lose money in a gigantic market crash that again would result in taxpayer-funded bailouts that spurred the first protests. For transparency's sake, what are your market positions today?
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> The only guy with more credibility than me in Occupy is Micah White but he's been growing vegetables in Oregon ever since he visited Davos a few years back. So I'm the best you've got.
As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
You have X complaint against an institution. Let's say the institution accepts and reforms somewhat. It's pretty rare that the complainant will pat themselves on the back and say job well done. It's ultimately a game of diminishing returns.
If you have a hammer, it's not just that everything is a nail - you must find enough nails to justify continuing to use the hammer.
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Seems like you're just giving yourself a voice? Why not do that on a personally branded domain?
I think whoever registered the domain deserves the domain. I would dislike anyone grabbing my domain because it was perceived as miss used.
Secondly a domain and a political movement are 2 different things. Either one can exist without the other.
The domain is not even a .org which would be befit a movement ownership
Substantively reply to the critique.
> [nobody left] with more credibility than me
Source: trust me bro
Justine, do you think that readers here don't have eyes? The page linked is a call to financial action that, if the advice is followed, will result in yet another unsophisticated ETF pump and dump at best and a call to financial suicide at worst.
You are personally underwriting propaganda for something you are very likely invested in, targeting the most credulous. For it to appear on a site called 'Occupy Wall Street' is deliciously ironic.
Here's my disclosure: I am completely divested for both the US and Japanese market, except for transient USD cash holdings. I don't have a horse in this race. Will you follow suit?
I know very little of what happened in NYC years ago, but I would tell anyone reading the site now that it is run by actively malevolent speculators.
I do, however, know a few of your associates. Stop hanging out with grungy, unwashed sex pests, they aren't as smart as they pretend to be, and you should know that by now. It's unbecoming and frankly sad. You have the means to start life anew elsewhere, and you should take that opportunity now.
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You in particular are my main criticism of Occupy as a movement. They lacked any sort of structure, shunned it in fact, that would have ripped control of these resources away from you once it became clear that you disagreed politically with the vast majority of the people involved. That you were allowed to keep control of those resources is emblematic of how Occupy could let all that energy dissipate into nothing.
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Anyone attempting to build a movement might find it interesting how Pumping Station One in Chicago is governed. It's a maker space but run by people who care (at least from my experience when I was a member back in 2015/2016). The process for electing leadership and holding members accountable was very democratic and fair, from my experience. They open-source as much as they can about how they organize:
https://wiki.pumpingstationone.org/wiki/Do-ocracy
https://wiki.pumpingstationone.org/wiki/Member_Manual
https://wiki.pumpingstationone.org/wiki/Administration
Quoting from https://web.archive.org/web/20111021162924/http://www.occupy...
> This #ows movement empowers real people to create real change from the bottom up. We want to see a general assembly in every backyard, on every street corner because we don't need Wall Street and we don't need politicians to build a better society.
Maybe at some point those people will understand that high-school approach doesn't work in the real world.
Look at the amount of change they brought, look at the amount of change that a single person like Donald Trump has brought (for better or worse, this is not an endorsement).
jart... Oh, Justine Tunney. Is she still a techno-fascist or did that change at some point?
I don't think it did, she was openly pro-musk during his purges with doge so very recently.
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They’re in the thread, ask them
As in Curtis Yarvin, Dark Enlightenment techno fascist? Really?
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Whenever a government offers loans at an interest rate which is below the risk premium, that difference essentially represents the government giving the borrower free money paid for by all citizens through loss of buying power.
So when Japan offered 0% interest loans to traders who used it to buy USD bonds, it represents the Japan government offloading the cost of the risk premium to its citizens and giving the difference to the traders for free... But then the traders give that free money to the US government where it helps to inflate the USD currency supply to make American asset-holders richer.
The traders aren't actually profiting from the carry trade because the 4% return on US bonds doesn't cover the real inflation (loss of buying power) of the US dollar; their net worth in terms of buying power is actually the same or dropping. US asset holders are the ones actually reaping the benefit.
Utter rubbish from an extremely biased source. Every time they say something like "didn't you notice X" or "your portfolio must look like Y" the answer is nope, you're completely wrong. Every time they talk about some major "crash" you can just go look at it and see that it recovered within 48 hours and looked identical to dozens of other events through recent history. The outright calls for violence + intentionally destroying our own economy to "stick it to the man" at the end surely make me believe this is some rational analysis.
It‘s really hard to read this article, it smells of LLM generated slop once you get past the first couple of paragraphs - lots of negative parallelisms and lots of words without adding value to the sentence:
> To validate the thesis that the Yen unwind is the primary driver of volatility, we must examine the sequence of events. The crash did not happen in a vacuum; it followed a precise timeline …
> It wasn't just about rates anymore; it was about the stability of the U.S.-led global order
> The unwinding of a carry trade is not a monolithic event; it is a cascade that ripples outward
It‘s like almost in every paragraph. I don’t understand why this gets to be on the frontpage to be honest. It just reads horrible even if some of the points may be true (or hallucinated, who knows)
I have a sense that were in a moment of mass hysteria.
You dot even understand what your reading anymore. Cant tell whether you're reading a hallucination or someones thoughts.
"I don't agree / understand this, it must not be real!"
Now, you have to wonder: is my grammar just poor? Or did I intentionally inject spelling and grammar errors into the output or an llm? Is it in my system prompt to do this?
Can anyone recommend a good source to ramp up one's understanding of macroeconomics/monetary policy to a point where they can make sense of this? Starting from more or less a layman's understanding. Could be a book or course, but doesn't have to be university quality, a good blog or youtube channel could do.
This is such a loaded question.
Because the fundamentals are basic:
Creating money out of thin air generally creates inflation, because theirs is more currency chasing the same amount of assets.
But the Devil is in the details, because there are hundreds of currencies, one currency can be exchanged for another, and interest rates vary all over the world.
Then once that starts to make sense, you open up a box called “derivatives,” and now the complexity just went off the charts.
I only need to understand it in the context of loans on assets, so I can do the math in my head or in excel. Occasionally I’ll vibe code this stuff in Python.
Because I’m not diving into the deep end of complexity, the books I absolutely LOVE are the cautionary tales of when it all blows up.
In that respect, I think “when genius fails” is an all timer.
Nearly everyone knows about the Great Recession, and the depression and the dot com bubble.
But the collapse of Long Term Capital Management was the canary in the coal mine.
LTCM blew up for all of the most predictable reasons, and as the name implies, nearly everyone involved in LTCM were at the top of their game.
Another book that is more folksy is “a man for all markets“, a book about the dude who revolutionized stock options, largely due to a fascination with Blackjack!
(The LTCM guys were big time gamblers too.)
https://www.google.com/search?q=a+man+for+all+markets+by+ed+...
Sir, just tell me what do I do to make money! Do I buy? Do I sell? And what?
Buy when others are selling. Sell when others are buying.
Thank you sir!!
Anyone doing any attempt at market analysis should lay out the trades they've made and the time frames they're talking about. So we can come back later and point a finger at them and laugh.
It seems like their conclusion is "hold lots of yen"? We'll see I guess.
Japan is interesting because it has the highest debt-to-GDP ratio of any developed country and most other countries in the world are increasing their debt-to-GDP ratio; in effect, they're all moving towards a Japanese reality due to the fiat system's lack of hard monetary constraints.
If you look at Japan, the aspects of its economy and society which stand out the most are:
- Rigid economic structure and processes.
- Economy dominated by huge corporations, without much room for startups.
- Highly concentrated urban population.
- Population decline. Many young people are not dating and not getting married, can't afford much on their salaries working in the city.
I've skimmed this article, but what does this mean for most of the people in the US?
The author is implying that BoJ can/might/will cause appreciation of the Yen, which will force folks who are short(borrowing Yen) to buy USD assets to go underwater, forcing liquidation to pay back the Yen, and appreciating the Yen more. It's possible but there is no guarantee it would be a disruptive feedback loop or this year or etc.
If you believe them, then you can hedge buy either shorting TLT(betting treasury yields will rise), or going long Yen (e.g. FXY shares/calls).
I bought some FXY calls but just enough to hedge the Yen prices of my upcoming Tokyo trip in case they're right.
We are profoundly fucked.
We always are. And yet, number go up.
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Only through the first two paragraphs but a little turned off by the "everybody else is wrong, we are right and it's this one specific thing" attitude when it the topic is understanding something as complex and opaque as the global economy
It reads exactly like a WallStreetBets "effort post" where someone has some pet theory that somehow explains the market in a way that nobody else understands, but is almost always either completely wrong, or a vast oversimplification
Fintwit is full of this crap. Fortunately it also has a few smart people who put it into context.
Financial doom porn sells well, but it's almost always wrong.
For a better-credentialed opinion on Japan, here's the former Chief FX Strategist at Goldman Sachs:
https://robinjbrooks.substack.com/p/debt-crisis-in-japan
Yeah that part is a bit red string but the analysis further down is more reasonable. I have no idea whether it is an opportunity or someone grabbed the domain and going for a pump-and-dump, either seems plausible.
Except the part where they confuse "cryptography" for cryptocurrency. Assuming they knew the difference.
Personally I think Microsoft's stock is crashing less about any of this (though it is a hell of a theory IMO) and more to do with the fact that:
* They are investing in AI, both financially and by corporate communication, over and above everything else and pissing off damn near everyone in the process
* The XBox brand is tanking
* Windows is an utter disaster, according to Microsoft themselves, and Valve is so dispirited with it as the future for gaming that they've invested millions into a linux-based framework to run Windows games
I’m a little impressed at how a company whose business model is to sell a product they developed in the 1990s over and over again while making inconsequential and non-breaking changes from year to year somehow still manage to screw that up. In my own opinion, they have always been a diabolical company. I’m glad to see them fail.
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Love the last line, what Valve has done on Windows emulation is herculean, I don't know (it would be great to know) other businesses creating/investing in incredible and risky third-party compatible technologies to run their real business on top of it.
I worked in what other calls "Adversarial Interoperability" [1] but the scale of Valve is on another level.
[1] https://www.nektra.com/main/2020/01/12/reflecting-on-16-year...
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The Yen Carry Trade isn't some big secret... it's caused enough turmoil that it hit the front pages of the WSJ a few times in last few years (Aug 2024 was a big one iirc)
Finance bros will make their way in here soon to give a better peanut gallery, but I think "is there something here" comes down to do you believe the final bit of the articles opening act:
> When correlations between historically uncorrelated assets (e.g. Gold, Bitcoin, Microsoft, and Silver) approach 1.0 during a sell-off, it serves as a distinct indicator that traders are not selling what they want to sell, but rather what they must sell in order to meet margin calls in a funding currency that is rapidly appreciating against their liabilities.
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Do you organize a sit in for your ideas at work? This is a wild comparison.
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Seriously, I really appreciate that article, explaining a lot a thing we see that news are able to understand and explain.
God job
>Following the Martin Luther King Jr. holiday, U.S. markets opened on January 20 to a bloodbath. The S&P 500 fell 2.1%, the Nasdaq composite dropped 2.4%,
Should someone that calls 2.4 percent movement bloodbath be taken seriously?
And fully recovered in less than 48 hours. What a bloodbath ..
Nothing that cant be fixed with threats to invade okinawa or 100% tarriffs to matcha or sth
>By anchoring borrowing costs at or near zero, the BOJ enabled Wall Street to borrow Yen cheaply and invest it with leverage into higher yielding instruments globally, such as U.S. treasuries, equities, and cryptography
Think you mean crypto currency here?
They got the word wrong, but I don't believe cryptocurrency would count either: The interest rates at BoJ _are_ low, but to borrow anywhere near that low they have to have high quality collateral like treasuries.
No, they've got into cartography now. Have you never heard of a bitmap?
Sounds good, too bad I only have $5k available. Even if I spend all on FXY it won't gain that much from the current $58.6 in the forseeable future. Rich get richer I guess so nothing changes just the location.
> then you buy treasury bonds that pay 4%
> used by a generation of investors
How short is a generation for investors? Aren't we near 20 year highs as far as US bond rates?
I guess the point is that this is more about the Yen than about US bonds?
A lot of the financial jargon makes the article hard to follow. I know I'm not the target audience, but I wish at times there were some plain English summaries of terms.
The Japanese central bank arrived in zero effective interest rates in the 90s, and has been practicing negative effective rates (I.E. smaller than inflation) for a while.
That had the effect that their banks took huge amounts of government loans and used it to buy foreign assets. As returns are higher in countries with higher interest rates, and lots of assets are practically safe, like government bonds, that is close to free money for them, and a very cheap loan to the receiving country.
But last year their central bank made the interest rate positive. And investors are acting on the expected way, selling the foreign assets and paying off their government. The article is claiming that this is the cause of the recent turbulence in the investment markets.
Thanks, that was generally how I interpreted the article.
The issue was the terms. There was a lot of logic inversion that someone who's much more familiar with the terms could probably follow, especially when trying to understand how an investment in Microsoft was loosing value when the investment was from a loan in yen.
Likewise, the end of the article uses a lot of abbreviations, especially when referring to Australian currency, which I just don't understand at all.
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Either way, we all know a crash is due before the next decade (everyone is IPOing to the exit), and if you don't realize that by now, well...
I'll bite. Isn't as obvious to me as it is to you, I'm just a programmer, I don't know how the economy works. This is literally the first time in my life I heard anything about governments borrowing Yen like this and that this would become an issue.
I'm aware of an "AI bubble" and the over-concentration on the "Magnificent 7".
What else is obvious to people and why is the timeframe (next 4 years) so obvious?
Well, investment markets all over the world are not reflecting the real economy right now. You can see that on how stock prices don't reflect how wealthy you feel and maybe more clearly in how house prices are completely unrelated to the amounts people can pay.
That's the obvious part. The consequences of that are anyone's guess, as is the timeframe. But it's not a sustainable situation, so something is bound to happen to change it eventually.
It’s not as obvious as they claim. If it was, if the future was somehow predictable, there would be software that did it; there isn’t.
People have been claiming the end is near since forever; economists have been saying for months now that stocks should already be falling, but they are going up. And also, it feels good to be part of the in-group that just knows more than everyone else. Just ask a prepper: they will be equally convinced.
So in summary, even if we’re headed for another crisis, unless you’re only a few years from pension, you’ll just sit this one out calmly, just like all crises before. Unless the global economy breaks down for good (in which case you’ve got other things to worry about), your ETF will recover. Don’t let the fear mongers get into your head.
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The entire stock market basically functions as a funnel of wealth from the middle class to the rich right now. When OpenAI and Anthropic IPO, they'll be megacap stocks and 401ks and pension funds the world over will invest in them. Then insiders will cash out, and the AI bubble will collapse. USD will have transferred from the retirement accounts of middle-class people to the rich. This is how all stock market crashes work. This one is especially interesting because the middle class is already so squeezed - how many more times can they pull this trick off? Seems like it can't go on many more times.
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People already said that last decade.
Great piece, I like the VIX part the best. Do you need any help with your site?
Smacks of:
"support my thesis and ignore alternative explanations and contrary evidence on whether there's even a there, there" AI-research slop.
> In short, occupywallst.org is a living archive and occasional update point for a landmark left-wing protest movement that put economic inequality and corporate power at the center of national conversation starting in 2011.
Is this true?
Dunno about the website or corp, but the occupy wall st movement was/is true. Happened right after 2008 stock market crash and people camped out on Wall Street in protest of bailing out the banks.
One can make the argument that trump was elected because of OWS knock-on effects...
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I would make the correction that the protest movement was not left wing. I think he’s trying to take credit for his favorite team. TARP was opposed by 80% of Americans. It passed legislation anyway. I think there’s a good lesson to be learned in how performative and inconsequential the electoral process is.
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Carried over to Europe too, I remember the camps and protests in many cities' financial districts.
Seems like a pretty fragile analysis
Bottom line is: buy Yen futures to screw billionaires. Sounds pretty good to me.
Bottom line is:
* Pay your debts
* Own useful assets
* Live in a peaceful stable country
Well duh. That's obviously what everyone should try to do, but it's nice to engage in a bit of flight of fancy. I like imaging a rogue group of retail investors buying up the yen, short squeezing carry traders and sticking it to the billionaires. Real life is much more boring, and involves habitual, long term good choices.
This reads like LLM slop. The "carry trade blowing up" has been written about hundreds of time before, so it's not surprising it's so prevalent in LLM training data.
The assertion that metals tanked because of Warsh being picked, is particularly telling. Warsh is not a hawk, despite some media narratives. The Fed is stuck behind not raising rates while the debt is coming down on banking while POTUS is crazier than ever and lowering rates to raise inflation/debase the currency and debt. It's not going to take long to see where this path leads.
Not to mention that Congress is the one in control of the ship and they don't seem particularly keen on putting their hands on the wheel.
HN is full of tech savvy people. Yet an llm slop article is upvoted to the front page of HN...
Imagine how deceptive llm slop contents are to the general population.
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Doubt that it’s LLM-generated given this is Justine Tunney’s project.
It is most certainly LLM generated. Nobody but an AI prompted with “connect the unwind of the yen carry trade with Trump’s threats to acquire Greenland” would have ever written something like that.
My guess is that she did a lot of research on the topic with AI then created this article partially with AI generated text.
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