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With the intervention in the Japanese yen, we should look at what happens to the yen-peso carry trade. The last time this faltered in mid 2024, take a look at ETFs like EWW and ILF. Right now, the yields on US treasuries are still higher than Japanese ones which is probably saving this trade. 

If the Japanese are going to intervene in the falling yen, then doesn’t that strengthen the yen, raise interest rates, and take away the Japanese carry trade? And shouldn’t that affect our stock market negatively? We’ve seen Japanese bond yields go up for a while but it hasn’t impacted our stocks. 

The book destruction by Anthropic reminds me of what Thanos says in Endgame: “I will shred this universe down to its last atom and then, with the stones you've collected for me, create a new one. Teeming with life that knows not what it has lost but only what it has been given. A grateful universe.”

Thanos Marvel: A Greatfull UniverseAlt: Thanos delivering a line in avengers endgame about how he wants to shred this universe down to its last atom and build a new one teaming with life that knows not what has been taken but only what has been given. A grateful universe.static.klipy.com

Kevin Warsh gave no clue as to how he would battle high inflation and you saw the bond and stock market react violently. The hardest choices require the strongest wills. In acting this way, he follows in the footsteps of Greenspan who presided over the dotcom crash. And that is destiny fulfilled. 

This day extracts a heavy toll. Meta’s stock was punished due to its free cash flow decline while Microsoft was rewarded due to reducing capex. There’s only so much cash flow left over. When there’s too many mouths and not enough to go around, investors bail. What I predicted has come to pass.

I expect Kevin Warsh to say that the Fed will resume QT, allow the MBS runoff to continue, and reinforce that the Fed has no tolerance for persistently high inflation. He’ll also tie a lower balance sheet to lower policy rates and say that the Fed will rely on the trimmed mean to measure CPI.

Even though Citadel believes that the Fed will raise rates, I don’t think they will. They’ll hold because Warsh has said that he wants to rely more on the CPI trimmed mean so that it strips out outliers and one time shocks. The CPI trimmed mean is pretty stable www.clevelandfed.org/indicators-a...

Median CPIThe median CPI is a measure of inflation computed by the Federal Reserve Bank of Cleveland. It ranks the components of CPI inflation and picks the one in the middle. Its construction makes it less sen...www.clevelandfed.org

Two different headlines about Jeff Bezos about the same story. This one from Fortune: fortune.com/article/jeff... and this one from TNW: thenextweb.com/news/bezos-s.... Reminder to everyone to always look behind the headlines even in a world with ever-decreasing attention spans.

Jeff Bezos says working harder is the cure for anxiety: ‘The stress goes away the second I take that first step’ | FortuneBezos worked through decades of stress to build the No. 1 Fortune 500 company.fortune.com