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Lawrence McDonald

@Convertbond

Oct 11

Any asset class that is relentlessly promoted by strippers and charlatans, an “investment” that plunges 70% four times in a decade is NOT a store of value. Long term track records on crypto are meaningless garbage.

Over the last decade, Bitcoin has spent most of the time off 40 to 80% - see the red drawdowns below. You must be prepared for this price action. Personal capital must have a long-term view with a mission to add in to weaknesses. If you will need the $ inside the next 5 years, get out now.

The conundrum. The pump artist and strippers draw young people into this dangerous game at the highs. They need to find the greater fool to move the asset class further. Young people adopt a perceived long-term view: "I will never sell." Then, Bitcoin drops 70% and stays there.

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Lawrence McDonald

@Convertbond

Sep 30

Business Development Companies BDC’s Private Credit - the slime show is oozing to the surface. Borrower “First Brands” used a Lehman like Repo 105 move to hide leverage and screw investors. Two size frauds in the last 10 days, stay tuned!

First Brands was;

“selling inventory at quarter end with a promise to buy it back higher after to hide in an effort to show better cash flow and inventory mgmt and hide the fact that there was that much more debt"

"Larry, Lehman Repo 105 is alive and well. This time in private credit!” CIO NJ

The loss to “private credit’ investors could be as high as $40B. “First Brands” balance sheet looks like so many of the mortgage CDO structures from 2007-2008. They want to “hide the salami,” - hide the leverage to produce returns.

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Lawrence McDonald

@Convertbond

Sep 23

Someone MUST start calling out this BS, a sustainable, forward-looking power path???

USA Nuclear Fleet -- average reactor has a capacity of around 1 GW (97 GW total capacity from 94 reactors).

You need 10 reactors, each with a capacity of 1 GW, for Jensen's "one project."

Building a nuclear power plant in the US typically takes around 7 to 10 years, considering both planning and construction phases. Sure, the Trump DOE (Department of Energy) can cut this timeline down, but it's time to GET REAL. A must-read - "When Markets Speak" on this subject.

Small Modular Reactors (SMRs) are designed to be built faster than traditional nuclear power plants, with construction times ranging from 2 to 7 years, depending on the design and regulatory approvals. Once again, Jensons' $NVDA pump festival is plagued by numerous issues.

Read 12 tweets

Lawrence McDonald

@Convertbond

Aug 28

U.S. Power Grid Stress and Colossal Impact

Over 15% of everyone’s 401k is crammed into two artificial intelligence focused stocks (Microsoft and Nvidia) without a sustainable plan for energy supply to support lofty growth assumptions.

“Never, ever invest in the present. You have to visualize the situation 18 months from now, and whatever that is, that’s where the price will be, not where it is today. If you invest in the present, you’re going to get run over.”

Stanley Druckenmiller

(2)

Jensen $NVDA (CEO) -- has done a great job of pumping up investors into the bull case, but he has an obligation to inform Nvidia shareholders on the risks to growth coming from energy bottlenecks in 2025-2028.

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Lawrence McDonald

@Convertbond

Jul 8

Japan was planet Earth's bond yield anchor for decades. When central bankers distort the true cost of capital over longer and longer periods of time, there's a price to pay for this charade; it's not free.

Japan, government spending as a percentage of GDP - The fiscal deficit was projected to widen to 3.6% in FY2024 from 2.9% in FY2023, despite the "gradual phase-out of some economic support packages."

*Central bankers have been financing (buying bonds) the masquerade for decades.

When interest rates rise, existing bond prices fall. The Apple $AAPL 2.55% bonds due in 2060 have been trading in the bid 50s (cents on the dollar) for nearly 3 years, which begs the question. Where are all those other bonds trading globally - the ones issued from 2011 to 2021?

Read 7 tweets

Lawrence McDonald

@Convertbond

Jul 1

Summer Read - Book Ideas

A Core Thesis Laid Out in "When Markets Speak" - Fiscal Dominance Regime and the death of the 60-40 era.

amazon.com/Listen-When-Ma…

"Could it be that Fiscal Dominance is replacing Monetary Dominance. Conversations about asset allocation in a changing world. If the secular regime has shifted from the Great Moderation of the 2000’s and 2010’s to one of Fiscal Dominance in the 2020’s and beyond, then in my view that calls for a refresh of the 60/40 paradigm that most of us grew up in."

Jurrien Timmer, Director of Global Macro at Fidelity Investments, June 30, 2025

"The risk-return moderation chart below shows that the Great Moderation was driven by robust returns for both US equities and bonds, boosted by a negative correlation between those two benchmarks. The result was a simple 60/40 that produced returns well above the inflation rate with a manageable risk. This was the era of risk parity, with long-term Treasuries producing 6% returns while also sporting a negative correlation to equities. With correlations swinging from negative to positive in 2022, and bonds now potentially impaired by a rising term premium, the days of the simple 60/40 may be over. "

Fidelity, Timmer.

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