Investment-Grade Bond Sales - pressure on prices below— the great crowd out. There are indeed AI (data center) bills to pay. After the META bond deal, last week's "drive-by" $30B surprise, now this:

*GOOGLE PARENT ALPHABET STARTS EIGHT-PART US DOLLAR BOND SALE - Bloomberg. The weakness in investment-grade bonds, see the LQD move lower. It’s not credit weakness, it was a surprise supply crowd out. The colossal Meta bond deal on Thursday was of a surprise size. Weighed on the market, big time. They printed $30bln (purpose - AI capex funding).

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.

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

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.

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

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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.

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

There is a price for higher for longer - it's NOT free. Interest rates up, bond prices down.

*Top Four Japan Insurers See $60 Billion in Unrealized Bond Losses - Bloomberg.

**Q: Mark to market losses on this one Apple $AAPL bond?

A: $805M. In October of 2023, Bank of America $BAC equity traded near $24 ($43 last week), with the U.S. 10 year Treasury yield at 4.91% (4.51% last week). Thank God for the Fed's Bank Term Funding Program (BTFP), but a lot of these losses are now sitting on the Fed's balance sheet.

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Book Ideas - "When Markets Speak" - Top Themes --Nuclear Power - AI Infrastructure - Think of this . The $NUKZ ETF is up 25% in May, top 3 holdings are only worth $250B vs. $3300B for Nvidia $NVDA

*Passive investing (Indexing, S&P 500) has everyone's capital in the wrong trade. A Historic week. This is a WW2 like initiative. National security, the USA is WAY behind China. Friday, executive orders were signed. The White House wants to 4x domestic production of nuclear power within the next 25 years, @elonmusk has been making this point for 36 months.

.@SpeakerJohnson warning, you guys are smoking in the dynamite shed. The Limited Life Cycle of a Democracy

Bondage
Spiritual faith
Great courage
Entrepreneurship
Private property rights
Liberty
Abundance
Complacency
Apathy
Dependency
Bondage

*Book - “When Markets Speak”

What do Bonds Know?

*Last 20 years, large equity market risk-off events have -- always -- brought in "flight to quality" buyers of long duration U.S. Treasuries. Not this time.

**Book Ideas - "How to Listen When Markets Speak" on Amazon. Largest Destruction of Equity Capital in the US

2022: Wars / Inflation -$10T (11 months)
2025: Trump tariffs: -$9T (6 weeks)
2020: COVID: -$9T (1 month)
2008: Lehman: -$8T (12 months)

*A powerful, colossal secular shift with a HIGH impact on your portfolio is developing.

Does President Trump realize he has to destroy everyone's 401k to Make America Great Again?

(1) "What multiple do you put on companies that are forced to invest by the state?" with @ces921

*Apple is 7.5% of the S&P 500's composition; a decade ago, the top three holdings were close to that weighting.

Serial Convertible Bond Issuers

SunEdison*
Chesapeake Energy*
SunPower*
Molycorp*
Lehman*
iStar Financial*
Calpine*
Fannie Freddie*
Enron*
Tyco*
Adelphia*
Six Flags*
eToys*
Avaya*
Worldcom*
Tesla
Coinbase
Microstrategy

*went bankrupt. The Last Saloon (2)

"Over the last 30 years, companies issuing more than one convertible bond in a three-year period – filed bankruptcy protection over 80% of the time, our research showed."

thebeartrapsreport.com/blog/2020/07/2…

If this were a stock, would you buy or sell it? Apple $AAPL 2.55% bonds due 2060 are down at 57 cents on the dollar. If long-term bond yields go to 6%, take a guess where this bond will trade?

*Now think of the trillions of USD loans issued in 2017-2021 on bank balance (commercial real estate, mortgages, corporate financings).

Since 2021

Bitcoin

59k to 59k

Gold

1750 to 2500

*Last ten years - Gold’s largest drawdown? 21% vs. Bitcoin -82%, -58%, -65%, -75%.

*A store of wealth holds its value. It doesn’t lose half its value or more every few years. No human being can put large portions of their personal wealth in an asset that drops 50-75% every few years. Gold is a colossal reservoir of liquidity, approaching a $17T market vs. bitcoin at $1.5T.

Chart from @Maverick_Equity

File under another multipolar world headline...

*MAERSK TELLS ALL ITS CONTAINER SHIPS TO PAUSE RED SEA VOYAGES A large percentage of sea-borne container traffic goes through the Red Sea. Even cargo from Shanghai to New York goes through the Red Sea. All the cargo that goes from China to Europe goes through the Red Sea. Very few go around Africa since it's more costly. Halting this traffic has the potential to disrupt a lot of cargo traffic...

With US Treasuries at 5%, Bank of America is close to 45x levered, at 6-7% infinitely levered.


For all of 2008, as Lehman was failing, the value of their core (safety) capital (US Treasuries) was moving higher, NOT lower.

*As interest rates move down, bond prices move up.

Off the Recent Lows

Orange Juice +45%
Natural Gas +43%
Sugar +41%
Gasoline +33%
Uranium +28%
Oil +24%
Lean Hogs +22%
Soybeans +16%
Iron Ore +15%
Coal +14%
Wheat +14%

*Bloomberg terminal data, lows since Dec.
**ALERT: Inflation expectations, US 5yr BEs, at a nine-year high. EU Gas Up 22% today

“The likelihood of a repetition of the crisis of last winter has gone down significantly, which can also be seen in the forward market, “But we have to be clear that the structural change ...

What do bonds know? We are looking at the 3-month US Treasury Bill yield vs. the 2-Year US Treasury yield. The Fed is holding up the front-end T-Bill yields with rate hikes and hits of more vs. market participants pushing down 2’s yield betting on recession - future rate cuts.

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“Policymakers consider themselves vindicated after they followed through on their half-percentage-point rate rise last week despite global market volatility” FT

*the ECB hasn’t figured out banks can’t fund them selves with front end rates this high after the AT1 debacle. The ECB is “smoking on the dynamite shed..”

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Goldman Sachs goes “all in” US consumer finance, then pukes 🤮 it out 18 months later? Really??? Tell me more… Flashback to 2006-2007, Goldman was the FIRST to exit subprime — it was a classic, hall of fame stop 🛑 loss. Today, as colossal interest rate risk hits the $4.8T consumer finance mkt - they cut bait again while most are asleep. History rhymes, indeed.