Been a long time since I summarized the current macro environment in the US. 🧵 This chart succinctly shows how most of the monetary drivers have evolved over time, showing YoY % change for US debt, M2, CPI, NGDP, and Wages.

Some people have asked me to explain my Disney meme more clearly. This is, in my opinion, the most important macro chart of all. 🧵 It's pretty simple, just pulled the data from the Fed Z tables on household wealth.

federalreserve.gov/releases/z1/

Your Bitcoin primer: Everything you need to know to understand the $BTC market.🧵 Before we talk about market dynamics, let's quickly discuss what $BTC is. People argue over whether it is a store of value, or a currency, or a commodity, which I am not going to try and decide here. Instead I will simply present the information and let you decide yourself.

Everyone here has the effect of treasury rates backwards because they are still operating with a low debt level framework. 🧵 If debt is same as cash, rates are irrelevant and NGDP growth = Deficit when bank reserve fraction constant. If treasuries carry duration risk, then rates are sensitive to supply as bond holders use the interest payments along with savings to balance proportional debt holdings.

Alright, we've all heard fintwit, seemingly every economist, and even the chair of the Federal Reserve say there is a housing shortage in our country. So did you know that there are more dwellings per person than there have been in the last 20 years? Time for a housing 🧵! Let's be real, the plot above is really just a flat line. So if housing supply more or less always tracks total population, what's really happening to housing prices? Let's peel it back and see if we can find anything.

As we await the Fed rate decision this week, it's important to put it into context. First is the chart I use to get a feel for macroeconomic conditions. It plots the YoY percent change of 1) US deficit, 2) M2 broad money, 3) CPI (inflation), 4) Nominal GDP, and 5) Wages. 🧵 Just to quickly recap, during and following Covid, the Fed printed and distributed nearly 40% of all money at the time. This influx of money was an attempt to offset the drop in money velocity (how many times money changes hands) from the pandemic.

Options market update for week ending 02/16/2024. Original post explaining scope linked. 🧵

https://twitter.com/Dr_Gingerballs/status/1726000196524417464

This week was Feb OPEX. Last week I said it looked a lot like Dec OPEX, which would likely provide immense upward pressure if it played out similarly. Although we ended the week negative, I think most people would agree buying pressure was immense.

Here's my take on the Geoffrey Hinton "just storing weights" meme about @GaryMarcus. I put in the prompt "game controller" into Bing image maker.

Look familiar?

I couldn't think of a better image to capture $MSFT stealing Sony concepts and telling them to "Get F***ed"🧵 I did a reverse image search in Google (take that $MSFT and Sony!), and quickly returned many likenesses of what is obviously a Sony Dualshock 4 wireless controller.

Options market update for week ending 01/26/2024. Original 🧵explaining scope of data linked.

https://twitter.com/Dr_Gingerballs/status/1726000196524417464

The total dollar value of open contracts has been pretty stable and boring since nov 23. Calls continue to make up most of the value. This week, over 1M puts were open on $SPX and only about 400k calls. Put selling continues en masse.

Okay a little deeper dive into why I think the data matches the rhetoric of workers saying they are behind. A lot of people are looking at wage rates in various ways to come to wildly different conclusions and I think this is the right way to look at it. 🧵 First, I've showed this chart before and it has extra stuff. Just look at blue (CPI) and yellow (median YoY wages) percent change per year. You can see before pandemic, workers wages were exceeding inflation. We will call that the baseline.

Weekly Options update 01/05/2024 🧵. Original post explaining scope linked.

https://twitter.com/Dr_Gingerballs/status/1726000196524417464

Total contract values on the market remain fairly stable just under $400B. Since The end of 2023, Calls have lost about $60B in value and puts have gained about $25B.

Okay I was going to let this go, but this CNBC pundit and shameless fund shill has decided to openly accuse me of stealing his ideas. So let’s set the record straight. @jam_croissant

https://twitter.com/jam_croissant/status/1741298265352794248

This morning I received this. The reply below. He never responded to my reply. He clearly thinks I’m just stealing his ideas. There’s a bunch of problems with this.

The $SPX had a wild year. As we end the year, there are renewed discussions that breadth is improving given the performance of the Russell 2000. Where do things stand statistically?🧵 Above is a market cap weighted histogram of the 1Y % change over time for the $SPX. So for example, the large $1T bar near 55% means that $1T worth of companies in the $SPX increased by 55% this year.

The end of 2023 options market wrap up. Original post explaining a lot of the concepts here linked.

Bonus my drunk predictions for 2024.

Happy New Year!

🧵

https://twitter.com/Dr_Gingerballs/status/1726000196524417464

First, total contract value on the market. With the EOY roll off, we sit around $400B, in line with longer term historical averages. The value is still mostly in calls, as we are concluding one of the fastest runs in recent market history.

Okay, lots of various takes on breadth in the market right now. As someone who has spent a lot of time with spectroscopy and solid state physics, I thought I would provide a different way to evaluate it. The most popular one is the percent of the top 7 tech stocks in $SPX.🧵 The next common one I see is actually a lot of different yes/no criteria. For example, percent of companies above their 20 day moving average. I saw percent of companies below 200 day moving average for awhile back in October. These are...okay...but they throw out a lot of info.

Weekly market options update 🧵

Original post explaining scope of data here:

https://x.com/Dr_Gingerballs/status/1726000196524417464?s=20

First up we have the total contract value of all contracts in the market. As can be seen, this jumped considerably this week to $420B, up from $400B. This was primarily driven by sold puts driving more calls ITM at $SPX $4600.

Weekly update to options market dynamics as promised. Original Thread linked. 🧵

https://x.com/Dr_Gingerballs/status/1726000196524417464?s=20

Gross market contract value increased noticeably by $20B this week, led by calls. Total value $410B.

Okay let's try to put to bed the idea that inflation was transitory. 🧵 First, the definition of transitory as defined by the Fed is misleading/confusing. The Fed definition of transitory was always that inflation rates would rise and then return to manageable levels on its own. Fine, I can live with that definition...

Some useful options market info for people interested in market mechanics. 🧵 How large is the options market and how important is it? The options contracts open today are worth aggregate roughly $400B. The stock market is $45.5T. This makes the options market worth about 1% of the total US stock market. Seems unimportant, right?

Seasonality posts for $SPX are everywhere, as everyone clings to the myth of the "Santa Rally." The problem is that seasonality arguments look only at average values and ignore variance. Over a 90 year window, you can expect 7.8% returns a year. Looking at just the average, it looks like one can expect pumpies into July, flat performance through Oct, then a 40% boost to yearly growth in the final two months. Hey, that looks like a Santa Rally...what gives?