Additional elements from Gundlach - Rosenberg interview.

https://twitter.com/GraphCall/status/1987932209278234960

FALSE LIQUIDITY FROM MANY PARTIES:

Harward was a tell tale example. It is basically pay as you go. $50 billion endowment.
Locked up in illiquidity and had to raise funds.

UST DEMAND DESTRUCTION
GUNDLACH and DALIO

The Fed is ending balance normalization (QT)

The fed is signalling that it will restart monetization of gov debt. Why?
It is not QE, it is monetization. Yes, there is a difference. Why would any central bank be crazy enough to stimulate a bubble?
There are problems with debt absorption.
We have discussed that before with the problems of repo.

1/23 BESSENT THE HEDGE FUND FARMER
As I was reading the piece from Joseph Wang on repo, I remember my readings from different sources and notably from the BIS on systemic risk that showed up in April 2025.

In fact the FED is forced to backstop the dgeneracy of the repo market and hedge fund. The Negative haircuts on UST decried as a source of systemic risk by the BIS.
x.com/FedGuy12/statu…

So what are hedge funds doing with REPO in present of a large primary deficit? 2/23 THE CORE MECHANISM (Simplified)

The U.S. government is spending $2 trillion more than it collects each year → it must issue $2 trillion in new Treasury bonds/bills annually.

Who buys all these Treasuries?
Not just pension funds or foreign central banks (who pay with cash).

A huge chunk is bought by hedge funds, proprietary trading desks, and dealers—but they don’t use their own cash.

Instead, they use leverage:
They borrow cash overnight in the repo market.

They use the newly bought Treasury as collateral for that loan.

This lets them control $100 of Treasuries with only $5–$10 of their own capital. (and in fact with negative haircut as explained by the BIS and it’s a key point)

hy do they do this?

Mainly to run the cash-futures basis trade:
Long the actual Treasury (bought with repo cash),

Short the corresponding Treasury futures contract.

Profit if the two prices converge (which they usually do… until they don’t).

We will explain why they didn’t and it’s structural

The catch: This trade only works if repo funding is cheap and reliable.

And because trillions of dollars of these trades exist, they create massive, ongoing demand for repo loans—not once, but every single day, since repo is often rolled overnight.

It’s that every new Treasury issued is potentially fuel for another leveraged trade, which needs more repo financing.

More deficit → more Treasury issuance → more leveraged buying → more demand for repo.
The lenders of repo cash (money market funds, banks) are finite.

As they run out of “easy” cash (e.g., from the Fed’s RRP facility), they demand higher rates to lend.
Repo rates rise above the Fed’s Interest on Reserves (IOR)—a red flag that funding is getting tight.

1/18 FISCAL DOMINANCE and PORK-BARREL BILLIONAIRES
ORACLE’s $38 billion data center debt offering.
The crony Inflationistas, caramba!
$ORCL will do inflation arbitrage — let’s explain…

https://x.com/MacroEdgeRes/status/1981503533271671039

2/18
Ok, basically Bessent is telling all corporates: “Borrow and spend now, because I won’t be able to hold that curve down for long, boys!” I am going to run out of foreign (UK) and domestic patsies (Morgan Stanley) to do bond stuffing and repress that curve.
@BankRegData

1/25 The Lessons of fiat money from the XVIIIth century

For someone using classical economics who has abundant archives about the widespread use of fiat currencies at the end of the 18th century, 2/25 ...the wording used by the financial press of today is very weird. People talk about gold rising?

Let’s review what Henry Thornton says about the possibility of the BoE lending too much money to the government.

1/17 About de-dollarization in action (not a Myth listen to Rogoff), US interest rates, And Gold Warrants.
Ethiopia wants to follow the steps of Kenya and convert its USD debt to Yuan. 2/17 Ethiopia's main exports to China include coffee, oilseeds (like soybeans), and sesame seeds. China also imports other agricultural products and raw materials such as cotton, dried legumes, and leather from Ethiopia.

1/25 PRIVATE EQUITY ZOMBIES PART I:

THE BIG FAT REGULATORY ARBITRAGE BETWEEN BASEL II BASEL III

How the Boiler room of procyclical mark to model under Basel II in banks leading to the GFC was stopped in banks by Basel III but moved to NDFIs - private equity not subject Basel 2/25

It all started in 2000 with IFRS accounting. The EU endorsed those procyclical standards even though bankers and politicians in Germany and France were against it, as they fear that accounting procyclicality would promote “irrational bubbles...

1/20 PROVING THAT BITCOIN IS A LIQUIDITY DECOY WITH SIMPLE DIFF EQUATIONS.
“HODL” on to your socks. (a bit technical)

ALSO The Fed is semi-lying, in fact, about “We would lose control of interest rates without IOR.”

docs.google.com/document/d/1n1… 2/20 Well, the opposite is true (long term), in fact, when the portion of interest-receiving reserves converges to 1.
IOR is convenient in the short term but lethal long term.
(Patience)

1/25 Can a push in a new tech prevent a credit correction in bad credit areas?
Maybe, but there is a precedent in 1885 2/25 After the 1873 Franco-Prussian war, there was first a credit expansion. The beginning is the prosperous part but this credit extension as usual ends in degenerations in Minsky asset. The Funny thing is that people today even claim “degen” as an basis for investing!!

1/15 UST Bonds Stuffing & National Security
Moreland, in his presentation about Morgan Stanley, shows how much the bank has been stuffing into UST and explains how, typically, “banks,” for some odd reasons, have an ability to predict rate cuts.
Here? Fiscal dominance twist... 2/15 Morgan Stanley is not the only one to be stuffed with U.S. Treasuries,
BUT this has had ZERO impact in reducing the 10-year UST.

1/22 YIELD-PIGGING AND BUGS IN THE WINDSHIELD
Credit problems in history are almost ALWAYS due to yield pigging BTW.

(There is evidence of that when looking at investment-grade private credit versus CCC private.)
But let me explain first.
What is yield-pigging? 2/22
Say you are operating in a strategy like risk arbitrage, where you have to arbitrage merger-arbitrage spreads (the difference between the current price and the deal value).

1/25 The GraphCall Credit quality vs spread metric

Watching the consumer delinquencies rise is worrying but it is not per se at a very high record (although some adjustments in those calculations are coming and BNPL have data silo issues)....

Are the credit spreads reflecting that properly? 2/25
Those are the credit spreads

1/9 Shares buy-back are contrarian indicators for the most part.

Bloomberg and other twitter accounts are trying to tell you that share buy-backs are great news for the stock market with a record high level. 2/9 So as a share of U.S. GDP, S&P-500 buybacks were roughly 0.95% in 2009 and 2.0% in 2010 and about ~3.4% in 2025 (using the 12-month Mar-2025 buyback total).

1/8 This chart circulated around is relatively easy to interpret.
Shanghai Gold Exchange, assayed, audited, secure, physical gold warrants volume. 2/8 (quick reminnder context)
YOU CAN SKIP THIS ONE IF YOU ALREADY KNOW ABOUT IT

The FX as reserves had three iterations, the post 1922 system with both GBP and USD politically forced as reserves with a bogus price convertibility (not at all a Gold standard, becausee a Gold standard implies letting the Gold flow and forbids using FX as reserves)

The Bretton Woods system post WWII which is a copy cat of the 1922 arrangement with again a bogus price convertibility but no Gold flow or convertibility just by everyday person.

The Bretton Woods II which severed any link to Gold and politically coerced the G-7 not to dump their exess USD trade surplus into Gold but forced them to do vendor financing and recycle those into UST.

1/10 Not entirely sure Dario interpreted correctly the elements he showed in his post imho. In fact the elements Dario showed indicate that supply is getting less tight versus demand or said otherwise demand is less raging versus supply. let's show that.

https://twitter.com/DarioCpx/status/1961177270154117589

2/10 NVDA had a lot of deferred revenues versus recognition back in the end of 2023, in short every one is giving them their "money in advance" to reserve the chips. That's why you have the deferred revenues ("The reservation" like you would pay the restaurant before eating)

1/21 Preventing the Gold Flow to Enable FX as Reserves and the History of Monetary Central Planning Failures from 1873 Europe, 1898 India forced FX as reserves in 1922 to the Present Day.

The BIS is once again pleading to organize and centralize the Gold flow.

The Gold flow has always been the problem for adept monetary central planning, as the Gold flow is an enforced discipline against expansion of currency and trade deficit. 2/21 Monetary Central Planning started with the advent of the demonetization of Silver, argues Marc Flandreau in “The Glitter of Gold.”
Why the need to centralize what used to be impossible to control?

1/24 BULL TRAP
2000 STIMMIE vs 2025 REVERSE STIMMIE

FIRST LET’S MAKE EVERYONE IS ON THE RIGHT PAGE HERE

Stimmie is money coming from the Gov going to consumers directly.
Reverse stimmie is money coming from consumers and going to the Gov. 2/24 One would have to suppose that both conditions can not have the same consequences, but should be suspected to have opposite consequences.

1/5 Bloomberg is explaining what we explained before here
EVs are cheap in EMs and the cost of fuels is monstruous for EM households.
RESULT?
The switching is happening MUCH faster than forecasters (not this twitter account)

Policymakers are also likely to extend such incentives for purely macroeconomic reasons. In India and Pakistan, oil and gas account for as much as a third of the total import bill, compared to around 10% in the US and European Union.

We explained before that India had a notorious fiscal dominance problem because it had to subsidized the fuel. With the cost per mile 10X cheaper in India?
Demand for gasoline and diesel in India sustained?
😂

1/10th of Oil demand wiped off by 2030.... It will probably be larger.

archive.ph/Ycx9C#selectio…

bloomberg.com/opinion/articl…
@KingKong9888
2/5 But don't count on China to supress the cut throat cost plunge in Battery. It's not like Solar where everybody is losing money, BYD still makes money CATL is coming up with Sodium battery in mass production at 170 wh/ kilo with Nextra by year end. And 200 wh/ kolp in 2 years.

1/8 Werner AT 44 minutes:
According to Banking School, Werner is correct again.
But using "money" for banks is a misnomer. It is called "bank currency" by the Banking school, let's explain why...

https://twitter.com/TuckerCarlson/status/1949877681027166608

2/8 Bank currency is a liability of the bank. It is created either when you bring M0- money - to the bank (paper bills today, or coins in the past.

1/7 The view from Werner is interesting and does match the Banking School' view of Thornton (the third theory,
"Enquiry into the paper credit ..."
, which is classical economics BTW (practiced by the twitter account)
Now why have people erred since then? 🤷‍♂️
It is a mystery.

https://twitter.com/TuckerCarlson/status/1949877681027166608

2/7
Thornton does not call bank currency "money". It calls it "bank currency", money being strictly M0 of the time PM. Bank currency can be created either by depositing M0 (money) or against a discountable article.

1/12 In this post we will show that the Yield control started in 2010, that yield curve control IS NOT SMALL and increasing.
2/12 I am old enough to remember having a cup of coffee for well under 1 USD before going to trade risk arbitrage situations.