Are you paying attention?

Bitcoin is now up +55% since its April 2025 low, hitting a RECORD $115,000.

Meanwhile, the US Dollar just had its WORST start to a year since 1973, falling nearly -11% in 6 months.

This is not a coincidence. Let us explain.

(a thread) Heading into April 2025, Bitcoin was moving in a straight-line lower on trade war fears.

On April 9th, tariffs were delayed for 90 days and Bitcoin bottomed.

On April 20th, the real rally began, without any major news, days after the delay.

So, what really happened here?

The crisis continues:

Since the debt ceiling was raised on July 3rd, US debt is now up $410 BILLION in 2 days.

This comes after the US Treasury ended "extraordinary measures," raising the debt ceiling by $5 trillion.

We are in the midst of the US' largest crisis.

(a thread) After hitting the debt limit of $36.1 trillion in January 2025, the Treasury began “extraordinary measures” to conserve cash.

Then, last week, President Trump's "Big Beautiful Bill" was signed into law.

This raised the debt ceiling from $36.1 trillion to $41.1 trillion.

It's official:

President Trump is now calling for the first 300+ basis point interest rate cut in US history.

This would be 3 TIMES larger than the 100 bps cut on March 15th, 2020, the largest in history.

So, what happens if the Fed does this? Let us explain.

(a thread) First, President Trump mentions that higher rates are costing the US more money on interest expense.

At a high level, this is true.

Annual interest expense on US debt has reached $1.2 TRILLION over the last 12 months.

The US is now paying $3.3 BILLION in interest per day.

Iran's response has begun:

After US strikes on Iranian nuclear facilities, Iran just attacked US military bases in Qatar and Iraq.

Meanwhile, oil prices just CRASHED over -6% on the news.

Why? Markets are saying EVERYTHING you need to know. Let us explain.

(a thread) Iranian media just announced that Iran has launched operation "Annunciation of Victory."

Iran's Armed Forces said they will not leave any attack on Iran unanswered.

This was Iran's first response to the US since the 3 strikes conducted by the US Airforce this weekend.

MAJOR news from Iran:

Iran's parliament officially approves CLOSING the Strait of Hormuz for the first time since 1972.

If approved by Iran's top security body, shipments of 20+ MILLION barrels of oil PER DAY will be impacted.

What's next? Let us explain.

(a thread) The Strait of Hormuz, between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.

This body of water controls ~20% of the world’s petroleum liquids consumption.

In other words, ONE FIFTH of global oil consumption flows through here EVERY DAY.

What is happening in Japan?

In 45 days, Japan's 30Y Government Bond Yield rose a MASSIVE +100 basis points, to a record 3.20%.

Over $500 BILLION worth of "safe" 40Y Japanese Government Bonds have lost 20%+ in 6 weeks.

Is Japan's bond market imploding?

(a thread) What's happening in Japan is not "normal."

Japan's 40Y government bond that was yielding ~1.3% two years ago is now yielding 3.5%.

As yields continue to surge, inflation has begun to rebound and Japan's economy is decline.

It appears Japan is entering a recession.

The trade war is back:

After a brief pause, Trump just threatened 50% tariffs on the EU beginning June 1st and 25% tariffs on Apple.

In 5 days, the S&P 500 has erased -$1.5 trillion of market cap.

What's next? Here's why you NEED to watch the bond market.

(a thread) First, at 7:19 AM ET today, President Trump made the below post.

As Apple, $AAPL, has moved iPhone production to India, Trump said this was not acceptable.

Trump says iPhones must be made in the USA or face tariffs of at least 25%.

The S&P 500 to 5820 on this news.

What just happened?

At 1:00 PM ET, the S&P 500 fell nearly -80 points in 30 minutes without any major "news."

What actually happened was a weak 20Y Bond Auction which sent US Treasury Yields soaring.

Investors MUST watch yields here. Let us explain.

(a thread) The US frequently conducts bond auctions, where investors can buy US Treasuries (debt).

Today, the US conducted a $16B auction of 20Y Bonds.

Typically, these auctions happen with minimal impact on markets.

However, today was different which sent yields soaring.

It's official:

For the first time in history, Moody's has downgraded the United States' credit rating.

Moody's cites concerns over soaring US debt levels with interest on US debt set to hit 30% of REVENUE by 2035.

What does it all mean? Let us explain.

(a thread) This isn't the first time the US has seen a credit rating downgrade.

In 2011, S&P downgraded the US' credit rating from AAA to AA+.

As seen below, the downgrade came with an ~8% drop in the S&P 500 in 2 months.

The 10Y Yield fell as much as ~35% within the first 2 months.

Gold won't stop.

Gold is surging again, now trading above $3,300/oz, even as the S&P 500 is up +17% from its April 7th low.

Since 2020, the gold ETF, $GLD, has now OUTPERFORMED the S&P 500 by 35 percentage points.

Are you still watching gold?

(a thread) Heading into 2025, $GLD was underperforming the S&P 500 since 2020 by ~10%.

However, as uncertainty has risen, $GLD is now up +109% since 2020 compared to +74% in the S&P 500.

But, why are gold prices surging even as the market recovers?

Uncertainty remains the answer.

This is insane:

Warren Buffett's Berkshire Hathaway just announced they now hold a record $348 BILLION in cash.

Since 2022, Buffett's cash balance is up $239 BILLION and he has net SOLD stocks for 10-straight quarters.

What does Warren Buffett see here?

(a thread) Below is Berkshire Hathaway's balance sheet:

They now hold $305.5 BILLION of US Treasury Bills and $36.9 billion of cash in their insurance and other business.

In their Railroad, Utilities and Energy business, they hold another ~$5.3 billion of cash.

This is unprecedented.

The Fed's worst nightmare just got worse:

New data showed that US GDP CONTRATCTED by -0.3% in Q1 2025, while +0.3% growth was expected.

To make things worse, the GDP Price Index surged to +3.7%, its highest since August 2023.

What does Powell do now?

(a thread) Annualized US GDP growth came in at -0.3% this morning, below expectations of +0.3%.

This marks the first negative reading since Q2 2022.

Just 4 months ago, GDP was expected to grow by over 3% in Q1 2025.

We have seen a MASSIVE shift in US economic output.

Where are the trade deals?

The S&P 500 has now erased -$2.5 TRILLION since the April 9th high after the 90-day tariff "pause."

While markets await trade deals, Japan just said they "won't just keep conceding" in US tariff talks.

Here's what's happening.

(a thread) On April 16th, Bloomberg published the below article claiming that trade negotiations with Japan are underway.

Trump Administration officials claimed trade deals were being discussed with 50+ countries.

Markets rallied sharply on this news over the last 5-10 days.

What just happened?

After rising +2,400 points since its April 7th low, the Nasdaq is now down nearly -900 points since Monday's high.

Today, Fed Chair Powell made it clear that the "Fed put" is NOT saving the market any time soon.

Here's what happened.

(a thread) First, selling pressure began mounting yesterday at around 6 PM ET.

Nvidia, $NVDA, said the US banned them from selling H20 chips to China "for the indefinite future."

Nvidia says this will come with a $5.5 billion charge to Q1 earnings.

$NVDA fell over -10% intraday today.

Gold is trading like we are in a depression:

Over the last 20 years, gold is now OUTPERFORMING stocks, up +620% compared to a +580% gain in the S&P 500.

Over the last 9 months, gold has officially surged by over +$1,000/oz.

What is gold telling us?

(a thread) Beginning in 2020, stocks widened their performance gap against gold.

However, as equities have entered a bear market, capital has rushed into gold.

As we have been writing for the last 12+ months, gold is the ONLY global safe haven asset now.

US bonds are not as desired.

We now know Trump's TOP economic priority:

For weeks, President Trump said there would be NO tariff delay, even as stocks erased $12+ TRILLION.

Then, the bond market BROKE and a 90-day tariff pause was implemented 12 hours later.

Keep watching bonds.

(a thread) Prior to the April 2nd "reciprocal tariffs," the 10-year note yield was falling in a straight line lower.

This meant the trade war could continue because rates were falling.

However, as the basis trade unwound due to volatility, the 10-year note yield surged +65 bps to 4.50%.

The bond market just BROKE:

In just 3 days, the 10Y Note Yield surged 60 basis points while the S&P 500 fell -8%.

This marks the LARGEST 3-day increase since 1982 and one of the largest divergences in history.

What happened? The basis trade broke.

(a thread) More specifically, something broke last night.

Between 7 PM ET and 12 AM ET, the 10-year note yield surged ANOTHER +25 basis points.

The 30-year note yield jumped above 5.00% even as stock market futures collapsed.

This is extremely unusual price action, something broke.

The BULL trap:

We just witnessed the biggest bull trap of 2025 with the S&P 500 erasing a ~4.5% rally in ~3 hours.

Between 10:30 AM ET and 3:15 PM ET, the S&P 500 erased -$2.3 TRILLION of market cap.

Bull traps are TEXTBOOK signs of a bear market.

(a thread) The day began with an ALL GREEN heat map pushing the S&P 500 toward 5300.

This put the index nearly +450 points ABOVE levels seen at yesterday's low.

However, we continued to reiterate that it simply did NOT make sense.

The trade war only got worse, but stocks were rising.

The LESSON investors learned today:

At 10:15 AM ET, US stocks swung $7 TRILLION in 30 minutes on a "fake" tariff deal headline.

While the move was undone, we obtained KEY information about the current state of the market.

Here's what you need to know.

(a thread) Beginning with some background:

At around 10:15 AM ET, it was reported that Trump was considering a 90-day pause on tariffs.

The S&P 500 rose +400 POINTS in a matter of minutes before the White House called this "fake news."

Then, the S&P 500 erased -300 points of that rally.

The free fall continues:

Today's drop in US stock market futures puts S&P 500 futures down -22% and in bear market territory.

The US stock market has now erased an average of $400 billion PER TRADING DAY for 32-straight days.

Is it time to BUY stocks yet?

(a thread) Exactly 32 trading days ago, the S&P 500 hit a new all time high of 6147.

In the below timeline, we explain how the S&P 500 has erased over 1,300 points in 32 trading days.

This is a March 2020-style decline and sentiment has reach some of its most bearish levels in history.

Did the White House compute "reciprocal tariffs" incorrectly?

New Trump tariffs are claiming to raise $3+ trillion over 10 years.

According to AEI, the formula used to calculate tariffs levied on the US was INFLATED by up to 400%.

Here's the breakdown.

(a thread) At the April 2nd "Liberation Day" announcement, President Trump held up a poster with reciprocal tariffs.

The formula used to compute these tariffs seemed rather simple.

Trump said the US was simply charging foreign countries 50% of what they are charging the US.