I see a lot of hot takes on why bonds are selling off so aggressively today. It's not an export ban (zero discernible correlation, and zero reaction in bonds when the news broke and was later retracted). It's not a 5 year auction (caused a blip, but didn't stick). It's not higher oil prices (bit player in the overnight session, at best). The initial pop at 9:45am was entirely driven by S&P PMI data. A majority of the selling since then has occurred in stunningly linear fashion without any "event risk" volume spikes. It has also largely tracked with stock losses. This is exactly what it looks like when a big outlier in econ data hits a nervous market that's on the edge of its seat waiting for data to speak to a recent shake up in the Fed rate hike outlook. It's not so much S&P PMI data itself as it is the risk it creates for next week's data. Safer to sell now and cover later if S&P ends up having painted too bullish a picture of next week's data. ZQV7 (October 2027 Fed Funds Futures, which capture September 2027 Fed Meeting odds) peaked simultaneously with 10yr yields after rising more than 20bps in implied yield from this morning (10s only rose 16bps).

Change in US household net worth from the end of 2019: Total: +70% Top 0.1%: +106% Remaining top 1%: 63% Next 9%: +57% Next 40%: +74% Bottom 50%: +129% awealthofcommonsense.com/202…

Great read by @djrosent & @gilbert … I strongly believe in the American Dream of homeownership, so I get this reinforces my cognitive bias on the topic, but homeownership and home improvement is just good business because it’s tied to what people care about and strive toward most… wsj.com/business/retail/home…

Bloomberg of Trump comments on Fed policy.

Central bank watchers now overwhelmingly expect not only a Fed rate increase this week, but a second hike before the end of the year

How long does it actually take to build a house in America? In San Francisco, a standard single-family home takes nearly four years from permit application to move-in ready—almost eight times longer than in the fastest-building cities

This Reuters 9/11 ‘reporters notebook’ is worth reaching. Also, lots of pics. This pic hit me hard … terrifying and heartbreaking. reuters.com/world/us/911-25-…

"You cannot give a speech like you did at Jackson Hole and not support a rate hike at the next meeting." -- @fcastofthemonth on Warsh after that CPI report.

After this week’s CPI and PPI figures, @AnsteyEco has key notes on what it means for 9/16 Fed decision…

These outlooks are fairly inertial. Only three banks changed their formal Fed "call" towards a September rate hike after Warsh's Jackson Hole speech (UBS, Barclays, and SocGen). Tracking the latest house views from various Fed watchers:

See the 4th component of McLuhan’s Tetrad

Just came across this Anthony Bourdain quote from Kitchen Confidential in my Kindle highlights. So good, esp the 'perceived' part... "After level of skills, it's how sensitive you are to criticism and perceived insult — and how well you can give it right back — that determines your place in the food chain."

The Fed’s preferred inflation gauge, Core PCE, came in at 3.3% for July. That marks 65 consecutive months above the Fed’s 2% target. In June, Kevin Warsh said: “We’ve missed for 5 years. And we’re gonna fix that.” So far: all talk, no action. Video: youtube.com/watch?v=TT9ajz9P…

"Every basis point of artificial yield suppression is a subsidy to procrastination."

.@martin_casado calls this age of venture completely different from any before: "Some of these major model efforts were done with very, very small teams. One of the most popular multimodal models many people use was built with a team of about 20 people. The cost of that was probably $2 billion plus." "This is unheard of. In the history of humanity, in the history of engineering efforts, we've never been able to have 20 people productively use $2 billion. What does that even mean, to put that much money to work with that small of a team and that small of a timeline?" "One of the major stories of this wave is the fact that we're able to apply large amounts of money productively in short amount of times to whatever problem we're trying to solve." @a16z

I think a lot of people still don't understand the scale of debt issuance by the hyperscalers. They're on pace to be as sizeable in the IG bond market as the big banks within a few years

#NEW Early signs suggest the AI wealth boom in San Francisco proper—which has created upward pricing pressure there this year—is also starting to spill over into parts of Alameda County (in particular around Berkeley) via ResiClub Terminal

The convergence of AI and blockchain is inevitable AI needs: • Verifiable compute • Transparent model training • Decentralized data ownership • Micropayment rails Blockchain provides all of this Most people see AI and crypto as separate narratives They're the same narrative Just on different timelines

Winner of best summer out of office auto-reply goes to @SoumayaKeynes 😂 “I am currently out of the office, trying to return home after a successful conquest involving a large wooden horse. It may take me some time.” This one is by far the winner. But the rest of her list is good too… ft.com/content/46caeb96-13a3…

Bank of America says the market's reaction to Kevin Warsh resembles an emerging market facing a credibility shock