Book Recs

September new home sales fell -0.6% m/m vs. -4.5% est. & +5.1% prior (revised down from +6.4%) … median new home price +3.9% m/m to $400,400; average selling price at $472,800

.@conferenceboard labor differential, which measures the share of consumers who say jobs are “plentiful” minus those who say jobs are “hard to get,” rose to 5.3% in October, up nearly 2.5 percentage points from the previous month

Let’s see if Fido flips or rolls over.

Finally, and now for something completely different. There has been some buzz lately over what other tricks the Treasury Department might have up its sleeve to try to bring down the cost of funding. The long-dated off-the-run buybacks certainly didn’t work (other than daring the bond vigilantes to show us who is in charge). Now an old meme has re-emerged. What if the Treasury were to mark-to-market its gold reserves, which the Fed holds on its behalf? Imagine if they repriced their gold holdings from the $42/oz that has been in place since the early 1970’s to the $4,200/oz that gold is worth today? The Treasury would become an instant $1 trillion richer (hence the trillion-dollar coin meme that has floated around for a few years). How would that work? It seems to work as follows: The Fed would all of a sudden have an extra $1 trillion in assets (grey bar at the top right of the chart below) on its balance sheet, and the liability offset would be the Treasury’s cash account at the Fed (TGA). Voila, the Treasury would have an extra trillion to spend without having to issue more debt. 🧵(1/2)

Jukebox Hero

Global Central Banks now own the most Gold this century 🚨🚨🚨

Strong grip for an old man

POV : you're doing a wheelie with me !😎

When you ate from the Tree of Knowledge, you were cursed to toil by the sweat of your brow. Align yourself with your passion, and you will never work another day in your life. For you were blessed, not cursed.

It's not the bike, it's the rider

Can you handle all three in one go ? 😏

By nature of being a vol trader, I’ve studied many different market crashes. Not just the common ones in the U.S., but episodes like Britain in 1720, Vienna in 1873, and the Dutch tulip mania of 1637. There are some interesting behavioral takeaways that aren’t entirely intuitive unless you participate in markets every single day. One of the biggest for me is that large market moves often need two-way action to develop. Behaviorally, you need participants willing to take the other side, because their eventual need to unwind can help accelerate the move. It’s almost like storing energy that gets released later. To create that dynamic, a “gray catalyst” can be particularly powerful one whose implications aren’t immediately black and white. Here are two examples that helped produce massive moves in opposite directions that had gray area headlines that led to that two way flow. COVID (March 2020): What often gets lost in the sauce is that many participants were aggressively betting against the idea that COVID would be severely disruptive. As stocks fell, they bought the dip and sold vol. When stocks kept falling and vol kept rising, some of those positions became fuel for the next leg of the move as participants were forced to unwind. Looking back, the outcome seems obvious. In real time, the eventual scale of the disruption was far from clear. There was HOPE that it would pass quickly. Headlines about potential treatments, policy support, or a less severe impact repeatedly gave investors reasons to step back in. Stocks would rip 5% higher immediately on that news and hope, only to reverse again even lower when more negative news hit. Those rallies matter. They give existing longs a reason to stay and new buyers a reason to enter. When the recovery fails, there is another round of positioning that may need to come out. Without that back-and-forth, it can be harder to produce the same degree of forced selling. The uncertainty helps keep replenishing the other side. Meme mania (January 2021): Companies like GameStop and AMC surged hundreds of percent amid a speculative frenzy and short squeezes. Here, too, there was a gray area. Many investors saw businesses facing serious fundamental challenges, which made shorting them appear rational, especially as their share prices climbed further away from what those investors believed they were worth. But a compelling fundamental argument does not tell you how far a stock can move before that argument pays off. As prices rose, some shorts covered, while others saw an even more attractive entry point and stepped in. That fresh short exposure created the potential for another round of forced buying if prices continued higher. The gray area was the gap between the fundamental thesis and the path the market could take. Of course these weren’t great stocks, and the fact that people came in on that helped the waves move higher and higher. That’s the behavioral dynamic I find so interesting. Uncertainty can keep attracting participants to the other side of a move. As the move extends, their conviction runs into their capital constraints, and an opinion can turn into a forced transaction.

Everyone who keeps sharing these short interest charts is missing the flows behind them. Most shops are not taking outright short bets. This is another effort to ease margin requirements across the street: banks providing balance sheet for more speculative bets are asking clients to post more short exposure. The sequence on the street looks like this: HF manager: “I want more margin.” Bank: “Things look risky in public AI bets, and we’re already lending a lot against private AI bets. For some clients, we’ll extend more financing, but only if they add more short exposure to improve their collateral scores.” HF manager: “Okay, I’ll short more stock against my main bet.” That is how you end up with short exposures that look astronomically high while many end users remain heavily long tech. The additional shorts are supporting the financing of their main bets. Which also tells the bigger story on why raw equity financing rates haven’t blown out the way they did ahead of the big SpaceX IPO in June, despite the fact that lending is slowing.

Gladiator! ⚔️🔥🔥🔥

Men are just now starting to learn what women knew all along: it takes many years and a lot of money to become a Hermès bagholder.

Beautiful Camaro! 💯🧡🔥

🚨 UPDATE: Kaylub Giamanco, the dad who killed the Bend, Oregon school shooter, gives credit to the unarmed TEACHER who fought the gunman with her BARE HANDS 👏🏻 "I want to recognize HER. SHE gave me the opportunity to make my shot without losing my life...That's a real TRUE hero, to not have a weapon and to put yourself in between your babies and a firearm." This man is pure selfless. Give him a medal of freedom! Police say she threw her PHONE at the 16-year-old gunman, then tackled him and fought for the gun. That gave Giamanco the shot he needed When the gunman went for his weapon again, Giamanco fired two more times "to make sure that he couldn't move" He saved countless lives, and he's still apologizing: "I want to apologize for not saving their babies." 💔 Man, this guy is a hero with a heart of gold. 🇺🇸 x.com/CollinRugg/status/2113…

🔥🔥🔥