Jim Bianco

Real Yields operate with cycles or regimes. During the "money printing" era from 2009 to 2022 (red), the 10-year real yield averaged just 0.23%. We are not in a zero-yield, money-printing era anymore (thank god). Before this (left blue), the 10-year real yield averaged 2.74%. I have argued the current period (right blue) should look like the pre-money-printing era (left blue), and it does. It also means 10-year real yields can go much higher before they become too restrictive (probably above 3%). What would cause 10-year real yields to go higher? Sticky inflation (we have now) and a Fed that does not "choose" (as Warsh terms it) to act on …

The US 10-Year is at 4.70%, the highest of Trump's second term. What will it take to get it to stop rising? See the repost below. tl;dr: Kevin Warsh says inflation is a "choice." It is time for the Fed to "choose" to act on it, as the market is deeply troubled by its current level and outlook.

Finally, something for markets... over 100 minutes in. Also, a red headline on BB *WARSH: 'MISSION ACCOMPLISHED' NOT MY VIEW AFTER CPI DATA TODAY

1/5 The fed funds futures have a HIKE at the end of the month (July 29) at 45%! (55% no move) Tomorrow morning's CPI report and Warsh's testimony will decide it. -- "When the Fed starts panicking, I can stop panicking." A hike stops rising yields; root for it. 🧵 2/5 The fed funds futures market now puts a July 29 HIKE (at the next FOMC meeting) at 45%. (55% no move) https://t.co/wkIRpC9J7w 3/5 Tomorrow's CPI report/Warsh's testimony (House at 9 AM) will decide. Our June CORE CPI expectations (the metric that counts here) * 0.3% = Fed hikes on July 29th * 0.2% = We debate a July 29th or Sept 16th (next meeting) hike. Sept hike now…

Starlink changed everything https://t.co/uFpbIQHEf0

Nvidia has a market capitalization of $5.12 trillion today.

1/9 Eric asks a reasonable question: what should be done about a future stock market slump? Specifically, should the Fed buy stocks? 🧵 tl:dr * The legal process for the Fed buying stocks means the Treasury actually owns them, the Fed finances it by extending loans to buy the stocks. * Trump will love this idea, as he wants a Sovereign Wealth Fund, and now has the Government holding several US companies. We suspect he will probably want these stocks as permanent government holdings, up to 20% of the stock market ($16n trillion of stocks). * This would balloon the Fed's balance sheet to $25 trillion (from $6.7 trillion now). * What woul…

A soccer match not involving the US, not played in the US, was the highest rated soccer match in the history of US TV ... just below the NFL Conference Championships this past January. To be clear, it was higher rated that the US/Belgium. This TV rating record might be broken again in the coming week, if not later today. --- When the US lost, many in the US said something like "good, now we can stop paying attention to soccer." Maybe something bigger is happening here. Isn't this how investors lose money? Failing to recognize a trend shift when it is happening? Are the snarky posters (trolls) failing to see a trend change?

So using AI is a form of cheating, then they’re told at graduation AI is the future, meaning this professor failed to prepare them. And you wonder why students boo and walk out on AI commencement speakers. If universities were properly doing their job, graduating students would be the most coveted employees in the workforce as they would most prepared to lead their businesses into this new AI world, like graduates did with the internet 25 years ago, and the PC 40+ years ago. Instead students get muddled and conflicting messages about using AI and left confused about what is expected of them. Why is AI cheating in the classroom but these t…

Note that he wrote "Strait of Hormuz," not "Iran."

Wow! Did the economist do it again?!? Hey @donnelly_brent, could we be looking at a new world record from them?

17 minutes after the NYSE closed ... *US MILITARY SAYS IT'S LAUNCHING SERIES OF STRIKES AGAINST IRAN ~105 minutes later ... *WTI OIL JUMPS 2.9% TO $72.46/BBL AT OPEN AFTER US STRIKES IRAN *BRENT OIL GAINS 2.8% TO $76.20/B AT OPEN AFTER US STRIKES IRAN ---- Expect Trump to post tomorrow morning, before the NYSE open that they have a deal with Iran ... again.

The Economist magazine is issuing a Mia Culpa on calling for much higher oil prices, and is now fully bearish Next step $200??? @donnelly_brent This was their March 1999 cover when the price was $10 A year later, it was $40 It is now considered one of their more famous cover story blunders. https://t.co/yLBDFv0nq1

We're looking at and analyzing this employment report, but I'll tell you one person who is not ... Kevin Warsh. If a payroll report is released, and the Fed Chairman is not looking at it, did it make a sound?

Should the Fed hike? I say yes. This AM on Bloomberg TV https://t.co/fz4T9mSgFR

@Vedatklyc Right now, I'm trying to document and understand the divergence (two asset classes). Should this be agreed to, we can stop arguing about its existence and move on to what to do about it.

2/7 They account for 44% of the S&P 500’s market cap and hit a peak of 49% earlier this month. https://t.co/ipW9mwNsyy 3/7 In his May 22 “Flow Show,” Michael Hartnett of BofA highlighted the chart below. It shows the stock market is the most concentrated in a single theme in 150 years. The last time we saw anything resembling this level of concentration was the railroads in the late 19th century. (Note: To say the stock market is the most concentrated in 150 years, we are using the table above showing a 49% peak, not the “AI Big 10” showing 40% that Hartnett uses below.) 4/7 And AI and non-AI stocks are starting to diverge from each…

Maybe the problem is that we compare this to investing. How leveraged ETFs compare to prediction markets and sports betting might be a better comparison. https://t.co/V9YWKRSg0F

2 Hours before the NYSE Open

On Friday (repost), I noted the US announced it attacked Iran 36 minutes after the NYSE closed. Well: 23 minutes after the Asian markets opened this evening, The US and Iran have agreed to stop attacking each other before peace talks resume this week over the Strait of Hormuz and other issues, paving the way to end days of tit-for-tat attacks that tested a fragile truce. https://t.co/smUPJ3xjGC

Over the last week or so, the $SPX is down ~2% (black) AI-related stocks (red) have slumped ~4.52%. This is ~50/75 of the S&P 500. Non-Al stocks (orange) have soared ~2.31%. This is ~425 to 450. Is this market telling us it is bullish for the economy if AI stocks get crushed? https://t.co/5KbjivEeaP

Heat wave is hitting the US starting Monday. The map is Wednesday’s projected highs. Yellow is 90s, red is 100s. Just in time for the knock out round. The hydration break is going from a commercial gimmick to a matter of survival. https://t.co/dGSuxSH7lH

What if they flipped the offsides rule from any part of your body in front of the defender is offsides to any part of your body behind the defender is not offsides? (hockey uses a fixed blue line for offsides. The puck has to cross the blue line first. A player is not offsides if any part of his body is on or behind the blue line when the puck crosses. So what I suggested is the way hockey defines a player being offsides.) The outrage is allowing minutes of unbridled celebration and then telling everyone the goal is disallowed. The sport needs is a real time signal of offsides before the goal is scored. Then immediately put it on the score…

@EricBalchunas Should football get rid of this rule, so the right guard can catch passes? How about the ineligible man down field rule too? Both would increase scoring, but would it make the game better?

Iran shot at a second tanker this morning (below). This headline crossed Bloomberg in the last 15 minutes. *US SAYS IT CONDUCTED ADDITIONAL STRIKES ON IRANIAN TARGETS

Moments after Trump signed the MOU, he gestured, "oil down, stocks up." (last 3 seconds below) Since June 17: * DJIA (Trump's preferred stock index) +0.75% * WTI Crude Oil, -8.57% So by Trump's stated metrics, he probably thinks this is his greatest deal ever.

1/5 The Bitcoin and Eth ETFs, plus Strategy ($MSTR) and BitMine Immersion Technologies ($BMNR), are collectively holding an unrealized loss of $62.41 Billion BTC Unrealized Losses (and average purchase price) All Spot Bitcoin ETFs = $22.42 Billion ($82,899) Strategy (largest BTC Treasury Company) = $19.84B ($75,640) Total Unrealized Losses = $42.26 Billion ETH Unrealized Losses (and average purchase price) All Spot Ethereum ETFs = $9.37 Billion ($3,934) BitMine Immersion Technologies (largest ETH Treasury Company) = $10.78 Billion ($3,456) Total Unrealized Losses = $20.15 Billion 2/5 Unrealized Losses (and average purchase price) All Spot…

So why are there not tens of thousands of billionaires from inherited wealth via these stock market gains? In fact, there are almost none. Victor Haghani and James White wrote a book explaining why … “The Missing Billionaires.” https://t.co/Trl05RRNVn

Money managers have abandoned positioning for $200 oil ... does this now increase the risk of $200 oil? ----- The CFTC was closed today, so the Commitment of Traders report for June 16 will be released on Monday. But the Intercontinental Exchange released its data for London's Brent Crude Oil Contract for June 16 today. Here is the net (long-short) for managed money (aka "money managers"). The chart starts on April 30, 2020 (beginning of the post-COVID recovery). In the last four weeks, these managers went from a fairly long position (see the May 19 position in the bottom panel) to a fairly low net long position (June 16). Note that these…

Trump signed this in Versailles yesterday. Let’s hope the “MOU of Versailles” is a better deal for the world than the “Treaty of Versailles.”