In the grand theatre of American finance, Treasury—loyal soldier of the Keynesian deep state and former scribe to George Soros—announces $195 billion collected from tariffs, dreaming of $500 billion annually. He claims the aim is “rebalancing trade,” yet whispers of $2,000 dividends, delivered via tax tricks or creative deductions, float like incense over the markets. Confucius might observe: “When rulers scatter gold from the sky, the people rejoice, yet the Way of moderation quietly shakes its head.”

https://www.youtube.com/watch?v=jv7uLF9F41I

In a nutshell, when political magicians shower the people with $2,000 “tariff dividends,” the crowd cheers, the markets dance, but the Way of moderation quietly shakes its head.

While everyone is talking about ‘Tariff Dividends, American household debt has hit a new zenith—$18.59 trillion after a $197 billion jump in Q3—leaving consumers, the supposed backbone of the economy, wobbling under mountains of mortgages, student loans, and credit card balances. Manufacturing slumbers in contraction, trade winds falter, and confidence has fled like a startled bird.

Mortgages cling to pandemic-era rates, bidding wars fade, and young people watch homeownership as a distant legend. Student debt now tops $1.65 trillion, with delinquencies ticking up, while credit cards swell to $1.23 trillion.

The lesson, whispered in the Confucian winds: when the people are shackled by debt, the nation’s prosperity teeters; applause cannot mask fragility, and even the smallest shock reverberates through the whole household of America.

The Macro Butler rolled out of bed at dawn—before even the coffee knew what was happening—to join BFM 89.9 and unpack how the U.S. government shutdown is turning the economy into a sitcom, what the Fed might (or might not) do next, and why the smart money is quietly sneaking out of energy-consuming sectors and into energy producers as America drifts toward its inevitable inflationary bust.

https://themacrobutler.substack.com/p/interview-with-bfm-899-malaysia-1011

As the shutdown circus limped to an end, the U.S. threw $58B of 3-year paper onto the market—investors showed up like it was Black Friday. The yield crept to 3.579% from 3.576%, nudging past the “When Issued” price by 1 basis point for the third straight time—the biggest poke-through since February 25.

The bid-to-cover jumped to 2.850 from 2.663 in October—the highest since August ’23 and well above the 2.583 average. Indirects held steady at 62.96%, above their 62.36% norm, while Directs rose to 27.32%, the strongest since August. Dealers got stuck with just 9.7%, below both last month’s 10.7% and the 13.8% average.

Overall, a surprisingly solid auction—but many investors still haven’t realized that in a U.S. increasingly resembling a banana-republic portfolio, the only assets worth owning are stocks and gold, while bonds and cash are just expensive IOUs.

While everyone was lost in the drama of Washington’s latest shutdown soap opera, the Fed quietly slipped $125 billion into the repo market — like a magician pulling cash from a hat, only this time the trick drained straight out of the Reverse Repo rabbit hole.

The widening SOFR–Fed Funds spread is flashing red, screaming “liquidity crisis,” but the problem runs deeper—the system’s spring is coiling tight again. With bank reserves at a four-year low of $2.8 trillion, the Fed’s back in the repo game, quietly swapping Treasuries for cash so banks can offload debt without calling it a bailout.

The public must trust the banks, and the banks must trust that the Fed will catch them when they fall. In 2025, a few small banks quietly vanished—small enough not to spook the herd. The Fed fears panic more than inflation; Powell knows price control is gone, but fear control isn’t—yet. The cycle can’t be stopped. As 2032 nears, expect tighter rules, frozen credit, and the final act: when banks stop trusting the Fed, and people stop trusting banks.

While the bond market was taking a well-deserved nap for Veterans Day and Washington was still performing its never-ending shutdown soap opera, the Treasury decided to sneak in a casual $42 billion 10-year auction—because what’s a little more debt between friends? The notes priced at 4.074%, slightly down from last month’s 4.117%, marking the second-lowest yield since October and, for extra drama, managed to tail the When-Issued by a whopping 0.6 bps. Nothing says fiscal discipline like celebrating veterans by selling more IOUs.

The bid-to-cover ratio limped in at 2.433, down from 2.478 and the second-lowest since August 2024—apparently, enthusiasm for lending to Uncle Sam is fading faster than a campaign promise. The internals weren’t much better: Indirects grabbed 67.0%, barely up from 66.8% but still shy of the 70.2% recent average. Directs took 22.55%, leaving Dealers stuck with 10.5%—their biggest slice since August and probably not the kind of “market share” they were hoping for.

In a nutshell, the tailing 10-year auction was yet another reminder that the “risk-free” U.S. Treasury is now the riskiest fruit in the bunch. As America leans deeper into banana republic territory, investors are waking up to the uncomfortable truth: the only safe portfolio left is the banana republic special — stocks for the show, and gold for survival.

On November 12, Congress finally ended the longest government shutdown in U.S. history—just in time to save Thanksgiving from turning into a national budgeting seminar. The deal funds key agencies like Veterans Affairs, Agriculture, and the FDA through 2026, while everyone else gets a short extension until January 30. Translation: they’ve kicked the can down the road... again.
Republicans won’t touch Obamacare subsidies, Democrats are trying to save face, and both sides clearly wanted to clock out for the holidays. The good news? Federal workers can relax, planes will still fly, and America can pretend everything’s fine through New Year’s. But let’s be real—Congress shouldn’t get paid for doing nothing. Their endless gridlock keeps adding billions to the national debt. At this rate, the only thing truly bipartisan in Washington is the art of procrastination… and maybe the quiet, creeping sense that the Union’s patience is running out.


https://x.com/WhiteHouse/status/1988821582802804866

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As the Washington shutdown circus finally folded its tent—at least until January—the US Treasury decided it was time to pass the hat around again, auctioning $25BN in 30-year bonds. The sale ended with a high yield of 4.694%, a tiny dip from last month’s 4.734%, but still managed to tail the When-Issued level of 4.684% by a full 1 basis point. That makes it the second tail in a row and the biggest since August, when the auction tripped over its own feet with a 2.1bps tail. Even the bond market seems exhausted by the political clown show.

The bid-to-cover limped in at 2.295, down from 2.382 and scraping the bottom of the barrel—its lowest since August’s 2.266. Remove that outlier and today’s number would be the worst since 2023. The internals tried their best to look respectable: Indirects stepped up with a 71% take, their strongest showing since October 2024. But Directs clearly didn’t get the memo, plunging to 14.5% from 26.9%—their weakest since, well, also October 2024. Dealers, as usual, were the unlucky ones left holding 14.5%, their heaviest load since August. In short: everyone showed up, just not in the right proportions.