WealthyReadings
Stop complaining about the $PYPL CFO telling the truth.
Weakness is here for longer. The mistake isn't on them for being honest; it's on us for selecting a weaker stock than we thought.
Accept the truth and move on. Don't blame it on them.
Focus on your next move. That is all that matters.
tweet
Stop complaining about the $PYPL CFO telling the truth.
Weakness is here for longer. The mistake isn't on them for being honest; it's on us for selecting a weaker stock than we thought.
Accept the truth and move on. Don't blame it on them.
Focus on your next move. That is all that matters.
tweet
Offshore
Photo
EndGame Macro
🇯🇵 The Calm Before the Carry Trade Cracks
Japan’s 10 year yield pushing up means bond prices are slipping and lenders are basically saying, “If I’m going to lend to Japan, I want more interest.” Simple.
Why it matters is Japan has been the world’s cheap funding source for years. Borrow yen for almost nothing, go buy something that pays more somewhere else. The moment Japanese yields rise, even a little, it changes the math on a massive amount of global positioning.
Even with Japan’s 10Y around 1.89%, the U.S. curve is still sitting much higher, front end near the high 3s, 10Y around 4.06%, 30Y around 4.73%. The UK is even higher at the long end. So yes, Japan is lifting off zero, but globally it’s still cheapish compared to where real yield is being paid.
Now look at USD/JPY. We’re still around 155+. That’s the twist. If Japan were truly escaping the cheap money era in a way markets believed would stick, you’d usually see the yen start to firm. But it hasn’t. That tells you the market still thinks Japan’s move is gradual, and the dollar still has gravity with higher yields, safe haven reflexes, and years of embedded behavior that treats the yen like a funding tool.
So what’s the outcome?
First, higher Japanese yields start pulling some money back home, not dramatically at first, but enough to matter. Japan’s savings pool is huge. If you can finally earn something domestically, you don’t need to reach as far into U.S. credit, EM, or long duration bets. Even small shifts there ripple because the base is so large.
Second, this should support the yen… but only if it actually compresses the gap with the U.S. and changes behavior. Right now the curves say the gap is still wide, and the FX chart says the same thing in plain language that the world is still choosing dollars, and the yen is still being used like a tool. Fund first, think later.
Third, this is a volatility story more than a Japan growth story. Japan lifting off the floor isn’t just Japan news. It’s the last big anchor moving. Markets can handle it if it creeps. They struggle if it jumps because a ton of global risk taking assumes yen funding stays cheap and predictable.
My Read
This isn’t about whether the 10 year is 1.89% today. It’s about the regime shift…Japan is drifting from yields are a policy choice to yields are a market problem again. Once markets believe that, global flow math changes.
And USD/JPY at 155+ isn’t a comfort blanket. It’s a warning label. It screams one way positioning. One way markets don’t unwind politely. They sit there… until something forces them to move.
If a global slowdown takes hold (increasingly likely)
That something is usually growth breaking. In a slowdown, U.S. and European yields tend to fall faster than Japan’s simply because they’ve got more room to fall. That compresses the spread which matters for USD/JPY. At the same time, risk off behavior unwinds carry trades and that’s when the yen can strengthen quickly because people rush to close funding.
So you get the nasty cocktail of weaker growth, falling global yields, spread compression, and a sudden urge to derisk. In that environment USD/JPY doesn’t gently drift lower. It can drop in chunks, because the funding trade flips and money heads home.
Rising JGB yields are the market tapping the glass. Japan isn’t just a country, it’s a funding pillar. And when that pillar starts shifting while USD/JPY is still pinned high, that’s when the whole room can move all at once.
tweet
🇯🇵 The Calm Before the Carry Trade Cracks
Japan’s 10 year yield pushing up means bond prices are slipping and lenders are basically saying, “If I’m going to lend to Japan, I want more interest.” Simple.
Why it matters is Japan has been the world’s cheap funding source for years. Borrow yen for almost nothing, go buy something that pays more somewhere else. The moment Japanese yields rise, even a little, it changes the math on a massive amount of global positioning.
Even with Japan’s 10Y around 1.89%, the U.S. curve is still sitting much higher, front end near the high 3s, 10Y around 4.06%, 30Y around 4.73%. The UK is even higher at the long end. So yes, Japan is lifting off zero, but globally it’s still cheapish compared to where real yield is being paid.
Now look at USD/JPY. We’re still around 155+. That’s the twist. If Japan were truly escaping the cheap money era in a way markets believed would stick, you’d usually see the yen start to firm. But it hasn’t. That tells you the market still thinks Japan’s move is gradual, and the dollar still has gravity with higher yields, safe haven reflexes, and years of embedded behavior that treats the yen like a funding tool.
So what’s the outcome?
First, higher Japanese yields start pulling some money back home, not dramatically at first, but enough to matter. Japan’s savings pool is huge. If you can finally earn something domestically, you don’t need to reach as far into U.S. credit, EM, or long duration bets. Even small shifts there ripple because the base is so large.
Second, this should support the yen… but only if it actually compresses the gap with the U.S. and changes behavior. Right now the curves say the gap is still wide, and the FX chart says the same thing in plain language that the world is still choosing dollars, and the yen is still being used like a tool. Fund first, think later.
Third, this is a volatility story more than a Japan growth story. Japan lifting off the floor isn’t just Japan news. It’s the last big anchor moving. Markets can handle it if it creeps. They struggle if it jumps because a ton of global risk taking assumes yen funding stays cheap and predictable.
My Read
This isn’t about whether the 10 year is 1.89% today. It’s about the regime shift…Japan is drifting from yields are a policy choice to yields are a market problem again. Once markets believe that, global flow math changes.
And USD/JPY at 155+ isn’t a comfort blanket. It’s a warning label. It screams one way positioning. One way markets don’t unwind politely. They sit there… until something forces them to move.
If a global slowdown takes hold (increasingly likely)
That something is usually growth breaking. In a slowdown, U.S. and European yields tend to fall faster than Japan’s simply because they’ve got more room to fall. That compresses the spread which matters for USD/JPY. At the same time, risk off behavior unwinds carry trades and that’s when the yen can strengthen quickly because people rush to close funding.
So you get the nasty cocktail of weaker growth, falling global yields, spread compression, and a sudden urge to derisk. In that environment USD/JPY doesn’t gently drift lower. It can drop in chunks, because the funding trade flips and money heads home.
Rising JGB yields are the market tapping the glass. Japan isn’t just a country, it’s a funding pillar. And when that pillar starts shifting while USD/JPY is still pinned high, that’s when the whole room can move all at once.
Someone explain to me what the outcome of this will be like I’m a 4th grader.
Seriously.
Paging all bond experts. https://t.co/G34Bu8qLEv tweet
Offshore
Photo
EndGame Macro
The Yen Carry Isn’t Dead It Just Went Underground
The BIS series only tells you about banks yen denominated cross border loans. That used to be a decent proxy for the classic carry trade back in the 2000s, borrow yen in cash, buy something with a higher yield.
But that world died with the GFC. Not because carry disappeared, but because the plumbing changed. Post 2008, most of the real yen funded activity stopped running through bank balance sheets and started running through derivatives desks, hedge funds, systematic strategies, and cross currency swaps. None of that shows up in this chart.
So when he says this isn’t a carry trade anymore, what he’s really saying is that the old form of it isn’t happening. Which is true.
But it doesn’t tell you much about the new form.
Where the yen trade actually lives now
The modern yen carry isn’t a banker in Tokyo handing out yen loans to a banker in London. It’s hedge funds running leverage through FX swaps. It’s multinational corporates hedging in one pocket and investing in another. It’s CTAs piling into trend trades when USD/JPY breaks levels. It’s the cross currency basis shifting when global dollar funding tightens or loosens.
These flows matter far more for today’s market behavior than the balance sheet lending of the early 2000s era. And they all share a single trait…they can unwind fast, violently, and at scale when the yen spikes or Japanese yields move sharply.
You don’t need a huge notional carry stock for that. You just need positioning, leverage, and volatility.
My Read
The old school yen carry isn’t the dominant force anymore. But the conclusion that the carry trade is dead misses the modern dynamics.
The real risk is that the yen is still treated as funding, even if the channels look different. And when a funding currency changes regime, the pain doesn’t show up in a BIS line chart, it shows up in forced deleveraging, margin calls, and cross asset volatility.
So the question isn’t whether the carry trade is dead. It’s whether markets are still implicitly short yen volatility without realizing it. That’s the setup that tends to blow up in real time.
tweet
The Yen Carry Isn’t Dead It Just Went Underground
The BIS series only tells you about banks yen denominated cross border loans. That used to be a decent proxy for the classic carry trade back in the 2000s, borrow yen in cash, buy something with a higher yield.
But that world died with the GFC. Not because carry disappeared, but because the plumbing changed. Post 2008, most of the real yen funded activity stopped running through bank balance sheets and started running through derivatives desks, hedge funds, systematic strategies, and cross currency swaps. None of that shows up in this chart.
So when he says this isn’t a carry trade anymore, what he’s really saying is that the old form of it isn’t happening. Which is true.
But it doesn’t tell you much about the new form.
Where the yen trade actually lives now
The modern yen carry isn’t a banker in Tokyo handing out yen loans to a banker in London. It’s hedge funds running leverage through FX swaps. It’s multinational corporates hedging in one pocket and investing in another. It’s CTAs piling into trend trades when USD/JPY breaks levels. It’s the cross currency basis shifting when global dollar funding tightens or loosens.
These flows matter far more for today’s market behavior than the balance sheet lending of the early 2000s era. And they all share a single trait…they can unwind fast, violently, and at scale when the yen spikes or Japanese yields move sharply.
You don’t need a huge notional carry stock for that. You just need positioning, leverage, and volatility.
My Read
The old school yen carry isn’t the dominant force anymore. But the conclusion that the carry trade is dead misses the modern dynamics.
The real risk is that the yen is still treated as funding, even if the channels look different. And when a funding currency changes regime, the pain doesn’t show up in a BIS line chart, it shows up in forced deleveraging, margin calls, and cross asset volatility.
So the question isn’t whether the carry trade is dead. It’s whether markets are still implicitly short yen volatility without realizing it. That’s the setup that tends to blow up in real time.
The Yen Carry Trade Is Dead
Despite a falling FX and low rates, the yen carry trade remains muted. Naked FX borrowing ended with the GFC, with the only thing left a lingering nostalgia for a trade that mattered 20yrs ago.
https://t.co/1h7Zlp3KVQ https://t.co/2llIZerTqt tweet
Offshore
Photo
EndGame Macro
RT @RVlahutin: Finland’s underground data centers heat cities 👇🏻
tweet
RT @RVlahutin: Finland’s underground data centers heat cities 👇🏻
Data centres eat electricity.
But their waste heat?
Finland turns it into home heating.
Cities are plugging data-centre heat into district-heating systems — cutting waste and cutting emissions. https://t.co/78z1icRbBH tweet
Offshore
Photo
EndGame Macro
When the Market Gets This Narrow, History Doesn’t End Well And Michael Burry Knows It
Burry is talking about a backdrop, the kind of environment that doesn’t break all at once, but grinds people down over time. When you lay the data out, you can see why he stepped back.
A market that looks strong but rests on a narrow base
Right now the top ten stocks make up about 37% of the entire U.S. market. That’s the highest concentration in over 50 years. It’s tighter than the Nifty Fifty era, tighter than the dot com peak in 2000, and even tighter than the U.S. market was in 1929, before the crash wiped out nearly eighty percent of total market value.
Concentration by itself doesn’t cause a collapse, but it makes the whole structure fragile. When the index is carried by a handful of megacaps, leadership doesn’t rotate smoothly, it tends to break. That’s how markets shift regimes, and historically that shift is rarely gentle.
A consumer picture that doesn’t match the headline narrative
Underneath the index, households are feeling pressure. Student loan delinquencies are sitting near 9.4%, the highest since the data began. Credit card delinquencies are above 3%, auto loans over 5%, and commercial real estate office delinquencies have pushed past 11% an all time record.
At the same time, consumer sentiment is hovering near the lows of 2022 despite wage growth. When optimism stays weak while missed payments rise, it’s a sign the stress is real. It doesn’t show up immediately in earnings or GDP prints, but it shows up eventually and when it arrives, it tends to reshape the market narrative quickly.
The wall waiting in 2026
Then there’s the refinancing problem looming ahead. Around $460 billion in commercial real estate loans come due in 2026, most of them written at rates that don’t exist anymore and backed by buildings that are worth less than they used to be. And right beside that sits a U.S. government interest bill that keeps rising, crowding out flexibility just as growth is slowing.
That kind of setup doesn’t trigger a dramatic one day break. It weighs on the system month after month, year after year, until valuations, earnings, and investor expectations finally have to adjust.
What Burry is really getting at
He’s saying the basic math that held up the last decade doesn’t hold anymore. Potential growth is lower. Potential job growth is lower. Consumers are strained. Debt service costs are rising across households, commercial real estate, and the federal government. And the market has become so narrowly led that it resembles the most extreme historical periods, including 1929.
This is called realism. When the underlying regime shifts, returns don’t collapse in a straight line, they just get harder, more volatile, and more disappointing. That’s what a number of bad years looks like. It’s not spectacular. It’s tiring.
And that’s the world Burry is describing.
tweet
When the Market Gets This Narrow, History Doesn’t End Well And Michael Burry Knows It
Burry is talking about a backdrop, the kind of environment that doesn’t break all at once, but grinds people down over time. When you lay the data out, you can see why he stepped back.
A market that looks strong but rests on a narrow base
Right now the top ten stocks make up about 37% of the entire U.S. market. That’s the highest concentration in over 50 years. It’s tighter than the Nifty Fifty era, tighter than the dot com peak in 2000, and even tighter than the U.S. market was in 1929, before the crash wiped out nearly eighty percent of total market value.
Concentration by itself doesn’t cause a collapse, but it makes the whole structure fragile. When the index is carried by a handful of megacaps, leadership doesn’t rotate smoothly, it tends to break. That’s how markets shift regimes, and historically that shift is rarely gentle.
A consumer picture that doesn’t match the headline narrative
Underneath the index, households are feeling pressure. Student loan delinquencies are sitting near 9.4%, the highest since the data began. Credit card delinquencies are above 3%, auto loans over 5%, and commercial real estate office delinquencies have pushed past 11% an all time record.
At the same time, consumer sentiment is hovering near the lows of 2022 despite wage growth. When optimism stays weak while missed payments rise, it’s a sign the stress is real. It doesn’t show up immediately in earnings or GDP prints, but it shows up eventually and when it arrives, it tends to reshape the market narrative quickly.
The wall waiting in 2026
Then there’s the refinancing problem looming ahead. Around $460 billion in commercial real estate loans come due in 2026, most of them written at rates that don’t exist anymore and backed by buildings that are worth less than they used to be. And right beside that sits a U.S. government interest bill that keeps rising, crowding out flexibility just as growth is slowing.
That kind of setup doesn’t trigger a dramatic one day break. It weighs on the system month after month, year after year, until valuations, earnings, and investor expectations finally have to adjust.
What Burry is really getting at
He’s saying the basic math that held up the last decade doesn’t hold anymore. Potential growth is lower. Potential job growth is lower. Consumers are strained. Debt service costs are rising across households, commercial real estate, and the federal government. And the market has become so narrowly led that it resembles the most extreme historical periods, including 1929.
This is called realism. When the underlying regime shifts, returns don’t collapse in a straight line, they just get harder, more volatile, and more disappointing. That’s what a number of bad years looks like. It’s not spectacular. It’s tiring.
And that’s the world Burry is describing.
tweet
Offshore
Photo
EndGame Macro
Why a $12.5B Buyback Matters More for Liquidity Than Debt
This isn’t the Treasury trying to juice the market or retire debt like a corporation buying back shares. It’s more like upkeep on a market that’s gotten massive, uneven, and occasionally twitchy. Treasury accepted about $12.5B of older notes even though almost triple that amount was offered. That alone tells you this wasn’t a scramble, it was controlled, targeted, and aimed at maturities clustered in 2026–2027.
Older bonds naturally lose liquidity. They drift off the benchmark curve, trading gets thinner, and small stress can turn into sloppy pricing. Treasury stepping in to clean up those pockets is housekeeping. They’re smoothing out the parts of the market that tend to wobble at exactly the wrong time.
And the reason this matters more now is simple…Treasuries aren’t just investments, they’re the core collateral of the entire overnight funding world.
Why it’s happening now
Look at the bigger backdrop. The Fed has already cut twice and formally ended QT on December 1. That’s policymakers basically saying they’re done draining liquidity. Now we’re focused on keeping the machine running smoothly.
This is where SOFR comes in. SOFR is built on the repo market, the overnight lending engine where Treasuries are exchanged for cash. When SOFR volumes explode the way it has lately, it means the entire financial system is leaning heavily on collateralized overnight financing. That’s fine… until some slice of the Treasury market starts trading weird. Then volatility in one corner spreads everywhere because the collateral itself becomes harder to move.
Buybacks help keep that from happening. Cleaner collateral means cleaner repo markets. And cleaner repo markets mean fewer chances for a sudden, unnecessary funding hiccup.
Why it matters
The number $12.5B isn’t the real story. It’s the fact that buybacks are becoming a tool, not a headline. Paired with the end of QT, it’s a pretty clear sign that stability is rising up the priority ladder.
My Read
This is what late cycle policy looks like in a system built on leverage and constant refinancing. You rarely get one big dramatic break. You get a series of quiet adjustments meant to keep the cracks from forming in the first place.
tweet
Why a $12.5B Buyback Matters More for Liquidity Than Debt
This isn’t the Treasury trying to juice the market or retire debt like a corporation buying back shares. It’s more like upkeep on a market that’s gotten massive, uneven, and occasionally twitchy. Treasury accepted about $12.5B of older notes even though almost triple that amount was offered. That alone tells you this wasn’t a scramble, it was controlled, targeted, and aimed at maturities clustered in 2026–2027.
Older bonds naturally lose liquidity. They drift off the benchmark curve, trading gets thinner, and small stress can turn into sloppy pricing. Treasury stepping in to clean up those pockets is housekeeping. They’re smoothing out the parts of the market that tend to wobble at exactly the wrong time.
And the reason this matters more now is simple…Treasuries aren’t just investments, they’re the core collateral of the entire overnight funding world.
Why it’s happening now
Look at the bigger backdrop. The Fed has already cut twice and formally ended QT on December 1. That’s policymakers basically saying they’re done draining liquidity. Now we’re focused on keeping the machine running smoothly.
This is where SOFR comes in. SOFR is built on the repo market, the overnight lending engine where Treasuries are exchanged for cash. When SOFR volumes explode the way it has lately, it means the entire financial system is leaning heavily on collateralized overnight financing. That’s fine… until some slice of the Treasury market starts trading weird. Then volatility in one corner spreads everywhere because the collateral itself becomes harder to move.
Buybacks help keep that from happening. Cleaner collateral means cleaner repo markets. And cleaner repo markets mean fewer chances for a sudden, unnecessary funding hiccup.
Why it matters
The number $12.5B isn’t the real story. It’s the fact that buybacks are becoming a tool, not a headline. Paired with the end of QT, it’s a pretty clear sign that stability is rising up the priority ladder.
My Read
This is what late cycle policy looks like in a system built on leverage and constant refinancing. You rarely get one big dramatic break. You get a series of quiet adjustments meant to keep the cracks from forming in the first place.
JUST IN 🚨: U.S. Treasury just bought back $12.5 Billion of their own debt, the largest Treasury buyback in history 🤯👀 tweet
WealthyReadings
RT @WealthyReadings: Too many people buy stocks simply because they think the company is great.
But every single buy should come with the answer to one very simple question: Why would that stock go up?
One of the most common answer is "because it’s cheap". Buying a stock because it's "cheap" is certainly one of the biggest source of underperformance in the markets.
If you do not have an answer and form a clear thesis, then there’s no reason to be buying that stock at that moment. Your liquidity is always better elsewhere.
Liking a company or following a great business does not mean it will end up being a great investment.
tweet
RT @WealthyReadings: Too many people buy stocks simply because they think the company is great.
But every single buy should come with the answer to one very simple question: Why would that stock go up?
One of the most common answer is "because it’s cheap". Buying a stock because it's "cheap" is certainly one of the biggest source of underperformance in the markets.
If you do not have an answer and form a clear thesis, then there’s no reason to be buying that stock at that moment. Your liquidity is always better elsewhere.
Liking a company or following a great business does not mean it will end up being a great investment.
tweet