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Somewhere a 22-Year-Old Just Quit Journalism Forever |
And that tells you everything about where we really are… |
President said China has no windmills. |
A 22-year-old journalism student got assigned to fact-check that statement, realized they'd have to verify whether a country that produces twice our wind capacity actually has windmills, and promptly quit to find himself in the Darien Gap. |
I don't blame the kid. This is why I don't take anything seriously anymore. |
But here's what you should take seriously: we just witnessed another policy reversal driven by bond market stress. |
Trump backed off Greenland tariffs not because he suddenly developed diplomatic skills, but because people were dumping US treasuries and Scott Bessent whispered in his ear. |
This is the sixth time we've done this dance, and each time the warning signals get louder. |
Before we dig into why yesterday's reversal matters, you need to do something today. |
Go through your entire portfolio and ask why everything is there. |
Why do I own this? Do I want to keep this? Is this a capital efficient business? Does it kick off cash? Will this help me as a trader? |
If you can't answer yes, now is the time to think about what you're doing with that money over the next 18 months. |
We keep getting the same warning signal over and over since August 2024. We're moving from crisis to crisis, and I need to shake you by the shoulders: do you see that we've had five major warning signs about how fragile all this is in the last year? |
Why Greenland actually matters (hint: it's not about Greenland) |
The bond market is infinitely more important than the equity market. It's not even close. |
Back in April 2025, leveraged funds were dumping bonds - the unwinding of the basis trade where funds leverage up, buy the same bonds, and squeeze returns. When they all unwind simultaneously, treasury yields spike, repo markets seize, and equities get hammered. |
That's exactly what was happening again. Sovereign wealth funds were preparing to dump bonds. There was expectation of another $130 billion being sold. A Danish pension fund actually sold $100 million. |
Then Trump announces Greenland military action, bond selling accelerates, and suddenly - taco time. Policy reversal. |
Here's the reality: what this administration wants to accomplish is not compatible with the actual structure of our bond market. They want to go Austrian on some things, Chicago on others. Good luck. You gotta rip the plumbing out first, and that ain't gonna look good. |
The throwback policy stack nobody's talking about |
Every policy response happening right now is a throwback to previous crises: |
Fed buying $40 billion monthly in short-term bills: throwback to 2019 repo crisis and 2023 Silicon Valley banking crisis Treasury front-end issuance: throwback to 2018 and debt concerns from 2020 Japan suppressing yields despite inflation: 2024 carry trade crisis Implicit tolerance of basis trades: regime maintenance, not normalization
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We're at peak liquidity cycle with everyone backed in simultaneously. All the can-kicking from multiple crises is meeting at the same time. |
Japan remains the canary in the coal mine. I've been complaining about this for 18 months, and I don't like beating my chest because it's not good when this happens. But they continue kicking the can down the road. |
Where the real money goes next |
They're doing you a favor by giving you another day to assess and prepare. Take advantage of it. |
Real assets are the play. Gold, silver, rare earth materials, uranium stocks. When you're debasing currency and shifting bilateral power globally, these are the winners. |
USAR, UUU - there's going to be more deal-making in these names. This is where the trade of 2026 lives, right in the heart of mercantilist policy focused on Greenland deals, national defense, oil production, and materials. |
The leveraged ETF space is already shifting from Bitcoin to commodities. Historically, commodity ETF exposure drops to 2-3% before these cycles. We're building back up because it's thematic and there's only so many ways to replicate the S&P 500. |
Why this takes time |
This requires something magnificent - Bretton Woods 3, asset repricing, regime shift. I don't think we're there yet. Central banks won't coordinate while everyone's offended at Christine Lagarde (who's been there 15 years - Europe only has three central bankers). |
But volatility spikes will resolve faster but higher. We've had periods where volatility spikes 40% then pulls back within 10 trading days. That never happened before 2011. They're trying to buy time without solutions. |
It's going to require coordination they're not ready for, especially with a more politicized Fed chair coming. That announcement could come today. |
What I'm watching next |
Pay attention to moving averages. Watch the 20 and 50-day. Keep an eye on FNGD positioning. Monitor leverage levels. |
In this environment where we move from crisis to crisis, technical structure matters more than fundamentals. The eight and 20 EMA compression creates opportunities when everyone's following the same signals simultaneously. |
Look for short squeeze candidates when the market bounces. High short interest becomes latent demand. Low float amplifies price impact. Rising prices increase margin stress and forced buying. |
The companies that matter: real assets, materials, anything that benefits from monetary inflation and regime instability. |
I'll be tracking all of this - the bond market signals, policy reversals, and how they translate into actual positioning - live in the TheoTrade chat room. |
This macro thesis doesn't mean much unless you can see it play out in real trades. |
When the next crisis hits (and it will), you'll want to understand what's actually driving the moves instead of just reacting to headlines about windmills. |
The 16-year-old journalism student had the right idea. But if you're staying in this game, at least understand what game you're actually playing. |
I'll see you in the room. |
Stay Positive, |
Garrett Baldwin |
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What percentage of your portfolio can you actually justify owning? |
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