You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. Is The Stock Market Just One Long Sandra Bullock Movie?Welcome to the Sandra Bullock Macro-to-Micro, Cinematic Universe...
Dear Fellow Traveler: In the movie The Proposal, Sandra Bullock plays a Canadian magazine editor who is about to be deported… and about to lose her job. She proposes a solution to the executives, asking them to work from Toronto for a year. They explain that she can’t work for a U.S. company if she’s deported. So she then does what any normal person in an institutional panic would do… She turns to her assistant… Ryan Reynolds, who just entered the room. She throws an arm around him and tells everyone they’re engaged.
Reynolds has no idea what’s happening. But before he can say anything, the bosses nod and tell her to make the marriage convincing. The lie has overtaken the truth. She then bribes an unwilling Reynolds with a promotion to keep up appearances... The “couple” flies to Alaska and meets his family. They pretend to be in love in front of a grandmother played by Betty White. The whole thing snowballs into a reality that everyone else operates around… not because it’s true, but because correcting it would be worse than going along with it. Hilarity ensues… Now… why did Monday’s market behavior feel like a variation of this movie plot? On Sunday night… the global market was cracking… The financial system was staring down a liquidity event. Oil was threatening to push bond yields into territory that would continue to crack private credit, pressure repo markets, and force margin calls. The Strait of Hormuz was functionally closed. The dollar was squeezing. Asia was dumping metals for oil. Every macro signal was flashing the kind of stress that doesn’t reverse on its own. And this Pressure index, covered by Jules Rimmer at Marketwatch, was the highest of any point in the Trump 2.0 term…
It reached a point of severe stress. But it still seemed to be in a territory where a single Tweet, action, or statement could still alleviate all of the pressure. When I saw futures at 7 am Monday go from down 1% to screaming into the sky… and then saw on CNBC that Trump said the U.S. and Iran had productive conversations… I felt confused… I read a Wall Street Journal article just 15 minutes earlier saying Iran’s Chief Negotiator didn’t want to negotiate… and Iran's media denied Trump’s statement… Maybe it was the lack of sleep or the lack of coffee, but at that moment, all I could think about was the plot of The Proposal… or some sort of market-based sequel. U.S.: We’ve had very productive conversations. A resolution may be coming. Iran: There have been no negotiations. U.S.: A deal is possible. Iran: Nothing has changed. U.S.: We want a deal and direct engagement. Markets: So… they’re engaged. Me: Engaged in what? Talks? Markets: No. To be married. Cut to: Markets rally. Cut to: Everyone starts buying Bitcoin… Cut to: Modern Bride magazine sales go through the roof. End of Act IWhat is Happening?I apologize if I seem to be making light of what’s going on in the Middle East… Or hallucinating… Or suggesting that all of our policies are made on a bend-but-don’t-break approach that seems to forget that the S&P 500 is supposed to be a wealth machine for ordinary Americans. But this is how I grieve... If you don’t laugh, you’re going to cry… CNBC reported the news on Monday morning as selling pressure in Asia continued. Were there negotiations? Was there evidence? More on those questions in a moment… Some media outlets chose to lead with Iran’s version of the story... The Wall Street Journal started writing about back-channel negotiations… Others ran with skeptical headiness… This is the Associated Press: Trump says US and Iran are talking. His claim is eliciting market cheers and plenty of skepticismAP did explain Trump’s statement…
MarketWatch, meanwhile, noted that this is the fourth time Trump has pulled the markets back from the brink of a deeper market downturn. I try to consider every scenario instead of (well, ever) jumping to a political stance. One thought was… “What if they’re negotiating with a different regime that they want to take over the country?” Then… the more plausible… “Is this a negotiating tactic, given that the U.S. is now considering advancing the Army’s 82nd Airborne or the 31st Marine Expeditionary Unit to Iran?“ Regardless of the story… I want to stress this… No one’s conclusion really mattered… This market isn’t based on complete information but on human interpretation and irrational behavior. We live in a world where markets don’t have time to ask questions… Markets move. It doesn’t matter what anyone thinks… just what was said in the premarket... Trump’s words and actions have become a major driver of the market. He doesn’t need a framework, a timeline, or a single diplomatic concession… or evidence, really. As I said yesterday, the markets will ultimately tell the truth through momentum and other signals that indicate whether there is a definitive bottom for equities. And of course, I noted yesterday that six peculiar Polymarket accounts suddenly started betting on a ceasefire by the end of the month, with the upside of earning $1 million. I’m still thinking about the alternative… which was Monday morning opening with no counternarrative to the crisis… And that it likely would have been really ugly... Exactly what I was prepared for when I went to bed on Sunday night… Regardless, all of our pressures are still there. Private credit, rising oil, weak consumers, inflationary pressures, deflationary dollars, and so on… But that’s not what I wanted to think about anymore on a Monday… So… I ended up thinking about Sandra Bullock movies some more… And your takeaway from Monday should be this… The lesson of The Proposal wasn’t that the narrative works forever. It’s that it works long enough to get on the plane, meet the family, and figure out the next move. That’s not romance. That’s crisis management. And if you think the comparison is a stretch, I’ll remind you that the entire Federal Reserve policy framework since 2008 has been based on the same principle… Say something confident enough, and the market will do the rest. Same as it ever was… I Can Do This All Day…Sandra Bullock has been making movies about the financial system for 30 years. You just weren’t paying attention. Neither was she… But if you squint hard enough, you’ll start noticing it. Many of her film plots are all built on the same dynamic…
Seriously… That’s almost every film she’s ever been in… And pretty much every single policy decision in the United States in the last 35 years… So, let me introduce… The Sandra Bullock Macro-to-Micro, Cinematic Universe Speed (1994)This one’s easy… There’s a bomb on the bus. If it drops below 50 miles per hour, it explodes. That’s the Fed’s balance sheet since 2008. They can’t stop. They tried once in 2018 with quantitative tightening, and the repo market seized up by September 2019. They tried to talk tough in 2022, and Silicon Valley Bank exploded six months later. Every time they take their foot off the gas, something in the plumbing breaks. Dennis Hopper is inflation, calling in threats that everyone has to take seriously, even though the bomb was rigged years ago, and nobody knows if the wiring still works. The whole movie is about a question… What happens when you can’t slow down? Eighteen years later, the Fed still doesn’t fully have that answer. Gravity (2013)A little harder… Sandra Bullock starts floating through space, stranded in orbit after a debris storm destroys the shuttle… Each attempted escape creates new danger. Every handhold she reaches for either isn’t there or breaks off when she grabs it. Every attempt to reach safety creates a new debris field, making things worse. That’s every offshore borrower trying to source dollars in a liquidity crunch. All that $14 trillion in dollar-denominated debt outside the U.S., according to the BIS. When funding tightens, every one of those borrowers is spinning in the dark, trying to grab onto anything that will hold. The fire extinguisher she uses to propel herself across open space is a central bank swap line… It’s not designed for this scenario. It’s not elegant, either, but it’s the only thing left that generates thrust. Now… think of George Clooney as the Bretton Woods system. He showed up looking great. Everyone felt better when he was around. But then he floats away about an hour in and never comes back. The rest of the movie is about surviving without him. That’s the monetary system after Nixon took us off the Gold Standard in 90 minutes. Miss Congeniality (2000)Too easy… Sandra Bullock plays an FBI agent who goes undercover at a beauty pageant, because why not? She doesn’t belong there. Everyone knows she’s not a pageant queen because of the way she walks and talks. Oh, I think her talent portion is a combat demonstration. So… she puts on the dress, learns to wave, and answers the questions about world peace or whatever with enough sincerity that the judges let her through. It’s not because she fooled them. It’s because the FBI needed someone undercover at a pageant. That’s cryptocurrency right now at the SEC on behalf of the Treasury Department. Crypto showed up covered in cypherpunk ideology and anarchist energy, and the SEC treated it accordingly for years. Then BlackRock filed for a spot ETF, and suddenly Bitcoin was in the evening gown portion of the competition. Crypto is now necessary… with new stablecoin funds and other exotic innovations that will help absorb Treasury bills and create new places for capital to flow… Michael Caine is Larry Fink… teaching her how to walk in heels, smile at the judges, and say the right things about portfolio diversification without mentioning the part about dismantling central banking and creating containers for Treasury demand. In the end, Bitcoin, cryptocurrencies, and tokenization can help save the day for never-ending monetary expansion. Thanks for being there, Bitcoin Bullock. Roll credits. While You Were Sleeping (1995)Give me a little liberty here… Sandra Bullock saves a man’s life on the subway platform, but he falls into a coma. Through a series of misunderstandings, his entire family becomes convinced she’s his fiancée (even though he has another woman who wants to be his fiancée). Wait, another movie where there’s a fake marriage? Anyway, she lets the misunderstanding go on too long. The longer she delays, the harder it becomes to tell the truth, since now everyone starts building their days around a version of reality that was never confirmed. Since we already did this… let’s talk about how it’s similar to equity market pricing in a “soft-landing scenario.” Every time the Fed signals that rate cuts are coming, the market starts to celebrate. Equities rally and credit spreads tighten. Homebuilders start acting like mortgages are heading back to 3%. But that man is still in a coma, everyone. The Fed hasn’t cut anything yet. The soft landing hasn’t landed either. But families start to reorganize their lives around the assumption and start looking at houses, thinking they can just refinance later. At this point, the cost of telling the truth is higher than keeping the fiction alive. The question is whether the correction comes gently… or the guy wakes up and says, “Who the hell are you, Lady?” while the S&P is at all-time highs. Demolition Man (1993)Okay… well, this is the gold standard… and the finest example by far. It’s technically a Sylvester Stallone movie, but Sandra Bullock is a key part of it… So, a cop from the 1990s gets frozen and wakes up in 2032, where every restaurant is Taco Bell because it was the only chain to survive the “Franchise Wars.” The whole society is so pacified and organized around safety and compliance that it’s incapable of handling a real threat. That’s the post-2020 Western financial system. We spent a decade building a financial system centered around low volatility, low rates, and infinite liquidity. Every risk was hedged, packaged, and sold to someone who didn’t read a prospectus… and we told ourselves that the Fed would handle it. Then inflation showed up like Wesley Snipes, unfrozen and pissed off, and the system had no idea how to fight him because it’d been living in a place where nothing bad was supposed to ever happen again. Sandra Bullock plays the optimistic bureaucrat who believes the system works because she’s never seen it tested. That feels like Janet Yellen saying in 2017 that she didn’t anticipate another financial crisis in “our lifetimes.” Of course, the real reason I included this film in this post was to talk about what matters in Demolition Man. In the movie, no one ever explains what the three seashells in the bathroom are...
Stallone's character doesn't know how to use them, so everyone laughs at him. In turn, he starts cursing, and a machine spits out fines he can use as toilet paper. It's one of the great unanswered questions in American film history... But in finance, the three seashells are the tools the modern financial system uses to clean up its own mess, and nobody outside the system understands how they work.
And the fiat currency… printed out as he curses it… is what Stallone has to “live” with… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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