It's been a minute...
So I'm thinking of opening a new (and probably short) Doom and Gloom Room today over on Clubhouse, for anyone interested in:
- macro
- Bitcoin
- bonds
- stonks
- living well
- investing wisely
As usual, I am not selling anything and the room probably won't be very interesting.
Any interest?
As anticipated, the 50 bps drop of the federal funds rate yesterday has resulted in a drop of the Prime Rate from 8.5% to 8.0%.
Short-term borrowers (those with HELOCs, credit card debt, etc.) should soon see some much-needed relief via lower rates in the coming days/weeks.
https://m.primal.net/KvAJ.png
Using @primal, I swapped out my old "recommended" relays for the following relays, and have already noticed a better experience.
Thanks @utxo the webmaster 🧑💻!
However, my phone's @damus client is now unresponsive. The new clients are not shown on Damus, and when I try to add them, it won't allow me to do so.
Any thoughts @jb55?
Without my Damus client, I have lost the ability to zap as well.
nostr:note1qpykj8mljjgy7sy7eunufjtveegnczx78jyn898n2wpv48uq4dkqyrpds6
Thanks for the recs.
I already tried logging out of Damus, with no change when I logged back in.
If @jb55 or someone else from @damus isn't able to help, I'll probably try Nostur.
Cheers.
My Damus client is unresponsive, so I can't zap anyone at the moment.
Primal desktop works well for most things, but I can't currently zap while using it.
Doom and gloomers still calling for an imminent major #recession in the US this morning.
Doom and gloomers still wrong.
#Normalization, not #recession.
Using @primal, I swapped out my old "recommended" relays for the following relays, and have already noticed a better experience.
Thanks @utxo the webmaster 🧑💻!
However, my phone's @damus client is now unresponsive. The new clients are not shown on Damus, and when I try to add them, it won't allow me to do so.
Any thoughts @jb55?
Without my Damus client, I have lost the ability to zap as well.
nostr:note1qpykj8mljjgy7sy7eunufjtveegnczx78jyn898n2wpv48uq4dkqyrpds6
Incoming: Standing overnight reverse repurchase agreement operations offering rate of 4.8%.
Down from 5.3%, previously. Which has been the standing rate since August 2023.
Short term (~1-3 months) T-bill yields will quickly reflect this new rate.
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Prime rate is derived from the federal funds rate, which was lowered today from 5.25-5.5% to 4.75-5.0%.
HELOCs and other short term lending rates are based, in part, off of the prime rate.
Hopefully, many Americans who are getting beaten down by such high interest rates will feel some relief in the coming months... in the form of lower interest rate payments.
BREAKING: 50 bps it is.
"In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent."
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FYI.
Regarding the federal funds effective rate (FFER), overnight reverse repurchase (ORR) agreements, Treasury bills, and US net liquidity.
https://m.primal.net/Ktuh.png
What I'm watching... 👀
The Federal Funds Effective Rate (FFER) has been set at 5.33% since August 2023.
It will almost certainly be lower by the end of the day.
The FFER heavily influences short-term T-bill rates, as well as the amount and flow of money utilizing Overnight Reverse Repurchase Agreements... which is a significant component of US Net Liquidity.
#macro
https://m.primal.net/Ktpd.png
Generally speaking, if the FFER is higher than the one month (and similar) T-bill yield, then money market funds will park their cash in the ORR facility to earn a higher short-term risk free rate. This results in a contraction of US net liquidity.
Conversely, if the FFER is lower than the one month (and similar) T-bill yield, then money market funds will remove their cash from the ORR facility and buy T-bills. This results in expansion of US net liquidity.
Incoming: Standing overnight reverse repurchase agreement operations offering rate of 4.8%.
Down from 5.3%, previously. Which has been the standing rate since August 2023.
Short term (~1-3 months) T-bill yields will quickly reflect this new rate.
nostr:note19th0qqm4v2vumpc8vsh2e4k5t8yj648puyufk9626tnmgt7frgps74pzpz
On the morning of (an unusually pivotal) #FOMC meeting, the CME futures market is predicting a 65% chance of a 50 bps cut of the federal funds rate, and a 35% chance of a 25 bps rate cut.
MORE IMPORTANT TO ME as a fund manager is what the FOMC minutes and Jerome Powell have to say (definitively) about the Fed's balance sheet going forward.
Will #QE begin in earnest? Or will the Fed wait for turmoil in the bond markets before ending "not-QT"?
In other words, will a new wave of liquidity begin to flow from the US government into the private sector? If so, at what rate?
Because we have non-free, centrally-manipulated markets, I will be watching today's events with great interest.
🍿 #macro
https://m.primal.net/KtoA.png
They probably won't announce the start of QE (purchasing Treasuries and/or MBS) today. Instead, they are likely to focus on the federal funds rate and their future intentions (with the FFR).
US net liquidity is separate from global M2 monetary supply... but they generally ebb and flow in relation to each other.
BREAKING: 50 bps it is.
"In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent."
nostr:note1hd9m492hw65utrl645zhfq8nfz5j2qz9rf69r4l909zxf2a7jzjsa4ly3y
For context:
Global M2 (bottom blue line) is finally rising materially again.
Gold has been responding nicely... up +33% in the past year!
#bitcoin is up an eye-watering +126%... which is an impressive 12-month performance. But it will likely be dwarfed by the coming 13-15 month performance, if history is any guide. 👀
https://m.primal.net/KtJk.pngnostr:note1m0yq0nfxzzs4nmsa3g4tx380yy0aawq7u92ue7056yr40w3tkp4s3f4ru7
For context:
Global M2 (bottom blue line) is finally rising materially again.
Gold has been responding nicely... up +33% in the past year!
#bitcoin is up an eye-watering +126%... which is an impressive 12-month performance. But it will likely be dwarfed by the coming 13-15 month performance, if history is any guide. 👀
https://m.primal.net/KtJk.pngnostr:note1m0yq0nfxzzs4nmsa3g4tx380yy0aawq7u92ue7056yr40w3tkp4s3f4ru7
There's a strong possibility that the next bull market will begin, in earnest, at 2pm ET on Sept 18, 2024.... Although it may start slowly at first while market participants wrap their heads around the FOMC statement over the ensuing days/weeks.
Late 1990s style.
Could be a humdinger for #bitcoin.
"The only way to beat bitcoin is more bitcoin."
- @saylor
I concur.
Wise speculative arbitrage is essentially the only way to outperform #bitcoin over the long-term.
$MSTR and $3350 seem to be doing a good job of it so far...
https://www.youtube.com/watch?v=k7XhzXMSAPo
Bitcoin Magazine (via UTXO) is an investor.
But it is Dylan LeClair, specifically, who is the head of Bitcoin Strategy and speculative arbitrage for Metaplanet. Though he is still young, I have much confidence in Dylan and his abilities.
My favorite page on the StLouisFed .org (FRED) site:
"Buying eggs with bitcoins."
Since they started keeping track in January 2015 through August 2024, the price of a dozen eggs:
- In US dollars: Up +51.7%, from $2.11 to $3.20.
https://m.primal.net/KpFe.png
- In #bitcoin: Down -99.4%, from 925,406 sats to 5,348 sats.
https://m.primal.net/KpFd.png
CONCLUSION: Life gets ever more expensive the longer you save in dollars (or any government fiat currency), while it generally gets (much) cheaper the longer you save in #bitcoin.
Inflationary fiat currency versus neutral inelastic energy money...
The choice is yours.
Source: https://fredblog.stlouisfed.org/2022/06/buying-eggs-with-bitcoins/
It seems to depend on the day. Some days Primal (desktop) and Damus (phone) work great, while other days... not so much.
That said, they have drastically improved UI/UX over the past 12 months.
What I'm watching... 👀
A five-year chart of popular global assets priced (appropriately) in neutral energy money (#bitcoin).
STATUS:
- $QQQ: Down -63%
- #Gold: Down -76%
- $DXY: Down -86%
- $TLT: Down -89%
OPINION: Choose your reserve asset(s) wisely.
https://m.primal.net/KopC.png
Just got triggered by another bitcoin analyst write-up.
So, for like the zillionth time...
The last six months of price consolidation "at or near the 2021 highs" is NOT ATYPICAL OR UNUSUAL if you understand that:
1. The 2021 bitcoin price high of approximately $69k was an (abnormally low) anomaly, historically-speaking... and *should have* been closer to $125k.
2. The anomaly was caused primarily by China's sudden and effective ban of Bitcoin mining, which caused the hash rate to drop precipitously by approximately 50% in the spring/summer months of 2021. By the time hash rate recovered, the liquidity and leverage wave of late 2021 had reached its peak, limiting further upside price action.
3. Once understood, the current post-halving rangebound consolidation of approximately 40-60% of $125k (range: $50k-75k) is TOTALLY NORMAL and quite similar to 2H 2016 and 2H 2020 price action.
Hopefully this makes sense and is helpful to those who are despairing and/or are new to bitcoin.
Cheers. 🍻
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