Anger about the 2008 bailout makes sense. Yen carry unwind deserves attention. However, the trading call to action fails on market structure.
Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
That $9.6T is mostly back and forth non-directional HFT.
Otherwise it would not take a day to swap $500 mil for commercial reasons (think buying a couple Boeing plane with Euros) to avoid too much market impact as documented in multiple interviews with currency dealers stating it takes them 1 day to "work" a $500 mil order.
Retail can move FX, if it piles into one pair. But unlike the Boeing order they will also need to exit the trade at some point, which makes them vulnerable.
It cost the taxpayers nothing (in fact it made us money), it destroyed 4 of the 5 largest investment banks in the US, and it sent over 200 bankers, brokers, and auditors to jail.
More generally, be very suspicious when someone offers you investing advice dressed up as a call for solidarity and revolution. It’s intellectually dishonest and emotionally manipulative.
What a lot of people seem to not understand about the stock market, is that at it's basis it's just a supply/demand ratio. When it goes down it means someone is selling a lot, someone is cashing in, at least converting it into cash.
For me it was obvious something was afoot with earnings and performance not matching the prices, I finally understand why now thanks to this article.
The fact that there are rules for institutional investors and retail investors and us in retail have so little visibility and time to keep up, just shows more and more the game is a david vs a goliath, and we are all slingless david.
It's more than just supply and demand. It's the price discovery. So I guess you can say supply and demand curves. The curves change with the market psychology and with future expectations.
Most institutional investors are not going to outperform your diversified portfolio. It's not like professionally managed funds are killing it while individual investors are losing. There are some specific examples of funds/people who do well but on average most do ... average.
Those of us calling ourselves value investors love perturbations in the market out of line with the underlying business. That’s called opportunity. Eventually the market recognizes the value. So long as you’re not playing with options or trying to get quick rich you can get rich slowly.
Speaking as a quant that has followed this story closely for months (and was educated about the yen carry trade in my degree), this narrative is somewhat wrong and also very obviously LLM slop.
It is true that the yen carry trade is currently being unwound and that it has significant implications for nearly all holders of treasuries. But claiming that ALL of the recent volatility is due to this one event is ludicrous. There are some blatant falsities, like saying that gold and silver are historically uncorrelated??? And it’s clear that the author has a bias against the financial establishment (“monopoly money”), coloring the output.
That said, there are legitimately interesting bits here I didn’t know about, like the Japanese institutional liquidation of US treasuries. I would not repeat this information to others without fact checking it, but if accurately described it’s an important space to watch. It’s not surprising that the LLM would get some things right, of course.
One big problem with this article is the clear prompt given to connect x current event to the yen carry trade, like Warsh’s nomination and the Greenland nonsense. This creates a lot of noise. It’s basically the LLM looking for a pattern between these things instead of identifying a structural flow. It might not even be wrong, but it’s horribly biased towards finding a fake pattern, so I would never trust it.
For the tech heads in HN that are excited to see a Justine Tunney post: don’t go crazy. If you’re really interested in learning about the unwinding of the yen carry trade, there’s plenty of information from actual experts to read about, not this slop.
We're deep in an era where "finance cosplay" is a thing. Wallstreetbets, zerohedge, the memestock subreddits. And daytrading apps to go along with that, like Robinhood. The trick is to realize that most market discussion you're not paying for is itself marketing at best and cosplay at worst. People doing this stuff professionally have Bloomberg terminals. Do not attempt to compete with Bloomberg Chat.
I am also veeery suspicious of monocausal finance explanations. There's simply a lot going on. The Greenland nonsense will definitely have moved the needle somehow; while a token deal was made to get it out of the media and allow all the insiders to front-run it, some very real changes are now going to happen over a longer period in order to decouple from US risk.
Also, while I’m not an expert on Japan, I’ve been following Gearoid Reidy’s commentary on Takaichi and the new Japanese economy and I think the fears expressed are significantly overblown. But this is also characteristic of many other market participants so I wouldn’t categorize this as something obviously wrong, just a disagreement.
Tbf, they are not far from a Truss-squared moment. And doesn’t help that CCP is gaining momentum with US leaving a vacuum while Sino-Japanese relation is going down the toilet.
This is a good analysis of the yen carry trade but i'd argue the causality is backwards. Record high margin debt in the U.S. is the root cause as it's a powder keg. The yen is just the fuse being lit. When system-wide leverage is this extreme, any funding sock (whether it's the BOJ rate hikes, hawish fed, or geopolitical event) can initiate the liquidation cascade. The yen carry trade is one source of that leverage but the fragility was baked in. If Japan didn't do anything something else would have cause the liquidation cascade, only a matter of time.
The real story isn't Tokyo, it's that Wall Street built a house of cards and ran out of steady hands.
I have a public ThetaEdge card that monitors margin debt and calculates the correlation with the S&P here:
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
Purposefully devaluing the dollar to make US goods more globally marketable and hide the Japanese debt crisis is an interesting but risky strategy.
Currently, I'm glad to see a correction without panic, but it's too early to make a call on the effect on the overall global economy. Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.
It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
I'm immediately concerned with the note about silver dropping so much. Yes, that happened, and was a historic drop. But it followed a historic run up to its prior price, so the drop is still net positive for even a 1 month period.
I'm not saying the article's thesis is incorrect, but its providing some data without context. I'm always leery of data presented without context.
DO NOT make financial decisions based on the advice of a youtube channel.
DO NOT make financial decisions based of of the advice of an an article written by a know associate of Curtis Yarvin.
You saw the video yesterday because this is a marketing exercise.
They hold a stake in the outcome, you are the greater fool.
Christ.
Find a professional fiduciary that doesn't have a youtube channel and never speculate more than you can afford to lose.
Everyone forgetting the more likely, more rule-of-law based fallback option for a reserve currency and international payments system (which is the important bit!): the Euro. Digital or otherwise.
> Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
I wonder why you’re worried. Regime’s change all the time. From a third party perspective, China is no better or worse than the US. Also, given how literally every country under the sun despises US now, this might just happen.
I spoke with a silver expert a week ago before the crash and he said half the flow is speculative, structural flow will remain. Looks like he was right.
This is such a weird use of the domain, and kind of sad. I know the original movement was very diverse and had different ideas, but I'm not sure dispensing what ultimately amounts to financial advice from within the system really fits.
Basically, when currency is scarce, its value goes UP.
When currency is plentiful, its value goes DOWN.
The first scenario lowers inflation, the second raises it.
After Japans bubble economy popped in the early 90s, they had asset values FALL.
So the BoJ began stimulating the economy - trying to push UP inflation - by adding currency to the markets.
The Carry Trade illustrates one of the dangers:
Japan was trying to stimulate their own economy, to counteract the deflation caused by their bubble popping.
But money doesn’t know borders, and though the money was intended to stimulate JAPANS economy, there was nothing stopping ANYONE from purchasing that currency. It’s not like you have to live in Japan to buy Yen.
So the money (yen) was created in Japan, but ended up all over the world.
This has consequences:
* Japan ended up with mountains of US dollars. This is one of the reasons that Japan has more US Treasuries than China. This mountain of dollars lowers YOUR cost of living. Because USD is being acquired for The Carry Trade. This creates artificial demand for USD.
* Because the yen is created in Japan but is then used for international commerce, it dramatically reduces the inflation that “printing money” would normally create. This is why Japan has more debt per capita than any country by far, by a factor of over 2X
I am just an I.T. dude who invests in real estate. So what I just posted may be completely wrong.
The carry trade has existed for about four decades; that’s my summary of how it affects us, from the perspective of a small time real estate guy.
It is a shame that jart got control of @OccupyWallSt and occupywallst.com and never gave it up. It seems like her politics and views are very out of line with many of the people who were originally involved in that movement. Repurposing occupywallst.com for something like this compared to it's origin is a big disappointing contrast. https://web.archive.org/web/20111021162924/http://www.occupy...
I was the one who registered it. Occupy as a movement has always been inclusive of people with different points of view. My job running the website and twitter has always been to give the people a voice. I think that's important, don't you? The only guy with more credibility than me in Occupy is Micah White but he's been growing vegetables in Oregon ever since he visited Davos a few years back. So I'm the best you've got.
Anyone attempting to build a movement might find it interesting how Pumping Station One in Chicago is governed. It's a maker space but run by people who care (at least from my experience when I was a member back in 2015/2016). The process for electing leadership and holding members accountable was very democratic and fair, from my experience. They open-source as much as they can about how they organize:
> This #ows movement empowers real people to create real change from the bottom up. We want to see a general assembly in every backyard, on every street corner because we don't need Wall Street and we don't need politicians to build a better society.
Maybe at some point those people will understand that high-school approach doesn't work in the real world.
Look at the amount of change they brought, look at the amount of change that a single person like Donald Trump has brought (for better or worse, this is not an endorsement).
Whenever a government offers loans at an interest rate which is below the risk premium, that difference essentially represents the government giving the borrower free money paid for by all citizens through loss of buying power.
So when Japan offered 0% interest loans to traders who used it to buy USD bonds, it represents the Japan government offloading the cost of the risk premium to its citizens and giving the difference to the traders for free... But then the traders give that free money to the US government where it helps to inflate the USD currency supply to make American asset-holders richer.
The traders aren't actually profiting from the carry trade because the 4% return on US bonds doesn't cover the real inflation (loss of buying power) of the US dollar; their net worth in terms of buying power is actually the same or dropping. US asset holders are the ones actually reaping the benefit.
Can anyone recommend a good source to ramp up one's understanding of macroeconomics/monetary policy to a point where they can make sense of this? Starting from more or less a layman's understanding. Could be a book or course, but doesn't have to be university quality, a good blog or youtube channel could do.
Creating money out of thin air generally creates inflation, because theirs is more currency chasing the same amount of assets.
But the Devil is in the details, because there are hundreds of currencies, one currency can be exchanged for another, and interest rates vary all over the world.
Then once that starts to make sense, you open up a box called “derivatives,” and now the complexity just went off the charts.
I only need to understand it in the context of loans on assets, so I can do the math in my head or in excel. Occasionally I’ll vibe code this stuff in Python.
Because I’m not diving into the deep end of complexity, the books I absolutely LOVE are the cautionary tales of when it all blows up.
In that respect, I think “when genius fails” is an all timer.
Nearly everyone knows about the Great Recession, and the depression and the dot com bubble.
But the collapse of Long Term Capital Management was the canary in the coal mine.
LTCM blew up for all of the most predictable reasons, and as the name implies, nearly everyone involved in LTCM were at the top of their game.
Another book that is more folksy is “a man for all markets“, a book about the dude who revolutionized stock options, largely due to a fascination with Blackjack!
It‘s really hard to read this article, it smells of LLM generated slop once you get past the first couple of paragraphs - lots of negative parallelisms and lots of words without adding value to the sentence:
> To validate the thesis that the Yen unwind is the primary driver of volatility, we must examine the sequence of events. The crash did not happen in a vacuum; it followed a precise timeline …
> It wasn't just about rates anymore; it was about the stability of the U.S.-led global order
> The unwinding of a carry trade is not a monolithic event; it is a cascade that ripples outward
It‘s like almost in every paragraph. I don’t understand why this gets to be on the frontpage to be honest. It just reads horrible even if some of the points may be true (or hallucinated, who knows)
I have a sense that were in a moment of mass hysteria.
You dot even understand what your reading anymore. Cant tell whether you're reading a hallucination or someones thoughts.
"I don't agree / understand this, it must not be real!"
Now, you have to wonder: is my grammar just poor? Or did I intentionally inject spelling and grammar errors into the output or an llm? Is it in my system prompt to do this?
Utter rubbish from an extremely biased source. Every time they say something like "didn't you notice X" or "your portfolio must look like Y" the answer is nope, you're completely wrong. Every time they talk about some major "crash" you can just go look at it and see that it recovered within 48 hours and looked identical to dozens of other events through recent history. The outright calls for violence + intentionally destroying our own economy to "stick it to the man" at the end surely make me believe this is some rational analysis.
Anyone doing any attempt at market analysis should lay out the trades they've made and the time frames they're talking about. So we can come back later and point a finger at them and laugh.
It seems like their conclusion is "hold lots of yen"? We'll see I guess.
The author is implying that BoJ can/might/will cause appreciation of the Yen, which will force folks who are short(borrowing Yen) to buy USD assets to go underwater, forcing liquidation to pay back the Yen, and appreciating the Yen more. It's possible but there is no guarantee it would be a disruptive feedback loop or this year or etc.
If you believe them, then you can hedge buy either shorting TLT(betting treasury yields will rise), or going long Yen (e.g. FXY shares/calls).
I bought some FXY calls but just enough to hedge the Yen prices of my upcoming Tokyo trip in case they're right.
Japan is interesting because it has the highest debt-to-GDP ratio of any developed country and most other countries in the world are increasing their debt-to-GDP ratio; in effect, they're all moving towards a Japanese reality due to the fiat system's lack of hard monetary constraints.
If you look at Japan, the aspects of its economy and society which stand out the most are:
- Rigid economic structure and processes.
- Economy dominated by huge corporations, without much room for startups.
- Highly concentrated urban population.
- Population decline. Many young people are not dating and not getting married, can't afford much on their salaries working in the city.
Only through the first two paragraphs but a little turned off by the "everybody else is wrong, we are right and it's this one specific thing" attitude when it the topic is understanding something as complex and opaque as the global economy
It reads exactly like a WallStreetBets "effort post" where someone has some pet theory that somehow explains the market in a way that nobody else understands, but is almost always either completely wrong, or a vast oversimplification
Yeah that part is a bit red string but the analysis further down is more reasonable. I have no idea whether it is an opportunity or someone grabbed the domain and going for a pump-and-dump, either seems plausible.
Personally I think Microsoft's stock is crashing less about any of this (though it is a hell of a theory IMO) and more to do with the fact that:
* They are investing in AI, both financially and by corporate communication, over and above everything else and pissing off damn near everyone in the process
* The XBox brand is tanking
* Windows is an utter disaster, according to Microsoft themselves, and Valve is so dispirited with it as the future for gaming that they've invested millions into a linux-based framework to run Windows games
The Yen Carry Trade isn't some big secret... it's caused enough turmoil that it hit the front pages of the WSJ a few times in last few years (Aug 2024 was a big one iirc)
Finance bros will make their way in here soon to give a better peanut gallery, but I think "is there something here" comes down to do you believe the final bit of the articles opening act:
> When correlations between historically uncorrelated assets (e.g. Gold, Bitcoin, Microsoft, and Silver) approach 1.0 during a sell-off, it serves as a distinct indicator that traders are not selling what they want to sell, but rather what they must sell in order to meet margin calls in a funding currency that is rapidly appreciating against their liabilities.
>Following the Martin Luther King Jr. holiday, U.S. markets opened on January 20 to a bloodbath. The S&P 500 fell 2.1%, the Nasdaq composite dropped 2.4%,
Should someone that calls 2.4 percent movement bloodbath be taken seriously?
>By anchoring borrowing costs at or near zero, the BOJ enabled Wall Street to borrow Yen cheaply and invest it with leverage into higher yielding instruments globally, such as U.S. treasuries, equities, and cryptography
They got the word wrong, but I don't believe cryptocurrency would count either: The interest rates at BoJ _are_ low, but to borrow anywhere near that low they have to have high quality collateral like treasuries.
Sounds good, too bad I only have $5k available. Even if I spend all on FXY it won't gain that much from the current $58.6 in the forseeable future. Rich get richer I guess so nothing changes just the location.
A lot of the financial jargon makes the article hard to follow. I know I'm not the target audience, but I wish at times there were some plain English summaries of terms.
The Japanese central bank arrived in zero effective interest rates in the 90s, and has been practicing negative effective rates (I.E. smaller than inflation) for a while.
That had the effect that their banks took huge amounts of government loans and used it to buy foreign assets. As returns are higher in countries with higher interest rates, and lots of assets are practically safe, like government bonds, that is close to free money for them, and a very cheap loan to the receiving country.
But last year their central bank made the interest rate positive. And investors are acting on the expected way, selling the foreign assets and paying off their government. The article is claiming that this is the cause of the recent turbulence in the investment markets.
I'll bite. Isn't as obvious to me as it is to you, I'm just a programmer, I don't know how the economy works. This is literally the first time in my life I heard anything about governments borrowing Yen like this and that this would become an issue.
I'm aware of an "AI bubble" and the over-concentration on the "Magnificent 7".
What else is obvious to people and why is the timeframe (next 4 years) so obvious?
> In short, occupywallst.org is a living archive and occasional update point for a landmark left-wing protest movement that put economic inequality and corporate power at the center of national conversation starting in 2011.
Dunno about the website or corp, but the occupy wall st movement was/is true. Happened right after 2008 stock market crash and people camped out on Wall Street in protest of bailing out the banks.
This reads like LLM slop. The "carry trade blowing up" has been written about hundreds of time before, so it's not surprising it's so prevalent in LLM training data.
The assertion that metals tanked because of Warsh being picked, is particularly telling. Warsh is not a hawk, despite some media narratives. The Fed is stuck behind not raising rates while the debt is coming down on banking while POTUS is crazier than ever and lowering rates to raise inflation/debase the currency and debt. It's not going to take long to see where this path leads.
Some comments were deferred for faster rendering.
panphora|25 days ago
Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
dist-epoch|25 days ago
Otherwise it would not take a day to swap $500 mil for commercial reasons (think buying a couple Boeing plane with Euros) to avoid too much market impact as documented in multiple interviews with currency dealers stating it takes them 1 day to "work" a $500 mil order.
Retail can move FX, if it piles into one pair. But unlike the Boeing order they will also need to exit the trade at some point, which makes them vulnerable.
bandrami|25 days ago
Does it?
It cost the taxpayers nothing (in fact it made us money), it destroyed 4 of the 5 largest investment banks in the US, and it sent over 200 bankers, brokers, and auditors to jail.
What part of that are people mad about, and why?
BobbyTables2|24 days ago
Now they act like they’re doing us a favor by negotiating to sell a vehicle only a little above sticker price.
Excuse me while I vomit…
dash2|25 days ago
msejas|25 days ago
For me it was obvious something was afoot with earnings and performance not matching the prices, I finally understand why now thanks to this article.
The fact that there are rules for institutional investors and retail investors and us in retail have so little visibility and time to keep up, just shows more and more the game is a david vs a goliath, and we are all slingless david.
YZF|25 days ago
Most institutional investors are not going to outperform your diversified portfolio. It's not like professionally managed funds are killing it while individual investors are losing. There are some specific examples of funds/people who do well but on average most do ... average.
ureushegf|24 days ago
sharifhsn|25 days ago
It is true that the yen carry trade is currently being unwound and that it has significant implications for nearly all holders of treasuries. But claiming that ALL of the recent volatility is due to this one event is ludicrous. There are some blatant falsities, like saying that gold and silver are historically uncorrelated??? And it’s clear that the author has a bias against the financial establishment (“monopoly money”), coloring the output.
That said, there are legitimately interesting bits here I didn’t know about, like the Japanese institutional liquidation of US treasuries. I would not repeat this information to others without fact checking it, but if accurately described it’s an important space to watch. It’s not surprising that the LLM would get some things right, of course.
One big problem with this article is the clear prompt given to connect x current event to the yen carry trade, like Warsh’s nomination and the Greenland nonsense. This creates a lot of noise. It’s basically the LLM looking for a pattern between these things instead of identifying a structural flow. It might not even be wrong, but it’s horribly biased towards finding a fake pattern, so I would never trust it.
For the tech heads in HN that are excited to see a Justine Tunney post: don’t go crazy. If you’re really interested in learning about the unwinding of the yen carry trade, there’s plenty of information from actual experts to read about, not this slop.
pjc50|25 days ago
I am also veeery suspicious of monocausal finance explanations. There's simply a lot going on. The Greenland nonsense will definitely have moved the needle somehow; while a token deal was made to get it out of the media and allow all the insiders to front-run it, some very real changes are now going to happen over a longer period in order to decouple from US risk.
sharifhsn|25 days ago
PantaloonFlames|25 days ago
Ok I’ll bite. Where ?
brazzy|25 days ago
That should have been more than obvious from the domain name and the logo at the top already.
Supermancho|25 days ago
There were news articles about this "happening" but this event never realized.
lvl155|25 days ago
mempko|25 days ago
The real story isn't Tokyo, it's that Wall Street built a house of cards and ran out of steady hands.
I have a public ThetaEdge card that monitors margin debt and calculates the correlation with the S&P here:
https://thetaedge.ai/public/thetix-card/42d9c6de-218d-4627-a...
topspin|25 days ago
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
caust1c|25 days ago
https://www.youtube.com/watch?v=7ws8Grsc4jU
Purposefully devaluing the dollar to make US goods more globally marketable and hide the Japanese debt crisis is an interesting but risky strategy.
Currently, I'm glad to see a correction without panic, but it's too early to make a call on the effect on the overall global economy. Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
avensec|25 days ago
It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
drakythe|25 days ago
I'm not saying the article's thesis is incorrect, but its providing some data without context. I'm always leery of data presented without context.
UltraSane|25 days ago
lkey|25 days ago
Christ.
Find a professional fiduciary that doesn't have a youtube channel and never speculate more than you can afford to lose.
pjc50|25 days ago
rednafi|25 days ago
I wonder why you’re worried. Regime’s change all the time. From a third party perspective, China is no better or worse than the US. Also, given how literally every country under the sun despises US now, this might just happen.
drewbailey|25 days ago
40% pullback but still up 150% over the past year..
khuey|25 days ago
sharifhsn|25 days ago
tartoran|25 days ago
airstrike|25 days ago
WD-42|25 days ago
wahnfrieden|25 days ago
1024core|25 days ago
johnvanommen|25 days ago
Basically, when currency is scarce, its value goes UP.
When currency is plentiful, its value goes DOWN.
The first scenario lowers inflation, the second raises it.
After Japans bubble economy popped in the early 90s, they had asset values FALL.
So the BoJ began stimulating the economy - trying to push UP inflation - by adding currency to the markets.
The Carry Trade illustrates one of the dangers:
Japan was trying to stimulate their own economy, to counteract the deflation caused by their bubble popping.
But money doesn’t know borders, and though the money was intended to stimulate JAPANS economy, there was nothing stopping ANYONE from purchasing that currency. It’s not like you have to live in Japan to buy Yen.
So the money (yen) was created in Japan, but ended up all over the world.
This has consequences:
* Japan ended up with mountains of US dollars. This is one of the reasons that Japan has more US Treasuries than China. This mountain of dollars lowers YOUR cost of living. Because USD is being acquired for The Carry Trade. This creates artificial demand for USD.
* Because the yen is created in Japan but is then used for international commerce, it dramatically reduces the inflation that “printing money” would normally create. This is why Japan has more debt per capita than any country by far, by a factor of over 2X
I am just an I.T. dude who invests in real estate. So what I just posted may be completely wrong.
The carry trade has existed for about four decades; that’s my summary of how it affects us, from the perspective of a small time real estate guy.
lbrito|25 days ago
jsutter909|25 days ago
worik|25 days ago
knuckleheads|25 days ago
jart|25 days ago
riddlemethat|25 days ago
https://wiki.pumpingstationone.org/wiki/Do-ocracy
https://wiki.pumpingstationone.org/wiki/Member_Manual
https://wiki.pumpingstationone.org/wiki/Administration
znpy|25 days ago
> This #ows movement empowers real people to create real change from the bottom up. We want to see a general assembly in every backyard, on every street corner because we don't need Wall Street and we don't need politicians to build a better society.
Maybe at some point those people will understand that high-school approach doesn't work in the real world.
Look at the amount of change they brought, look at the amount of change that a single person like Donald Trump has brought (for better or worse, this is not an endorsement).
unknown|25 days ago
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shadowgovt|25 days ago
unknown|25 days ago
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unknown|25 days ago
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jongjong|25 days ago
So when Japan offered 0% interest loans to traders who used it to buy USD bonds, it represents the Japan government offloading the cost of the risk premium to its citizens and giving the difference to the traders for free... But then the traders give that free money to the US government where it helps to inflate the USD currency supply to make American asset-holders richer.
The traders aren't actually profiting from the carry trade because the 4% return on US bonds doesn't cover the real inflation (loss of buying power) of the US dollar; their net worth in terms of buying power is actually the same or dropping. US asset holders are the ones actually reaping the benefit.
MaxfordAndSons|25 days ago
johnvanommen|25 days ago
Because the fundamentals are basic:
Creating money out of thin air generally creates inflation, because theirs is more currency chasing the same amount of assets.
But the Devil is in the details, because there are hundreds of currencies, one currency can be exchanged for another, and interest rates vary all over the world.
Then once that starts to make sense, you open up a box called “derivatives,” and now the complexity just went off the charts.
I only need to understand it in the context of loans on assets, so I can do the math in my head or in excel. Occasionally I’ll vibe code this stuff in Python.
Because I’m not diving into the deep end of complexity, the books I absolutely LOVE are the cautionary tales of when it all blows up.
In that respect, I think “when genius fails” is an all timer.
Nearly everyone knows about the Great Recession, and the depression and the dot com bubble.
But the collapse of Long Term Capital Management was the canary in the coal mine.
LTCM blew up for all of the most predictable reasons, and as the name implies, nearly everyone involved in LTCM were at the top of their game.
Another book that is more folksy is “a man for all markets“, a book about the dude who revolutionized stock options, largely due to a fascination with Blackjack!
(The LTCM guys were big time gamblers too.)
https://www.google.com/search?q=a+man+for+all+markets+by+ed+...
aeneas_ory|25 days ago
> To validate the thesis that the Yen unwind is the primary driver of volatility, we must examine the sequence of events. The crash did not happen in a vacuum; it followed a precise timeline …
> It wasn't just about rates anymore; it was about the stability of the U.S.-led global order
> The unwinding of a carry trade is not a monolithic event; it is a cascade that ripples outward
It‘s like almost in every paragraph. I don’t understand why this gets to be on the frontpage to be honest. It just reads horrible even if some of the points may be true (or hallucinated, who knows)
potsandpans|24 days ago
You dot even understand what your reading anymore. Cant tell whether you're reading a hallucination or someones thoughts.
"I don't agree / understand this, it must not be real!"
Now, you have to wonder: is my grammar just poor? Or did I intentionally inject spelling and grammar errors into the output or an llm? Is it in my system prompt to do this?
thegrim000|25 days ago
IncreasePosts|25 days ago
It seems like their conclusion is "hold lots of yen"? We'll see I guess.
helios_invictus|25 days ago
largbae|25 days ago
If you believe them, then you can hedge buy either shorting TLT(betting treasury yields will rise), or going long Yen (e.g. FXY shares/calls).
I bought some FXY calls but just enough to hedge the Yen prices of my upcoming Tokyo trip in case they're right.
forgetfreeman|25 days ago
jongjong|25 days ago
If you look at Japan, the aspects of its economy and society which stand out the most are:
- Rigid economic structure and processes.
- Economy dominated by huge corporations, without much room for startups.
- Highly concentrated urban population.
- Population decline. Many young people are not dating and not getting married, can't afford much on their salaries working in the city.
meindnoch|25 days ago
nojvek|24 days ago
mwt|25 days ago
Trasmatta|25 days ago
everybodyknows|25 days ago
https://robinjbrooks.substack.com/p/debt-crisis-in-japan
svnt|25 days ago
ToucanLoucan|25 days ago
* They are investing in AI, both financially and by corporate communication, over and above everything else and pissing off damn near everyone in the process
* The XBox brand is tanking
* Windows is an utter disaster, according to Microsoft themselves, and Valve is so dispirited with it as the future for gaming that they've invested millions into a linux-based framework to run Windows games
floatrock|25 days ago
Finance bros will make their way in here soon to give a better peanut gallery, but I think "is there something here" comes down to do you believe the final bit of the articles opening act:
> When correlations between historically uncorrelated assets (e.g. Gold, Bitcoin, Microsoft, and Silver) approach 1.0 during a sell-off, it serves as a distinct indicator that traders are not selling what they want to sell, but rather what they must sell in order to meet margin calls in a funding currency that is rapidly appreciating against their liabilities.
lijok|25 days ago
[deleted]
QuiCasseRien|25 days ago
God job
ReptileMan|25 days ago
Should someone that calls 2.4 percent movement bloodbath be taken seriously?
thegrim000|25 days ago
seydor|25 days ago
elaida73|25 days ago
Think you mean crypto currency here?
largbae|25 days ago
soperj|25 days ago
thrownawaysz|25 days ago
jayd16|25 days ago
> used by a generation of investors
How short is a generation for investors? Aren't we near 20 year highs as far as US bond rates?
I guess the point is that this is more about the Yen than about US bonds?
gwbas1c|25 days ago
marcosdumay|25 days ago
That had the effect that their banks took huge amounts of government loans and used it to buy foreign assets. As returns are higher in countries with higher interest rates, and lots of assets are practically safe, like government bonds, that is close to free money for them, and a very cheap loan to the receiving country.
But last year their central bank made the interest rate positive. And investors are acting on the expected way, selling the foreign assets and paying off their government. The article is claiming that this is the cause of the recent turbulence in the investment markets.
rvz|25 days ago
barbazoo|25 days ago
I'm aware of an "AI bubble" and the over-concentration on the "Magnificent 7".
What else is obvious to people and why is the timeframe (next 4 years) so obvious?
layer8|25 days ago
RayMan1|25 days ago
ricksunny|25 days ago
"support my thesis and ignore alternative explanations and contrary evidence on whether there's even a there, there" AI-research slop.
joshuamcginnis|25 days ago
Is this true?
bfung|25 days ago
mekdoonggi|25 days ago
worik|25 days ago
* Pay your debts
* Own useful assets
* Live in a peaceful stable country
Havoc|25 days ago
unknown|25 days ago
[deleted]
wenbin|25 days ago
Imagine how deceptive llm slop contents are to the general population.
OGEnthusiast|25 days ago
Supermancho|25 days ago
anonymous908213|25 days ago
cedws|25 days ago