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.
You in particular are my main criticism of Occupy as a movement. They lacked any sort of structure, shunned it in fact, that would have ripped control of these resources away from you once it became clear that you disagreed politically with the vast majority of the people involved. That you were allowed to keep control of those resources is emblematic of how Occupy could let all that energy dissipate into nothing.
Co-opting potentially effective political movements is how the people in control stay in control. Once you start noticing it, you see it time and time again.
What resources? OccupyWallSt.org only accepted enough donations to keep the 1-800 number and website online. I was smart enough to understand back then that an unemployed 26 year old activist living in a park wasn't qualified to manage the capital that was being offered to us. So what did I do? I gave you about twenty different links for various projects on the donation page to choose from.
Thank you for another example of why Occupy was doomed to fail, I had not considered that you had control over the donation flow. Instead of working together as a group and finding somebody more responsible than yourself to manage the incoming capital, you diverted it away from the movement and dispersed it to the winds. Was that decision made collectively by the group? Or did you take it upon yourself to do so? Control over the domains and twitter account, along with the incoming flow of donations are the resources that you had and Occupy let you squander.
Every group that showed up in the park and was working on a project, they could come to me and ask that their donation link be posted on the OccupyWallSt.org donate page. I'm a tech person. I registered a domain. I play it neutral. I included everything from basket weaving to aspiring governments. One of these groups called itself NYCGA or the NYC General Assembly. They were the political organization that claimed dominion over Occupy Wall Street and the public elected to give them the lion's share of donations. The guy who ended up with most of their money, if memory serves me right, is a tattoo artist named Pete Dutro. So these days I'm a lot more opinionated. The Pete Dutros of the financial community took out trillions of dollars of loans from Japan and the economy is crashing right now because of them. We should be focusing on reallocating that capital.
What a fall from grace, trying to fashion buying calls on FXY as a revolution! Put this on your own personal website and redirect that page, let the domain maintain some dignity.
This was posted on OccupyWallSt.com. The OccupyWallSt.org website is still exactly as it was in its full 2011 looking glory. I've been dragging my heels on renewing the SSL certificate however everything's still there. It's even been cataloged and archived by the Library of Congress for posterity. So the dignity of the movement has been secured and is continuing to be respected. Your voices are now a permanent artifact in America's historical record.
Yep, occupy may have had the moral high ground but they squandered it because they were the modern day hippy idealists with no boots-on-the-ground (or feet touching grass) know-how to actually effect change in a protracted way.
> My job running the website and twitter has always been to give the people a voice. I think that's important, don't you?
Do you truly believe in your heart of hearts that people posting neo-MOASS wish fulfillment suffer from a lack of a voice, and no place for them to be heard? Take this seriously. More important than "a voice" is consistency and clarity of communication. The people involved in occupy wall street in 2011 weren't occupying it because they wanted to eventually join it, and I don't think that their form of economic justice would be for Wall Street to lose money in a gigantic market crash that again would result in taxpayer-funded bailouts that spurred the first protests. For transparency's sake, what are your market positions today?
> 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.
As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
You have X complaint against an institution. Let's say the institution accepts and reforms somewhat. It's pretty rare that the complainant will pat themselves on the back and say job well done. It's ultimately a game of diminishing returns.
If you have a hammer, it's not just that everything is a nail - you must find enough nails to justify continuing to use the hammer.
> As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
It crumbled when the physical encampments were forcibly removed by the police. I mean, even at the tiny encampment of UC Davis-- essentially a few camping tents-- the students got pepper sprayed and hauled off. Remember that meme? Many of those same students also faced serious jail time for a protest outside Washington Mutual Bank. It's probably difficult to sustain a movement under those conditions, no?
In any case, the message that resonated across the U.S. encampments is essentially what turned into Bernie Sanders two runs for president. That, the group behind AOC's House run, and many other important grassroots movements are the legacy of OWS. Whatever the deal is with jart's website is orthogonal to all this-- I've literally never heard about her association with OWS outside of HN.
Justine, do you think that readers here don't have eyes? The page linked is a call to financial action that, if the advice is followed, will result in yet another unsophisticated ETF pump and dump at best and a call to financial suicide at worst.
You are personally underwriting propaganda for something you are very likely invested in, targeting the most credulous. For it to appear on a site called 'Occupy Wall Street' is deliciously ironic.
Here's my disclosure: I am completely divested for both the US and Japanese market, except for transient USD cash holdings. I don't have a horse in this race. Will you follow suit?
I know very little of what happened in NYC years ago, but I would tell anyone reading the site now that it is run by actively malevolent speculators.
I do, however, know a few of your associates. Stop hanging out with grungy, unwashed sex pests, they aren't as smart as they pretend to be, and you should know that by now. It's unbecoming and frankly sad. You have the means to start life anew elsewhere, and you should take that opportunity now.
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:
If by "the movement," you mean Occupy Wall St., one of the things about it as an organization is that it didn't have a mechanism to exclude people really, if I understand correctly. So there was a pretty broad slice of political philosophies united around the common idea "The system that rewards risk-takers for taking risks with other people's money while consolidating the consequences on those who did not consent to the risks is fundamentally flawed."
> 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).
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
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.
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.
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
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
I’m a little impressed at how a company whose business model is to sell a product they developed in the 1990s over and over again while making inconsequential and non-breaking changes from year to year somehow still manage to screw that up. In my own opinion, they have always been a diabolical company. I’m glad to see them fail.
> I’m a little impressed at how a company whose business model is to sell a product they developed in the 1990s over and over again while making inconsequential and non-breaking changes from year to year somehow still manage to screw that up.
This wasn't nearly as bad as what's going on with Microsoft and Windows.
In retrospect, Coke made mistakes, but at the time their logic was kinda sound. Market was changing, people were changing, product tested really well, etc.
And they owned up to the mistake and reverted in under 90 days. Honestly, they probably came out stronger and re-affirmed the attachment that people have with the brand.
In addition, they haven't made that mistake again and have been much smarter protecting their core while chasing trends. Free-style is a brilliant bit of tech, marketing, and logistics combined.
Love the last line, what Valve has done on Windows emulation is herculean, I don't know (it would be great to know) other businesses creating/investing in incredible and risky third-party compatible technologies to run their real business on top of it.
I worked in what other calls "Adversarial Interoperability" [1] but the scale of Valve is on another level.
On the hand at one point the emulation layer becomes the target. Hopefully game developers will realise this and start using native Linux technologies before they are tied to a single companies abstraction layer. Again.
When it was created DirectX was a really useful thing for game makers. It made it easier to write hardware accelerated applications that were also consumer friendly. Contemporary Windows is full of anti-patterns. MSFT just can't seem to resist sticking things into it that make it less pleasant to use in support of MSFT's ecosystem. It's no wonder Valve invests into trying to be independent of that.
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.
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.
> 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 really wish that people would wake up to the danger posed by meme stock BS “leaking” into the general markets.
Just as voters are responsible for changes in society, uninformed investors can impact society too, especially when they’re amplifying their purchasing power via leverage.
For instance, I’ve been buying real estate forever, and I’ve enjoyed the Reventure app.
But I’ve REALLY noticed that his YT videos are exclusively doom and gloom.
This ceaseless negativity moves markets, just as the irrational exuberance for real estate in 2005 moved markets.
But the exuberance for real estate was driven by people who were buying real estate.
The endless doom and gloom of YT finance videos is for a much different reason:
It drives page views.
That’s not a good thing. Because it’s really easy to get swept up in the negativity. And that negativity has a downstream effect, where it’s often used to convince people to invest in things that the YouTuber is promoting.
Basically, I don’t know if we need an “SEC for YouTube,” but we might.
Yes, I know we already have an SEC for YouTube (it’s the SEC), but nearly none of the people doling out financial advice on YT are trained professionals. It’s the fundamental defect of internet advice; who to trust?
Misinformation and mass hysteria suck, I agree. But if the amplification of the sky-is-falling-flavor-of-the-week braindead youtuber take can materially imperil financial markets, the stability of that system was always doomed.
An “SEC for YouTube” can’t prevent shit if the lever of influence is already that long. It might be able to keep a lot of meme investor idiots from losing their shirts, but that has to be weighed against the historically evident risks of having what amounts to a ministry of truth/state propaganda regulator.
I can only personally speak for myself and I'm not giving financial advice here. I use the Bolgehead strategy of the 3 fund portfolio is still the tried and true I follow, and I have yet to not benefit from doing so, even in economic downturns[0]
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.
The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.
I don't understand why gold-backing is required. I'm a novice.
My understanding is that a reserve currency requires fluid markets and a stable, reliable, metrics-based currency policy. It's why the Fed is so stubborn about its relatively simple policy goals: 2% inflation and low unemployment.
China appears to be attempting to reproduce what the USD was before it was free floating.
USD is currently backed by debt and nominally military might. If the US defaults then all of the US bonds held by foreign banks become worthless. That is an enormous risk which is why countries have been divesting from US bonds. If USD was still gold, as it was before 1913, if you hold your money it cannot be made worthless by a third party. After 1913 USD became gold backed bills with partial reserve. It is why USD became the global reserve currency. But, reserve requirements were reduced and more paper was produced. In 1971 Nixon removed the convertibility of paper bills to gold metal effectively stealing the gold of any nation that asked the US to hold it.
One of my favorite bits of currency trivia is that a $20 double gold eagle coin used in circulation prior to 1933 had a gold content of 0.9675 troy ounces. Twenty dollars in your hand was literally nearly an ounce of gold.
> 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.
The way China manages it's currency is very different to how the US manages theirs.
China maintains strict controls on capital flows in/out. A reserve currency requires free convertibility. Holders need to move large sums instantly without permission. China has repeatedly tightened these controls during stress periods (2015-16 devaluation fears, for example).
Limited access to Chinese bond markets and equities for foreign institutions. Reserve currency status requires deep, liquid markets where central banks can park hundreds of billions. US Treasury market is $26T and extremely liquid. Chinese government bond market is smaller and less accessible.
Reserve currency issuer must run persistent current account deficits to supply the world with currency. China's economic model is built on export surpluses. They'd need to fundamentally restructure their economy.
This is PRC's fundamental disagreement. US reserve currency morphed into high liquid, high speculative instrument to fund unsustainable debt, hollowed out domestic industry (triffin)... but this is not by design. It's the result of emergency adaptations moving off gold, then people post rationalize the trinity musts (open capital, floating rates, independent central bank) is what makes reserve when it's unintended structural outcome from failed gold peg.
Now we see hints of end stage USD reserve behavior, debt snow balls and reserve controller will pull the our dollar, your problem card. This US doing current conniptions trying to either reduce USD strength or inflate away debt... costly instability. People forget, liquidity / storage only matters to sovereign buyers who needs reserve for utility... everyone else (now plurality) are private buyers who buy for returns. If we enter end of dollar cycle and USD reserve cost them money, then they go elsewhere
Elsewhere is what PRC wants to offer, HIGHLY CONTROLLED, BUT STABLE reserve pegged to PRC industrial chains, i.e. real economy instead of speculative financialization. This what recent yuan reserve talk is from (note it was old Xi speech republished in Qiushi), so the propose model isn't even in response to current USD conniptions but prediction on end life of US behavior when USD reserve goes from exorbitant privilege to just exorbitant.
It's precisely because logical outcome of current reserve "musts", i.e. triffin charity/global good that makes it ultimately a stupid arrangement where the system breaks when US/owner can't afford to maintain or develops bad habits (deficit spending). Hence, what PRC plans to offer in parallel: stable regulated reserves for "real economy" financial utility. Stable Yuan "bank" reserve can coexist with volatile USD "casino" reserve. Now of course this all heterodox theory, but we are seeing theory of USD reserve limits peaking it's head, and PRC not retarded enough to pickup triffin baton. IMO PRC fine with US dealing with triffin headache and IMO betting US will fuck global creditors when shit hits fan, i.e. they waiting for USD reserve to implode due to inherent contradictions, to show world precisely why yuan reserve not modelled to repeat same mistake.
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.
Aww, then you missed the best part! Who wouldn't be head over heels for the opportunity to follow this financial advice and lose all of their "monopoly money" (funsie term for real cash!)?
Call To Action
This won't just be the big one. This could be the last one. If you've been preparing your whole life, knowing that something's coming, then this could be the thing you've been preparing for. One final opportunity to get the guys who did this. [...] The worst that can happen is you lose your monopoly money, but that's been happening anyway.
It is most certainly LLM generated. Nobody but an AI prompted with “connect the unwind of the yen carry trade with Trump’s threats to acquire Greenland” would have ever written something like that.
My guess is that she did a lot of research on the topic with AI then created this article partially with AI generated text.
I definitely got a strong feel of LLM output reading it. Not sure if the points themselves have any merit, but I don't think that I'll go and run to buy jpy.
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.
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.
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.
I’m not finding a single article with a good summary, but you can find coverage on Bloomberg of all the twists and turns. FX markets are complicated, so you’ll need to do some research on how they operate as well. It’s not too hard to plug the keywords and concepts from these articles into AI and get a reasonably good background, though.
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.
Takaichi is much more popular than Truss was, and Japan is in a much better situation right now than post-Brexit post-COVID UK. And absolutely nobody is seeking a better relationship with the US right now other than satisfying short-term needs. Japan is not in a good spot long term (population slowdown, debt, slow economy) but there’s no reason to panic right now.
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.
One cost is to the savings of Japanese people who don't get a competitive rate of return on their savings. They save a lot and generally don't invest abroad.
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.
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.
>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.
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)
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.
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!
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.
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?
You're right that $566B alone isn't a black swan. That FINRA figure only captures retail and small institutional margin at broker-dealers. It excludes prime brokerage (hedge funds), securities-based lending, and repo markets. Conservative estimates put total leveraged exposure at $10-15 trillion. The $566B is maybe 5% of the iceberg.
I see visible margin debt as both a canary and a proxy. It's a canary because retail cracks first (less sophisticated risk management, stricter regulatory margin). It's a proxy because when visible leverage contracts, it usually means hidden leverage is contracting too. They're exposed to the same assets. When FINRA margin debt starts falling, it's not just a warning, it's confirmation that system-wide deleveraging is already underway.
> 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.
I would make the correction that the protest movement was not left wing. I think he’s trying to take credit for his favorite team. TARP was opposed by 80% of Americans. It passed legislation anyway. I think there’s a good lesson to be learned in how performative and inconsequential the electoral process is.
Just, like, it was the first populist political movement following the ‘08 crash, and while Obama was supposed to be the liberal technocratic answer to the failure of neoliberalism, he was not able to create policies that restored the social and economic post-war order in the US. After Bernie Sanders lost the 2016 nomination, the populist left, which still retained a hope of a new kind of society, no longer had a political representative, and Trump managed to clinch the nomination by campaigning in states that had been neglected by the Clinton campaign. Biden was another, more radical but still fundamentally liberal technocratic attempt to save the status quo of America politics, but the largest economic gains were for the educated professional class, and many people in the country felt left behind and ignored—-again, now with the backing of popular support, Trump won the 2024 election with a promise to completely reshape the country. And he has at least in part succeeded.
Hmm…there has to be more to it though right? The timeline tracks but it looks like there are events missing in between. How do we go from OWS to things like “Drain the Swamp” within a span of roughly five years?
How do you get from occupy to the tea party is the link this hypothesis is missing.
Tea party was the clear predecessor to the maga movement, with its nucleation point being simple racist backlash against obama and trump being personally & directly involved in stoking that racism. In retrospect it obviously laid the groundwork for trump's movement, and I can't see any direct link from occupy to tea party other than perhaps some individuals like tunney.
Well duh. That's obviously what everyone should try to do, but it's nice to engage in a bit of flight of fancy. I like imaging a rogue group of retail investors buying up the yen, short squeezing carry traders and sticking it to the billionaires. Real life is much more boring, and involves habitual, long term good choices.
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?
Well, investment markets all over the world are not reflecting the real economy right now. You can see that on how stock prices don't reflect how wealthy you feel and maybe more clearly in how house prices are completely unrelated to the amounts people can pay.
That's the obvious part. The consequences of that are anyone's guess, as is the timeframe. But it's not a sustainable situation, so something is bound to happen to change it eventually.
It’s not as obvious as they claim. If it was, if the future was somehow predictable, there would be software that did it; there isn’t.
People have been claiming the end is near since forever; economists have been saying for months now that stocks should already be falling, but they are going up. And also, it feels good to be part of the in-group that just knows more than everyone else. Just ask a prepper: they will be equally convinced.
So in summary, even if we’re headed for another crisis, unless you’re only a few years from pension, you’ll just sit this one out calmly, just like all crises before. Unless the global economy breaks down for good (in which case you’ve got other things to worry about), your ETF will recover. Don’t let the fear mongers get into your head.
The entire stock market basically functions as a funnel of wealth from the middle class to the rich right now. When OpenAI and Anthropic IPO, they'll be megacap stocks and 401ks and pension funds the world over will invest in them. Then insiders will cash out, and the AI bubble will collapse. USD will have transferred from the retirement accounts of middle-class people to the rich. This is how all stock market crashes work. This one is especially interesting because the middle class is already so squeezed - how many more times can they pull this trick off? Seems like it can't go on many more times.
>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?
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.
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.
You in particular are my main criticism of Occupy as a movement. They lacked any sort of structure, shunned it in fact, that would have ripped control of these resources away from you once it became clear that you disagreed politically with the vast majority of the people involved. That you were allowed to keep control of those resources is emblematic of how Occupy could let all that energy dissipate into nothing.
Co-opting potentially effective political movements is how the people in control stay in control. Once you start noticing it, you see it time and time again.
What resources? OccupyWallSt.org only accepted enough donations to keep the 1-800 number and website online. I was smart enough to understand back then that an unemployed 26 year old activist living in a park wasn't qualified to manage the capital that was being offered to us. So what did I do? I gave you about twenty different links for various projects on the donation page to choose from.
Thank you for another example of why Occupy was doomed to fail, I had not considered that you had control over the donation flow. Instead of working together as a group and finding somebody more responsible than yourself to manage the incoming capital, you diverted it away from the movement and dispersed it to the winds. Was that decision made collectively by the group? Or did you take it upon yourself to do so? Control over the domains and twitter account, along with the incoming flow of donations are the resources that you had and Occupy let you squander.
Every group that showed up in the park and was working on a project, they could come to me and ask that their donation link be posted on the OccupyWallSt.org donate page. I'm a tech person. I registered a domain. I play it neutral. I included everything from basket weaving to aspiring governments. One of these groups called itself NYCGA or the NYC General Assembly. They were the political organization that claimed dominion over Occupy Wall Street and the public elected to give them the lion's share of donations. The guy who ended up with most of their money, if memory serves me right, is a tattoo artist named Pete Dutro. So these days I'm a lot more opinionated. The Pete Dutros of the financial community took out trillions of dollars of loans from Japan and the economy is crashing right now because of them. We should be focusing on reallocating that capital.
What a fall from grace, trying to fashion buying calls on FXY as a revolution! Put this on your own personal website and redirect that page, let the domain maintain some dignity.
This was posted on OccupyWallSt.com. The OccupyWallSt.org website is still exactly as it was in its full 2011 looking glory. I've been dragging my heels on renewing the SSL certificate however everything's still there. It's even been cataloged and archived by the Library of Congress for posterity. So the dignity of the movement has been secured and is continuing to be respected. Your voices are now a permanent artifact in America's historical record.
I was in 8th grade in 2011 and new to web2.0. Saw much about Occupy Wall St and was inspired. Just thought I'd let you know, so thanks for the work.
> Your voices are now a permanent artifact in America's historical record.
I like how the wording here (Your voices) is giving off that sarcastic and patronizing "you're welcome" tone.
Like a religious person saying "I'll pray for you" to someone non-religious, where the undertone is an obvious middle finger.
It's pretty fun.
I was quoting Coriolanus by William Shakespeare.
Yep, occupy may have had the moral high ground but they squandered it because they were the modern day hippy idealists with no boots-on-the-ground (or feet touching grass) know-how to actually effect change in a protracted way.
I’d love to talk with you because I’ve tried to do anarchist organization in the past and it’s super fucking hard
one (started here) was successful but one failed hard
I’d just be curious to trade stories to see if we can learn from each other
My handle@iCloud if you want to reach out
Well, and now you use it for this so what was all that for?
The 'Occupy' energy didn't dissipate into nothing. It fueled extremism and populism, both on the left and on the right.
> My job running the website and twitter has always been to give the people a voice. I think that's important, don't you?
Do you truly believe in your heart of hearts that people posting neo-MOASS wish fulfillment suffer from a lack of a voice, and no place for them to be heard? Take this seriously. More important than "a voice" is consistency and clarity of communication. The people involved in occupy wall street in 2011 weren't occupying it because they wanted to eventually join it, and I don't think that their form of economic justice would be for Wall Street to lose money in a gigantic market crash that again would result in taxpayer-funded bailouts that spurred the first protests. For transparency's sake, what are your market positions today?
> 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.
As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
You have X complaint against an institution. Let's say the institution accepts and reforms somewhat. It's pretty rare that the complainant will pat themselves on the back and say job well done. It's ultimately a game of diminishing returns.
If you have a hammer, it's not just that everything is a nail - you must find enough nails to justify continuing to use the hammer.
> As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
It crumbled when the physical encampments were forcibly removed by the police. I mean, even at the tiny encampment of UC Davis-- essentially a few camping tents-- the students got pepper sprayed and hauled off. Remember that meme? Many of those same students also faced serious jail time for a protest outside Washington Mutual Bank. It's probably difficult to sustain a movement under those conditions, no?
In any case, the message that resonated across the U.S. encampments is essentially what turned into Bernie Sanders two runs for president. That, the group behind AOC's House run, and many other important grassroots movements are the legacy of OWS. Whatever the deal is with jart's website is orthogonal to all this-- I've literally never heard about her association with OWS outside of HN.
Edit: clarification
I think whoever registered the domain deserves the domain. I would dislike anyone grabbing my domain because it was perceived as miss used.
Secondly a domain and a political movement are 2 different things. Either one can exist without the other.
The domain is not even a .org which would be befit a movement ownership
Seems like you're just giving yourself a voice? Why not do that on a personally branded domain?
> [nobody left] with more credibility than me
Source: trust me bro
Justine, do you think that readers here don't have eyes? The page linked is a call to financial action that, if the advice is followed, will result in yet another unsophisticated ETF pump and dump at best and a call to financial suicide at worst.
You are personally underwriting propaganda for something you are very likely invested in, targeting the most credulous. For it to appear on a site called 'Occupy Wall Street' is deliciously ironic.
Here's my disclosure: I am completely divested for both the US and Japanese market, except for transient USD cash holdings. I don't have a horse in this race. Will you follow suit?
I know very little of what happened in NYC years ago, but I would tell anyone reading the site now that it is run by actively malevolent speculators.
I do, however, know a few of your associates. Stop hanging out with grungy, unwashed sex pests, they aren't as smart as they pretend to be, and you should know that by now. It's unbecoming and frankly sad. You have the means to start life anew elsewhere, and you should take that opportunity now.
Substantively reply to the critique.
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:
https://wiki.pumpingstationone.org/wiki/Do-ocracy
https://wiki.pumpingstationone.org/wiki/Member_Manual
https://wiki.pumpingstationone.org/wiki/Administration
jart... Oh, Justine Tunney. Is she still a techno-fascist or did that change at some point?
They’re in the thread, ask them
I don't think it did, she was openly pro-musk during his purges with doge so very recently.
Source, seems pretty relevant. https://www.rollingstone.com/culture/culture-features/occupy...
As in Curtis Yarvin, Dark Enlightenment techno fascist? Really?
Specifically. https://dspace.mit.edu/handle/1721.1/123614 - reference page 68.
"Questioned on Twitter about her beliefs, she replied: "Read Mencius Moldbug.""
(Original source of that information, as cited by above paper, is https://thebaffler.com/latest/mouthbreathing-machiavellis ; I don't have a Twitter archive at my fingertips so I cannot pull up the primary source.)
Fascinating. I had no idea.
I feel International coverage, and even academic studies on the movement, missed this completely at the time.
If by "the movement," you mean Occupy Wall St., one of the things about it as an organization is that it didn't have a mechanism to exclude people really, if I understand correctly. So there was a pretty broad slice of political philosophies united around the common idea "The system that rewards risk-takers for taking risks with other people's money while consolidating the consequences on those who did not consent to the risks is fundamentally flawed."
Quoting from https://web.archive.org/web/20111021162924/http://www.occupy...
> 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).
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
For a better-credentialed opinion on Japan, here's the former Chief FX Strategist at Goldman Sachs:
https://robinjbrooks.substack.com/p/debt-crisis-in-japan
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.
Except the part where they confuse "cryptography" for cryptocurrency. Assuming they knew the difference.
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.
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
Fintwit is full of this crap. Fortunately it also has a few smart people who put it into context.
Financial doom porn sells well, but it's almost always wrong.
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
I’m a little impressed at how a company whose business model is to sell a product they developed in the 1990s over and over again while making inconsequential and non-breaking changes from year to year somehow still manage to screw that up. In my own opinion, they have always been a diabolical company. I’m glad to see them fail.
> I’m a little impressed at how a company whose business model is to sell a product they developed in the 1990s over and over again while making inconsequential and non-breaking changes from year to year somehow still manage to screw that up.
Two words:
*New Coke.*
This wasn't nearly as bad as what's going on with Microsoft and Windows.
In retrospect, Coke made mistakes, but at the time their logic was kinda sound. Market was changing, people were changing, product tested really well, etc.
And they owned up to the mistake and reverted in under 90 days. Honestly, they probably came out stronger and re-affirmed the attachment that people have with the brand.
In addition, they haven't made that mistake again and have been much smarter protecting their core while chasing trends. Free-style is a brilliant bit of tech, marketing, and logistics combined.
They have been more focused on cloud stuff (and now AI) for a long time.
Love the last line, what Valve has done on Windows emulation is herculean, I don't know (it would be great to know) other businesses creating/investing in incredible and risky third-party compatible technologies to run their real business on top of it.
I worked in what other calls "Adversarial Interoperability" [1] but the scale of Valve is on another level.
[1] https://www.nektra.com/main/2020/01/12/reflecting-on-16-year...
On the hand at one point the emulation layer becomes the target. Hopefully game developers will realise this and start using native Linux technologies before they are tied to a single companies abstraction layer. Again.
The XBox was named after a Microsoft API. Definitely one of the more clever ways to force developers to eat your dogfood.
When it was created DirectX was a really useful thing for game makers. It made it easier to write hardware accelerated applications that were also consumer friendly. Contemporary Windows is full of anti-patterns. MSFT just can't seem to resist sticking things into it that make it less pleasant to use in support of MSFT's ecosystem. It's no wonder Valve invests into trying to be independent of that.
Wine is more stable as an API to target than any of the native Linux technologies.
Do you apologize at work before proposing an idea?
Do you organize a sit in for your ideas at work? This is a wild comparison.
You didn’t answer the question and yet I think it’s “yes”.
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.
I watched this video yesterday corroborating this story and I gotta say the evidence is pretty hard to refute:
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.
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.
> 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 really wish that people would wake up to the danger posed by meme stock BS “leaking” into the general markets.
Just as voters are responsible for changes in society, uninformed investors can impact society too, especially when they’re amplifying their purchasing power via leverage.
For instance, I’ve been buying real estate forever, and I’ve enjoyed the Reventure app.
But I’ve REALLY noticed that his YT videos are exclusively doom and gloom.
This ceaseless negativity moves markets, just as the irrational exuberance for real estate in 2005 moved markets.
But the exuberance for real estate was driven by people who were buying real estate.
The endless doom and gloom of YT finance videos is for a much different reason:
It drives page views.
That’s not a good thing. Because it’s really easy to get swept up in the negativity. And that negativity has a downstream effect, where it’s often used to convince people to invest in things that the YouTuber is promoting.
Basically, I don’t know if we need an “SEC for YouTube,” but we might.
Yes, I know we already have an SEC for YouTube (it’s the SEC), but nearly none of the people doling out financial advice on YT are trained professionals. It’s the fundamental defect of internet advice; who to trust?
Misinformation and mass hysteria suck, I agree. But if the amplification of the sky-is-falling-flavor-of-the-week braindead youtuber take can materially imperil financial markets, the stability of that system was always doomed.
An “SEC for YouTube” can’t prevent shit if the lever of influence is already that long. It might be able to keep a lot of meme investor idiots from losing their shirts, but that has to be weighed against the historically evident risks of having what amounts to a ministry of truth/state propaganda regulator.
I can only personally speak for myself and I'm not giving financial advice here. I use the Bolgehead strategy of the 3 fund portfolio is still the tried and true I follow, and I have yet to not benefit from doing so, even in economic downturns[0]
[0]: https://www.bogleheads.org
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.
The Yuan is never going to be a global reserve currency with how opaque the CCP is.
The Yuan already is a popular reserve currency.
What is this crazy idea that every single country must act all the time in the same simplified way?
The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.
The first currency to be gold backed will take the crown. China appears to be building towards that end.
I don't understand why gold-backing is required. I'm a novice.
My understanding is that a reserve currency requires fluid markets and a stable, reliable, metrics-based currency policy. It's why the Fed is so stubborn about its relatively simple policy goals: 2% inflation and low unemployment.
Partially gold backed reduces counter-party risk. Fully gold backed, and exchangeable, eliminates counter-party risk.
China appears to be attempting to reproduce what the USD was before it was free floating.
USD is currently backed by debt and nominally military might. If the US defaults then all of the US bonds held by foreign banks become worthless. That is an enormous risk which is why countries have been divesting from US bonds. If USD was still gold, as it was before 1913, if you hold your money it cannot be made worthless by a third party. After 1913 USD became gold backed bills with partial reserve. It is why USD became the global reserve currency. But, reserve requirements were reduced and more paper was produced. In 1971 Nixon removed the convertibility of paper bills to gold metal effectively stealing the gold of any nation that asked the US to hold it.
One of my favorite bits of currency trivia is that a $20 double gold eagle coin used in circulation prior to 1933 had a gold content of 0.9675 troy ounces. Twenty dollars in your hand was literally nearly an ounce of gold.
> 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.
The way China manages it's currency is very different to how the US manages theirs.
China maintains strict controls on capital flows in/out. A reserve currency requires free convertibility. Holders need to move large sums instantly without permission. China has repeatedly tightened these controls during stress periods (2015-16 devaluation fears, for example).
Limited access to Chinese bond markets and equities for foreign institutions. Reserve currency status requires deep, liquid markets where central banks can park hundreds of billions. US Treasury market is $26T and extremely liquid. Chinese government bond market is smaller and less accessible.
Reserve currency issuer must run persistent current account deficits to supply the world with currency. China's economic model is built on export surpluses. They'd need to fundamentally restructure their economy.
>Reserve currency issuer must run
This is PRC's fundamental disagreement. US reserve currency morphed into high liquid, high speculative instrument to fund unsustainable debt, hollowed out domestic industry (triffin)... but this is not by design. It's the result of emergency adaptations moving off gold, then people post rationalize the trinity musts (open capital, floating rates, independent central bank) is what makes reserve when it's unintended structural outcome from failed gold peg.
Now we see hints of end stage USD reserve behavior, debt snow balls and reserve controller will pull the our dollar, your problem card. This US doing current conniptions trying to either reduce USD strength or inflate away debt... costly instability. People forget, liquidity / storage only matters to sovereign buyers who needs reserve for utility... everyone else (now plurality) are private buyers who buy for returns. If we enter end of dollar cycle and USD reserve cost them money, then they go elsewhere
Elsewhere is what PRC wants to offer, HIGHLY CONTROLLED, BUT STABLE reserve pegged to PRC industrial chains, i.e. real economy instead of speculative financialization. This what recent yuan reserve talk is from (note it was old Xi speech republished in Qiushi), so the propose model isn't even in response to current USD conniptions but prediction on end life of US behavior when USD reserve goes from exorbitant privilege to just exorbitant.
It's precisely because logical outcome of current reserve "musts", i.e. triffin charity/global good that makes it ultimately a stupid arrangement where the system breaks when US/owner can't afford to maintain or develops bad habits (deficit spending). Hence, what PRC plans to offer in parallel: stable regulated reserves for "real economy" financial utility. Stable Yuan "bank" reserve can coexist with volatile USD "casino" reserve. Now of course this all heterodox theory, but we are seeing theory of USD reserve limits peaking it's head, and PRC not retarded enough to pickup triffin baton. IMO PRC fine with US dealing with triffin headache and IMO betting US will fuck global creditors when shit hits fan, i.e. they waiting for USD reserve to implode due to inherent contradictions, to show world precisely why yuan reserve not modelled to repeat same mistake.
> We saw silver drop 40% which hasn't happened since 1980
40% pullback but still up 150% over the past year..
It was the same on Silver Thursday in 1980 too. And then it went sideways for a couple decades.
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.
Bitcoin is crashing hard too.
yeah, I stopped reading there
Aww, then you missed the best part! Who wouldn't be head over heels for the opportunity to follow this financial advice and lose all of their "monopoly money" (funsie term for real cash!)?
Yeah that’s a huge red flag
Seriously, I really appreciate that article, explaining a lot a thing we see that news are able to understand and explain.
God job
LLM-generated global financial theories rivalling the best of the GME "due diligence" posting, wonderful.
Doubt that it’s LLM-generated given this is Justine Tunney’s project.
It is most certainly LLM generated. Nobody but an AI prompted with “connect the unwind of the yen carry trade with Trump’s threats to acquire Greenland” would have ever written something like that.
My guess is that she did a lot of research on the topic with AI then created this article partially with AI generated text.
I definitely got a strong feel of LLM output reading it. Not sure if the points themselves have any merit, but I don't think that I'll go and run to buy jpy.
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.
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.
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.
> 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,
Ok I’ll bite. Where ?
I’m not finding a single article with a good summary, but you can find coverage on Bloomberg of all the twists and turns. FX markets are complicated, so you’ll need to do some research on how they operate as well. It’s not too hard to plug the keywords and concepts from these articles into AI and get a reasonably good background, though.
You can start here: https://www.bloomberg.com/news/articles/2024-12-02/yen-carry...
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.
Takaichi is much more popular than Truss was, and Japan is in a much better situation right now than post-Brexit post-COVID UK. And absolutely nobody is seeking a better relationship with the US right now other than satisfying short-term needs. Japan is not in a good spot long term (population slowdown, debt, slow economy) but there’s no reason to panic right now.
> like the Japanese institutional liquidation of US treasuries
There were news articles about this "happening" but this event never realized.
Good to know. Thanks.
Nothing that cant be fixed with threats to invade okinawa or 100% tarriffs to matcha or sth
I don't understand one thing: why would the Japanese government maintain a ZIRP or a NIRP ? What do they have to gain by doing so?
Probably to stimulate the economy which has been stagnant in terms of GDP since the 90s
It’s to control inflation.
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.
Because it means they can borrow for free
Everything has consequences.
Free money is never free.
One cost is to the savings of Japanese people who don't get a competitive rate of return on their savings. They save a lot and generally don't invest abroad.
If their own government is giving them a 0 interest rate, why are they not investing abroad?
Deflation.
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.
> then you buy treasury bonds that pay 4%
> 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?
I've skimmed this article, but what does this mean for most of the people in the US?
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.
We are profoundly fucked.
We always are. And yet, number go up.
Tell that to Adolf Merckle.
>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
Think you mean crypto currency here?
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.
No, they've got into cartography now. Have you never heard of a bitmap?
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)
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.
It doesn’t. The author is a Yarvinite and Musk worshipper
Being trans and a Musk worshipper is wild
Great piece, I like the VIX part the best. Do you need any help with your site?
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.
This is such a loaded question.
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+...
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.
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:
https://thetaedge.ai/public/thetix-card/42d9c6de-218d-4627-a...
> Record high margin debt
$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?
You're right that $566B alone isn't a black swan. That FINRA figure only captures retail and small institutional margin at broker-dealers. It excludes prime brokerage (hedge funds), securities-based lending, and repo markets. Conservative estimates put total leveraged exposure at $10-15 trillion. The $566B is maybe 5% of the iceberg.
I see visible margin debt as both a canary and a proxy. It's a canary because retail cracks first (less sophisticated risk management, stricter regulatory margin). It's a proxy because when visible leverage contracts, it usually means hidden leverage is contracting too. They're exposed to the same assets. When FINRA margin debt starts falling, it's not just a warning, it's confirmation that system-wide deleveraging is already underway.
That's my 2c. Does that make sense?
Smacks of:
"support my thesis and ignore alternative explanations and contrary evidence on whether there's even a there, there" AI-research slop.
> 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.
Is this true?
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.
I would make the correction that the protest movement was not left wing. I think he’s trying to take credit for his favorite team. TARP was opposed by 80% of Americans. It passed legislation anyway. I think there’s a good lesson to be learned in how performative and inconsequential the electoral process is.
Carried over to Europe too, I remember the camps and protests in many cities' financial districts.
One can make the argument that trump was elected because of OWS knock-on effects...
> One can make the argument that trump was elected because of OWS knock-on effects...
Absolutely.
And guys like Tim Poole got famous off Occupy, then parlayed that fame into building an audience for themselves.
The libertarians at OWS never went away, they just found new causes.
I was at the HUMONGOUS rally that Obama held in Portland in 2008.
The epicenter of OWS was based a few blocks away, years later, and reflected the optimism of 2008 hardening into frustration over Wall Street excess.
I’m listening—...
Just, like, it was the first populist political movement following the ‘08 crash, and while Obama was supposed to be the liberal technocratic answer to the failure of neoliberalism, he was not able to create policies that restored the social and economic post-war order in the US. After Bernie Sanders lost the 2016 nomination, the populist left, which still retained a hope of a new kind of society, no longer had a political representative, and Trump managed to clinch the nomination by campaigning in states that had been neglected by the Clinton campaign. Biden was another, more radical but still fundamentally liberal technocratic attempt to save the status quo of America politics, but the largest economic gains were for the educated professional class, and many people in the country felt left behind and ignored—-again, now with the backing of popular support, Trump won the 2024 election with a promise to completely reshape the country. And he has at least in part succeeded.
Hmm…there has to be more to it though right? The timeline tracks but it looks like there are events missing in between. How do we go from OWS to things like “Drain the Swamp” within a span of roughly five years?
Its a rough sketch. In the end, the viccisitudes of individual history are unable to capture the broader conditions of the events they take place in.
Either no single name/event mentioned in the timeline you provided was remarkable enough to furnish such a vista on its own, or you’re correct.
How do you get from occupy to the tea party is the link this hypothesis is missing.
Tea party was the clear predecessor to the maga movement, with its nucleation point being simple racist backlash against obama and trump being personally & directly involved in stoking that racism. In retrospect it obviously laid the groundwork for trump's movement, and I can't see any direct link from occupy to tea party other than perhaps some individuals like tunney.
Yes
Trump told people "you're OK".
It is what people need to hear
Bottom line is: buy Yen futures to screw billionaires. Sounds pretty good to me.
Bottom line is:
* Pay your debts
* Own useful assets
* Live in a peaceful stable country
Well duh. That's obviously what everyone should try to do, but it's nice to engage in a bit of flight of fancy. I like imaging a rogue group of retail investors buying up the yen, short squeezing carry traders and sticking it to the billionaires. Real life is much more boring, and involves habitual, long term good choices.
Either way, we all know a crash is due before the next decade (everyone is IPOing to the exit), and if you don't realize that by now, well...
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?
Well, investment markets all over the world are not reflecting the real economy right now. You can see that on how stock prices don't reflect how wealthy you feel and maybe more clearly in how house prices are completely unrelated to the amounts people can pay.
That's the obvious part. The consequences of that are anyone's guess, as is the timeframe. But it's not a sustainable situation, so something is bound to happen to change it eventually.
It’s not as obvious as they claim. If it was, if the future was somehow predictable, there would be software that did it; there isn’t.
People have been claiming the end is near since forever; economists have been saying for months now that stocks should already be falling, but they are going up. And also, it feels good to be part of the in-group that just knows more than everyone else. Just ask a prepper: they will be equally convinced.
So in summary, even if we’re headed for another crisis, unless you’re only a few years from pension, you’ll just sit this one out calmly, just like all crises before. Unless the global economy breaks down for good (in which case you’ve got other things to worry about), your ETF will recover. Don’t let the fear mongers get into your head.
The entire stock market basically functions as a funnel of wealth from the middle class to the rich right now. When OpenAI and Anthropic IPO, they'll be megacap stocks and 401ks and pension funds the world over will invest in them. Then insiders will cash out, and the AI bubble will collapse. USD will have transferred from the retirement accounts of middle-class people to the rich. This is how all stock market crashes work. This one is especially interesting because the middle class is already so squeezed - how many more times can they pull this trick off? Seems like it can't go on many more times.
People already said that last decade.
>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?
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.
HN is full of tech savvy people. Yet an llm slop article is upvoted to the front page of HN...
Imagine how deceptive llm slop contents are to the general population.