I was talking to my friend who’s a financial advisor, and he gave me a lot of insight into what’s going on right now.
There’s clearly been a ton of liquidation across markets though realistically, there could still be more. He said there are a bunch of catalysts that could pop up anytime: geopolitical risk, FX and carry-trade pressure, domestic data, SCOTUS rulings, global energy, changes in Treasury reserves, QT unwinding, and corporate bond/credit yields especially with AI infrastructure spending ramping up.
He also mentioned how SOFR now accepts UST and MBS as collateral. For years, money market funds were basically being used to pump M2 and lever into equities. But the economy is weak and loan rates are high, so banks would rather buy Treasuries than issue loans. Lower rates are starting to change that dynamic, but inflation is still an issue. A lot of the system is running on leverage using Treasuries as collateral. kind of a K shaped setup.
He’s been watching M2 and M2V closely, especially since velocity recently broke its long-term trend.
From a technical standpoint, bar-to-bar and trend counts still show a clear downtrend on the 4H and daily. Those are fighting with the weekly (which is shifting) and the monthly. things only get ugly when the monthly finally flips.
And with the BoJ likely hiking in December, the Fed starting QE on Dec 1, and the possibility of a U.S. rate cut that same month, it’s interesting that the BoJ is tokenizing a lot of Treasuries. A carry trade unwind could easily happen onchain, especially with how BTC treasury reserves are being handled. His view was that this might be the start of a “1933-style reset” but with BTC instead of gold basically a slow-moving dollar debasement.
We’ve had a lot of “false dawns” for dollar debasement, but he thinks the setup finally points toward a gradual, multi-year move into 2028.
. Not easy buying the dip for each stock you own multiple times over if you misjudge "the dip"
#AnyGivenMoment
