[HN Gopher] The Great Unwind
___________________________________________________________________
The Great Unwind
Author : jart
Score : 205 points
Date : 2026-02-04 17:49 UTC (5 hours ago)
(HTM) web link (occupywallst.com)
(TXT) w3m dump (occupywallst.com)
| caust1c wrote:
| 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.
| rednafi wrote:
| > 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.
| UltraSane wrote:
| 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.
| maxglute wrote:
| >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.
| UltraSane wrote:
| The Yuan is never going to be a global reserve currency with
| how opaque the CCP is.
| bloppe wrote:
| 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.
| tastyfreeze wrote:
| The first currency to be gold backed will take the crown.
| China appears to be building towards that end.
| unethical_ban wrote:
| 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.
| tastyfreeze wrote:
| 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.
| marcosdumay wrote:
| 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?
| avensec wrote:
| 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.
| johnvanommen wrote:
| > 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?_
| zbentley wrote:
| 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.
| no_wizard wrote:
| 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
| drakythe wrote:
| 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.
| lkey wrote:
| 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.
| mwt wrote:
| 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
| floatrock wrote:
| 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.
| svnt wrote:
| 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.
| terminalbraid wrote:
| Except the part where they confuse "cryptography" for
| cryptocurrency. Assuming they knew the difference.
| ToucanLoucan wrote:
| 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
| wslh wrote:
| 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...
| tomstockmail wrote:
| 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.
| johnvanommen wrote:
| The XBox was named after a Microsoft API. Definitely one
| of the more clever ways to force developers to eat your
| dogfood.
| georgeecollins wrote:
| 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.
| foobiekr wrote:
| Wine is more stable as an API to target than any of the
| native Linux technologies.
| GorbachevyChase wrote:
| 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.
| johnvanommen wrote:
| > 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.*
| petethered wrote:
| 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.
| kyorochan wrote:
| They have been more focused on cloud stuff (and now AI) for
| a long time.
| Trasmatta wrote:
| 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
| 01100011 wrote:
| 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.
| lijok wrote:
| Do you apologize at work before proposing an idea?
| collingreen wrote:
| Do you organize a sit in for your ideas at work? This is a
| wild comparison.
| lijok wrote:
| You didn't answer the question and yet I think it's "yes".
| everybodyknows wrote:
| 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
| elaida73 wrote:
| >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?
| largbae wrote:
| 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.
| soperj wrote:
| No, they've got into cartography now. Have you never heard of a
| bitmap?
| joshuamcginnis wrote:
| > 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?
| bfung wrote:
| 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.
| irishcoffee wrote:
| One can make the argument that trump was elected because of
| OWS knock-on effects...
| tolerance wrote:
| I'm listening--...
| DiscourseFan wrote:
| 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.
| worik wrote:
| Yes
|
| Trump told people "you're OK".
|
| It is what people need to hear
| giraffe_lady wrote:
| 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.
| tolerance wrote:
| 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?
| DiscourseFan wrote:
| 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.
| tolerance wrote:
| 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.
| johnvanommen wrote:
| > 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.
| barbazoo wrote:
| Carried over to Europe too, I remember the camps and protests
| in many cities' financial districts.
| GorbachevyChase wrote:
| 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.
| anonymous908213 wrote:
| LLM-generated global financial theories rivalling the best of the
| GME "due diligence" posting, wonderful.
| cedws wrote:
| Doubt that it's LLM-generated given this is Justine Tunney's
| project.
| sharifhsn wrote:
| 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.
| kykat wrote:
| 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.
| drewbailey wrote:
| > We saw silver drop 40% which hasn't happened since 1980
|
| 40% pullback but still up 150% over the past year..
| airstrike wrote:
| yeah, I stopped reading there
| anonymous908213 wrote:
| 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.
| johnvanommen wrote:
| Yeah that's a huge red flag
| tartoran wrote:
| Bitcoin is crashing hard too.
| sharifhsn wrote:
| 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.
| khuey wrote:
| It was the same on Silver Thursday in 1980 too. And then it
| went sideways for a couple decades.
| OGEnthusiast wrote:
| 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.
| Supermancho wrote:
| 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.
| seydor wrote:
| Nothing that cant be fixed with threats to invade okinawa or 100%
| tarriffs to matcha or sth
| helios_invictus wrote:
| I've skimmed this article, but what does this mean for most of
| the people in the US?
| forgetfreeman wrote:
| We are profoundly fucked.
| alex_young wrote:
| We always are. And yet, number go up.
| forgetfreeman wrote:
| Tell that to Adolf Merckle.
| largbae wrote:
| 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.
| 1024core wrote:
| 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?
| lbrito wrote:
| Probably to stimulate the economy which has been stagnant in
| terms of GDP since the 90s
| johnvanommen wrote:
| 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.
| jsutter909 wrote:
| Because it means they can borrow for free
| johnvanommen wrote:
| Everything has consequences.
|
| Free money is never free.
| georgeecollins wrote:
| 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.
| 1024core wrote:
| If their own government is giving them a 0 interest rate,
| why are they not investing abroad?
| worik wrote:
| Deflation.
| rvz wrote:
| 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...
| barbazoo wrote:
| 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?
| wilkommen wrote:
| 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.
| 9dev wrote:
| 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.
| marcosdumay wrote:
| 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.
| layer8 wrote:
| People already said that last decade.
| mempko wrote:
| 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...
| topspin wrote:
| > 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?
| mempko wrote:
| 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?
| topspin wrote:
| > a canary and a proxy
|
| Whatever shenanigans are appear in the public record,
| multiply by 10x to approximate of the real story.
|
| > Does that make sense?
|
| Yep. 1929 called. Just to gloat. They don't want their
| market back.
| knuckleheads wrote:
| 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...
| jart wrote:
| 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.
| knuckleheads wrote:
| 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.
| jart wrote:
| 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.
| giraffe_lady wrote:
| Well, and now you use it for this so what was all that
| for?
| knuckleheads wrote:
| 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.
| jart wrote:
| 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.
| knuckleheads wrote:
| 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.
| jart wrote:
| 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.
| greggoB wrote:
| > 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.
| jart wrote:
| I was quoting Coriolanus by William Shakespeare.
| animal_spirits wrote:
| 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.
| jart wrote:
| Thank you for saying this.
| popalchemist wrote:
| 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.
| AndrewKemendo wrote:
| 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
| bombcar wrote:
| 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.
| thomassmith65 wrote:
| The 'Occupy' energy didn't dissipate into nothing. It
| fueled extremism and populism, both on the left and on the
| right.
| detourdog wrote:
| 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
| closewith wrote:
| Seems like you're just giving yourself a voice? Why not do
| that on a personally branded domain?
| Edman274 wrote:
| > 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?
| legitster wrote:
| > 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.
| jancsika wrote:
| > 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
| popalchemist wrote:
| Substantively reply to the critique.
| lkey wrote:
| > [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.
| shadowgovt wrote:
| jart... Oh, Justine Tunney. Is she still a techno-fascist or
| did that change at some point?
| johnvanommen wrote:
| They're in the thread, ask them
| giraffe_lady wrote:
| I don't think it did, she was openly pro-musk during his
| purges with doge so very recently.
| hyperpape wrote:
| Source, seems pretty relevant.
| https://www.rollingstone.com/culture/culture-
| features/occupy...
| lbrito wrote:
| As in Curtis Yarvin, Dark Enlightenment techno fascist?
| Really?
| shadowgovt wrote:
| 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.)
| lbrito wrote:
| Fascinating. I had no idea.
|
| I feel International coverage, and even academic studies
| on the movement, missed this completely at the time.
| shadowgovt wrote:
| 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."
| znpy wrote:
| 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).
| riddlemethat wrote:
| 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
| IncreasePosts wrote:
| 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.
| mekdoonggi wrote:
| Bottom line is: buy Yen futures to screw billionaires. Sounds
| pretty good to me.
| worik wrote:
| Bottom line is:
|
| * Pay your debts
|
| * Own useful assets
|
| * Live in a peaceful stable country
| mekdoonggi wrote:
| 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.
| sharifhsn wrote:
| 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.
| sharifhsn wrote:
| 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.
| Supermancho wrote:
| > like the Japanese institutional liquidation of US treasuries
|
| There were news articles about this "happening" but this event
| never realized.
| sharifhsn wrote:
| Good to know. Thanks.
| lvl155 wrote:
| 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.
| sharifhsn wrote:
| 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.
| PantaloonFlames wrote:
| > 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 ?
| sharifhsn wrote:
| 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...
| ReptileMan wrote:
| >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?
| panphora wrote:
| 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.
| dist-epoch wrote:
| 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.
| RayMan1 wrote:
| Great piece, I like the VIX part the best. Do you need any help
| with your site?
| MaxfordAndSons wrote:
| 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.
| johnvanommen wrote:
| 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+...
| wenbin wrote:
| 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.
| aeneas_ory wrote:
| 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)
| jayd16 wrote:
| > 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?
| thrownawaysz wrote:
| 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.
| ricksunny wrote:
| Smacks of:
|
| "support my thesis and ignore alternative explanations and
| contrary evidence on whether there's even a there, there" AI-
| research slop.
| WD-42 wrote:
| 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.
| wahnfrieden wrote:
| It doesn't. The author is a Yarvinite and Musk worshipper
| Biganon wrote:
| Being trans and a Musk worshipper is wild
| gwbas1c wrote:
| 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.
| marcosdumay wrote:
| 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.
| gwbas1c wrote:
| Thanks, that was generally how I interpreted the article.
|
| The issue was the terms. There was a lot of logic inversion
| that someone who's much more familiar with the terms could
| probably follow, especially when trying to understand how an
| investment in Microsoft was loosing value when the investment
| was from a loan in yen.
|
| Likewise, the end of the article uses a lot of abbreviations,
| especially when referring to Australian currency, which I
| just don't understand at all.
| QuiCasseRien wrote:
| Seriously, I really appreciate that article, explaining a lot a
| thing we see that news are able to understand and explain.
|
| God job
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