Race car driver. Wall Street veteran. Author of The Apex Between Us, being released 9/1. Building bold second acts with risk, grit & intuition.
Atlanta, GA
Joined January 2011
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I just received anecdotal evidence that some community banks are refusing to lend federal workers money in advance of their furlough ending. Back in 2019, Wilbur Ross told CNBC viewers to get paycheck loans. #EndTheShutdown @elonmusk @POTUS cnbc.com/2019/01/24/commerce…
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Check out my latest article: What the Headlines Aren’t Saying: Tariffs, AI, and the Real Story Behind Rates. Link in comments.
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Check out my latest article: Opinion: Outdated Davis-Bacon Wage Practices Are Undermining HUD's Role in Solving the Housing Crisis
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Racerkim retweeted
(1) Here’s the full breakdown of what likely happened between April 7 and April 9, 2025, and what it suggests going forward:
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April 7: The “Tariff Pause” That Wasn’t
At 10:15 AM ET on April 7, markets were jolted by a rumor that President Trump was pausing all tariffs for 90 days, excluding China. The S&P 500 exploded over 400 points intraday, reversing deep early losses. But beneath that rally, something far more ominous was happening.
Multiple real-time stress signals lit up across global markets:
•10Y Treasury yield spiked 30+ bps, one of the largest intraday reversals in modern history—not consistent with a “risk-on” rally from good news.
•TLT (long-duration Treasury ETF) saw record volume, 25% above prior highs, implying forced liquidations or a massive flight from duration.
•Fed Funds rate cut odds for May FOMC collapsed from 85% to 33% in one session—a violent re-pricing suggesting emergency liquidity stress, not stable policy expectations.
•DAT load volume surged, Japan’s 20Y yield jumped 15 bps, and the Nikkei rallied +6%, suggesting cross-border scrambling for USD collateral.
•Consumer credit missed badly: -$0.81B vs. +$15B expected, pointing to a real-economy evaporation of demand-side credit.
Put together, these signals don’t align with an optimistic market reacting to trade easing. They scream liquidity fracture—likely within shadow banking, macro hedge funds, or FX hedging markets, particularly involving foreign sovereign actors or leveraged carry trades unwinding. The “90-day pause” rumor was almost certainly not the cause of the rally, but rather a strategic cover for a silent liquidity run.
⸻
April 9: The Real Announcement—and the Real Tell
Fast forward to today, April 9, when Trump officially announces the real 90-day tariff pause, lowering most tariffs to 10%, while raising tariffs on China to 125%. The result? Markets rallied again NASDAQ +9.66%, S&P also surged but this time, bonds didn’t confirm the rally.
•10Y UST yields shot up to 4.50%+
•Gold surged $100 intraday
•Junk bond yields hit 8.51% (a 52-week high)
•SOFR swap spreads collapsed to -40.62
•Crude oil fell below $58
•TLT again saw massive volume and drawdowns
This is not normal behavior during a “relief rally.” Instead, it reflects desperate collateral repair. As one market analyst put it: “They needed a rapid boost in equity prices to post as collateral to continue shorting precious metals and plugging funding gaps.
Racerkim retweeted
Here’s what COULD be happening beneath the surface: we’re witnessing a coordinated pause by the Fed and Treasury, not out of strength or stability, but as a last-ditch effort to stall systemic collapse while they prepare the architecture for a new monetary regime. The plumbing of the global dollar system is breaking down basis trades are unraveling, swap spreads are collapsing into negative territory, SOFR-Fed Funds spreads are inverted, and long-end Treasuries are being sold into weakness, not bought. And yet, the Fed isn’t stepping in. That’s not because things are fine it’s because they can’t move until the timing aligns with broader structural changes happening behind closed doors.
The Fed and Treasury are buying time for four key reasons. First, inflation is still elevated, and now being intentionally kept hot through tariffs, which function as a stealth tool to drive nominal GDP and keep long-end yields high. This lets the Treasury fund itself at the cost of consumer purchasing power. Cutting rates into this environment would trigger political backlash and destroy the illusion that the Fed still has control over inflation expectations. Second, the U.S. must roll over $8–9 trillion in maturing debt over the next year. With foreign buyers stepping away particularly China and Japan the U.S. needs yields high enough to attract capital, but not so high that it causes Treasury auctions to fail. The tariffs help engineer this by maintaining inflation optics, steepening the yield curve, and creating the appearance of “growth” without requiring Fed balance sheet expansion yet.
Third, there is likely deep coordination underway between the Fed, Treasury, and global central banks. The toolkit they’re preparing won’t look like 2020-era QE. It may include Treasury buybacks, a UST-specific standing repo facility, or synthetic QE via dealer collateral swaps. But deploying this too early risks stoking panic, crashing the dollar, or sparking another inflation cycle. It needs to be launched at the exact point where stress justifies it but before confidence fails completely. The Fed doesn’t want to save the market they want to be forced to save it, so the intervention appears reactive, not premeditated.
Meanwhile, China is playing the long game in the background, carefully applying pressure through controlled CNY devaluation, accelerated gold accumulation, UST divestment, and expanding yuan-settled trade agreements. They’re not trying to collapse the U.S. system overnight but they are trying to hollow out dollar hegemony, one FX reserve, trade route, and commodity contract at a time. As the U.S. pushes tariffs to manage optics and capital flows, China uses those same pressures to justify accelerating its de-dollarization plans. This geopolitical loop is amplifying the internal fragilities of the dollar system itself.
What we’re really watching isn’t a typical market cycle it’s a managed descent into a new monetary world. The Fed and Treasury are holding off intervention not because they’ve got it under control, but because they need the current system to teeter just enough to allow a transition without admitting that the existing framework is collapsing. They’re not delaying to avoid risk; they’re delaying because once they move, the old game is officially over. This is the quiet stage before the narrative changes permanently from QE to yield suppression, from dollar dominance to multipolar settlement, and from monetary policy to geopolitical capital control. The intervention will come but only once the system is ready to accept that it can’t go back.
Racerkim retweeted
I’ll spell it out explicitly one last time.
Everyone thinks Trump wants balanced trade. He does not.
He wants to force allies to stop trading with China. Completely. Zero inbound supply.
Because it’s not just because of American jobs. It’s a proactive move to slow down Chinas industrial rise.
Everything is downstream of this. Reserve currency status. The ability to address fiscal debt.
It’s a crazy risk because China has a vote.
It’s a crazy risk because you are forcing Europe to commit seppeku because they have very little leverage or say in the matter.
It’s a crazy risk because Xi might bomb the fabs in Taiwan and the world doesn’t get AGI.
It’s a crazy risk because China knows how financialized we are and will dump bonds and equities to drive anger towards trump.
But it also has benefits if it works.
If your allies can’t trade with China there is no near peer competitor to worry about.
That has a ton of benefits. Just look at what happened after WW2/USSR collapse when American was the last man standing.
Hegemony.
Trumps advisors like Miran believe that you can coerce your allies to pay for your security umbrella in the form of buying longer dated treasuries.
This removes the overhangs of the debt load while allowing you to pump markets in time for midterms.
If Mexico can’t import from China then you solved the fentanyl crisis because they won’t have precursors.
More importantly by establishing a tolerance for risk the level of fear you can instill in cartels is an order of magnitude higher.
“Shit if they risked WW3 they won’t think twice about droning Sinaloa. “
This same “logic” applies to the Middle East.
Now I will repeat for the 100x that this is not advocacy.
I’m only telling you guys what the people in power believe. And I’m telling you that what happens next if I’m right will come down to how Xi wants to fight.
He can go gloves off or glove on. There are real constraints as I have outlined in prior tweets.
But there is a plan and therefore the tolerance for market pain is way way higher than you think.
Because first you need Europe to be willing to commit economic seppuku. And they won’t want to (rightly). So Trump will crush them economically until they cry uncle. And then they still won’t want to and he’s going to threaten to defang NATO. And then they still won’t want to and he will withdraw swap lines.
Or a lot more likely, he will do it all very forcefully and all at once to maximize leverage.
Now you’ll rightly ask… why wasn’t this messaged better? Why have midwits like Lutnik on the team?
Because you are attempting to execute a reckless gambit where the big variables are not what the tariffs rates are. Or if you tariff penguins. Or if the person sounds dumb on TV. Non of that matters.
What matters is - will Japan capitulate quickly and agree to buy a large amount of treasuries? Will Saudi capitulate quickly with your B2 bombers waiting in Diego Garcia to bomb Iran? Will China invade Taiwan?
Many of you think everyone around Trump is retarded. I get it. You hate the guy and everything he stands for. But I will say this until I’m blue in the face. Bessant, and even Miran, have higher IQs than most if not all of you. They thought through the second order effects. Believe me. If I, a dumb TMT L/S bro thought this far ahead, they certainly did too. Which means they warned Trump how risky this was and how deeply irrational it is if you planned to eventually cut a deal with China. Therefore you have to assume Trump heard the risks and said “fuck it we ball” anyways.
Economic Blitzkrieg. That’s what we’re seeing. And it’s only the start.
Racerkim retweeted
Something has broken tonight in the bond market. We are seeing a disorderly liquidation.
If I had to GUESS, the basis trade is in full unwind.
Since Friday's close to now ... the 30-year yield is up 56 bps, in three trading days.
The last time this yield rose this much in 3 days (close to close) was January 7, 1982, when the yield was 14%.
This kind of historic move is caused by a forced liquidation, not human managers make decisions about the outlook for rates at midnight ET.
Racerkim retweeted
My current best view:
Trump lets tariff reactions play out for a few weeks. Sees the trend of capitulations and is emboldened to keep going. He fields offers from everyone. Negotiates with no one.
Then brings everyone to MaL in a month or two and puts an offer on the table: Bretton Woods 2.0. It’s simpler and more effective to have one Grand Bargain than negotiate piecemeal with 80 countries+.
I am focused on figuring out what terms matter most for the MaL Accords. I have a few in mind which are obvious and would kingmake the US.
I don’t buy this whole “end of US hegemony”. This is the moment to go for the jugular and establish world order around America.
Epic stock market rebound!! 1500 points in 15 min. Bond sell-off raises rates 20 bps in 30 min!!!
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