SmedleyButlerUSMC

The yield curve is unpredictable But the very long term moving average of the yield curve is nearly a perfect deterministic mathematical function Its first derivative is screaming "time for un-inversion" You might want to start paying attention

@GoodTexture That's one way to look at it Another viewpoint is that It shows an immediate rally (one of the largest in history) followed by two more rallies (also the largest in history) followed by a 50 year long rally (the largest in history)

@SmedleyButlerUS the first time, it took 2 years for the bond rally to start

Silver/oil is now down -65% from the peak (-10% today) This has happened before, precisely like this, but only twice in history (>100 years), making this a 3 in >1 century event. 100% of those 2 times coincided with historic (in both magnitude and speed) bond market rallies.

@hotpotato3141 I think it's delayed this time, not different. All the indications are that we should have gone full cycle but haven't The technical top was in 2022, all technical indicators show a bottom, but we haven't started I think it might resolve quickly & late not opposite to normal

@SmedleyButlerUS This is a little bit scary chart. take ur time to go through it.

DXY/Bonds dx/dy(RSI)* *RSI(RSI SMA)

@hotpotato3141 Valid concerns I'll take a longer look at it, here's a quick back of the envelope in the mean time -> Longer timeframes seem to show similarities to the last 2 major cycles

@mellamofartface Every Eurasian Geopolitical event of the last 50 years has happened on the Silk Road. Baghdad, Afghanistan, Tehran, Ankara, Damascus, Egypt & the other one. China's #1 strategy = Silk Rd #2/ belt & rd Geopolitics is about geography War is about logistics Empire is about trade

@SmedleyButlerUS After our chat, I went hunting for fundamental mechanisms that could drive what I viewed as an arbitrary quantitative reversion to the mean… and boy did this piece deliver (remarkable timing). I just bought a seat on the bond train with a chip shot on $TMF. Let’s ride.

US10Y

@RFitz8990 @E055Michel1842 Level headed approach

@E055Michel1842 @SmedleyButlerUS I still have a healthy exposure to equities and gold miners (I think gold itself is cumbersome and not worth the hassle) but I also have a healthy exposure to high duration assets that will react strongly to falling rates. I don’t think equity valuations will extend from here.

@hotpotato3141 Great points

It's just like 2008. The yields didn't drop until the crash. There was fears of inflation due to oil shock. Also know that, after the crash, the yields went up to pre crash levels, despite the fed funds being low. I do think the crash is coming soon but looks like there will be pain. Yesterday everything sold off, it's a classic liquidity crunch behavior.

This looks like either indecision or the behavior of leverage not structure

@PolarityRadio Awesome Do you have any thoughts on whether credit expansion and contraction (by whatever means - the how is less important than the if) can be given independent variable status for economic outputs, including financial market performance?

I have been articulating this particularly the January 18, 1980 peak in Silver for 31 years at $50.35 coincide with the initiation of a 370 basis points flattener over 370 days. These were a blow off top of liquidity and there’s an enormous amount of equity loss now 10 trillion in commodities and that is gonna make a lot of bad paper and a lot less credit formation.

@CastorCalvarium Bottom signal I love the way markets do this literally every time for every asset and yet no one sees what's happening Marvelous!

@SmedleyButlerUS Still waiting for this to work I see

The slope of the long SMA of TLT is now positive for the first time in over 4 years This condition has immediately preceded every major bond rally (larger than +40%) in TLT's history You made it. What's next? TLT >= 200 Welcome to the bond bull

@AutismCapital I used to chew. The nicotine absorbs directly into your bloodstream through your gums Anything in toothpaste will do the exact same thing. Most chemicals in toothpaste are toxic poisons meant to kill everything that is alive @ MINIMUM dentists = RETARDED! for not seeing this

Are there any toothpaste autists out there? What is the truth? We need to know. The world needs guidance. Toothpastepill us.

@nathans2024 Why aren't you holding to 326

@SmedleyButlerUS I got 150k position Down about 10k on it Holding all the way up to 170ish

@mellamofartface Same to you, Sir Please remember, I'm very forgiving and merciful When you see later on what happens, feel free to come back. No apologies necessary as they are assumed.

@SmedleyButlerUS Stay classy

@mellamofartface It's been a pleasure meeting you Fartface Good luck

@SmedleyButlerUS ALL deviations revert to the long term average? ALL? Interesting theory. Have fun losing money, Smedley.

@mellamofartface No Sir I'm talking about quantitative analytic tools for predicting the behavior of complex systems. Namely, numerical as opposed to other methods, and specifically mean reversion. All complex systems tend toward the trend, all deviations revert to the long term average. ok

@SmedleyButlerUS Correct. And the best tools of the system are: - Supply: Adding $2.5T/year and climbing - Demand: Withering, moving from CBs to HFs who demand higher yields (lower prices) - Price action: shows bonds are being abandoned as a safe haven asset Bad tools incl. MAs from before 2020.

@mellamofartface That's not what I said. I said price depends on too many variables to hang your analysis on the number of them that your brain can process, meaning this type of analysis is fundamentally incapable of predicting the behavior of complex systems. You have to use the tools of systems

@SmedleyButlerUS You are comically, Britishly arrogant. I know what you said: price depends on too many variables to model on any one of them. Don’t talk to me about basics. The basic question for any investment is who’s buying, WHICH YOU CANNOT ANSWER. But the answer is ghoulishly bearish.

@mellamofartface Dude It's not "nothing" because you don't understand it! The market is a complex system. You don't understand what I'm saying because you don't have an education in what the market actually is - namely, precisely, a complex system. Start there (systems basics) and come back.

@SmedleyButlerUS If I prompted AI to answer this question in the style of some guy named Smedley Butler, this is exactly what I’d get: a heap of nothing dressed up in smart words. You can’t even explain who’s buying it, and your “basic premise” is… it’s too complicated? 😂 Run away, everyone.

@mellamofartface Here is the basic premise: the price is the dependent variable for the entire system. All arguments about a handful of ivariables (liquidity/supply/demand) are incapable of predicting the output of any complex system with millions of variables, regardless of sophistication.

@SmedleyButlerUS Please explain where the demand is coming from to absorb $2 trillion in new supply annually, while also driving your estimated returns. Do you have a model of the fundamentals, Smedley, or just some lines you drew on a chart?