TheGreatestFool

When the market finally breaks out of the range it’s been trading in over the last six months, the move will be monstrous. From compression comes expansion. Market wide consolidation like this can lead a very explosive move with tons of opportunity, potentially exciting stuff.

Kalshi founder on institutional adoption: "Block trades are already live on the platform...Right now a trade that we're seeing a lot is in the $20-30 million range for payroll hedging"

A User's Guide to Reducing the Federal Reserve's Balance Sheet: Reducing the Fed's balance sheet would have many benefits. If we reduce our balance sheet, we'll naturally be shedding liabilities (reserves) and assets (Treasury and mortgage securities). Each has some risks we'd need to be attentive to. Reducing the liability side risks repo vol, and reducing the asset side risks a taper tantrum. Starting with the liability side: every time the Fed starts to reduce its balance sheet, it eventually causes stress in short term funding markets as reserves approach scarcity and short term funding becomes more valuable. To address this, policymakers can take steps to reduce the equilibrium demand for reserves through adjustments to the regulatory and implementation framework. Some of these possible actions: -Easing LCR (and related) requirements; -Bounding ILST and related resolution planning liquidity standards; -Destigmatizing standing repos, discount window usage and intraday credit; -Making it easier for dealers to absorb securities; -Making alternatives to reserves, like Treasury securities, relatively more attractive; -And conducting policy with a slightly higher EFFR relative to IORB given a target range. There are more possible steps described in the paper that can be taken to ease balance sheet reduction. On the asset side, as Treasury securities mature off our balance sheet and are reissued into the private sector, it could cause longer-term yields to move higher if the market has trouble absorbing the additional securities. There are steps we can take to mitigate that risk and help the market absorb the additional securities: -Going slowly; -Central clearing of Treasury repo; -Adjusting G-SIB surcharges to be neutral with respect to Treasury holdings. These are unlikely to increase the market's capacity to absorb the securities we shed one-for-one, so there will likely be some tightening of the net stance of monetary policy as a result of balance sheet reduction. Fortunately, as long as we're not at the zero lower bound, this tightening can be offset with additional reductions in the fed funds rate. I expect such actions would be necessary, if we decided to undertake a material reduction in the size of the balance sheet.

little revisionist history here but it's a good mental exercise to go through each point, refute it and then laugh out loud

The U.S. has perpetrated an atrocity at sea, 2,000 miles away from Iran's shores. Frigate Dena, a guest of India's Navy carrying almost 130 sailors, was struck in international waters without warning. Mark my words: The U.S. will come to bitterly regret precedent it has set.