The Reichsbank will have its revenge on the ECB.

I guess it's one of those things you can never explain

Who do you think is more capable of driving a runaway train?

This group in 1921:

Or this group today?

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I'm starting up a new Finnish black metal band called "Blackstone Defaults.”

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The Fed balance sheet actually went UP $2.6 billion in the past week, and we’re all very proud.

Also, the national Case-Shiller index is still up 5.8% YOY, and the Fed still holds $2.6 Trillion more MBS than they did in 2008.

Keep hope alive!

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You can see the fear in Scott’s eyes.

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Ouch.

• Crypto bank Silvergate to shut down in face of market turmoil

• Silvergategate: The Collapse of Silvergate and the Future of Cryptocurrency Banking

• You might want to bookmark this link.

Mike Mayo.

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Boris “stands up and he says, “I am invincible,” at which point the liquid nitrogen tanks behind him rupture and he’s turned into a popsicle. And I have that feeling, Grant. And I think this is the question that the clients are trying to ask. Just because it hasn’t hit you yet, are you invincible? Is it different or is it just that you haven’t got hit by the liquid nitrogen yet and is it coming?” - Julian Brigden

I spoke to James Aitken recently and we were talking about this. And he said, “Look, what I’ve been saying to people is, ‘What would 7% Fed funds rate mean for your portfolio?’” And he pointed out to me that he’d said a year ago, “What would 4% Fed funds mean for your portfolio?” And people were like, “We’ll never get there because the system will break.”

- Grant Williams

I like to point out that, for many, the system broke years ago:

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August 27, 2019

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I wonder if ending the carried interest loophole will survive budget negotiations…

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Will 0DTE Cause Gammageddon? With Mike Green and Craig Peterson

The risk that exists as always in options is that you can’t actually hedge that exposure. An instantaneous gap of a large quantity, given the volume of these that are outstanding and the open interest that stands there, could create significant risks for the actual exchanges and market makers themselves, setting up conditions that look more like an AIG failure than anything else.

- Mike Green

Well maybe these type of things should be banned, if they can create such systemic risk (which the taxpayer will ultimately be on the hook for).

On a related note…

We all remember (actually, almost no one remembers) who really got bailed out in Geithner’s AIG bailout…

The events of the following Monday showed that the Fed’s New York trading team was essentially flying blind in the age of ZIRP. This meant that the entire leadership team of the Fed, including Jay Powell, was also flying blind. The central bank had transformed the financial landscape by swamping it with money and in doing so had destroyed one monetary regime and replaced it with a new one. But there was no reliable instrument to measure the terrain of the new regime. This fact was made a stark reality on Monday, when the repo market blew up. The resulting market crisis almost became a full-fledged financial crisis, at a moment in history when the markets were supposed to be stable and in good health. The only reason that this didn’t happen was that the Fed stepped in, almost instantaneously, and initiated a $400 billion bailout. This bailout was unprecedented, and it benefitted a small group of hedge funds that had essentially hijacked the repo market and used it as a vehicle to make risky bets. The Fed saved them from the consequences of those bets. But maybe the most remarkable part of the bailout is that the Fed did it without much notice. A $400 billion emergency cash injection was no longer news. The Fed described it as a matter of normal maintenance.

- Christopher Leonard, The Lords of Easy Money

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Nice little garbage-stock rant I found via the excellent site Credit Bubble Stocks:

Quantum Computing Shorts:

Remember that the next time someone tells you to just buy an index fund or a mutual fund.  Index funds are propping this bullshit up, just like they’re propping up the fact that Yahoo has a “sustainability” column. I’m sure the list of bullshit the index funds are propping up is very long now. While the concept of an index fund is sound (average many things together to lower your risk), the entire idea is nihilism unless some thought has been put into the index components. Think about it: how is Capitalism supposed to work if you just mindlessly buy whatever index some knucklehead tells you is an index? You could at least remove overt frauds like these. VCs are the real culprits though. Their hype machines are how this nonsense gets started.

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Perfect, Krümel.

#ETF

Thank you everyone on Twitter.

Basically.

Good point.

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Thanks, Patrick. Sometimes I make mistakes.

Thank you, Stan.

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Avi: My friend Azim was shot down yesterday right here. Died at my feet. And here you are, bringing life to the world. I never married. Never had a child. Because I'm a soldier. Always a soldier. I go from one battlefield to another. It's what I do. It's what I am. But you? You're not like me.

Franklin: How'd you see that?

Avi: First time I met you I said to myself, this young man can do anything he wants. And that's the biggest curse a man can have.

Franklin: A curse?

Avi: I have no choice. I do what I am. But you? You could do anything. You could be anything. A teacher, a businessman, a rabbi...a drսg dealer. It's all in you. It all wants to come out. I go from war to war. Whereas a man like you has the war inside.

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Thank you to the Substack people who believe my “writing is worth paying for. They have pledged a subscription, which will be activated if you decide to turn on payments for your publication.” I’ve always avoided that. This multi-decade labor of love has kept me from overtrading, but then again, the cost of living is going up...

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Please - left and right - let’s stop with this “national divorce” crap. Again, people have lost their minds. From Sept. 2020:

My response…

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Cry Me an Atmospheric River