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.
* 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
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...
Two words:
*New Coke.*
Financial doom porn sells well, but it's almost always wrong.
Think you mean crypto currency here?
Is this true?
My guess is that she did a lot of research on the topic with AI then created this article partially with AI generated text.
40% pullback but still up 150% over the past year..
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.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.
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.
Free money is never free.
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?
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...
$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?
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
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
It seems like their conclusion is "hold lots of yen"? We'll see I guess.
* Pay your debts
* Own useful assets
* Live in a peaceful stable country
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.
There were news articles about this "happening" but this event never realized.
Should someone that calls 2.4 percent movement bloodbath be taken seriously?
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.
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.
Imagine how deceptive llm slop contents are to the general population.
caust1c•1h ago
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•1h ago
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•32m ago
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.
UltraSane•37m ago
avensec•31m ago
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•3m ago
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?
drakythe•30m ago
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.