Shutdowns pause the release of potentially bearish economic data and pressure the Fed to be more cautious, supporting liquidity. Markets now discount these events, seeing them as temporary political theater with a predictable resolution, unlike in the past when they caused fear and hedging.
The best macro traders (Jones, Druckenmiller, Soros) are defined by their ability to discard a viewpoint the moment facts change, rather than defending it out of ego. This intellectual flexibility is crucial for survival and success, as clinging to a wrong idea is a far greater error than admitting a mistake.
As the "con game" of global fiat currency dilution becomes undeniable, a secular shift is underway. Capital is rotating out of traditional financial assets and into long-neglected hard assets like precious metals and crypto. This creates a structural short squeeze on sectors with tight supply, like gold miners.
Extremely low realized volatility is fueling systematic buying. Simultaneously, hedging demand has pushed implied volatility to 99th percentile highs. This creates a large premium for options sellers, turning short volatility strategies into a consistent yield-generating trade in the current market environment.
The number of public companies has nearly halved since the 90s, concentrating capital into fewer assets. This scarcity, combined with passive funds locking up float, creates structural imbalances. Sophisticated retail traders can now identify these situations and trigger gamma squeezes, challenging institutional dominance.
New corporate treasuries are buying ETH at a faster rate relative to its market cap than Bitcoin proxies did for BTC. This creates a powerful supply absorption dynamic. Combined with washed-out positioning and heavy profit-taking, ETH is tactically bullish and a poor short candidate.
Unlike the past, where economics dictated a strong yen despite loose policy, markets are now driven by politics. The Japanese government is allowing the yen to devalue to manage its debt, even as interest rates rise. This weakens the yen, strengthens the dollar, and could fuel a US equity boom via carry trades.
While AI represents the largest segment of corporate debt, the risk is not yet systemic. The current build-out is primarily financed by the massive free cash flow from operations of megacap tech companies, not excessive leverage. The real danger emerges when this shifts to debt financing that cash flow cannot support.