Everyone is focused on the stock market, but the bond market will call the ball.

bantam inc jack duval multi-family office MFO UHNW manhattan new york city - 30 year yield chart

The downward step function in 30-year U.S. Treasury Bond yields.

In this video, Bantam CEO Jack Duval revisits his January 31, 2019 blog post about the Jerome Powell pivot, and takes a quick tour of the stock and bond markets.

https://youtu.be/DipEp_uWJN4 Topics discussed include: The S&P 500;2-year U.S. Treasury Note;MOVE Index;Deutsche Bank, and;The downward step function in 30-year U.S. Treasury Bond yields

Investors should use any rallies to reduce equity positions.

Federal Reserve rate cuts

What is thy bidding, my master?

The S&P 500 rallied 2.1 percent yesterday on the back of Jerome Powell's comments that the Federal Reserve would cut interest rates if the trade war continued to affect the economy. Investors are foolish to buy on such news. Historically, when the Fed cuts rates, you want to be well

out of the stock market. Indeed, falling Fed Funds rates and a steepening yield curve have almost always coincided with U.S. economic recessions. Chart 1: Federal Funds Rates v. Economic Recessions Chart 2: Yield Curve Steepness v. Economic Recessions Currently, the yield curve is steepening and the Fed is likely…

The truth goes through three phases: First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as self-evident.

bantam inc jack duval multi-family office new york manhattan - participant ponzi - jim cramer image

This guy will not save you.

In my first two blog posts in this series, I introduced the idea of the Participant Ponzi and then explained how the U.S. stock markets have been in a Participant Ponzi. In this post, I explain how the U.S. equity Participant Ponzi could end. The End of the Participant Ponzi Funding is

the key to the Participant Ponzi, as it is for all Ponzi schemes.  Like a traditional Ponzi, the Participant Ponzi fails when the sources of funding have become exhausted.  New buyers are not available to take out earlier buyers who want to sell. I believe we have entered…

The Fed has shifted its basilisk gaze from the economic cycle to the credit cycle.

bantam inc jack duval MFO UHNW multi-family office New York City Manhattan - basilisk image

Jerome Powell, speaking Parseltongue.

In my first post, I introduced the concept of the Participant Ponzi.  In this post, I will show how the current Participant Ponzi in the U.S. stock market has come to exist. The Participant Ponzi in Practice In my previous post, I outlined the necessary conditions for a Participant Ponzi to exist.  They include:

One or more sources of consistent, indiscriminate (value indifferent) buyers;Steadily rising prices with no sustained or extreme drawdowns;Supply constraints, and;Rationalization.  All these conditions are currently present in the U.S. equity market. Condition 1: Consistent, Indiscriminate Buyers There can be no debate that there have been multiple…

In a Participant Ponzi, the participants play the role of the “fraudster”.

bantam inc. jack duval MFO UHNW multi-family office manhattan new york - Dallas Cowboys Stadium - participant ponzi

Sports franchises are a good example of a Participant Ponzi.

In a traditional Ponzi scheme, early investors are paid out with later investors investment flows.  As the number of investors grows, it requires more new investors to pay out earlier investors when they liquidate their holdings to realize their (unknowingly fraudulent) gains. In this way, the flows into the investment are

critical to keep the Ponzi going. In the stock market, the flow dynamics are the same as in a traditional Ponzi scheme.  For the sage advice of "buy low, sell high" to work, later investors have to stand ready to take out early investors who are selling. The difference…