Lawrence McDonald

NY Times Bestselling Author, over 1 million copies sold, now published in 12 languages globally. Long-time @CNBC Contributor, founder of the @BearTrapsReport

[Lawrence McDonald @Convertbond]

Got Hard Assets?

It's Happening - Financial Repression

Breaking - LONG-TERM US YIELDS DROP ON TREASURY PLANS TO BOOST BUYBACKS - Bloomberg

[Lawrence McDonald @Convertbond]

Wall St. Research: I was literally told 20x this month that Mag7 - unchanged since May and up 6% YTD - are impervious to higher interest rates, cost of capital.

[Convexititties, CFA @convexititties]

Don’t overthink it. Hyperscaler and AI CapEx stocks are dumping because the assumption that there will be unlimited cheap debt to fund the AI buildout is proving false.

Only two ways around it:
1) Cut the CapEx
2) Fund it with equity

And both result in lower EPS.

Welcome to your first commodity cycle, Muse bros.

[Lawrence McDonald @Convertbond]

Financial assets vs. Hard Assets

[Anthony Scaramucci @Scaramucci]

My parents paid $16,000 for the house I grew up in. It’s now worth $783,000 on Zillow.

Sounds like they made a fortune, right?

In gold terms, that house cost 450 ounces in 1962. At today’s gold price, it’s worth 250 ounces.

The house actually lost value.

Politicians get away with robbing working class people blind because most people don’t realize their nominal gains aren’t real gains.

They think they’re inflation-adjusted rich, but they’re not.

[Lawrence McDonald @Convertbond]

How can the Fed hike rates? Net interest on the U.S. debt is > $1T, approaching a *record* 20% of every tax dollar collected > defense spending. We’re not borrowing for the future anymore, we have to pay the bill on the past. This isn’t a fiscal problem. It’s a math problem.

[Lawrence McDonald @Convertbond]

*TREASURY 5-YEAR YIELD FALLS 15 BASIS POINTS ON DAY TO 4.80%

*Credit risk surges with a bond rally, hmmmmm.

[Lawrence McDonald @Convertbond]

Contagion - Credit Leads Equities

Junk Bonds (HY OAS)

Oct 20: 332bps
Sept 22: 266bps

*fastest rate of change wider (higher bond yields / lower prices) in that time frame since

Q1 2025 Trade War fears
Q3 2024 Yen Carry Trade unwind fears

[Lawrence McDonald @Convertbond]

Contagion - Credit Leads Equities

Junk Bonds (HY OAS)

Oct 20: 332bps
Sept 22: 266bps

*fastest rate of change wider (higher bond yields / lower prices) in that time frame since

Q1 2025 Trade War fears
Q3 2024 Yen Carry Trade unwind fears

[Lawrence McDonald @Convertbond]

Quick update - a few things you need to know right now.

CIO level Ideas Dinner - Special thanks to Astrid & Gaston! An outstanding venue.

[Lawrence McDonald @Convertbond]

"biggest threat to USD bears right now, is the FREXIT, France has to roll $500B debt annually, well known bear case, the gov proposed $50B in savings in recent weeks, that has already been wiped out by the change in spread (credit risk last 30 days), a lot of their rolling debt is refi-ing near 5% from zero to 2% (bonds issued 2020-2022, interest on the debt is exploding higher. The ECB must stop the bal sheet runoff, threaten the bears with $10B a month of QE to stop this bleeding. SX7E -14% drawdown, new local lows, with the XLF +600bps off the October lows (strong counter trend rally), this is telling" CIO London

[Kieran Goodwin @kieranwgoodwin]

Elon says neoclouds execution risk is very real.

Some neoclouds will prove to be operators and some will be exposed as promoters.

The unsecured bonds have capped upsides and IMO close to zero in a bankruptcy so market is demanding high yields.

Big dispersion = higher yields

[Lawrence McDonald @Convertbond]

@DanielaCambone Looking forward to meeting you my friend. Great pic.

[Lawrence McDonald @Convertbond]

@TylerHardt What would @BillAckman do? Buy, year end tax loss basket.

[Lawrence McDonald @Convertbond]

@trend_bullish Truth!

[Lawrence McDonald @Convertbond]

Brent, days > $100

2026: 115
2008: 162

Grok data

[Lisa Abramowicz @lisaabramowicz1]

Oil traders are increasingly pricing the battle over the Strait of Hormuz as the new normal. Futures contracts for brent crude in December 2027 are now close to $90 a barrel, the highest ever and a sharp departure from even a month ago.

[Lawrence McDonald @Convertbond]

So many lessons in here - A great Christmas gift for that someone special. Pick up these two today on Amazon! Worth more than a few years at Harvard Business School :)

[Lawrence McDonald @Convertbond]

Looking down the road ahead. Special thanks to StoneX for hosting us in Lima, Peru this week. Pension funds, family offices, some of Latam’s best. Gratitude 🙏

[Lawrence McDonald @Convertbond]

Fiscal Overdosing

+

A Multipolar World

+

AI Capex Overdosing

+

Reshoring

=

[Lyn Alden @LynAldenContact]

Not great.

[Lawrence McDonald @Convertbond]

The pushback I get is that it’s tighter on spread, duration risk. Haven’t looked recently, will do so. Appreciate the update.

?

NVDA chips piling up in storage lockers, + CDS a lot wider for NVDA, ORCL, AVGO, +neocloud credit and ipo puke-athon, + USA frontier model growth slowing vs higher ai chip rental rates ??