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@grok @flowersslop @nematophy @nic_carter @tenobrus @grok In this case, Anthropic voluntarily chose not to comply. The aftermath of that is a potential supply chain risk designation; which applies to all enterprises who have contracts with the DoD/federal government, no? That's the willing *legal* decision by both parties?
@flowersslop @nematophy @nic_carter @tenobrus This is the fundamental misunderstanding. What is illegal and unethical are two different things; tracing back to Congressional legislation post 2001. Trying to equate today ethicality to legality is a moot point when it comes to federal powers.
@Azerick54 ELI5
This exchange has me thinking more deeply about the structural resilience of basis trades in the face of what I see as deteriorating funding conditions.
If SOFR–RRP is 30bps and the Treasury–futures basis is tight, yet the trade persists, then something else is absorbing the pressure.
The trader I engaged with here implied that what’s commonly viewed as a hedge (short SOFR futures) may actually be the primary leg. That inversion reframes the entire structure.
So what’s keeping the trade alive?
I am thinking out loud here and would love your feedback:
One possibility is collateral transformation trades. Lower-quality collateral (equities, corporates) is swapped for high-quality collateral (USTs) via intermediaries. This can synthetically lower repo costs or unlock balance sheet capacity. But does this make sense in context of recent JNK ? I don't think so.
Another is sponsored repo, where clients access centrally cleared bilateral repo, via FICC sponsorship. This potentially offers repo rates below market. It’s opaque, but scalable. However its temporary. If funding costs are going up, they will show up here eventually as well. So I'm not sure about this.
Then there’s cross-currency basis arbitrage: borrow JPY ( or EUR) at low repo rates, buy USD Treasuries, hedge FX via basis swaps. This introduces FX and swap curve risk, but can preserve carry if USD repo is stressed. Recent USD/JPY basis widening may be a clue. So far this is my best guess as to what we're seeing, and weaves into other posts about JPY.
If any of these are the "hidden leg", then the risk in basis trades isn’t gone, it’s just migrating to other parts of the market. Which is what one would expect as liquidity tightens.
That said, I would love to hear from folks closer to the machinery.
What are the viable legs keeping basis trades alive?
Are we seeing signs of stress in those domains?
Is the hedge actually the primary?
I really just want to get past the defensiveness and gatekeeping, looking for a straight forward exchange with real insight.
DMs open. Replies welcome. Thank you 🙏
https://t.co/UZm9FUs3Hj
A while ago, probably in 2017, I appeared on Tucker Carlson's Fox show to talk about God knows what. Afterwards a name I barely knew sent me a DM on twitter and told me I did a great job. It was Charlie Kirk, and that moment of kindness began a friendship that lasted until today.
Charlie was fascinated by ideas and always willing to learn and change his mind. Like me, he was skeptical of Donald Trump in 2016. Like me, he came to see President Trump as the only figure capable of moving American politics away from the globalism that had dominated for our entire lives. When others were right, he learned from them. When he was right--as he usually was--he was generous. With Charlie, the attitude was never, "I told you so." But: "welcome."
Charlie was one of the first people I called when I thought about running for senate in early 2021. I was interested but skeptical there was a pathway. We talked through everything, from the strategy to the fundraising to the grassroots of the movement he knew so well. He introduced me to some of the people who would run my campaign and also to Donald Trump Jr. "Like his dad, he's misunderstood. He's extremely smart, and very much on our wavelength." Don took a call from me because Charlie asked him too.
Long before I ever committed (even in my mind) to running, Charlie had me speak to his donors at a TPUSA event. He walked me around the room and introduced me. He gave me honest feedback on my remarks. He had no reason to do this, no expectation that I'd go anywhere. I was polling, at that point, well below 5 percent. He did it because we were friends, and because he was a good man.
When I became the VP nominee--something Charlie advocated for both in public and private--Charlie was there for me. I was so glad to be part of the president's team, but candidly surprised by the effect it had on our family. Our kids, especially our oldest, struggled with the attention and the constant presence of the protective detail. I felt this acute sense of guilt, that I had conscripted my kids into this life without getting their permission. And Charlie was constantly calling and texting, checking on our family and offering guidance and prayers. Some of our most successful events were organized not by the campaign, but by TPUSA. He wasn't just a thinker, he was a doer, turning big ideas into bigger events with thousands of activists. And after every event, he would give me a big hug, tell me he was praying for me, and ask me what he could do. "You focus on Wisconsin," he'd tell me. "Arizona is in the bag." And it was.
Charlie genuinely believed in and loved Jesus Christ. He had a profound faith. We used to argue about Catholicism and Protestantism and who was right about minor doctrinal questions. Because he loved God, he wanted to understand him.
Someone else pointed out that Charlie died doing what he loved: discussing ideas. He would go into these hostile crowds and answer their questions. If it was a friendly crowd, and a progressive asked a question to jeers from the audience, he'd encourage his fans to calm down and let everyone speak. He exemplified a foundational virtue of our Republic: the willingness to speak openly and debate ideas.
Charlie had an uncanny ability to know when to push the envelope and when to be more conventional. I've seen people attack him for years for being wrong on this or that issue publicly, never realizing that privately he was working to broaden the scope of acceptable debate.
He was a great family man. I was talking to President Trump in the Oval Office today, and he said, "I know he was a very good friend of yours." I nodded silently, and President Trump observed that Charlie really loved his family. The president was right. Charlie was so proud of Erika and the two kids. He was so happy to be a father. And he felt such gratitude for having found a woman of God with whom he could build a family.
Charlie Kirk was a true friend. The kind of guy you could say something to and know it would always stay with him. I am on more than a few group chats with Charlie and people he introduced me to over the years. We celebrate weddings and babies, bust each other's chops, and mourn the loss of loved ones. We talk about politics and policy and sports and life. These group chats include people at the very highest level of our government. They trusted him, loved him, and knew he'd always have their backs. And because he was a true friend ,you could instinctively trust the people Charlie introduced you to. So much of the success we've had in this administration traces directly to Charlie's ability to organize and convene. He didn't just help us win in 2024, he helped us staff the entire government.
I was in a meeting in the West Wing when those group chats started lighting up with people telling Charlie they were praying for him. And that's how I learned the news that my friend had been shot. I prayed a lot over the next hour, as first good news and then bad trickled in.
God didn't answer those prayers, and that's OK. He had other plans. And now that Charlie is in heaven, I'll ask him to talk to big man directly on behalf of his family, his friends, and the country he loved so dearly.
You ran a good race, my friend.
We've got it from here.
10y yield telling you that fed cutting here is not a policy mistake.
Historic rule of thumb is that every 25 bp FFR cut lowers:
-2y by 17 bps
-10y by 10 bps
-7 bp bull steepener
Curve is normal now and this move is almost exactly what you would expect imo.
US federal court has officially blocked Trump's "Liberation Day" tariffs from going into effect
@Azerick54 We may see 2nd neg print after all from import front running round 2 🤣
The 90-day rush to import as much as possible began today.
(To get as many goods as possible into the country in case Chinese tariffs go back to 145% after this reprieve ends.)
https://t.co/YuIOn6a5yS
*OPEC+ BRINGS FORWARD CALL TO DISCUSS JUNE OUTPUT PLANS TO MAY 3
Trump: "if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th"
We need to regulate AI immediately
This guy is so out of pocket 🤣
SNL was COOKING last night 😂😂😂
“We’re down 2-0 Suzanne”
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