People are all up in arms over this Tucker-Putin interview.

I’m all for free journalism but I am also busy this week. For people who have seen it, is it worth spending two hours to watch it or does Tucker get cucked by Putin the whole time?

What still confuses you the most about #Bitcoin?

This week I had the chance to bring my friend nostr:npub1jt0x3vsnqtazzda3ewa8ykdch2t8k566qhrd9vyy0k0ntleu744q8h6q3n on the show. If you don't follow her...you're missing out on interacting with one of the funniest and sweetest people in this community.

Our talk: youtu.be/Okdkdz1iWDM

Susie's story is fascinating. She found great success in the dentistry business with her husband, raised four children, and began learning about/buying #Bitcoin in 2019 thanks to her 17-year-old son. Fast forward just a few years and she ended up selling her home and business and leaving the 'trappings' of a successful fiat life to retire in Hawaii and keep buying #Bitcoin . She also started a medical clinic in El Salvador that is looking for volunteers. Susie, you are an inspiration!

Did y'all see this one…

Guys, help me out here. A dude I’m working with just told me he’s been into Hex for the past couple years. All I know is it’s a Ponzi, but I don’t actually know enough about it to explain what makes this scam different than any other scam.

I’m going to try to get him to download a Lightning wallet today or tomorrow, so stay tuned.

Disinflation is Here, What Could It Mean?

Long form post:

1) Disinflation is in motion. Sufficiently tight Fed policy is doing it's job, as evidenced by 1m & 3m annualized sticky CPI decelerating meaningfully. Focus from market participants should be shifted from inflation to the reality of the tightest monetary policy in fifteen years. (see chat #1)

2) High inflation, particularly in the core basket (ex. food & energy) masked the effects of the fastest tightening cycle in history - a tight labor market fueled the flames for higher wages, second half of the inflationary impulse wasn't energy driven, it was instead fueled by wages in a tight labor market.

3) Real yields (using both trailing 12m inflation and forward expectations) are the highest they have been in decades. This isn't the 1980s, debt levels don't allow for sufficiently positive real yields for long before things start to deteriorate. (chart #1)

4) Take a look at previous Fed tightening & cutting cycles. There is a reason that much of the pain in equity markets is felt after the Fed starts cutting. Is the Fed causing distress by lowering interest rates? Obviously not, they are merely attempting to ease the pain from the second and third order effects of sufficiently tight monetary policy.

Look at when 2y yields topped in previous cycles (2y yields are essentially a proxy for the blended average of the next two years of Fed Funds) - look at what follows for equity markets/the real economy historically (chart #2)

5) Disconnect between bond markets and equity markets is large and growing by the day. It's understandable that equity earnings would be in favor relative to bonds during an inflationary regime due to pricing power advantage of equities, but with disinflation now underway, the growing divergence between equity multiples & real yields can no longer be ignored. This can also be seen through the equity risk premium (equities yields - bond yields, chart #3).

6) In equity markets in particular, the FOMO is real, with the latest round of buyers being lots of long only funds caught offside sitting in cash and plenty of retail from what I can see. 2021 bubble favorites are so back.

7) Looking at what's fueling strong earnings surprises and a resilient U.S. consumer, look partially to excess savings. COVID-era fiscal stimulus remains in the coffers of U.S. consumers, but the distribution of those excess saving is key to monitor. (chart #4)

“We estimate that the top income quintile currently holds just over 80% of excess savings. The 0-20% and 20-40% quintiles have already depleted their excess savings balances, while the 40-60% quintile will likely follow in the next month or so.” - BNP Paribas

With consumer savings running dry for all but the upper class, expect the resilient consumer of late to begin to feel some stress, with student debt obligations restarting at the same time as excess savings running dry, with possible/expected labor market weakness on the horizon as well.

8) Final Point:

I've admittedly been pleasantly surprised by the strength of the U.S. economy and the equity markets in particular so far in 2023.

The recent bull parade, especially following the cool CPI print this week, has been especially interesting to see. Meme stonks are back, Nvidia is the new Tesla, and shorting vol is once again a path to infinite riches, all is right in the world...

In the midst of it all however, I cannot escape the thought that some of the recent celebrations and fist pumping may be a bit premature.

If history is to serve as any sort of precedent, the cycle is far from over, as the fun doesn't even begin until the Fed starts to cut rates...

Midday Mempool

Immediate Fee Rate: 117 sat/vByte

Hour Fee Rate: 106 sat/vByte

Day Fee Rate: 7 sat/vByte

Mempool Accept Rate: 5 sat/vByte

Mempool Count: 162,198

Blocks to Clear: 49

Block Interval: 10:09

Pending Fees: 1,758,224,711 sats