From Matthew Graham at Mortgage News Daily: Mortgage Rates Start Week at Another Long-Term Low

Mortgage rates have done almost nothing but move lower over the past 4 months. The first Fridays in August and September account for about half of the total drop thanks to weaker results in the jobs report.

Since the September 5th jobs report, rates have held a sideways-to-slightly lower range that's resulted in several additional "lowest since" headlines. There's nothing special about today in that regard. Bonds (which dictate rates) happened to improve, so rates inched to another 11+ month low.

Today's levels aren't appreciably different than last Friday's. Volatility is a bigger risk over the next two days thanks to economic data tomorrow morning and the Fed announcement on Wednesday. [30 year fixed 6.25%]
emphasis added

Tuesday:
• At 8:30 AM ET, Retail sales for August will be released.  The consensus is for a 0.3% increase in retail sales.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for August. The consensus is for no change in Industrial Production, and for Capacity Utilization to decrease to 77.4%.

• At 10:00 AM, The September NAHB homebuilder survey. The consensus is for a reading of 33, up from 32 in August. Any number below 50 indicates that more builders view sales conditions as poor than good.

Microsoft Deal Rewrite Could Save OpenAI $50 Billion Amid Record AI Data Center Spend 

The Information recently reported that ChatGPT-maker OpenAI has informed shareholders that it expects to reduce the percentage of revenue paid to Microsoft from about 20% today to just 8% by 2030. The shift could save the chatbot startup tens of billions of dollars over the next half-decade as it struggles with soaring compute costs and an accelerating buildout of data centers.

Under the proposed terms being discussed in an amended OpenAI–Microsoft collaboration deal, the outlet reports a potential seismic shift in how much OpenAI will pay Microsoft. This change could help offset record-breaking computing costs and save the startup $50 billion:

As part of their original partnership agreement, Microsoft is entitled to 20% of the startup's revenue through 2030. But OpenAI has projected to share roughly 8% of its revenue with commercial partners—namely, Microsoft—by the end of the decade from just under 20% this year. The difference between those figures adds up to over $50 billion in additional revenue OpenAI would keep for itself through 2030, which it needs because it has projected record-breaking expenses for computing power before that year.

The companies are also negotiating what will happen when OpenAI achieves so-called artificial general intelligence, or AI that's as intelligent as a human. The companies' existing contract stipulates that Microsoft will lose exclusive access to OpenAI's technology once the startup demonstrates that its technology can surpass certain financial milestones, but Microsoft has been angling for the AGI clause to be modified or removed from the contract.

The two companies are also negotiating how much OpenAI will spend to rent servers from Microsoft, according to another person briefed on the discussions.

. . . 

It's not clear why OpenAI is projecting sharing less than 20% of its revenue with Microsoft, given the earlier terms, but some OpenAI leaders want Microsoft to exempt future OpenAI products that haven't been released yet from the existing revenue-sharing agreement, such as PhD-level agents that cost $20,000 a month.

. . .

While many aspects of the deal are still up in the air, some aspects of the agreement have been largely worked out, say people close to the discussions. Namely, OpenAI's nonprofit and Microsoft will each get around one-third of the new company, which is currently allowing its employees to sell shares at a $500 billion valuation, one of the people said.

Over the past several weeks, teams from OpenAI and Microsoft have met to negotiate revenue-sharing and other restructuring details. Any cut in OpenAI's payout to Microsoft would offer relief to a startup burning through cash on AI infrastructure like a drunken sailor. For now, the nonprofit-governed company remains a money pit with no end in sight.

Tyler Durden Mon, 09/15/2025 - 15:25

Microsoft Deal Rewrite Could Save OpenAI $50 Billion Amid Record AI Data Center Spend 

The Information recently reported that ChatGPT-maker OpenAI has informed shareholders that it expects to reduce the percentage of revenue paid to Microsoft from about 20% today to just 8% by 2030. The shift could save the chatbot startup tens of billions of dollars over the next half-decade as it struggles with soaring compute costs and an accelerating buildout of data centers.

Under the proposed terms being discussed in an amended OpenAI–Microsoft collaboration deal, the outlet reports a potential seismic shift in how much OpenAI will pay Microsoft. This change could help offset record-breaking computing costs and save the startup $50 billion:

As part of their original partnership agreement, Microsoft is entitled to 20% of the startup's revenue through 2030. But OpenAI has projected to share roughly 8% of its revenue with commercial partners—namely, Microsoft—by the end of the decade from just under 20% this year. The difference between those figures adds up to over $50 billion in additional revenue OpenAI would keep for itself through 2030, which it needs because it has projected record-breaking expenses for computing power before that year.

The companies are also negotiating what will happen when OpenAI achieves so-called artificial general intelligence, or AI that's as intelligent as a human. The companies' existing contract stipulates that Microsoft will lose exclusive access to OpenAI's technology once the startup demonstrates that its technology can surpass certain financial milestones, but Microsoft has been angling for the AGI clause to be modified or removed from the contract.

The two companies are also negotiating how much OpenAI will spend to rent servers from Microsoft, according to another person briefed on the discussions.

. . . 

It's not clear why OpenAI is projecting sharing less than 20% of its revenue with Microsoft, given the earlier terms, but some OpenAI leaders want Microsoft to exempt future OpenAI products that haven't been released yet from the existing revenue-sharing agreement, such as PhD-level agents that cost $20,000 a month.

. . .

While many aspects of the deal are still up in the air, some aspects of the agreement have been largely worked out, say people close to the discussions. Namely, OpenAI's nonprofit and Microsoft will each get around one-third of the new company, which is currently allowing its employees to sell shares at a $500 billion valuation, one of the people said.

Over the past several weeks, teams from OpenAI and Microsoft have met to negotiate revenue-sharing and other restructuring details. Any cut in OpenAI's payout to Microsoft would offer relief to a startup burning through cash on AI infrastructure like a drunken sailor. For now, the nonprofit-governed company remains a money pit with no end in sight.

Tyler Durden Mon, 09/15/2025 - 15:25

It's A Crisis! A Whopping 67% Of American Workers Are Living Paycheck To Paycheck In 2025

Authored by Michael Snyder via TheMostImportantNews.com,

When two-thirds of all the workers in your entire country are just barely scraping by from month to month, you have got a major crisis on your hands. For a long time, our standard of living has been going down and the middle class has been shrinking. But in recent years, those two trends have accelerated. We have now reached a point where it takes 5 million dollars to live the American Dream for a lifetime. Needless to say, the vast majority of the population will never come close to making that sort of money. But most Americans continue to strive to live a middle class lifestyle, and as a result most people are teetering on the brink of financial disaster in this day and age.

According to a survey that was recently conducted by PNC Bank, 67 percent of U.S. workers are now living paycheck to paycheck…

A growing share of U.S. workers are struggling to cover expenses as everyday costs continue to weigh heavily on household budgets, according to new survey findings.

PNC Bank’s annual Financial Wellness in the Workplace Report shows that 67 percent of workers now say they are living paycheck to paycheck, up from 63 percent in 2024.

The report surveyed 1,000 U.S. workers aged 21 to 69 who work full time at companies with more than 100 workers.

There are two very important points that I want to make about this survey.

First of all, it only covers people that actually have a job.

There are vast numbers of other Americans that are not employed and that are deeply struggling right now.

So when you take that into account, this survey is even more shocking.

Secondly, it is clear that we are rapidly moving in the wrong direction.

It was bad enough that 63 percent of U.S. workers were living paycheck to paycheck last year, but now we are at 67 percent.

A four percent jump in a single year is a very troubling sign.

The primary reason why so many employed Americans are struggling financially is due to the rapidly rising cost of living.

For example, the price of coffee has risen by almost 21 percent over the past 12 months…

Coffee drinkers are in for a jolt long before their first sip.

Retail coffee prices in the United States in August jumped nearly 21% compared to the same month last year — the largest annual jump since October 1997, according to the latest Consumer Price Index, released Thursday. On a monthly basis, coffee prices rose 4%, the most in 14 years.

The vast majority of the coffee that we drink is imported, and Brazil is the number one source…

Coffee, for instance, is largely imported because there are only a handful of places in the U.S. where the beans can be grown, such as Hawaii and Puerto Rico. About 80% of unroasted coffee imports are sourced from Latin America, primarily from Brazil, according to the U.S. Department of Agriculture.

Products from Brazil that are shipped to the U.S. now face a 50% tariff, according to the White House.

If you drink coffee, you will want to brace yourself, because prices are only going to go higher in the months ahead.

Of course just about everything has become significantly more expensive, and this is pushing many consumers over the edge.

I recently wrote about how subprime auto loan delinquencies in the U.S. have risen to an all-time high, and now we have learned that one of the largest subprime auto loan lenders in the U.S. has filed for Chapter 7 bankruptcy…

A company that provides auto loans to families with poor or no credit has filed for bankruptcy.

Tricolor Holdings, a Dallas-based car fixing and credit company, has filed for Chapter 7 — or liquidation — bankruptcy. The filing typically means the company will quickly go out of business.

The company’s demise is a warning sign for the US economy: Americans are racking up a huge amount of debt to keep their cars, while a record amount can’t keep up with the payments.

This is just the beginning.

There will be more failures.

At this stage, most of us can feel the change that is in the air.  In fact, it is being reported that consumer confidence “dropped sharply in September”…

Consumer confidence dropped sharply in September to its lowest level in four months, according to preliminary data released Friday, as Americans expressed growing anxiety about job security and the persistence of high prices.

The University of Michigan’s closely watched index of consumer sentiment fell to 55.4 in September from 58.2 in August, missing economists’ expectations and reflecting what survey director Joanne Hsu described as “multiple vulnerabilities in the economy.”

And the confidence that Americans have in being able to find a new job has fallen to the lowest level ever recorded…

In the latest sign of trouble for the U.S. labor market, confidence in the ability to move from one job to another has hit a record low, according to a New York Federal Reserve survey released Monday.

Respondents to the central bank’s monthly Survey of Consumer Expectations for August indicated a 44.9% probability of finding another job after losing their current one. The reading tumbled 5.8 percentage points from the prior month and is the lowest in the survey’s history dating back to June 2013.

If you are thriving in this extremely difficult economic environment, good for you.

For most of the population, things are very painful at this moment.

The ranks of the middle class are steadily thinning out, poverty is growing all around us, and more Americans are homeless than ever before in our entire history.

In Los Angeles, one homeless encampment has become so enormous that it is now being described as a full-blown “city”…

A sprawling homeless encampment in Los Angeles is drawing ire from neighbors who say the makeshift shelter has grown into a full “city” of its own, complete with working electricity and a recreational area featuring a tennis court, garden and barbecue pit.

The encampment sits on a vacant Koreatown lot surrounded by apartment buildings and other structures, according to ABC 7.

“The reason why people are sleeping here is because you leaders are sleeping on not taking initiative and action to clean this place up,” neighborhood resident Daniel King told the station.

Most Americans are just a few bad breaks from losing everything.

In fact, there are already millions of Americans that have lost everything, and those that are on the bottom levels of the economic pyramid are becoming increasingly desperate.

When things really start hitting the fan in this country, vast numbers of extremely desperate people will cause tremendous chaos throughout our society.

Things didn’t have to turn out this way.

If we would have made much different decisions over the past 50 or 60 years, we would have gotten much different results.

But we just kept doing things the wrong way, and now we shall reap what we have sown.

*  *  *

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Mon, 09/15/2025 - 15:05

It's A Crisis! A Whopping 67% Of American Workers Are Living Paycheck To Paycheck In 2025

Authored by Michael Snyder via TheMostImportantNews.com,

When two-thirds of all the workers in your entire country are just barely scraping by from month to month, you have got a major crisis on your hands. For a long time, our standard of living has been going down and the middle class has been shrinking. But in recent years, those two trends have accelerated. We have now reached a point where it takes 5 million dollars to live the American Dream for a lifetime. Needless to say, the vast majority of the population will never come close to making that sort of money. But most Americans continue to strive to live a middle class lifestyle, and as a result most people are teetering on the brink of financial disaster in this day and age.

According to a survey that was recently conducted by PNC Bank, 67 percent of U.S. workers are now living paycheck to paycheck…

A growing share of U.S. workers are struggling to cover expenses as everyday costs continue to weigh heavily on household budgets, according to new survey findings.

PNC Bank’s annual Financial Wellness in the Workplace Report shows that 67 percent of workers now say they are living paycheck to paycheck, up from 63 percent in 2024.

The report surveyed 1,000 U.S. workers aged 21 to 69 who work full time at companies with more than 100 workers.

There are two very important points that I want to make about this survey.

First of all, it only covers people that actually have a job.

There are vast numbers of other Americans that are not employed and that are deeply struggling right now.

So when you take that into account, this survey is even more shocking.

Secondly, it is clear that we are rapidly moving in the wrong direction.

It was bad enough that 63 percent of U.S. workers were living paycheck to paycheck last year, but now we are at 67 percent.

A four percent jump in a single year is a very troubling sign.

The primary reason why so many employed Americans are struggling financially is due to the rapidly rising cost of living.

For example, the price of coffee has risen by almost 21 percent over the past 12 months…

Coffee drinkers are in for a jolt long before their first sip.

Retail coffee prices in the United States in August jumped nearly 21% compared to the same month last year — the largest annual jump since October 1997, according to the latest Consumer Price Index, released Thursday. On a monthly basis, coffee prices rose 4%, the most in 14 years.

The vast majority of the coffee that we drink is imported, and Brazil is the number one source…

Coffee, for instance, is largely imported because there are only a handful of places in the U.S. where the beans can be grown, such as Hawaii and Puerto Rico. About 80% of unroasted coffee imports are sourced from Latin America, primarily from Brazil, according to the U.S. Department of Agriculture.

Products from Brazil that are shipped to the U.S. now face a 50% tariff, according to the White House.

If you drink coffee, you will want to brace yourself, because prices are only going to go higher in the months ahead.

Of course just about everything has become significantly more expensive, and this is pushing many consumers over the edge.

I recently wrote about how subprime auto loan delinquencies in the U.S. have risen to an all-time high, and now we have learned that one of the largest subprime auto loan lenders in the U.S. has filed for Chapter 7 bankruptcy…

A company that provides auto loans to families with poor or no credit has filed for bankruptcy.

Tricolor Holdings, a Dallas-based car fixing and credit company, has filed for Chapter 7 — or liquidation — bankruptcy. The filing typically means the company will quickly go out of business.

The company’s demise is a warning sign for the US economy: Americans are racking up a huge amount of debt to keep their cars, while a record amount can’t keep up with the payments.

This is just the beginning.

There will be more failures.

At this stage, most of us can feel the change that is in the air.  In fact, it is being reported that consumer confidence “dropped sharply in September”…

Consumer confidence dropped sharply in September to its lowest level in four months, according to preliminary data released Friday, as Americans expressed growing anxiety about job security and the persistence of high prices.

The University of Michigan’s closely watched index of consumer sentiment fell to 55.4 in September from 58.2 in August, missing economists’ expectations and reflecting what survey director Joanne Hsu described as “multiple vulnerabilities in the economy.”

And the confidence that Americans have in being able to find a new job has fallen to the lowest level ever recorded…

In the latest sign of trouble for the U.S. labor market, confidence in the ability to move from one job to another has hit a record low, according to a New York Federal Reserve survey released Monday.

Respondents to the central bank’s monthly Survey of Consumer Expectations for August indicated a 44.9% probability of finding another job after losing their current one. The reading tumbled 5.8 percentage points from the prior month and is the lowest in the survey’s history dating back to June 2013.

If you are thriving in this extremely difficult economic environment, good for you.

For most of the population, things are very painful at this moment.

The ranks of the middle class are steadily thinning out, poverty is growing all around us, and more Americans are homeless than ever before in our entire history.

In Los Angeles, one homeless encampment has become so enormous that it is now being described as a full-blown “city”…

A sprawling homeless encampment in Los Angeles is drawing ire from neighbors who say the makeshift shelter has grown into a full “city” of its own, complete with working electricity and a recreational area featuring a tennis court, garden and barbecue pit.

The encampment sits on a vacant Koreatown lot surrounded by apartment buildings and other structures, according to ABC 7.

“The reason why people are sleeping here is because you leaders are sleeping on not taking initiative and action to clean this place up,” neighborhood resident Daniel King told the station.

Most Americans are just a few bad breaks from losing everything.

In fact, there are already millions of Americans that have lost everything, and those that are on the bottom levels of the economic pyramid are becoming increasingly desperate.

When things really start hitting the fan in this country, vast numbers of extremely desperate people will cause tremendous chaos throughout our society.

Things didn’t have to turn out this way.

If we would have made much different decisions over the past 50 or 60 years, we would have gotten much different results.

But we just kept doing things the wrong way, and now we shall reap what we have sown.

*  *  *

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Mon, 09/15/2025 - 15:05

With unemployment increasing, but not quite recessionary, I'm reminded of a post I wrote in May 2011: Employment: A dirty little secret

[I]t really isn't much of a secret that Wall Street and corporate America like the unemployment rate to be a little high. But it is "dirty" in the sense that it is unspoken. Higher unemployment keeps wage growth down, and helps with margins and earnings - and higher unemployment also keeps the Fed on the sidelines. Yes, corporations like to see job growth, so people have enough confidence to spend (and they can have a few more customers). And they definitely don't want to see Depression era unemployment - but a slowly declining unemployment rate (even at 9%) with some job growth is considered OK.

And from others, like Kash Mansori, also in 2011: Why a Bad Job Market is Good News for Some

[T]his opens up an interesting line of reasoning, one that is certainly not new but which this data reminds us of. If a bad labor market means that workers get a smaller share of the productivity they bring to their employers, then the owners of companies will have a strong preference for a weak labor market. Firms don't like recessions, of course -- it's hard to make money when your sales are falling. But companies do enjoy the way that a very slow recovery in the job market can allow them to keep wages down, and thus keep a larger share of the output of their workers for themselves.

And from Paul Krugman in 2013: The Plight of the Employed

And may I suggest that employers, although they’ll never say so in public, like this situation? That is, there’s a significant upside to them from the still-weak economy. I don’t think I’d go so far as to say that there’s a deliberate effort to keep the economy weak; but corporate America certainly isn’t feeling much pain, and the plight of workers is actually a plus from their point of view.

Back then we had high, but a slowly declining unemployment rate. Now we have a low but slowly increasing unemployment rate. This is bad news for those losing their jobs, or those looking for jobs, or on the cusp of becoming unemployed. But this is a positive for corporate America (as long as we avoid a recession).

Dollar Debates & Gold's Winning End-Game

Authored by Matthew Piepenburg via VonGreyerz.gold,

Whatever one thinks of the United States (economically, morally, militarily or politically), we can all agree that its dollar exerts tremendous influence (and controversy) over a rapidly changing world.

The Dollar’s Fate = Our Fate

The “greenback” is much more than the subject of what often feels like overly theoretical debates on its (near and longer-term) direction in both absolute terms (i.e., inherent purchasing power) or in terms of its relative strength to other currencies (i.e., as measured by the DXY).

As the world’s reserve currency, in which:

1) 58% of global FX reserves are held, 2) 80% of global trade finance is conducted, 3) $13T in global debt is denominated, 4) over $90T in FX swaps are traded and 5) the vast majority of US income-earners measure their wealth – the strength, direction and fate of this currency is of massive relevance to all of us – both within and outside of the United States.

A rising or falling dollar, for example, has a direct and immediate impact on stock market direction, bond market volatility, global trade shifts, local currency behaviors, tariff efficiency, central bank policies, alternative currency momentum, war motives and, of course, precious metal price action in the backdrop of gold’s rising reserve asset status.

Or stated even more simply: The fate of the USD matters because all of our fates – and not just the gold price – are tied to it.

More Than a “Debate”

Thus, when asking whether this USD will strengthen or weaken, there is far more at stake than just “winning a debate.”

What is of greater significance is understanding the moving parts of this admittedly complex issue before declaring a conclusion.

To help gain this understanding, we are compelled to respect both arguments – i.e. those who see a dollar’s “last dance” to record highs, and those who think the dollar’s dance (and hegemony) has already come to a historical turning point downwards, though, never, of course, in a perfectly straight line.

Lots of Smart

Toward this end, I have enjoyed unpacking this topic (debate?) with very smart leaders of the “strong dollar camp,” including a November 2023 conversation with the Milkshake Theory’s very own (and very smart) Brent Johnson.

I argued then for a secularly declining dollar; Brent saw a stronger dollar ahead.

At that time, the DXY was near 107. Two years later, the DXY sits today at 97.

Does that mean “I won” the dollar debate?

Hardly.

Start at the End

The dollar, like history, can be full of short-term surprises/movements despite a mathematically confirmed end-game, one in which all paper money, as Voltaire quipped, inevitably reverts to the zero-value of the paper it’s printed on…

But imagining a dying dollar (which has already lost 99% of its purchasing power against a milligram of gold since 1971) is almost impossible to do, especially a dollar as critical to global trade and finance as the world’s reserve currency.

And so, this critical debate, like time and he dollar itself, marches forward.

My Latest Debate

At the end of last month, for example, Francis Hunt and myself enjoyed what could be described as a “spirited exchange” with Henrik Zeberg, who, like Brent Johnson, makes a credible case for at least one more great DXY spike in the USD’s otherwise unlovable trajectory and profile.

Zeberg, like Johnson, legitimately reminds us of critical arguments in favor of a rising DXY (i.e., a USD growing relatively stronger than other key currencies), which I am unfairly simplifying here for reasons of word-count.

The crux, however, of the strong-dollar case hinges upon the fact that trillions (over $13T) in USD-denominated debt trading outside the US (i.e. “Eurodollar debt”) and over $90T in USD-based derivative transactions are perma-thirsty (and straw-sucking) for ever-more USDs to keep their credit and options markets forever dollar-greased and operative.

In times of crisis, this “thirst” for more USDs only increases in a backdrop for which James Rickards has warned there “won’t be enough dollars”, thereby sending the dollar relatively higher as: 1) demand for USDs to cover dollar-denominated (Eurodollar) debt skyrockets, and 2) global investors flock to the relatively safe-haven of the USD and UST.

The 2008 Dollar Template

Zeberg uses the Great Financial Crisis of 2008 as a critical template which confirms the foregoing argument.

During the GFC, for example, massive demand for USDs caused a 20% spike in the DXY and a short, but dramatic, fall in the gold price.

For Zeberg, the past is prologue.

Soon, likely in 2026, his model sees a massive and deflationary “uh-oh” moment in what we all agree is a grotesquely over-valued S&P.

Fair enough.

In the wake of such a crisis, the otherwise unloved and debased USD will see what Zeberg predicts as its “last dance,” evidenced by a spiking DXY and gold dramatically retracing, as we all saw in the 08 crisis.

There is much to consider in this considerably logical argument.

Zeberg, like Brent Johnson, for example, argues (as do I and Francis Hunt) that we are marching toward a sovereign debt crisis/cliff.

In the chaos of such a crisis, Johnson (like Zeberg) argues that more USD liquidity will be the automatic re-cap model familiar to most of the world.

That is, the US will effectively have the biggest “straw” to draw capital in from that world, thereby sending the dollar up relative to other currencies.

In short, and despite its obvious flaws, the USD is presented as “the best horse in the glue factory.”

In times of crisis, the thirst for this key currency will spike. (Even when USTs lost their AAA rating, for example, investor money still flocked to USD.)

These are valid points, indeed.  

More Reasons for the Dollar’s Last Dance

Johnson also reminds that in prior moments of a world on the edge of a credit crisis (such as the higher-for-longer, Powell-induced UST crisis, or the BoE-induced Gilt crisis of 2022), the USD reached a 30-year high.

This, alas, could easily happen again. In fact, for Johnson and Zeberg, it could be even more dramatic going forward.

Why?

Less Cooperative Swap Lines?

In such global inflection points (i.e., liquidity crises thirsty for dollars), the currency swap lines between global central banks traditionally helped buy time to keep USD-liquidity flowing without sending the DXY dangerously too high (because when the DXY rips, just about everything else – from local currencies to tech stocks – tanks).

But today, in a Trump world where global cooperation (and hence central bank currency swaps) could take a second seat to national protectionism, Johnson rightfully wonders if the DXY could spike dramatically higher in such a less-coordinated/cooperative backdrop.

Carry Trade Failures?

There is also the greater risk of carry-trade failures, which could limit liquidity in the next debt crisis and thus send the dollar much higher.

We all saw, for example, how the once reliably weaker/cheaper Yen, traditionally used to create USD liquidity via the arbitraged “Yen Carry Trade,” unwound last August, sending the USD higher.

For Johnson, a simultaneously strengthening Yen and USD could add fire to a percolating global liquidity nightmare in which the DXY could easily hit 150.

This would cripple local currencies, threaten credit markets (via rising rates), crush any chance of a US export revival and potentially trigger an equity market sell-off.

Again: When the DXY rises, just about everything but the dollar falls…

For Zeberg, this includes gold.

A Great Gold Fall?

Although Zeberg, like Johnson and myself, are ultimately bullish on gold, he sees a 2008-like pullback in gold once the last DXY dance/spike takes stride.

Thereafter, and once the Fed resorts to extreme QE to weaken the dollar and monetize otherwise openly unpayable debt levels, Zeberg sees gold racing to astronomical highs as the dollar comes down from its last dance.

These, again, are admittedly simplistic summaries of the strong-dollar case.

An Alternative Take on the Dollar

Which brings me to my counter-argument, or at least counterpoints.

Ultimately, I don’t see a dramatically spiking DXY, a temporarily tanking gold price, nor even a dying dollar.

Instead, I see a dollar being slowly but deliberately re-priced (rather than immediately de-levered) in a backdrop where its role relative to other currencies maintains some supremacy but far less hegemony.

In other words, the dollar won’t vanish, but its historical respect, use and influence will continue to weaken in a world openly moving away from it.

No Rubel, Yuan, Euro or Yen, however, is going to replace the otherwise unlovable USD anytime soon. These currencies don’t want or need to seek global reserve status.

Instead, they are openly reaching trade deals in regional currencies which are net-settled in gold, not USDs or USTs.

This is also why I do NOT see a dramatic or lasting pullback in the gold price during the next deflationary credit-crisis/S&P implosion.

Gold’s Role Has Changed

The current stock market bubble, credit crisis and gold backdrop are objectively different from the 2008 template/example cited above.

Stated more simply, gold won’t act like it did in 2008 (i.e. retrace by > 30%), because the gold of 2025 and beyond operates in a dramatically different landscape and role today than yesterday.

The strong dollar case underestimates the open de-dollarization movement, which came in the wake of the 2022 weaponization of the greenback; it also assumes smooth and continuous dollar hegemony in a new “Game of Thrones” setting by which the dollar is not the same dragon it used to be…

With those broad statements thus made, let’s dig a bit deeper to make this case.

The US Doesn’t Want a Stronger USD

First, and as I argued with Brent Johnson back in 2023, one of the primary arguments against a dangerously spiking DXY/USD is the simple fact that the US doesn’t want, nor can it afford, a DXY ripping North.

The aim of the US, both for trade deficits and debt monetization, is a relatively (as well as absolutely) weaker (not stronger) USD.

Of course, this alone is no defense. Not wanting a stronger USD doesn’t mean it can’t happen.

But should the DXY start climbing into the 130’s or higher, there would be an immediate, and yes, desperate, series of foreseeable and unforeseeable (and rocky rather than smooth) policy moves (with admittedly less effective “tools”) to slow any further spike.

This is because a dangerously rising DXY destabilizes the world.

Such desperate “reactions” would and could take any number of forms, from a sudden Plazza Accord 2.0 or Bretton Woods 2.0 event to a global scrambling of central bank demands for emergency swap lines, YCC and extreme Fed QE to the moon – all in order to prevent a rising USD from crushing local and global debt markets, spiking US trade deficits and gyrating global equity markets.

Any such messy “solutions” could protect the USD’s relative strength from spiking the DXY, but naturally and simultaneously destroy its absolute purchasing power, which is now beyond current or even future dispute.

This is because the US, at current and historically unprecedented debt levels, is out of currency options: It’s now inflate or die.

In other words, the FED and US Treasury will continue to debase (weaken) the USD and run negative real rates to “save” its debt market by further destroying its paper dollar.

This template of currency destruction in a debt crisis is as old and predictable as history itself.

It is thus critical to understand that even a rising DXY does not protect the dollar from being inherently debased.

Gold Rising in the Next Crisis

As for gold retracing ala 2008 in the next deflationary credit implosion, Zeberg’s argument assumes that the world still sees gold as a speculation or liquidity asset (as it did then) rather than as a strategic global reserve asset (as it does now).

The evidence of gold replacing the UST and USD as a far greater (and strategic) store of value since 2008 is no longer a conspiracy theory or “gold bug spin.”

Instead, the evidence of gold’s rising status and role is literally all around us – from: 1) the rise of gold as a net-settlement asset within the ever de-dollarizing BRICS+ coalition, 2) the weakening petrodollar and rising Yuan/Russia oil trade, 3) the IMF’s confession of gold being critical to any reset to come, 4) the 3X expansion of central bank gold stacking since the US weaponized the USD in 2022, and 5) the BIS openly granting gold aTier-1 status to 6) the embarrassing repatriation of physical gold off the London and New York exchanges.

In other words, and contrary to Zeberg’s argument of the USD and UST as a “safe-haven” in the next deflationary crisis, I (and Francis Hunt) would argue the very opposite.

Why, after all, would the world seek a “safe-haven” in a UST (the worst performing asset in the last 5 years with a 50% loss of value) and hence USD, when gold, the new Tier-1 asset, is an objectively, monetarily and mathematically superior store of value?

Rather than dump gold in the next “08 moment,” the world will instead be racing toward it.

A Mug’s Game, A Critical Asset

Again, a deeper dive into the nuances of these otherwise complex yet broadly stroked arguments is not my aim here.

Predicting precise scenarios and DXY directional percentages is ultimately a mug’s game in a sea of volatility.

Nevertheless, tracking the empirical decline of the USD’s absolute purchasing power is no debate, but an empirical fact.

As for the USD’s relative moves in the DXY and against other currencies, that is admittedly, and in all fairness to Brent Johnson, harder to “win” or predict in the near-term.

There is much to his and Zeberg’s arguments, though Johnson, like me, does not believe that the gold price will fall even if the DXY should spike.

Gold and the USD can rise (and have risen) together.

And to repeat: Even a rising DXY does not mean the USD is protected from a debasement of its absolute purchasing power.

This is why gold will outperform rather than retrace in the next crisis, regardless of the DXY’s relativity theory…

It is equally worth noting that despite the necessary and important differences in opinions as to the great dollar/DXY debate outlined above, all of us – Hunt, Zeberg and Johnson – do agree on this: In the end, gold will continue to be an essential, if not THE essential, asset in the years ahead.

Regardless, then, of the DXY’s debated direction, gold’s finest hours are yet to come.

Tyler Durden Mon, 09/15/2025 - 14:25

Dollar Debates & Gold's Winning End-Game

Authored by Matthew Piepenburg via VonGreyerz.gold,

Whatever one thinks of the United States (economically, morally, militarily or politically), we can all agree that its dollar exerts tremendous influence (and controversy) over a rapidly changing world.

The Dollar’s Fate = Our Fate

The “greenback” is much more than the subject of what often feels like overly theoretical debates on its (near and longer-term) direction in both absolute terms (i.e., inherent purchasing power) or in terms of its relative strength to other currencies (i.e., as measured by the DXY).

As the world’s reserve currency, in which:

1) 58% of global FX reserves are held, 2) 80% of global trade finance is conducted, 3) $13T in global debt is denominated, 4) over $90T in FX swaps are traded and 5) the vast majority of US income-earners measure their wealth – the strength, direction and fate of this currency is of massive relevance to all of us – both within and outside of the United States.

A rising or falling dollar, for example, has a direct and immediate impact on stock market direction, bond market volatility, global trade shifts, local currency behaviors, tariff efficiency, central bank policies, alternative currency momentum, war motives and, of course, precious metal price action in the backdrop of gold’s rising reserve asset status.

Or stated even more simply: The fate of the USD matters because all of our fates – and not just the gold price – are tied to it.

More Than a “Debate”

Thus, when asking whether this USD will strengthen or weaken, there is far more at stake than just “winning a debate.”

What is of greater significance is understanding the moving parts of this admittedly complex issue before declaring a conclusion.

To help gain this understanding, we are compelled to respect both arguments – i.e. those who see a dollar’s “last dance” to record highs, and those who think the dollar’s dance (and hegemony) has already come to a historical turning point downwards, though, never, of course, in a perfectly straight line.

Lots of Smart

Toward this end, I have enjoyed unpacking this topic (debate?) with very smart leaders of the “strong dollar camp,” including a November 2023 conversation with the Milkshake Theory’s very own (and very smart) Brent Johnson.

I argued then for a secularly declining dollar; Brent saw a stronger dollar ahead.

At that time, the DXY was near 107. Two years later, the DXY sits today at 97.

Does that mean “I won” the dollar debate?

Hardly.

Start at the End

The dollar, like history, can be full of short-term surprises/movements despite a mathematically confirmed end-game, one in which all paper money, as Voltaire quipped, inevitably reverts to the zero-value of the paper it’s printed on…

But imagining a dying dollar (which has already lost 99% of its purchasing power against a milligram of gold since 1971) is almost impossible to do, especially a dollar as critical to global trade and finance as the world’s reserve currency.

And so, this critical debate, like time and he dollar itself, marches forward.

My Latest Debate

At the end of last month, for example, Francis Hunt and myself enjoyed what could be described as a “spirited exchange” with Henrik Zeberg, who, like Brent Johnson, makes a credible case for at least one more great DXY spike in the USD’s otherwise unlovable trajectory and profile.

Zeberg, like Johnson, legitimately reminds us of critical arguments in favor of a rising DXY (i.e., a USD growing relatively stronger than other key currencies), which I am unfairly simplifying here for reasons of word-count.

The crux, however, of the strong-dollar case hinges upon the fact that trillions (over $13T) in USD-denominated debt trading outside the US (i.e. “Eurodollar debt”) and over $90T in USD-based derivative transactions are perma-thirsty (and straw-sucking) for ever-more USDs to keep their credit and options markets forever dollar-greased and operative.

In times of crisis, this “thirst” for more USDs only increases in a backdrop for which James Rickards has warned there “won’t be enough dollars”, thereby sending the dollar relatively higher as: 1) demand for USDs to cover dollar-denominated (Eurodollar) debt skyrockets, and 2) global investors flock to the relatively safe-haven of the USD and UST.

The 2008 Dollar Template

Zeberg uses the Great Financial Crisis of 2008 as a critical template which confirms the foregoing argument.

During the GFC, for example, massive demand for USDs caused a 20% spike in the DXY and a short, but dramatic, fall in the gold price.

For Zeberg, the past is prologue.

Soon, likely in 2026, his model sees a massive and deflationary “uh-oh” moment in what we all agree is a grotesquely over-valued S&P.

Fair enough.

In the wake of such a crisis, the otherwise unloved and debased USD will see what Zeberg predicts as its “last dance,” evidenced by a spiking DXY and gold dramatically retracing, as we all saw in the 08 crisis.

There is much to consider in this considerably logical argument.

Zeberg, like Brent Johnson, for example, argues (as do I and Francis Hunt) that we are marching toward a sovereign debt crisis/cliff.

In the chaos of such a crisis, Johnson (like Zeberg) argues that more USD liquidity will be the automatic re-cap model familiar to most of the world.

That is, the US will effectively have the biggest “straw” to draw capital in from that world, thereby sending the dollar up relative to other currencies.

In short, and despite its obvious flaws, the USD is presented as “the best horse in the glue factory.”

In times of crisis, the thirst for this key currency will spike. (Even when USTs lost their AAA rating, for example, investor money still flocked to USD.)

These are valid points, indeed.  

More Reasons for the Dollar’s Last Dance

Johnson also reminds that in prior moments of a world on the edge of a credit crisis (such as the higher-for-longer, Powell-induced UST crisis, or the BoE-induced Gilt crisis of 2022), the USD reached a 30-year high.

This, alas, could easily happen again. In fact, for Johnson and Zeberg, it could be even more dramatic going forward.

Why?

Less Cooperative Swap Lines?

In such global inflection points (i.e., liquidity crises thirsty for dollars), the currency swap lines between global central banks traditionally helped buy time to keep USD-liquidity flowing without sending the DXY dangerously too high (because when the DXY rips, just about everything else – from local currencies to tech stocks – tanks).

But today, in a Trump world where global cooperation (and hence central bank currency swaps) could take a second seat to national protectionism, Johnson rightfully wonders if the DXY could spike dramatically higher in such a less-coordinated/cooperative backdrop.

Carry Trade Failures?

There is also the greater risk of carry-trade failures, which could limit liquidity in the next debt crisis and thus send the dollar much higher.

We all saw, for example, how the once reliably weaker/cheaper Yen, traditionally used to create USD liquidity via the arbitraged “Yen Carry Trade,” unwound last August, sending the USD higher.

For Johnson, a simultaneously strengthening Yen and USD could add fire to a percolating global liquidity nightmare in which the DXY could easily hit 150.

This would cripple local currencies, threaten credit markets (via rising rates), crush any chance of a US export revival and potentially trigger an equity market sell-off.

Again: When the DXY rises, just about everything but the dollar falls…

For Zeberg, this includes gold.

A Great Gold Fall?

Although Zeberg, like Johnson and myself, are ultimately bullish on gold, he sees a 2008-like pullback in gold once the last DXY dance/spike takes stride.

Thereafter, and once the Fed resorts to extreme QE to weaken the dollar and monetize otherwise openly unpayable debt levels, Zeberg sees gold racing to astronomical highs as the dollar comes down from its last dance.

These, again, are admittedly simplistic summaries of the strong-dollar case.

An Alternative Take on the Dollar

Which brings me to my counter-argument, or at least counterpoints.

Ultimately, I don’t see a dramatically spiking DXY, a temporarily tanking gold price, nor even a dying dollar.

Instead, I see a dollar being slowly but deliberately re-priced (rather than immediately de-levered) in a backdrop where its role relative to other currencies maintains some supremacy but far less hegemony.

In other words, the dollar won’t vanish, but its historical respect, use and influence will continue to weaken in a world openly moving away from it.

No Rubel, Yuan, Euro or Yen, however, is going to replace the otherwise unlovable USD anytime soon. These currencies don’t want or need to seek global reserve status.

Instead, they are openly reaching trade deals in regional currencies which are net-settled in gold, not USDs or USTs.

This is also why I do NOT see a dramatic or lasting pullback in the gold price during the next deflationary credit-crisis/S&P implosion.

Gold’s Role Has Changed

The current stock market bubble, credit crisis and gold backdrop are objectively different from the 2008 template/example cited above.

Stated more simply, gold won’t act like it did in 2008 (i.e. retrace by > 30%), because the gold of 2025 and beyond operates in a dramatically different landscape and role today than yesterday.

The strong dollar case underestimates the open de-dollarization movement, which came in the wake of the 2022 weaponization of the greenback; it also assumes smooth and continuous dollar hegemony in a new “Game of Thrones” setting by which the dollar is not the same dragon it used to be…

With those broad statements thus made, let’s dig a bit deeper to make this case.

The US Doesn’t Want a Stronger USD

First, and as I argued with Brent Johnson back in 2023, one of the primary arguments against a dangerously spiking DXY/USD is the simple fact that the US doesn’t want, nor can it afford, a DXY ripping North.

The aim of the US, both for trade deficits and debt monetization, is a relatively (as well as absolutely) weaker (not stronger) USD.

Of course, this alone is no defense. Not wanting a stronger USD doesn’t mean it can’t happen.

But should the DXY start climbing into the 130’s or higher, there would be an immediate, and yes, desperate, series of foreseeable and unforeseeable (and rocky rather than smooth) policy moves (with admittedly less effective “tools”) to slow any further spike.

This is because a dangerously rising DXY destabilizes the world.

Such desperate “reactions” would and could take any number of forms, from a sudden Plazza Accord 2.0 or Bretton Woods 2.0 event to a global scrambling of central bank demands for emergency swap lines, YCC and extreme Fed QE to the moon – all in order to prevent a rising USD from crushing local and global debt markets, spiking US trade deficits and gyrating global equity markets.

Any such messy “solutions” could protect the USD’s relative strength from spiking the DXY, but naturally and simultaneously destroy its absolute purchasing power, which is now beyond current or even future dispute.

This is because the US, at current and historically unprecedented debt levels, is out of currency options: It’s now inflate or die.

In other words, the FED and US Treasury will continue to debase (weaken) the USD and run negative real rates to “save” its debt market by further destroying its paper dollar.

This template of currency destruction in a debt crisis is as old and predictable as history itself.

It is thus critical to understand that even a rising DXY does not protect the dollar from being inherently debased.

Gold Rising in the Next Crisis

As for gold retracing ala 2008 in the next deflationary credit implosion, Zeberg’s argument assumes that the world still sees gold as a speculation or liquidity asset (as it did then) rather than as a strategic global reserve asset (as it does now).

The evidence of gold replacing the UST and USD as a far greater (and strategic) store of value since 2008 is no longer a conspiracy theory or “gold bug spin.”

Instead, the evidence of gold’s rising status and role is literally all around us – from: 1) the rise of gold as a net-settlement asset within the ever de-dollarizing BRICS+ coalition, 2) the weakening petrodollar and rising Yuan/Russia oil trade, 3) the IMF’s confession of gold being critical to any reset to come, 4) the 3X expansion of central bank gold stacking since the US weaponized the USD in 2022, and 5) the BIS openly granting gold aTier-1 status to 6) the embarrassing repatriation of physical gold off the London and New York exchanges.

In other words, and contrary to Zeberg’s argument of the USD and UST as a “safe-haven” in the next deflationary crisis, I (and Francis Hunt) would argue the very opposite.

Why, after all, would the world seek a “safe-haven” in a UST (the worst performing asset in the last 5 years with a 50% loss of value) and hence USD, when gold, the new Tier-1 asset, is an objectively, monetarily and mathematically superior store of value?

Rather than dump gold in the next “08 moment,” the world will instead be racing toward it.

A Mug’s Game, A Critical Asset

Again, a deeper dive into the nuances of these otherwise complex yet broadly stroked arguments is not my aim here.

Predicting precise scenarios and DXY directional percentages is ultimately a mug’s game in a sea of volatility.

Nevertheless, tracking the empirical decline of the USD’s absolute purchasing power is no debate, but an empirical fact.

As for the USD’s relative moves in the DXY and against other currencies, that is admittedly, and in all fairness to Brent Johnson, harder to “win” or predict in the near-term.

There is much to his and Zeberg’s arguments, though Johnson, like me, does not believe that the gold price will fall even if the DXY should spike.

Gold and the USD can rise (and have risen) together.

And to repeat: Even a rising DXY does not mean the USD is protected from a debasement of its absolute purchasing power.

This is why gold will outperform rather than retrace in the next crisis, regardless of the DXY’s relativity theory…

It is equally worth noting that despite the necessary and important differences in opinions as to the great dollar/DXY debate outlined above, all of us – Hunt, Zeberg and Johnson – do agree on this: In the end, gold will continue to be an essential, if not THE essential, asset in the years ahead.

Regardless, then, of the DXY’s debated direction, gold’s finest hours are yet to come.

Tyler Durden Mon, 09/15/2025 - 14:25

Nano Nuclear Wins Reactor Contract From US Air Force As UK's Starmer Touts "Golden Age Of Nuclear"

NANO Nuclear Energy, one of the handful of nuclear microreactor companies that are at the forefront of energizing the AI revolution, has won a contract from AFWERX - the US Air Force’s innovation arm - to study the feasibility of deploying its KRONOS MMR microreactor at Joint Base Anacostia-Bolling in Washington, DC. The project would mark the first-ever nuclear microreactor at an urban US military base, a milestone with major implications for defense energy resilience, and comes at a time when there is a growing sense of panic about how the US will power itself when most new energy infrastructure is going to powering AI data centers. 

The project, in partnership with the 11th Civil Engineering Squadron, will assess energy needs, grid risks, siting, environmental factors, and regulatory pathways, and will set the stage for accelerated rollouts of similar projects.

A few technical details: the stationary, high-temperature gas-cooled KRONOS Microreactor is designed to deliver 15 MWe, run for decades, operate autonomously during outages, and withstand cyber and physical threats. It uses TRISO fuel with passive helium cooling and can scale by combining units.

Acquired by NANO Nuclear in January 2025, the KRONOS MMR is also set for research deployment at the University of Illinois Urbana-Champaign. The company is developing additional designs, including ZEUS, ODIN, and the space-focused LOKI.

CEO James Walker called the award “another milestone for NANO Nuclear and a validation of our belief that KRONOS MMR Energy System as a leading microreactor programme,” saying it offers “resilience, safety, and carbon-free generation.”

Founder Jay Yu added: “Our KRONOS MMR is designed to protect critical missions in the most demanding environments, and this contract underscores NANO Nuclear’s emerging status as the leader in bringing microreactors to the defense ecosystem.”

This comes amid growing defense interest in microreactors, including Project Pele at Idaho National Laboratory, the ANPI program with multiple contractors, Oklo’s planned Aurora deployment in Alaska, and recent deals with Radiant Nuclear and X-energy. 

Back in May 2024, Zero Hedge was the first outlet to highlight NANO Nuclear's close peer Oklo, which has since exploded almost 20x higher, and today alone the stock up more than $11 and trading around $92 per share, about 10x from when we first highlighted it a year ago, and more than 15x since Jim Cramer said "I can't even look at it."

OKLO is up 13x since Jim Cramer said "I can't even look at it" in Sept 2024 https://t.co/sHI70eOT8v

— zerohedge (@zerohedge) July 21, 2025

 Today, NANO Nuclear may be an even higher-beta bet on microreactors - whose fate is closely tied to that of the broader AI space - as it has a similar development profile yet its short interest is double that of Oklo. Having former Energy Secretary Rick Perry as the Chairman of its executive advisory board won't hurt either.

Meanwhile, the broader nuclear space got another boost this week after UK Prime Minister Keir Starmer announced a US-UK nuclear deal on Monday ahead of Donald Trump’s state visit, aiming to show "a golden age of nuclear" with faster approvals, new jobs, and lower bills, according to Financial Times. 

The FT reported that Starmer hopes the visit boosts Britain’s investment appeal. Downing Street said the deal will cut nuclear licensing times from 3–4 years to about 2. “Together with the US, we’re building a golden age of nuclear,” said Starmer.

US energy secretary Chris Wright - who formerly worked on the Oklo board of directors - praised Trump for “ushering in a true nuclear renaissance.” As part of the announcement, Rolls-Royce also entered the US regulatory process for small modular reactors, while Centrica and X-energy announced a reactor project in Hartlepool.

The nuclear plans are early stage, needing financing and state support, but reflect growing demand for low-carbon power. Ministers also welcomed £1.25 billion of US financial services investment, creating 1,800 UK jobs—1,000 from Bank of America in Belfast, £1.1 billion from Citigroup, plus expansions by BlackRock and S&P Global.

Zero Hedge readers may recall that it was back in April 2024 when he highlighted the coming nuclear boom in our note "The Next AI Trade."  Since that note, some 18 months ago, nuclear and its derivatives - which was at the forefront of the various investment opportunities we highlighted for powering up America - has almost doubled... 

... and is dramatically outperformed the broader market.

Tyler Durden Mon, 09/15/2025 - 14:05

Nano Nuclear Wins Reactor Contract From US Air Force As UK's Starmer Touts "Golden Age Of Nuclear"

NANO Nuclear Energy, one of the handful of nuclear microreactor companies that are at the forefront of energizing the AI revolution, has won a contract from AFWERX - the US Air Force’s innovation arm - to study the feasibility of deploying its KRONOS MMR microreactor at Joint Base Anacostia-Bolling in Washington, DC. The project would mark the first-ever nuclear microreactor at an urban US military base, a milestone with major implications for defense energy resilience, and comes at a time when there is a growing sense of panic about how the US will power itself when most new energy infrastructure is going to powering AI data centers. 

The project, in partnership with the 11th Civil Engineering Squadron, will assess energy needs, grid risks, siting, environmental factors, and regulatory pathways, and will set the stage for accelerated rollouts of similar projects.

A few technical details: the stationary, high-temperature gas-cooled KRONOS Microreactor is designed to deliver 15 MWe, run for decades, operate autonomously during outages, and withstand cyber and physical threats. It uses TRISO fuel with passive helium cooling and can scale by combining units.

Acquired by NANO Nuclear in January 2025, the KRONOS MMR is also set for research deployment at the University of Illinois Urbana-Champaign. The company is developing additional designs, including ZEUS, ODIN, and the space-focused LOKI.

CEO James Walker called the award “another milestone for NANO Nuclear and a validation of our belief that KRONOS MMR Energy System as a leading microreactor programme,” saying it offers “resilience, safety, and carbon-free generation.”

Founder Jay Yu added: “Our KRONOS MMR is designed to protect critical missions in the most demanding environments, and this contract underscores NANO Nuclear’s emerging status as the leader in bringing microreactors to the defense ecosystem.”

This comes amid growing defense interest in microreactors, including Project Pele at Idaho National Laboratory, the ANPI program with multiple contractors, Oklo’s planned Aurora deployment in Alaska, and recent deals with Radiant Nuclear and X-energy. 

Back in May 2024, Zero Hedge was the first outlet to highlight NANO Nuclear's close peer Oklo, which has since exploded almost 20x higher, and today alone the stock up more than $11 and trading around $92 per share, about 10x from when we first highlighted it a year ago, and more than 15x since Jim Cramer said "I can't even look at it."

OKLO is up 13x since Jim Cramer said "I can't even look at it" in Sept 2024 https://t.co/sHI70eOT8v

— zerohedge (@zerohedge) July 21, 2025

 Today, NANO Nuclear may be an even higher-beta bet on microreactors - whose fate is closely tied to that of the broader AI space - as it has a similar development profile yet its short interest is double that of Oklo. Having former Energy Secretary Rick Perry as the Chairman of its executive advisory board won't hurt either.

Meanwhile, the broader nuclear space got another boost this week after UK Prime Minister Keir Starmer announced a US-UK nuclear deal on Monday ahead of Donald Trump’s state visit, aiming to show "a golden age of nuclear" with faster approvals, new jobs, and lower bills, according to Financial Times. 

The FT reported that Starmer hopes the visit boosts Britain’s investment appeal. Downing Street said the deal will cut nuclear licensing times from 3–4 years to about 2. “Together with the US, we’re building a golden age of nuclear,” said Starmer.

US energy secretary Chris Wright - who formerly worked on the Oklo board of directors - praised Trump for “ushering in a true nuclear renaissance.” As part of the announcement, Rolls-Royce also entered the US regulatory process for small modular reactors, while Centrica and X-energy announced a reactor project in Hartlepool.

The nuclear plans are early stage, needing financing and state support, but reflect growing demand for low-carbon power. Ministers also welcomed £1.25 billion of US financial services investment, creating 1,800 UK jobs—1,000 from Bank of America in Belfast, £1.1 billion from Citigroup, plus expansions by BlackRock and S&P Global.

Zero Hedge readers may recall that it was back in April 2024 when he highlighted the coming nuclear boom in our note "The Next AI Trade."  Since that note, some 18 months ago, nuclear and its derivatives - which was at the forefront of the various investment opportunities we highlighted for powering up America - has almost doubled... 

... and is dramatically outperformed the broader market.

Tyler Durden Mon, 09/15/2025 - 14:05

Trump Is Successfully Corralling Countries To Join Trade War Against China

By Benjamin Picton, senior market strategist at Rabobank

Central Banks and State Visits

The week ahead is shaping up as somewhat of a watershed for markets as the FOMC looks poised to deliver the first rate cut of the second Trump presidency. 85 of 93 analysts surveyed by Bloomberg are predicting a 25bp cut (including RaboResearch), with 6 forecasting no change and 2 plumping for an extra-large 50bp cut.

OIS futures are convinced that a cut of at least 25bps is a done deal, despite core PCE and CPI sitting well above the Fed’s 2% target at 2.9% and 3.1% respectively. A delta of 26.1bps is currently priced in to the implied Fed Funds rate following a dovish pivot from Jerome Powell at Jackson Hole, two consecutive months of dreadful jobs figures (which the FT is today laying at the feet of Trump’s tariffs) and some even more dreadful revising-away of previously reported employment gains that appear to have been – in part – magicked-up by the BLS’s Birth-Death model.

Regular readers will recall that Trump – unhappy with the swings in reported employment levels – sensationally fired BLS head Erika McEntarfer after the July payrolls report disclosed a huge 258,000 downward revision to reported employment gains in May and June.

The intrigue of this week’s FOMC meeting will be heightened by the Senate confirmation hearing of Trump acolyte Stephen Miran that is scheduled to take place later today. The administration is pushing to have Miran confirmed as replacement for Adriana Kugler – who recently stepped down from her position as a Fed Governor – before the FOMC meeting begins tomorrow. There’s little doubt that Miran would join July dissenters Bowman and Waller in pushing for a rate cut (maybe even a 50bp cut?) if his appointment is confirmed later today. President Trump certainly seems to think so, he told reporters on Sunday that he is expecting a “big cut” from the FOMC this week.

Separately, President Trump renewed a request on Sunday for a Federal appeals court to allow him to fire Fed Governor Lisa Cook prior to this week’s FOMC meeting. Bloomberg Economics lists Cook amongst the most dovish Fed Governors on its spectrometer, which seems to run counter to the idea that Trump wants to stack the FOMC with doves. Could it be that the President is convinced that Fed Governors’ determinations of the appropriateness of monetary policy are not a purely technocratic process and actually exhibit some malleability dependent on who happens to be occupying the White House? See here for our full preview of this week’s FOMC meeting.

The Fed is not the only central bank in action this week. The Bank of Canada, Bank of England, Norges Bank, Bank of Japan and Brazil Central Bank will all be meeting to set policy rates. Of those listed, the BOC and Norges Bank are expected to deliver 25bp cuts, while the BOJ, BOE and BCB keep rates unchanged.

The Bank of Canada finds itself in a similar position to the Fed, whereby the course of its monetary policy is being dictated by a rapidly deteriorating labour market even as inflation pressures remain uncomfortably elevated. As Molly Schwartz and Christian Lawrence point out here, the Canadian economy is being buffeted by tariff shocks through the trade channel which were not helped by the economic nationalism adopted by former PM Trudeau while he had one foot out the door earlier this year. Increasingly, Mark Carney seems to be walking back Trudeau’s hairy-chested approach in favour of a more “go along to get along” strategy with Canada’s Southern Neighbor.

Carney’s slow motion fold on the tariff fight is interesting in the context of Donald Trump’s suggestions late last week that NATO allies should place tariffs of 50-100% on China and India as secondary sanctions for their continued purchases of Russian energy. Uncomfortably, the EU also continues to purchase Russian energy and no leaders of NATO countries have seen fit to endorse Trump’s plan.

However, it might be worth remembering that it was only a short while ago that the 5% spending target demanded of NATO allies by the USA was seen as a non-starter and impossible under current fiscal constraints – until it wasn’t. It was similarly assumed that the EU would not sign on to a one-sided trade agreement with the United States – until it did, and South Korea wasn’t going to agree to 3.5% defence spending – until it did. Are we seeing a pattern here?

Trump has been transparent in his efforts to corral allies into supporting his strategy of isolating China economically and geopolitically, though many media outlets remain oblivious to the broader strategy and continue to see only chaos.

Canada got in ahead of time to impose tariffs of 100% on Chinese EVs and 25% on Chinese steel and aluminum, while Mexico – ahead of USMCA renegotiations slated for next year – has announced tariffs of up to 50% on cars and other products made in China and Asian economies suspected of acting as intermediaries for Chinese transshipment. The EU imposed tariffs of up to 35% on Chinese EVs in October last year, and South Korea has placed duties of 38% on Chinese steel plate and 21% on stainless steel while also making commitments to lend its expertise (and capital) to help revive US shipbuilding. Trump’s demands are prodding allies further down a protectionist path that they are already on toward common tariffs against China.

For further signs of Western leaders crabwalking towards the US’ policy demands, look no further than Australia. Having spent months pushing back on suggestions that Australia would be forced to increase defence spending in line with US demands, PM Albanese recently announced an A$1.7bn investment in a new fleet of AI-equipped undersea lethal drones to be built by US arms manufacturer Anduril. Shortly afterwards, Albanese announced a A$12bn “downpayment” to expand shipbuilding and maintenance facilities in Western Australia where US Virginia class and UK Astute class nuclear submarines will be rotationally-based and undergo sustainment under the terms of the AUKUS agreement (even as a Chinese defence industry study says that AI could make it “nearly impossible” for submarines to survive in future naval combat), thereby reducing capacity pressures on the US’ own shipbuilding and maintenance facilities. Again, are we sensing a trend here?

Trump himself will make a state visit to the UK from Tuesday this week with NVIDIA’s Jensen Huang and OpenAI’s Sam Altman in tow. The FT reports that PM Starmer is today set to announce a new US-UK agreement on nuclear energy, which apparently includes an agreement between the UK’s Centrica and US’ X-Energy to build advanced modular reactors in Hartlepool, England. Other deals covering tech, AI and Scotch whiskey are also likely to be announced.

Of course, energy is an input to all production and the immense electricity consumption of AI-enabling data centres requires abundant affordable energy to be viable. While reporting on the nuclear energy partnership the FT concurrently bemoans that “the West is buried under red tape” as risk-shy bureaucrats ladle on regulation and complexity, thereby killing competition, innovation and productivity of the kind that will be needed to realise the ‘affordable’ part of ‘abundant, affordable energy’. Trump’s trade tariffs and the various national responses to them are pointed to as another source of complexity that Western business has to deal with.

Perhaps a common external tariff would simplify things?

Tyler Durden Mon, 09/15/2025 - 13:45

Trump Is Successfully Corralling Countries To Join Trade War Against China

By Benjamin Picton, senior market strategist at Rabobank

Central Banks and State Visits

The week ahead is shaping up as somewhat of a watershed for markets as the FOMC looks poised to deliver the first rate cut of the second Trump presidency. 85 of 93 analysts surveyed by Bloomberg are predicting a 25bp cut (including RaboResearch), with 6 forecasting no change and 2 plumping for an extra-large 50bp cut.

OIS futures are convinced that a cut of at least 25bps is a done deal, despite core PCE and CPI sitting well above the Fed’s 2% target at 2.9% and 3.1% respectively. A delta of 26.1bps is currently priced in to the implied Fed Funds rate following a dovish pivot from Jerome Powell at Jackson Hole, two consecutive months of dreadful jobs figures (which the FT is today laying at the feet of Trump’s tariffs) and some even more dreadful revising-away of previously reported employment gains that appear to have been – in part – magicked-up by the BLS’s Birth-Death model.

Regular readers will recall that Trump – unhappy with the swings in reported employment levels – sensationally fired BLS head Erika McEntarfer after the July payrolls report disclosed a huge 258,000 downward revision to reported employment gains in May and June.

The intrigue of this week’s FOMC meeting will be heightened by the Senate confirmation hearing of Trump acolyte Stephen Miran that is scheduled to take place later today. The administration is pushing to have Miran confirmed as replacement for Adriana Kugler – who recently stepped down from her position as a Fed Governor – before the FOMC meeting begins tomorrow. There’s little doubt that Miran would join July dissenters Bowman and Waller in pushing for a rate cut (maybe even a 50bp cut?) if his appointment is confirmed later today. President Trump certainly seems to think so, he told reporters on Sunday that he is expecting a “big cut” from the FOMC this week.

Separately, President Trump renewed a request on Sunday for a Federal appeals court to allow him to fire Fed Governor Lisa Cook prior to this week’s FOMC meeting. Bloomberg Economics lists Cook amongst the most dovish Fed Governors on its spectrometer, which seems to run counter to the idea that Trump wants to stack the FOMC with doves. Could it be that the President is convinced that Fed Governors’ determinations of the appropriateness of monetary policy are not a purely technocratic process and actually exhibit some malleability dependent on who happens to be occupying the White House? See here for our full preview of this week’s FOMC meeting.

The Fed is not the only central bank in action this week. The Bank of Canada, Bank of England, Norges Bank, Bank of Japan and Brazil Central Bank will all be meeting to set policy rates. Of those listed, the BOC and Norges Bank are expected to deliver 25bp cuts, while the BOJ, BOE and BCB keep rates unchanged.

The Bank of Canada finds itself in a similar position to the Fed, whereby the course of its monetary policy is being dictated by a rapidly deteriorating labour market even as inflation pressures remain uncomfortably elevated. As Molly Schwartz and Christian Lawrence point out here, the Canadian economy is being buffeted by tariff shocks through the trade channel which were not helped by the economic nationalism adopted by former PM Trudeau while he had one foot out the door earlier this year. Increasingly, Mark Carney seems to be walking back Trudeau’s hairy-chested approach in favour of a more “go along to get along” strategy with Canada’s Southern Neighbor.

Carney’s slow motion fold on the tariff fight is interesting in the context of Donald Trump’s suggestions late last week that NATO allies should place tariffs of 50-100% on China and India as secondary sanctions for their continued purchases of Russian energy. Uncomfortably, the EU also continues to purchase Russian energy and no leaders of NATO countries have seen fit to endorse Trump’s plan.

However, it might be worth remembering that it was only a short while ago that the 5% spending target demanded of NATO allies by the USA was seen as a non-starter and impossible under current fiscal constraints – until it wasn’t. It was similarly assumed that the EU would not sign on to a one-sided trade agreement with the United States – until it did, and South Korea wasn’t going to agree to 3.5% defence spending – until it did. Are we seeing a pattern here?

Trump has been transparent in his efforts to corral allies into supporting his strategy of isolating China economically and geopolitically, though many media outlets remain oblivious to the broader strategy and continue to see only chaos.

Canada got in ahead of time to impose tariffs of 100% on Chinese EVs and 25% on Chinese steel and aluminum, while Mexico – ahead of USMCA renegotiations slated for next year – has announced tariffs of up to 50% on cars and other products made in China and Asian economies suspected of acting as intermediaries for Chinese transshipment. The EU imposed tariffs of up to 35% on Chinese EVs in October last year, and South Korea has placed duties of 38% on Chinese steel plate and 21% on stainless steel while also making commitments to lend its expertise (and capital) to help revive US shipbuilding. Trump’s demands are prodding allies further down a protectionist path that they are already on toward common tariffs against China.

For further signs of Western leaders crabwalking towards the US’ policy demands, look no further than Australia. Having spent months pushing back on suggestions that Australia would be forced to increase defence spending in line with US demands, PM Albanese recently announced an A$1.7bn investment in a new fleet of AI-equipped undersea lethal drones to be built by US arms manufacturer Anduril. Shortly afterwards, Albanese announced a A$12bn “downpayment” to expand shipbuilding and maintenance facilities in Western Australia where US Virginia class and UK Astute class nuclear submarines will be rotationally-based and undergo sustainment under the terms of the AUKUS agreement (even as a Chinese defence industry study says that AI could make it “nearly impossible” for submarines to survive in future naval combat), thereby reducing capacity pressures on the US’ own shipbuilding and maintenance facilities. Again, are we sensing a trend here?

Trump himself will make a state visit to the UK from Tuesday this week with NVIDIA’s Jensen Huang and OpenAI’s Sam Altman in tow. The FT reports that PM Starmer is today set to announce a new US-UK agreement on nuclear energy, which apparently includes an agreement between the UK’s Centrica and US’ X-Energy to build advanced modular reactors in Hartlepool, England. Other deals covering tech, AI and Scotch whiskey are also likely to be announced.

Of course, energy is an input to all production and the immense electricity consumption of AI-enabling data centres requires abundant affordable energy to be viable. While reporting on the nuclear energy partnership the FT concurrently bemoans that “the West is buried under red tape” as risk-shy bureaucrats ladle on regulation and complexity, thereby killing competition, innovation and productivity of the kind that will be needed to realise the ‘affordable’ part of ‘abundant, affordable energy’. Trump’s trade tariffs and the various national responses to them are pointed to as another source of complexity that Western business has to deal with.

Perhaps a common external tariff would simplify things?

Tyler Durden Mon, 09/15/2025 - 13:45

Ram Cancels All-Electric Pickup Truck Plan Citing Slowing Demand

Ram has abandoned plans to launch an electric pickup truck, according to a Sept. 12 statement from Stellantis.

“As demand for full-size battery-electric trucks slows in North America, Stellantis is reassessing its product strategy and will discontinue development of a full-size [battery-electric] pickup,” the company stated.

In December 2024, the company stated that it planned on launching its Ram 1500 battery-electric pickup in the first half of 2025.

As part of the latest decision, Ramcharger, a pickup truck featuring an electric battery and a gas engine, will be renamed the Ram 1500 REV.

“This vehicle will set a new benchmark in the half-ton segment, offering exceptional range, towing capability, and payload performance,” the Stellantis statement reads.

As Naveen Athrappully reports below for The Epoch Times, Stellantis’s decision to end its full battery-electric trucks comes as a federal tax incentive for purchasing electric vehicles (EVs) is scheduled to end this month.

The New Clean Vehicle Tax Credit grants up to $7,500 in incentives for buying an EV. The credit was offered as part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022.

On July 4, President Donald Trump signed the One Big Beautiful Bill Act into law, scheduling the credit to end on Sept. 30. After this date, EV purchases will stop receiving subsidies.

In a Sept. 9 statement, General Motors said it expects negative effects over the short term from the incentives ending.

It stated that August was GM’s “best month ever” in terms of EV sales and that the company is expecting strong demand in September as well.

“The question, of course, is what’s next?“ the company stated. ”There’s no doubt we’ll see lower EV sales next quarter after tax credits end September 30, and it may take several months for the market to normalize. We will almost certainly see a smaller EV market for a while, and we won’t overproduce.”

However, GM remains positive about the EV market’s potential.

“We believe GM can continue to grow EV market share,“ the company stated. ”Our confidence in the future of our EV business starts with our portfolio. Before there was an [Inflation Reduction Act], the strongest segments were affordable EVs and luxury, and we have those bases covered with our stunning Cadillacs, the Chevrolet Equinox EV, and soon, the new Chevrolet Bolt.”

According to a Sept. 3 statement from Cox Automotive, the EV market outlook among dealers hit a “record low” in the third quarter.

“The EV market outlook index, which asked dealers about the EV market three months from now, dropped to 30, the lowest score on record,” Cox stated in a commentary.

Jonathan Smoke, chief economist at Cox, said: “The outlook for future EV sales really comes as no surprise: Dealers have calendars too; they see the end of government-backed incentives fast approaching and are expecting a slowdown as the market adjusts to a new reality in Q4.”

On his first day in office, Trump signed the “Unleashing American Energy” executive order, calling for the removal of incentives for EVs.

Burdensome and ideologically motivated regulations have impeded the development of the United States’ abundant energy resources, the order states.

The order calls for ending the EV mandate, removing regulatory barriers to motor vehicle access, and terminating state emission waivers that limit the sale of gas-powered vehicles.

In June, Trump signed a package of resolutions blocking California’s vehicle emission mandates, which included phasing out the sale of new gasoline-only vehicles by 2035.

California Gov. Gavin Newsom and California Attorney General Rob Bonta then sued the administration over the revocation of state policies, according to a June 12 statement from the governor’s office.

“Trump’s all-out assault on California continues—and this time he’s destroying our clean air and America’s global competitiveness in the process,“ Newsom said at the time. ”We are suing to stop this latest illegal action by a President who is a wholly-owned subsidiary of big polluters.”

California is also mulling funding the $7,500 tax credit for EV vehicles as a way to maintain its zero emissions market.

Meanwhile, a Sept. 9 analysis by EY (previously Ernst & Young) predicts that EV sales in the United States will slow down because of the end of incentives, legislative uncertainty, and new import tariffs.

Tyler Durden Mon, 09/15/2025 - 13:25

Ram Cancels All-Electric Pickup Truck Plan Citing Slowing Demand

Ram has abandoned plans to launch an electric pickup truck, according to a Sept. 12 statement from Stellantis.

“As demand for full-size battery-electric trucks slows in North America, Stellantis is reassessing its product strategy and will discontinue development of a full-size [battery-electric] pickup,” the company stated.

In December 2024, the company stated that it planned on launching its Ram 1500 battery-electric pickup in the first half of 2025.

As part of the latest decision, Ramcharger, a pickup truck featuring an electric battery and a gas engine, will be renamed the Ram 1500 REV.

“This vehicle will set a new benchmark in the half-ton segment, offering exceptional range, towing capability, and payload performance,” the Stellantis statement reads.

As Naveen Athrappully reports below for The Epoch Times, Stellantis’s decision to end its full battery-electric trucks comes as a federal tax incentive for purchasing electric vehicles (EVs) is scheduled to end this month.

The New Clean Vehicle Tax Credit grants up to $7,500 in incentives for buying an EV. The credit was offered as part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022.

On July 4, President Donald Trump signed the One Big Beautiful Bill Act into law, scheduling the credit to end on Sept. 30. After this date, EV purchases will stop receiving subsidies.

In a Sept. 9 statement, General Motors said it expects negative effects over the short term from the incentives ending.

It stated that August was GM’s “best month ever” in terms of EV sales and that the company is expecting strong demand in September as well.

“The question, of course, is what’s next?“ the company stated. ”There’s no doubt we’ll see lower EV sales next quarter after tax credits end September 30, and it may take several months for the market to normalize. We will almost certainly see a smaller EV market for a while, and we won’t overproduce.”

However, GM remains positive about the EV market’s potential.

“We believe GM can continue to grow EV market share,“ the company stated. ”Our confidence in the future of our EV business starts with our portfolio. Before there was an [Inflation Reduction Act], the strongest segments were affordable EVs and luxury, and we have those bases covered with our stunning Cadillacs, the Chevrolet Equinox EV, and soon, the new Chevrolet Bolt.”

According to a Sept. 3 statement from Cox Automotive, the EV market outlook among dealers hit a “record low” in the third quarter.

“The EV market outlook index, which asked dealers about the EV market three months from now, dropped to 30, the lowest score on record,” Cox stated in a commentary.

Jonathan Smoke, chief economist at Cox, said: “The outlook for future EV sales really comes as no surprise: Dealers have calendars too; they see the end of government-backed incentives fast approaching and are expecting a slowdown as the market adjusts to a new reality in Q4.”

On his first day in office, Trump signed the “Unleashing American Energy” executive order, calling for the removal of incentives for EVs.

Burdensome and ideologically motivated regulations have impeded the development of the United States’ abundant energy resources, the order states.

The order calls for ending the EV mandate, removing regulatory barriers to motor vehicle access, and terminating state emission waivers that limit the sale of gas-powered vehicles.

In June, Trump signed a package of resolutions blocking California’s vehicle emission mandates, which included phasing out the sale of new gasoline-only vehicles by 2035.

California Gov. Gavin Newsom and California Attorney General Rob Bonta then sued the administration over the revocation of state policies, according to a June 12 statement from the governor’s office.

“Trump’s all-out assault on California continues—and this time he’s destroying our clean air and America’s global competitiveness in the process,“ Newsom said at the time. ”We are suing to stop this latest illegal action by a President who is a wholly-owned subsidiary of big polluters.”

California is also mulling funding the $7,500 tax credit for EV vehicles as a way to maintain its zero emissions market.

Meanwhile, a Sept. 9 analysis by EY (previously Ernst & Young) predicts that EV sales in the United States will slow down because of the end of incentives, legislative uncertainty, and new import tariffs.

Tyler Durden Mon, 09/15/2025 - 13:25

Invest Or Index - Exploring 5-Different Strategies

Authored by Lance Roberts via RealInvestmentAdvice.com,

Investing is about choices. Every investor faces the same challenge: how to grow wealth while controlling risk. Over the years, distinct approaches have proven effective, though none guarantee success. Some strategies require patience. Others demand discipline in timing and execution. A few provide stability and income. There is no right or wrong way to invest, and every strategy has pros and cons. In some cycles, one approach will outperform another. That doesn’t mean a strategy is broken; it just means it is out of favor in the current environment. The problem that investors often face is that they abandon an underperforming strategy to chase another, often at precisely the wrong time.

The cycle rotation on investment strategies was discussed in detail in “Why Investing Is Like Gardening:“

“Like everything in life, there is a “season” and a “cycle.” When it comes to the markets, “seasons” are dictated by the “technical and economic constructs,” and the “cycles” are dictated by “valuations.” The seasons are shown in the chart below.”

With this in mind, we will examine five major investment strategies: value, growth, momentum, dividend, and index investing. Each comes with strengths and weaknesses. More importantly, each offers lessons from history’s greatest investors, including Benjamin Graham and Warren Buffett. By exploring these strategies, you can better align your portfolio with your financial goals, risk tolerance, and time horizon.

1. Value Investing

Value investing focuses on buying stocks trading below their intrinsic value. Benjamin Graham, often called the father of value investing, defined the approach in Security Analysis (1934) and later The Intelligent Investor. Graham wrote: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”

Value investing emphasizes fundamentals—strong balance sheets, healthy cash flow, and low debt. The strategy assumes markets misprice securities in the short run, but eventually, fundamentals assert themselves. Graham explained this with his famous line: “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

“Why do quality stocks outperform over the long run? The below graph is pretty clear, although recent years could question the conclusions drawn from it: does high-quality always outperform lower-quality? Market euphoria, quantitative easing et cetera oftentimes lead to temporary deviations from this general trend.” – The Compounding Tortoise

Warren Buffett, Graham’s most famous student, captured the essence of value investing in fewer words: “Price is what you pay. Value is what you get.” He also stressed the importance of discipline through the idea of a margin of safety. By buying below the intrinsic value, investors protect themselves if the company underperforms or the market takes longer to recognize value.

Tactics for Value Investors

• Screen for companies with low price-to-earnings and price-to-book ratios.

• Favor firms with consistent free cash flow and limited debt.

• Require a margin of safety before buying.

• Diversify across sectors to avoid concentration risk.

• Exercise patience. Recognition of value often takes years.

Value investing works best for investors willing to wait for fundamentals to assert themselves. It is not exciting, but it has delivered reliable long-term returns.

2. Growth Investing

Growth investing takes the opposite view. Instead of focusing on undervaluation, it targets companies expected to expand faster than the market. Technology, healthcare, and other innovation-driven sectors dominate this space. These companies often reinvest earnings into expansion rather than pay dividends, prioritizing growth over immediate income.

The attraction is clear: owning the next Amazon, Apple, or Nvidia before the market fully appreciates its potential can generate outsized returns. But growth investing carries risks. Paying high multiples for future earnings leaves no margin for error. If growth slows or expectations are missed, share prices fall quickly.

As noted above, growth investing works during economic expansion cycles. However, in late-cycle and pre-recessionary periods, the risks of being solely allocated to growth investing can be detrimental.

Buffett once said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” This statement captures both value and growth perspectives. Growth matters, but only when tied to quality and reasonable valuation.

Tactics for Growth Investors

• Target companies with sustained revenue growth above the market average.
• Use metrics like price-to-sales and price-to-earnings-growth (PEG) to avoid overpaying.
• Dollar-cost average into volatile names to manage timing risk.
• Limit allocation. Growth should complement a portfolio, not dominate it.
• Be prepared for volatility and trim exposure when valuations stretch.

Growth investing suits investors with longer time horizons and higher risk tolerance. The rewards can be significant, but discipline is essential.

3. Momentum Investing

Momentum investing rests on a simple premise: stocks that are rising tend to keep rising, while those falling tend to keep falling. Investors identify strong trends and ride them until they weaken. This strategy relies heavily on technical analysis and often involves short holding periods.

Momentum thrives in bull markets. Herd behavior pushes winners higher, creating self-reinforcing trends. But the risks are significant. Trends can reverse quickly. Benjamin Graham warned: “The more you trade, the more you are likely to lose.” Frequent trading increases costs and exposes investors to sharp reversals when sentiment shifts.

We discussed the concept in more detail in “Momentum Investing:”

“The chart shows the difference in the performance of the “value vs. growth” index. (Fidelity Value Fund vs S&P 500 Index).

Notable are the periods when “value investing” outperforms.

While it may seem like the current bull market will never end, abandoning decades of investment history would be unwise. As Howard Marks once stated:

“Rule No. 1: Most things will prove to be cyclical.

Rule No. 2: Some of the most exceptional opportunities for gain and loss come when other people forget Rule No. 1.”

Momentum is not about fundamentals. It is about psychology and timing. That makes it risky for most investors.

Tactics for Momentum Investors

• Use strict stop-loss orders to protect capital.
• Limit position size and portfolio exposure.
• Focus on liquidity. Stick to names where you can exit quickly.
• Be disciplined about exits. Do not wait for confirmation once momentum fades.
• Treat momentum as tactical, not core.

Momentum requires constant monitoring and emotional discipline. It is not for casual investors, but it can be effective for those willing to stay vigilant.

4. Dividend Investing

Dividend investing focuses on stability and income. Investors buy companies with reliable dividend payments and strong balance sheets. This approach appeals to retirees and others who prioritize cash flow over growth. The benefit of dividend investing is that the provision of consistent income reduces reliance on capital gains. They also offer a compounding advantage when reinvested. Over time, reinvested dividends significantly increase portfolio value.

“Dividends have played a significant role in the returns investors have received during the last several decades. Going back to 1960, 85% of the cumulative total return of the S&P 500 Index can be attributed to reinvested dividends and the power of compounding.” – Hartford Funds

Dividend stocks tend to be less volatile than growth names. Companies that pay dividends often have mature businesses and steady earnings. But this stability comes with trade-offs. High-dividend companies may reinvest less in expansion, limiting growth. Dividend stocks are also sensitive to interest rate changes, as higher bond yields can make them less attractive.

Tactics for Dividend Investors

• Seek companies with long records of raising dividends.
• Avoid chasing yield. High yields may signal financial distress.
• Diversify across industries such as utilities, consumer staples, and healthcare.
• Reinvest dividends during accumulation years.
• Transition to income withdrawals during retirement.

Dividend investing provides both income and resilience. It works best for investors seeking stability and compounding power.

5. Index Investing

Index investing is simple. Buy a portfolio that mirrors a benchmark, such as the S&P 500, and hold it. This passive approach minimizes costs and provides broad diversification.

Buffett has long recommended index funds for most investors. In his 2013 annual letter to shareholders, he wrote: “My advice to the trustee could not be simpler: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.” His reasoning is straightforward; most active managers underperform the market after fees.

Index investing reduces the need for constant decision-making. It captures market returns without trying to predict winners. But it also has drawbacks. Index funds hold every stock in the benchmark, including poor performers. They will not outperform the market, because they are the market.

Tactics for Index Investors

• Use low-cost funds to minimize expense drag.
• Make index funds the foundation of your portfolio.
• Rebalance annually to maintain allocation.
• Combine with active strategies if you want additional exposure.
• Stay invested. The biggest risk with index investing is abandoning the strategy during downturns.

Index investing suits those seeking long-term consistency without the complexity of stock selection.

Final Thoughts

Each strategy offers lessons. Value emphasizes patience and fundamentals. Growth rewards innovation but demands valuation discipline. Momentum takes advantage of market psychology but carries high risk. Dividends provide stability and compounding. Index investing delivers simplicity and cost efficiency.

Benjamin Graham warned against speculation disguised as investing: “The essence of investment management is the management of risks, not the management of returns.” Warren Buffett added his own guardrail: “Know your circle of competence, and stick within it. The size of that circle is not very important; knowing its boundaries, however, is vital.”

In practice, the best approach often blends elements of each. Index funds can form a low-cost core. Value and dividend strategies add resilience. Growth provides upside. Momentum, if used carefully, offers tactical opportunities. Success lies not in chasing the latest idea, but in consistency through cycles.

Markets will always be volatile. Strategies will fall in and out of favor. What matters most is discipline. The investor who remains patient, diversified, and focused on long-term goals will outperform those who chase trends or panic during downturns.

Tyler Durden Mon, 09/15/2025 - 13:05

Invest Or Index - Exploring 5-Different Strategies

Authored by Lance Roberts via RealInvestmentAdvice.com,

Investing is about choices. Every investor faces the same challenge: how to grow wealth while controlling risk. Over the years, distinct approaches have proven effective, though none guarantee success. Some strategies require patience. Others demand discipline in timing and execution. A few provide stability and income. There is no right or wrong way to invest, and every strategy has pros and cons. In some cycles, one approach will outperform another. That doesn’t mean a strategy is broken; it just means it is out of favor in the current environment. The problem that investors often face is that they abandon an underperforming strategy to chase another, often at precisely the wrong time.

The cycle rotation on investment strategies was discussed in detail in “Why Investing Is Like Gardening:“

“Like everything in life, there is a “season” and a “cycle.” When it comes to the markets, “seasons” are dictated by the “technical and economic constructs,” and the “cycles” are dictated by “valuations.” The seasons are shown in the chart below.”

With this in mind, we will examine five major investment strategies: value, growth, momentum, dividend, and index investing. Each comes with strengths and weaknesses. More importantly, each offers lessons from history’s greatest investors, including Benjamin Graham and Warren Buffett. By exploring these strategies, you can better align your portfolio with your financial goals, risk tolerance, and time horizon.

1. Value Investing

Value investing focuses on buying stocks trading below their intrinsic value. Benjamin Graham, often called the father of value investing, defined the approach in Security Analysis (1934) and later The Intelligent Investor. Graham wrote: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”

Value investing emphasizes fundamentals—strong balance sheets, healthy cash flow, and low debt. The strategy assumes markets misprice securities in the short run, but eventually, fundamentals assert themselves. Graham explained this with his famous line: “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

“Why do quality stocks outperform over the long run? The below graph is pretty clear, although recent years could question the conclusions drawn from it: does high-quality always outperform lower-quality? Market euphoria, quantitative easing et cetera oftentimes lead to temporary deviations from this general trend.” – The Compounding Tortoise

Warren Buffett, Graham’s most famous student, captured the essence of value investing in fewer words: “Price is what you pay. Value is what you get.” He also stressed the importance of discipline through the idea of a margin of safety. By buying below the intrinsic value, investors protect themselves if the company underperforms or the market takes longer to recognize value.

Tactics for Value Investors

• Screen for companies with low price-to-earnings and price-to-book ratios.

• Favor firms with consistent free cash flow and limited debt.

• Require a margin of safety before buying.

• Diversify across sectors to avoid concentration risk.

• Exercise patience. Recognition of value often takes years.

Value investing works best for investors willing to wait for fundamentals to assert themselves. It is not exciting, but it has delivered reliable long-term returns.

2. Growth Investing

Growth investing takes the opposite view. Instead of focusing on undervaluation, it targets companies expected to expand faster than the market. Technology, healthcare, and other innovation-driven sectors dominate this space. These companies often reinvest earnings into expansion rather than pay dividends, prioritizing growth over immediate income.

The attraction is clear: owning the next Amazon, Apple, or Nvidia before the market fully appreciates its potential can generate outsized returns. But growth investing carries risks. Paying high multiples for future earnings leaves no margin for error. If growth slows or expectations are missed, share prices fall quickly.

As noted above, growth investing works during economic expansion cycles. However, in late-cycle and pre-recessionary periods, the risks of being solely allocated to growth investing can be detrimental.

Buffett once said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” This statement captures both value and growth perspectives. Growth matters, but only when tied to quality and reasonable valuation.

Tactics for Growth Investors

• Target companies with sustained revenue growth above the market average.
• Use metrics like price-to-sales and price-to-earnings-growth (PEG) to avoid overpaying.
• Dollar-cost average into volatile names to manage timing risk.
• Limit allocation. Growth should complement a portfolio, not dominate it.
• Be prepared for volatility and trim exposure when valuations stretch.

Growth investing suits investors with longer time horizons and higher risk tolerance. The rewards can be significant, but discipline is essential.

3. Momentum Investing

Momentum investing rests on a simple premise: stocks that are rising tend to keep rising, while those falling tend to keep falling. Investors identify strong trends and ride them until they weaken. This strategy relies heavily on technical analysis and often involves short holding periods.

Momentum thrives in bull markets. Herd behavior pushes winners higher, creating self-reinforcing trends. But the risks are significant. Trends can reverse quickly. Benjamin Graham warned: “The more you trade, the more you are likely to lose.” Frequent trading increases costs and exposes investors to sharp reversals when sentiment shifts.

We discussed the concept in more detail in “Momentum Investing:”

“The chart shows the difference in the performance of the “value vs. growth” index. (Fidelity Value Fund vs S&P 500 Index).

Notable are the periods when “value investing” outperforms.

While it may seem like the current bull market will never end, abandoning decades of investment history would be unwise. As Howard Marks once stated:

“Rule No. 1: Most things will prove to be cyclical.

Rule No. 2: Some of the most exceptional opportunities for gain and loss come when other people forget Rule No. 1.”

Momentum is not about fundamentals. It is about psychology and timing. That makes it risky for most investors.

Tactics for Momentum Investors

• Use strict stop-loss orders to protect capital.
• Limit position size and portfolio exposure.
• Focus on liquidity. Stick to names where you can exit quickly.
• Be disciplined about exits. Do not wait for confirmation once momentum fades.
• Treat momentum as tactical, not core.

Momentum requires constant monitoring and emotional discipline. It is not for casual investors, but it can be effective for those willing to stay vigilant.

4. Dividend Investing

Dividend investing focuses on stability and income. Investors buy companies with reliable dividend payments and strong balance sheets. This approach appeals to retirees and others who prioritize cash flow over growth. The benefit of dividend investing is that the provision of consistent income reduces reliance on capital gains. They also offer a compounding advantage when reinvested. Over time, reinvested dividends significantly increase portfolio value.

“Dividends have played a significant role in the returns investors have received during the last several decades. Going back to 1960, 85% of the cumulative total return of the S&P 500 Index can be attributed to reinvested dividends and the power of compounding.” – Hartford Funds

Dividend stocks tend to be less volatile than growth names. Companies that pay dividends often have mature businesses and steady earnings. But this stability comes with trade-offs. High-dividend companies may reinvest less in expansion, limiting growth. Dividend stocks are also sensitive to interest rate changes, as higher bond yields can make them less attractive.

Tactics for Dividend Investors

• Seek companies with long records of raising dividends.
• Avoid chasing yield. High yields may signal financial distress.
• Diversify across industries such as utilities, consumer staples, and healthcare.
• Reinvest dividends during accumulation years.
• Transition to income withdrawals during retirement.

Dividend investing provides both income and resilience. It works best for investors seeking stability and compounding power.

5. Index Investing

Index investing is simple. Buy a portfolio that mirrors a benchmark, such as the S&P 500, and hold it. This passive approach minimizes costs and provides broad diversification.

Buffett has long recommended index funds for most investors. In his 2013 annual letter to shareholders, he wrote: “My advice to the trustee could not be simpler: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.” His reasoning is straightforward; most active managers underperform the market after fees.

Index investing reduces the need for constant decision-making. It captures market returns without trying to predict winners. But it also has drawbacks. Index funds hold every stock in the benchmark, including poor performers. They will not outperform the market, because they are the market.

Tactics for Index Investors

• Use low-cost funds to minimize expense drag.
• Make index funds the foundation of your portfolio.
• Rebalance annually to maintain allocation.
• Combine with active strategies if you want additional exposure.
• Stay invested. The biggest risk with index investing is abandoning the strategy during downturns.

Index investing suits those seeking long-term consistency without the complexity of stock selection.

Final Thoughts

Each strategy offers lessons. Value emphasizes patience and fundamentals. Growth rewards innovation but demands valuation discipline. Momentum takes advantage of market psychology but carries high risk. Dividends provide stability and compounding. Index investing delivers simplicity and cost efficiency.

Benjamin Graham warned against speculation disguised as investing: “The essence of investment management is the management of risks, not the management of returns.” Warren Buffett added his own guardrail: “Know your circle of competence, and stick within it. The size of that circle is not very important; knowing its boundaries, however, is vital.”

In practice, the best approach often blends elements of each. Index funds can form a low-cost core. Value and dividend strategies add resilience. Growth provides upside. Momentum, if used carefully, offers tactical opportunities. Success lies not in chasing the latest idea, but in consistency through cycles.

Markets will always be volatile. Strategies will fall in and out of favor. What matters most is discipline. The investor who remains patient, diversified, and focused on long-term goals will outperform those who chase trends or panic during downturns.

Tyler Durden Mon, 09/15/2025 - 13:05

The post Cheap Advice for the Fed appeared first on CEPR.

President Trump Calls To End Quarterly Financial Reporting, Suggesting Semiannual Schedule Instead

President Donald Trump suggested Monday on Truth Social that companies should stop filing quarterly earnings reports and instead move to a semiannual schedule. Trump’s call to replace quarterly earnings reports with semiannual filings revives a debate that also surfaced during his first term.

In his post, Trump said the idea is “subject to SEC approval” and would “save money, and allow managers to focus on properly running their companies.” He added: “Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis??? Not good!!!’”

The concept has long divided business leaders and regulators. In 2018, Warren Buffett and JPMorgan Chase CEO Jamie Dimon argued against quarterly guidance, writing: “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

But others warn that reducing reporting could weaken transparency. “Trying to get companies less hyper focused on the short-term quarterly hamster wheel would be good, but it's far from clear that reducing investor disclosure to semi-annual reporting would do that,” Dennis Kelleher, CEO of advocacy group Better Markets, told Axios. “The real solution would be getting Boards of Directors to incentivize and then support corporate executives to focus more on the long term and less on the short term.”

TD Cowen, in a note Monday, said Trump’s comments could carry weight: given his push to roll back regulations, the post moves the idea “from improbable to probable though not guaranteed,” according to Axios.

“In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. ‘Stop quarterly reporting & go to a six month system,’ said one. That would allow greater flexibility & save money. I have asked the SEC to study!” Trump said in a post on X during his first term in 2018.

Currently, U.S. companies must file quarterly reports, though forecasts remain voluntary. Proponents say frequent reports give investors timely, reliable insights, with GAAP standards ensuring consistency. Critics, however, argue that short-term pressure hampers long-range planning.

Despite Trump’s comparison to China, firms there are required to file quarterly, semiannual, and annual reports. Hong Kong-listed companies report every six months, similar to rules in the U.K. and EU, where quarterly updates are optional. Norway’s sovereign wealth fund recently proposed semiannual reporting as well, citing the need for companies to prioritize long-term growth.

Tyler Durden Mon, 09/15/2025 - 12:45

President Trump Calls To End Quarterly Financial Reporting, Suggesting Semiannual Schedule Instead

President Donald Trump suggested Monday on Truth Social that companies should stop filing quarterly earnings reports and instead move to a semiannual schedule. Trump’s call to replace quarterly earnings reports with semiannual filings revives a debate that also surfaced during his first term.

In his post, Trump said the idea is “subject to SEC approval” and would “save money, and allow managers to focus on properly running their companies.” He added: “Did you ever hear the statement that, ‘China has a 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis??? Not good!!!’”

The concept has long divided business leaders and regulators. In 2018, Warren Buffett and JPMorgan Chase CEO Jamie Dimon argued against quarterly guidance, writing: “In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

But others warn that reducing reporting could weaken transparency. “Trying to get companies less hyper focused on the short-term quarterly hamster wheel would be good, but it's far from clear that reducing investor disclosure to semi-annual reporting would do that,” Dennis Kelleher, CEO of advocacy group Better Markets, told Axios. “The real solution would be getting Boards of Directors to incentivize and then support corporate executives to focus more on the long term and less on the short term.”

TD Cowen, in a note Monday, said Trump’s comments could carry weight: given his push to roll back regulations, the post moves the idea “from improbable to probable though not guaranteed,” according to Axios.

“In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S. ‘Stop quarterly reporting & go to a six month system,’ said one. That would allow greater flexibility & save money. I have asked the SEC to study!” Trump said in a post on X during his first term in 2018.

Currently, U.S. companies must file quarterly reports, though forecasts remain voluntary. Proponents say frequent reports give investors timely, reliable insights, with GAAP standards ensuring consistency. Critics, however, argue that short-term pressure hampers long-range planning.

Despite Trump’s comparison to China, firms there are required to file quarterly, semiannual, and annual reports. Hong Kong-listed companies report every six months, similar to rules in the U.K. and EU, where quarterly updates are optional. Norway’s sovereign wealth fund recently proposed semiannual reporting as well, citing the need for companies to prioritize long-term growth.

Tyler Durden Mon, 09/15/2025 - 12:45

The Fed Models Were Wrong About The US Economy

Authored by Daniel Lacelle,

In 2025, the mainstream Keynesian narrative that the United States would inevitably experience a recession and stagflation has proven to be utterly incorrect.

The American economy is performing much better than its comparable nations, is showing broad-based strength, and even has indications of accelerating growth, giving investors and consumers plenty of reason to feel more optimistic, despite the consensus estimates from earlier in the year.

The consensus was wrong.

The United States economy is outperforming the economies of the UK, Germany, France, Italy, Japan, and the entire euro area, showing estimates of economic growth that exceed those of the best-performing developed nations, along with significantly lower unemployment rates and solid real wage growth.

Due to exaggerated expectations of the impact of factors like new tariffs, global uncertainty, and the potential for persistently high inflation, most mainstream analysts and market commentators projected a stagnant or recessionary environment for the US in 2025, while hailing the euro area as the place to invest. We have seen the opposite.

US bond yields are falling, while euro area sovereign yields are rising despite ECB rate cuts. Additionally, GDP growth estimates for the euro area are weak, and US economic growth is stronger than the European Union’s “engines of growth,” whereas Japan and the UK remain stagnant. Inflation is under control, real wage growth is strong, and the private sector is improving.

The mainstream consensus predictions were biased and incorrect. Rather, the US economy has reported strong real GDP growth: following a short contraction in Q1, growth in the second quarter bounced back to 3–3.3% annually, and the Atlanta Fed’s GDPNow model currently projects Q3 growth at a stable 3% pace. In addition to consumer spending and imports, business investment also contributed to this GDP strength, and, more importantly, it came with government spending under control.

The most recent CPI and PPI data dispel concerns that the tariff regime is causing inflation. CPI and core measures in August came in close to or below expectations, indicating that headline monthly inflation and producer price increases are still under control. Prices for durable and nondurable goods are still stable, and, despite negative forecasts, tariffs have not generated a significant increase in the cost of living for Americans; instead, energy and important imports have either decreased or stabilised.

Despite recent revisions, the private-sector labor market maintained momentum from January through August. The significant negative revisions occurred during the January-December 2024 period, indicating that the Biden administration’s job creation was only half of what was reported and required a two million downward adjustment to the job figures from 2023 to 2024. What the Bureau of Labour Statistics has shown clearly is that the United States was in a private sector recession in 2024, which justified the negative sentiment from citizens.

Private payrolls have reported consistent net gains, particularly in the important service and construction segments, despite slight revisions to previous months. Even more encouraging is the fact that real wage growth is accelerating rather than merely keeping up with inflation. Real average hourly earnings increased by 1.2%, and real weekly earnings increased by 1.4% between July 2024 and July 2025. Increased purchasing power is boosting middle-class disposable income and driving retail demand because wage gains are outpacing price growth.

Retail sales also remain resilient in the face of market volatility and trade uncertainty. Bloomberg predicts that headline retail sales will increase by 0.2% in August, while the core control group will increase by 0.3%. This increase is significantly better than what April estimates showed, particularly since consumer sentiment is still cautious but generally stable. Throughout the third quarter, household consumption is increasing due to strong private labor markets and healthy wage growth.

The growing agreement that inflation risks are under control represents the most significant development for financial markets, paving the way for the Federal Reserve to finally recognise reality and cut interest rates in the coming months. Markets are beginning to anticipate that the Fed will soon lower interest rates, which could further boost borrowing, investment, and the economy’s momentum for the rest of 2025.

Despite the pessimistic predictions of recession and stagflation, they have proven to be undeniably wrong. The US economy is in a period of true private sector expansion, thanks to strong job and wage growth, favourable taxation, and deregulation, whereas tariffs are having no real impact on inflation. Now the Fed needs to be truly data dependent. Putting aside the pessimism of the previous year, the data currently indicates an improving outlook and a recovery from the private sector recession and fiscal mess inherited in 2024.

The Fed models were wrong about inflation and used labor market figures that were hugely inflated. The Fed should have read its own Beige Book, which alerted of a marked slowdown in job creation in March and April, instead of succumbing to the biased consensus narrative.

Tyler Durden Mon, 09/15/2025 - 12:25