u/BGID_to_the_moon

Long term treasury yields spiked to multi decade highs recently. This appears to have finally prompted a response from the treasury yesterday. Bessent managed to drop the 10y year by 0.1% (a significant 1 day move for the 10y) only to have the move largely reverse today.

Bessent has signaled he will regularly buy long term treasuries. Though he claims the action has nothing to do with interest rates being high, buying treasuries does ultimately put pressure on interest rates.

I don’t believe for a second the decision to purchase treasuries is unrelated to the spike in yields.

At the same time, Bessent talks about wanting to maintain high growth, stating that the country can ‘grow its way out of debt’. High growth is more achievable if the fed cuts rates, which would lower shorter term yields. Yet the inflationary pressure would push longer term yields even higher, which I’m sure Bessent is fully aware of.

So I’m confused about the agenda. Bessent seems to want lower long term yields but will support inflationary policies (in an already high inflation environment thanks to uncontrolled government borrowing) that ultimately raise long term yields (and put pressure on the US dollar). What is he trying to achieve and is it even possible if he’s supporting conflicting actions?

Or is it possible he’s not really sure what he’s doing?

Long term treasury yields spiked to multi decade highs recently. This appears to have finally prompted a response from the treasury yesterday. Bessent managed to drop the 10y year by 0.1% (a significant 1 day move for the 10y) only to have the move largely reverse today.

Bessent has signaled he will regularly buy long term treasuries. Though he claims the action has nothing to do with interest rates being high, buying treasuries does ultimately put pressure on interest rates.

I don’t believe for a second the decision to purchase treasuries is unrelated to the spike in yields.

At the same time, Bessent talks about wanting to maintain high growth, stating that the country can ‘grow its way out of debt’. High growth is more achievable if the fed cuts rates, which would lower shorter term yields. Yet the inflationary pressure would push longer term yields even higher, which I’m sure Bessent is fully aware of.

So I’m confused about the agenda. Bessent seems to want lower long term yields but will support inflationary policies (in an already high inflation environment thanks to uncontrolled government borrowing) that ultimately raise long term yields (and put pressure on the US dollar). What is he trying to achieve and is it even possible if he’s supporting conflicting actions?

Or is it possible he’s not really sure what he’s doing?

Over the past 2 weeks, all major economic reports have indicated both the economy and inflation are weaker than expected. ADP and NFP both indicated weak hiring activity, CPI was in line with expectations, PPI was weaker than expected, and today's retail sales report was concerningly poor.

Odds of the federal reserve hiking rates at the September FOMC meeting have dropped from over 80% near the end of July to about 30% as of this morning.

Surprisingly, long term treasury yields have remained high through all the data. The 10 year yield is still at multi decade highs of over 4.65%.

What's keeping yields up despite all the weak economic data? Is it uncontrolled government borrowing/spending? Big tech's accelerating debt issuance? The general belief that oil stays high as the middle east conflict drags? I'm unsure of the primary driver of high yields, but whatever it is, it's outweighing this month's weak data.

And will the resiliency of treasury yields eventually become a concern for the stock market? Markets haven't cared at all so far - the S&P is all time highs despite elevated yields. But with tech companies increasingly relying on debt to fuel ai spending, I'm starting to wonder if elevated yields will eventually stifle spending and growth.

I'm unsure if high yields are a warning sign or if market resiliency reflects the expectation that earnings will outpace the rising cost of borrowing. But I am personally leaning towards the former being more likely.

Over the past 2 weeks, all major economic reports have indicated both the economy and inflation are weaker than expected. ADP and NFP both indicated weak hiring activity, CPI was in line with expectations, PPI was weaker than expected, and today's retail sales report was concerningly poor.

Odds of the federal reserve hiking rates at the September FOMC meeting have dropped from over 80% near the end of July to about 30% as of this morning.

Surprisingly, long term treasury yields have remained high through all the data. The 10 year yield is still at multi decade highs of over 4.65%.

What's keeping yields up despite all the weak economic data? Is it uncontrolled government borrowing/spending? Big tech's accelerating debt issuance? The general belief that oil stays high as the middle east conflict drags? I'm unsure of the primary driver of high yields, but whatever it is, it's outweighing this month's weak data.

And will the resiliency of treasury yields eventually become a concern for the stock market? Markets haven't cared at all so far - the S&P is all time highs despite elevated yields. But with tech companies increasingly relying on debt to fuel ai spending, I'm starting to wonder if elevated yields will eventually stifle spending and growth.

I'm unsure if high yields are a warning sign or if market resiliency reflects the expectation that earnings will outpace the rising cost of borrowing. But I am personally leaning towards the former being more likely.

The potus canceled the strike against Iran’s energy infrastructure about an hour ago, stating that both Iran and middle eastern allies asked him to hold off.

However, like the last dozen attempts at peace, he demanded that Iran open up Hormuz and give up nuclear ambitions. There has been no change in demands from either side. And nothing has happened between June’s ‘memorandum of understanding’ and now that would convince Iran to give up control of Hormuz.

Given the lack of any progress towards peace over the past 2 months, I’m fairly unconvinced the market will pump materially on this development like it has following every other cease fire agreement. There is just no evidence that the latest TACO will lead to permanent peace.

There have been far too many identical TACOs and fake peace deals that have ended up in renewed conflict. You can only trick the market so many times before it stops believing you. Iran will continue to attempt to toll the strait, leading America to continue strikes on Iran. And the entire time, middle eastern oil supply will continue to be choked off.

These cease fires are only dragging out the conflict. The more the potus dawdles on a decision, the longer the standoff will last and the longer Hormuz will weigh on the markets. A decision needs to be made to either give up the strait or don’t.

- “I’m extremely serious about inflation. Super committed to 2% target.”

- does nothing about it

The market has to understand Warsh was handpicked by the potus who has desperately demanded rate cuts for years.

Warsh will put up a tough front when talking about inflation. He’s given the same speech about keeping inflation in check for 2 FOMCs now without actually voting for a hike or hinting that he will.

The other voting members may eventually force a hike, but Warsh will never actually vote for a rate hike himself.

Google, Tesla, and Intel earnings last Wed/Thurs all indicated AI related capex exceeded expectations in the previous quarter and that future capex will also be higher than expected.

Yet chip-related stocks fell sharply on Friday (SOXX -4.4%, memory -8+%, neoclouds -10+%). It's important to note that before these ERs, many of these stocks already fell 30+% since mid-May.

I'm having a hard time finding reasons why chip stocks continued to drop after the big tech ERs and other positive sector news last week (Samsung/SK Hynix deals with Nvidia/Broadcom/Anthropic). Could something be happening behind the scenes that suggests AI spending is about to drastically slow down?

Please weigh in if you believe you understand last week's continued chip stock sell off after big tech released bullish ERs. Would appreciate any insights.

Preemptively addressing explanations I expect to see:

1. Escalating Iran War and high oil/interest rates:
I think the war is partially responsible for the pressure on chips. However, the extent of the chip sell off is confusing because other stocks that are historically sensitive to war/interest rates didn't drop materially on Friday. Small caps normally fall as interest rates rise, but were barely down on Friday. Gold also generally falls, but actually finished positive. Oil fell 2%.

The immaterial reaction from other interest rate sensitive stocks suggests that the chip stock massacre was more likely due to chip sector specific developments.

2. Bullish ERs being 'sell the news' events:
I understand chip stocks have gone on a historic run and good news can serve as profit taking events. However, chips already took a huge haircut prior to big tech ERs. Many fell 30-50% between mid-May and July 21 (pre-big tech ERs). It's hard to understand why semis would fall another 5-10% on Friday right after the market discovered chip spend will rise even more than expected.

3. Introduction of low cost Chinese AI models (Kimi K3):
To me, this might be the most likely explanation of the reasons I've considered. Compared to US models, Chinese models are able to operate at a fraction of both compute and memory costs. US companies may try to replicate the results, leading to a reduction in future chip spend.

However, I've read cheaper priced Chinese models are met with so much user activity that compute and memory demand ultimately rise despite less being needed per request (Jevons' paradox). Plus, predictions that chip spend will decline are speculation so far, as both Google and Tesla raised capex guidance.

Google, Tesla, and Intel earnings last Wed/Thurs all indicated AI related capex exceeded expectations in the previous quarter and that future capex will also be higher than expected.

Yet chip-related stocks fell sharply on Friday (SOXX -4.4%, memory -8+%, neoclouds -10+%). It's important to note that before these ERs, many of these stocks already fell 30+% since mid-May.

I'm having a hard time finding reasons why chip stocks continued to drop after the big tech ERs and other positive sector news last week (Samsung/SK Hynix deals with Nvidia/Broadcom/Anthropic). Could something be happening behind the scenes that suggests AI spending is about to drastically slow down?

Please weigh in if you believe you understand last week's continued chip stock sell off after big tech released bullish ERs. Would appreciate any insights.

Preemptively addressing explanations I expect to see:

1. Escalating Iran War and high oil/interest rates:
I think the war is partially responsible for the pressure on chips. However, the extent of the chip sell off is confusing because other stocks that are historically sensitive to war/interest rates didn't drop materially on Friday. Small caps normally fall as interest rates rise, but were barely down on Friday. Gold also generally falls, but actually finished positive. Oil fell 2%.

The immaterial reaction from other interest rate sensitive stocks suggests that the chip stock massacre was more likely due to chip sector specific developments.

2. Bullish ERs being 'sell the news' events:
I understand chip stocks have gone on a historic run and good news can serve as profit taking events. However, chips already took a huge haircut prior to big tech ERs. Many fell 30-50% between mid-May and July 21 (pre-big tech ERs). It's hard to understand why semis would fall another 5-10% on Friday right after the market discovered chip spend will rise even more than expected.

3. Introduction of low cost Chinese AI models (Kimi K3):
To me, this might be the most likely explanation of the reasons I've considered. Compared to US models, Chinese models are able to generate tokens at a fraction of both compute and memory costs. US companies may try to replicate the results, leading to a reduction in future chip spend.

However, I've read cheaper priced Chinese models are met with so much user activity that compute and memory demand ultimately rise despite less being needed per token (Jevons' paradox). Plus, predictions that chip spend will decline are speculation so far, as both Google and Tesla raised capex guidance.

With new sets being released every month, it's getting increasingly difficult to collect cards and acquire rare chase cards even if you're subscribed to the monthly pass. There are just way too many cards.

Increasing shinedust rewards and the pace of trade token regeneration would really help us keep up. We're basically in a quickly inflating economy where the currency values stay exactly the same.

Also, PTCGP is a trading card game. Achieving a high degree of player interaction should be a priority. Trading should be promoted to encourage player engagement, yet trading is one of the hardest things to do on the app. Even if you have a monthly pass, you're limited to maybe 2 or 3 large trades a month. Every new set has 30+ 2 star and shiny rares - there isn't enough shinedust to trade for chase cards. And with only 1 trade token being generated per day, you can only trade 30 times a month for common cards - this is especially problematic for newer players looking to complete older sets.

I'm not sure if DENA even remotely follows this subbreddit, but I hope they realize it's gettiing increasingly impossible to keep pace unless you're a whale willing to spend hundreds of dollars per month. Giving the players more shinedust and more trade tokens would really go a long way.

EDIT:
Not sure why so many posts are saying I'm expecting to collect every card in the game.

It's pretty clear the post is about allowing the broader player base to somewhat keep pace through trading in a trading card game, not achieve master collections

There has been significant escalation in the war between the US and Iran over the past few days. The POTUS has been threatening to hit Iranian bridges and power plants over the past week. Last night, Iran decided to beat the US to the punch and attacked oil and water infrastructure in neighboring states. 2 of Kuwait's 8 desalination plants were damaged.

Complete destruction of desalination plants in the middle east would be an absolute catastrophe. There would be a humanitarian crisis, middle eastern economies would collapse, and oil would rise to unprecedented levels and cripple the global economy. The stock market would likely crash.

With markets being only a few % off all time highs, stocks clearly haven't priced in this doomsday scenario being the base case. But with Iran now preemptively targeting energy and water plants, is there a larger chance that the POTUS follows through on his threats to hit Iranian power plants? If so, I have to imagine Iran then doubles down on desalination plant attacks. This crisis would quickly spiral out of control.

I just hope frail egos aren't the reason for a global catastrophe.

There has been significant escalation in the war between the US and Iran over the past few days. The POTUS has been threatening to hit Iranian bridges and power plants over the past week. Last night, Iran decided to beat the US to the punch and attacked oil and water infrastructure in neighboring states. 2 of Kuwait's 8 desalination plants were damaged.

Complete destruction of desalination plants in the middle east would be an absolute catastrophe. There would be a humanitarian crisis, middle eastern economies would collapse, and oil would rise to unprecedented levels and cripple the global economy. The stock market would likely crash.

With markets being only a few % off all time highs, stocks clearly haven't priced in this doomsday scenario being the base case. But with Iran now preemptively targeting energy and water plants, is there a larger chance that the POTUS follows through on his threats to hit Iranian power plants? If so, I have to imagine Iran then doubles down on desalination plant attacks. This crisis would quickly spiral out of control.

I just hope frail egos aren't the reason for a global catastrophe.

The semi trade has gotten dumped very hard over the past 2 months even though there hasn’t been any material sector related bad news - nothing that would indicate a slowdown in chip demand anyway.

I understand the semi trade was overcrowded and needed some relief, but major chip names are down 30-40% across the board, despite the latest earnings coming in more and more bullish (see micron, asml, tsm).

The extent of the selling on good news makes me think something else is going on.

Is there some upcoming announcement from hyperscalers about reduced capex that only insiders know about?

Or is the general market just taking a guess that capex will fall due to every chip and memory company (mu, asml, tsm) announcing price increases in their latest ERs?

Does anyone understand why there's such a wide gap between SK Hynix KR ticker and ADR?

I'm guessing based on EWY and DRAM, the KR ticker would be trading no more than 10% higher during US market hours today. But the ADR is up 20+%. The ADR was already trading at a 10+% premium to the KR ticker even before today. Now the gap just got even wider.

I understand US ADRs trade at a bit of a premium (TSM, BABA, etc), but how can the difference be this large? Will there be some convergence in price at some point?

I read the SK Hynix ADR is supposed to open at $180, roughly 20% higher than the Korea ticker.

Does that mean the ADR will start being added into DRAM at the 20% premium? So DRAM won't actually benefit from any of the 20% increase in price?

And are the Korean ticker and the ADR expected to gradually converge in price - as in either the KR ticker moves up or the ADR moves down (or both)? If the ADR is added to DRAM at $180 and then gradually moves down to meet the KR ticker price, aren't DRAM holders naturally scammed just by an inclusion mechanic?

I don't fully understand the inclusion mechanics here, but they seem like they're going to be funky. Please weigh in if you do understand.

The new milotic deck made the pve winstreak missions substantially more difficult. Because expert AI is guaranteed optimal RNG, the AI is outputting 100-120 damage + sleep by turn 2 every game I face this deck.

Rigged rng is too oppressive for this particular deck and is adding hours to achieving the winstreak mission. It single handedly stopped my streaks 3-4 times.

This deck is already a good enough challenge without needing to give the AI favorable RNG. I’m sure the player base would have less of an issue with this deck existing in pve if standard rng were implemented.

The odd thing is, I’m sure DENA knew exactly what kind of monstrosity it was introducing to pve. I’m really not sure what DENA is hoping to achieve by going out of its way to irritate its player base.