I'm Just Talking to My Diary

...and Wondering why I got out of bed at all

I don’t know. It’s good to be in something from the ground floor. I came too late for that, I know. But lately, I’m getting the feeling that I came in at the end. The best is over.

Many Americans, I think, feel that way.

I think about my father. He never reached the heights like me. But in a lot of ways he had it better, he had his people, they had their standards, they had their pride… What do we got?

Something I wish I had known before I became enthralled by markets is how lonely it gets. You’re a very popular lad when the push notifications start flowing and shit hits the fan, but as soon as you start to explain how it all connects — and if you’ve survived over regimes, you do see it — people’s eyes start to glaze over, and you realize that there is nothing you could possibly do to convey how the most ludicrous system designed around “what happens next?” works without sounding like a gibbering schizophrenic. As soon as you attempt to explain one thread and how it connects to a seemingly unrelated thread, but actually a third thread unravels when a fourth thing happens, people tune out, or worse, they get scared. They look for the simple explanation around them, which doesn’t exist, but is cleverly sold through “experts” who exist just to tell you that everything’s alright, when it never is.

Back in September, I wrote in Postmodern Society and its Future that

Securitized reality is a simulation, but it’s just not knowable when the curtain reveals itself. We don’t know when the universe expires. We can only hope to expand it. It’s not provable, but it is observable, and it’s why precise predictions of doom are never accurate but bad feelings tend to be more accurate than not. Obviously, I am not exactly a bullish individual, but I know that there are serious cracks in the system, and have written about plenty of them…

What I realized is that the “trick” that kickstarts liquidity in a belief-based system (fiat) is the fact that you have to get people to believe in it. If I endlessly point out how everything is constructed around an assumption, and continuously harangue the point that “it’s not real”, it becomes a self-fulfilling reality if my ideas hit critical mass…

The entire point of a centralized government apparatus is to short societal volatility. Someone has to know the outcome in advance, even though it’s uncertain when exactly the election is “called” for one side or the other. It’s not a conspiracy, it is the literal job of the government to not upend society. Pulling up the curtain creates pure discord.

But, this is why everyone gets exhausted. Humans have a finite level of attention span reduction while computers can only keep trying to overfit and spread information at the highest frequency. Humanity is at the end of its tether emotionally for this very reason.

This is why I get the feeling that something seems more off the more all of my intuition gets confirmed. Frenetic information absorption means nothing will ever happen, sure clarity means an inflection point is coming.

I don’t want to verbalize what I’m thinking because I am not a prophet, but my intuition feels that something very, very off. It’s why I have so much inner clarity, internal zen. The insights are all in my writing: the amount of crowding around everything is dangerous, there’s too much competition for liquidity, and there’s not enough real flow to go around, and people are burnt out and tired of it, and it cannot be subsidized artificially anymore. We are going to get a post-FFR meta in my lifetime, is what I have concluded, and I simply don’t know what that looks like. It’s unpredictable.

And, in a sense, we have arrived at what I saw back then. After 15 years of thinking about markets, and 10 years of trading them, we are at the point where the post-FFR meta should commence. But before I outline what that is, I just need y’all to bear with me for a minute.

My dad was a biochemist by profession — an insanely talented one from what I understand — and seemingly spent most of his time in his own head. My only real memories of time spent together up until I went to college center around watching sports or traveling to chess tournaments in relative silence. He would read newspapers and other research materials while I played my games, and that was about it. The strong, silent type, as it were.

Piecing together the rare bits of advice I got is a puzzle in and of itself at my age now. I remember all sorts of simple lines that are stunningly deep when I think about them now — you’re not capable of doing a Ph.D is a single quip that probably freed up my entire 20s — but I was never once given actual financial advice. I was handed a Wall Street Journal when I entered high school (after having saved up what I thought was “actual money” from teaching lessons and winning pittances at the tournaments) with the sales pitch of “you understand this, and you’ll understand money.”

That was after 2008, of course. And though I don’t know much about what actually happened to anyone personally, I can piece enough together. My dad didn’t seem to understand money at all — I heard a couple anecdotes about taking car loans in the 1980s at 20% to buy brand new vehicles without understanding interest, and another where he chose a pension option instead of a job at a small biotech startup that’s now worth well into the hundreds of billions of dollars. In his 40s, he seemed to have put it together, but then right as things were going well, the world ended.

And I do mean actually ended, as in “200 people applying for jobs as a McDonald’s burger flipper” ended. Maybe nobody really knows what a crash is anymore, because they joke about “put the fries bag in the bro”, which is perhaps the most defining part of Ben Bernanke’s legacy,

There exists a catch-22 when the lender of last resort has to act: if central banks exist to provide liquidity in last resort scenarios and successfully do so, then markets then can quantify and account for this course of action, thereby creating continuous last resort scenarios which rely on central bank liquidity provision. As far as I can tell, it can work as long as people continue to believe in it, but believing in infinite liquidity provision when reality dictates that liquidity is finite feels like ontology rather than analysis.

and whose memoir — The Courage to Act — I devoured after it came out, and highly recommend if you want to understand the theory of mind behind the Federal Reserve.

Here’s the thing about the Wall Street Journal though — it sucks! You don’t learn anything from it. I purportedly had a laptop for chess purposes, but

I’ll offer a bit of personal history here, as perhaps one of the youngest people (being in my late 20s) to have a pretty clear idea of how this has progressed since I first got online in 2004. Ever since I got my first laptop, my life has been perpetually online first and foremost for the past two decades. Under the guise of studying chess, my entire life has been scrolling, reading, chatting, and generally being “aware” of what goes on in the murkier corners of the internet in a manner that circumvents what I now know “COPPA” was supposed to prevent. It’s why I am not a hardline anti-screentime person, because in many ways, if I didn’t have the internet, I might have imploded out of sheer boredom in grade school.

this was the peak era of the Internet of Blogs, and, of course, I made my way to the original zerohedge.blogspot.com, which still remains in its true form as a relic of the past era.

In a sense, I’ve been plugged in to sentiment longer than most of the Minecraft generation has been sentient. I know what it looks like on the internet when the world is crashing because this was the first time I truly got a glimpse into what was actually going on. I had the news telling me one thing, and then I’d scroll through the comment sections above and at leveragedsellout.com, another all-time classic, and see scores and scores of former financiers bitter beyond anything I had ever read online before. Couple that with Matt Taibbi’s iconic Goldman Sachs Vampire Squid piece, and you have the basis for a real-life mystery novel — how did they convince everyone that there was “no risk” (by allowing interest rates to remain at zero), and why did people start buying into stocks again? — that has captured me for a decade and a half now.

I don’t need to write any more about ZIRP, or passive vehicles — this entire blog is essentially a real-time dissertation (and my X account is real-time drafting) to explore why these things simply don’t work unless the Fed deems it so, and how the mechanics affect the prices during trading hours down to the microsecond, because nobody else would bother listening to me in real-life. The first ~60 posts on this site were written for an audience of ten — mostly people I had met through WallStreetBets, which is a memoir for another time (because of course I found my way there by 2014) — and it’s still kind of surprising that people actually read my thoughts now. I truly don’t know if it makes sense to anyone other than myself, so I’m mostly forced to write it for myself.

I knew when I was recruited for institutional trading jobs in the 2010s that the best was over as soon as I set foot in my first internship — I quickly learned that nobody was trading due to the Volcker Rule preventing prop speculation (with some caveats, namely that there had to be actual external flow to trade around), as the broker I sat next to politely informed me that nobody was trading other than to roll collars. I learned the difference between “principal” and “agency” trading (read: flow trading vs execution trading) due to the fact that the “principal” desk I was supposed to be on, and that had hired me, had all left 3 weeks prior to me showing up. Everyone forgot that I was supposed to be there.

I read the writing on the wall and got the hell out after, admittedly, having a blast in what is a tradition that simply isn’t the same post-2020 — intern season in New York City.

I’ve never made any meaningful amount of money from paychecks, and, in fact, haven’t received one since 2018. I don’t spend all my time consulting nor do I charge money for anything I write — all my money comes from doing the exact same thing I did 11 years ago, but better — sit at my computer and figure out what’s going on in everyone’s head, and then find the path of least resistance to position around. I think that’s an important distinction to make, because when it’s your own money as opposed to client money, you have a totally different perspective from everyone else. Just look at FTX — they tried to do exactly what their billion dollar infrastructure fastest-connection-in-the-West firm did, and blew up in such spectacular fashion that I simply can’t believe the operation lasted as long as it did. In a similar manner, I saw people that genuinely had no idea what they were doing raise fund after fund for the same quantitative bullshit that everyone else does having a resume and not much else in their head blow up in the same fashion over and over again. Back in the pre-2020 days it was always some rube who tried to grind out short vol on a little too much leverage, nowadays it’s “momentum” or “pods” or another buzzword, just like tech types saw all sorts of random data science machine learning bullshit get acquired for unfathomable amounts of money over and over again when we know there was nothing to it other than “cheap money needs somewhere to go”.

couldn’t*

So, to answer the question everyone probably opened this email to see answered: no, this isn’t a real crash. Any time you see mass selling 3 days in a row, it is people levered to the tits blowing out in the same way they always do. (And, as it so happens, zerohedge always is ahead of the curve with that rumor mill — it’s the TMZ for hedge fund blowups.) A real recession market trades kinda like it did just two years ago, which, of course, everyone memoryholed already — things just go down over time with no real bid, much as they went up over time for the entire 2010s.

Something I say often is that trading for a living sucks. It’s a lot of waiting and stressing out about the sky falling that never really comes, until it does, and it has the worst dollar-per-hour offer on the planet. You can spend all your time working on this stuff and lose relentlessly through no fault of your own! Believe me, I get why people freak out about red days, but when you’ve bet on yourself and won — I won’t ever replicate what I pulled off in 2024 again — you almost feel incensed at how hard it was to do it this way when, like everyone else with a NE private school technical degree, I could have just gone west, put pronouns in bio, written the diversity statement, and done some useless product management stuff and collected equity that was forced upwards for a decade straight. If you had actual money to buy Q’s and hold from 2012 onwards, or happened to be in that sphere, congrats, you won the easy way. You don’t get to complain about when, after a 10x in 10 years, things finally get a little shaky.

I rarely use this phrase, but the madman actually did it. In my entire life, I have never once seen a politician win and then do exactly what he said he was going to do for months straight (or, if we’re really keeping track, since the 1980s.) Hell, Obama did the complete opposite in 2008 as noted by the relentless, aforementioned Taibbi:

Every politician breaks promises, but the issue with many of the items in Obama’s long list of reversals was not failure but betrayal, in the most profound and devastating sense of the word. I was relatively a booster of Obama in 2008, but once assigned to cover the financial crisis found myself stunned at choices he made, beginning with the appalling decision to invite still-employed Citigroup officials to run his economic transition. This move led to one of the more breathtakingly corrupt deals in modern presidential history, one the press gave almost a complete pass. I heard about it from a senior Democratic Party official, a great believer in Obama who was flabbergasted by the lack of press attention and still I think hopeful on some level that the King simply didn’t know what was going on at his court.

Obama hired his close friend and Harvard law classmate Michael Froman, a protege of former Bill Clinton Treasury Secretary Bob Rubin, to run his economic transition team. Froman was a Citigroup executive who made $7.4 million at the company in 2008 and did not resign when he joined the transition team. This is significant because less than a month after Obama’s election, on November 23rd, 2008, a deal was struck to give a $306 billion bailout to Citigroup, a rescue negotiated in significant part by Timothy Geithner, another former deputy to Rubin.

Some background is required to understand the full depth of the betrayal. Rubin, along with Clinton and former Fed chair Alan Greenspan, had been instrumental in repealing the Glass-Steagall Act, a 1930s law which prohibited the merger of commercial banks, investment banks, and insurance companies. In the 1990s, that law ostensibly stood in the way of the Citigroup merger, which united Salomon Brothers, Citibank, and Travelers.

I say ostensibly because the Citi CEO Sanford Weill simply concluded the merger extralegally, thanks to what was essentially a Papal indulgence from Greenspan, who temporarily blessed the deal in 1998 pending congressional action. With a big push from Clinton, Rubin, and Froman (who was Rubin’s chief of staff from 1997-1999), and tangentially Geithner (who also worked under Rubin in the Clinton Treasury), the Glass-Steagall Act was finally repealed via the passage of the Gramm-Leach-Bliley Act, which legalized the Citigroup merger post-factum.

Once the Citi merger went through, Rubin and Froman immediately went to work at the new super-bank. Rubin was paid CEO wages at $115 million per year for a job Citi itself described as having “no line responsibilities.” Nonetheless, Rubin did have a senior position at the bank, which by 2007 had accrued $43 billion in toxic mortgage assets, a major part of the reason the company eventually needed a bailout.

Follow the bouncing ball: it’s November of 2008, and Citigroup, Rubin, and Froman are headed down the drain of history. The company is rescued when Froman is hired by the incoming president, an old college buddy, and another former protege of Rubin’s, Geithner, negotiates aggressive intervention by the Federal Reserve bank to flood the essentially bankrupt company with cash. Now for the good part: before the Citi bailout was even announced, Timothy Geithner was hired by that still-employed Citigroup executive Michael Froman to be Barack Obama’s Treasury Secretary. Citigroup then turned around and — after the bailout — gave Froman a $2.25 million year-end bonus. Another Citi official who’d gone to work for Obama, future Treasury Secretary Jack Lew, got a $940,000 bonus after the negotiated bailout. When news of this got out, it was finally a bridge too far, optics-wise, and Froman at least pledged to give the last bonus check to charities “related to homelessness and cancer.”

If it seems like the lengthy excerpts indicate that I’m heated as I type this, of course I am. This is what actual “Occupy Wall Street” thinking looks like — I can trace every bit of how bullshit this system has been that causes the righteous bitterness that I have to control so I don’t get carried away and get blown up shorting against the Fed.

Do I know what Trump’s plan is with tariffs? Of course not. But this guy threw an absolute Molotov cocktail directly at the people who have been winning the rigged game with someone else’s money while not being able to point to anything they actually delivered of value to regular people outside of smartphones, which are engineered to be mind-sucking brainrot slot machines that sit in your pocket fucking endlessly, that has driven people to the point where they support a kid icing some poor schlep who worked his way to the top of an insurance company through no fault of his own other than putting himself to work because nobody can understand why the number keeps going up while everything seems to get shittier and shittier. A phrase I have been using all weekend is “point the gun at your head to own the Fed”, and that’s what post-FFR truly means: the “independence” of the Fed is gone, because the rates don’t matter anymore, as soon as they concede and cut, because there is no purpose to have monetary policy separate from fiscal policy when the country is going broke if all their actions do is push up the stocks even more, as I explicitly outlined at the beginning of the year:

I knew going into the election that Trump would win, as I had been saying for over a year in advance, and wrote to assuage some, er, liberal concerns that

here’s the good news — for the first time since 2020, I get the feeling that people are willing to try again. The entirety of 2020 felt like one collective psychotic break that I wasn’t a part of, and the chaos that ensued in 21-22 meant that a lot of people just kept their heads down, and some still are. But for my sect of peers — talented people who didn’t quite get a shot to build anything in the free money era, then immediately got plunged into the pandemic — there’s a palpable urgency that the next few years might be the last shot any of us has to innovate in prime working years

and I could only describe the “anti-acc” mindset of mine as “optimistically bearish”. “The SPY is falling” is awfully close to “sky is falling”, but if it delevers and sells off in the right manner rather than entirely collapsing, I think this is a better societal outcome than giga-churn big tech pushing the market up 20% would be.

Did I get what I wanted? Abso-fucking-lutely. Bill Ackman and Dave Portnoy and the literal worst people to ever talk about “an honest day’s work” bawling about their net worths dropping 20%, as if they haven’t been robbing people blind for decades (and, in Portnoy’s case, effectively lobotomizing an entire generation of fraternity brothers and getting them addicted to sports gambling), is not going to “crash the economy”. The Fed is not coming to save your stocks anymore, because almost all the stocks are owned by a very small percentage of the population! They are going to have to find a way to operate in line with what Trump has, again, stated he would do for 7 months — try and find any way to bring actually doing shit back to the US.

It just outright has to be true going forward (for me as well) that sitting around slapping on a MacBook cannot pay exponentially more than working as a chemical or electrical engineer. It’s only stock-based comp that really separates the two. Thus you have people on this site who think that it’s concurrently a travesty to make less than 6 figures in a city while ignoring the fact that nobody can even point to why their job pays so much other than “billings” and “ads”. Frank Sobotka had it right, all we do is stick our hands in other people’s pockets.

Without fail, every single person who has complained about stocks and tariffs in the past week to me has sent some TikTok video of an old Japanese guy who’s been making the same omelette or shoes for 60 years. Don’t just go to the fucking Jiro Dreams of Sushi restaurant, actually understand what craftmanship is. The concept of pride in doing something simple well is apparently completely lost on people who always complain about how pointless their emails are or how much of their day is wasted on meetings.

It is cheaper to bail out a company than a market cap, and even moreso to bail out people rather than bloated messes like Ford. For example, I think it’s totally fair to wipe student loan debt for kids who were sold the dream of a white collar job in exchange for what we’re doing now. Something has to change about “max 401k target date fund send email” mentality, and if this is what it takes, so be it.

I truly don’t know what the future holds, but I trust people who get sentiment like no other — I mean, Trump has been the center of attention of the world for a decade straight and won 2 elections, he has some ungodly ability to tap into everyone’s brain rent free (which is good, because he wouldn’t have paid the rent anyway — and people who have executed while handling ungodly levels of risk that even I can barely comprehend — are not going to send things into the ground, because they get what Luigi implies. A truly fair result in the aftermath of 2008 would have been every single person involved in any manner being hauled off to jail in a Soviet show-trial fashion, because we’re not that far removed from the very real fact that, when empires collapse (and this will be elaborated on in my next post about Russia and Germany), it turns into every man for themselves, with skeletons in closets that should never be brought up. Only one person went to jail, but hooray! The Lehman Ch 11, which closed only recently, generated billions in fees. Are those part of the vaunted job figures and growth numbers we’ve been putting out for the past decade, or are we still fluffing everything with “people who have driven Doordash a few times”?

The clean resolution to the tariff drama depends on how long the faceoff between Trump and China lasts. I don’t think it’ll last longer than the month, but that is when regular people will start to feel the pain, and I hope it doesn’t come to that. I’m almost certain it doesn’t, but who knows? The lesson of my dad’s non-guidance about financial advice is that nobody actually knows what will happen. Profit confirms intuition, and I have done well enough to think my thoughts are worth spreading, but I know for a fact that everyone paid to write a column or post takes that confidently says anything is utterly, 100%, full of shit. If everything goes well, we will return to fundamental value actually mattering, single stocks being picked, and everything else I outlined at the end of Postmodern Society and it’s Future. If everything doesn’t, well, we are going to have to take our medicine at one point or another. I don’t forget anything I’ve ever written or read (or anything else for that matter), and I can confidently say that every bit of discourse that I read about markets has been debated since the beginning of trading itself.

What I will advise, though, is that there’s nothing wrong with walking away. Think back to my concept of “the algorithm”:

There is an algorithm that ebbs and flows around the American workday that controls what everyone who logs on to some form of media or another will see within 4 hours to 6 days. Depending on the form of media, the frequency with which you see things will imply different things about the signal and actionability of what is being pushed. How well you have curated your mediums of choice alters how you take advantage of it — if you understand X very well, you have a head start on doing things, while if you understand how things break containment into regular news, you have a far greater ability to sit on your hands and operate on a “nothing ever happens” wavelength, as so frequently happens. As Deepseek so beautifully put it, the velocity of the flow is dependent on the collective inability of society to stop checking their phones.

This algorithm is not something that’s just coded up — it’s metaphysical, the collective machinations of everyone involved in the post/scroll/share/react timeline.

The algorithm is still incredibly potent — I myself witnessed boomers at what was ostensibly a college progressive middle east rally holding “Down with Elon” signs like it was a Grateful Dead concert. They don’t even know why they’re mad about Sunday night futures movement, just that they’re told to do so.

Somehow, I’ve gotten mine, but it just doesn’t sit well. I’m always going to pay attention to markets, but I need actual time to sit and think and build what I have in my head — something real — and I’ve done more sitting and staring at green-and-red television static than anyone in their right mind should do in a dozen lifetimes. So, I’m finally going to take the last bit of advice my dad ever gave me regarding the market, in jest: Sell in May and Go Away.