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Strategies & Market Trends : World Outlook

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From: Don Green	10/18/2025 9:18:26 AM
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WTF Is Going On...The markets are a little wild today and there is no specific item driving it from what we can see. Here are a few that we are hearing 16th day of the shutdown and no signs of a break (chatter that it may last til Thanksgiving) Geopolitical risk rising: Lengthy Putin call, China-US trade tensions escalating, India ignoring Trump demand to stop buying Russian oil Hawkish FedSpeak - Waller sounded less dovish than normal Huge OpEx - The notional open interest for this expiration is the largest recorded for any October. Regional bank angst - Zions and Western Alliance down big on loan losses. US funding market stress - surging SOFR rates signaling a liquidity shortage [url=][/url] WTF is going on... Stocks are tanking... [url=][/url] Regional banks getting slammed... [url=][/url] Bonds are aggressively bid with 2Y yields are suddenly collapsing (10Y back below 4.00%)... [url=][/url] Gold is going vertical (up)... [url=][/url] And crypto is going vertical (down)... [url=][/url] If we had to guess, we would say this is mostly related to the funding stress finally being recognized by a broader set of market participants as it seems demand for 'good' collateral is on the rise (gold and short-dated bonds) and leveraged risky assets are dumped. The most important indicator, as always, remains the SOFR rate: should the recent drift higher continue, the self-fulfilling cascade of a liquidity shortage will almost certainly be activated. And today's SRF auction shows the stress continues to build... [url=][/url] In fact it's worsening... [url=][/url] Trade accordingly. * * * *And if that's not working out, try some lithium*

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