Even if QT Completely Stops, That Only Takes us to January 2025 Before a Repocalypse

Find out why by getting past this subtitle.

• The 9th of Av is almost over, and Iran has not attacked. If we can get through today with nothing, then we're probably in the clear for now.

• Assuming QT stops completely today and Fed balance sheet completely stabilizes, we still hit 36% below double exponential (last repocalypse) by January.

• Repo market volume ratches up past $2.1T consistently now, basis trades on 10Y, 5Y, and even 30Y at new records yet again, which are funded by repo cash.

• Nobody has any idea how much of the Yen carry trade has unwound.

Still Nothing From Iran, They Probably Chickened Out

If Iran doesn't attack Israel today, they probably won't for the time being. Signs are that they are backing off, now saying that "the only thing that can stop an Iranian attack is a Gaza ceasefire". That's a major sign of weakness, and I think Netanyahu is going to try to squeeze it. My sense is that most of the Israeli population does not want a ceasefire, since Netanyahu is rising in the polls and he's back in the lead for the first time since October 7. Nevermind he's responsible for the atrocity, but what can you do. Trump was responsible for Covid vaccines and lockdowns by not fighting them but nobody seems to care about that either.

All our politicians are horrible. The only way out is the death of the dollar that gives those politicians power.

Timing Update from Dr. John Hartnett, January 2025?

Dr. Hartnett put out a piece on August 6 updating work we collaborated on a few months ago. He plotted Fed liabilities along a double exponential curve going back to 1913 and we found that the last repocalypse happened when total Fed liabilities fell 36% below that curve. By the rate of QT since post regional bank bailout, that level would have been hit by August 31 this year. But the rate of QT has slowed somewhat, and so I added in a new vertical line to the chart right through the "32% below" and "36% below" arrowheads.