Tony Greer: The Bond Market Is Calling Washington’s Bluff

0:16Oh man, it's always a special week when I get a kick off the week with a market update from my brother, Mr. Tony Greer, TG.

0:25Tony Greer: How are you, man? I'm good. I'm good, Trev, dog. How you doing, man? Yeah, I'm good. It feels like after the summer doldrums, things are kind of feeling a little bit weird, but looking for some sort of direction, some sort of clarity, I don't know if that happens this week, Tony. Honestly, it's hard to decide what is going to move markets, the big markets, one way or the other. I think we're kind of in no man's land, to be quite honest with you. I see a couple of things that could happen, you know, they might take a catalyst and, and, but I think that there are some things that are set up to happen that will shake this tape up massively.

1:06Tony Greer: We can get into that however direction you want. Yeah, yeah. Let's do it. You actually published a fantastic note, which is saying something because I read everything you publish, right? And this, today's was, well, listen, today's note was special, but it also, I think kind of just, it triggered me a little bit. Not only your note, I'm in the middle of Andrew Sorkin's 1929 book. And so I'm taking all this information of what happened in like, and currently like 1931. Wow. And then I've also, our friend Barry Knapp, who we're going to see in a couple weeks in Nashville at JD's conference, at the Dirt Knapp conference.

1:46He put out an interesting note again this morning. But let's start kind of where I want to take this, because you are a house amongst yourself, TG. But Scott Besson's walking back of I Am The House was some sort of... sentiment indicator if it wasn't in itself. Man. Today, you compared Scott Besant to Dick Fold. Some people may not know who Dick Fold is. Lehman Brothers days. Is that a proper comparison? Tell me what the thought's going through your head right now.

2:25Tony Greer: Trevor, you know what's wild is that it's the season of batshit crazy things happening on Wall Street, right? We're settling into September, October, and you have trader brain memory from seasonal things, no matter what. And when Scott Besson said, I'm the house now, it just reminded me like my gut says immediately, oh, they're going to come after him for that. Right. You know that because that's how markets work. And I was like, this is Dick Fould five days before Lehman went under saying that we're pretty well capitalized, you know what I mean? And just, you know, keeping a strong, trying to play a strong hand when he doesn't have one, right?

3:08Tony Greer: That was another case of what Scott, that is a definite, that's the kind of metaphor for me, is that we have two massive mega highly public leaders playing a lousy hand with strong rhetoric, right? Lehman is totally capitalized. I am the house now. Now, we got Scott Besson comes back on and I saw it tweeted by Nick Timoros or if I'm saying his name correctly or not, but he's the messenger. Right. So if he's getting it out, that's what they want the markets to hear. And he had to walk it back and say, no, that was just, you know, I have some inside information. I can see more than you. Right. And I think that he was trying to be like, OK, let's get the I'm the house target off my back.

3:51Tony Greer: Right. Yeah. Because what's happening in the markets is 10-year and 30-year yields don't want to hear it. They do not care that he's the house. They don't care who the house is. They are on a trajectory path higher. And people can feel bond longs getting long squeezed. People can feel the range break and rates are clearly headed to another zip code. And we don't know where yet. and people are starting to feel that around the next 10 basis points higher in yields, we're going to hear from Scott Pessant. You know what I mean? And it's not just going to be a passive thing. It's going to be, we're going to have to do this in the markets.

4:33And so that's kind of what I'm trying to be on the lookout for.

4:38Tony Greer: And if I had to find a catalyst, I don't look much further than the oil market. You know, if you look at crack spreads and the diesel price, I feel personally like it's the diesel price that's wagging this whole inflation scare. Right. I feel like$6 diesel has shaken everybody up to, yeah, that's why my grocery bill is 3X, right? It's the diesel prices and they're not going down because the crack spread won't loosen up a penny with refiners running at full capacity. and Trevor, I wonder what happens if all of a sudden crack spreads break the top of this range and leg higher, you know, because the economy can bear refiners paying any price for crude oil so that they can fill their tanks right now.

5:25Tony Greer: And that's, that's literally what's going on. And with the crack spread bottled up between 60 and$70, we see diesel above six bucks and we see yields climbing. So that's the market storm center to me. Those are the first things I'm looking at every day when I wake up. Where's jet fuel? Where's the crack spread? How is the bond market reacting to that? And I just wonder, what if the crack spread goes 75 bid, diesel goes$7, 10-year and 30-year yields are going to be north of 6%. It's going to happen fast. you you did a great job of kind of breaking down a little bit of the flows we're seeing on the retail side of the market mentioning that in fact retail investors specifically caught the the stock that the europeans dumped last year and it helped help save revive that market but now they're just going into tlt retail investors buying bonds here tony that's not something i had on my bingo card.

6:27Right. Right. But, and bear with me here. Let's go back to what I, you know, been consuming from Sorkin's 1929. Let's hear that. Retail at that time was the margin levered buyer and they got completely wiped out. What makes today's retail bond buyer any different than what we saw almost a hundred years ago?

6:50Tony Greer: So I would say that the retail force is a little bit different than it was back then. I think it's basically larger and stronger because I think that there are more number one individual traders and individual investors out there than there were in the 1930s, certainly. and they're playing with house money now, man. Right. At some level, you know, what was, what was very obvious was that they were the marginal buyer, right. Of the, of the liberation day thousand point S and P slide when the Europeans were pulling their hair out saying this country is uninvestable. Your president is batshit crazy, which is more or less all true, but they sold their positions into a black hole and they were just hitting bids without remorse, divesting from the United States.

7:41Tony Greer: That's when we saw massive inflows of retail funds into all the ETFs. And that marked the bottom of that move. I mean, and the dead ball bottom. And then we got a thousand point S &P rally. And I'm going to tell you that none of the retail people that bought those stocks a year and change ago are sellers. They just throw that in the portfolio. Now we're up a lot more because we bought all the stock on the dip. And now, you know, you're going kind of around the horn. And if you're paying close attention to the financial views on bonds, you know, JD, Jared Dillian, my partner in crime on the podcast, our podcast was one of the first vocal bulls, right?

8:20Tony Greer: He's getting a little bit run over, especially right now. And then you had Jim Bianco, who is a career bond bear, turn around and say, I'm kind of bullish down here, right? Like I kind of got the move that I've been looking for. And for now, and I'm sure that he's not talking about forever. He's just saying, okay, from here, this stuff, bonds are well oversold. And he sees a couple of things where he's vocally saying, okay, I'm kind of interested in the bond market now. And when smart bears get bullish, everybody sits up in their chair, right? It's the guy that had the thesis right that all of a sudden wants to cover his position.

8:58Tony Greer: And everybody's like, well, I want to buy bonds at five and a quarter, at five and a half, it's in 30. So I'm in with this guy's trade, if the bear got bullish and I like five and a half percent yield in the 30 year, then I'm a bond buyer too. And so I think that a little bit of that has bled into the markets and people are getting off their ass and saying, okay, I'm not going to chase any more Nvidia up here, but I will buy some TLT with the money, you know, or things like that. So I think that I'm interested because I'm only sitting up in my chair because retail used to be a force that you'd be interested in fading.

9:32Tony Greer: And after that operation last April, May, I'm not interested in fading them anymore. And I feel like they've gotten more and more things right. So that's my point on that, Trevor, if that's fair. And I could be all wrong, man. You know, who knows? Well, if the bonds continue to sell off, you expect either Warsh or Besant to step in and provide some port. Is the bigger risk a Fed tightening once too often, similar to what we saw in 1930s? Or is it officials who rescue the market too eagerly? That's a great question, and it's a hard one. Because, you know, Warsh just got this first quarter point hike on the tape.

10:17Tony Greer: It seemed very much like he had to do it to save face. And now I feel like the bond market is saying, okay, well, let's have another one because that was a step in the right direction, but also a drop in the bucket. You know what I mean? So like, let's have another one because we didn't get, he didn't do enough to hurt long end inflation expectations, right? So where there's going to have to be another hike in here somewhere to be able for the long end to come off for the long end to say, okay, the treasury secretary is going to address high yields. And maybe this is as stretched as we get in the 30 year.

10:56Tony Greer: And then the 30 year bonds can rally and yields can fall back into range. But it's going to be tricky to see, you know, if he doesn't, if he hikes again and doesn't get that reaction, then we have a problem. If he doesn't hike and yields just keep flying higher, then we also have a problem. Right. So I'm with you that these guys better be having closed door meetings and saying, OK, what the fuck are we going to do if they keep holding our hand to the fire, right? Excuse my French, but how else is it going with yields at new highs right now? They are on the phone texting each other saying, oh shit.

11:32So what's amazing,

11:34Tony Greer: and how about this, Trevor, the AI bubble is so powerful that the only thing that can rally while rates are ripping is tech stocks, semiconductors, AI tech stocks, and perhaps oil stocks. But this is a pretty interesting scenario where you would think that the stock market would be like, oh shit, rates are flying higher at a really fast pace right now. Maybe it's time for profit taking in the S &P. And what's going on instead? NVIDIA ripening towards the high, SpaceX ripping higher. You know what I mean? They're inhaling tech here even while rates are rising. So that to me is like an incredible sign of strength, right?

12:16Tony Greer: I would think higher yields would be a little bit of a headwind to a bubble that we've blown like ai but it's just not time to pop that bubble yet we're just not there what is what are you looking for if when we do get to a point obviously a bubble popping is always going to be hindsight we're like oh we saw this coming i guarantee you what if when if it happens tony thousands of us will be out there saying we knew this was going to happen but looking ahead what are some things you are going to be really honing in on to get the read that maybe something is about to happen. I tell you, Trevor, if we made it through Jensen Wang signing a pair of breasts and the stock never looked back with that sentiment bomb on the tape, I think the stock's freaking 20 % higher now.

13:04Tony Greer: If we made it through that sentiment top, I think it's going to be the IPOs hitting the tape that are going to be the only sell the fact catalyst that we get because as of now you know you've got invidious even with the circular financing whatever they're doing however they're accounting for it invidia is putting up good numbers and analysts are coming out saying the stock is cheap right and so the stock is trading like plain vanilla guys are saying yeah out 10 years the stock is cheap at 240 let's buy some right and until we get to the point where there's this hairy ipo on the tape maybe everything rallies into that ipo the way semis rallied right into spacex and then if you notice spacex hit the tape and semis backed off and you know haven't made a new high since i think that that's kind of going to be a little bit of what the overlay will be like because i've thought of every other you know we've had all these other scenarios where the big tech or ai stocks gap open higher and fall back and have an outside day and you want to be able to say that that might be a good high.

14:12Tony Greer: And then they just come in and, you know, cancel out the high that they made that day and keep going. You know, so when higher highs like that aren't working and things like that, I'm just going right back to what we're going to have. We're going to have a sell the fact print when Anthropic or OpenAI hit the tape. And I'm not even sure which is scheduled to happen first, but it might be Sam Altman finally going public and then everything will collapse from there. I think it was last week's image of basically who's who of Silicon Valley in the White House. And that image of whatever, there's 20 people in that room.

14:49Yeah. And that scared the living shit out of me, TJ.

14:52Tony Greer: Totally, dude. Dude, they're not talking about data centers. They're talking about how the mass surveillance plan is going. Right? They're selling it to us as data centers, whether we're buying that or not. But that's what I think is going on. Yeah. coordinated, a coordinated event to put it right in front of your face. Absolutely. This is where they want it to go. Yeah. And as conspiratorial as that sounds, like you have got to look at that photo and just question, why am I seeing this and why am I seeing this now? Ben Hunt would be proud. Yeah. Yeah. If you look at the people that were all at that meeting, they all clearly make up the architecture of the next wave of whatever mass surveillance is.

15:32Tony Greer: Right. They had all the AI guys there. They had Peter Thiel. there they had Pfizer there you know what I mean like the whole thing just stinks yeah so I'm with you but you know we got to play the cards that are laying out there on the table no matter what that's right all right well this is mining stock daily here TG so I'd be reminisced if I didn't ask you about some metals and some miners you don't feel very bullish on the gold chart right now and I can understand I could understand why uh it's dealing with higher rates a bond market dust continues to sell off, obviously not good for the gold price.

16:06I will provide a little bit of silver lining, uh, given the, the expedited sell-off in bonds. I'm actually fairly surprised gold is holding in there above 4 ,000 as well as it is. I know sentiment's not great, but I also can, I also get your point where the chart just doesn't look all that good. Yeah.

16:26Tony Greer: I'm very much with you where I kind of flip-flopped and said, oh man, gold is really disappointing me. And now all of a sudden with yields making higher highs, we're 41 and a quarter bid gold. And I'm like, I really feel like we could be testing 4K with no problem here. So there's a little bit of a premium. It's hanging in there a little bit better. I'm really disappointed though, Trevor, the thing that I can't get over. So the two things I'm thinking about in the gold market are number Number one, we had that blue sky breakout above 4 ,500 that should have been green light go for the gold bull market to engage.

17:05Tony Greer: You know, we couldn't get a clear handle on the debasement trade again because we've got this energy price fluctuation that's still kind of, you know, in the front page of the news. So the problem, though, that was that it gave back all the moving averages, all three of them, right back down through the 200, 150 day. And that plane sucks. Right. Now, that being said, it could have fallen a lot farther. I'm shocked that we're not testing 4K again already. It feels like that's coming. And it feels like it's in an orderly enough fashion move towards that price that if there's a buyer there, that he's still there.

17:42Tony Greer: If that's fair. You know what I mean? Like, you know, maybe he came to the market on some of it, maybe not. But I got a feeling that I'm kind of not afraid to buy the pullback to 4K again for a trading position and stop out on the other side of it. You know what I mean? Like gold is hanging in just fine. And like you said, like when Besant or Worsh show up and we get the actual response to the higher bond yields that they are going to say, okay, here's a line in the sand. Once that line is drawn, gold is going to go. that's what i think you know what i mean like once they say okay just so you know like in not so many words we're here to stop rates from f in flying gold is going to be like got it yep no matter what sideways rates sideways to lower we found the top of the range and that's what gold is waiting for yeah until we find the top of the range and rates sideways sideways gold But what is it doing, man?

18:38Tony Greer: It's retaining value. It's retaining value. So I'm not going to get all negative on it. Gold stocks are all over the board today. So, I mean, in the last couple of weeks. So that's another story, but. Yeah. Well, tell me, what are you seeing of that? I know it's a whole nother story. Break it down. What are you seeing in the gold equities? So the same thing, you know, everybody piled into gold stocks ahead of that gold breakout, took the GDX back up above 100. And then when the gold breakout failed, the same thing. GDX right back into support. But what's amazing is that it's trying to hold above its last moving average support here, right?

19:14Tony Greer: The hundred day moving average is down at like 85 and we won't go below there. But the thing is gold miners ripped from 75 to 105 so fast that there's gaps all the way down to 77. You know what I mean? And as a, as a long-term bull, you hate leaving gaps behind on the chart. You know, you want those all to fill in so you never have to worry about them again. And so we just closed the first gap. I think today we closed the first gap that goes all the way to August 5th.

19:47Tony Greer: No, we didn't close it yet, but we're close. Anyway, if we get down to 82, we will have closed the gap back down to August 5th. If we don't, then you still leave that lingering gap behind the market. And there's even another one below that down at like 77, like I said. So I'd almost rather gold miners back and fill just like gold is. But they seem to be hanging in. Okay. I'm not afraid of them either. Yeah. Okay. Just be volatile. Good to see you, buddy. I'll see you next week. Yeah. I'm looking forward to that, man. I'm going to be in Nashville. Speaking at JD's conference. I'll be there for a couple of days before and a couple of days after.

20:25Tony Greer: It's going to be a lot of fun. Oh, nice. Well, I look forward to safe travels, my friend. Call me when you get there, brother. You'll be the first one, I call. And we'll go mix it up. Sounds good. All right, all right. Everybody, The Navigator, Tony Greer's newsletter, must read. It's on my reading list multiple times a week when he does publish it. It is incredibly important, Tony. Trevor, I want to add one thing I'm going to launch. I'm just going to announce this to your listeners, if you don't mind. For the first time, I'm going to release my quarterly outlook to the public with a price tag that I haven't announced yet.

20:59Tony Greer: But that is a report that goes to my second tier of subscribers that are all in my Slack channel. Every quarter, they very much appreciate seeing me kind of refocus where I am on asset classes and the trades that I'm going to be kind of pursuing that quarter. I'm going to make it available to the public and we'll see if people are interested as a freestanding report. So if you are interested, that will be on TGMacro.com as of, I believe, tomorrow night. And I will be going through it with a audio presentation. Oh, awesome. I'll put a link in the show notes here to TGMacro just so everybody has it as well.

21:37You're the best. Thanks for letting me announce that. Yeah, you are welcome. All right. See you next week, buddy. Thank you so much.

21:41Tony Greer: Thank you, bro. The information presented should not be considered investment advice. Mining Stock Daily Yance affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.