DHUnplugged #815: Stupid Does Stupid

Things are getting weird – looks like someone is panicking.

The Dumber side of finance – let’s dig in.

A big week ahead – major earnings could move markets.

– Gold, Bitcoin moving on a lower USD.

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Warm-Up

- Things are getting weird - looks like someone is panicking

- The Dumber side of finance - let's dig in (5 top items)

- Cold War and Hot War - Canada, China and Iran

- Economic "D" day - no one cares

- Saying goodbye to Dolly Parton

Markets

- Gold, Bitcoin moving on a lower USD

- Oil starting to settle

- Big Week - NVDA earnings on tap - all eyes!

STUPID IS WHAT STUPID DOES - A DHU One-Time Series On The Dumber Side of Finance

1) LOWER BEEF PRICES

- Trump plans temporary tariff relief for certain ground-beef imports as U.S. beef prices remain near record highs.

- The plan would allow up to 300,000 metric tons of discounted imported ground beef over roughly 90 days.

- Supposedly this will reduce the prices for consumers

- Ranchers and several farm-state Republicans are pushing back, arguing cheaper imports could hurt domestic producers.

---- Question: Tariff reduction is going to reduce prices for consumers? Didn't someone say that tariffs are paid by the companies and exporting countries???

2) IRAN SANCTIONS - BIG THREAT, LIMITED IMMEDIATE ACTION

- Treasury warned countries doing business with Iran that they could face secondary sanctions, calling it an "economic D-Day."

- New sanctions hit about 60 individuals, companies and vessels, but major Chinese financial institutions were not targeted.

- China remains the biggest buyer of Iranian oil, making Chinese banks the potential pressure point.

- Treasury says sanctions could expand into gold, digital assets, aviation, shipping and other sectors.

3) TREASURY TRIES TO TAME LONG-TERM YIELDS

- Treasury will at least double the maximum size of certain long-term bond buybacks to $4 billion per operation.

- The announcement briefly knocked nearly 10 basis points off the 30-year Treasury yield.

- Critics say this treats the symptom rather than the cause - huge deficits, heavy issuance and persistent inflation risk.

------Bessent had to come out on Friday to say "at least" $4B - as bind yields moved back up

-------Maybe there is a concern over the $40TRILLION debt we have amassed as a country?

4) SOMEONE GOT LONG BONDS AT THE RIGHT TIME

- TLT took in roughly $529 million of net inflows on August 18, one day before Treasury's surprise bond-buyback announcement.

- The next day Bessent doubled planned buybacks of 10- to 30-year Treasurys, immediately pushing long yields lower.

- TLT jumped about 1.7% on the announcement.

- No public evidence identifies a single buyer - but the timing of the unusually large inflow is certainly worth noting.

5) DOLLAR GETS HIT BY THE BOND RESCUE

- The dollar weakened as investors questioned Treasury's expanded bond-buyback strategy.

- The concern is that suppressing yields without fixing fiscal problems simply transfers pressure from bonds to the currency.

- The 30-year yield has remained elevated despite Treasury intervention.

- Bitcoin rallied as investors looked toward alternatives to traditional fiat assets.

- PEOPLE: This is NOT Quantitative Easing - Just a move to buy longer dated and issue more short dated

WALMART FLASHES A CONSUMER WARNING

- Walmart U.S. comparable sales grew just 2.6%, its slowest pace in roughly six years and below expectations.

- Shares dropped sharply after the report.

- E-commerce remained strong, while store traffic and discretionary spending showed more weakness.

- Walmart raised full-year guidance but gave a softer-than-expected third-quarter outlook.

- As America's biggest retailer, Walmart's slow