Why the stock market is crashing (And what I am doing)
In a Nutshell
Rising bond yields and $2T annual interest payments are forcing a market reckoning, with the 30-year Treasury at 19-year highs. Japanese and South Korean markets are already crashing from leveraged overbought positions, while Trump’s tariff pause and tweet signals remain the dominant market-moving variables. The core takeaway is that leverage at elevated levels—not the underlying assets—drives forced liquidations, and the speaker is staying cautious until the FOMC minutes clarify direction.
These notes were generated by AI and may contain inaccuracies.
NASDAQ experienced a bearish day following ongoing news developments discussed in previous sessions. The market is responding to red flags that have been present, though timing of market reaction remains uncertain.
Bond and treasury yields continue rising, creating a situation the US cannot ignore. The federal government pays nearly $2 trillion in interest payments on borrowed money. 42% of federal income tax revenue goes solely to interest payments, rather than Medicare, Social Security, military, or defense spending.
This represents a politician issue rather than partisan politics, as both parties have contributed to mismanagement of funds. Despite campaign promises, deficit reduction efforts have not materialized and the debt has increased.
The US 30-year bond yield reached 5.334%, marking the highest level in 19 years. Market concern about yields fluctuates based on sentiment and external factors.
The Nikkei crashed 3%, extending its sell-off into a second consecutive day. $225 billion USD has been wiped from Japanese stocks. This market decline is expected to impact US markets.
Over 3.4% of South Korea's adult population has received margin calls. The key lesson is that the problem stems from using leverage at overbought levels, not from investing in high-performing assets. Investors without leverage cannot be forced to sell their positions.
Sign in to read the full notes
Get access to AI-generated notes, topic timestamps, and more.