What could be more American than a silver dollar with a portrait of the President? Well, like a lot of things we enjoy here, the American silver dollar came from somewhere else. It didn't begin its life as a symbol of American pride, but of American dependence. /1 www.politico.com/news/2025/10...

The entertaining part of this is that he keeps wanting to do things that are 180 degrees out of phase with Republican free market orthodoxy. “Let’s impose tariffs so we can give everybody $1000.” Lol, lmao.

Prediction markets think the shutdown will last more than a week but less than a month:

Inspired by the work done by the geniuses at the BIS in the past, here's a network map of global currency markets in 2025, illustrating the dominance of the four major trading hubs:

In a reflection of the broader community’s apathy toward the issues that afflict financial professionals, there are no pubs open during non-farm payrolls release time in Toronto this morning.

payrolls Friday without payrolls

Many of the purported threats to dollar dominance don’t stand up under close examination, but a politically-driven withdrawal of the Fed’s backstop to global dollar liquidity really would force the world to seek alternatives.

On National Poetry Day, the greatest poem I have ever read

"In the great global currency debate, market forces have never been more passé and political forces have never been so prominent," writes @danielmcdowell.bsky.social. https://www.atlanticcouncil.org/in-depth-research-reports/issue-brief/how-to-dismantle-a-reserve-currency/

Draining the swamp by adding more creatures to it.

Was struck when I visited the grave of Eisenhower, the archetypal 20th c. warrior, he chose the inscription above his tomb, ”Every gun made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed“

Growth in foreign exchange market flows has vastly outpaced the real economy:

The remarkable thing about this is that it really is completely insane, in spite of all the people who say it is completely insane.

In 2026 we're going to hear people talking about electricity bills teh way we would typically hear about gas prices at the pump.

Major threat to Blockbuster.

Happy BIS Triennial Survey day tomorrow to those who celebrate.

Excellent piece, reminds me of the smartest thing I've heard someone say this year—the FT's Gillian Tett, on the Odd Lots podcast in June:

Crypto still trying to build a slower, less efficient, and more unstable version of the traditional financial system: Financial Times: Stablecoin issuer Circle examines ‘reversible’ transactions in departure for crypto www.ft.com/content/5b00...

We worry about Very Online Kids much more than their Very Online Parents, and I'm not sure that's wise

This is a great story with a big takeaway IMO. What characterizes AI investment is exceptionally high capex needs (like railways or grid) but with one big component— semiconductors—obsoleting/depreciating exceptionally fast (unlike RR or grid). Chip Transit Gloria Mundy www.wsj.com/tech/ai/ai-b...

TARIFF RATE: The September 25 announcement raises the average effective tariff rate by 0.5pp to 17.9% pre-substitution (as of Oct 1), the highest since 1934. After consumers & businesses shift their spending mix, the post-substitution rate is 16.7%, highest since 1936. 2/10

Another day, another round of data showing US consumers continuing to spend, even as everything else goes wrong.

I'll also note that the aggregate impact here reinforces the K-shape dynamic which IMO was an extremely exaggerated model until roughly the start of 2024 but has now become very salient. This only impacts capital income streams, not labor income, so disproportionately benefits high income consumers.

Amid all the claims about a erosion in 'US exceptionalism' (many of which I ascribe to), it must be admitted that 10-year Treasury yields have tracked changes in economic surprise indices—which measure gaps between forecasts and measured data—quite closely:

US import taxes are ramping up more slowly than they are announced, suggesting that the impact on the economy will arrive at a delay. Numbers released yesterday indicate that the collected US tariff rate climbed to 11.2% in August, below the 16.5-17.5% terminal level expected under current policy:

This is a modest but notable step in opening the capital account, which is the single biggest impediment to the yuan serving as an alternative reserve currency to the USD. *PBOC SUPPORTS FOREIGN INVESTORS TO ACCESS ONSHORE REPO BOND MKT

Apropos of nothing, a reminder that the bulk of tariff revenues collected in Trump's first term went to paying off farmers affected by... the tariffs. www.cfr.org/blog/92-perc... @bennsteil.bsky.social

The vibe-coding of finance is underway: www.cnbc.com/2025/09/24/a...

Is it just me, or is @alphaville.ft.com again approaching pre-GFC levels of excellence? on.ft.com/46RM7fT

"It was just sex"

NEW from me. Trump wants to take over the Federal Reserve and lower interest rates in part because he believes it will cut federal budget interest costs by "$1 Trillion per year." In @thedispatchmedia.bsky.social, I show that fiscal dominance would NOT reduce interest costs very much. 🧵

The world sits, stunned into silence.

Nice piece on the contradictions appearing in China's state-capitalist economy, perfectly timed to coincide with the Trump administration's deployment of a similar model in the United States: www.nytimes.com/2025/09/23/o...

*Some* stereotypes are accurate—from @adamtooze.bsky.social : “amongst OECD Countries, Germany has the highest share of STEM graduates (c. 1/3( amongst its tertiary-educated population” adamtooze.substack.com/p/top-links-...

This morning, the @chicagofed introduced new labor market indicators that combine private sector data with official labor statistics to provide a real-time view of hiring, layoffs and other job separations, and an early forecast of the unemployment rate. www.chicagofed.org/research/dat....

There are many issues with this speech. But perhaps the biggest is that if you think tariffs haven't added to inflation, and can still see that core PCE ex food, energy & housing has *risen* this year, that should tell you something about the balance of demand vs supply and the stance of policy.

"The Rush to Return to the Office Is Stalling" www.wsj.com/lifestyle/wo... "Even as corporate bosses cut back on remote work and ratchet up in-office mandates, average office attendance has barely budged across U.S. workplaces."

Never ascribe to malice that which is adequately explained by Trumpian incompetence. But it is worth noting that, since 1975, the dollar has only seen a steeper year-to-date decline during the deliberate depreciation that followed the 1985 Plaza Accord:

As in the poem; Give me, ancient lands, your storied pomp!" cries Trump, With silent lips. "Keep your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Don’t send these, the homeless, tempest-tost to me, I douse my lamp beside the golden door

Today's Fed dot plot:

"To the extent we have problems with the data it's that response rates are so low. The fix to that is to make sure that the agencies in question have the resources they need. It's not a complicated problem." <-- great answer

Miran clearly relegated to the kids table.

Poor deluded fella thought it was to make the state more capitalist, not implement state capitalism.

Capital Econ: "Recent bond market movements suggest that equilibrium real interest rates may have risen further, perhaps justified by strong AI investment and persistently high government borrowing...We stand by our view that r* will reach about 2% in the US and 1% in the euro-zone in the 2030s."

Third straight year where there's been a week with a *huge* spike in initial claims filings for Texas. Prior two times were big one-offs. If that's the case again, the national claims data looks completely different...v similar to last couple of years.

This seems exactly correct. Adding friction to cross-border flows of people, goods, and money will ultimately reduce economic efficiency while increasing growth and inflation volatility. Policy tradeoffs are already becoming much more difficult.

Foreign buying has played a bigger role in US financial markets over the years, but domestic players are still way more dominant:

By my estimates, the top ten US AI plays listed on US exchanges have done at least $383 billion in capex over the last year—equivalent to nearly 1.3 percent of gross domestic product—and plan at least $475 billion more in the coming year, helping counterbalance softness elsewhere in the economy:

FT journalist to economist: How does it feel to have a career as a dismal scientist? Economist: But … YOU’RE the dismal scientist! on.ft.com/4n2TVBq

Byerou