Market Structure is Fueling an Inflation Trap | Weekly Roundup

**Tyler** (0:00)
The market is just a giant derivatives trade. It's what happens when everything gets so centralized and everyone's asset management looks the same.

**Felix** (0:07)
How much of this is driven by these systematic flows and positioning warfare? It's like, what's actually real? Like, what are we supposed to discount on? And like, at what time horizon?

**Quinn** (0:16)
Probably one of the worst things the Trump admin has done is just disintegrated the integrity of capital markets in the US and basically allowed white collar crime to be legal inside of trading everything.

**Felix** (0:26)
Inflation is going to continue. The Fed's not going to get in front of it. So who's left holding the bag here? And it's regular people. And then he looked at the Michigan Consumer Sentiment Index, all time lows in consumer sentiment. Where does that track? Tracks into the midterms. I feel like there's room here for them to do something. Obviously, the cost that we just talked about is inflation. But who cares about inflation if the stock market is going up, right?

**Tyler** (0:47)
The policy is pump stock market. That's what it is.

**Felix** (0:51)
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What's going on, everybody? Welcome back to another Roundup Edition of Forward Guidance, according to Wednesday this week, because Quinn's out for the rest of the week. Am I allowed to say where you're going or no? Is that all professional?

**Quinn** (1:39)
No, it's fine, it's fine. I got to go to the Keys for a bachelor party, but I need Tyler's shirt. Looks like Tyler got dressed in the dark this morning.

**Tyler** (1:46)
Yeah, you want to trade shirts?

**Quinn** (1:48)
Yeah.

**Felix** (1:50)
Take that onto the boat and smoke it.

**Tyler** (1:53)
I was going for the opposite of Felix's like, we're going on a hunt Canadian, you know, we're going to go have a rodeo.

**Quinn** (2:02)
Honestly, the blue, the clashing blues kind of slaps, man, for a 40-year-old dad, like it's pretty nice.

**Felix** (2:11)
Yeah. You got some really good walking shoes on too, I bet.

**Tyler** (2:15)
That's the first compliment you've given me in like months. Thanks.

**Felix** (2:22)
I got a couple of messages that people think that we don't like each other, we like roast each other a little too hard, especially because last week, we were kind of all at odds a little bit, like Bullish or Bearish, and just roasting each other. But we all love each other. It's like a brotherhood here.

**Tyler** (2:38)
That's the difference between Gen X, I'm borderline Gen X, you guys are the Gen Z is so soft, bro.
I'd walk into the locker room, they'd find everything that would make you really, really bothered and then just go for the neck. Every trading desk, that's what happened.

**Quinn** (2:59)
And now it's like cancel culture. It's like everyone's just trying to find a reason that got you. Oh, you said this, so you're racist and sexist.

**Tyler** (3:09)
Yeah. That's why people like to roast each other.

**Felix** (3:12)
Yeah, exactly.

**Tyler** (3:14)
You figure out all your insecurities and-

**Felix** (3:17)
Yeah, exactly.
All right. Yeah. Well, Tyler, we got to roll out the red carpet for you, because, dude, look at the one point, this is just a good encapsulation of last week. The last 10 days have been like any 10-day period in the market since 1950 First, the S&P 500 is up 9.8 percent in 10 days, which is in the 99th percentile of all 10-day returns. So obviously, man, we just had a hell of a rally. So props. I don't know if you expected a 99th percentile of rally, but props to you.

**Tyler** (3:49)
Yeah. I mean, obviously, this is the market's becoming self-reflexive in both directions, and it's really this is the market structure thesis on steroids now. And the easiest way to explain it is a normal heart beats like this. Boop, boop, boop. And now because of daily options, zero days till expiry, it's now going, choo, choo, choo, choo. And you have these just crazy positioning on wines, and I got some good charts to go through later on this stuff. But the market is just a giant derivatives trade. It's what happens when everything gets so centralized.