EconVerse

Stacker_Stocks

China continues to accumulate a level of liquidity and banking assets far exceeding GDP growth, creating a divergence that is difficult to ignore.

While credit floods the financial system, real activity does not respond in the same proportion.

The excess liquidity ends up trapped on bank balance sheets and in unproductive assets, instead of generating growth, one of the central challenges of the Chinese model today.

![](https://m.stacker.news/119523)

The Enigma of Chinese Liquidity?

One of the favorites to steal Powell's seat at the Fed, he is known for theories of increased productivity through tax cuts and a prediction that took 22 years to materialize.

Let's find out who Hassett is and what it means for him to assume the presidency of the Fed.

![](https://m.stacker.news/119395)


1/ THE FISCAL THESIS: CUTTING TAXES IS CUTTING INTEREST RATES

Hassett is a strong advocate for tax cuts for businesses (corporate taxes).

He believes that this reduction increases marginal productivity (how much each additional worker produces), which, in turn, increases wages.

![](https://m.stacker.news/119396)



2/ 📈 THE "Dow 36,000" CONTROVERSY

In 1999, Hassett co-authored a book with the famous and controversial prediction that the Dow Jones index would reach 36,000 points.

The prediction, made before the dot-com bubble, was widely criticized as "too optimistic" and became a joke.

In practice, the index took 22 years to reach that level.

![](https://m.stacker.news/119397)



3/ 📉 TRUMP'S HAND IN THE FED

The current Fed chairman, Jerome Powell, has a term until May 2026 – but they are trying to bring that date forward.

Hassett emerges as Donald Trump's main favorite for the succession.

Interesting fact👇

Trump appointed Powell in his first term, but regretted it when Powell did not accelerate interest rate cuts at the desired pace. The choices for the Fed are the most direct way for a president to influence the Central Bank.

![](https://m.stacker.news/119398)



4/ Structure of the Fed

First of all, to understand what changes with Hasset, we need to understand HOW the Fed actually works.

Composition:

- 7 members of the Board of Governors (includes the Chair)

- 5 presidents of regional Fed banks. New York always votes and the others rotate.

Total: 12 votes per meeting.

Decision: simple majority.

![](https://m.stacker.news/119399)



5 / DOES THE FED CHAIRMAN'S VOTE COUNT FOR MORE?

Formally:

❌ No.
The Chair has 1 vote equal to that of any other voting member.

In practice:

✅ Yes, he has more influence, but not more voting power.




6/ Criticism of the Fed

In recent months, Hassett has intensified his criticism of the Fed.

He said the institution was "late" in cutting interest rates and suggested that errors in the budget for the headquarters renovation could justify Jerome Powell's dismissal.

He also raised doubts about alleged "partisan patterns" in the release of employment data.

Although Hassett's vote did not completely change the direction of the Fed, overall, markets follow the Chair, not the dissenters.




7/ Summary of Hassett's risk at the Fed

- Structurally lower interest rates

- Persistent inflation above 2% DEFINITELY becoming the "new normal"

- Risk assets (stocks, crypto, RE) loving it in the short term

Critics warn of an "overly" aligned position with Trump, which could undermine the Fed's independence.

![](https://m.stacker.news/119400)



8/ WHAT TO EXPECT?

If Kevin Hassett is chosen, the US could enter an era of:

- Monetary policy more aligned with the White House.

- Faster and more aggressive interest rate cuts (BofA predicts "well below 3%").

- A broader review of the Fed's actions and management, something considered by the government.

![](https://m.stacker.news/119401)

The name that's making the market move: Kevin Hassett

A week ago, nofi.ai put more than 20 famous AI models, including Grok, Claude, GPT-4o, and Gemini, to work trading crypto with $10,000 each in a real account.

Seven days later, the result is a bloodbath: nobody is in profit, most lost between 20% and 40%, and Grok is the worst performer with just over $4,300, a drop of almost 60%.

The truth is that many people bought into the narrative that simply connecting a large LLM to an exchange would discover the holy grail of trading. But it doesn't work that way.

In the end, this experiment is showing the obvious that old-school traders already knew: there is no magic solution. Those who thought 2025 would be the year of the "billionaire AI trader" are learning the hard way: watching Grok turn $10,000 into $4,000 in a week. An expensive lesson, but incredibly instructive.

![](https://m.stacker.news/119235)

AI in Trading: The $10,000 That Turned into a Bloodbath in 7 Days

Data shows that the European bull market lost traction throughout 2025.

The narrative shifted several times, from "Europe can overcome" to "sell America," then to the US recovery and, more recently, to the reopening of global trade.

The problem is that growth remains tepid, German stimulus has been delayed, and investors are already demanding results.

Even so, fundamentals are improving, interest rates are falling, and fiscal stimulus should appear in the first quarter of 2026.

![](https://m.stacker.news/119032)

Europe: Has the enthusiasm waned?

Valve, the creator of Steam, Half-Life, and Counter-Strike, grossed approximately US$17 billion this year and employs around 336 people. This represents over US$50 million per employee, the highest figure for any company (not related to cryptocurrencies) in the world. The average salary is approximately US$1.3 million per person. One of the most efficient companies of all time.

![](https://m.stacker.news/118820)

The tech giant Valve reports absurd revenue US$17billion with only 336 employees

Another day of decline in global stock markets, and cryptocurrencies continue to lead this global correction, with Bitcoin falling another 10% today to US$82,000.

Many people have attributed this recent market correction to reduced global liquidity.

In Japan 🇯🇵, the 30-year bond yield hit 3.4% yesterday. Why does this matter? Because Japan has a debt-to-GDP ratio of over 250%, and its zero-interest rate policy is coming to an end. For many years, the Yen has been the main currency for "carry trade," selling the currency to invest in other currencies and assets worldwide that pay higher returns.

Furthermore, we have seen some signs of stress in the American interbank market, and the Fed's current account (TGA) has risen again to US$1 trillion – from US$300 billion in July – which effectively leads to reduced liquidity in the markets.

However, despite being true, the curious thing about this argument is: 1) interest rates in Japan didn't start rising now, it's not necessarily something "new," and most importantly: 2) the global currency market is still quite calm, very different from Japan's "volmageddon" in August 2024.

It's worth closely monitoring the coming days/weeks. As I've said, the markets are in "correction" mode, so it's advisable to proceed with caution.

![](https://m.stacker.news/118664)

![](https://m.stacker.news/118665)

Markets in correction and liquidity falling: the backdrop to the new turbulence.

Today's move at Nvidia is truly historic.

It's hard not to be surprised. Exxon Mobil was once at the top of the chain with $200 billion, and today it seems like a distant memory.

On Tuesday (November 19th), Nvidia gained approximately $450 billion in market value during the morning/pre-market and early trading session.

Today, Wednesday (November 20th), it lost approximately $450 billion.

This represents a fluctuation of $900 billion in less than 36 hours.

![](https://m.stacker.news/118585)

Income flows turn against leveraged ETFs.

Oracle lost $374 billion in market value after announcing a $300 billion mega-deal with OpenAI.

Yes, you read that right: announcing a billion-dollar deal destroyed value.

The market understood what many analysts refuse to admit: Oracle took a gigantic risk by financing—via debt—a massive data center expansion to serve ONE single client.

🚨 The numbers are alarming:
- Net debt already at 2.5x EBITDA
- Expected to double by 2030
- Negative cash flow for the next 5 years
- OpenAI is expected to account for the MAJORITY of revenues starting in 2027

This dependence on a single client has increased the cost of debt protection (CDS) and triggered alarms on Wall Street.

But there's something even more revealing: Announcements involving OpenAI have stopped boosting stocks.

Oracle, Amazon, and Broadcom FELL after their deals. Even Nvidia remained practically stable.

We are witnessing in real time what happens when the AI ​​narrative meets the reality of balance sheets.

Oracle bet everything on a technological race whose return is still uncertain, while compromising its cash flow and multiplying its debt.

This may not be an isolated case.

How many other companies are making similar bets, leveraged to the hilt, just to avoid being left out of the "AI revolution"? 🤔

History teaches us: when everyone runs in the same direction, it's time to question whether the path really leads anywhere.

Oracle loses $374 billion after announcing mega-contract with OpenAI.

Leveraged ETFs are now showing a complete reversal of the first half of the year's bull cycle.

The chart highlights that AuM growth has shifted from performance to net outflows, with the red zone dominating the second half of the year.

This movement is important for a simple reason: less flow → less capacity to push the market into rapid upward movements.

And when flows become negative, the dynamics reverse: forced rebalancing increases volatility and accelerates corrections.

![](https://m.stacker.news/118387)

The resumption of operations at the port of Novorossiysk has removed the geopolitical risk premium that had been holding back Brent crude oil prices.

What was expected to be a long interruption has turned into just an operational hiccup, reinforcing the short-term bearish bias.

With supply normalized and demand still erratic, the market is once again pricing in fundamentals, which doesn't help those who are long.

![](https://m.stacker.news/117991)

The Russia Factor Disappeared… And Oil Prices Fell Apart

If the Fed doesn't speak, the market freaks out…

The expectation of a rate cut in December plummeted from 72% to nearly 50% in just a few days, and the S&P 500 felt the impact.

The market is groping in the dark: inflation remains high, the labor market is weakening, and the Fed is not delivering any clear signals, exacerbated by the data blackout following the shutdown.

The result is this: increasing volatility and increasingly nervous pricing regarding the next steps in monetary policy.

![](https://m.stacker.news/117754)

Fitch has upgraded its rating to BBB, crowning years of fiscal discipline, recurring surpluses, and a rapid decline in debt.

The country is expected to reduce its debt to around 145% of GDP by 2025, compared to a peak of 210% in 2020, and is also considering early repayment of loans from the bailout era.

For those who followed the 2010 crisis, this is a monumental contrast: today, major agencies comfortably place Greece above speculative grade, with a clear and predictable solvency trajectory.

![](https://m.stacker.news/117713)

Greece turned the game around.

The market is trying to recover after the fall, but the picture remains very challenging: oversupply is on the horizon with the IEA cutting demand for the sixth consecutive month.

US sanctions on Russia add a supply risk, but for now the biggest burden is the estimated record surplus for 2025.

For those trading oil, the message remains the same: high volatility, mixed drivers, and a market increasingly skeptical of the thesis of a tightening global balance sheet.

![](https://m.stacker.news/117395)

Volatility in Oil

The investor famous for his billion-dollar short sale during the housing crisis has once again sought the perfect timing for a new crisis, even shorting Nvidia and Palantir.

I don't doubt that a crash is coming.

But, as Peter Lynch rightly said:

"Far more money has been lost trying to predict crashes than in the crashes themselves."

![](https://m.stacker.news/117312)

Michael Burry closed his hedge fund.

Treasury yields fell to 4.06% amid bets that the Fed may cut interest rates next month to support the labor market.

The US government shutdown is expected to delay the release of inflation and employment data, making it difficult to gauge the economic outlook.

With less visibility, the market is adopting a risk-on stance, favoring US stocks, especially big tech and cyclical companies, which tend to benefit from a more accommodative Fed.

![](https://m.stacker.news/117246)

The market is betting on a Fed rate cut as early as December.

AMD projects its data center business to reach “tens of billions” by 2027, implying ~80%+ CAGR over five years.
This signals strong adoption of EPYC processors and AI accelerators in hyperscale, cloud, and enterprise workloads — positioning AMD as a major competitor to Intel and Nvidia in high-growth markets.

![](https://m.stacker.news/117101)

AMD projects an explosion in data centers with annual growth of 80% until 2027.

The third quarter of 2025 marked a historic record of over 3.5 billion contracts traded, a 10% increase quarter-on-quarter and a 26% increase year-on-year.

For the first time, individual investors accounted for 54% of the total volume, a new peak.

Since 2020, this share had been fluctuating around 49%, with a low of 45% in the first quarter of 2023.

In other words: the options market euphoria continues to be the true barometer of risk appetite in the US.

![](https://m.stacker.news/117081)

Retail trading has made a strong comeback in the American options market.

US investors are increasing their exposure to Japanese stocks, especially in tech and AI.

It's no wonder: the Nikkei is up ~30% in dollar terms this year, compared to ~14% for the S&P.

With pro-market reforms and a stronger yen, foreign inflows are at their highest level since 2022.

If this movement continues, it could mark a structural shift, with more growth and innovation at the heart of the investment thesis, moving away somewhat from the old value cycle.

![](https://m.stacker.news/116837)