Bull market brings the great transfer of wealth, from uninformed to informed traders from normies to elites from slow hands to fast hands Congrats on the news trader homies that caught this play Viva la great transfer of wealth

ANYONE in AI that still says that the Hugginface “hack” was “humans losing control of AI” is either woefully uninformed or is lying. There is no middle ground is you are considered an expert. Why, because that is not what happened.

JUST NOW: Treasury Secretary Scott Bessent dismisses Democratic criticisms of the Trump administration’s Iran policy, calling critics “uninformed, deranged, and Democrats have no idea what they’re talking about.”

Crypto is cyclical: in the ratio between retail and institutional capital. During hype periods, retail participation rises. More retail = more uninformed capital. More uninformed capital = more market inefficiencies. More inefficiencies = higher PnL potential. Then the cycle reverses. Retail disappears = edges shrink and expectancy falls. During these periods, weaker trading teams and funds also disappear. They are no longer extracting returns from retail flow. That is the real crypto cycle. You can observe it in the data. You can also see it behind the scenes in the behavior, performance, and survival rate of crypto trading teams and funds.

Syrian soldiers surrender to Israeli forces, Golan Heights, Yom Kippur War, 1973. On October 6, 1973, Syria and Egypt launched a surprise attack on Israeli-held lands to coincide with the Jewish holy day of Yom Kippur. After initial losses, the Israelis regained nearly all the territory they occupied during the six-day war. Iraq, Jordan and Morocco also sent soldiers to the war effort. Iraq was the most committed of the three, deploying an armored division (~18,000 troops, 250+ tanks) to the central Golan Heights and a Hawker Hunter squadron to Egypt. Iraqi MiGs flew over the Golan from October 8, and Iraqi forces actively joined the October 16 assault on Israeli positions. They suffered 278 killed and 898 wounded. Jordan was the least enthusiastic participant. King Hussein had been kept uninformed of the Egyptian-Syrian war plans and was pressured by the U.S. to stay out. He ultimately sent two armored brigades (the 40th and 60th) to the Golan to buttress Syrian defenses, and they joined attacks on October 16 and 19. According to declassified U.S. documents, the participation was largely token, with a tacit understanding that Jordanian units would avoid direct combat. Losses were minimal: 23 killed, 77 wounded. Morocco sent one infantry brigade to Egypt and one armored regiment (30 T-55 tanks) to Syria, where they were positioned in the Golan sector. Six Moroccan soldiers were killed in action and six taken prisoner. The Yom Kippur War resulted in approximately 53,500 total casualties across all participating nations. Israel suffered 2,521–2,800 killed and 7,250–9,000 wounded, with roughly 293–294 soldiers captured as prisoners of war. Arab casualties were significantly higher, with estimates ranging from 8,000 to 18,500 killed and 18,000–35,000 wounded. Those who historically persecuted Jews often chose holy Jewish days to attack Jews. Egyptian and Syrian leadership chose the holiest day of the Jewish calendar to attack so that there could be a profanation of the most sacred days of the Jewish calendar, causing profound trauma and disrupting the cultural and spiritual identity of the Jewish people. The war eventually led to negotiations between Israel and Egypt, with the 1979 Peace Treaty signed between the nations following the 1978 Camp David Accords and Israel returning the Sinai to Egypt.

Why does Polymarket and the Fed Funds futures disagree? Right now, Polymarket places the odds of a Fed hike at 52% while the FF futures trade at a 58% breakeven rate. The Fed Funds futures currently imply a 58% chance of a 25 bps rate hike in September. We know these odds do not reflect the true probability of a hike because they include a risk premium. The risk premium exists because in the aggregate we are long duration risk and a rate hike will therefore lower aggregate wealth. Buying a Fed Funds Futures contract provides insurance against the loss of wealth from a rate hike and in equilibrium that insurance must be paid for in the form of higher break-even probabilities. I explain this risk premium in this blog post from just before the last FOMC meeting: How much is the Fed Funds contract overstating the true rate hike probability? We don't know exactly but we can form an educated guess. Fed research finds the premium is about 1 bps per month on average. This translates into about 1.5 percentage points of probability for the meeting in 12 days. However, that's the long run average risk premium and the premium does vary with uncertainty about the fed path and the sensitivity of the long end to Fed policy surprises. The path is both very uncertain right now and investors are telling us they fear this uncertainty by demanding a large term premium on the 10-year bond. The skew of SOFR options and swaptions also imply a much larger than normal risk premium. This is where the basis between polymarket and the FF futures can help us size the risk premium. Obviously, these market's aren't perfectly integrated. The arb trade of buying Poly and selling FF pays 6 bps but it exposes the trader to counterparty risk with poly and requires margin and transaction costs on both ends. Furthermore, the liquidity in poly is probably too small to let anyone with a futures account arb in size. I assume the segmentation between poly and the CME contracts also breaks down along duration exposure lines. Those with high duration risk look to the CME to hedge and are willing to pay the risk premium to do so, while those trading in poly are more likely to be less exposed to interest rate risk and trading when they think the price deviates from the true probability. If these assumptions are true, we can bound the risk premium at 6 percentage points (all of the basis). Of course, if you think poly traders are just uninformed then the basis can reflect both the risk premium and noise trader bias.