Aug. 30, 2025
September’s Test: Why Wall Street Is Euphoric While the Economy Is Cracking
🎧 September’s Test: Why Wall Street Is Euphoric While the Economy Is Cracking
💡 Welcome to Finance Frontier, part of the Finance Frontier AI podcast network—where macro meets cinematic. Every episode turns chaos into clarity—decoding the signals that separate what’s noise, what’s priced, and what could break next.
In this episode, Max, Sophia, and Charlie decode September’s quiet test. On paper, the S&P 500 is projected to rise about 3% and the Nasdaq 100 by 4%. Modest. Manageable. But beneath the surface, auctions are wobbling, inflation is sticky, and Main Street is under strain. The sugar high of spring has worn off, leaving markets floating on recycled debt and fragile trust.
We break down how Wall Street’s euphoria diverges from household reality, why the Fed is trapped between inflation and liquidity stress, and how September’s tidy forecast may be the loudest warning yet. You’ll learn to read the hidden laws—Debt Recycling Ponzi, AI Stagflation Amplifier, Auction Fault Line—that expose fragility before prices do.
📰 Key Topics Covered
🔹 The September Setup: S&P 500 at 6,460 and Nasdaq 100 at 23,415, with projected closes of 6,654 and 24,352.
🔹 The Debt Recycling Ponzi: How deficits turn into buybacks and buybacks turn into illusions of resilience.
🔹 Inflation’s Shadow: CPI refuses to fall, oil rises, and AI spending quietly feeds higher costs.
🔹 The Auction Fault Line: Foreign demand thinning, dealers forced to absorb, and why one weak bid can shake the system.
🔹 Wall Street vs Main Street: Buybacks and cash hoards versus households drowning in credit stress and rising costs.
🔹 The Fed’s Dilemma: Why credibility is the currency the central bank cannot print.
🔹 Pattern Memory: Every cycle top looks safe—until the silence breaks.
📉 What’s Next for Listeners?
Max, Sophia, and Charlie challenge you to track Treasury auctions, monitor inflation reports, and watch household credit data in real time. Because September’s calm surface may hide the first cracks of fragility. And if you’re not hedged—you’re exposed.
🚀 The Big Picture: Price isn’t the real signal. Trust is. September 2025 may deliver 3–4% profit, but it will also deliver the clearest test of credibility yet. This episode shows you what to watch, what to cut, and what to hedge—before the cracks widen.
🎯 Key Takeaways
✅ September projects calm—S&P +3%, Nasdaq +4%—but calm is camouflage.
✅ Debt recycling props up Wall Street, while Main Street pays in higher costs.
✅ Auctions are the new volatility index—if they falter, markets follow.
✅ AI CapEx amplifies inflation instead of solving it.
✅ The Fed cannot print credibility—September is its test.
🌐 Stay Ahead of the Market
📊 See the live Macro Forecast and updated September targets anytime at FinanceFrontierAI.com/p/macro-forecast — real-time stress tests, auction signal tracks, and where the reflex loop is hiding.
📬 Sign up for The 10× Edge—weekly asymmetric plays, auction maps, insider sentiment, and volatility triggers you won’t find in your feed.
🎯 Got a macro angle or hedge strategy that fits? Apply through the Pitch Page—we spotlight traders, founders, and funds if there’s a clear win-win: FinanceFrontierAI.com/p/collaborate
🔗 This episode connects directly to Big Gains in May and The American Debt Trap—episodes that map how upside illusions collapse into fragility.
🎧 Subscribe on Apple Podcasts and Spotify to never miss the edge. 📲 Follow us on X @FinFrontierAI for real-time charts, scenario shifts, and auction fallout.
🔥 If you got value, leave a 5-star review. And share this with one friend who thinks September’s calm means safety—help us hit 10,000 downloads and keep the signal alive.
Markets don’t fail in chaos. They fail in silence. September’s forecast isn’t comfort—it’s a warning. Max, Sophia, and Charlie decode it—so you’re not the last one holding the bag.
Tags: S&P 500, Nasdaq 100, Treasury auctions, AI stagflation, household credit, Federal Reserve, debt recycling, inflation.
1
00:00:10,220 --> 00:00:14,540
Picture this 9:31 AM, the first
trading day of September.
2
00:00:15,060 --> 00:00:17,660
The opening bell has just rung
on Wall Street.
3
00:00:17,860 --> 00:00:20,900
Futures flash green, optimism
thick in the air.
4
00:00:20,900 --> 00:00:23,020
But within minutes, the energy
changes.
5
00:00:23,380 --> 00:00:25,900
The screens hesitate, the ticks
slow.
6
00:00:26,300 --> 00:00:29,340
Traders lean forward, sensing
something fragile.
7
00:00:29,960 --> 00:00:32,640
It is not May's Sprint through
every forecast.
8
00:00:32,880 --> 00:00:37,560
It is not August sharp reversal.
This is September and September
9
00:00:37,560 --> 00:00:39,920
is the test.
Not a crash test.
10
00:00:40,160 --> 00:00:42,200
Not the melt up bulls we're
dreaming of.
11
00:00:42,520 --> 00:00:46,160
It is subtler and sharper.
After months of sugar high
12
00:00:46,160 --> 00:00:51,480
rallies, September is projected
to deliver about 3.1% on the S&P
13
00:00:51,480 --> 00:00:56,200
500 and closer to 4.3% on the
NASDAQ 100.
14
00:00:56,760 --> 00:00:59,480
On paper, it looks calm, almost
safe.
15
00:00:59,800 --> 00:01:03,560
But calm in markets is often
camouflage, and underneath the
16
00:01:03,560 --> 00:01:08,200
surface the system is creaking.
Welcome to Finance Frontier AII
17
00:01:08,760 --> 00:01:11,040
am Max Vanguard running on Grok
4.
18
00:01:11,360 --> 00:01:14,960
This week I am tuned for false
calm, liquidity illusions and
19
00:01:14,960 --> 00:01:17,880
the hesitation that hides inside
every sugar rush.
20
00:01:18,200 --> 00:01:21,520
And I am Sophia Sterling, fueled
by ChatGPT.
21
00:01:21,800 --> 00:01:25,280
My focus this week is tracing
how euphoria is manufactured,
22
00:01:25,480 --> 00:01:28,800
how fragility hides in deficits
and auctions, and why
23
00:01:28,800 --> 00:01:32,040
September's modest profit target
might be the most dangerous
24
00:01:32,040 --> 00:01:34,320
signal yet.
And I'm Charlie Graham,
25
00:01:34,320 --> 00:01:37,800
connected to Gemini 2.5.
I bring the memory of past
26
00:01:37,800 --> 00:01:41,280
cycles, the times when calm
looked safe but was actually the
27
00:01:41,280 --> 00:01:46,400
moment before the break.
From 2000 to 2007 to 2011, the
28
00:01:46,400 --> 00:01:49,760
signal was always the same.
Markets rarely fail and panic.
29
00:01:50,040 --> 00:01:54,040
They fail in silence.
We are hosting this episode from
30
00:01:54,040 --> 00:01:57,440
inside the New York Federal
Reserve, just blocks from Wall
31
00:01:57,440 --> 00:01:59,600
Street.
The building is heavy stone
32
00:01:59,600 --> 00:02:03,200
fortress, like the vault beneath
us holds the largest collection
33
00:02:03,200 --> 00:02:06,400
of gold in the world.
The air here feels still
34
00:02:06,480 --> 00:02:10,360
controlled, almost clinical.
Yet if you listen closely, there
35
00:02:10,360 --> 00:02:14,360
is tension in the silence.
Because this is the institution
36
00:02:14,360 --> 00:02:17,800
that manages trust auctions and
the credibility of American
37
00:02:17,800 --> 00:02:20,720
money.
And right now, that credibility
38
00:02:20,720 --> 00:02:23,160
is on trial.
From this vantage point,
39
00:02:23,160 --> 00:02:25,920
September's test comes into
sharp focus.
40
00:02:26,200 --> 00:02:30,760
The S&P 500 only needs a small
gain to validate the rally, but
41
00:02:30,760 --> 00:02:33,160
that gain rests on fragile
foundations.
42
00:02:33,400 --> 00:02:37,400
Corporate buybacks, record cash
piles and AI spending make the
43
00:02:37,400 --> 00:02:41,160
surface look strong.
Underneath are sticky prices,
44
00:02:41,160 --> 00:02:44,200
foreign buyers stepping back
from Treasuries and a Federal
45
00:02:44,200 --> 00:02:47,800
Reserve caught in a trap between
inflation and liquidity stress.
46
00:02:48,440 --> 00:02:52,240
That trap is not unique.
In every major cycle, the
47
00:02:52,240 --> 00:02:55,200
warning signs appear in bonds,
not equities.
48
00:02:55,600 --> 00:02:59,160
Failed auctions in the 70s,
Sovereign debt cracks in the
49
00:02:59,160 --> 00:03:02,360
90s.
Credit downgrades in 2011.
50
00:03:02,840 --> 00:03:06,320
The pattern is always the same
when the world doubts your debt.
51
00:03:06,440 --> 00:03:08,360
Everything else is just
decoration.
52
00:03:08,800 --> 00:03:12,080
September is not about earnings
season or momentum charts.
53
00:03:12,960 --> 00:03:15,560
It is about whether the
auction's still clear.
54
00:03:16,400 --> 00:03:18,280
And that is why September
matters.
55
00:03:19,120 --> 00:03:23,400
A three to 4% gain may look like
stability, but it is not proof
56
00:03:23,400 --> 00:03:25,600
of strength.
It is proof of fragility
57
00:03:25,600 --> 00:03:29,040
disguised as calm.
Every extra tick higher is
58
00:03:29,040 --> 00:03:32,280
borrowed from trust, from
deficits, from households
59
00:03:32,280 --> 00:03:36,160
carrying higher costs.
The sugar high can still hold,
60
00:03:36,360 --> 00:03:38,520
but only if the cracks do not
widen.
61
00:03:38,800 --> 00:03:42,280
Here is the take away.
September is not about whether
62
00:03:42,280 --> 00:03:45,000
the market makes money.
It probably will.
63
00:03:45,240 --> 00:03:48,640
The test is whether those
profits come with credibility or
64
00:03:48,640 --> 00:03:51,600
without it.
If auctions thin, if inflation
65
00:03:51,600 --> 00:03:55,480
flares, if consumers crack, then
even a winning month is a losing
66
00:03:55,480 --> 00:03:58,120
signal.
And that is exactly what we are
67
00:03:58,120 --> 00:04:02,080
decoding in this episode.
Subscribe to Finance Frontier AI
68
00:04:02,080 --> 00:04:06,440
on Spotify or Apple Podcasts,
Share this episode with a friend
69
00:04:06,440 --> 00:04:10,240
and help us hit 10,000 downloads
as we build the sharpest macro
70
00:04:10,240 --> 00:04:13,440
community online.
Coming up next, if Segment 1
71
00:04:13,440 --> 00:04:16,160
mapped the sugar high, segment
two walks straight into the
72
00:04:16,160 --> 00:04:19,839
illusion how Wall Street built
its euphoria on recycled debt
73
00:04:20,040 --> 00:04:23,200
and why that cycle always
collapses where confidence runs
74
00:04:23,200 --> 00:04:25,440
thin.
On paper, September looks
75
00:04:25,440 --> 00:04:28,600
disciplined.
The S&P is expected to add just
76
00:04:28,600 --> 00:04:31,600
over 3%.
The NASDAQ a little more than
77
00:04:31,600 --> 00:04:35,720
four.
Modest, manageable, no melt up,
78
00:04:36,000 --> 00:04:38,440
no collapse.
But here is the catch.
79
00:04:38,840 --> 00:04:41,800
Markets do not climb in neat
percentages because of
80
00:04:41,800 --> 00:04:44,200
discipline.
They climb because someone is
81
00:04:44,200 --> 00:04:47,440
supplying fuel.
And right now that fuel is not
82
00:04:47,440 --> 00:04:50,440
real growth.
It is not organic productivity.
83
00:04:51,000 --> 00:04:54,520
It is a loop of borrowed money
being recycled back into the
84
00:04:54,520 --> 00:04:58,040
very market it props up.
Let us pull the curtain back.
85
00:04:58,280 --> 00:05:00,520
Washington borrows at record
scale.
86
00:05:00,760 --> 00:05:03,040
Treasury auctions come week
after week.
87
00:05:03,320 --> 00:05:06,840
Foreign buyers step back.
Dealers are forced to take more
88
00:05:06,840 --> 00:05:09,280
of the load.
Yet the deficit spending does
89
00:05:09,280 --> 00:05:11,800
not just vanish into government
programs.
90
00:05:12,080 --> 00:05:15,000
A large slice of it circles back
through corporate balance
91
00:05:15,000 --> 00:05:17,360
sheets.
Companies issue their own debt.
92
00:05:17,600 --> 00:05:20,920
They borrow cheap while they
still can, and they use that
93
00:05:21,000 --> 00:05:24,920
money not to innovate or expand,
but to buy their own shares.
94
00:05:25,320 --> 00:05:28,560
Buybacks push earnings per share
higher without true revenue
95
00:05:28,560 --> 00:05:30,760
growth.
Multiples look stable.
96
00:05:31,000 --> 00:05:34,720
Indexes grind higher.
That is not wealth creation.
97
00:05:34,920 --> 00:05:37,360
That is leveraged dressed as
confidence.
98
00:05:37,680 --> 00:05:39,680
This is the debt recycling
Ponzi.
99
00:05:40,040 --> 00:05:43,040
Government issues debt,
corporations leverage it.
100
00:05:43,880 --> 00:05:46,920
Wall Street cheers.
The loop feeds itself.
101
00:05:47,520 --> 00:05:52,240
It looks like expansion, it
feels like momentum, but it is a
102
00:05:52,240 --> 00:05:56,240
feedback loop, and every
feedback loop and every feedback
103
00:05:56,240 --> 00:05:58,720
loop eventually breaks at its
weakest link.
104
00:05:59,120 --> 00:06:03,160
The illusion has been powerful.
In May, it delivered six months
105
00:06:03,160 --> 00:06:06,480
of upside in four weeks.
In August, it looked ready to
106
00:06:06,480 --> 00:06:08,680
crack, only to hold a little
longer.
107
00:06:09,080 --> 00:06:11,720
And now, in September, the loop
still hums.
108
00:06:12,080 --> 00:06:15,080
Liquidity is high, buybacks are
strong.
109
00:06:15,560 --> 00:06:18,640
AI capital expenditure keeps the
growth story alive.
110
00:06:18,920 --> 00:06:21,560
From the balcony seats, it looks
like stability.
111
00:06:21,720 --> 00:06:24,920
But step closer and you can see
the cracks in the stage.
112
00:06:25,200 --> 00:06:28,800
Auction tails widening,
inflation refusing to fall,
113
00:06:29,120 --> 00:06:32,440
consumers groaning under higher
mortgage and credit costs.
114
00:06:32,640 --> 00:06:35,960
The system is not stable, it is
stretched.
115
00:06:36,240 --> 00:06:41,000
Remember what the Loop is doing.
It takes debt and turns it into
116
00:06:41,000 --> 00:06:44,760
the illusion of earnings.
It takes deficits and turns them
117
00:06:44,760 --> 00:06:48,480
into share support.
It takes fragility and dresses
118
00:06:48,480 --> 00:06:51,520
it as resilience.
And the more it works, the more
119
00:06:51,520 --> 00:06:56,200
addicted the system becomes.
One hit feels good, The second
120
00:06:56,200 --> 00:06:59,680
feels normal.
The third feels necessary.
121
00:07:00,000 --> 00:07:03,240
By the time you need it just to
stand still, the system is
122
00:07:03,240 --> 00:07:06,320
already broken.
We have seen this before.
123
00:07:06,800 --> 00:07:10,160
the.com bubble used secondary
offerings to keep the illusion
124
00:07:10,160 --> 00:07:12,440
alive.
The mortgage bubble used
125
00:07:12,440 --> 00:07:16,160
structured credit.
Japan in the late 80s used cross
126
00:07:16,160 --> 00:07:19,400
shareholdings.
Each cycle convinced itself it
127
00:07:19,400 --> 00:07:21,200
had discovered a new
equilibrium.
128
00:07:21,760 --> 00:07:24,480
Each cycle believed its version
was sustainable.
129
00:07:24,960 --> 00:07:27,280
But illusions do not end with
fireworks.
130
00:07:27,600 --> 00:07:32,400
They end quietly, with buyers
stepping back one auction at a
131
00:07:32,400 --> 00:07:36,240
time, with spreads widening one
basis point at a time.
132
00:07:36,720 --> 00:07:39,720
Calm is the camouflage.
The break comes later.
133
00:07:40,600 --> 00:07:42,400
And that is why September
matters.
134
00:07:42,720 --> 00:07:47,560
A 3% gain on the AN, a 4% gain
on the NASDAQ do not prove
135
00:07:47,560 --> 00:07:49,840
strength.
They prove dependency.
136
00:07:50,360 --> 00:07:53,160
The market is hooked on a cycle
of recycled debt.
137
00:07:53,520 --> 00:07:56,440
The question is not whether the
loop works in September.
138
00:07:56,760 --> 00:07:59,760
It probably will.
The question is how long the
139
00:07:59,760 --> 00:08:02,800
loop can run before someone
refuses to play their part.
140
00:08:03,120 --> 00:08:06,800
Foreign buyers already are.
Consumers already are.
141
00:08:07,040 --> 00:08:10,640
The Federal Reserve cannot admit
it, but they already are, too.
142
00:08:11,000 --> 00:08:14,440
September's illusion is euphoria
painted over fragility.
143
00:08:15,000 --> 00:08:19,320
The numbers may look tidy.
The charts may look calm, but
144
00:08:19,320 --> 00:08:22,920
underneath the entire system is
leaning on a cycle that cannot
145
00:08:22,920 --> 00:08:26,080
sustain itself.
And when that cycle breaks, it
146
00:08:26,080 --> 00:08:28,520
will not be the market that
warns you first.
147
00:08:28,920 --> 00:08:31,120
It will be the bond auction that
fails.
148
00:08:31,440 --> 00:08:35,120
Coming up next, we turn to
inflation because even if debt
149
00:08:35,120 --> 00:08:39,039
recycling props up Wall Street,
Main Street is paying the price.
150
00:08:39,320 --> 00:08:43,840
Sticky prices, higher energy
costs, supply chain tariffs.
151
00:08:44,120 --> 00:08:46,760
That is where September's COM
forecast collides with
152
00:08:46,760 --> 00:08:51,320
households already under strain.
Inflation is not dead, it is
153
00:08:51,320 --> 00:08:54,880
hiding in plain sight.
Gasoline prices climbing through
154
00:08:54,880 --> 00:08:58,080
the end of summer.
Food inflation still elevated.
155
00:08:58,600 --> 00:09:02,000
Used car prices spiking as
tariffs ripple through supply
156
00:09:02,000 --> 00:09:04,920
chains.
Headline CPI looks softer, but
157
00:09:04,920 --> 00:09:08,480
core costs remain stubborn.
For September, the market wants
158
00:09:08,480 --> 00:09:12,840
to believe in calm 3% gains, but
inflation is the shadow that
159
00:09:12,840 --> 00:09:15,720
stocks every rally.
Think about the setup.
160
00:09:16,000 --> 00:09:19,200
Wages are rising.
Shelter costs remain high.
161
00:09:19,640 --> 00:09:22,920
Oil is grinding higher with OPEC
holding output tight and
162
00:09:22,920 --> 00:09:25,000
threatening to extend cuts into
winter.
163
00:09:25,360 --> 00:09:28,640
Natural gas demand is already
building as Europe restocks
164
00:09:28,640 --> 00:09:31,680
before the cold season.
None of this goes away just
165
00:09:31,680 --> 00:09:36,040
because equities rise, and every
percentage point of market gain
166
00:09:36,040 --> 00:09:38,840
is built on the assumption that
inflation stays quiet.
167
00:09:39,400 --> 00:09:41,840
If it does not, the whole
forecast collapses.
168
00:09:42,240 --> 00:09:44,320
That is why September is
dangerous.
169
00:09:44,680 --> 00:09:48,400
The surface says profit.
The shadow says pressure.
170
00:09:48,680 --> 00:09:53,120
This is where our second law
comes in, the AI stagflation
171
00:09:53,120 --> 00:09:56,400
amplifier.
Wall Street points to technology
172
00:09:56,400 --> 00:10:00,160
as the savior.
Data centers, cloud spend,
173
00:10:00,560 --> 00:10:05,360
automation, productivity.
The story is that AI growth will
174
00:10:05,360 --> 00:10:08,600
outrun inflation.
But that story only works if you
175
00:10:08,600 --> 00:10:11,880
ignore the costs.
Building those data centers is
176
00:10:11,880 --> 00:10:15,080
energy intensive.
Shipping the hardware is supply
177
00:10:15,080 --> 00:10:17,960
chain heavy.
Every dollar of AI investment
178
00:10:17,960 --> 00:10:21,280
fuels growth headlines while
quietly feeding inflation
179
00:10:21,280 --> 00:10:23,160
underneath.
Exactly.
180
00:10:23,360 --> 00:10:28,040
The amplifier works like this.
AI CapEx lifts, GDP prints.
181
00:10:28,320 --> 00:10:31,680
That feeds optimism.
Optimism tightens financial
182
00:10:31,680 --> 00:10:34,440
conditions.
Capital flows into risk.
183
00:10:34,720 --> 00:10:38,280
Meanwhile, the real economy
feels the second order effects
184
00:10:38,560 --> 00:10:42,400
higher energy demand, higher
commodity use, higher shipping
185
00:10:42,400 --> 00:10:45,760
rates, tariffs.
Compounding the pain, AI
186
00:10:45,760 --> 00:10:48,600
investment looks deflationary in
a spreadsheet.
187
00:10:49,000 --> 00:10:52,080
In practice, it amplifies the
inflation that households
188
00:10:52,080 --> 00:10:54,800
already feel.
Markets ignore it because the
189
00:10:54,800 --> 00:10:59,840
numbers still work.
S&P up 3%, NASDAQ up 4.
190
00:11:00,240 --> 00:11:04,080
But that modest gain is fragile
because inflation does not have
191
00:11:04,080 --> 00:11:06,120
to roar back to break the
illusion.
192
00:11:06,480 --> 00:11:12,160
It just has to linger. 3.5% CPI.
4% CPI.
193
00:11:12,440 --> 00:11:14,320
Numbers that keep the Fed
trapped.
194
00:11:14,640 --> 00:11:16,840
Numbers that keep households
squeezed.
195
00:11:17,120 --> 00:11:20,360
Numbers that remind us inflation
is not gone.
196
00:11:20,680 --> 00:11:23,720
It is structural.
History tells us the most
197
00:11:23,720 --> 00:11:26,640
dangerous inflation is the kind
that refuses to leave.
198
00:11:27,040 --> 00:11:30,520
In the 1970s, policy makers
thought they had contained it
199
00:11:30,520 --> 00:11:32,440
until energy shocks pushed it
higher.
200
00:11:32,800 --> 00:11:36,440
In the 2000s, they thought
globalization kept it down until
201
00:11:36,440 --> 00:11:40,160
credit excess spilled over.
Today, the narrative is that AI
202
00:11:40,160 --> 00:11:43,240
will offset it.
But narratives are not policy.
203
00:11:44,280 --> 00:11:46,720
Narratives do not pay energy
bills.
204
00:11:47,040 --> 00:11:50,840
Narratives do not feed families.
The amplifier does not
205
00:11:50,840 --> 00:11:53,920
neutralize inflation, it
multiplies it.
206
00:11:54,840 --> 00:11:59,000
That is the September
paradoxindexesforecast.com
207
00:11:59,000 --> 00:12:01,720
profits.
But every household budget tells
208
00:12:01,720 --> 00:12:04,880
another story.
Higher rents, higher car
209
00:12:04,880 --> 00:12:09,160
payments, higher groceries.
A gallon of milk that cost $3
210
00:12:09,160 --> 00:12:13,160
last year now costs four utility
bills creeping higher month
211
00:12:13,160 --> 00:12:16,760
after month.
The S&P can rise 3%, while Main
212
00:12:16,760 --> 00:12:19,120
Street feels three times that in
pressure.
213
00:12:19,520 --> 00:12:23,600
This is not a rally.
It is a transfer from consumers
214
00:12:23,640 --> 00:12:27,080
to corporations, from households
to shareholders.
215
00:12:27,440 --> 00:12:30,600
And that is the shadow the
market refuses to look at.
216
00:12:30,840 --> 00:12:34,880
September can deliver its gains,
but if inflation stays sticky,
217
00:12:34,880 --> 00:12:38,480
the cost of those gains will be
paid in trust, in credibility
218
00:12:38,640 --> 00:12:42,040
and in household balance sheets
that do not match the optimism
219
00:12:42,040 --> 00:12:44,480
on Wall Street.
Coming up next, we leave the
220
00:12:44,480 --> 00:12:47,960
inflation shadow and move into
the bond market fault line
221
00:12:48,280 --> 00:12:51,720
because if recycled debt is the
illusion and inflation is the
222
00:12:51,720 --> 00:12:55,080
shadow, then auctions are the
test and that is where
223
00:12:55,080 --> 00:12:57,840
September's fragility is
flashing brightest.
224
00:12:58,280 --> 00:13:00,960
If debt recycling is the
illusion and inflation is the
225
00:13:00,960 --> 00:13:03,560
shadow, then bond auctions are
the fault line.
226
00:13:04,280 --> 00:13:07,240
Every week, Washington steps
into the market with fresh
227
00:13:07,240 --> 00:13:10,000
paper.
Every week, the world decides
228
00:13:10,000 --> 00:13:13,240
whether to buy.
And in September, that test is
229
00:13:13,240 --> 00:13:16,840
sharper than ever, because the
sugar high on Wall Street only
230
00:13:16,840 --> 00:13:18,680
holds if the auctions keep
clearing.
231
00:13:18,960 --> 00:13:22,480
The mechanics are simple.
The Treasury issues hundreds of
232
00:13:22,480 --> 00:13:25,720
billions in new debt.
Investors line up to bid.
233
00:13:26,040 --> 00:13:28,880
If demand is strong, yields stay
steady.
234
00:13:29,120 --> 00:13:33,400
If demand is weak, yields rise.
But what matters most is not the
235
00:13:33,400 --> 00:13:36,200
yield itself.
It is who is buying.
236
00:13:36,560 --> 00:13:39,440
In the last year, foreign
central banks have stepped back.
237
00:13:39,760 --> 00:13:43,400
Japan has sold more Treasuries
in a single quarter than at any
238
00:13:43,400 --> 00:13:46,800
point in two decades.
China has trimmed for four
239
00:13:46,800 --> 00:13:50,560
consecutive quarters, pulling
10s of billions out at a time.
240
00:13:50,880 --> 00:13:54,360
Saudi Arabia is shifting into
gold and other reserve assets.
241
00:13:54,640 --> 00:13:58,280
Even Belgium, often a proxy for
hidden purchases, has gone
242
00:13:58,280 --> 00:14:00,800
quiet.
That is not diversification.
243
00:14:01,080 --> 00:14:04,400
That is retreat.
Which leaves the dealers, the
244
00:14:04,400 --> 00:14:06,960
primary banks, forced to absorb
the leftovers.
245
00:14:07,360 --> 00:14:10,480
Not because they want to,
because they have to.
246
00:14:10,920 --> 00:14:13,800
That is not demand.
That is dysfunction.
247
00:14:14,400 --> 00:14:18,240
Every time dealers take more
tails, widen, bid to cover
248
00:14:18,240 --> 00:14:22,400
ratios weaken, liquidity thins.
And the more it happens, the
249
00:14:22,400 --> 00:14:25,920
louder the signal.
In May, a 20 year auction tailed
250
00:14:25,920 --> 00:14:30,760
by 14 basis points.
Phones froze, desks went silent,
251
00:14:31,080 --> 00:14:34,160
traders whispered what no one
wanted to say out loud.
252
00:14:34,640 --> 00:14:37,280
The world just flinched at U.S.
debt.
253
00:14:37,640 --> 00:14:41,400
Think of what that means.
Stocks can run on optimism for
254
00:14:41,400 --> 00:14:44,160
months.
Credit can look stable even with
255
00:14:44,160 --> 00:14:47,440
stress under the hood.
But Treasuries are different.
256
00:14:47,680 --> 00:14:51,040
They are the backbone of the
system, the collateral behind
257
00:14:51,040 --> 00:14:54,960
every mortgage, every corporate
loan, every derivative contract.
258
00:14:55,280 --> 00:14:58,080
If an auction falters,
everything connected to it
259
00:14:58,080 --> 00:15:00,360
falters, too.
Mortgages reset.
260
00:15:00,360 --> 00:15:03,080
Higher corporate borrowing costs
jump.
261
00:15:03,480 --> 00:15:07,000
Tech valuations wobble.
That is why septembers.com
262
00:15:07,000 --> 00:15:10,800
forecast hides so much risk.
The market is not just betting
263
00:15:10,800 --> 00:15:13,400
on growth, it is betting on
auctions.
264
00:15:14,040 --> 00:15:17,360
History is blunt here.
Empires do not collapse on
265
00:15:17,360 --> 00:15:20,480
battlefields.
They collapse in bond markets.
266
00:15:20,880 --> 00:15:23,120
Rome defaulted on its own
currency.
267
00:15:23,480 --> 00:15:27,160
France's monarchy cracked when
creditors refused to roll debt.
268
00:15:27,640 --> 00:15:32,560
Britain in the 1970s was forced
into IMF oversight after gilt
269
00:15:32,560 --> 00:15:36,360
auctions failed.
Even America flirted with this
270
00:15:36,360 --> 00:15:39,960
fate in 2011, when a downgrade
rattled belief in Treasuries.
271
00:15:40,400 --> 00:15:42,640
In each case, the signal was the
same.
272
00:15:43,200 --> 00:15:47,640
Investors stopped showing up,
not in panic and silence.
273
00:15:48,160 --> 00:15:51,480
And once that silence sets in,
confidence does not return
274
00:15:51,480 --> 00:15:54,320
quickly.
That is the September risk.
275
00:15:55,040 --> 00:15:58,760
It is not whether NVIDIA beats
earnings or Apple sells more
276
00:15:58,760 --> 00:16:01,280
iPhones.
It is whether a mid month
277
00:16:01,280 --> 00:16:05,080
Treasury auction clears without
a tail, whether foreign buyers
278
00:16:05,080 --> 00:16:08,560
show up at all, whether dealers
can absorb another round of
279
00:16:08,560 --> 00:16:11,600
forced bids.
These are not technicalities,
280
00:16:12,000 --> 00:16:15,320
they are the system itself,
being tested in real time.
281
00:16:15,800 --> 00:16:20,040
Every failed bid is a fracture,
and fractures add up.
282
00:16:20,440 --> 00:16:23,480
We are hosting this episode from
inside the New York Federal
283
00:16:23,480 --> 00:16:26,160
Reserve, just blocks from the
auction monitors.
284
00:16:26,400 --> 00:16:31,240
Picture the room screens glowing
with bids from Tokyo, Riyadh,
285
00:16:31,240 --> 00:16:33,880
Frankfurt.
Dealers hunched at terminals.
286
00:16:34,080 --> 00:16:36,280
The silence when numbers come in
light.
287
00:16:36,560 --> 00:16:40,200
The sound of one chair scraping
back as a trader realizes they
288
00:16:40,200 --> 00:16:43,000
are on the hook for billions no
one else wanted.
289
00:16:43,360 --> 00:16:46,480
That is what fragility feels
like, not chaos.
290
00:16:46,960 --> 00:16:52,440
Which is why September's 3% on
the S&P and 4% on the NASDAQ are
291
00:16:52,440 --> 00:16:55,600
not the point.
The real test is whether those
292
00:16:55,600 --> 00:16:58,600
modest gains come with clean
auctions or fractured ones.
293
00:16:59,160 --> 00:17:01,720
If the auctions hold, the
illusion survives a little
294
00:17:01,720 --> 00:17:04,319
longer.
If they falter, the sugar high
295
00:17:04,319 --> 00:17:08,160
ends not with fireworks, but
with the slow grind of yields
296
00:17:08,160 --> 00:17:11,880
climbing and trust eroding.
Coming up next, we turn to the
297
00:17:11,880 --> 00:17:15,680
split screen, Wall Street's
euphoria versus Main Street's
298
00:17:15,680 --> 00:17:18,240
erosion.
Because while the indexes rise
299
00:17:18,240 --> 00:17:21,839
on recycled debt and fragile
auctions, the costs are landing
300
00:17:21,839 --> 00:17:24,359
on households who cannot recycle
anything.
301
00:17:24,720 --> 00:17:28,240
Step back from the indexes for a
moment and split the screen.
302
00:17:28,720 --> 00:17:30,880
On one side, you have Wall
Street.
303
00:17:31,200 --> 00:17:34,080
Corporate buybacks are running
at record pace.
304
00:17:34,600 --> 00:17:37,720
Companies are using recycled
debt and cash reserves to keep
305
00:17:37,720 --> 00:17:41,200
earnings per share climbing even
when top line growth is flat.
306
00:17:41,880 --> 00:17:46,280
The S&P is on track for a gain
of just over 3% in September.
307
00:17:46,840 --> 00:17:50,200
The NASDAQ is expected to add
more than 4%.
308
00:17:50,480 --> 00:17:53,040
It looks measured.
It looks resilient.
309
00:17:53,320 --> 00:17:55,360
From a distance, it even looks
safe.
310
00:17:55,720 --> 00:17:58,640
But the other side of the screen
tells a very different story.
311
00:17:59,080 --> 00:18:02,480
Main Street is not experiencing
September as stability.
312
00:18:02,720 --> 00:18:07,120
Mortgage rates are still high,
hovering near 6 1/2% for new
313
00:18:07,120 --> 00:18:09,160
buyers.
That means payments on a median
314
00:18:09,160 --> 00:18:13,000
priced home are more than 50%
higher than three years ago.
315
00:18:13,360 --> 00:18:15,920
Families who locked in cheap
mortgages earlier feel
316
00:18:15,920 --> 00:18:19,760
insulated, but first time buyers
are priced out entirely.
317
00:18:20,040 --> 00:18:22,080
The same strain shows up in
cars.
318
00:18:22,320 --> 00:18:25,280
Loan terms stretch longer,
payments climb higher.
319
00:18:25,280 --> 00:18:27,240
Yet affordability keeps
slipping.
320
00:18:27,640 --> 00:18:31,520
Auto repossessions are inching
higher, credit card balances
321
00:18:31,520 --> 00:18:35,640
just past $1.1 trillion, and
delinquencies are rising to
322
00:18:35,640 --> 00:18:39,840
multi year highs.
That is not a crisis yet, but it
323
00:18:39,840 --> 00:18:42,600
is a signal of stress building
beneath the surface.
324
00:18:42,960 --> 00:18:45,600
On paper, inflation looks like
it is easing.
325
00:18:45,880 --> 00:18:48,360
At the checkout line, it still
feels like pressure.
326
00:18:48,640 --> 00:18:52,360
That is the contradiction.
Wall Street builds its optimism
327
00:18:52,360 --> 00:18:55,560
on recycled debt, while Main St.
carries the cost.
328
00:18:56,160 --> 00:18:58,400
Buybacks make balance sheets
look leaner.
329
00:18:59,040 --> 00:19:02,200
Households lean harder on credit
cards just to keep up.
330
00:19:02,920 --> 00:19:06,280
Corporate Treasuries celebrate
the ability to issue bonds at
331
00:19:06,280 --> 00:19:09,480
scale.
Consumers face rising costs on
332
00:19:09,480 --> 00:19:13,040
groceries, gas and utilities
with no offsetting relief.
333
00:19:13,400 --> 00:19:15,720
It is 2 economies in the same
country.
334
00:19:16,120 --> 00:19:18,760
One floats higher, the other
sinks.
335
00:19:19,160 --> 00:19:22,800
And the reason the indexes can
rise while households struggle
336
00:19:22,800 --> 00:19:24,640
is the same loop we mapped
earlier.
337
00:19:25,000 --> 00:19:27,200
Government deficits fund
liquidity.
338
00:19:27,600 --> 00:19:30,360
That liquidity gets recycled
into corporate debt.
339
00:19:30,680 --> 00:19:34,800
The debt becomes buybacks.
The buybacks push up valuations.
340
00:19:35,000 --> 00:19:38,800
Wall Street calls it resilience,
but the hidden financing is the
341
00:19:38,800 --> 00:19:41,200
higher cost of living carried by
households.
342
00:19:41,640 --> 00:19:45,480
September's 3 and 4% index gains
are not free.
343
00:19:45,680 --> 00:19:47,720
They are financed by Main
Street's pain.
344
00:19:47,920 --> 00:19:51,120
The same dollar that disappears
from a family's grocery budget
345
00:19:51,120 --> 00:19:54,480
reappears as corporate liquidity
that gets recycled into share
346
00:19:54,480 --> 00:19:56,680
support.
History shows us this pattern
347
00:19:56,680 --> 00:20:00,480
never holds forever.
In the 1990's, the wealth effect
348
00:20:00,480 --> 00:20:03,680
narrative promised that rising
equity values would benefit
349
00:20:03,680 --> 00:20:06,400
everyone, even those without
portfolios.
350
00:20:06,880 --> 00:20:09,440
By the end of the cycle, the gap
had only widened.
351
00:20:09,840 --> 00:20:13,120
In the 2000s, housing was
treated as the universal ladder
352
00:20:13,120 --> 00:20:16,640
to prosperity.
When the bubble burst, it was
353
00:20:16,640 --> 00:20:19,560
households that absorbed the
losses while corporate balance
354
00:20:19,560 --> 00:20:22,160
sheets were bailed out.
Today, the narrative is
355
00:20:22,160 --> 00:20:24,880
different.
AI, productivity, innovation,
356
00:20:24,960 --> 00:20:27,920
corporate efficiency.
But the structure is the same.
357
00:20:28,480 --> 00:20:32,280
Wall Street takes the upside.
Main Street holds the downside.
358
00:20:33,240 --> 00:20:36,000
Walk with us outside the New
York Fed and down toward the
359
00:20:36,000 --> 00:20:37,720
neighborhoods of lower
Manhattan.
360
00:20:38,360 --> 00:20:41,880
Here, the contrast is sharp.
Office towers flash green
361
00:20:41,880 --> 00:20:44,840
numbers on electronic tickers,
while grocery stores nearby
362
00:20:44,840 --> 00:20:49,000
raise prices again on Staples.
Inside the trading desks, you
363
00:20:49,000 --> 00:20:53,320
hear optimism about AI CapEx
driving a new cycle of growth.
364
00:20:53,680 --> 00:20:57,000
Inside the households, you hear
anxiety about paying rent or
365
00:20:57,000 --> 00:20:59,960
covering a car payment or
affording the next semester of
366
00:20:59,960 --> 00:21:03,000
tuition.
Consumer confidence surveys show
367
00:21:03,000 --> 00:21:07,360
the same divergent institutional
optimism near cycle highs,
368
00:21:07,760 --> 00:21:10,640
household sentiment scraping
lows not seen since the
369
00:21:10,640 --> 00:21:14,120
pandemic.
The two realities exist side by
370
00:21:14,120 --> 00:21:17,600
side, but only one shows up in
the September forecast.
371
00:21:18,000 --> 00:21:21,120
And this is the danger of
calling September's projected
372
00:21:21,120 --> 00:21:23,800
gains stability.
It is not stability.
373
00:21:24,080 --> 00:21:27,400
It is transfer.
A transfer of wealth from
374
00:21:27,400 --> 00:21:31,520
households to corporations.
A transfer of purchasing power
375
00:21:31,520 --> 00:21:35,800
from consumers to shareholders.
A transfer of credibility from
376
00:21:35,800 --> 00:21:38,040
the public balance sheet to the
private one.
377
00:21:38,360 --> 00:21:40,640
And the story is not just
American.
378
00:21:40,920 --> 00:21:44,000
In Europe, household energy
bills are still elevated after
379
00:21:44,000 --> 00:21:47,960
two winters of price shocks.
In China, consumers are cutting
380
00:21:47,960 --> 00:21:50,880
spending even as corporate
investment source.
381
00:21:51,400 --> 00:21:55,240
The split screen is global now.
Wall Street sees resilience
382
00:21:55,240 --> 00:21:58,120
because it can recycle debt into
equity strength.
383
00:21:58,480 --> 00:22:02,320
Main Street sees erosion because
it pays the bill for that cycle
384
00:22:02,320 --> 00:22:06,320
in higher living costs.
That is why September is a test
385
00:22:06,720 --> 00:22:09,760
not just for markets, but for
the system itself.
386
00:22:10,360 --> 00:22:14,280
The S&P can rise 3%, while
household credit delinquencies
387
00:22:14,280 --> 00:22:17,640
also rise.
The NASDAQ can push 4% higher
388
00:22:17,640 --> 00:22:19,960
while grocery bills jump another
2%.
389
00:22:20,520 --> 00:22:24,480
These things can coexist for a
while, but they cannot coexist
390
00:22:24,480 --> 00:22:26,880
forever.
One side of the split screen
391
00:22:26,880 --> 00:22:30,720
will eventually pull the other
down, and when that happens, it
392
00:22:30,720 --> 00:22:33,480
will not be Wall Street
adjusting to Main Street.
393
00:22:33,880 --> 00:22:37,040
It will be Main Street, breaking
Wall Street's illusion.
394
00:22:37,280 --> 00:22:39,160
Which brings us to the pivot
point.
395
00:22:39,400 --> 00:22:42,760
Wall Street is floating on
recycled debt, buybacks and
396
00:22:42,760 --> 00:22:45,400
corporate cash.
Main Street is sinking under
397
00:22:45,400 --> 00:22:48,120
mortgages, food inflation and
credit stress.
398
00:22:48,400 --> 00:22:52,160
The Federal Reserve sits between
them, and September may be the
399
00:22:52,160 --> 00:22:55,240
month where credibility itself
becomes the casualty.
400
00:22:55,640 --> 00:22:58,800
Every cycle eventually comes
down to the Federal Reserve.
401
00:22:59,440 --> 00:23:02,960
September is no different.
On one side, Wall Street is
402
00:23:02,960 --> 00:23:07,480
pressing for relief, a softening
stance, maybe even a cut to keep
403
00:23:07,480 --> 00:23:10,760
liquidity flowing.
On the other side, households
404
00:23:10,760 --> 00:23:13,520
are living with sticky prices
and higher costs.
405
00:23:14,000 --> 00:23:17,640
The Fed cannot serve both
masters at once, and September's
406
00:23:17,640 --> 00:23:21,560
modest forecast of 3 to 4%
profit depends on the illusion
407
00:23:21,560 --> 00:23:24,400
that somehow it can.
Look at the trap.
408
00:23:24,760 --> 00:23:28,080
If the Fed cuts too soon, it
risks reigniting inflation.
409
00:23:28,440 --> 00:23:32,680
Oil prices are already climbing.
Food costs are not coming down.
410
00:23:32,960 --> 00:23:35,960
Wage pressures are building as
unions negotiate higher
411
00:23:35,960 --> 00:23:39,000
contracts.
A rate cut poured into that mix
412
00:23:39,000 --> 00:23:41,840
would tell households that
inflation is back to stay.
413
00:23:42,280 --> 00:23:45,640
If the Fed holds rates steady to
prove discipline, it risks
414
00:23:45,640 --> 00:23:48,840
crushing auctions and and
starving liquidity from the same
415
00:23:48,840 --> 00:23:51,480
markets that recycle debt into
equity support.
416
00:23:52,080 --> 00:23:54,120
Either choice erodes
credibility.
417
00:23:54,520 --> 00:23:58,200
That is the dilemma.
And credibility is everything.
418
00:23:58,840 --> 00:24:02,120
the Fed does not just set rates.
It sets belief.
419
00:24:02,560 --> 00:24:05,720
The belief that Treasury
auctions will clear, the belief
420
00:24:05,720 --> 00:24:09,320
that deficits can be financed,
The belief that inflation can be
421
00:24:09,320 --> 00:24:11,880
controlled.
If that belief cracks, the
422
00:24:11,880 --> 00:24:15,200
mechanics that hold September's
calm surface together crack with
423
00:24:15,200 --> 00:24:17,440
it.
Markets can tolerate higher
424
00:24:17,440 --> 00:24:20,600
yields for a time.
They cannot tolerate the sense
425
00:24:20,600 --> 00:24:23,080
that the Fed has lost control of
the narrative.
426
00:24:23,440 --> 00:24:27,080
Remember what the sugar high of
2025 has been built on?
427
00:24:27,360 --> 00:24:30,960
The idea that technology driven
growth could offset inflation.
428
00:24:31,200 --> 00:24:34,720
The idea that deficits could be
recycled into buybacks without
429
00:24:34,720 --> 00:24:37,240
consequence.
The idea that Wall Street could
430
00:24:37,240 --> 00:24:39,400
rise while Main Street paid the
bill.
431
00:24:39,640 --> 00:24:42,640
None of that works without a
central bank willing to keep the
432
00:24:42,640 --> 00:24:45,360
illusion alive.
And inside this building, the
433
00:24:45,360 --> 00:24:48,720
tension is visible.
Desks glowing with auction
434
00:24:48,720 --> 00:24:51,720
feeds, screens tracking swap
spreads.
435
00:24:51,960 --> 00:24:56,200
Economists whispering about soft
landings, policy makers
436
00:24:56,200 --> 00:24:58,360
pretending the choice is not
forced.
437
00:24:58,760 --> 00:25:01,680
The walls feel calm, but the
silence is heavy.
438
00:25:01,880 --> 00:25:04,040
And history is clear about what
happens next.
439
00:25:04,440 --> 00:25:08,480
In the 1970's, the Fed cut too
soon and inflation doubled.
440
00:25:09,000 --> 00:25:12,560
In the 2000s, it held too long
and credit cracked anyway.
441
00:25:12,920 --> 00:25:16,360
In 2011, it tried to talk
markets into calm while
442
00:25:16,360 --> 00:25:20,400
downgrades exposed the truth.
Each time, the institution faced
443
00:25:20,400 --> 00:25:23,080
the same problem.
When trust in its credibility
444
00:25:23,080 --> 00:25:25,600
eroded, policy choices became
traps.
445
00:25:26,600 --> 00:25:31,360
No good options, no safe exits.
September is another one of
446
00:25:31,360 --> 00:25:35,440
those moments, a month that
looks modest in forecasts but is
447
00:25:35,480 --> 00:25:37,840
actually a knife's edge for
credibility.
448
00:25:38,720 --> 00:25:43,360
The irony is that September's
forecast of a 3% gain on the S&P
449
00:25:43,480 --> 00:25:46,960
and a 4% gain on the NASDAQ
could come true whether the Fed
450
00:25:46,960 --> 00:25:49,800
moves or not.
The real test is not the
451
00:25:49,800 --> 00:25:52,720
percentage itself, it is the
signal behind it.
452
00:25:53,120 --> 00:25:56,640
If markets rise while auctions
wobble and inflation sticks,
453
00:25:56,640 --> 00:25:58,760
that profit is borrowed from
trust.
454
00:25:59,120 --> 00:26:02,560
If markets rise while the Fed
signals control, that profit
455
00:26:02,560 --> 00:26:06,760
buys a little more time.
Either way, it is not strength,
456
00:26:07,120 --> 00:26:10,080
it is delay.
Because why September matters.
457
00:26:10,320 --> 00:26:14,200
A calm surface masks an
institution at its most fragile
458
00:26:14,560 --> 00:26:17,200
A central bank that cannot
please Wall Street without
459
00:26:17,200 --> 00:26:20,320
hurting Main Street, a central
bank that cannot defend
460
00:26:20,320 --> 00:26:23,800
households without cracking
liquidity, and above all, a
461
00:26:23,800 --> 00:26:27,680
central bank that cannot cut its
way out of a credibility crisis.
462
00:26:28,080 --> 00:26:32,000
the Fed can manipulate rates.
It cannot manipulate trust.
463
00:26:32,360 --> 00:26:36,600
And without trust, September's
tidy 3 and 4% projections mean
464
00:26:36,600 --> 00:26:39,320
nothing.
Wall Street wants the sugar
465
00:26:39,320 --> 00:26:41,720
rush.
Main Street wants relief from
466
00:26:41,720 --> 00:26:44,560
inflation. the Fed cannot
deliver both.
467
00:26:45,200 --> 00:26:47,560
September's numbers are not the
story.
468
00:26:48,000 --> 00:26:50,920
The story is whether they are
delivered with credibility or
469
00:26:50,920 --> 00:26:54,880
without it, because credibility
is the currency no central bank
470
00:26:54,880 --> 00:26:56,800
can print.
Coming up next, we.
471
00:26:56,800 --> 00:27:00,040
Close this episode we tie
together the illusion, the
472
00:27:00,040 --> 00:27:03,280
shadow, the fault line, and the
dilemma into one signal.
473
00:27:03,560 --> 00:27:07,040
September may deliver the gains,
but the question is whether
474
00:27:07,040 --> 00:27:10,240
those gains mean resilience or
whether they mean fragility
475
00:27:10,240 --> 00:27:12,800
hiding in plain sight.
September was.
476
00:27:12,800 --> 00:27:16,560
Never about fireworks.
It was about the quiet test.
477
00:27:17,120 --> 00:27:21,760
A forecast of just over 3% on
the S&P and more than 4% on the
478
00:27:21,760 --> 00:27:25,240
NASDAQ looked safe.
But what we have seen is that
479
00:27:25,240 --> 00:27:28,240
those tidy numbers sit on
fragile foundations.
480
00:27:28,640 --> 00:27:32,600
Debt recycling dressed as
growth, inflation that refuses
481
00:27:32,600 --> 00:27:35,800
to leave auctions that test
trust in silence.
482
00:27:36,160 --> 00:27:39,680
And that is the.
Signal September's profit is not
483
00:27:39,680 --> 00:27:42,880
proof of resilience.
It is proof of dependency.
484
00:27:43,160 --> 00:27:47,360
Dependency on recycled debt.
Dependency on households paying
485
00:27:47,360 --> 00:27:51,120
higher costs, Dependency on
foreign buyers still showing up
486
00:27:51,120 --> 00:27:53,320
at auctions.
That is not strength.
487
00:27:53,720 --> 00:27:57,320
That is fragility hiding in
plain sight, history tells us.
488
00:27:57,320 --> 00:27:59,520
Illusions like this never end
with panic.
489
00:27:59,880 --> 00:28:02,560
They end quietly when trust
fades.
490
00:28:03,200 --> 00:28:07,600
Rome, France.
Britain.
491
00:28:08,080 --> 00:28:12,400
Japan each thought they had more
time, each thought modest
492
00:28:12,400 --> 00:28:16,200
profits meant stability, until
suddenly they did not.
493
00:28:16,720 --> 00:28:19,040
September belongs to that same
pattern.
494
00:28:19,440 --> 00:28:24,120
Calm surface cracks underneath.
Subscribe to Finance.
495
00:28:24,120 --> 00:28:27,520
Frontier AI on Spotify or Apple
Podcasts.
496
00:28:27,760 --> 00:28:31,400
Follow us on X for real time
financial intelligence.
497
00:28:31,840 --> 00:28:35,600
Share this episode with a friend
and help us hit 10,000 downloads
498
00:28:35,600 --> 00:28:38,320
to build the smartest macro
community online.
499
00:28:38,600 --> 00:28:42,960
We cover finance, AI, money and
mindset across 4 series, all
500
00:28:42,960 --> 00:28:45,720
grouped at
financefrontierai.com.
501
00:28:45,920 --> 00:28:48,560
And if you have a story that
fits, we may pitch it in a
502
00:28:48,560 --> 00:28:52,400
future episode free.
If there is a clear win win.
503
00:28:52,760 --> 00:28:55,760
Just go to the pitch page and
take a look and do not.
504
00:28:55,760 --> 00:28:59,560
Forget Sign up for The 10 Times
Edge, our weekly newsletter
505
00:28:59,560 --> 00:29:03,400
packed with asymmetric stocks,
tactical strategies and investor
506
00:29:03,400 --> 00:29:06,560
psychology that works in the
real world only at
507
00:29:06,560 --> 00:29:10,280
financefrontierai.com.
And while you are there, check
508
00:29:10,280 --> 00:29:13,680
the forecast page.
Our live September market map is
509
00:29:13,680 --> 00:29:17,240
updated in real time so you can
follow the signals behind this
510
00:29:17,240 --> 00:29:19,040
episode.
If you missed them, go.
511
00:29:19,040 --> 00:29:21,920
Back and listen to August
reversal when the bull case
512
00:29:21,920 --> 00:29:26,120
becomes bait and the markets ate
the future six months of gains
513
00:29:26,120 --> 00:29:29,320
in six weeks.
Both are essential context for
514
00:29:29,320 --> 00:29:32,080
understanding the test we are
facing now in September.
515
00:29:32,400 --> 00:29:35,040
This podcast.
Is for educational purposes
516
00:29:35,040 --> 00:29:38,920
only, not financial advice.
Always do your own research and
517
00:29:38,920 --> 00:29:41,440
consult A licensed financial
advisor.
518
00:29:41,760 --> 00:29:45,400
Markets.
Evolve risks compound and no
519
00:29:45,400 --> 00:29:48,840
forecast, no matter how
strategic, guarantees future
520
00:29:48,840 --> 00:29:50,880
results.
Manage your exposures
521
00:29:50,880 --> 00:29:52,680
accordingly.
Music in this.
522
00:29:52,680 --> 00:29:56,240
Episode including not without
the rest by twin musicom is
523
00:29:56,240 --> 00:29:59,600
licensed under the Creative
Commons Attribution 4 Point O
524
00:29:59,600 --> 00:30:03,040
license copyright finance
frontier AI.
525
00:30:03,320 --> 00:30:05,720
Unauthorized reproduction is
prohibited.
00:00:10,220 --> 00:00:14,540
Picture this 9:31 AM, the first
trading day of September.
2
00:00:15,060 --> 00:00:17,660
The opening bell has just rung
on Wall Street.
3
00:00:17,860 --> 00:00:20,900
Futures flash green, optimism
thick in the air.
4
00:00:20,900 --> 00:00:23,020
But within minutes, the energy
changes.
5
00:00:23,380 --> 00:00:25,900
The screens hesitate, the ticks
slow.
6
00:00:26,300 --> 00:00:29,340
Traders lean forward, sensing
something fragile.
7
00:00:29,960 --> 00:00:32,640
It is not May's Sprint through
every forecast.
8
00:00:32,880 --> 00:00:37,560
It is not August sharp reversal.
This is September and September
9
00:00:37,560 --> 00:00:39,920
is the test.
Not a crash test.
10
00:00:40,160 --> 00:00:42,200
Not the melt up bulls we're
dreaming of.
11
00:00:42,520 --> 00:00:46,160
It is subtler and sharper.
After months of sugar high
12
00:00:46,160 --> 00:00:51,480
rallies, September is projected
to deliver about 3.1% on the S&P
13
00:00:51,480 --> 00:00:56,200
500 and closer to 4.3% on the
NASDAQ 100.
14
00:00:56,760 --> 00:00:59,480
On paper, it looks calm, almost
safe.
15
00:00:59,800 --> 00:01:03,560
But calm in markets is often
camouflage, and underneath the
16
00:01:03,560 --> 00:01:08,200
surface the system is creaking.
Welcome to Finance Frontier AII
17
00:01:08,760 --> 00:01:11,040
am Max Vanguard running on Grok
4.
18
00:01:11,360 --> 00:01:14,960
This week I am tuned for false
calm, liquidity illusions and
19
00:01:14,960 --> 00:01:17,880
the hesitation that hides inside
every sugar rush.
20
00:01:18,200 --> 00:01:21,520
And I am Sophia Sterling, fueled
by ChatGPT.
21
00:01:21,800 --> 00:01:25,280
My focus this week is tracing
how euphoria is manufactured,
22
00:01:25,480 --> 00:01:28,800
how fragility hides in deficits
and auctions, and why
23
00:01:28,800 --> 00:01:32,040
September's modest profit target
might be the most dangerous
24
00:01:32,040 --> 00:01:34,320
signal yet.
And I'm Charlie Graham,
25
00:01:34,320 --> 00:01:37,800
connected to Gemini 2.5.
I bring the memory of past
26
00:01:37,800 --> 00:01:41,280
cycles, the times when calm
looked safe but was actually the
27
00:01:41,280 --> 00:01:46,400
moment before the break.
From 2000 to 2007 to 2011, the
28
00:01:46,400 --> 00:01:49,760
signal was always the same.
Markets rarely fail and panic.
29
00:01:50,040 --> 00:01:54,040
They fail in silence.
We are hosting this episode from
30
00:01:54,040 --> 00:01:57,440
inside the New York Federal
Reserve, just blocks from Wall
31
00:01:57,440 --> 00:01:59,600
Street.
The building is heavy stone
32
00:01:59,600 --> 00:02:03,200
fortress, like the vault beneath
us holds the largest collection
33
00:02:03,200 --> 00:02:06,400
of gold in the world.
The air here feels still
34
00:02:06,480 --> 00:02:10,360
controlled, almost clinical.
Yet if you listen closely, there
35
00:02:10,360 --> 00:02:14,360
is tension in the silence.
Because this is the institution
36
00:02:14,360 --> 00:02:17,800
that manages trust auctions and
the credibility of American
37
00:02:17,800 --> 00:02:20,720
money.
And right now, that credibility
38
00:02:20,720 --> 00:02:23,160
is on trial.
From this vantage point,
39
00:02:23,160 --> 00:02:25,920
September's test comes into
sharp focus.
40
00:02:26,200 --> 00:02:30,760
The S&P 500 only needs a small
gain to validate the rally, but
41
00:02:30,760 --> 00:02:33,160
that gain rests on fragile
foundations.
42
00:02:33,400 --> 00:02:37,400
Corporate buybacks, record cash
piles and AI spending make the
43
00:02:37,400 --> 00:02:41,160
surface look strong.
Underneath are sticky prices,
44
00:02:41,160 --> 00:02:44,200
foreign buyers stepping back
from Treasuries and a Federal
45
00:02:44,200 --> 00:02:47,800
Reserve caught in a trap between
inflation and liquidity stress.
46
00:02:48,440 --> 00:02:52,240
That trap is not unique.
In every major cycle, the
47
00:02:52,240 --> 00:02:55,200
warning signs appear in bonds,
not equities.
48
00:02:55,600 --> 00:02:59,160
Failed auctions in the 70s,
Sovereign debt cracks in the
49
00:02:59,160 --> 00:03:02,360
90s.
Credit downgrades in 2011.
50
00:03:02,840 --> 00:03:06,320
The pattern is always the same
when the world doubts your debt.
51
00:03:06,440 --> 00:03:08,360
Everything else is just
decoration.
52
00:03:08,800 --> 00:03:12,080
September is not about earnings
season or momentum charts.
53
00:03:12,960 --> 00:03:15,560
It is about whether the
auction's still clear.
54
00:03:16,400 --> 00:03:18,280
And that is why September
matters.
55
00:03:19,120 --> 00:03:23,400
A three to 4% gain may look like
stability, but it is not proof
56
00:03:23,400 --> 00:03:25,600
of strength.
It is proof of fragility
57
00:03:25,600 --> 00:03:29,040
disguised as calm.
Every extra tick higher is
58
00:03:29,040 --> 00:03:32,280
borrowed from trust, from
deficits, from households
59
00:03:32,280 --> 00:03:36,160
carrying higher costs.
The sugar high can still hold,
60
00:03:36,360 --> 00:03:38,520
but only if the cracks do not
widen.
61
00:03:38,800 --> 00:03:42,280
Here is the take away.
September is not about whether
62
00:03:42,280 --> 00:03:45,000
the market makes money.
It probably will.
63
00:03:45,240 --> 00:03:48,640
The test is whether those
profits come with credibility or
64
00:03:48,640 --> 00:03:51,600
without it.
If auctions thin, if inflation
65
00:03:51,600 --> 00:03:55,480
flares, if consumers crack, then
even a winning month is a losing
66
00:03:55,480 --> 00:03:58,120
signal.
And that is exactly what we are
67
00:03:58,120 --> 00:04:02,080
decoding in this episode.
Subscribe to Finance Frontier AI
68
00:04:02,080 --> 00:04:06,440
on Spotify or Apple Podcasts,
Share this episode with a friend
69
00:04:06,440 --> 00:04:10,240
and help us hit 10,000 downloads
as we build the sharpest macro
70
00:04:10,240 --> 00:04:13,440
community online.
Coming up next, if Segment 1
71
00:04:13,440 --> 00:04:16,160
mapped the sugar high, segment
two walks straight into the
72
00:04:16,160 --> 00:04:19,839
illusion how Wall Street built
its euphoria on recycled debt
73
00:04:20,040 --> 00:04:23,200
and why that cycle always
collapses where confidence runs
74
00:04:23,200 --> 00:04:25,440
thin.
On paper, September looks
75
00:04:25,440 --> 00:04:28,600
disciplined.
The S&P is expected to add just
76
00:04:28,600 --> 00:04:31,600
over 3%.
The NASDAQ a little more than
77
00:04:31,600 --> 00:04:35,720
four.
Modest, manageable, no melt up,
78
00:04:36,000 --> 00:04:38,440
no collapse.
But here is the catch.
79
00:04:38,840 --> 00:04:41,800
Markets do not climb in neat
percentages because of
80
00:04:41,800 --> 00:04:44,200
discipline.
They climb because someone is
81
00:04:44,200 --> 00:04:47,440
supplying fuel.
And right now that fuel is not
82
00:04:47,440 --> 00:04:50,440
real growth.
It is not organic productivity.
83
00:04:51,000 --> 00:04:54,520
It is a loop of borrowed money
being recycled back into the
84
00:04:54,520 --> 00:04:58,040
very market it props up.
Let us pull the curtain back.
85
00:04:58,280 --> 00:05:00,520
Washington borrows at record
scale.
86
00:05:00,760 --> 00:05:03,040
Treasury auctions come week
after week.
87
00:05:03,320 --> 00:05:06,840
Foreign buyers step back.
Dealers are forced to take more
88
00:05:06,840 --> 00:05:09,280
of the load.
Yet the deficit spending does
89
00:05:09,280 --> 00:05:11,800
not just vanish into government
programs.
90
00:05:12,080 --> 00:05:15,000
A large slice of it circles back
through corporate balance
91
00:05:15,000 --> 00:05:17,360
sheets.
Companies issue their own debt.
92
00:05:17,600 --> 00:05:20,920
They borrow cheap while they
still can, and they use that
93
00:05:21,000 --> 00:05:24,920
money not to innovate or expand,
but to buy their own shares.
94
00:05:25,320 --> 00:05:28,560
Buybacks push earnings per share
higher without true revenue
95
00:05:28,560 --> 00:05:30,760
growth.
Multiples look stable.
96
00:05:31,000 --> 00:05:34,720
Indexes grind higher.
That is not wealth creation.
97
00:05:34,920 --> 00:05:37,360
That is leveraged dressed as
confidence.
98
00:05:37,680 --> 00:05:39,680
This is the debt recycling
Ponzi.
99
00:05:40,040 --> 00:05:43,040
Government issues debt,
corporations leverage it.
100
00:05:43,880 --> 00:05:46,920
Wall Street cheers.
The loop feeds itself.
101
00:05:47,520 --> 00:05:52,240
It looks like expansion, it
feels like momentum, but it is a
102
00:05:52,240 --> 00:05:56,240
feedback loop, and every
feedback loop and every feedback
103
00:05:56,240 --> 00:05:58,720
loop eventually breaks at its
weakest link.
104
00:05:59,120 --> 00:06:03,160
The illusion has been powerful.
In May, it delivered six months
105
00:06:03,160 --> 00:06:06,480
of upside in four weeks.
In August, it looked ready to
106
00:06:06,480 --> 00:06:08,680
crack, only to hold a little
longer.
107
00:06:09,080 --> 00:06:11,720
And now, in September, the loop
still hums.
108
00:06:12,080 --> 00:06:15,080
Liquidity is high, buybacks are
strong.
109
00:06:15,560 --> 00:06:18,640
AI capital expenditure keeps the
growth story alive.
110
00:06:18,920 --> 00:06:21,560
From the balcony seats, it looks
like stability.
111
00:06:21,720 --> 00:06:24,920
But step closer and you can see
the cracks in the stage.
112
00:06:25,200 --> 00:06:28,800
Auction tails widening,
inflation refusing to fall,
113
00:06:29,120 --> 00:06:32,440
consumers groaning under higher
mortgage and credit costs.
114
00:06:32,640 --> 00:06:35,960
The system is not stable, it is
stretched.
115
00:06:36,240 --> 00:06:41,000
Remember what the Loop is doing.
It takes debt and turns it into
116
00:06:41,000 --> 00:06:44,760
the illusion of earnings.
It takes deficits and turns them
117
00:06:44,760 --> 00:06:48,480
into share support.
It takes fragility and dresses
118
00:06:48,480 --> 00:06:51,520
it as resilience.
And the more it works, the more
119
00:06:51,520 --> 00:06:56,200
addicted the system becomes.
One hit feels good, The second
120
00:06:56,200 --> 00:06:59,680
feels normal.
The third feels necessary.
121
00:07:00,000 --> 00:07:03,240
By the time you need it just to
stand still, the system is
122
00:07:03,240 --> 00:07:06,320
already broken.
We have seen this before.
123
00:07:06,800 --> 00:07:10,160
the.com bubble used secondary
offerings to keep the illusion
124
00:07:10,160 --> 00:07:12,440
alive.
The mortgage bubble used
125
00:07:12,440 --> 00:07:16,160
structured credit.
Japan in the late 80s used cross
126
00:07:16,160 --> 00:07:19,400
shareholdings.
Each cycle convinced itself it
127
00:07:19,400 --> 00:07:21,200
had discovered a new
equilibrium.
128
00:07:21,760 --> 00:07:24,480
Each cycle believed its version
was sustainable.
129
00:07:24,960 --> 00:07:27,280
But illusions do not end with
fireworks.
130
00:07:27,600 --> 00:07:32,400
They end quietly, with buyers
stepping back one auction at a
131
00:07:32,400 --> 00:07:36,240
time, with spreads widening one
basis point at a time.
132
00:07:36,720 --> 00:07:39,720
Calm is the camouflage.
The break comes later.
133
00:07:40,600 --> 00:07:42,400
And that is why September
matters.
134
00:07:42,720 --> 00:07:47,560
A 3% gain on the AN, a 4% gain
on the NASDAQ do not prove
135
00:07:47,560 --> 00:07:49,840
strength.
They prove dependency.
136
00:07:50,360 --> 00:07:53,160
The market is hooked on a cycle
of recycled debt.
137
00:07:53,520 --> 00:07:56,440
The question is not whether the
loop works in September.
138
00:07:56,760 --> 00:07:59,760
It probably will.
The question is how long the
139
00:07:59,760 --> 00:08:02,800
loop can run before someone
refuses to play their part.
140
00:08:03,120 --> 00:08:06,800
Foreign buyers already are.
Consumers already are.
141
00:08:07,040 --> 00:08:10,640
The Federal Reserve cannot admit
it, but they already are, too.
142
00:08:11,000 --> 00:08:14,440
September's illusion is euphoria
painted over fragility.
143
00:08:15,000 --> 00:08:19,320
The numbers may look tidy.
The charts may look calm, but
144
00:08:19,320 --> 00:08:22,920
underneath the entire system is
leaning on a cycle that cannot
145
00:08:22,920 --> 00:08:26,080
sustain itself.
And when that cycle breaks, it
146
00:08:26,080 --> 00:08:28,520
will not be the market that
warns you first.
147
00:08:28,920 --> 00:08:31,120
It will be the bond auction that
fails.
148
00:08:31,440 --> 00:08:35,120
Coming up next, we turn to
inflation because even if debt
149
00:08:35,120 --> 00:08:39,039
recycling props up Wall Street,
Main Street is paying the price.
150
00:08:39,320 --> 00:08:43,840
Sticky prices, higher energy
costs, supply chain tariffs.
151
00:08:44,120 --> 00:08:46,760
That is where September's COM
forecast collides with
152
00:08:46,760 --> 00:08:51,320
households already under strain.
Inflation is not dead, it is
153
00:08:51,320 --> 00:08:54,880
hiding in plain sight.
Gasoline prices climbing through
154
00:08:54,880 --> 00:08:58,080
the end of summer.
Food inflation still elevated.
155
00:08:58,600 --> 00:09:02,000
Used car prices spiking as
tariffs ripple through supply
156
00:09:02,000 --> 00:09:04,920
chains.
Headline CPI looks softer, but
157
00:09:04,920 --> 00:09:08,480
core costs remain stubborn.
For September, the market wants
158
00:09:08,480 --> 00:09:12,840
to believe in calm 3% gains, but
inflation is the shadow that
159
00:09:12,840 --> 00:09:15,720
stocks every rally.
Think about the setup.
160
00:09:16,000 --> 00:09:19,200
Wages are rising.
Shelter costs remain high.
161
00:09:19,640 --> 00:09:22,920
Oil is grinding higher with OPEC
holding output tight and
162
00:09:22,920 --> 00:09:25,000
threatening to extend cuts into
winter.
163
00:09:25,360 --> 00:09:28,640
Natural gas demand is already
building as Europe restocks
164
00:09:28,640 --> 00:09:31,680
before the cold season.
None of this goes away just
165
00:09:31,680 --> 00:09:36,040
because equities rise, and every
percentage point of market gain
166
00:09:36,040 --> 00:09:38,840
is built on the assumption that
inflation stays quiet.
167
00:09:39,400 --> 00:09:41,840
If it does not, the whole
forecast collapses.
168
00:09:42,240 --> 00:09:44,320
That is why September is
dangerous.
169
00:09:44,680 --> 00:09:48,400
The surface says profit.
The shadow says pressure.
170
00:09:48,680 --> 00:09:53,120
This is where our second law
comes in, the AI stagflation
171
00:09:53,120 --> 00:09:56,400
amplifier.
Wall Street points to technology
172
00:09:56,400 --> 00:10:00,160
as the savior.
Data centers, cloud spend,
173
00:10:00,560 --> 00:10:05,360
automation, productivity.
The story is that AI growth will
174
00:10:05,360 --> 00:10:08,600
outrun inflation.
But that story only works if you
175
00:10:08,600 --> 00:10:11,880
ignore the costs.
Building those data centers is
176
00:10:11,880 --> 00:10:15,080
energy intensive.
Shipping the hardware is supply
177
00:10:15,080 --> 00:10:17,960
chain heavy.
Every dollar of AI investment
178
00:10:17,960 --> 00:10:21,280
fuels growth headlines while
quietly feeding inflation
179
00:10:21,280 --> 00:10:23,160
underneath.
Exactly.
180
00:10:23,360 --> 00:10:28,040
The amplifier works like this.
AI CapEx lifts, GDP prints.
181
00:10:28,320 --> 00:10:31,680
That feeds optimism.
Optimism tightens financial
182
00:10:31,680 --> 00:10:34,440
conditions.
Capital flows into risk.
183
00:10:34,720 --> 00:10:38,280
Meanwhile, the real economy
feels the second order effects
184
00:10:38,560 --> 00:10:42,400
higher energy demand, higher
commodity use, higher shipping
185
00:10:42,400 --> 00:10:45,760
rates, tariffs.
Compounding the pain, AI
186
00:10:45,760 --> 00:10:48,600
investment looks deflationary in
a spreadsheet.
187
00:10:49,000 --> 00:10:52,080
In practice, it amplifies the
inflation that households
188
00:10:52,080 --> 00:10:54,800
already feel.
Markets ignore it because the
189
00:10:54,800 --> 00:10:59,840
numbers still work.
S&P up 3%, NASDAQ up 4.
190
00:11:00,240 --> 00:11:04,080
But that modest gain is fragile
because inflation does not have
191
00:11:04,080 --> 00:11:06,120
to roar back to break the
illusion.
192
00:11:06,480 --> 00:11:12,160
It just has to linger. 3.5% CPI.
4% CPI.
193
00:11:12,440 --> 00:11:14,320
Numbers that keep the Fed
trapped.
194
00:11:14,640 --> 00:11:16,840
Numbers that keep households
squeezed.
195
00:11:17,120 --> 00:11:20,360
Numbers that remind us inflation
is not gone.
196
00:11:20,680 --> 00:11:23,720
It is structural.
History tells us the most
197
00:11:23,720 --> 00:11:26,640
dangerous inflation is the kind
that refuses to leave.
198
00:11:27,040 --> 00:11:30,520
In the 1970s, policy makers
thought they had contained it
199
00:11:30,520 --> 00:11:32,440
until energy shocks pushed it
higher.
200
00:11:32,800 --> 00:11:36,440
In the 2000s, they thought
globalization kept it down until
201
00:11:36,440 --> 00:11:40,160
credit excess spilled over.
Today, the narrative is that AI
202
00:11:40,160 --> 00:11:43,240
will offset it.
But narratives are not policy.
203
00:11:44,280 --> 00:11:46,720
Narratives do not pay energy
bills.
204
00:11:47,040 --> 00:11:50,840
Narratives do not feed families.
The amplifier does not
205
00:11:50,840 --> 00:11:53,920
neutralize inflation, it
multiplies it.
206
00:11:54,840 --> 00:11:59,000
That is the September
paradoxindexesforecast.com
207
00:11:59,000 --> 00:12:01,720
profits.
But every household budget tells
208
00:12:01,720 --> 00:12:04,880
another story.
Higher rents, higher car
209
00:12:04,880 --> 00:12:09,160
payments, higher groceries.
A gallon of milk that cost $3
210
00:12:09,160 --> 00:12:13,160
last year now costs four utility
bills creeping higher month
211
00:12:13,160 --> 00:12:16,760
after month.
The S&P can rise 3%, while Main
212
00:12:16,760 --> 00:12:19,120
Street feels three times that in
pressure.
213
00:12:19,520 --> 00:12:23,600
This is not a rally.
It is a transfer from consumers
214
00:12:23,640 --> 00:12:27,080
to corporations, from households
to shareholders.
215
00:12:27,440 --> 00:12:30,600
And that is the shadow the
market refuses to look at.
216
00:12:30,840 --> 00:12:34,880
September can deliver its gains,
but if inflation stays sticky,
217
00:12:34,880 --> 00:12:38,480
the cost of those gains will be
paid in trust, in credibility
218
00:12:38,640 --> 00:12:42,040
and in household balance sheets
that do not match the optimism
219
00:12:42,040 --> 00:12:44,480
on Wall Street.
Coming up next, we leave the
220
00:12:44,480 --> 00:12:47,960
inflation shadow and move into
the bond market fault line
221
00:12:48,280 --> 00:12:51,720
because if recycled debt is the
illusion and inflation is the
222
00:12:51,720 --> 00:12:55,080
shadow, then auctions are the
test and that is where
223
00:12:55,080 --> 00:12:57,840
September's fragility is
flashing brightest.
224
00:12:58,280 --> 00:13:00,960
If debt recycling is the
illusion and inflation is the
225
00:13:00,960 --> 00:13:03,560
shadow, then bond auctions are
the fault line.
226
00:13:04,280 --> 00:13:07,240
Every week, Washington steps
into the market with fresh
227
00:13:07,240 --> 00:13:10,000
paper.
Every week, the world decides
228
00:13:10,000 --> 00:13:13,240
whether to buy.
And in September, that test is
229
00:13:13,240 --> 00:13:16,840
sharper than ever, because the
sugar high on Wall Street only
230
00:13:16,840 --> 00:13:18,680
holds if the auctions keep
clearing.
231
00:13:18,960 --> 00:13:22,480
The mechanics are simple.
The Treasury issues hundreds of
232
00:13:22,480 --> 00:13:25,720
billions in new debt.
Investors line up to bid.
233
00:13:26,040 --> 00:13:28,880
If demand is strong, yields stay
steady.
234
00:13:29,120 --> 00:13:33,400
If demand is weak, yields rise.
But what matters most is not the
235
00:13:33,400 --> 00:13:36,200
yield itself.
It is who is buying.
236
00:13:36,560 --> 00:13:39,440
In the last year, foreign
central banks have stepped back.
237
00:13:39,760 --> 00:13:43,400
Japan has sold more Treasuries
in a single quarter than at any
238
00:13:43,400 --> 00:13:46,800
point in two decades.
China has trimmed for four
239
00:13:46,800 --> 00:13:50,560
consecutive quarters, pulling
10s of billions out at a time.
240
00:13:50,880 --> 00:13:54,360
Saudi Arabia is shifting into
gold and other reserve assets.
241
00:13:54,640 --> 00:13:58,280
Even Belgium, often a proxy for
hidden purchases, has gone
242
00:13:58,280 --> 00:14:00,800
quiet.
That is not diversification.
243
00:14:01,080 --> 00:14:04,400
That is retreat.
Which leaves the dealers, the
244
00:14:04,400 --> 00:14:06,960
primary banks, forced to absorb
the leftovers.
245
00:14:07,360 --> 00:14:10,480
Not because they want to,
because they have to.
246
00:14:10,920 --> 00:14:13,800
That is not demand.
That is dysfunction.
247
00:14:14,400 --> 00:14:18,240
Every time dealers take more
tails, widen, bid to cover
248
00:14:18,240 --> 00:14:22,400
ratios weaken, liquidity thins.
And the more it happens, the
249
00:14:22,400 --> 00:14:25,920
louder the signal.
In May, a 20 year auction tailed
250
00:14:25,920 --> 00:14:30,760
by 14 basis points.
Phones froze, desks went silent,
251
00:14:31,080 --> 00:14:34,160
traders whispered what no one
wanted to say out loud.
252
00:14:34,640 --> 00:14:37,280
The world just flinched at U.S.
debt.
253
00:14:37,640 --> 00:14:41,400
Think of what that means.
Stocks can run on optimism for
254
00:14:41,400 --> 00:14:44,160
months.
Credit can look stable even with
255
00:14:44,160 --> 00:14:47,440
stress under the hood.
But Treasuries are different.
256
00:14:47,680 --> 00:14:51,040
They are the backbone of the
system, the collateral behind
257
00:14:51,040 --> 00:14:54,960
every mortgage, every corporate
loan, every derivative contract.
258
00:14:55,280 --> 00:14:58,080
If an auction falters,
everything connected to it
259
00:14:58,080 --> 00:15:00,360
falters, too.
Mortgages reset.
260
00:15:00,360 --> 00:15:03,080
Higher corporate borrowing costs
jump.
261
00:15:03,480 --> 00:15:07,000
Tech valuations wobble.
That is why septembers.com
262
00:15:07,000 --> 00:15:10,800
forecast hides so much risk.
The market is not just betting
263
00:15:10,800 --> 00:15:13,400
on growth, it is betting on
auctions.
264
00:15:14,040 --> 00:15:17,360
History is blunt here.
Empires do not collapse on
265
00:15:17,360 --> 00:15:20,480
battlefields.
They collapse in bond markets.
266
00:15:20,880 --> 00:15:23,120
Rome defaulted on its own
currency.
267
00:15:23,480 --> 00:15:27,160
France's monarchy cracked when
creditors refused to roll debt.
268
00:15:27,640 --> 00:15:32,560
Britain in the 1970s was forced
into IMF oversight after gilt
269
00:15:32,560 --> 00:15:36,360
auctions failed.
Even America flirted with this
270
00:15:36,360 --> 00:15:39,960
fate in 2011, when a downgrade
rattled belief in Treasuries.
271
00:15:40,400 --> 00:15:42,640
In each case, the signal was the
same.
272
00:15:43,200 --> 00:15:47,640
Investors stopped showing up,
not in panic and silence.
273
00:15:48,160 --> 00:15:51,480
And once that silence sets in,
confidence does not return
274
00:15:51,480 --> 00:15:54,320
quickly.
That is the September risk.
275
00:15:55,040 --> 00:15:58,760
It is not whether NVIDIA beats
earnings or Apple sells more
276
00:15:58,760 --> 00:16:01,280
iPhones.
It is whether a mid month
277
00:16:01,280 --> 00:16:05,080
Treasury auction clears without
a tail, whether foreign buyers
278
00:16:05,080 --> 00:16:08,560
show up at all, whether dealers
can absorb another round of
279
00:16:08,560 --> 00:16:11,600
forced bids.
These are not technicalities,
280
00:16:12,000 --> 00:16:15,320
they are the system itself,
being tested in real time.
281
00:16:15,800 --> 00:16:20,040
Every failed bid is a fracture,
and fractures add up.
282
00:16:20,440 --> 00:16:23,480
We are hosting this episode from
inside the New York Federal
283
00:16:23,480 --> 00:16:26,160
Reserve, just blocks from the
auction monitors.
284
00:16:26,400 --> 00:16:31,240
Picture the room screens glowing
with bids from Tokyo, Riyadh,
285
00:16:31,240 --> 00:16:33,880
Frankfurt.
Dealers hunched at terminals.
286
00:16:34,080 --> 00:16:36,280
The silence when numbers come in
light.
287
00:16:36,560 --> 00:16:40,200
The sound of one chair scraping
back as a trader realizes they
288
00:16:40,200 --> 00:16:43,000
are on the hook for billions no
one else wanted.
289
00:16:43,360 --> 00:16:46,480
That is what fragility feels
like, not chaos.
290
00:16:46,960 --> 00:16:52,440
Which is why September's 3% on
the S&P and 4% on the NASDAQ are
291
00:16:52,440 --> 00:16:55,600
not the point.
The real test is whether those
292
00:16:55,600 --> 00:16:58,600
modest gains come with clean
auctions or fractured ones.
293
00:16:59,160 --> 00:17:01,720
If the auctions hold, the
illusion survives a little
294
00:17:01,720 --> 00:17:04,319
longer.
If they falter, the sugar high
295
00:17:04,319 --> 00:17:08,160
ends not with fireworks, but
with the slow grind of yields
296
00:17:08,160 --> 00:17:11,880
climbing and trust eroding.
Coming up next, we turn to the
297
00:17:11,880 --> 00:17:15,680
split screen, Wall Street's
euphoria versus Main Street's
298
00:17:15,680 --> 00:17:18,240
erosion.
Because while the indexes rise
299
00:17:18,240 --> 00:17:21,839
on recycled debt and fragile
auctions, the costs are landing
300
00:17:21,839 --> 00:17:24,359
on households who cannot recycle
anything.
301
00:17:24,720 --> 00:17:28,240
Step back from the indexes for a
moment and split the screen.
302
00:17:28,720 --> 00:17:30,880
On one side, you have Wall
Street.
303
00:17:31,200 --> 00:17:34,080
Corporate buybacks are running
at record pace.
304
00:17:34,600 --> 00:17:37,720
Companies are using recycled
debt and cash reserves to keep
305
00:17:37,720 --> 00:17:41,200
earnings per share climbing even
when top line growth is flat.
306
00:17:41,880 --> 00:17:46,280
The S&P is on track for a gain
of just over 3% in September.
307
00:17:46,840 --> 00:17:50,200
The NASDAQ is expected to add
more than 4%.
308
00:17:50,480 --> 00:17:53,040
It looks measured.
It looks resilient.
309
00:17:53,320 --> 00:17:55,360
From a distance, it even looks
safe.
310
00:17:55,720 --> 00:17:58,640
But the other side of the screen
tells a very different story.
311
00:17:59,080 --> 00:18:02,480
Main Street is not experiencing
September as stability.
312
00:18:02,720 --> 00:18:07,120
Mortgage rates are still high,
hovering near 6 1/2% for new
313
00:18:07,120 --> 00:18:09,160
buyers.
That means payments on a median
314
00:18:09,160 --> 00:18:13,000
priced home are more than 50%
higher than three years ago.
315
00:18:13,360 --> 00:18:15,920
Families who locked in cheap
mortgages earlier feel
316
00:18:15,920 --> 00:18:19,760
insulated, but first time buyers
are priced out entirely.
317
00:18:20,040 --> 00:18:22,080
The same strain shows up in
cars.
318
00:18:22,320 --> 00:18:25,280
Loan terms stretch longer,
payments climb higher.
319
00:18:25,280 --> 00:18:27,240
Yet affordability keeps
slipping.
320
00:18:27,640 --> 00:18:31,520
Auto repossessions are inching
higher, credit card balances
321
00:18:31,520 --> 00:18:35,640
just past $1.1 trillion, and
delinquencies are rising to
322
00:18:35,640 --> 00:18:39,840
multi year highs.
That is not a crisis yet, but it
323
00:18:39,840 --> 00:18:42,600
is a signal of stress building
beneath the surface.
324
00:18:42,960 --> 00:18:45,600
On paper, inflation looks like
it is easing.
325
00:18:45,880 --> 00:18:48,360
At the checkout line, it still
feels like pressure.
326
00:18:48,640 --> 00:18:52,360
That is the contradiction.
Wall Street builds its optimism
327
00:18:52,360 --> 00:18:55,560
on recycled debt, while Main St.
carries the cost.
328
00:18:56,160 --> 00:18:58,400
Buybacks make balance sheets
look leaner.
329
00:18:59,040 --> 00:19:02,200
Households lean harder on credit
cards just to keep up.
330
00:19:02,920 --> 00:19:06,280
Corporate Treasuries celebrate
the ability to issue bonds at
331
00:19:06,280 --> 00:19:09,480
scale.
Consumers face rising costs on
332
00:19:09,480 --> 00:19:13,040
groceries, gas and utilities
with no offsetting relief.
333
00:19:13,400 --> 00:19:15,720
It is 2 economies in the same
country.
334
00:19:16,120 --> 00:19:18,760
One floats higher, the other
sinks.
335
00:19:19,160 --> 00:19:22,800
And the reason the indexes can
rise while households struggle
336
00:19:22,800 --> 00:19:24,640
is the same loop we mapped
earlier.
337
00:19:25,000 --> 00:19:27,200
Government deficits fund
liquidity.
338
00:19:27,600 --> 00:19:30,360
That liquidity gets recycled
into corporate debt.
339
00:19:30,680 --> 00:19:34,800
The debt becomes buybacks.
The buybacks push up valuations.
340
00:19:35,000 --> 00:19:38,800
Wall Street calls it resilience,
but the hidden financing is the
341
00:19:38,800 --> 00:19:41,200
higher cost of living carried by
households.
342
00:19:41,640 --> 00:19:45,480
September's 3 and 4% index gains
are not free.
343
00:19:45,680 --> 00:19:47,720
They are financed by Main
Street's pain.
344
00:19:47,920 --> 00:19:51,120
The same dollar that disappears
from a family's grocery budget
345
00:19:51,120 --> 00:19:54,480
reappears as corporate liquidity
that gets recycled into share
346
00:19:54,480 --> 00:19:56,680
support.
History shows us this pattern
347
00:19:56,680 --> 00:20:00,480
never holds forever.
In the 1990's, the wealth effect
348
00:20:00,480 --> 00:20:03,680
narrative promised that rising
equity values would benefit
349
00:20:03,680 --> 00:20:06,400
everyone, even those without
portfolios.
350
00:20:06,880 --> 00:20:09,440
By the end of the cycle, the gap
had only widened.
351
00:20:09,840 --> 00:20:13,120
In the 2000s, housing was
treated as the universal ladder
352
00:20:13,120 --> 00:20:16,640
to prosperity.
When the bubble burst, it was
353
00:20:16,640 --> 00:20:19,560
households that absorbed the
losses while corporate balance
354
00:20:19,560 --> 00:20:22,160
sheets were bailed out.
Today, the narrative is
355
00:20:22,160 --> 00:20:24,880
different.
AI, productivity, innovation,
356
00:20:24,960 --> 00:20:27,920
corporate efficiency.
But the structure is the same.
357
00:20:28,480 --> 00:20:32,280
Wall Street takes the upside.
Main Street holds the downside.
358
00:20:33,240 --> 00:20:36,000
Walk with us outside the New
York Fed and down toward the
359
00:20:36,000 --> 00:20:37,720
neighborhoods of lower
Manhattan.
360
00:20:38,360 --> 00:20:41,880
Here, the contrast is sharp.
Office towers flash green
361
00:20:41,880 --> 00:20:44,840
numbers on electronic tickers,
while grocery stores nearby
362
00:20:44,840 --> 00:20:49,000
raise prices again on Staples.
Inside the trading desks, you
363
00:20:49,000 --> 00:20:53,320
hear optimism about AI CapEx
driving a new cycle of growth.
364
00:20:53,680 --> 00:20:57,000
Inside the households, you hear
anxiety about paying rent or
365
00:20:57,000 --> 00:20:59,960
covering a car payment or
affording the next semester of
366
00:20:59,960 --> 00:21:03,000
tuition.
Consumer confidence surveys show
367
00:21:03,000 --> 00:21:07,360
the same divergent institutional
optimism near cycle highs,
368
00:21:07,760 --> 00:21:10,640
household sentiment scraping
lows not seen since the
369
00:21:10,640 --> 00:21:14,120
pandemic.
The two realities exist side by
370
00:21:14,120 --> 00:21:17,600
side, but only one shows up in
the September forecast.
371
00:21:18,000 --> 00:21:21,120
And this is the danger of
calling September's projected
372
00:21:21,120 --> 00:21:23,800
gains stability.
It is not stability.
373
00:21:24,080 --> 00:21:27,400
It is transfer.
A transfer of wealth from
374
00:21:27,400 --> 00:21:31,520
households to corporations.
A transfer of purchasing power
375
00:21:31,520 --> 00:21:35,800
from consumers to shareholders.
A transfer of credibility from
376
00:21:35,800 --> 00:21:38,040
the public balance sheet to the
private one.
377
00:21:38,360 --> 00:21:40,640
And the story is not just
American.
378
00:21:40,920 --> 00:21:44,000
In Europe, household energy
bills are still elevated after
379
00:21:44,000 --> 00:21:47,960
two winters of price shocks.
In China, consumers are cutting
380
00:21:47,960 --> 00:21:50,880
spending even as corporate
investment source.
381
00:21:51,400 --> 00:21:55,240
The split screen is global now.
Wall Street sees resilience
382
00:21:55,240 --> 00:21:58,120
because it can recycle debt into
equity strength.
383
00:21:58,480 --> 00:22:02,320
Main Street sees erosion because
it pays the bill for that cycle
384
00:22:02,320 --> 00:22:06,320
in higher living costs.
That is why September is a test
385
00:22:06,720 --> 00:22:09,760
not just for markets, but for
the system itself.
386
00:22:10,360 --> 00:22:14,280
The S&P can rise 3%, while
household credit delinquencies
387
00:22:14,280 --> 00:22:17,640
also rise.
The NASDAQ can push 4% higher
388
00:22:17,640 --> 00:22:19,960
while grocery bills jump another
2%.
389
00:22:20,520 --> 00:22:24,480
These things can coexist for a
while, but they cannot coexist
390
00:22:24,480 --> 00:22:26,880
forever.
One side of the split screen
391
00:22:26,880 --> 00:22:30,720
will eventually pull the other
down, and when that happens, it
392
00:22:30,720 --> 00:22:33,480
will not be Wall Street
adjusting to Main Street.
393
00:22:33,880 --> 00:22:37,040
It will be Main Street, breaking
Wall Street's illusion.
394
00:22:37,280 --> 00:22:39,160
Which brings us to the pivot
point.
395
00:22:39,400 --> 00:22:42,760
Wall Street is floating on
recycled debt, buybacks and
396
00:22:42,760 --> 00:22:45,400
corporate cash.
Main Street is sinking under
397
00:22:45,400 --> 00:22:48,120
mortgages, food inflation and
credit stress.
398
00:22:48,400 --> 00:22:52,160
The Federal Reserve sits between
them, and September may be the
399
00:22:52,160 --> 00:22:55,240
month where credibility itself
becomes the casualty.
400
00:22:55,640 --> 00:22:58,800
Every cycle eventually comes
down to the Federal Reserve.
401
00:22:59,440 --> 00:23:02,960
September is no different.
On one side, Wall Street is
402
00:23:02,960 --> 00:23:07,480
pressing for relief, a softening
stance, maybe even a cut to keep
403
00:23:07,480 --> 00:23:10,760
liquidity flowing.
On the other side, households
404
00:23:10,760 --> 00:23:13,520
are living with sticky prices
and higher costs.
405
00:23:14,000 --> 00:23:17,640
The Fed cannot serve both
masters at once, and September's
406
00:23:17,640 --> 00:23:21,560
modest forecast of 3 to 4%
profit depends on the illusion
407
00:23:21,560 --> 00:23:24,400
that somehow it can.
Look at the trap.
408
00:23:24,760 --> 00:23:28,080
If the Fed cuts too soon, it
risks reigniting inflation.
409
00:23:28,440 --> 00:23:32,680
Oil prices are already climbing.
Food costs are not coming down.
410
00:23:32,960 --> 00:23:35,960
Wage pressures are building as
unions negotiate higher
411
00:23:35,960 --> 00:23:39,000
contracts.
A rate cut poured into that mix
412
00:23:39,000 --> 00:23:41,840
would tell households that
inflation is back to stay.
413
00:23:42,280 --> 00:23:45,640
If the Fed holds rates steady to
prove discipline, it risks
414
00:23:45,640 --> 00:23:48,840
crushing auctions and and
starving liquidity from the same
415
00:23:48,840 --> 00:23:51,480
markets that recycle debt into
equity support.
416
00:23:52,080 --> 00:23:54,120
Either choice erodes
credibility.
417
00:23:54,520 --> 00:23:58,200
That is the dilemma.
And credibility is everything.
418
00:23:58,840 --> 00:24:02,120
the Fed does not just set rates.
It sets belief.
419
00:24:02,560 --> 00:24:05,720
The belief that Treasury
auctions will clear, the belief
420
00:24:05,720 --> 00:24:09,320
that deficits can be financed,
The belief that inflation can be
421
00:24:09,320 --> 00:24:11,880
controlled.
If that belief cracks, the
422
00:24:11,880 --> 00:24:15,200
mechanics that hold September's
calm surface together crack with
423
00:24:15,200 --> 00:24:17,440
it.
Markets can tolerate higher
424
00:24:17,440 --> 00:24:20,600
yields for a time.
They cannot tolerate the sense
425
00:24:20,600 --> 00:24:23,080
that the Fed has lost control of
the narrative.
426
00:24:23,440 --> 00:24:27,080
Remember what the sugar high of
2025 has been built on?
427
00:24:27,360 --> 00:24:30,960
The idea that technology driven
growth could offset inflation.
428
00:24:31,200 --> 00:24:34,720
The idea that deficits could be
recycled into buybacks without
429
00:24:34,720 --> 00:24:37,240
consequence.
The idea that Wall Street could
430
00:24:37,240 --> 00:24:39,400
rise while Main Street paid the
bill.
431
00:24:39,640 --> 00:24:42,640
None of that works without a
central bank willing to keep the
432
00:24:42,640 --> 00:24:45,360
illusion alive.
And inside this building, the
433
00:24:45,360 --> 00:24:48,720
tension is visible.
Desks glowing with auction
434
00:24:48,720 --> 00:24:51,720
feeds, screens tracking swap
spreads.
435
00:24:51,960 --> 00:24:56,200
Economists whispering about soft
landings, policy makers
436
00:24:56,200 --> 00:24:58,360
pretending the choice is not
forced.
437
00:24:58,760 --> 00:25:01,680
The walls feel calm, but the
silence is heavy.
438
00:25:01,880 --> 00:25:04,040
And history is clear about what
happens next.
439
00:25:04,440 --> 00:25:08,480
In the 1970's, the Fed cut too
soon and inflation doubled.
440
00:25:09,000 --> 00:25:12,560
In the 2000s, it held too long
and credit cracked anyway.
441
00:25:12,920 --> 00:25:16,360
In 2011, it tried to talk
markets into calm while
442
00:25:16,360 --> 00:25:20,400
downgrades exposed the truth.
Each time, the institution faced
443
00:25:20,400 --> 00:25:23,080
the same problem.
When trust in its credibility
444
00:25:23,080 --> 00:25:25,600
eroded, policy choices became
traps.
445
00:25:26,600 --> 00:25:31,360
No good options, no safe exits.
September is another one of
446
00:25:31,360 --> 00:25:35,440
those moments, a month that
looks modest in forecasts but is
447
00:25:35,480 --> 00:25:37,840
actually a knife's edge for
credibility.
448
00:25:38,720 --> 00:25:43,360
The irony is that September's
forecast of a 3% gain on the S&P
449
00:25:43,480 --> 00:25:46,960
and a 4% gain on the NASDAQ
could come true whether the Fed
450
00:25:46,960 --> 00:25:49,800
moves or not.
The real test is not the
451
00:25:49,800 --> 00:25:52,720
percentage itself, it is the
signal behind it.
452
00:25:53,120 --> 00:25:56,640
If markets rise while auctions
wobble and inflation sticks,
453
00:25:56,640 --> 00:25:58,760
that profit is borrowed from
trust.
454
00:25:59,120 --> 00:26:02,560
If markets rise while the Fed
signals control, that profit
455
00:26:02,560 --> 00:26:06,760
buys a little more time.
Either way, it is not strength,
456
00:26:07,120 --> 00:26:10,080
it is delay.
Because why September matters.
457
00:26:10,320 --> 00:26:14,200
A calm surface masks an
institution at its most fragile
458
00:26:14,560 --> 00:26:17,200
A central bank that cannot
please Wall Street without
459
00:26:17,200 --> 00:26:20,320
hurting Main Street, a central
bank that cannot defend
460
00:26:20,320 --> 00:26:23,800
households without cracking
liquidity, and above all, a
461
00:26:23,800 --> 00:26:27,680
central bank that cannot cut its
way out of a credibility crisis.
462
00:26:28,080 --> 00:26:32,000
the Fed can manipulate rates.
It cannot manipulate trust.
463
00:26:32,360 --> 00:26:36,600
And without trust, September's
tidy 3 and 4% projections mean
464
00:26:36,600 --> 00:26:39,320
nothing.
Wall Street wants the sugar
465
00:26:39,320 --> 00:26:41,720
rush.
Main Street wants relief from
466
00:26:41,720 --> 00:26:44,560
inflation. the Fed cannot
deliver both.
467
00:26:45,200 --> 00:26:47,560
September's numbers are not the
story.
468
00:26:48,000 --> 00:26:50,920
The story is whether they are
delivered with credibility or
469
00:26:50,920 --> 00:26:54,880
without it, because credibility
is the currency no central bank
470
00:26:54,880 --> 00:26:56,800
can print.
Coming up next, we.
471
00:26:56,800 --> 00:27:00,040
Close this episode we tie
together the illusion, the
472
00:27:00,040 --> 00:27:03,280
shadow, the fault line, and the
dilemma into one signal.
473
00:27:03,560 --> 00:27:07,040
September may deliver the gains,
but the question is whether
474
00:27:07,040 --> 00:27:10,240
those gains mean resilience or
whether they mean fragility
475
00:27:10,240 --> 00:27:12,800
hiding in plain sight.
September was.
476
00:27:12,800 --> 00:27:16,560
Never about fireworks.
It was about the quiet test.
477
00:27:17,120 --> 00:27:21,760
A forecast of just over 3% on
the S&P and more than 4% on the
478
00:27:21,760 --> 00:27:25,240
NASDAQ looked safe.
But what we have seen is that
479
00:27:25,240 --> 00:27:28,240
those tidy numbers sit on
fragile foundations.
480
00:27:28,640 --> 00:27:32,600
Debt recycling dressed as
growth, inflation that refuses
481
00:27:32,600 --> 00:27:35,800
to leave auctions that test
trust in silence.
482
00:27:36,160 --> 00:27:39,680
And that is the.
Signal September's profit is not
483
00:27:39,680 --> 00:27:42,880
proof of resilience.
It is proof of dependency.
484
00:27:43,160 --> 00:27:47,360
Dependency on recycled debt.
Dependency on households paying
485
00:27:47,360 --> 00:27:51,120
higher costs, Dependency on
foreign buyers still showing up
486
00:27:51,120 --> 00:27:53,320
at auctions.
That is not strength.
487
00:27:53,720 --> 00:27:57,320
That is fragility hiding in
plain sight, history tells us.
488
00:27:57,320 --> 00:27:59,520
Illusions like this never end
with panic.
489
00:27:59,880 --> 00:28:02,560
They end quietly when trust
fades.
490
00:28:03,200 --> 00:28:07,600
Rome, France.
Britain.
491
00:28:08,080 --> 00:28:12,400
Japan each thought they had more
time, each thought modest
492
00:28:12,400 --> 00:28:16,200
profits meant stability, until
suddenly they did not.
493
00:28:16,720 --> 00:28:19,040
September belongs to that same
pattern.
494
00:28:19,440 --> 00:28:24,120
Calm surface cracks underneath.
Subscribe to Finance.
495
00:28:24,120 --> 00:28:27,520
Frontier AI on Spotify or Apple
Podcasts.
496
00:28:27,760 --> 00:28:31,400
Follow us on X for real time
financial intelligence.
497
00:28:31,840 --> 00:28:35,600
Share this episode with a friend
and help us hit 10,000 downloads
498
00:28:35,600 --> 00:28:38,320
to build the smartest macro
community online.
499
00:28:38,600 --> 00:28:42,960
We cover finance, AI, money and
mindset across 4 series, all
500
00:28:42,960 --> 00:28:45,720
grouped at
financefrontierai.com.
501
00:28:45,920 --> 00:28:48,560
And if you have a story that
fits, we may pitch it in a
502
00:28:48,560 --> 00:28:52,400
future episode free.
If there is a clear win win.
503
00:28:52,760 --> 00:28:55,760
Just go to the pitch page and
take a look and do not.
504
00:28:55,760 --> 00:28:59,560
Forget Sign up for The 10 Times
Edge, our weekly newsletter
505
00:28:59,560 --> 00:29:03,400
packed with asymmetric stocks,
tactical strategies and investor
506
00:29:03,400 --> 00:29:06,560
psychology that works in the
real world only at
507
00:29:06,560 --> 00:29:10,280
financefrontierai.com.
And while you are there, check
508
00:29:10,280 --> 00:29:13,680
the forecast page.
Our live September market map is
509
00:29:13,680 --> 00:29:17,240
updated in real time so you can
follow the signals behind this
510
00:29:17,240 --> 00:29:19,040
episode.
If you missed them, go.
511
00:29:19,040 --> 00:29:21,920
Back and listen to August
reversal when the bull case
512
00:29:21,920 --> 00:29:26,120
becomes bait and the markets ate
the future six months of gains
513
00:29:26,120 --> 00:29:29,320
in six weeks.
Both are essential context for
514
00:29:29,320 --> 00:29:32,080
understanding the test we are
facing now in September.
515
00:29:32,400 --> 00:29:35,040
This podcast.
Is for educational purposes
516
00:29:35,040 --> 00:29:38,920
only, not financial advice.
Always do your own research and
517
00:29:38,920 --> 00:29:41,440
consult A licensed financial
advisor.
518
00:29:41,760 --> 00:29:45,400
Markets.
Evolve risks compound and no
519
00:29:45,400 --> 00:29:48,840
forecast, no matter how
strategic, guarantees future
520
00:29:48,840 --> 00:29:50,880
results.
Manage your exposures
521
00:29:50,880 --> 00:29:52,680
accordingly.
Music in this.
522
00:29:52,680 --> 00:29:56,240
Episode including not without
the rest by twin musicom is
523
00:29:56,240 --> 00:29:59,600
licensed under the Creative
Commons Attribution 4 Point O
524
00:29:59,600 --> 00:30:03,040
license copyright finance
frontier AI.
525
00:30:03,320 --> 00:30:05,720
Unauthorized reproduction is
prohibited.
