early innings

market vibes

September 9… )

“Even Napoleon had his Watergate.” Yogi Berra

No algo-sensitive data today. At 10:00, NFP payroll revisions might be lively. Keep an eye out for that. The Treasury holds a three-year note auction at 1:00 PM. API crude data at 4:00.

In the news, London mining giant Anglo American merged with Teck Resources. Anglo still needs to spin off DeBeers and its platinum assets. More pressure on Adams to resign from Ackman. If Sliwa quits, too, they say it flips in favor of Cuomo, so it’s 90% certain both will take the money and drop out. Macron goes to a flimsy bench… again.

Payroll revisions are a serious problem for the Fed. Of the nearly 1,800 PhD economists employed by all federal agencies and departments (source: Federal Reserve), the Fed employs 800 of them. Although each department has its own mandates and they do not overlap, it would be childish to think the FOMC doesn’t liaise with the BLS (300 PhD economists) when analyzing policy options. I am reminded of Howard Baker’s famous legal canard that took Nixon down as Powell will step to the podium next week: “What did he know, and when did he know it?”

In the markets

On September 9, 2024, the S&P settled at 5,730, or 20% under last night’s close. In September 2024, margin debt totaled $810.84 billion. Today, it’s a record-high $1.023 trillion, or 25% higher. Margin debt dropped to $850 billion in April and rose vertically to a record one trillion in June, where it remains now at 1.023 trillion (FINRA via Grok).

Total market leverage is $5 to $6 trillion, or 10% of market cap. Total market leverage was between $4.5 and $5.5 trillion from 2020 to 2024 but jumped to a record $5.5 to $6.5 trillion in 2025, the largest tranche from the lows in April to this morning (FINRA via Grok).

Here’s a snapshot of margin debt in weekly data. I thought, since the range at the top of all this debt is so lifeless, it would be good to know what the collateral setup looks like, just in case. It’s no wonder the stock market is on hold until the FOMC cuts. In that light it seems curious, almost admirable that Powell was loath to do it.

This morning’s comments are a deeper dive than usual into metals and bitcoin; past to present in longer time frames. It’s quiet so let’s take a thoughtful step back.