FOMC Cuts 25bp Mixed Market Signals
Subscriber Data Update Sept19 2025
As expected by the marketplace the FOMC cut the Federal Funds rate to a range of 4.00 to 4.25% last week. One FOMC member did vote for a 50bp cut but perhaps the FOMC is finally realizing that their monetary transmission mechanism is broken. The amount of money in the system has truly outpaced organic economic fundamental demand and its evident by the simple fact that 10% of the population account for more than 50% of all the total spending in the United States.
This is a distortion that rests solely on the shoulders of an insane central bank monetary policy that has, over the last 30 years, increased its balance sheet by 9.7% on an annualized.
In fact I will put it as plainly as this, nothing matters more to asset prices than the global central banks balance sheet expansion.
For me, this is the base layer that all leverage is applied and then translated into the fiat nominal asset price of all risk assets. The law of large numbers is now working against the ability of global central banks to mask the monetarist problem, that organic economics no longer apply, that principles of supply/demand, productivity, efficiency, capital spending, none of it stands a chance against an overly aggressive asset accumulating central bank, none of it.
So now we have a financial system that has been fully hijacked, pretending that interest rates matter, that by raising and lowering, this will have a restrictive/loosening effect upon the purse strings of the general consumer…it most certainly will not.
Don’t get me wrong, by raising rates, you murder leverage and make it absolutely impossible to finance debt and the over levered will be punished, but don’t think for one minute that lowering rates will lead to this massive refinance boom and unlocking of hordes of untapped equity wealth. We are far beyond those pretenses, we are at the point in time by which no matter what the FOMC does, it becomes a very big problem. We have come to the monetary apex point by which the system isn’t starved of capital, but rather it is starved of productive outlets to deploy said capital. The system is bifurcated, converted from an efficient opportunistic frontier into a highly overly concentrated capital surplus vacuum, that acts like a low pressure zone, to be filled by any excess monetary stimulus that the central banks want to deploy.
Nobody talks about the misaligned allocation of resources when the monetary spigots are opened, the false signaling that monetary stimulus applies to a global economic system that moves capital all around at record speeds. No matter how much money that the global central banks introduce to they system, it moves faster and faster through the hands of the Plebeian masses and right back into the coffers of the Patrician class of elites.
This is why the stock market is NO LONGER A MEASURE OF ECONOMIC ANYTHING.
It is simply the bank accounts of the elite class that already has far too much fiat wealth than it knows to do with.
I don’t envy the central banks one bit, I don’t envy the global market place one bit because eventually imbalances get corrected and the longer that it takes, the tighter the rubber band gets and the larger more devastating the corrective forces will be.
So that is our little rant and although we feel the FOMC will continue to cut rates as the global economies continue to pretend all is well because equity prices are doing well, nothing could be further from the truth. Underneath it all is a brewing sense of unease, a massive dislocation for the 90% Plebeian class once again, who know all to well prices are way out of line with reality.
Stability leads to instability and eventually we have to deal with it head on and its always best to deal with a beast on your terms rather than the uncertainty of a future inevitability whose arising may come at at time that is most inconvenient!
So with that let’s take a quick look at a few markets and see how the week settled out. The QQQ continues to chug along, nothing stopping the concentration of wealth on this front:
Let’s look at the Nasdaq futures contract which is now December and we can see its now back above the long term trend slope line:
When we compare the contract performance of the SP500 futures with the Nasdaq futures, well its a new all time low for the SP500 vis a vis:
This chart tells us that the big money doesn’t care about any diversification, rather its concentrating wealth at an increasing pace! This is both fascinating and alarming at the same time.
The US Dollar also putting in a bottom here with the FOMC rate cut, but rate cuts are suppose to be a sign of fiat dollar weakness? Well not so much, guess everyone is worried about something else, perhaps the cleanest dirtiest shirt syndrome here for the USD, or the fact that the money will continue to flow into US risk assets and out of weaker peripheral economies?
Gold continues to rise as well and showing no signs of stopping and after the breakout above $3525 seems pretty well supported by many accounts:
As far as the US Govt 10 Year, we know 4.09% is our pivot and it closed the week above it after a brief dip below during the week. It probably makes sense that markets are going to take a bit to digest this weeks move to determine the FOMCs veracity for the rest of the year:
Ok we have a few Fed speakers this week including Miran who was the lone dissenter looking for a 50bp cut and we have PMI numbers, GDP and PCE at the end of the week. These are very difficult concepts to convert into tradeable, executable actions because it seems very counterintuitive to continue to plow money into risk assets with the FOMC cutting rates and signaling that the risks have tilted, or as Powell stated, this cut was more of a “risk management tool.” We will do our best to keep you informed but for now, know that wealth is highly concentrated and highly embedded into a system that cannot support two masters, those that have it all and those that have very little to nothing.
Alright let’s move onto the Magnelibra Subscriber section with all our data for the markets that we cover.
Magnelibra CTA Futures Market Trend Sentiment (Our proprietary commodity trading advisory futures market sentiment long/neutral/short market flows indicator) The portfolio is made up of the core futures markets we cover and the indicators are for single contracts of the futures market, whether long, short or zero neutral. The P+L is generated via the starting daily position and the ending daily settlement. This is considered a high risk alternative strategy. However most investors should leave a portion of their overall portfolio within a high risk basket. Some of the percentages of the overall portfolio dedicated to high risk should vary from 3% to 18% depending on ones overall time to invest and risk profiles. We added the Sharpe to our data now as well for those quantitative types!
Post FOMC action has prompted a more neutral shift in our Futures Market Trend Sentiment. The Nasdaq will be a neutral position here as is the Nikkei, the Swiss Franc is a short here now and we will continue to monitor any further changes post FOMC action here. The top 10% crowd continues to go all in on equities, and this is driving a highly concentrated risk position by many with any and all disregard to anything else other than momentum:
NOTABLE CHANGES:
Move to “1” Long Bias:
Move to “0” Neutral Bias:
Move to “-1” Short Bias: S6
Post FOMC action has prompted a more neutral shift in our Futures Market Trend Sentiment. The Nasdaq will be a neutral position here as is the Nikkei, the Swiss Franc is a short here now and we will continue to monitor any further changes post FOMC action here. The top 10% crowd continues to go all in on equities, and this is driving a highly concentrated risk position by many with any and all disregard to anything else other than momentum:
The U.S. Bond Yield Curve (This is our daily graphic displaying the U.S. bond market yield curve changes. We follow the 2 year thru 30 year durations. Please note that bond prices work inversely to yield changes so for instance if bond prices are rising and moving upward, then their yields are falling or moving downward. We also track the relationship between the durations known as US Yield Curve Spreads, when we list it as 2s5, we are comparing the yield differential between the 2 year vs the 5 year with the positive/negative viewed from the higher durations perspective.
Daily Settlement Sheet (Magnelibra’s Futures and Cash bond market coverage of the daily settlement prices and dollar value of the contracts given move)
The equity markets have been rolled to December contracts:
The 5 & 30 Day rolling changes with top 3 Winners and losers (The last 5 trading days and 22 trading days net changes)
Silver, Gold and Bitcoin the YTD winners:
Magnelibra MEGA9s Portfolio Tracker (This is a synthetic long only portfolio of the Top 9 largest equities by market cap. We started this tracker because we understand Ai dominates the investment landscape and operates in a binary construct. What we mean is that it issues a buy or a sell and will do so in reinforcing mechanisms, meaning if alpha is rising it will add, if it is falling it well sell and remove. We also created a “hedge” for those that want a more active approach to tactically maximizing their long only static portfolio of equities)
Apple is the only one in the group still under water YTD, Tesla making a decent come back now +5.5% on the year. The options hedge expired worthless and the MEGA9 unhedged is at its widest to the hedged value thus far this year. The MEGA9s as a long only +20.85%:
MEGA9s total market cap chart (This chart represents the total market cap of the MEGA9s and lists the 21pMA in pink along with the 50p and 200p MA)
Strategy Inc / BTC Trading Tracker (Bitcoin vs MSTR equity, Our Strategy Inc. Covered Call Portfolio Tracker, Long 100 shares MSTR and short 1, 3% to 7% out of the money call on Monday’s open each week)
The MSTR call strategy short this week was only a 3% OTM as volatility is collapsing. We have also updated the Strategy Inc BTC data as they purchased more BTC today. For those playing along at home, please note, this long MSTR strategy that incorporates a short covered call hedge is something you cannot pick and choose to do one week to the next! This is a mandatory weekly hedge vs your long holdings. Volatility continues to get stripped out and crushed, buying Bitcoin outright vs MSTR is always the preferred exposure, if you were wondering. The option hedge settled in the money by $4.75 and we have adjusted our data accordingly:
BTC/MSTR shares = 0.1908 and Total BTC owned = 638985 and the dollar cost average = $73,913 with the premium metric tumbling today to 1.56x:
Alright that is it, we hope our letter demonstrates the power of being an active investor vs your static long only holdings. In today’s world there are only excuses when it comes to losses, you should be active and do things that mitigate your overall risk, to not do so is purely just lazy. If you need to review your own risk, we would be glad to help, we can simplify pretty much everything and offer you a new way to look at investing. Too many of you often use mutual funds, often pay 1% or more for passive investing and chalk it up to the fact that this is how old grand dad did it that is how I will do it. Well don’t be foolish, today’s markets are nothing like even a decade ago, let alone a generation ago. We hope we are giving you a better and clearer proof of that then anyone else. Anyway reach out send a DM here, send an email and let’s discuss what you can do, its a matter of being proactive rather than being just pure laziness!
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