Watch! MASSIVE WARNING! Japan, UK, BONDS, UST vs PE -Double Java!! 12May26

Ajouté : 2026-05-12

[00:00:01]Welcome back to Java and thank you kindly for joining me. It's May 12th, 2026. It is also Tuesday. There is a massive amount going on. A lot I would like to cover with you today. I might have to break this up into actually two so we can like to get going into the markets. We're getting close. I did stay for the inflation numbers. Now, we've got a lot more setups beginning to look like we are in what they're calling now the roaring 2020s because this market is on a melt up path. We just had another record high yesterday. Today breaking a little bit. We've got debt versus debt.

[00:00:42]I'm going to talk about that because I think that is one of the most uh critical issues going forward. Now, that is in reference from public debt versus private debt. So, I'll talk about that with all of this going on, everything happening with the four. And if you've been here for a while, you understand.

[00:01:02]If you haven't or if you're new here, stick with me, make a comment below, reach out. happy to explain some of this, but I like to try to keep these uh short and sweet so you can get on with your market morning, but you actually have a little bit of a basis for what is going on. Now, we did get CPI this morning numbers came in inflation. These are their reported numbers at 3.8% currently and they're looking at core inflation 2.8% are the numbers that they came out with.

[00:01:35]Now, we knew this would come out high or as they say, hot inflation. This is going to kind of hold the Fed towards any cuts they cannot make. So, they're going to be sitting on the sidelines. Uh they talk about the possibility of a hike. I don't believe that's going to necessarily be on the table because the Fed has a dual mandate. So, we've got a few uh headwinds for this market. it did stay so I could get those numbers. Now this hot print uh kind of is based on the assumption that these trait pour moves will be opening soon. The uh stock futures take a look at those uh numbers.

[00:02:22]Our fear greed meter is still in great territory but it's come down a bit. I expect it to come down even further today cuz we are looking at a weak market on opening because of all of this. Now relative strength of the dollar is up. That is because the other currencies look even worse than ours.

[00:02:42]We've got the 10-year yield is up. Bit of a fear trade. Uh looking at yesterday did hit those record highs. We're going to see the volatility index increasing more. It's approaching 20% at this moment. We've got uh gold back under pressure. Futures as we see at this moment looking down and cryptocurrencies also taking a bit of a hit here. Now this is from yesterday. Iran's response did create this uh stronger dollar starting yesterday. Now I want to talk a little bit more about the dual mandate of the Fed. Uh everyone is expecting these right uh easing easier money but they're kind of stuck. They're not the main players in the game anymore. And that's what I want to talk about. So, we've got a problem with a wage price spiral hitting differently in the upper, middle, and lower class. So, we're going to uh push these extremes, the differences between the classes and the wage price growth. What this means is if you get a raise at at your job, you work a job, you're in the lower class, you're in trouble because your wages are going up 1.5%.

[00:03:59]Well, if we go back up here and look at these inflation numbers, uh core inflation 2.8%.

[00:04:07]Normal u they're broad inflation looking at 3.8%.

[00:04:12]So you are losing value on your money by the difference of that inflation to your 1.5% wage growth. Now the middle class is just below it. Their wage growth is estimated 3%. So some are doing better, some are not because that's an average.

[00:04:30]So we're going to see a little bit more separation in that class. The upper class is making wage growth of 6% or more. So they are beating inflation.

[00:04:42]They're going to continue to get more wealthy as this time goes on. Now we've got boomers for the middle class and the lower class. In short, they're paying the bills for their kids. They've got the equity in their homes covering this middle at the moment. So that is where the separation is going to be as they've run out of uh assets. those that have invested in real assets will rise above to that 6% or more wage growth they'll do okay now bond information versus private credit we are going to talk about this in a little bit but uh we've got what they're saying a resilient economy on earnings forward but this is all just tech sector semiconductors but the Cosby which is the Korean markets are giving us a massive warning.

[00:05:36]We're we've got what we're calling the Cosby shock. They lost over $300 billion uh yesterday. What happened was they tweeted out uh they had tweeted out that there might be a citizen dividend, meaning there they would require anyone to deal with AI to pay out to the citizens. Well, they didn't like that.

[00:06:00]They don't want any money going out unless it's directly to their investors.

[00:06:04]So that crushed their market almost $300 billion dollars in just over 90 minutes.

[00:06:11]So we can see the kind of shock that will happen if they don't like that. Now this morning we've got semiconductors down in United States market. So what does this mean forward at this moment?

[00:06:24]We've got human capital meaning human workers are still less expensive to be using then artificial intelligence.

[00:06:32]That's for now. So the economic implications as we just spoke about with the jobs means that they're going to be winding out more jobs uh going forward.

[00:06:44]So this will lead to demand destruction.

[00:06:46]No more jobs, no more purchasing. But this is forward. So we're looking forward in the macro probably uh between 6 months and a year. So we'll see what happens. Now let's go back to the geopolitical risk and what is happening with the bond markets. Now Trump is going to be speaking with Chi as starting Wednesday evening market time for New York. They will be discussing arm sales in Taiwan. Now, they're talking also about the unbelievably weak ceasefire over in Iran and possibly a gas tax holiday. Now, what this means for you at the pump, prices have gone up roughly $1.50. That'll give you a break about uh 18 cents per gallon on that increase. Now, UAE has joined in the fight. They have confirmed they are giving strikes against Iran. We've got an incredibly unstable um issuance over in the Middle East. Now the bond market is having further uh problems volatility happening because Secretary Bessant is now over in Japan.

[00:07:59]Why is he in Japan? Japan holds the largest amount of United States treasuries globally. So they're going back to this narrative about the bond vigilantes because in short what these people are doing they're borrowing money at 60.70 cents per dollar and they're investing it in United States Treasury's bond market and getting five or 6%. Now if they can do this they're making the spreads at Nabich not having to work at the moment they're getting better spreads they are uh purchasing these out of Tokyo and London. Now the problem with this is when it reverses they have to sell off those assets of the stock market in the United States as well as US treasuries and they pay off back uh with these rising interest rates for the other places. Now not just Tokyo, we've got a problem with them hiking. Uh Bessant is now speaking with Japan because volatility in their currency.

[00:08:59]They're agreeing that it's very undesirable. Really? Of course it's undesirable. It's causing massive issues. So they are now having talks between uh Katayyama Taki and Bessant and they are saying coming out saying the US uh finance uh of Japan have a good relation and that they've got a strong economy in Japan. This is load garbage. This is a cover story and there's more problems there underneath.

[00:09:31]When this cracks, we don't know, but it's going to happen. And it's a question of when, not if. They did admit to doing a currency intervention and in April as well as early May, and they've got to do more. That is why Secretary Bessant is over there speaking with them right now. So, we're seeing volatility with Japan. We've also got issues with Kier Starmer in the UK. So, we've got guilt yields massively moving higher.

[00:09:59]So, bond market screaming issues. Now, I know this is going on long, but I've got to cover this uh because this is going to happen at any point in time. Could also be a bit of a long longer trade.

[00:10:14]Now with this bond vigilante still in Tokyo and London uh Kirst sending yields sharply higher uh with the shenanigans in the uh UK the reform UK taking over power there sending these forward now what do I want to talk about that's affecting these uh we've got the private sector debt now JP Morgan is having their capital markets meeting in Paris the lead at Apollo, which is private credit, one of the large ones. We have Blue have issues. Apollo had issues as well as Black Rockck. They are the largest issuer globally. Why am I bringing this up?

[00:10:59]Because the Treasury market is much larger than the stock market. But even larger now than the United States Treasury market is private credit. Their issuance larger than US treasuries. This means they are much higher risk and it is not even being watched. So, let's take a quick look at the calendar and I'll get back to this. We've got uh CPI just came out tomorrow expecting PPI, but that's all about the Fed. We've got a few uh pardon me individual movers.

[00:11:30]Popart a sharp drop overseas sales decline. We're watching demand destruction zoom down on guidance cut.

[00:11:40]Broch, now this is up because they've got tests coming out. Big Pharma, Under Arour missed their earnings. They're getting hit. eBay rejecting GameStop's offer. They they are taking a hit.

[00:11:53]They're down. Hims is down on earnings miss higher cost. So, we're seeing simply tech sector semiconductor soft bank is up on funding at brunch data center. The only bright spot in that bunch. if you will. Now when this demand destruction happens that is what causes deeper recessions. We can see the last time that's M2 the flow of money 2020 we all know what happened then the economy came to a grinding halt they had shutins so we are heading back towards this now market to military this is Germany's private sector is imploding now keep this in mind I'm going to go back to the private sector for a moment now this gentleman he is the lead of global trade for Apollo. Now, they're talking about they've got livered loans. This means that it's not just the loan amounts that they've got, but they are 100 times exponential.

[00:12:59]He's talking about how they're so happy because they've got investment grade hard asset loans, first leans, talking about the quality. Nothing could go wrong with this, but this is all based on this inflated value. it's a problem. So while he's saying it's the best in class, when the entire class plummets, the best still goes down as well. But he's saying that not as much volatility uh as the fear of volatility. Well, the news to him is that the market runs on fear. Fear is the number one emotion and when it hits the markets, it hits all at once. So his name is John Cortez. He is a global head of uh trading for Apollo.

[00:13:48]They are invested massively in this hypers scaling. He's absolutely excited about this and he's only been working there since the com. Now is this on purpose because he hasn't been through that. Now we've got huge issuance of all of this money they're putting into going into capex and that is where all of their yields are coming from. Now, what happens if these take a drop and everyone wants their money out? They're going to freeze the funds. I've been warning about this if something seems too good to be true. It generally is just a warning. You got to look into it.

[00:14:26]Now, they've got data center financing, power financing, which we just saw what can happen with that. uh chip financing which is now about to get an influx of competition as well as other headwinds and corporate financing. So if these businesses go down especially if it's with has to do with data center financing and power financing this is like 2020 uh 2000.com bubble on steroids. And what does he have to say about this? His answer to the risk is well it'll be right or it'll be wrong saying that they intend on spreading the risk to Europe that the EU is a different risk not related to AI so it's safe so memory marker here for that market military they're trying to shift their auto business to weapons because again it's imploding not my words they're saying they're imploding So, how is this going to work out? He's saying also that uh artificial intelligence is safe and that uh Europe is their hedge because they're going to finance their power infrastructures.

[00:15:46]Well, Germany just imploded because of that because they all shifted to uh their green energy. So, how's that been working for them? They are now at the mercy of Russia to get their natural gas supply as well as their energy. So, moving forward for a moment, we've got the consumer wanting more transparency from them. If they don't give it, they're going to shut the doors and hold in all of the capital and they will all follow suit. Now, I just want to bring up two more things and I'll let you go cuz this has gone on. Amazon is now issuing Swiss Frank denominated bonds for artificial intelligence capital expenditure spending which is going into this fund for Apollo. Now they're also at the same time trying to donate millions of funds to the Robin Hood Foundation to support New York's living below poverty. They are also trying to create a permanent endowment at the same time. So while they're trying to raise money on bonds, they are also giving money in this massive fund for instance to New York for the lower income. And why are they doing this? Because if they do not keep this M2 flowing, they will all implode. This is recession and it's going to hit them by magnitudes. So with all of this view rest going forward.

[00:17:12]We're going to have discord tomorrow night. I'm going to be putting more of this in X as I can today and tomorrow to keep you guys uh a breast of this. You have any comments on this, please feel free to leave them below. Reach out to me if you have any questions or anything you think that I should uh kind of go into a little bit more detail in a separate video because I know this has encompassed a lot. So until I see you again, my friends, resist.