TBL Weekly #170: Claude Code is taking over
A quick market update alognside all the things you might have missed from TBL this week.
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Announcement Board
Due to popular demand, Nik & Johan are hosting another live TBL Pulse walkthrough on Tuesday, June 2nd at 2:00 PM EST.
This webinar includes a special bonus to those who attend:
During the call, we will send out a one-page memo to all attendees discussing our most important charts from TBL Pulse and how we read their respective signals.
Free for everyone to attend.
This session will primarily focus on the bitcoin portion of our TBL Pulse dashboard, where both Nik and Johan will walk us through the latest Valuation & Trend research, which is the underlying framework for the State Quadrant.
Dear Readers,
Over the past few months, TBL has been building. The average start to a workday is slowly transitioning into 6-8 Claude Code instances on the screen, and reaching token limits within the first 45 minutes of work…mind you, we are a small business.
Hence, why (as someone who works with Nik) I simply cannot oppose his bullish stance on AI. Ever since we started training ourselves on how to properly use Claude Code, our work weeks have become shorter.
AI has made us more productive, but it hasn’t reduced our workload at all. Paradoxically (and ironically), we do not finish our workdays earlier due to higher productivity. We’re instead chasing time to keep building.
To top it all off, my MacBook Pro crashed three times this week because I was running too many Claude Code instances with individual agents simultaneously, which means I am in the market for a Mac Mini (or even Mac Studio).
Multiply my situation by some 800,000 more individuals working in finance in Canada alone (chart below)...
…and you get an idea of just how powerful this beast is becoming. Even Jamie Dimon made headlines recently, acknowledging this monster:
This reminds me of a scene I really enjoyed from the movie “Moneyball,” where Billy Beane adopts a new way of assembling a baseball team with a fraction of the capital that other fancier teams have access to. His reasoning for changing things up?
Anyway, enough about the AI train. Let me now bore you with some money markets stuff to start your weekend.
The Secured Overnight Funding Rate (SOFR) currently finds itself well below the Interest on Reserve Balances (IORB):
In fact, this is the lowest the spread has been in years:
This unsurprisingly comes as the TGA falls from its $1T level to what is now a little short of $800B:
This isn’t necessarily surprising, as we expected TGA declines in May given seasonal tax refunds:
As Jerome Powell departs, and Kevin Warsh takes the throne, this is perhaps the calm before the storm. A TBL friend (Conks) put it best in a recent post, discussing how the Warsh shakeup of reduced Fed communications and a reduced balance sheet size could bring about some unwanted vol into funding markets.
For now, however, stigmatized take-ups at facilities like the SRP appear to be a thing of the past (courtesy of Powell’s RMPs):
It looks to me like money markets are flush with cash at the moment, meaning the heart of the financial system is beating just fine.
And we have yet to bring up talks of the Treasury potentially investing extra TGA cash into repo to keep this healthy heart going…but that’s a topic for another time.
Substack This Week
Nik’s weekly letter went out on Monday;
Johan’s weekly letter went out on Wednesday; and,
Nik’s monthly video update with Checkonchain went out on Thursday:
YouTube This Week
Nik’s Free Global Macro Update went out on Tuesday
And a snippet of his paywalled chat with James Check came out on Friday:
For Podcast Listeners
Here are the links to our latest episode:
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