The hottest Financial Stability Substack posts right now

And their main takeaways
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Top Finance Topics

The Fed's Independence is at Stake and it May Be Its Own Fault!

TK News by Matt Taibbi • 2849 implied HN points • 21 Jan 26
đź’° Finance Financial Stability
  1. The Fed’s independence is under direct political threat, as prosecutions and public attacks on its chair show how easily monetary policy can be politicized.
  2. Since 2008 the Fed gained huge powers (QE and near-zero rates) and its leaders became public celebrities, which makes their decisions more influential and more attractive targets for presidents who want easier policy.
  3. By failing to stop the pre-2008 bubble and then rescuing the system with extraordinary tools, the Fed created moral hazard and invited interference; protecting independence means avoiding normalizing emergency policies and dialing back the public spotlight.

Chartbook 422: The malign coincidence revisited: The great "melt up" of 2025, hyperfinancialization and liquidity.

Chartbook • 1845 implied HN points • 29 Dec 25
đź’° Finance Financial Stability
  1. In 2025 US stocks and gold rose together into bubble territory, a simultaneous surge not seen in about 50 years.
  2. The likely drivers are a mix of abundant liquidity and shifting risk appetite: pandemic stimulus, low nominal rates, big deficits and easier retail trading have boosted credit creation and pushed asset prices higher.
  3. Retail investors have been buying aggressively while institutions pull back, creating a self-reinforcing bubble concentrated in the asset-owning top 20 percent and raising the risk of sharp market swings and wider political and social consequences.

Time to Pump the Brakes on Artificial Intelligence Finance?

TK News by Matt Taibbi • 2954 implied HN points • 05 Dec 25
đź’° Finance Financial Stability
  1. Big tech's huge, interconnected AI spending creates concentrated financial risk that could hurt ordinary investors, pensions, and insurers if revenues don't materialize.
  2. Much of the funding comes from private credit, off‑balance‑sheet deals and asset‑backed securities. That channels pension and insurance money into risky AI projects without beneficiaries' direct choice.
  3. Data centers and GPUs face real physical and valuation risks — overbuilding, tech obsolescence, local opposition, and uncertain long‑term demand — which could leave assets stranded and wipe out expected returns.

Top Links 985 Bad loans to malls. Iran's currency troubles. Germknödel & Leonardo's DNA.

Chartbook • 543 implied HN points • 17 Jan 26
đź’° Finance Financial Stability
  1. Loans tied to U.S. shopping malls are seriously stressed — about 20% of those loans are delinquent, signaling big trouble in retail real estate.
  2. Iran's currency is under severe pressure, creating economic instability and likely driving up prices and import difficulties for people and businesses.
  3. The links mix light cultural pieces like germknödel with scientific stories such as DNA analysis related to Leonardo, showing a blend of food culture and historical science.

The Private Credit Collapse Accelerates

QTR’s Fringe Finance • 35 implied HN points • 03 Mar 26
đź’° Finance Financial Stability
  1. Trouble in the private credit market is accelerating, with stress building across funds and loans.
  2. Blackstone’s private credit fund is facing record redemptions, signaling investors are pulling back and liquidity is under strain.
  3. The escalating conflict with Iran and other geopolitical noise are distracting markets and masking worsening fault lines in credit markets.
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Countdown to Detonation: America’s Leverage Problem

QTR’s Fringe Finance • 38 implied HN points • 13 Feb 26
đź’° Finance Financial Stability
  1. Household debt is very high and still rising, with delinquencies increasing; student loans and mortgages in lower-income areas are showing the most strain.
  2. Real interest rates are now positive, so borrowing is more expensive and many loans and projects that relied on cheap refinancing are being exposed.
  3. The hardest hit will be lower-income regions, weak labor markets, and sectors built on easy credit, and while some deleveraging is a normal correction, the adjustment could be sharp if asset prices or liquidity worsen.

Update: The Housing Bubble and Mortgage Debt as a Percent of GDP

CalculatedRisk Newsletter • 114 implied HN points • 05 Jan 26
đź’° Finance Financial Stability
  1. The housing bubble was visible as a sharp rise in mortgage debt relative to GDP, but current mortgage debt as a share of GDP does not show the same alarming pattern.
  2. Lending standards are much stronger now, and most recent mortgage originations come from borrowers with reasonably good credit.
  3. Most homeowners have significant equity and affordable, low-rate mortgages, so a large wave of distressed sales and cascading price declines is unlikely.

How much I've made with Modeling Mindsets

Mindful Modeler • 379 implied HN points • 22 Aug 23
đź’Ľ Business Financial Stability
  1. The author shared the earnings from their book 'Modeling Mindsets,' revealing they earned $14,155 in total.
  2. The book received positive feedback with 73 reviews, 40 on Amazon and 33 on Leanpub.
  3. Despite not getting rich, the author found financial stability through writing and digital assets, hinting at the potential for future income from the book.

Think of It as Generating Our "Investment Surplus", Not as Our "Trade Deficit"

Brad DeLong's Grasping Reality • 146 implied HN points • 04 Jun 25
đź’° Finance Financial Stability
  1. Think of the trade deficit as an investment surplus instead. This way, we can see the benefits of foreign investments in the U.S. economy.
  2. A current-account trade deficit actually reflects an investment surplus by nature. This means that money from foreign exports is being used to buy U.S. assets, which can help keep interest rates low.
  3. While there are some costs linked to trade deficits, such as job losses in certain sectors, it's also important to recognize that investments can lead to new technology and greater economic strength in the long run.

Eurodollar I: Origins

The Dollar Endgame • 139 implied HN points • 07 Oct 23
đź’° Finance Financial Stability
  1. There exists a secret financial system, the Eurodollar System, that operates outside traditional financial regulations and could impact the global economy significantly.
  2. In the history of banking, innovations like private banks and clearing systems arose to address challenges like widely circulated banknotes and redemption issues.
  3. The Federal Reserve was created based on existing reserve bank systems, adding the revolutionary concept of the money printer and bank reserves, paving the way for expansion of credit creation.

The Fed's New Rescue Mechanism

Concoda • 513 implied HN points • 13 Feb 24
đź’° Finance Financial Stability
  1. The Federal Reserve's Bank Term Funding Program (BTFP) is expiring after being used to address financial panic and market stimulation caused by banks' underwater assets.
  2. Following a series of bank failures in the aftermath of COVID-19's speculative boom, the Fed introduced the BTFP to provide a confidence boost and stabilize markets.
  3. The BTFP evolved into a risk-free arbitrage opportunity for banks, leading to its rapid increase in volumes before its sudden discontinuation in March 2024.

The Fed's Global Dilemma

Concoda • 794 implied HN points • 01 May 23
đź’° Finance Financial Stability
  1. The banking system has evolved significantly post the 2007/08 Great Financial Crisis, leading to changes in global monetary standards and U.S. central bank's mechanisms.
  2. Regulatory standards like LCR, NSFR, and SLR have transformed major financial institutions into stable entities, impacting their ability to engage in certain financial activities.
  3. The Federal Reserve introduced new mechanisms like Jaws of the Fed™ to control money market rates and ensure financial stability, but faces a dilemma with vulnerabilities in its global lower jaws.

The Battle for the Treasury Market

Concoda • 502 implied HN points • 21 Mar 23
đź’° Finance Financial Stability
  1. There is a hidden battle within America's sovereign debt market that is about to transform.
  2. The regulatory focus is shifting towards increasing transparency in the Treasury market to subdue systemic risk.
  3. Implementing all-to-all trading in the Treasury market could democratize the market, enhance liquidity, and improve market resilience.

CROSSPOST/HOISTED: Larry Summers from 2022 on the "Polycrisis"

Brad DeLong's Grasping Reality • 84 implied HN points • 16 Jan 25
đź’° Finance Financial Stability
  1. The global economy is facing a 'polycrisis,' which means there are many problems at once, like inflation, energy issues, and conflicts affecting different regions.
  2. Inflation is a big concern, and controlling it might require tough decisions like raising interest rates, which could lead to higher unemployment but is seen as necessary for stability.
  3. The situation in the UK shows how quickly financial stability can turn into chaos from bad policy, highlighting the importance of credibility and wise fiscal management.

The Death of QT

The Last Bear Standing • 179 implied HN points • 17 Mar 23
đź’° Finance Financial Stability
  1. The Federal Reserve struggled with liquidity tightening, leading to emergency measures and a new financial crisis.
  2. Understanding the monetary plumbing system is crucial to comprehending the impact of Quantitative Tightening (QT) on the banking sector.
  3. Quantitative Tightening (QT) may not continue for long, as challenges in the banking sector could be exacerbated without further accommodations from the Federal Reserve.

Hitting Pause

The Last Bear Standing • 152 implied HN points • 14 Apr 23
đź’° Finance Financial Stability
  1. The Federal Reserve is likely to pause interest rate hikes soon, signaling a shift in monetary policy.
  2. Inflation has been influenced by significant increases in money supply during the pandemic, impacting consumer behavior and economic growth.
  3. Financial stability is a top concern for the Fed, potentially outweighing traditional inflation targets and leading to a pause in rate hikes.

The Fed's $300B Emergency Response

Apricitas Economics • 57 implied HN points • 18 Mar 23
đź’° Finance Financial Stability
  1. The Federal Reserve lent over $300B in emergency funds to American banks to stabilize the financial system.
  2. Most of the emergency lending was short-term, with a majority of the funds coming from the discount window.
  3. Reforms to the discount window have helped reduce stigma around borrowing from the Fed during financial crises.