Markets Wrap: Bessent's Big Bet, Bond Yields and the AI Bubble
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Welcome to the MerTalks Money Market Wrap, where we talk about the biggest moves in the markets this week and what's driving them. I'm John Stebick, senior reporter and author of the Money to Still newsletter. And joining me this week a man who's becoming something of a regular, Bloomberg micro strategist Simon White. Welcome back Simon. Good to see you again. Thanks for having me again, John. And I hope I didn't jump the gun there by saying you're becoming a regular. I'm uh I'm gonna twist your arm in future as well. Um but so Simon, this week's chat I wanted us to get into a few of the big topics this week. Uh first I think we'll have a wee chat about Scott Besson, the US Treasury Secretary, um, and what he's been doing.
Um and then I think really the biggest story of the week is bond yields and what's been happening with them globally, but particularly in the UK. And if we get two minutes we can maybe touch on AI at the end because uh A load of people at Anthropic and OpenAI have been saying that it's gonna murder us all in our sleep or something along those lines. But let's start with Scott Presson. So this week he kind of came out and said eros he said, I am the house.
I am the house now. I have pretty good insight into what the Bank of Japan's gonna do. You can bet against me if you want.
And kind of challenge the the market to bet against him um in the various things that he's trying to do. So do you mind talk us through what he's actually doing and whether he's actually having any success at it? Well, thanks for the intro.
And I'm glad we're keeping the human extinction thing to the the second part the show. Yeah, yeah, yeah. Well we've still got time, right? Exactly. Yes. Scott Besson is um yeah, that that was quite a comment, you know, I'm the house now. Uh which is kinda remarkable in a way for someone like him to say 'cause he's got personal experience of betting against the house and succeeding, right? Everyone knows now that he bet against Sterling in the early nineties and and that worked. They broke the the peg at the ERM. So I'm kind of yeah, a bit surprised he's he's saying that, but he keeps talking about his asymmetric information. So, you know, but We'll find out what that is at some point. At some point.
He's basic he's basically saying that I'll I've got insider knowledge and you guys are are gonna lose. Um i it does seem quite uh a gutsy thing to set himself up as a target in that way, but presumably he Well
you'd think you'd think as a you know, w it's sort of a case of don't watch what I say, but watch what I do. And he's not really done much. I mean he's done the buybacks of course.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–5:45
2
What is the weekly market wrap and who are the hosts of this episode?
5:45–7:40
3
How is Scott Bessent influencing US Treasury policy and the yen market?
7:40–9:14
4
Why are UK bond yields the highest in the G7 and what is driving them?
9:14–12:26
5
What are the implications of the UK’s rising defense costs and inflation pressures on fiscal policy?
12:26–16:51
6
How does the Treasury’s long‑term bond buy‑back strategy affect liquidity and yields?
16:51–22:05
7
What is the current state of the AI boom and could a correction be imminent?
22:05–27:24
8
What are the main AI safety concerns and how likely is a catastrophic scenario?
27:24–32:17
Speakers
5 identifiedMore from Merryn Talks Money
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Live From Fringe: What Adam Smith Would Say of Bond Market Turmoil
Live from Fringe: What Adam Smith Can Teach Investors About AI and Investing
Markets Wrap: Predictions Meet AI Skepticism
What Happens When Quantum Computing Actually Works?