The Compound and Friends New Year’s Resolutions, the $15 Trillion Liquidity Flood With Garrett Baldwin, Reacting vs Predicting
96 snips
Dec 30, 2025 
Garrett Baldwin, a financial writer and investor known for his macro analysis, discusses the dynamics of global liquidity and its impact on markets. He highlights how a $15 trillion liquidity surge has driven asset rallies and shares insights on the importance of repo markets over the Fed funds rate. Garrett also touches on the growing foreign capital influx into U.S. markets, discusses the role of insider buying as a bottom signal, and emphasizes the need to react to market signals rather than predict outcomes. A compelling analysis on the financial landscape!
AI Snips
Chapters
Transcript
Episode notes
Liquidity Flood Drives Asset Prices
- Global liquidity expanded by roughly $15 trillion since January 2024 and mechanically lifted asset prices across markets.
- Garrett Baldwin argues liquidity, not fundamentals, explains record highs and rapid GDP surprises.
Repo Market Trumps Fed Funds Rate
- The market's plumbing — SOFR and the repo system — matters more now than the Fed funds rate.
- Stabilizing repo markets prevents overnight lending freezes and systemic shocks, per Garrett Baldwin.
Market Structure Amplifies Unwind Risk
- Post-2008 structure shifted flows: passive and leveraged allocations dominate versus 1990s value-driven flows.
- Baldwin warns this concentrated ownership plus rehypothecation creates violent unwind risk.