# The Japanese Carry Trade is Destroying US Stocks | AGAIN Source: https://www.youtube.com/watch?v=HksyYFHmciU Recap page: https://rapidrecap.app/video/HksyYFHmciU Generated: 2025-11-20T22:35:45.891+00:00 --- ## Quick Overview The market is currently selling off due to fears that the Japanese carry trade unwind is imminent, which would strengthen the Yen and force the Bank of Japan to raise rates, potentially triggering a liquidity crisis similar to events last August; however, the speaker argues that the market is overreacting to these fears, as the Burry Depreciation Trade (BDT) is still ahead of us, and current liquidity issues are more systemic than just the carry trade. **Key Points:** - NVIDIA stock experienced a massive decline of 9% from its morning high, evaporating nearly half a trillion dollars in market cap. - The speaker identifies five major factors contributing to current market weakness: liquidity/private credit stress, institutional selling on VIX/CTA, fear of a Japanese carry trade unwind, strange Nvidia financials, and a perceived Fed 'rug pull' regarding expected December rate cuts. - The Japanese carry trade unwind involves the Yen strengthening (as Japanese yields rise due to stimulus), forcing Japanese investors who borrowed Yen to buy US assets (like stocks) to sell those assets to pay back their Yen loans, creating selling pressure in the US. - A key piece of evidence cited is the rising yield on the Japanese 30-year bond (3.368% as of the video), which indicates the market anticipates the Bank of Japan will be forced to raise rates. - The speaker believes the major issue today is systemic liquidity/private credit stress, not just the carry trade, which is a 'future problem' still ahead of us (the Burry Depreciation Trade). - The speaker highlights that Nvidia insider Jen Hsun Huang sold significant shares between July and October 2025, and the company's recent financials look suspicious (only $2M cash vs. $1.2B due in 12 months, leading to 'BANKRUPTCY!!!' concerns on the balance sheet). - The speaker concludes that while the fears driving the sell-off are valid, the immediate catalyst is likely systemic liquidity/credit stress, not the BDT, which is still in the future. ![Screenshot at 00:09: The main chart displays the sharp intraday decline in NVIDIA stock \(NVDA\) from a high of $211.57 down to $180.64, illustrating the volatility discussed in the video.](https://ss.rapidrecap.app/screens/HksyYFHmciU/00-00-09.png) **Context:** The video features a financial analyst discussing recent sharp declines in the stock market, particularly focusing on NVIDIA's significant drop and broader market instability. The speaker directly references Michael Burry's long-term bearish thesis (the Burry Depreciation Trade, or BDT) and analyzes current macroeconomic fears, such as the potential unwind of the Japanese carry trade and ongoing liquidity issues, using charts and SEC filings to support his analysis. ## Detailed Analysis The speaker opens by noting NVIDIA's massive intraday sell-off, losing nearly half a trillion in market cap, which he attributes to five key factors currently pressuring the market. First, there are severe liquidity and private credit issues, compounded by institutions selling volatility products (VIX/CTA selling). Second, there is fear surrounding the potential unwind of the Japanese carry trade, where a stronger Yen would force Japanese investors to sell US assets to repay Yen-denominated loans, an event that previously caused market stress in late July. Third, the speaker highlights concerning Nvidia financials, pointing to SEC filings showing insider Jen Hsun Huang sold millions of shares between July and October 2025, and the balance sheet shows only $2 million in cash against $1.2 billion due in the next 12 months, suggesting bankruptcy risk. Fourth, the speaker notes the Fed's actions regarding potential December rate cuts, which he believes might be a mistake, and the artificial inflation of September jobs data while hiding October data. The speaker then synthesizes these points, concluding that while the immediate market sell-off is driven by liquidity/credit stress, the feared Japanese carry trade unwind (which would strengthen the Yen) and the long-term Burry Depreciation Trade (BDT) are still future events. He emphasizes that the BDT is not yet here, but the current environment is primed for it once growth tops off or a crash occurs. ### Market Instability Factors - 1. Liquidity and private credit HELL - 2. Institutions selling on VIX / CTA selling - 3. Fear of Japanese carry trade coming, getting ahead of it by selling - 4. Nvidia weird financials - 5. Fed rug pulling on December rate cut... probably a big mistake! - 6. Artificial pump in Sept jobs.... While we hide October jobs data!!!! ### The Japanese Carry Trade Threat - The market fears the Yen will strengthen, forcing Japanese investors who borrowed Yen cheaply to fund US stock purchases to liquidate those holdings, leading to market drops (This is creating the potential Carry Trade 2.0 scenario). ### Nvidia Financials Deep Dive - Jen Hsun Huang sold shares consistently from July to October 2025; the balance sheet shows only $2M cash against $1.2B due in the next 12 months, leading to a 'BANKRUPTCY!!!' red flag. ### Future Problem - Burry Depreciation Trade (BDT) - This long-term issue has not happened yet; it comes after growth tops off or a crash, and is a major risk that is currently 'ahead of us for pain.' ### The Current Situation - Liquidity issues are driving current selling, not the BDT, which is premature; the speaker suggests paying off personal debt and being cautious, as the market is pricing in Fed rate cuts that might be a mistake. ![Screenshot at 00:09: NVIDIA stock chart showing a massive intraday drop from $211.57 to $180.64, illustrating the market instability discussed.](https://ss.rapidrecap.app/screens/HksyYFHmciU/00-00-09.png) ![Screenshot at 00:39: A handwritten note summarizing the core issues, including the fear of the Japanese carry trade unwind and its potential impact on yields.](https://ss.rapidrecap.app/screens/HksyYFHmciU/00-00-39.png) ![Screenshot at 02:35: A screenshot of an SEC filing \(Form 144\) showing Jen Hsun Huang's routine sales of NVIDIA stock, which the speaker uses as evidence of insider selling.](https://ss.rapidrecap.app/screens/HksyYFHmciU/00-02-35.png) ![Screenshot at 04:00: A comparison chart showing the inverse relationship between the Japan 30-year bond yield \(orange line\) and Bitcoin \(blue line\), highlighting the carry trade dynamic.](https://ss.rapidrecap.app/screens/HksyYFHmciU/00-04-00.png) ![Screenshot at 04:39: A CNBC chart showing the Japanese 30-year Treasury yield spiking to 3.368%, which the speaker links to the fear of the carry trade unwinding.](https://ss.rapidrecap.app/screens/HksyYFHmciU/00-04-39.png)