Scott Bessent, the US treasury secretary, announced that the treasury department would triple its buyback of US treasuries, increasing the operation from $2bn to $6bn. I have clients who can triple that in seconds. Bessent was part of the whole group of what I call “The Club.” They were never traders, they sought only the “guaranteed” trade. They would gang up together to manipulate a market like Russia in 1998. They assumed that the IMF would never allow Russia to default. In 1998, yields on Russian GKOs reached as high as 150% annually due to the country’s severe fiscal issues and the need to attract buyers amid a looming default. By early August 1998, yields were approaching 200% on new GKO issuances, indicating a market pricing in near-certain default.
Scott Bessent left Soros Fund Management in 2015 to start his own hedge fund, Key Square Group, I believe with seed money from Soros. He had previously worked with Soros from 1991 to 2000 and then returned as chief investment officer from 2011 to 2015 before his departure. So when I say he hates my guts because they had the perfect guaranteed manipulation making 150%+ in Russia and lost $2 billion, I’m not joking.
I held a WEC in London in June 1998 and warned our computer projected Russia would collapse in a matter of weeks. The FT put that on te front page of the second section. The “CLUB” wanted me to put in $10 billion into Hermitage Capital Management run by Bill Browder. I was told they had this in the bag when I said Russia would collapse. I was told about they blackmail in 1998. I warned it would not work. They did not listen.
I was even invited to the IMF dinner they put on renting the entire National Gallery to prove to me that they had the IMF in the pocket. Everyone was there. I remember talking to Paul Volcker about the ECM and he agreed that the business cycle was regular and of about 8 years in duration.
It was all a setup. Republic National Bank steered the $7 billion wire through bank of New York and as soon as it took place, they ran to the DOJ to report it in June 1998. Yetsin was then blackmailed to step down or the world would find out he stole $7 billion from the IMF loans. The two employees of Bank of NY received 6 months house arrest after pleading guilty, showing it was all a setup. Bankers never go to jail. I have the transcripts and when they pleaded guilty, they said the money included a ransom for a Russian business man. The judge never even asked WHO. I believe the Judge was instructed to put on a show to hide Yeltsin’s involvement. No jail time for the largest money laundering case in history.
I was a trader – not a manipulator looking for the guaranteed trade by paying bribes. Personally, I would NEVER have picked Bessent for Treasury Secretary. That was a huge mistake. He has shown he is still part of that crowd. I would be concerned about who he even talks to these days,
Bessent’s stated goal was to drive down the 10-year Treasury yield—ideally below 4%. Instead, the benchmark rate briefly climbed above 5.04% in September 2026, its highest level since 2007 . This occurred despite a surprise intervention in August 2026 to “at least double” Treasury buybacks of long-dated bonds. The risk here is that by the 2nd quarter 2027, the main resistance stands at 6.72%-7.04% is this year closes above 5.3%.In case he never looks at charts not being a trader, it was a 39-year decline from 1981 to 2020 and the trend has shifted. A traders knows, the market is NEVER wrong. The trend is your friend, as they say.
By Bessent buying in 10-20-30-year debt, he is shortening the maturity of the national debt making the country far more vulnerable to interest rate swings. The greater the short-term maturity, then this will put the Fed in the crosshairs. The market will then dictate both the long and short-term debt market and the interest expenditure will be propelled higher. If the Democrats gain control, they will NOT fix the problem, they will raise taxes and destroy productivity for a national debt will simply become uncontrollable. The Republicans will not address this issue so we are being propelled into an inevitable sovereign debt crisis.
The Treasury’s $6 billion buyback of 10- to 20-year bonds was widely dismissed as insufficient against a “$32 trillion” Treasury market and $40 trillion national debt. This was not even a “band-aid ” on slitting your wrist or as some would say a “drop in the bucket.”
Bessent thought he could manipulate the market by claiming “I AM THE HOUSE,” only proves his background is NOT as a trader. Rather than falling, yields surged to multi-year highs in the days following the announcement. Thus, his boisterous claim “bet against” him if you dare was laughable and he lost showing the same mentality that I always traded against. They think they can manipulate the world and its always about power and money.
The forces pushing yields higher is war and trillion-dollar deficits, persistent inflation, and heavy corporate borrowing for AI infrastructure. All of these factors are beyond the Treasury’s control. This crowd has always been about trying to fooling the markets or mother nature with their ESG nonsense. You’ve got to fix the fundamentals and they think they can run deficits perpetually and there is NEVER consideration of reform because they are ignorant of even how the world economy functions.
The market interpreted the intervention as weakness. Bessent’s buyback massively flopped in front of the world. Bessent showed his hand. Now the world is paying attention to the fact that long-term rates are going higher and Bessent can’t stop them. Structural forces have overwhelm the Treasury’s firepower. Unlike the Federal Reserve, the Treasury cannot create unlimited reserves. Its buyback program is constrained by a finite cash balance, making it ill-suited to fighting market forces driven by the deepest and most liquid bond market on earth. Bessent is pointing an empty gun and trying to intimidate the world with no bullets.
Bessent thought he could intimidate the market while he had shown he DOES NOT understand the world economy and is purely a linear thinker. All you have to do is look outside the USA and rates are rising everywhere as the war drums are beating louder. Europe is broke and the ONLY way for the EU and Brussels to survive, necessitates war with Russia and they assume they will win and re-capitalize the EU to federalize Europe.
The bond market’s reaction suggests Bessent’s “I AM THE HOUSE” declaration was more bravado than reality and demonstrates his complete incompetence to be Treasury Secretary. I had written to President Reagan back in 1985 and warned that you cannot manipulate the dollar lower to reduce the trade deficit without causing a crash because you are devaluing everything else in the country. I was told that I was the only one with such a model and until someone else agreed with me, thank you, but no thanks.
The masterminds then held the Plaza Accord and announced they wanted the dollar down 40%. The dollar already was in crash mode. They did not understand markets. When the dollar fell and other countries then complained, they held the Louvre Accord in Paris during February 1987 and said that was enough. The dollar kept falling, the market proved the government manipulators wrong again. Then rumors circulated that the dollar would fall another 40% and the central banks could NOT prevent it. That was the 1987 Crash.
This is what Bessent has just done. He showed his hand. He lost. And now the market KNOWS that he is incompetent and his bravado is laughable. This stupid attempt to manipulate long-term rates in the US cannot succeed when war is on the horizon and the sovereign debt markets are in crisis. He is still a manipulator, not a trader, and his folly pretending to control the economy has undermined the CONFIDENCE exactly as the what followed the Louvre Accord.
Bessent is an absolute manipulating fool who cannot be a seasoned trader who would NEVER not act on theory, scare-tactics, or bribes. He cannot beat rising rates by talking a big game when he cannot control world events and is, in fact, accelerating them. He tells Japan to reduce its deficit, but uses the US to manipulate the world. He has threatened sanctions on everything and anyone who trades with Iran – another endless war they cannot win. All he’s doing is further exposing his lack of credibility and ignorance of how the world economy functions. The market, NOT the Treasury Secretary, has set the terms.
He cannot change that and he should be removed from office ASAP. We were adversaries in the markets. So my opinion is colored with that reality. I have traded toe-to-toe with this crowd I call “the club” so I KNOW how they act and supposedly trade.
