Report
The Capital Layer of Deterrence
The proposed Defense, Security and Resilience Bank shows how sovereign guarantees, capital markets, and industrial capacity are becoming the connective tissue of allied security.
Research theme
Capital Markets
Which strategies survive contact with the price of time.
We read what the market is actually pricing, where leverage is changing behavior, and when capital costs alter institutional choices.
- 224.0%US market capitalizationListed domestic companies, share of GDP
- 201.3%US private creditDomestic credit to private sector, share of GDP
- 115.8%US central government debtGross debt, share of GDP
What we study
Rates and Liquidity
Term premium, real yields, Fed balance sheet.
Credit
Private credit, bank exposure, risk transfer.
Market Structure
Index concentration and price discovery.
Capital Flows
Treasury holders, reserves, dollar funding.
What we believe
The market and the state are racing to define the future of capital.
The thirty-year Treasury yield told the story of fiscal absorption before any budget document did. We read prices for what they reveal about funding conditions, the term premium, and which borrowers can still execute at a higher price of time. Intervention can move a price; only a change in policy can hold it there.
The term premium, not the policy rate, is the number that matters.
Long yields set the price of mortgages, corporate debt, and federal deficits, and the Federal Reserve does not control them.
Debt has moved, not disappeared.
Risk has migrated from bank balance sheets into private credit funds and insurers that report less and mark slower.
Foreign reserves are now a funding-market variable.
When Japan defends the yen through the Fed's repo facility instead of selling Treasuries, the dollar system is being managed to protect the U.S. bond market.
Featured Research
Latest Research
Unwinding Trump's Tariffs
Six exhibits trace the tariff unwind through federal revenue, China’s surplus, trade flows, consumer prices, and capital goods imports.
Jackson Hole and the Conditions for Credible Discretion
Kevin Warsh has pulled the Federal Reserve back from forward guidance. His first Jackson Hole address must show how a more restrained communications regime will preserve a clear monetary-policy rule.
The Yen Problem
Currency intervention moves a price. It does not replace the market mechanism. The yen is now the clearest live test of that distinction, and the outcome matters for how every government defends a currency it does not fully control.
The Saudi Nuclear Deal Tests the Value of American Influence
The agreement could support Saudi industrial development, strengthen the U.S. nuclear sector, and prevent China or Russia from becoming Riyadh’s principal nuclear partner.
The Arsenal as Portfolio
Prime contractors are acquiring options on the future industrial base with a rounding error of capital, and the sequence rather than the sum is what should concern policymakers.
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Key questions
What is the market actually pricing?
Where is leverage building beneath the surface?
When does passive flow distort real signal?
How do credit conditions transmit to policy?