If The Big Short was made in 2026

In this month’s DMXCP report we discuss three emerging companies with global opportunities that we met with during the month. In the DMXASF report we provide our thinking on the takeover offer for $KME which has now been recommended by the board dmxam.com.au/monthly-reports…

I’m constantly amazed at the horrendous capital allocation decisions microcap management make. Here’s a list of past behavior historical red flags you should include in your AI prompts: 1. When companies have an ATM and a buy back in place at the same time. 2. When companies buy back stock shortly after an offering. 3. When they quote investment banking studies in private conversations with you, to justify why they should have a shelf out there. Well ya!!! …. That’s easily my favorite. 4. When the liquidity sections in filings state a company has enough cash for the short and long term - then do a raise. 5. When management makes public statements that they don’t have to raise capital and then do so shortly thereafter. 6. Issuing a shelf right after they raise a bunch of money. WTF, let it fucking breathe before you destroy shareholder capital. 7. The “just in case shelf: Management teams that justify filing a shelf registration because “the stock might go up” or “an acquisition opportunity might come along.” Then months, sometimes years, go by with no acquisitions. Or better yet, they make acquisitions without ever needing to tap the shelf. So why did they need it in the first place? Investment bankers are usually the ones prodding a company to do this after showing them how they could’ve raised money when the stock went up if they had a shelf … and now it’s back down. “Be ready for the next move,” when in actuality, who knows if the stock would have went up with a shelf out there - the bankers leave that little detail out of the equation. 8. Management teams that seem to view every significant increase in their stock price as an opportunity to issue more shares, regardless of whether they actually need the capital. 9. Management teams that justify issuing more shares because they want to increase trading liquidity. So you’re willing to dilute existing shareholders to make it easier for other investors to trade your stock? That’s your capital allocation strategy? I’m not saying companies shouldn’t tap the capital markets to raise money via equity. But if you want shareholders to trust that you understand smart capital allocation, you have to earn that trust through decisions that make sense and demonstrate an ability to create shareholder value.

🚨 SCOTT BESSENT EFFECTIVELY CONFIRMS A BOND CRISIS, SAYS MARKET TOO ILLIQUID TO CONTROL Treasury Secretary Scott Bessent went on CNBC and said the quiet part out loud: He raised the size of U.S. Treasury buybacks because “we are in a very illiquid period. The market is moving quickly… I can’t set the equilibrium price.” This is the same man who weeks earlier told traders “I am the house now. I have asymmetric information. Bet against me if you want.” Here’s what’s actually happening. He doubled bond buybacks, then pushed toward $6 billion, liquidity-support buybacks of 10- to 30-year bonds. He went on to dump Euros and Dollars to save the yen so BoJ doesn’t dump their U.S. Treasury Holdings. Scott Bessent even warned the Fed to expand the FIMA facility to Japan or watch the treasury market bleed. The 10-year has been grinding toward 5.2%+. The 30-year just printed levels last seen in 2004. Global government bond yields are near 4%, highest since 2007. Japan’s 10-year hit highs not seen since 1996. Germany’s 10-year is at 17-year peaks. This isn’t one country. This is a synchronized long-end revolt. Japan still holds about $1.1 trillion of U.S. Treasuries, the largest foreign holder. Those holdings have been sliding for months as Tokyo’s own debt-to-GDP sits above 220% and JGB yields explode. When the world’s biggest overseas buyer starts preferring its own higher-yielding paper (or just needs the cash), the bid for U.S. duration gets thinner. That’s the illiquidity Bessent is now admitting he cannot paper over with a few billion in buybacks against hundreds of billions in new issuance and $40 trillion+ of existing debt. When the official who called himself “the house” starts saying he cannot set the equilibrium price, the market is telling you something simple: we are in a bond crisis. The most dangerous response from @yutokanzakireal: “Japan isn’t just betting against the house, it’s bringing the entire house down.” We’re now seeing that as a global debt crisis which could catastrophically turn into a global liquidity crisis if not stopped. That’s why gold exists. Not as a trade. As the asset that doesn’t require a Treasury Secretary to promise he can still control the price.