TruthArchive.ai - Tweets Saved By @DarioCpx
@DarioCpx - JustDario 🏊♂️
FTX Super Bowl AD aired a few months before it went bust - A reminder that "Start-Ups" splurging cash on ADs tends to turn out as an attempt to portray themselves as stronger and more valuable than what they truly are https://t.co/5zBiqZCytT
@DarioCpx - JustDario 🏊♂️
#OpenAI whistleblower found dead in SF All #OpenAI Co-Founders, but Scam Altman left the firm #ChatGPT is falling more and more behind its competition #OpenAI employees eagerly sold their #stocks to #SoftBank Shall we bet a “Theranos moment” is coming soon for #OpenAI?
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨 THE SMOKING GUN THAT PROVES HOW OPENAI IS MICROSOFT’S REVENUES LAUNDROMAT 🚨 #OpenAI $MSFT #stocks @SECGov @usbcsdny Article 👇🏻 https://justdario.com/2024/10/the-smoking-gun-that-proves-how-openai-is-microsofts-revenues-laundromat/
@DarioCpx - JustDario 🏊♂️
13 Jan 2021 - In the pics what was happening I believe CS will be soon forced to deliver the $GME shares on the $GME short positions they helped Archegos and fellow HF to build because the risk-netting OTC derivatives they put in place that day will be ultimately due in 11 days https://t.co/dGWZHp9ajr
@DarioCpx - JustDario 🏊♂️
I think I decyphered @TheRoaringKitty message: he is calling out $CS $GME swaps BS ⚠️ 9th Jan 21: when Archegos started to breach swaps risk limits with CS [Pic 1 from #SEC report] 20th April 21: when CS declared they covered most of their exposure against those swaps [pic 2]
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ THE STORY OF CREDIT SUISSE, ARCHEGOS, AND A SWAP THAT “SCREAMS” GME ⚠️ $GME #Archegos #CreditSuisse Article 👇🏻 https://justdario.com/2024/06/the-story-of-credit-suisse-archegos-and-a-swap-that-screams-gme/
@DarioCpx - JustDario 🏊♂️
Is $BAC Risk Management team rushing to their desks on a Sunday night already? https://t.co/7L997BQl0u
@DarioCpx - JustDario 🏊♂️
It’s being documented and tracked since 2022 👇🏻 #silver $BAC https://t.co/Qh0y4R0pot
@DarioCpx - JustDario 🏊♂️
The more you dig the more you find…. 👇🏻🙈 Of all the deep ITM puts available on $GME with expiry 21 June, what are the chances the 20$ strike ones suddenly see an outsized jump in volumes today and their price closes Unchanged despite the stock being down ~16%? Open: 0.81, low: 0.29 Close: 0.82 Tell me you shorted 20$ calls, bought puts in size (hence you got discounted) and then you wash traded the first lower and the second higher, without telling me 🤭 Translated: what you see there is a “milking” of @TheRoaringKitty positions….
@DarioCpx - JustDario 🏊♂️
3 possible explanations for what happened to $GME 20$ strike call options maturing next week 👇🏻 So after the post below $GME 20$ strike calls maturing next week (the ones owned by @TheRoaringKitty ) started to trade in high volumes spreading fear he might be selling some of his positions and ultimately impacting the stock. Scenario 1: the above assumption is plausible, he cashed out some like pretty much any trader in his position would have done Scenario 2: E-Trade applied a positions limit on him and hence forced the selling, considering he used a retail account the broker can do this anytime Scenario 3: looking at the tape the volumes and trades look quite odd to me, as if someone started to trade the same options back and forth (aka wash trading) to attract attention there. Please have a look at the screenshot below, do you notice anything strange? Let me guide your eye here. 1 - After a “Block” trade at a certain price, 2 “Sweep” orders hits moving the HIGHER with 1 second gap - > That’s a buy 2 - ~1min 30 sec later another “Sweep” order hits moving the price LOWER - That’s a sell 3 - The dollar value of those trades above is very close, reason why I have more than one suspicion they can be “wash” ones 4 - Reason to “wash trade”? Well… it’s an illegal practice that can be deployed to inflate volumes and/or force an asset price to move up or down. Were 20$ strike calls “washed down” to spread fear among @TheRoaringKitty supporters and push the price lower? There is a chance and only a highly sophisticated institutional trader would have been able to pull that off…..
@DarioCpx - JustDario 🏊♂️
@peruvian_bull
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ $GME EPISODE 6: THE RETURN OF THE JEDI ⚠️ An analysis of what can happen to #GME in the next 72hours - 10days, enjoy 🙏🏻 Article 👇🏻 https://justdario.com/2024/06/gme-episode-6-the-return-of-the-jedi/
@DarioCpx - JustDario 🏊♂️
3 possible explanations for what happened to $GME 20$ strike call options maturing next week 👇🏻 So after the post below $GME 20$ strike calls maturing next week (the ones owned by @TheRoaringKitty ) started to trade in high volumes spreading fear he might be selling some of his positions and ultimately impacting the stock. Scenario 1: the above assumption is plausible, he cashed out some like pretty much any trader in his position would have done Scenario 2: E-Trade applied a positions limit on him and hence forced the selling, considering he used a retail account the broker can do this anytime Scenario 3: looking at the tape the volumes and trades look quite odd to me, as if someone started to trade the same options back and forth (aka wash trading) to attract attention there. Please have a look at the screenshot below, do you notice anything strange? Let me guide your eye here. 1 - After a “Block” trade at a certain price, 2 “Sweep” orders hits moving the HIGHER with 1 second gap - > That’s a buy 2 - ~1min 30 sec later another “Sweep” order hits moving the price LOWER - That’s a sell 3 - The dollar value of those trades above is very close, reason why I have more than one suspicion they can be “wash” ones 4 - Reason to “wash trade”? Well… it’s an illegal practice that can be deployed to inflate volumes and/or force an asset price to move up or down. Were 20$ strike calls “washed down” to spread fear among @TheRoaringKitty supporters and push the price lower? There is a chance and only a highly sophisticated institutional trader would have been able to pull that off…..
@DarioCpx - JustDario 🏊♂️
In case you wonder what these “wash traders” objective tried to achieve today, partially succeeding, I explained it 24h ago towards the end of my article 🙏🏻
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ $GME EPISODE 6: THE RETURN OF THE JEDI ⚠️ An analysis of what can happen to #GME in the next 72hours - 10days, enjoy 🙏🏻 Article 👇🏻 https://justdario.com/2024/06/gme-episode-6-the-return-of-the-jedi/
@DarioCpx - JustDario 🏊♂️
I wonder if this is what @TheRoaringKitty figured out about $GME 🤔 Because of a 2023 decree related to Archegos bust $UBS now has a strict cap on risk exposure to single counterparts!👀⚠️ What does this mean? It means that if #CreditSuisse (now part of UBS) truly allowed its clients to extend the equity swaps and other derivatives they were using to short the stock, then they aren't in a position to roll those forward anymore for the full size. Considering it is nearly impossible to roll such a toxic exposure with another bank, if all the above is correct the big losses of the first GME squeeze in 2021, assuming they were hidden in $CS belly, are about to surface and this time hedge funds and market makers will be forced to cover their shorts
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ WHY $GME IS NOT A “DAVID VS GOLIATH’ STORY, BUT A “GODZILLA VS KONG” ONE ⚠️ #stocks Article 👇🏻 https://justdario.com/2024/06/why-gme-is-not-a-david-vs-goliath-story-but-a-godzilla-vs-kong-one/
@DarioCpx - JustDario 🏊♂️
@FinanceLancelot @peruvian_bull @BossBlunts1 @wallstreetbets
@DarioCpx - JustDario 🏊♂️
Personally speaking I think many people are missing the point of what’s happening here with $GME, it’s a fight against the system that keeps inflating MegaCap #stocks to nosebleed valuations (and that’s fine since the 1% gets rich) while common people are being consistently taken advantage of through pump & dump schemes, recklessly overpriced IPOs , taxes, #inflation, unemployment and so on. If they are lucky they managed to eat some crumbles… sometimes… that’s it. What’s happening with #GME is a social rebellion and trying to explain it using financial tools and metrics is pointless in situations like this one because the problem is of a whole different nature My 2 cents 🙏🏻
@peruvian_bull - Peruvian Bull
Ready for the battle for $160??? OGs remember! h/t @CitiZenSleuthX https://t.co/q5xIXqOoB0
@DarioCpx - JustDario 🏊♂️
Were these in anyone bing card to happen on the SAME day? 😳 - #Fed activates emergency liquidity facility (https://t.co/dhhlGXfYxP) - Israel retaliates against Iran - #stocks Options OPEX day - #Bitcoin halving Narrator: holy cow, brace for volatility… ⚠️
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ HOW TO MANAGE YOUR INVESTMENTS AND FINANCES RISK WHEN YOU GET CAUGHT TOTALLY UNPREPARED ⚠️ TL;DR: Almost everyone is dismissing #IranAttackIsrael as a “nothing burger” for #stocks, but just in case it is not better to know what to do https://justdario.com/2024/04/how-to-manage-your-investments-and-finances-risk-when-you-get-caught-totally-unprepared/
@DarioCpx - JustDario 🏊♂️
Well… what can I say… doing my best to warn as many as possible 🥲🤷🏻♂️ $JPM
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ GET READY, INSIDERS TOLD ME A HORRIBLE #BANKS’ EARNINGS SEASON IS ABOUT TO BEGIN ⚠️ $JPM $WFC $C $HSBC $MS Link to Article 👇🏻 https://justdario.com/2024/04/get-ready-insiders-told-me-a-horrible-banks-earnings-season-is-about-to-begin/
@DarioCpx - JustDario 🏊♂️
I never saw a market being so illiquid from Asia to Europe to US with the exception of holiday periods At some point today the thought of banks/brokers having maxed out their balance sheets to keep supporting the constantly growing #0DTE volumes crossed my mind It might also simply be serious concern for the situation in Middle East chances of escalation in any moment Not only people aren’t hedged (everyone is max long), but there are big players significantly levered on thin capital. All of them relying on the speed of their algorithms to take them out in the blink of an eye if anything serious materialises Seriously, this is a perfect recipe of a financial disaster of a magnitude no one can remotely imagine. Be careful out there
@DarioCpx - JustDario 🏊♂️
Such a low level of #stocks trading volumes is completely unusual in this part of the year, be very careful about receding tides……. https://t.co/p384nkmOIY
@DarioCpx - JustDario 🏊♂️
Meanwhile, in a galaxy far far away from #tech #stocks and the almighty #mag7…… No one got spare change for them? 🥲
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily - The Full Read ⚠️ ARE WE GOING TO SEE THE #FED FIREFIGHTING A #BOJ HIKE THIS WEEK? 🔥⚠️ https://justdario.com/2024/03/are-we-going-to-see-the-fed-firefighting-a-boj-hike-this-week/
@DarioCpx - JustDario 🏊♂️
JUST IN: #EVERGRANDE FINED 4.2 $CNY OVER SUSPECTED FRAUDULENT ISSURANCE OF CORPORATE BONDS ⚠️ Few questions here: 1 - How can they pay it 2 - If they can pay what’s left for creditors 3 - How many other companies meets the same criteria….. https://t.co/fjGcBesjJd
@DarioCpx - JustDario 🏊♂️
Just to help everyone to picture the magnitude of things today better I highlighted in the chart 1987 Options Volumes (when computer based strategies triggered the infamous Black Monday #stocks crash)…. https://t.co/LasjoFNkby
@DarioCpx - JustDario 🏊♂️
🚨It’s only March and #Stocks Options volumes are already above the TOTAL in 2023! 🤯🚨 Mr.Derivatives in full control 💪🏻 Narrator: this will end so badly @Barchart https://t.co/h8BFo0qGjV
@DarioCpx - JustDario 🏊♂️
Yes, although fiat money fate was sealed the moment QE infinity began and Central Banks started to blindly (and recklessly) monetise deficit spendings
@FixTheFed - Fix The Fed
Are we witnessing the rapid failure of fiat in real time? If so, there's no one to thank more than the out-of-control Powell Fed and their central and private banker cronies. Wen $1M for a single bitcoin? With more than 60M millionaires, they can't all own even one $BTC each. https://t.co/WyBVQi8Kp4
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨WHY #CHINA MARGIN LENDING NIGHTMARE IS A BIG WARNING ⚠️ TO #US AND #EUROPE #STOCKS🚨 As you know, I am currently in mainland #China, so please forgive me if I am going to be extra careful about anything I write until next week 🙏🏻 Yesterday, #China #stocks suddenly started to free fall in what could have turned into a 1987 style crash if it wasn't for circuit breakers and the big support coming from the Chinese "national team". #Stocks indexes only started to bounce back after trading in about 25% of all listed companies in #China was suspended for the day. What could have triggered such panic selling? Last week, I warned about a potential big dump coming for #China #stocks due to the unlock of many controlling shareholders' shares post-IPO (see below) and it looks like that is what triggered Monday's mayhem in Chinese #stocks. In a practice very common in investment banking, many brokers lent money to company founders against their pre-IPO shares as collateral in order to secure the IPO mandate. However, what no one could have expected during the "everything is #bullish" years was that by the time the shares became tradable, all the collateral was underwater. Imagine brokers rushing to sell altogether as fast as possible to cover their margin lending losses in a market that is completely illiquid and you have the perfect recipe for a #stocks disaster. Considering that the selling happened in many #stocks that just IPOed, the crash was more acute because of the already low market cap and razor-thin liquidity. That triggered a chain reaction of margin lending unwinding across the board that only stopped once the circuit breakers were hit one after the other, forcing the selling to stop. As you can see from chart 1 here, not only are there still 1.55 trillion $CNY of margin loans outstanding, but traders (in particular the "Dumb & Dumbers" hedge funds) levered up big time to #BTFD from mid-September till December 2023 while #stocks kept grinding lower. All in all, what you are seeing right now happening between #China and #HongKong is a massive liquidation of #stocks collateral (that looks like far from ending). Now, do you think #China is an isolated case in the world? Of course not! Even if brokers' margin lending eased in western countries since the 2022 peak (see chart 2) and now at about ~400bn $USD in US, in reality, the "indirect" leverage kept growing, fuelling the #stocks bubble. I know I sound like a broken record here (https://x.com/dariocpx/status/1749237911743320418?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA), but clearly, no one out there can still connect the consumer debt dot with $NVDA and other popular retail #stocks out there that keep running against logic and gravity. As I said in the title, what's happening in #China is a big warning to people out there still gambling wildly with borrowed money in both the #US and #Europe. Never forget that bubbles bursting make gains disappear, but debts do remain and, like many of our parents learned the hard way during the Dot-com bust, it can be very hard to recover after that.
@DarioCpx - JustDario 🏊♂️
⚠️ #CHINA #STOCKS POTENTIAL DUMP ALERT ⚠️ Very interesting how everyone on @X missed this news 😅 perhaps this explains why the urgent need to pump #stocks with emergency stimmies last week?🤷🏻♂️ Lock-up shares worth around 50.92 billion yuan (about 7.16 billion U.S. dollars) will become eligible for trading on China's bourses this week. From Today to Feb. 2, a total of 4.77 billion lock-up shares will start trading on the Shanghai and Shenzhen stock exchanges
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ #CHINA WANTS INVESTORS AND THEIR MONEY BACK - WILL IT SUCCEED THIS TIME? ⚠️ #China and #HongKong #stocks were literally on the verge of free falling when the "national team" stepped in last week to the rescue. Clearly, the benefits of it were short-lived and yesterday the $HSI closed again below the 15,000 mark. Some #bullish hedge funds that went all-in on #china #stocks in December didn't survive (picture 1), talk about "smart" money… 🥲 I bet the situation must have been very serious for many (particularly leveraged) players out there if the government is stepping in, with its full weight, again. The real question is, will they succeed this time? 🤷🏻♂️ First of all, for all those thinking that ~300bn$ alone can prop up #stocks, put your hopes aside because ~300bn$ is peanuts. 🙄 An outright bid in the market will simply provide exit liquidity to all those big international asset managers that have been busy divesting away from #china (and they won't suddenly U-turn no matter what). However, if ~300bn$ will be capital to support a #TARP-like rescue effort then #china might have a chance to succeed. Here is the problem, #China tried a #TARP-like type of rescue in the past creating national AMCs companies (the top 4 are Cinda, Huarong, Great Wall, and China Orient) to deal with toxic debt from previous cycles. This not only didn't work according to the plans, but it created an even bigger problem that remained unresolved to the point these companies faced a serious liquidity issue in 2022 (Picture 2). What's the real reason the previous experience didn't work? Very simple, you cannot solve debt problems with even more debt in the same way you cannot extinguish a fire using gasoline 🤷🏻♂️ At this point, it should be clear why the market didn't believe the many "stimulus" announcements delivered so far: because every single time the solution proposed was more debt and no capital. The last announcement of this sort was literally 7 days ago 🙈(Picture 3) So what should all the $KWEB and $BABA bulls out there hope for? That these 300bn$ will be real capital. Here is where China can kill 2 🐦 with one 🪨. The Chinese government directly owns a vast amount of non-strategic companies, many of them well managed and profitable. They should consider the brave move of selling them, or at least a significant non-controlling share, to Chinese nationals with the condition they pay the acquisition by repatriating capital they held abroad. The next step would be to then use the 300bn$ raised to create a new vehicle that can issue 600bn$ of debt and buy out from the secondary market bonds and loans stuck in banks' Hold To Maturity books because at a distressed level "mark to market", but still with good chances to be repaid in the future (not necessarily at 100%) at a profit for the government. This will free up a lot of balance sheet and capital from lenders injecting at the same time a ton of liquidity in the system that wasn't printed out of thin air. As a consequence, these lenders will be able to lend money again and this time (hopefully) to creditworthy borrowers rebooting the economy. What's the Achilles heel of all the plan I described above? Banks' capital. Will Chinese banks have enough capital to absorb the losses in their books? In theory, yes, and considering the very low price to book (Picture 4 as an example for Bank of China, CCB, and ICBC #stocks listed in Hong Kong) their #stocks trade this move might well have zero if not positive impact (since it will remove a lot of uncertainty on the value of the remaining assets) on their share prices. Bottom line, if tomorrow the #PBOC will announce another plan to fix debt issues with more debt you can forget about any lasting effect on the country's markets. If the #PBOC will announce a (brave) plan as the one I described, then the country stands a chance to get investors (Chinese first and foreign later) to bring their money back into #China.
@DarioCpx - JustDario 🏊♂️
Well…. the local news put it a bit differently from Bloomberg…. 😅 From my personal experience living in #hongkong for 10 years after seeing this plenty of times and observing the different reaction between $CSI and $HSI this has good chances to be another nothing burger https://t.co/TS7lgCn9mR
@DarioCpx - JustDario 🏊♂️
⚠️ #CHINA #STOCKS POTENTIAL DUMP ALERT ⚠️ Very interesting how everyone on @X missed this news 😅 perhaps this explains why the urgent need to pump #stocks with emergency stimmies last week?🤷🏻♂️ Lock-up shares worth around 50.92 billion yuan (about 7.16 billion U.S. dollars) will become eligible for trading on China's bourses this week. From Today to Feb. 2, a total of 4.77 billion lock-up shares will start trading on the Shanghai and Shenzhen stock exchanges
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily ⚠️ #CHINA WANTS INVESTORS AND THEIR MONEY BACK - WILL IT SUCCEED THIS TIME? ⚠️ #China and #HongKong #stocks were literally on the verge of free falling when the "national team" stepped in last week to the rescue. Clearly, the benefits of it were short-lived and yesterday the $HSI closed again below the 15,000 mark. Some #bullish hedge funds that went all-in on #china #stocks in December didn't survive (picture 1), talk about "smart" money… 🥲 I bet the situation must have been very serious for many (particularly leveraged) players out there if the government is stepping in, with its full weight, again. The real question is, will they succeed this time? 🤷🏻♂️ First of all, for all those thinking that ~300bn$ alone can prop up #stocks, put your hopes aside because ~300bn$ is peanuts. 🙄 An outright bid in the market will simply provide exit liquidity to all those big international asset managers that have been busy divesting away from #china (and they won't suddenly U-turn no matter what). However, if ~300bn$ will be capital to support a #TARP-like rescue effort then #china might have a chance to succeed. Here is the problem, #China tried a #TARP-like type of rescue in the past creating national AMCs companies (the top 4 are Cinda, Huarong, Great Wall, and China Orient) to deal with toxic debt from previous cycles. This not only didn't work according to the plans, but it created an even bigger problem that remained unresolved to the point these companies faced a serious liquidity issue in 2022 (Picture 2). What's the real reason the previous experience didn't work? Very simple, you cannot solve debt problems with even more debt in the same way you cannot extinguish a fire using gasoline 🤷🏻♂️ At this point, it should be clear why the market didn't believe the many "stimulus" announcements delivered so far: because every single time the solution proposed was more debt and no capital. The last announcement of this sort was literally 7 days ago 🙈(Picture 3) So what should all the $KWEB and $BABA bulls out there hope for? That these 300bn$ will be real capital. Here is where China can kill 2 🐦 with one 🪨. The Chinese government directly owns a vast amount of non-strategic companies, many of them well managed and profitable. They should consider the brave move of selling them, or at least a significant non-controlling share, to Chinese nationals with the condition they pay the acquisition by repatriating capital they held abroad. The next step would be to then use the 300bn$ raised to create a new vehicle that can issue 600bn$ of debt and buy out from the secondary market bonds and loans stuck in banks' Hold To Maturity books because at a distressed level "mark to market", but still with good chances to be repaid in the future (not necessarily at 100%) at a profit for the government. This will free up a lot of balance sheet and capital from lenders injecting at the same time a ton of liquidity in the system that wasn't printed out of thin air. As a consequence, these lenders will be able to lend money again and this time (hopefully) to creditworthy borrowers rebooting the economy. What's the Achilles heel of all the plan I described above? Banks' capital. Will Chinese banks have enough capital to absorb the losses in their books? In theory, yes, and considering the very low price to book (Picture 4 as an example for Bank of China, CCB, and ICBC #stocks listed in Hong Kong) their #stocks trade this move might well have zero if not positive impact (since it will remove a lot of uncertainty on the value of the remaining assets) on their share prices. Bottom line, if tomorrow the #PBOC will announce another plan to fix debt issues with more debt you can forget about any lasting effect on the country's markets. If the #PBOC will announce a (brave) plan as the one I described, then the country stands a chance to get investors (Chinese first and foreign later) to bring their money back into #China.
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨 2024 - THE YEAR WHEN THE "HIDE TILL MATURITY" TRICK HITS THE MATURITY WALL AND BREAKS? 🤷🏻♂️ 🚨 During 2023, we have discussed so often how (ridiculously insolvent) banks have made extensive use of "Hold To Maturity" accounting to the point that it is now more appropriate to rename it "Hide Till Maturity" (https://x.com/dariocpx/status/1728786228211015966?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA). Dump any asset with a market value implying a steep loss in the HTM books, and the loss is "gone". However, this trick has two significant weaknesses: 1 - If you are forced to sell the underwater assets in HTM books before maturity, then the loss turns from "paper" into "real". 2 - If the asset matures, hence ceases to be eligible for HTM accounting, and the principal isn't repaid in full, then the paper loss becomes a real one again. In 2023, the FED took care of the first weakness with the #BTFP (non-bailout 😉) that effectively allowed banks in liquidity crisis to borrow against the nominal value of their US Treasuries rather than the market one, dodging a forced selling that would have likely triggered a domino of regional bank bankruptcies. As I explained in a post almost 3 months ago (https://x.com/dariocpx/status/1714455707003830741?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA), big banks too are benefiting from the #BTFP, which is why the only scenario in which this program isn't extended this coming March is the one where the #FED led by Jerome Burns goes totally out of its mind. 🙄 The second weakness, greatly ignored by #FOMO #stocks investors, not only is about to become a major issue but is also a problem that the #FED and other Central Banks cannot tackle, avoiding the "bailout" shame. Good luck putting together another official financial system bailout in a big election year, not only in the #US but also in other G7 countries like #Japan and the #UK. ⚠️ BEWARE - #FED CUTTING RATES DOESN'T FIX A BORROWER'S INSOLVENCY PROBLEM BECAUSE ITS PROBLEM IS NOT THE COST OF *FUTURE* DEBT BUT THE DEBT *ALREADY* ACCUMULATED. In 2024, you will have the US Treasury Department competing in the open market to raise Trillions of $USD (https://x.com/dariocpx/status/1723825931503194398?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA), at the same time when 5+ Trillion $USD [Picture 1] of private corporate debt (bond + loans) matures, and, as if this wasn't already enough, a lot of this private debt is going to be impossible to refinance because no one wants to be that last bag holder of a zombie company without the guarantee of a publicly sponsored TARP-like bailout fund. Simplifying all in a sentence: the "hide till maturity" trick is about to hit the (debt) maturity wall, literally speaking. 🫣 Which sector is the one likely to implode first? Commercial Real Estate. The National Bureau of Economic Research estimates just released in December [Picture 2] portray a situation beyond horrible and now hard to ignore for Banks like they did before (post in quote below). According to the NBER, 14.3% of CRE loans are in NEGATIVE EQUITY status. Many of the remaining ones are expected to face cash flow and refinancing issues due to the high Loan-To-Value in place (average 80%) and almost double debt costs in the current interest rate environment. At ~14% default rate, US banks already face more than 100bn$ of losses according to the NBER [Picture 3]. How to solve the issue then if #Fed rate cuts are useless here? The NBER suggests: "A near-term solution could consider a market-based recapitalization of the U.S. banking system" [Picture 4]. Translated: BANKS NEED A BAILOUT 🙄 We know that CRE is only the tip of the iceberg of the financial system problems. Credit Cards debt, buy now pay later consumer loans, student debt, and on and on. The list is pretty long, and none of these issues can be fixed with either a rate cut or money printing because capital is all that matters to sustain credit losses and avoid insolvency materializing into bankruptcy. Perhaps 2024 will be another irrationally exuberant #bullish year for #stocks, but once the party ends, because for sure it will, the “debt hangover” this time around will be brutal.
@DarioCpx - JustDario 🏊♂️
⚠️The great paradox of CRE lending: while owners are freaking out, banks are chilling 🫣 Q2 US bank earnings reported so far paint such a rosy picture of CRE loan risk. Yes, they admit there will be an uptick in losses (maybe), but banks barely show any concern. So why are CRE landlords panicking, not being shy with the press, describing the situation as "apocalyptic" or "a Cat 5 Hurricane"? 🤔 This is how the BIS, the "central bank of central banks," defines CRE loan risk: "the prospects for servicing the loan materially depend on the cash flows generated by the property securing the loan rather than on the underlying capacity of the borrower to service the debt from other sources." According to this (flawed) metric, as long as the property has enough tenants to cover the interests, then the loan wouldn't be considered problematic. This valuation approach applies to "Close-end residential loans" (CERL) where the borrower is typically a corporate landlord that rents the properties. Hence, these assets are as well materially dependent on the ability of these to generate enough income to cover interests. Here is the mind-blowing fact: despite what happened in 2008, banks still need to appraise the principal value of real estate collateral only if they are the principal occupant of the property. 🙄 Remember what triggered the 2008 GFC? Yes, interest-only loans... 🤯 So when will CRE ($2.9T) and CERL ($2.3T) start to be a problem for US banks? Most of these loans are "non-recurring," meaning the landlord can hand over the keys to the lender and walk away. While, as of now, CERL properties' vacancy rates are still at historical average ( $BREIT investors can take a sigh of relief), CRE vacancy rates are increasing fast and currently at 18.6%, a level seen last time during the CRE glut of the early '90s. This is an aggregated number, though. If we split it into Cat A, Cat B, and Cat C CRE office buildings, according to CRE office landlords, the vacancy for the last two categories is already at 50% and 70% in some prime locations like NYC, LA, and SF, with many Cat C buildings already completely empty, badly in need of heavy renovations, and practically worthless. Then it shouldn't come as a surprise that big landlords like Brookfield and Starwood started to default on their CRE loans and hand over the properties to banks. Why are CRE landlords so catastrophic? Because the trend is spreading to Cat A buildings with sub-lease availability climbing fast, signaling tenants' intention to downsize as soon as their agreements expire (unless they walk away earlier than that). Accounting for the current sublease rates reported by CBRE, the real vacancy rate of CRE is already beyond 25% in aggregate 😳 When the banks get hold of a property, they need to start assessing its "value," but again here no problem on the surface since prices are holding up pretty well... in aggregate! What about Cat B and Cat C? The latest transactions reported a drop in prices already up to 35% in the first category and up to 60% for the second one 🥶 during the GFC, CRE property prices declined ~30% at the bottom of the crisis... now the crisis didn't even start! ⚠️ Considering the average LTV for a CRE loan is ~75%, banks are already "losing" on their principal, and this is only the beginning 🥵 It's impossible to make forecasts at this stage, but banks (and regulators) are dangerously ignoring the risk banks will end up holding a huge amount of Cat B and Cat C worthless CRE. Isn't this what's exactly happening in China? Look at how things are going there, with even state-backed developers defaulting on their debt (#Wanda and #Greenland), and #stocks already trading at the same levels as during the GFC 🚨 Add to this banks' mounting liquidity problems, with FHLB advances already at ATH beyond GFC levels and an ongoing deposits hemorrhage, and you have the perfect setup for the mother of all banking crises. 🤯 Suggested read: https://nymag.com/press/2023/07/the-panic-and-pivot-of-manhattans-office-megalandlords.html
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨WITHOUT THE #FED #BTFP, BANKS WILL NOW HAVE A HARDER TIME TO “HIDE TILL MATURITY” THEIR LOSSES 🤷🏻♂️🚨 I started the year writing about how in 2024 the practice used by banks of hiding their losses in Hold to Maturity books (hence “hide till maturity”) would have come to an end [Post Below]. However, I was wrong there, because I wrote this: “As I explained in a post almost 3 months ago (x.com/dariocpx/statu…), big banks too are benefiting from the #BTFP, which is why the only scenario in which this program isn't extended this coming March is the one where the #FED led by Jerome Burns goes totally out of its mind.” Well.. As per the #FED press release that just came out at 7pm EST today (Picture 1), either our dear Jerome Burns finally realized what it means to be a Central Banker, or he lost his mind and unintentionally just rug pulled half of the US banking sector. There is a potential third justification for the #FOMC action though: okay, we are in a US election year, and a bull market is good for the incumbent president, but looking at what’s happening with $NVDA, imagine if this idiocy pops before November from a much higher market cap, and Biden ends up being forced to bail out hedge funds, fraudsters, and gamblers singing “Kumbaya!” all together on this stock right now. 🙄 Please let me know in the comments what do you thinks is the reason that pushed the #FED to do what they just did. Nevertheless, the outcome is not going to change, and this is what’s coming. 🚩 THE #FED WILL STOP “LEAKING” LIQUIDITY As you can see in Picture 2, the #BTFP was effectively #FED QE in disguise, and it is not a coincidence that the #stocks bubble re-inflated once the net liquidity in the system resumed its climb. 🚩 THE #FED WANTS (TO TEACH) BANKS TO USE THE DISCOUNT WINDOW There are two reasons why banks don’t like to go (and beg) at the #FED discount window: 1 - Makes their liquidity issues manifest. 2 - The discount applied to the assets they want to pledge for liquidity (usually the best they can offer) will reveal the true value of their HTM books and, likely, their insolvency. Now here is where the #FED is making a big mistake. Many US Regional Banks right now have an insolvency problem, hence they need capital. Accessing liquidity at the discount window won’t have any impact on the radioactive defaults in their Loans books. Imagine my shock if they already have a new TARP plan drafted out at the #FED but they hope there won’t be a need to disclose it before November. 🚩 INVESTORS WILL NOW SCRUTINISE BANKS' BOOKS MORE SERIOUSLY So far this year, the US banks' earnings season has been horrible, to say the least. Ask anyone working in a bank how’s the mood there and what do they expect the business to go in the near future; while in #stocks, the morale is through the roof, bankers' one is through the floor. Despite this, bank #stocks have been doing okay since the Q4-23 earnings season started. Why? Because the #FED “got it covered” with its magic wand that could fix everything like, for example, empty shopping mall loans stuck in the books of a bank somewhere and now worth not even the cost of the material build that shopping mall to begin with. Management at banks like $BAC totally embraced this thinking to the point there is barely a trace of CRE crisis in their results 🙈: https://x.com/dariocpx/status/1746581808538689762?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA Personally, I couldn’t believe my eyes 1 hour ago when the #FED announcement popped up on my screen, I even went to check if it could have been a deep fake or, like what happened to their #SEC cousins, the #FED too didn’t use a 2FA to protect their X account. But no, the official announcement was there on their website (Picture 3) and all it missed were 2 words at the end of it: “GAME OVER” 😐
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨 2024 - THE YEAR WHEN THE "HIDE TILL MATURITY" TRICK HITS THE MATURITY WALL AND BREAKS? 🤷🏻♂️ 🚨 During 2023, we have discussed so often how (ridiculously insolvent) banks have made extensive use of "Hold To Maturity" accounting to the point that it is now more appropriate to rename it "Hide Till Maturity" (https://x.com/dariocpx/status/1728786228211015966?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA). Dump any asset with a market value implying a steep loss in the HTM books, and the loss is "gone". However, this trick has two significant weaknesses: 1 - If you are forced to sell the underwater assets in HTM books before maturity, then the loss turns from "paper" into "real". 2 - If the asset matures, hence ceases to be eligible for HTM accounting, and the principal isn't repaid in full, then the paper loss becomes a real one again. In 2023, the FED took care of the first weakness with the #BTFP (non-bailout 😉) that effectively allowed banks in liquidity crisis to borrow against the nominal value of their US Treasuries rather than the market one, dodging a forced selling that would have likely triggered a domino of regional bank bankruptcies. As I explained in a post almost 3 months ago (https://x.com/dariocpx/status/1714455707003830741?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA), big banks too are benefiting from the #BTFP, which is why the only scenario in which this program isn't extended this coming March is the one where the #FED led by Jerome Burns goes totally out of its mind. 🙄 The second weakness, greatly ignored by #FOMO #stocks investors, not only is about to become a major issue but is also a problem that the #FED and other Central Banks cannot tackle, avoiding the "bailout" shame. Good luck putting together another official financial system bailout in a big election year, not only in the #US but also in other G7 countries like #Japan and the #UK. ⚠️ BEWARE - #FED CUTTING RATES DOESN'T FIX A BORROWER'S INSOLVENCY PROBLEM BECAUSE ITS PROBLEM IS NOT THE COST OF *FUTURE* DEBT BUT THE DEBT *ALREADY* ACCUMULATED. In 2024, you will have the US Treasury Department competing in the open market to raise Trillions of $USD (https://x.com/dariocpx/status/1723825931503194398?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA), at the same time when 5+ Trillion $USD [Picture 1] of private corporate debt (bond + loans) matures, and, as if this wasn't already enough, a lot of this private debt is going to be impossible to refinance because no one wants to be that last bag holder of a zombie company without the guarantee of a publicly sponsored TARP-like bailout fund. Simplifying all in a sentence: the "hide till maturity" trick is about to hit the (debt) maturity wall, literally speaking. 🫣 Which sector is the one likely to implode first? Commercial Real Estate. The National Bureau of Economic Research estimates just released in December [Picture 2] portray a situation beyond horrible and now hard to ignore for Banks like they did before (post in quote below). According to the NBER, 14.3% of CRE loans are in NEGATIVE EQUITY status. Many of the remaining ones are expected to face cash flow and refinancing issues due to the high Loan-To-Value in place (average 80%) and almost double debt costs in the current interest rate environment. At ~14% default rate, US banks already face more than 100bn$ of losses according to the NBER [Picture 3]. How to solve the issue then if #Fed rate cuts are useless here? The NBER suggests: "A near-term solution could consider a market-based recapitalization of the U.S. banking system" [Picture 4]. Translated: BANKS NEED A BAILOUT 🙄 We know that CRE is only the tip of the iceberg of the financial system problems. Credit Cards debt, buy now pay later consumer loans, student debt, and on and on. The list is pretty long, and none of these issues can be fixed with either a rate cut or money printing because capital is all that matters to sustain credit losses and avoid insolvency materializing into bankruptcy. Perhaps 2024 will be another irrationally exuberant #bullish year for #stocks, but once the party ends, because for sure it will, the “debt hangover” this time around will be brutal.
@DarioCpx - JustDario 🏊♂️
🚨BREAKING: THE #FED JUST PULLED THE PLUG TO BANKS #BTFP LIFE SUPPORT🚨 1 - I was wrong, I never thought they had the guts to do it 2 - Read my post below from months ago to understand how critical is the #BTFP to keep the whole financial system together Fasten your seatbelts! https://t.co/39DOOewK62
@DarioCpx - JustDario 🏊♂️
My comment on this news 👇🏻
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨WITHOUT THE #FED #BTFP, BANKS WILL NOW HAVE A HARDER TIME TO “HIDE TILL MATURITY” THEIR LOSSES 🤷🏻♂️🚨 I started the year writing about how in 2024 the practice used by banks of hiding their losses in Hold to Maturity books (hence “hide till maturity”) would have come to an end [Post Below]. However, I was wrong there, because I wrote this: “As I explained in a post almost 3 months ago (x.com/dariocpx/statu…), big banks too are benefiting from the #BTFP, which is why the only scenario in which this program isn't extended this coming March is the one where the #FED led by Jerome Burns goes totally out of its mind.” Well.. As per the #FED press release that just came out at 7pm EST today (Picture 1), either our dear Jerome Burns finally realized what it means to be a Central Banker, or he lost his mind and unintentionally just rug pulled half of the US banking sector. There is a potential third justification for the #FOMC action though: okay, we are in a US election year, and a bull market is good for the incumbent president, but looking at what’s happening with $NVDA, imagine if this idiocy pops before November from a much higher market cap, and Biden ends up being forced to bail out hedge funds, fraudsters, and gamblers singing “Kumbaya!” all together on this stock right now. 🙄 Please let me know in the comments what do you thinks is the reason that pushed the #FED to do what they just did. Nevertheless, the outcome is not going to change, and this is what’s coming. 🚩 THE #FED WILL STOP “LEAKING” LIQUIDITY As you can see in Picture 2, the #BTFP was effectively #FED QE in disguise, and it is not a coincidence that the #stocks bubble re-inflated once the net liquidity in the system resumed its climb. 🚩 THE #FED WANTS (TO TEACH) BANKS TO USE THE DISCOUNT WINDOW There are two reasons why banks don’t like to go (and beg) at the #FED discount window: 1 - Makes their liquidity issues manifest. 2 - The discount applied to the assets they want to pledge for liquidity (usually the best they can offer) will reveal the true value of their HTM books and, likely, their insolvency. Now here is where the #FED is making a big mistake. Many US Regional Banks right now have an insolvency problem, hence they need capital. Accessing liquidity at the discount window won’t have any impact on the radioactive defaults in their Loans books. Imagine my shock if they already have a new TARP plan drafted out at the #FED but they hope there won’t be a need to disclose it before November. 🚩 INVESTORS WILL NOW SCRUTINISE BANKS' BOOKS MORE SERIOUSLY So far this year, the US banks' earnings season has been horrible, to say the least. Ask anyone working in a bank how’s the mood there and what do they expect the business to go in the near future; while in #stocks, the morale is through the roof, bankers' one is through the floor. Despite this, bank #stocks have been doing okay since the Q4-23 earnings season started. Why? Because the #FED “got it covered” with its magic wand that could fix everything like, for example, empty shopping mall loans stuck in the books of a bank somewhere and now worth not even the cost of the material build that shopping mall to begin with. Management at banks like $BAC totally embraced this thinking to the point there is barely a trace of CRE crisis in their results 🙈: https://x.com/dariocpx/status/1746581808538689762?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA Personally, I couldn’t believe my eyes 1 hour ago when the #FED announcement popped up on my screen, I even went to check if it could have been a deep fake or, like what happened to their #SEC cousins, the #FED too didn’t use a 2FA to protect their X account. But no, the official announcement was there on their website (Picture 3) and all it missed were 2 words at the end of it: “GAME OVER” 😐
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨THE BIG BANKS ARE ALREADY UTILIZING THE FED BTFP! 🚨 What do $JPM, $C, $WFC, $PNC, $SCHW, $BAC, and $GS have in common at the moment (besides greed)? They are all losing a shit ton of money... The top spot goes to $BAC, currently carrying $135bn "paper losses" in its belly, followed by $C and $WFC, both at around $100bn. True, these losses are only due to the increase in interest rates, and the US will never default on its debt (because if it does, we go back to barter). Hence, these are "paper losses," and banks are in great shape, right! Well... thanks to the FED's "virtual bailout," better known as the BTFP program they are already benefiting from… Wait what? Yes sir! Why am I saying that the big banks are already utilizing the #BTFP? Am I nuts? No, I am not, and I will explain why. Because of the #BTFP potential total capacity of up to $2T, investors are already associating its benefits with the big banks, even if they are not tapping into it (yet). Wait a second, doesn't the #BTFP expire in 5 months? Well... if Jerome Burns wants the world to keep believing the #FED will maintain rates "higher for longer," he has no alternative but to extend the duration of the program, making it "temporarily permanent," just like they did for Quantitative Easing before (for example). The FED enjoys keeping its cake and eating it too, so rest assured their habits will not change. 😌 There is a problem, though. The #BTFP only covers US Treasuries, Agencies, and Government Guaranteed MBS. Here is where investors are making a big (big) mistake. ⚠️They are assuming that if the time comes, the "BTFP cocoon" will transform into a "TARP butterfly"! 🐛 This is the only rational explanation for the market willingly ignoring what's going on in the Credit space, starting from Commercial Real Estate, and not "punishing" the Big Banks for the ridiculously low Credit Loss Provisions they booked for Q3. Another sign of this general thought lies in Credit Spreads across all rating spectrums "refusing" to increase. [https://x.com/dariocpx/status/1713812823938384383?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA…]. 🤦🏻♂️ Banks are as smart as foxes, and they have seized the opportunity. Have you noticed that Credit Loss Provisions for Q3 are consistently lower than Q2 for all the banks that reported so far, despite the increase in Non-Performing Loans (and a general skyrocketing of Chapter 11 filings)? While before, I felt a bit lonely, I have to admit that now it is so obvious that banks are "twisting" the numbers so much to "beat expectations" that they are at odds with the reality everyone can observe. Although we cannot blame them too much when the government, which should police them, is doing exactly the same. 🙈 So here we are today, with banks faking their numbers in plain sight, and investors being happy about that. 🤦🏻♂️ In just a few decades, we have literally moved from the concept of an "Intelligent Investor" to an "Ignorant Investor." The reporting season is only beginning, and I am particularly curious to see how European banks will fare, starting from UB-C-S 😬, and how they will manage to hide the even bigger losses government bonds are digging into their HTM books. Notice I said "losses" and not "paper losses" because in Europe, they don't have a BTFP (yet). Considering the outrageously high inflation in a contingent that is barely growing its GDP, it will be very hard for politicians to endorse another inflative Central Bank weapon of mass wealth destruction. 😵💫
@DarioCpx - JustDario 🏊♂️
What I find incredible in the current market froth with risk from every direction and with bankruptcies heading to nosebleed levels is that Credit Spreads are still at “normal” long term trend level 🤔 Well below 2020 Covid crash and miles away from GFC peaks So puzzling… 😵💫
@DarioCpx - JustDario 🏊♂️
SPEAKING OF THE DEVIL….. 👀
@DarioCpx - JustDario 🏊♂️
#JustDarioDaily 🚨 WHICH BANKS ARE AT RISK OF GOING BUST IN A LIQUIDITY CRISIS BECAUSE ALREADY (RIDICULOUSLY) INSOLVENT? 🚨 Thank you for waiting, but I assure you what follows isn't going to disappoint you! 😁 Two months ago in "This time is NOT different - Part 2," I flagged how my analysis at that time flashed (big) red warnings on several US banks (https://x.com/dariocpx/status/1706274260489228552?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA). My analysis today will expand on the methodology presented (https://x.com/dariocpx/status/1706274251727409331?s=46&t=Hz7-qku8ZNVPw6L9nBJOZA) to include the following points: 1 - I will now include the largest European banks. Consequently, I reclassified their figures to harmonize all the datasets on US reporting. In particular, with regards to Available For Sale (AFS) and Hold To Maturity (HTM) securities. 2 - All values presented are in $USD. Non-USD figures have been converted using the 30th September FX rate for consistency. 3 - Shareholders' Equity is considered in its entirety. Now that the stage is set, the show can begin! 🎬 ⚠️ LOAN / DEPOSIT RATIO A L/D ratio above 90% is already a warning sign, but there are 2 banks that managed to lend more than the deposits they collected! (Table 1) ⚠️ [LOAN + HTM] / DEPOSIT RATIO HTM books are now officially "Hide to maturity" and stuffed with assets trading at a significant loss because of high interest rates (and soon high credit losses too). Not only banks cannot afford to sell those securities, but trading at such a discount to the par value, they even stop being collateral-worthy. Effectively, the risk of those books is now equivalent to the loan ones. Furthermore, bear in mind there is no #BTFP in Europe, while in the US, that only applies to US Treasuries or government-guaranteed securities. Now, check how many banks hold more highly illiquid assets than the deposits they collected...(table 2) I feel now the warning bells in your head are already pretty loud 😂 ⚠️ [LOAN + HTM + AFS] / DEPOSIT RATIO AFS securities aren't Marked to Market but booked according to their "fair value." Translated, their real value in the market is lower due to a lack of liquidity. Now, check how many banks cannot cover their deposits if we include the AFS assets in the analysis... (table 3) I bet now those bells in your head turned into a Marilyn Manson concert! 🤣 At this point, I hope you agree with me that all those capital ratios and risk metrics the regulators use to assess banks' health are completely useless. As a matter of fact, banks that went bust always had "strong capital" according to the regulatory metrics, from #CreditSuisse (recently) to #Lehman in 2008. Fyi, both banks imploded with an "A" rating! 🙈 🚨 Alright, now is time for fireworks! 🚨 In the last table, I present two scenarios on the current state of banks’ books: 1 - "La La Land" that only assumes 5% losses on loans, 10% on HTM, and 2.5% on AFS books and compares those with the bank's total equity. 2 - “Soft Landing" that assumes 7.5% losses on loans, 20% on HTM, and 5% on AFS books. I wanted to include a "Realistic" one, but my heart ❤️ couldn't bear it, sorry. 🥲🙏🏻 Feel free to play with the data and see what happens if you assumes realistic losses.. Considering how twisted the reality we are living in is, I used green crayons to mark all those banks that have high chance of being already insolvent in the “ridiculous” scenarios presented. 🤭 ⚠️Important to bear in mind is this analysis only considers on-balance sheet items to limit its complexity. However, if we bring in off-balance sheet items I strongly doubt banks like $BAC , $UBS and $HSBC will come up so strong as per previous detailed analysis I posted… Beware, during a financial crisis, all the assets, including "cash and equivalents," suffer a haircut while liabilities only get a haircut 💇 after a company files for Chapter 11. This means that the chances for the assets I left out to be able to increase in value during a crash to compensate for the calculated losses are close to zero. THE END 🎇🎆
@DarioCpx - JustDario 🏊♂️
🍿 POPCORN ALERT 🍿 This weekend I am going through the financial reports belonging to the 32 largest banks between US and Europe, can hardly hold back my excitement for what I found halfway through it 😆 Stay tuned https://t.co/Fqj22QkfiK
@DarioCpx - JustDario 🏊♂️
Troubles in the Commercial Papers market starting to escalate? 😨 🚨Liquidity crisis might be starting to seriously bite 🚨 I wonder how many noticed that yesterday $WFC notified the #DTCC of not 1, neither 2, but 3 issuer failures! ⚠️ 👀 You think this isn’t a big deal? I went through the archive and there was no triple filing to the #DTCC in a day in the past 5years while only 3 times there was a double filing in a day.. 😐 Cannot go further back in time, but I clearly remember when #Lehman started filing MMI failures in 2008 and when it escalated everyone realised the GFC nuke was about to blast 🫣
@DarioCpx - JustDario 🏊♂️
🚨Is the liquidity crisis about to hit and #stocks bids evaporate?🚨 @SpyMasterTrades post the other day inspired me to look deeper into the behaviour of the spread between $SPX front and second $ES futures. I got some interesting things out of it 👀 Charting the 20MA on the weekly and daily you can see that while the spread is a poor indicator to track $SPX long term trends (flat between 2008 and 2016 while the bull was running free), it it is instead a damn good indicator of the liquidity being drained or injected by central banks in #stocks ⚠️ While in the pre-covid era the beta between Fed Funds and this indicator was close to 1, we can clearly see a big spike after 2021 and Beta going well above 1. What caused that? 1- Fiscal stimulus boost effect fading 2-QT (FED stopping monetising US Debt) at the same time. The combination of the 2 factor is likely resulting in a liquidity drain from the market far greater than what #stocks are pricing. 😨 If we zoom in focusing on the past year, you can clearly see how the indicator tracked well the liquidity injected during the #BankingCrisis waves of March ( $SIVB) and May ( $FRC). But the indicator is telling us another thing, #stocks rally since May 2022 (when the indicator as well exactly bottomed) happened during a massive liquidity drain from the system. 🚨This has been a characteristic that anticipated every single market crash since 2000, a clear indicator of #FOMO and bubble exuberance. 🚨 While before it took far less liquidity drain to pop those bubbles, because less was injected prior to them forming, this time the drain is massive and well above what people are pricing off FF tightening effects (that have 12-18m lag) Summing all up, the run from May 2022 might have inflated the biggest bubble of all. This disconnect between #stocks and real economy is well portrayed by other indicators like the divergence between Treasuries and #QQQ (credit to @TaviCosta )or the divergence between the #DAX and German PMI. How far are we from the big bust? Considering how steep is the 20MA of $SPX futures spread and how wide is the disconnect with the real economy I fear we are pretty damn close 🥵
@DarioCpx - JustDario 🏊♂️
🚨Another Money Market fund goes bust, it’s $C this time 👀🚨 I wonder how many are paying attention to what happens at the #DTCC Remember when #Lehman started to get notices like this one? 🤫 https://t.co/YBuVoQCQZM
@DarioCpx - JustDario 🏊♂️
Troubles in the Commercial Papers market starting to escalate? 😨 🚨Liquidity crisis might be starting to seriously bite 🚨 I wonder how many noticed that yesterday $WFC notified the #DTCC of not 1, neither 2, but 3 issuer failures! ⚠️ 👀 You think this isn’t a big deal? I went through the archive and there was no triple filing to the #DTCC in a day in the past 5years while only 3 times there was a double filing in a day.. 😐 Cannot go further back in time, but I clearly remember when #Lehman started filing MMI failures in 2008 and when it escalated everyone realised the GFC nuke was about to blast 🫣
@DarioCpx - JustDario 🏊♂️
⚠️ GOOD TRY #DTCC ! 😆⚠️ So the #DTCC changed the format of the “Issuer Failure” notice (like the one in the post below) to this “POSTPONEMENT EMAIL” Read the part highlighted in the pic🤦🏻♂️ Anyhow, a UBS SECURITIES LLC instrument failed to settle and when it will do it is “TBD” https://t.co/RDSWV0KdaL
@DarioCpx - JustDario 🏊♂️
🚨Another Money Market fund goes bust, it’s $C this time 👀🚨 I wonder how many are paying attention to what happens at the #DTCC Remember when #Lehman started to get notices like this one? 🤫 https://t.co/YBuVoQCQZM
@DarioCpx - JustDario 🏊♂️
⚠️ANOTHER ONE FOR THE #DTCC “WEIRDER THINGS” RECORDS ⚠️ According to this note below, the Cusip ID of a UBS bond due to settle tomorrow has been “deleted” 🤨 So now bonds don’t default anymore because they will be deleted before failing to settle? 😆 https://t.co/iDSYeoyEVc
@DarioCpx - JustDario 🏊♂️
⚠️ GOOD TRY #DTCC ! 😆⚠️ So the #DTCC changed the format of the “Issuer Failure” notice (like the one in the post below) to this “POSTPONEMENT EMAIL” Read the part highlighted in the pic🤦🏻♂️ Anyhow, a UBS SECURITIES LLC instrument failed to settle and when it will do it is “TBD” https://t.co/RDSWV0KdaL
@DarioCpx - JustDario 🏊♂️
🚨Is the liquidity crisis about to hit and #stocks bids evaporate?🚨 @SpyMasterTrades post the other day inspired me to look deeper into the behaviour of the spread between $SPX front and second $ES futures. I got some interesting things out of it 👀 Charting the 20MA on the weekly and daily you can see that while the spread is a poor indicator to track $SPX long term trends (flat between 2008 and 2016 while the bull was running free), it it is instead a damn good indicator of the liquidity being drained or injected by central banks in #stocks ⚠️ While in the pre-covid era the beta between Fed Funds and this indicator was close to 1, we can clearly see a big spike after 2021 and Beta going well above 1. What caused that? 1- Fiscal stimulus boost effect fading 2-QT (FED stopping monetising US Debt) at the same time. The combination of the 2 factor is likely resulting in a liquidity drain from the market far greater than what #stocks are pricing. 😨 If we zoom in focusing on the past year, you can clearly see how the indicator tracked well the liquidity injected during the #BankingCrisis waves of March ( $SIVB) and May ( $FRC). But the indicator is telling us another thing, #stocks rally since May 2022 (when the indicator as well exactly bottomed) happened during a massive liquidity drain from the system. 🚨This has been a characteristic that anticipated every single market crash since 2000, a clear indicator of #FOMO and bubble exuberance. 🚨 While before it took far less liquidity drain to pop those bubbles, because less was injected prior to them forming, this time the drain is massive and well above what people are pricing off FF tightening effects (that have 12-18m lag) Summing all up, the run from May 2022 might have inflated the biggest bubble of all. This disconnect between #stocks and real economy is well portrayed by other indicators like the divergence between Treasuries and #QQQ (credit to @TaviCosta )or the divergence between the #DAX and German PMI. How far are we from the big bust? Considering how steep is the 20MA of $SPX futures spread and how wide is the disconnect with the real economy I fear we are pretty damn close 🥵
