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Jim Bianco Profile picture
@biancoresearch
Jan 29, 2021 • 6 tweets • 2 min read • Read on X
Thread to explain the mkt

Q: Why is GameStop still trading at $350 when everyone that understands "fundamentals" think this is a $5 dollar stocks?

A: The only "fundamental" that matters, 62M shs short with 50M share float. It is physical impossible to cover this short.

(1/6) Image
This squeeze does not stop until this short is covered

I would GUESS that is when it gets below 25M shares, or 50% of float, and probably much less than that.

Viewed this way, what happened this week it is not that irrational.

(2/6)
Q2: Why is this driving the entire stock market down?

A2: Because the "masters of the universe" are not surrendering their shorts/covering.

So the fear is these shorts will rise so much, leading to losses and inability to meet margin calls. Brokers at risk

(3/6)
Note this is a fear, the financial system is not impaired now.

But it was reckless and irresponsible for the "masters"/brokers/prime brokers/clearinghouses/regulators to allow this to happen. They are now paying the price.

bloomberg.com/news/articles/…

(4/6)
What's Next?

Will the "masters" cover shorts or think they have a giant pay-day ahead when these short stocks collapse? If wrong, margin calls put the financial industry at risk.

Viewed this way, we can see why the S&P is down 2% today and near the lows of 2021.

(5/6)
The "retail revolters" did not get lucky. They saw this vulnerability was allowed to happen and took advantage of it.

(6/6)

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More from @biancoresearch

Jim Bianco Profile picture
May 1
1/6
As this chart shows, the current BTC price is the average purchase price of the Spot BTC ETF buyers. ~$57K to ~$58K Image
2/6
So, about $37 billion in Spot BTC assets (x-GBTC) now have no profits and maybe a small loss. Image
3/6
As I have been detailing, the 13F shows very little institutional buying of these ETFs. 95+% of the buyers are either hedge funds, institutional investors holding less than $100m, or retail degens.

Retail degens dominate.




Read 6 tweets
Jim Bianco Profile picture
Apr 28
1/11

The more data we get, the more I worry about the risks involved with Spot ETF.

🧵to update
--
Investment Advisors hold about 35% of all ETFs. However, they hold less than 1% of the new Spot BTC ETF.

"Here come the boomers" was/is a myth.

2/11

Why does this matter?

It confirms my fear that the Spot BTC ETFs are effectively "orange FOMO poker chips" for paper-handed small-time traders (degens).

These degens are getting close to their breakeven, which could turn them in big-time sellers.

Let's dig in.
3/11

A Citi study shows that investment advisors (IAs) hold ~35% of all ETFs. The table shows the 4 largest BTC ETFs. IA's (blue ribbon) hold less than 1% of the New BTC ETFs.

For comparison, see the two popular non-equity ETFs, GLD and TLT. IAs hold 22% of HYG and 40% of TLT. Image
Read 11 tweets
Jim Bianco Profile picture
Apr 21
1/6
The deficit as a % of GDP (bottom), now 5.93%, is higher than in any period except the Great Recession (2007 - 2009) and the 2020 COVID shutdown (dotted line).

The government is borrowing to spend money like the economy is trying to recover from a recession. Image
2/6
This separates Federal revenues (orange) and spending (blue).

The difference is the deficit (middle panel).

The bottom panel (black) shows that taxes only cover 73% of federal spending. The other 27% has to be borrowed. Image
3/6
Yearly federal spending is $6.24 trillion or 22.3% of the US economy (or nominal GDP).

Like the deficit chart above, the only time the government has spent this much as a % of GDP is when trying to get the economy out of a recession.

The economy is in year 4 of a recovery.Image
Read 6 tweets
Jim Bianco Profile picture
Apr 19
1/7
Happy Bitcoin halving day Degens!

A 🧵on

The flows peaked in a frenzy in Mid-March.

The 13Fs are a disappointment. Very little wealth manager adoption so far (like 1%).

Unrealized gains are shrinking fast.

Why I've been skeptical of Spot BTC ETFs.
2/7
* March 11 = only $1B inflow day.

* March 12 = Brokerage report saying $220B of inflows over the next 3 years (effectively predicting constant inflows, forever).

* March 13, all-time high close (5PM ET price)

Since the mid-March frenzy, inflows peaked (top panel). Image
3/7
The 3/31 13Fs are coming out, and they are disappointing for those who thought a big boomer wave of buying BTC ETFs through wealth managers was underway. Only odd lots.

IBIT has only 27 13Fs with more than 10,000 IBIT shares (~$360k), way less than 1% of outstanding shares. Image
Read 7 tweets
Jim Bianco Profile picture
Apr 16
1/15

What's going on with the bond market?

It is not pretty.

And if the bond market is ugly, everyone else suffers.

🧵
2/15

First, let's remember how this year started.

On December 18, 2023, BofA published its December 2023 Global Fund Manager Survey.

This graphic shows that these managers were the most bullish on rates since they started asking the question 20 years ago (2003). Image
3/15

Global fund managers agreed that 2024 would be the best time to be long-duration (lower rates) in the last 2 decades.

They were more bullish on rates now than on the 2008 financial crisis or the 2020 global economy shutdown (both were massive gains, if long-duration).
Read 15 tweets
Jim Bianco Profile picture
Apr 11
1/13

The street has had a tough 24 hours.

Rallied bonds/stocks into CPI, thinking they would miss the consensus (below). Instead, they beat the consensus (above).

This morning, they sold off stocks/bonds into PPI, thinking they would beat. Instead, they missed.

🧵
2/13

We need to ask why getting a handle on inflation is so hard.

My take ....

* Inflation is incredibly hard to predict. It might be the hardest of all economic indicators.

* Everyone believes inflation is the easiest to predict.
3/13

So, let's start with what I believe everyone still needs to understand ...

The COVID lockdown/restart of the economy was the biggest ECONOMIC event of our lifetime. Bigger than the financial crisis.

It changed the economy in ways we see but do not want to accept.
Read 14 tweets

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