Here is another escalation point that I have been pointing out since 2017.
reuters.com/world/saudi-co…
There is also a big political divide between Saudi Arabia and the UAE has steadily grown as the UAE withdrew from Yemen- officially ending their direct involvement in Feb 2020. Pressure was mounting between the two allies as they differed in opinion on how to proceed.
Both countries had direct involvement, but also relied extensively on proxies within Yemen- but their paths began to diverge. UAE wanted to cut involvement and their proxies were willing to make a deal/ceasefire with the Houthis in the region.
KSA and their proxies broadly refused and altercations ensued between both entities in Yemen and behind close doors behind the GCC members. The UAE decided to accelerate their withdrawal of personnel and equipment from Yemen as well as ending monetary...
& air support for the civil war. This left KSA alone (and bitter) about having to carry out support mostly alone (UAE still supports to some capacity). The political issues have continued to mount on the Yemen front, but both have been moving in a positive direction with Israel.
The UAE was the first to cross the line signing a peace agreement in Sept 2020, while KSA has so far avoided any “official” ties to Israel. Israel has been effective in putting pressure on the “Shia Crescent” and hitting Iranian proxies at every turn.
The complexity of the UAE and KSA relationship has only grown as their goals have diverged.

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More from @markfny

22 Jul
Iran is seeing an increase in protests regarding water shortages and underlying economic weakness. Ahwaz started protesting against their economic condition (Minority Arabs- 2% of the Iran population) because they sit on some of the most resource rich acreage in the world. Image
Protests have increased in Khuzestan, Lorestan, and Tehran following rampant water shortages. Instead of sending water, the regime sent military equipment & personnel that have used live fire on protestors to disperse rallies. Image
The IRGC claims that arms have been smuggled through the region into the country providing a reason to increase their presence. They aren't wrong as the locals look to defend themselves against a corrupt regime and demanding change for their weakening economy. Image
Read 5 tweets
25 May
What is the Fed's RRP (Reverse Repo Program)? The "Fed Open Market Trading Desk" sells a security (SOMO) with an agreement to repurchase it at a specified price & time in the future. It helps protect the Fed funds rate and absorbs near term liquidity. Why is this so important?
As the size of RRP increase, it usually signifies the market is saturated with liquidity and tapering will be close(6 months?) Banks have various options to invest excess liquidity, but rising gov't transfer, excess corporate cash, & limited bank loans increase cash on hand.
The Loan-to-Deposit (LDR) is Total Loans/Total Deposits, which ideally is near .8 or said a different way the bank invested $.80 of every $1 received. In the current market, the bank has made limited loans due to shrinking opportunities & returns married with MASSIVE deposits.
Read 6 tweets
23 Mar
I think it is important to highlight some underlying issues in the global crude market.
1) the physical market has been weak for months and not the "weeks" being peddled by the narrative shift
2) the bigger issue now is the rising rates at the EM level and "new" demand headwinds
We have talked about (been bearish) the emerging market world as cracks were already forming before the US 10 Yr took off. Monetary policy is already shifting tighter as Fiscal tries to remain accommodative- but costs are rising and pressuring government balance sheets.
COVID cases are rising again in some key spots limiting travel and the "normalization" of activity throughout Asia/Europe. The reduction of activity will only stress balance sheets further as jobs data/inflation impact underlying wages and spending.
Read 7 tweets

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