1/8

A 🧵on the LME situation and why it should bother anyone in mkts.

A blatant disregard for the rules, to protect one Chinese Tycoon against the market.

This is far worse than GameStop.

I tried to keep this as simple as possible. Pls correct in the replies.
2/8

Tsingshan is China’s largest nickel producer. $40B in revenues

It is run by its founder, Xiang Guangda. His moniker is “big shot.” Take that to mean he has a huge ego.

He shorted 100,00 tons of Nickel, yes, that’s a huge amount.
3/8

He was counseled to reign in this massive short. But he’s “big shot” and runs Tsingshen, so he “knows better.”

In retrospect, this position was causing mkt imbalances. This imbalance often shows up when all mkts are stressed, like they were/are with Russia invading Ukraine.
4/8

The market moved against him enough to get a margin call. By all accounts he simply said he did not want to pay it.

So, the LME gave him a “reprieve.” In other words, the LME ignore its own rules.
5/8

Why? Maybe because he is “big shot” a major player, and his broker was the state-owned China Construction bank, and the LME is owned by the Hong Kong Stock Exchange. Hong Kong, as of 2020, is now part of China.
6/8

When he was given his “reprieve” the mkt had a “off-sides” player that could be squeezed. So, prices rocketed 250% to $100k.

A that point he could not pay the margin. Not to worry, the LME halted trading and canceled trades back down to $50k.
7/8

This got him back to a “mark to market” level he could pay.

So, all those traders that correctly assessed the situation and went long in legitimate trades lost all their profits between $50k and $100k.
8/8

Now “big shot” wants to stay short and the LME, which initially said Nickel trading would restart tomorrow, put that on hold. The fear is the short imbalance still exists and the price rockets back to $100k and doubles his margin, and then they have to cancel more trades.
Good summary in today's WSJ with additional info

wsj.com/articles/the-m…

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More from @biancoresearch

Mar 11
1/8

Jeff's comments are spot on and deserve expansion in a 🧵

It is part of a disturbing trend over the last few months of financial institutions and Govts "just taking" (stealing) other people's money in broad daylight.
@CliffordAsness @jdorman81

2/8

Canada's emergencies act allowed Ottawa to freeze the accounts (steal) the money of protesting truckers without any due process.
3/8

Also, the emergencies act created "retroactive laws" (nice Orwellian term) to say when you donated to the truckers it was legal, but now it is not so you are retroactively in violation of the law so Canada can freeze (steal) your money without due process.
Read 8 tweets
Mar 4
1/11

Reading between the lines and it sounds like Shell's trading arm cannot be controlled.

A 🧵to explain.

ft.com/content/9aecf0…
2/11
Shell Monday:

When [Shell] revealed on Monday plans to exit its joint venture in Russia, its chief executive Ben van Beurden said he was shocked by the loss of life in Ukraine, resulting from a “senseless act” of military aggressive, which “threatens European security” ...
3/11

... “Our decision to exit is one we take with conviction,” he said. “We cannot — and we will not — stand by.”

---

Ok Shell made a decision to walk away from Russia.
Read 11 tweets
Mar 4
*UKRAINE'S KULEBA: RUSSIA FIRING ON ZAPORIZHZHIA NUCLEAR PLANT

Markets are freaking out that Russia is bombing a nuclear power plant!

10-year yield down 16 basis points in 30 minutes (below)

ES futures down about 70 handles over the same time period.
picture of the facility
Russian forces are firing on the Zaporizhzhia Nuclear Plant, Ukrainian Foreign Minister Kuleba said, adding that a fire has broken out.

Earlier, the IAEA confirmed that the Russian military is battling now outside the gates of Europe’s and Ukraine’s biggest nuclear power plant.
Read 5 tweets
Mar 3
In 1917 when the Bolsheviks seized power they renounced the debt, known as czar bonds. Over the ensuing decades speculators bought them for a penny or two on the dollar thinking they would hit the lottery and one or a few might pay.

History repeats
Finally in 1997, 80 years later, after the Soviet Union fell, the Russian government made a small payment on some of these bonds, mainly to French bond holders. And the French government taxed most of it away.

nytimes.com/2000/11/19/wor…
Hold that penny or two in cash equivalents (t-bills) over those decades produced a far superior return.
Read 4 tweets
Feb 23
1/6

Short 🧵on recent market action

S&P correction is now 12%, largest since spring of 2020 Image
2/6

The Russell 2000 (small cap stocks) is back into media defined bear market territory. Image
3/6

NASDAQ Composite approaching media defined bear market levels. Image
Read 6 tweets
Feb 20
1/7

A 🧵on the new Goldman's Fed call of "nine for nine"

bloomberg.com/news/articles/…
2/7

First, "nine for nine" is not really that far from what is priced in.

As of Friday's close, the market was pricing in "eight for nine."
3/7

From Jun-04 to Jul-06 the Fed hiked rates 17 times in 17 meetings, from 1.0% to 5.5%. So, 9 for 9 is not unprecedented.

When the Fed was done in 2006, the yield curve inverted, housing prices peaked 2-months later (Case Schiller) and following next year was the GFC.
Read 7 tweets

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