Thread by @BaldingsWorld

I don't think most people grasp what exactly is going on here and the true significance do let me really you through what exactly happened and happening 1/n

https://twitter.com/W7VOA/status/1502006866339061769

Nickel jumped enormously the other day though likely linked in some way to swings in asset prices the underlying reason was much simpler: a Chinese whale (big better) had accumulated some massive positions in nickel and got squeezed (in the wrong direction) 2/n

Because the nickel market is not nearly as big or as liquid, with traders both smelling blood, and the short whale trying to get out prices at one point I think were up nearly 100%. There are billions in losses at the whale. So why does this matter? More backstory needed 3/n

The whale was one of China's largest nickel producers with billions owed to banks. The amount I'm hearing Chinese firms are sitting on would crater at least a nickel producer or two and a mid-size bank. These aren't small numbers. Rumor also has that fund managers were 4/n

Front running industrial trades to make some money. Rumor has the counterparty in most of these trades as a major western commodity firm. The rumor told me was they offered to settle the losses in exchange for some mines. The Chinese nickel company refused. Now it gets crazy 5/n

Because the Hong Kong Exchange OWNS the London Metals Exchange, and guess who owns HKEX? First letter is a C third letter is a P won't tell you the middle one, the HKEX owning the LME just shut down all metals trading in nickel so that a Chinese company didn't blow up 6/n

Let me repeat that: the LME a major global commodity exchange SHUT DOWN trading in nickel so a Chinese company wouldn't go bankrupt. The losses haven't vanished. You know what the real risk is? The counterpart to the Chinese trade could very validly go after both the exchange 7/n

And the banks. They are sitting on some gains that are ENORMOUS. This is going to be litigated for a long time and not just against the Chinese nickel company. Remember that global markets are being shut down to avoid one Chinese company going bankrupt. TGIF right?