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
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?

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More from @BaldingsWorld

Mar 2
Sitting in an airport let me give you a list of principles I'm willing to bring any discusion around China and Russia upon:
1. The United States is not at fault for the autocratic mobster rule it has suffered through almost uninterrupted since 1989. As loathsome his work 1/n
For Huawei, neither Jeff Sachs, Larry Summers, are any more responsible for Russia than I am.

2. NATO had no bearing on Russia's decision to invade Ukraine. That is nothing more than smoke screen obfuscation and we all know it

3. Negotiate from a position of strength

4. Putin is mad and threatening nuclear Holocaust only because we don't just give him what he wants.

5. Shared values and standing up for democracy is the biggest bullshit ever thrown about by politicos and IR profs. Never have such great values meant so little in practice 3/n
Read 7 tweets
Mar 2
ICYMI, here is my latest paper with my new think tank New Kite Data Labs. In this paper, we cover the case of a Chinese military civil fusion firm who has exfiltrating data from high value networks like US military and European universities. Are major findings are: 1/n
1. Chinese enterprise, likely acting on behalf of a major state owned enterprise designated by the US government as tied to the People’s Liberation Army, is engaged in data collection from sensitive high value information networks of the US military and other non-US targets 2/n
2. The data and the associated source code provides evidence of methodical exfiltration from a variety of high value networks ranging from known but top-secret US military projects to non-US university and government linked targets. 3/n
Read 7 tweets
Mar 1
So in professional news I am happy to announce that @that_data_chap and I have started the the think tank newkitedata.com. Our first report is on Chinese military civil fusion about the case of a private Chinese company using AI processing to manage data 1/n
Exfiltration from top secret US military projects, companies, and non-US institutions including government linked entities and universities. We are also proud to announce the China Data Project where will be releasing a series of reports in the coming weeks and months 2/n
About China and other data collection activities by authoritarian states. We will be working with other trusted researchers and institutions prioritizing researchers from Taiwan, Hong Kong, East Turkestan, and Tibet who feel the weight of authoritarian policies 3/n
Read 6 tweets
Feb 28
So let's take a deep breath and recap some of where we are and some of the different points I have been hitting. 1. I think you still have to call the Russians the proverbial favorites as they have a lot more they can easily do in Ukraine. Don't mistake me here 1/n
I want the Ukranians to win but Russia has a lot of cards left to play in Ukraine and a much higher appetite to absorb and inflict savage losses. That said: this is going to be a real fight all around. True prayers be upon Ukraine that they survive this fight. 2/n
2. So far the Biden administration gets very mixed grade. They have made some real mistakes and been very slow to react. For instance, Biden being public with intel and sharing intel with Beijing is a high risk move. Given that Biden did nothing to backstop Ukraine 3/n
Read 13 tweets
Feb 25
I see this idea being bandied about that roughly goes if sanctions don't prevent Putin from going into Ukraine then what's the point? This is attempting to draw a staight line from X sanction to Y action. There are multiple problems with the line of thinking. Let's unpack 1/n
1. Sanctions can be used simply to make something more difficult or cut of customers. As a simple example, why should the United States consumer being funding Russian petro-state when it can produce that same gas domestically. Yes, Russia can sell that gas elsewhere 2/
But why should the US be funding in this case Russia when they are so stridently anti US and or attacking? 2. Can be used to stimulate shifts away from one producer to another. China has opened up its markets to Russia but sanctions can stimulate growth from other producers 3/n
Read 6 tweets
Feb 24
Look at almost any event and if you play back the decisions or little events that led up to that, what we see as the "BIG EVENT" ultimately became almost inevitable by all the previous events or decisions that took place to cause the "BIG EVENT". Let's revisit why we are here 1/n
1. Disconnect between word and deeds. The reality is there is a vast difference between the two and enemies looking for any weakness to exploit know that the major democratic powers are little more than hashtag powers 2/n
2. Engagement needs to be shot between the eyes. Russia, China, Iran and others know engagement is a one way bet. Let people make some money because they will never do anything because they fear the consequences. What have universities really accomplished in Russia/China?
Read 12 tweets

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