Tweet

PlungeProtectionTeam

Follow @gamesblazer06

Mar 12 • 4 tweets • 1 min read

https://twitter.com/gamesblazer06/status/1502423621846798337

“The only thing that we learn from history is that we learn nothing from history.”

- Hegel

https://twitter.com/gamesblazer06/status/1502423621846798337

Hate to break it to some of these Perma Bears… but the Fed hasn’t run out of Bullets to fight inflation… they can continue to Hike rates & slow down QE or even step up RRP cash disbursements that make the Banking system even more ridiculously liquid.

The act of liquifying Banks in a Post Basel III & Gold Plated (including CCAR etc) world.. & creating M2 doesn’t in & of itself create inflation.. the Regulatory framework pushes money out of Banks on Supply side when it meets an optimal demand function. $XLF #Reflation

All those XS deposits are locked by Basel III LCR & Gold Plated RLAP… on Bank Cash flow statements… & Capital governs Sheet deployment… all the excess is just in HQLA & it’s release is fine tuned by a multitude of Regulations that are the true Money Supply Fulcrum.

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @gamesblazer06

PlungeProtectionTeam

@gamesblazer06

Feb 22

https://twitter.com/charliekirk11/status/1496210100239106048

#NotRocketScience

https://twitter.com/charliekirk11/status/1496210100239106048

This ain’t gonna play well in Nov ‘22 for Dems.

The calculus was to push Inflation blame game on Russia…. Instead they are gonna get the Alt Left War on American Energy made Putin Richer & Americans Poorer.

Really bad optics…& factually correct. If I was him… I’d quickly come to some Russian resolution..

Like Yesterday.

Read 5 tweets

PlungeProtectionTeam

@gamesblazer06

Feb 14

10Y +4bps to 1.98%
30Y +4bps to 2.28%

Growth rarely Decelerates meaningfully with $ZROZ down to this degree, unless This Time Is Different. Highly Doubt it
$XLF #Reflation

Margins usually Peak ~Year 3 (+/-) of a Recovery. For instance, Margins Peaked a Decade before the last Credit Cycle ended. Leadership changes…& Cycles usually Sequence.

$XLF #Reflation

Read 7 tweets

PlungeProtectionTeam

@gamesblazer06

Jan 23

https://twitter.com/akochar1982/status/1485324963666182154

🎯

https://twitter.com/akochar1982/status/1485324963666182154

U nailed it imho….first thing people do is go back to the last episode (2018-2020) w/o a good understanding of the changing contextual backdrop as well as QT mitigants that are currently in place & evolving further.
$XLF #Reflation

Another big time clue imho… $BAC did a 4.5% Pref Issuance a few days ago… if that ain’t a sign the Market has too much liquidity not sure what is….
$XLF #Reflation

Read 5 tweets

PlungeProtectionTeam

@gamesblazer06

Jan 22

https://twitter.com/gamesblazer06/status/1265787113426968576

The question for Investors (longer term horizon) is when do you sell $XLF ?
The answer is when Deposit Betas finally catch up to ~50% or 10Y3M Inverts Investors start to Pay Less & Less for every $1 of earnings power (driven by the Flow Through Rate of Inflation)….

https://twitter.com/gamesblazer06/status/1265787113426968576

Long Term “Investors” who respect the Credit Cycle Started selling $XLF at the Peak of Price/TBV on $BKX in Jan 2018 at 2.1x & also long $ZROZ …as Deposit Betas were Peaking + Cyclicals/Commodity stocks like $CAT etc..

The other natural question that should pop up is…well if the Taper is coming & BKX is 1.8x…why shouldn’t 1 sell now? Won’t the Fed kill the Cycle w QT.. why on earth would 1 wait around… after doubling/tripling money from the March 20 bottom.. why wouldn’t 1 crystallize gains?

Read 7 tweets