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Tom Luongo (Head Sneetch) Profile picture
@TFL1728
Apr 29, 2022 • 7 tweets • 2 min read • Read on X
@zerohedge does not understand what's going on in Turkey. The last thing Turkey wants is foreign capital returning.

Offering a 4% two year bond is just a stop-gap for those that paying higher rates than that, to offset some cap. outflow.

1/
zerohedge.com/markets/after-…
I've explained this before. Erdogan is de-dollarizing. And he Keynesian assumption of a linear response of inflation to interest rates is a very poor one. 2/

tomluongo.me/2021/12/23/is-…
Now, let's turn to the issue of the day. Russia's gas for rubles trade it is forcing on the world. Gazprombank builds up euros/dollars/etc. foists the FX costs off on the buyer. Ruble demand rises. 3/ Image
Gazprombank has no interest in holding USD/EUR/GBP so they set up a swap with Turkey to pass them through and stabilize FX reserves at 4%
/4 Image
Those Lira can then be offset, hedged, a carry created, etc. With all of them in a bear market dynamic vs. the RUB, Russia is now going to double dip on the returns as the TRY stabilizes.

Those USD/EUR/GBP will pay for Turkey's stabilization. 5/
Using depreciating EUR to buy oil/gas to sell to Turkey at 4% which accelerates the payoff rate of foreign currency debt in Turkey, which feeds the doom loop of FX weakness vs. Russian exports to 'unfriendly' countries. 6/
Image

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More from @TFL1728

Tom Luongo (Head Sneetch) Profile picture
Mar 4
Building on things @biancoresearch has talked about.
Trump wants to be repaid for the post-WWII defense arrangements with the EU.

One of the possibilities is a cram down on the debt they have. Trump's opening off is to replace all the existing USTs owned by European banks (not clear if it's commercial + central or just central) with 0%, perpetual or 100-year bonds.

Now, I think this is a pretty hilarious offer especially in light of what I've been saying for 3 years about how the EU + UK complex has been gorging on USTs since Powell began raising rates.... to the tune of $1.1 trillion net/net since Sept 2021.
/1Image
Image
They did this to manage credit spreads between US and UK/German bonds in order to keep their banks solvent.

Look up Lagarde's Transmission Protection Instrument (TPI), she instantiated in July 2021 in response to Powell's 75 bps raises back then.

The speculation then was to help the ECB manage the Italian/German spreads which were blowing out... @zerohedge covered it that way back then.

It wasn't.... the real control lever is US yields, against which all other debt is measured. Control the long-end of the US YC, you control global rates.
/2
Now, that the Euro-zone + UK and subsidiaries (Caymans, Canada, Bermuda, BVI, etc) are the largest holders of US debt, the bulk of which were bought at much lower prices, higher yields, Trump wants to cram them down to 0%
/3
Read 8 tweets
Tom Luongo (Head Sneetch) Profile picture
Dec 17, 2023
Last year when the @PeterZeihan's of the world were calling for a 5 million bbl/day collapse of output I told you about the importance of the ESPO pipeline, which could double it's flows to 1 million bbls/day.
/1
archive.ph/nTTZk
Image
Now look for Russia to double ESPO again after finishing the port upgrades at Kozmino

/2tass.com/economy/1555847
Transneft is more than prepared to expand the Eastern Oil route.
/3
tass.com/economy/1553297
Read 5 tweets
Tom Luongo (Head Sneetch) Profile picture
Oct 10, 2023
After this weekend's upside results for @AfD in Hesse and Bavaria I want to remind everyone that this time is different for them as compared to 2018.

They have transformed into the "solutions for Germany" Party, like I said they needed to become then. /1
tomluongo.me/2018/06/18/cro…
Because they didn't rebrand themselves in 2018-19 they were easy pickings during COVID which saw their support drop to a low of 10%. They failed to cross the 16% chasm and fell back.

But, they were on the right side of the issues, German voters needed to catch up to them. /2
They would do so because once Merkel was gone, the rebrand under Alice Weidel could finally take root. They went from the "Anti-Merkel" party on immigration to the "Pro-Germany" party on immigration, war, and the economy.
/3
Read 8 tweets
Tom Luongo (Head Sneetch) Profile picture
Sep 25, 2023
So, the YC is steepening this morning thanks to @SecYellen panicking on Friday, announcing Yield Curve Control.

Note the 5yr/7yr spread is about to turn positive!

This is killing the euro and the Eurobond markets.
/1 Image
Euro below the 1-bar Quarterly Reversal level of 1.0633 and falling fast. /2 Image
German 10-year at 2.79% and rising (up 5 bps today). /3 Image
Read 5 tweets
Tom Luongo (Head Sneetch) Profile picture
Sep 5, 2023
Niger’s former “independent government”was allowing France to take Uranium out of the country for $0.80/kg. Current price is $150.

The junta just raised the price to France to €200 or $185.

But France isn’t dependent on Nigerien Yellowcake, or so the bots kept scolding me last week

France’s budget is a complete nightmare, and unlike other members of the EU it can violate budget rules b/c some PIGS are more equal than others /2

goldgoatsnguns.slack.com/files/U02DSF8F…
Go back and reread what I wrote about Niger and France in July

/3

tomluongo.me/2023/07/07/mac…
Read 7 tweets
Tom Luongo (Head Sneetch) Profile picture
Aug 5, 2023
Once you see how multi-vector the attacks on the auto industry are you can't unsee them.

EVs are a cancer eating away at private transportation. EV fires are the next stage of this.


/1zerohedge.com/political/will…
As ICEs are being legislated out of the market, unsafe EVs will come with higher insurance costs all through their lifecycle.

Your True Cost of Ownership will rise as the depreciation curve steepens and initial cost rises thanks to complexity.
Simple, straightforward trucks are leaving the market.

RIP the Nissan Titan whose footprint is too small to stay in the market, like the Ram 1500 Classic. All full-sized trucks shorter than 146" wheelbase can't be sold at scale without huge CAFE fines.
carscoops.com/2023/08/nissan…
Read 5 tweets

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