Literally a swap every single day now...

When was the last time swaps were used so heavy?
The gfc...

yesterdays move was a swap BACK

streamable.com/hgak4k Image
you might want to read this a little closer.

Debt payments are too high to pay - so the govt is going to have to do some really weird shit now to cover these payments to treasury hodlrs.

OR its gun have to massively increase the debt ceiling.
Image
The govt is outta dough to enable fed to continue raising interest rates to fight inflation.

So they HAVE to raise taxes or they have to increase debt ceiling (a bad look in a high inflation env)

This is why this legis was pushed thru quickly.
npr.org/2022/07/27/111…
This govt only works when there is a crisis.

Guess what?

We have arrived at another one...

Pow needed to raise rates 100bp. He didnt.

And this is why...
It also means there is little room to bail out stonk market or do stimmies or forgive student loans.

They cant ease cause inflation would skyrocket higher.

They cant increase rates cause govt cant afford that.
The relief valve is taxes.

You: "Oz, who would they tax?"
You: "Fuck.
Oz, what would that do to growth?"
Theres more.... todays swap weakened USD (UUP instrument)& STRENGTHENED opposing currencies - about every country that has a swap line with US got a stronger currency today, esp USDJPY

On this chart, when say USDJPY goes down, it means japanesa yen STRENGTHENED.

Infl in japn-- Image
To do that particular swap, I think the fed bought USDJPY, USDEUR, USDAUD, etc...

This is also btw why corporations love globalization - when currency games result in favorable exchange rates...

india in particular comes to mind...
rn indian IT backoffice labor is DIRT CHEAP ImageImageImage
$UUP (PINK) vs $VIX vs $US30y (purple) vs $USDJPY (YELLOW)

USDJPY strengthened (inflation in japan went DOWN)
USD weakened (inflation in usa went UP)

Now fed has room to raise rates again higher now that currency strength exported?

Notice what us30y is doing rn... Image
I know there is a lot on this chart - but same data (no vix) now including Michigan consumer sentiment.

Never in 20y has the fed hiked when consumer sentiment this bad.... (green)

The only time this cocktail was present was when consumers were kinda happy.

That aint now... Image
and a little history lesson....
streamable.com/rxqsxx
and from same testimony - this is as close to a technocrat getting choked by a senator as i've seen in recent memory...
streamable.com/1e2lml

(sorry for crappy vid quality)
And remember me saying taxes goin up?
A lot of corps avoid tax and some pay less tax than you do, even tho they make BILLIONS.

Well, those days are numbered....

A tax increase on corporations is good for profits?

they'll need that deficit reduction amount to keep funding bidens war in ukraine....
Then, there's this.... i think i was mistaken about swap on this one. It wasnt a swap. Foreign CB's bought everything they could get their hands on cause yield is so much greater than their own.

Eventually the Fed will buy it all back with next cycle of QE... Image
This little mistake JPow made is gun cost u.
See,higher interest rates means it costs more to run the govt.

Who pays those costs?

U do: Thru taxes,fees,customs duties,etc

Foreigners/rich ppl ARE snapping up all this debt-hi interest pmt is a tax U will pay to THEM.

#EpicFail
Tin foil hat time:
The fed raises rates and foreign CB's buy it all to hold on their balance sheet.
This weakens USD and strengthens their currency (IE USDJPY)

With USD weak, US can continue to raise rates.

The goal is to get the interest rate number HIGHER, not crash stonks. Image
Is this why company after company can report shitty earnings, and no forward guidence, zombie companies like $CVNA can rally with terrible future prospects?

Why Vol keeps getting suppressed?

And why we havent already crashed?

• • •

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

Keep Current with Expound the profound-Cut'n thru bs 1 layer @a time

Expound the profound-Cut'n thru bs 1 layer @a time Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

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

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @frankoz95967943

Jun 26
This is beef.

Since covid its up nearly 175%

Many of you eat hamburger and madonnas.

This is why madonna's is no longer affordable.
👇🧵 Image
Here is mcdonna's vs beef

"Oz - they didnt collapse with beef going up??!"

correct.

And there's raisons.... Image
Enter currencies - zimbabwe'ing the currency has implications for the underlying

when u c it Image
Read 15 tweets
Jun 25
The Final Reckoning - A Nation Consumes Itself
🧵👇

I study the vix, geopolitics and currencies - trying to make sense of what is actually happening in the context of sound bites we get here or there from government.

Its hard to paint an actual picture from a single sound bite or news article.

But when you put them all together you paint a tapestry - some call it a masterpiece - others call it a dystopian hellscape.

For each point I will try to include a relevant news topic.

Lets begin.
The U.S. is not just struggling; it's in a death spiral.

Driven by hyperinflation & desperation, the government is making choices that solidify its descent into kleptocracy and civil breakdown.

Here’s the terrifying truth that is unfolding
Crypto: Not Innovation, But Capitulation.

The government, facing a worthless dollar, is now frantically trying to contain crypto by regulating it into the banking system.

This isn't forward-thinking; it's a desperate attempt to co-opt the flight from fiat before total loss of control.

Its an admission the dollar is no longer a store of value which is pretty damning for a government to turn against its own currency like this.

#DeDollarization #CryptoControl

abcnews.go.com/Business/geniu…
Read 35 tweets
Jun 17
Lets build.

This is my calculated vix.
The higher it goes the higher the vix should be.

👇🧵 Image
It is a function of bond yields.
Bond yields SLOW the markets down.
Its MORE expensive to borrow

The west runs on finance- price of debt (the yield) matters a lot, just like it matters to you when you buy a car a house or put chipotle on credit. Image
Zoomed in on right side Image
Read 42 tweets
Jun 17
A while back i calculated what the vix SHOULD be based on yields.

(1) you can see clear correlation
(2) it broke but the peaks still match
🧵👇 Image
The vix is a function of bond yields. Image
Read 9 tweets
May 5
Currency fiddling.
Pegs.
Making your currency artificially weaker -

This is all great when you are attempting to game the system.

Until one day it blows up in your face.

👇🧵 Image
I have an open quiz, go ahead and take it before moving forward - cause its important to understand the game....
So what happened to TWD?

well, the game is "make our currency weaker so we can export more"

This has been going on a long time - they arent the only ones doing this.
Read 48 tweets
Apr 23
Its wednesday.

Lets break your brain again.

This is a currency thread.
🧵👇
This is complex, so clear your mind, get some coffee and relax.

You are in charge of a country call it "MyCountry" with a currency called "Denaro's"

In the past you invested heavily to build your factories and vities to make things as efficient (read low cost) as possible.
Now you want to increase trade.

What do you do?

You weaken your currency - now, your products compared to the world are cheaper than anywhere else.

Your orders explode.
Read 59 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(