Tom Luongo (Head Sneetch) Profile picture
Mar 18, 2023 11 tweets 3 min read Read on X
Quick thread on the strategic importance of Credit Suisse and why the Fed's support of it is so important.

Famously, the SNB holds a big equity portfolio, at last count ~$139B. These are mostly US large caps. /1
whalewisdom.com/filer/swiss-na…
Last Summer I took heat from the skeptical on Fintwit for my 'thesis' of a war between Davos and the Fed because the Fed sent billions in a lifeline to the SNB who helped out $CS. /2
This happened at the same time as Blackrock's assault on the Bank of England, bringing down PM Liz Truss, installing Davos boy Rishi Sunak.

At the time I noted the two banking jurisdictions in Europe not under ECB control were assaulted simultaneously. No coincidences /3
$CS has been under constant attack since then, with the latest push occurring while the Fed clearly decapitated $SIVB and Signature Bank. Move/Countermove. /4
$CS is a key driver of SNB monetary policy. It's their $JPM. Without $CS a run on the SNB is very possible. For the Fed, who just set off a wave of instability across the eurodollar system, the SNB is a key partner, as they provide key liquidity to US equities such as $AAPL /5
It's not a stretch to then conclude that the Fed will support CS through the SNB to support US equity markets.

If you are the Fed you want to allow global capital to flow into US stocks as safe havens
/6
If you are Davos, you want to cut off all avenues of escape from the incipient capital flight Powell set off with the BTFP and not bailing out $SIVB, the SNB and $CS play a big role in this.

For Davos, volatility is their main weapon, and you increase vol by drying up volume. /7
If you want to hurt the Fed after the Fed clearly hurt you a continued assault on CS is a logical move.

ft.com/content/5e4a8d…
Who do you think ordered this at this moment in time? Paging @wef

So, strategically, the Fed will pay certain prices to achieve larger goals. This is what so many in Fintwit fail to grasp, wanting to just ab react and scream "BACKDOOR QE!" "IT'S ALL A CLUB!" blah blah blah.

Think about relationships. Map incentives. /8
Conclusion: The Fed and NY will continue to try and support CS as the chess game continues.

Whether that's good or bad for anyone outside of the Marriner-Eccles building or Wall St. is anyone's guess. But that's the lay of the land. /end
@threadreaderapp

• • •

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

Keep Current with Tom Luongo (Head Sneetch)

Tom Luongo (Head Sneetch) 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 @TFL1728

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
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
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
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
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
Apr 25, 2023
So, let's talk Yellen wanting Blackrock to be regulated as a SIFI. Moving Non-banks into this pile, which now gives them access they didn't have before.

BLK doesn't want to be a SIFI. But, now that they are in trouble, thanks to Powell they do? /1

From this 2019 Article on BLK in Europe. /2 Image
So, what's changed? Clearly that BLK didn't 'use leverage' but invested everyone's pension funds in stocks and Sovereign Debt at insane prices... 10 year German bunds at -0.8%... mmmmm... tasty!

Now? /3 Image
Read 7 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!

:(