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.
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
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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
Now look for Russia to double ESPO again after finishing the port upgrades at Kozmino
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
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…
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
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!