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Arthur Hayes Profile picture
@CryptoHayes
Apr 28 • 4 tweets • 1 min read Twitter logo Read on Twitter
1/ Let's Fucking Go! Another Friday, another US bank on the brink of being deaded by the FDIC. Image
2/ The issue with $FRC is that their balance sheet has few treasuries and a lot of other dog shit like commercial real estate loans which are not eligible collateral for the #banktermfundingprogram
3/ Therefore unless some muppet bank decides to bail out $FRC, expect over the weekend the #banktermfundingprogram is expanded to allow other types of loans to be eligible to be swapped for freshly printed dollaz.
4/ And then $BTC will take another leg up as another few trillion $ are added to the tab. Money Printer go Brrr!!!

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More from @CryptoHayes

Arthur Hayes Profile picture
Apr 30
1/ How to think about @firstrepublic ?

It's very simple:
Will the regulators actually solve the problem and stop the banking crisis

Or

Will they find a half-ass solution that solves this particular issue but leaves the broader system just as fucked? Image
2/
 Whether a group of TBTF banks buy $FRC at a sweet discount or the FDIC takes it over the question we need to ask is?

Do the regulators finally realise that either the Fed cuts rates to close the spread btw deposit rates and RRP, or BTFP accepts any bank loan as collateral?
3/
 Seems like the Fed still wants to hike 0.25% at its meeting this week. They still don't get it, or maybe they do and are just hoping and praying the market is stupid. Doesn't matter either way, a rate hike almost gtees another non-TBTF will bite the dust this week. Image
Read 5 tweets
Arthur Hayes Profile picture
Apr 26
1/x The @firstrepublic saga

$FRC indicating down 15% at the open ...

If they make it to the weekend without being taken over by the FDIC colour me surprised. Image
2/
 If FDIC takes over, the next question is whether deposits over $250k will be made whole. This is a decision of US Treasury Secretary Yellen. She told the market she has the authority to deem a banking institution systemic and then gtee all deposits.
3/
 Yellen knows backstopping all banking deposits increases moral hazard and cements the view that the USG stands behind the entire US banking deposit base. Inflationary BIGLY!
Read 8 tweets
Arthur Hayes Profile picture
Mar 20
1/ Swap lines what's going on?

TLDR another way to bailout non-US banks that isn't obvious to the average person.
2/
 It's politically toxic for the Fed to be seen bailing out foreign banks when so many small domestic banks need help.

But the Fed can't have foreign banks dumping treasuries into an liquid market and further fucking shit up.
3/ Solution:
- Fed gives $ swap line to major CB like ECB
- ECB allows EU banks to give them treasuries at par
- ECB gives $'s to the banks
- Banks can now handle any $ deposit outflows
- ECB gets the $ from the Fed using the swap line
Read 5 tweets
Arthur Hayes Profile picture
Jan 13
.#SBF_FTX

1/
Before I finish, let’s do some math.

Assumptions:
FTX deposit base = $15bn
Alameda position notional = $1.3bn
Processed withdrawals pre bankruptcy = $5bn
2/
First let’s assume that alameda’s position goes to zero for a loss to FTX of $1.3bn.

Net of customer deposits that’s $13.7bn
3/
Next we subtract the amount of processed withdrawals and come to $8.7bn.
Read 6 tweets
Arthur Hayes Profile picture
Jan 13
.#SBF_FTX

1/

The exchange should never lose money if a customer gets liquidated. There is no excuse giving you hedge fund alameda an account with liquidation turned off.
2/
All this talk about what Alameda did is misdirection. It doesn’t matter how they hedged or didn’t hedge, or what dogshit was in their portfolio.
3/

If you want to do some explaining tell us why you thought it was a good idea to give your hedge fund an account with the liquidation feature turned off?
Read 5 tweets
Arthur Hayes Profile picture
Nov 9, 2022
1/
 What happens now that Baron CZ passed on FTX bailout and SBF is bankrupt. The next question is who could save FTX?
2/
If CZ, the richest person in #crypto, can't do the deal. No one can do the deal.
3/
 FTX customer deposits will only see recovery in a bankruptcy court, and that will take many years to sort out. Mt Gox creditors still haven't received funds and it's been almost a decade.
Read 12 tweets

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