1/25 ABOUT, COCOA, ORANGE JUICE, SILVER and HUME & THORNTON

What we saw recently with cocoa, Coffee and now Silver is a classic rotational spike&correct. As Thornton writes in 1804, citing Hume 2/25 But that is the second phase in fact the first phase is “exciting industry” aka TINA .

1/19 In the last couple of days a striking observation was relayed by various Fintwit accounts.
A combination of productivity gains and stagnant real wages 2/ Coupled with some dissavings

1/ ABOUT THE USE OF SILVER vs COPPER IN SOLAR PANEL,
LONGi SWITCHING,
AND THE DIFFERENTIAL PROCESS OF SOLAR PANEL COSTS

(falling PV energy to produce PV in a feedback loop)
What would be the impact for Solar Panels manufacturers of switching from Silver to base metals? 2/ Most current research and industrial sources discuss that switching to copper would result in 0.8%-1% loss in conversion (e.g., copper-metallized cells can be within ~1% efficiency of silver-based ones).:

Copper-metallised cells are within ~1% efficiency of silver counterparts — TNO / international research: tno.nl/en/newsroom/20… tno.nl/nl

SunPower / research comparison (copper vs silver metallisation): sunpropower.com/news/industry-… sunpropower.com

In that research, fully copper-metallised cells had slightly lower efficiency (e.g., ~23.08% vs 23.79% for silver), indicating about 0.7% — 0.8%+ efficiency difference in some test cases.

1/16
STRUCTURED REASONING ON OIL DEMAND FOR 2026 AND BEYOND
a.
2023-2024 LOWEST GROWTH IN OIL DEMAND OUTSIDE OF A RECESSION
b.
DEMAND FOR ROAD TRANSPORTATION WAS THE DRIVER OF TOTAL GROWTH IN OIL DEMAND BUT IS NOW FLAT
c.
A STRUCTURAL SHIFT : OIL DEMAND GROWTH WAS BEFORE DOMINATED BY GROUND TRANSPORTATION
d.
TRUCKS WERE DRIVING OIL DEMAND WITHIN THE TOTAL GROUND TRANSPORATION, BUT THE SHARE OF TRUCK IN $OIL DEMAND IS UNDER ATTACK
e.
CHINA TRUCKS : TRANSPORTATION WENT FROM THE MAIN DRIVER OF OIL GROWTH TO NEUTRAL:
f.
EUROPEAN OEMs ON SHARE OF EV IN TRUCK SALES BY 2030: 50-60%
g.
TRUCKS IN INDIA
h.
VERY LARGE IMPACT FROM E-BIKES
i.
CONCLUSION: LOOKING INTO 2026 AND BEYOND 2/16 DEMAND FOR ROAD TRANSPORTATION WAS THE DRIVER OF TOTAL GROWTH IN OIL DEMAND BUT IS NOW FLAT
In 2024, chemical feedstocks & aviation each accounted for around half of oil demand growth in energy terms (in volumetric terms, the share of feedstocks was higher, at around 70%).

1/8 Blackwell Party Crash:
Interconnects will "Poof" NVIDIA's Premium

Everyone excited about Blackwell? 🎉

PARTY CRASHING
inefficient
Like each chip guzzles up to 1kW but with horrendous scalability limits due to crappy interconnects.
PARTY CRASHER?
MicroLED interconnection

2/8 The Bottlenecks in AI Scaling: Interconnection (Copper vs. Laser)
Let's see...

COPPER
Result you cram a few very good architecture chips in a box connected with cooper wires(that’s the Blackwell situation today)
OR...

1/10 Michael Burry spotting "overtrade"

In classical economics the bust is often attributed by the British writers to “overtrade”, and this is often magnified by excessively loose monetary policy. But it can happen without excessive loose monetary or fiscal policy... archives 👇

https://twitter.com/michaeljburry/status/1990171815155752976

2/10

Clement Juglar in 1880s.

1/14
$SOFI, as I was starting to read the actual 10-Q thinking I am missing something, right from the beginning KABOOM! 💥🤣

The Company posted this cash flow statement and we can see through that the non cash gain of fair value adjustment of 270 million for 9 months (in red) 2/14

LITTLE REMINDER
In the cash flow statement, non cash expenses like stock compensation are added back and non cash gains are substracted, nothing special just a bit of education for the non-specialists.

Additional elements from Gundlach - Rosenberg interview.

https://twitter.com/GraphCall/status/1987932209278234960

FALSE LIQUIDITY FROM MANY PARTIES:

Harward was a tell tale example. It is basically pay as you go. $50 billion endowment.
Locked up in illiquidity and had to raise funds.

UST DEMAND DESTRUCTION
GUNDLACH and DALIO

The Fed is ending balance normalization (QT)

The fed is signalling that it will restart monetization of gov debt. Why?
It is not QE, it is monetization. Yes, there is a difference. Why would any central bank be crazy enough to stimulate a bubble?
There are problems with debt absorption.
We have discussed that before with the problems of repo.

1/23 BESSENT THE HEDGE FUND FARMER
As I was reading the piece from Joseph Wang on repo, I remember my readings from different sources and notably from the BIS on systemic risk that showed up in April 2025.

In fact the FED is forced to backstop the dgeneracy of the repo market and hedge fund. The Negative haircuts on UST decried as a source of systemic risk by the BIS.
x.com/FedGuy12/statu…

So what are hedge funds doing with REPO in present of a large primary deficit? 2/23 THE CORE MECHANISM (Simplified)

The U.S. government is spending $2 trillion more than it collects each year → it must issue $2 trillion in new Treasury bonds/bills annually.

Who buys all these Treasuries?
Not just pension funds or foreign central banks (who pay with cash).

A huge chunk is bought by hedge funds, proprietary trading desks, and dealers—but they don’t use their own cash.

Instead, they use leverage:
They borrow cash overnight in the repo market.

They use the newly bought Treasury as collateral for that loan.

This lets them control $100 of Treasuries with only $5–$10 of their own capital. (and in fact with negative haircut as explained by the BIS and it’s a key point)

hy do they do this?

Mainly to run the cash-futures basis trade:
Long the actual Treasury (bought with repo cash),

Short the corresponding Treasury futures contract.

Profit if the two prices converge (which they usually do… until they don’t).

We will explain why they didn’t and it’s structural

The catch: This trade only works if repo funding is cheap and reliable.

And because trillions of dollars of these trades exist, they create massive, ongoing demand for repo loans—not once, but every single day, since repo is often rolled overnight.

It’s that every new Treasury issued is potentially fuel for another leveraged trade, which needs more repo financing.

More deficit → more Treasury issuance → more leveraged buying → more demand for repo.
The lenders of repo cash (money market funds, banks) are finite.

As they run out of “easy” cash (e.g., from the Fed’s RRP facility), they demand higher rates to lend.
Repo rates rise above the Fed’s Interest on Reserves (IOR)—a red flag that funding is getting tight.

1/18 FISCAL DOMINANCE and PORK-BARREL BILLIONAIRES
ORACLE’s $38 billion data center debt offering.
The crony Inflationistas, caramba!
$ORCL will do inflation arbitrage — let’s explain…

https://x.com/MacroEdgeRes/status/1981503533271671039

2/18
Ok, basically Bessent is telling all corporates: “Borrow and spend now, because I won’t be able to hold that curve down for long, boys!” I am going to run out of foreign (UK) and domestic patsies (Morgan Stanley) to do bond stuffing and repress that curve.
@BankRegData

1/25 The Lessons of fiat money from the XVIIIth century

For someone using classical economics who has abundant archives about the widespread use of fiat currencies at the end of the 18th century, 2/25 ...the wording used by the financial press of today is very weird. People talk about gold rising?

Let’s review what Henry Thornton says about the possibility of the BoE lending too much money to the government.

1/17 About de-dollarization in action (not a Myth listen to Rogoff), US interest rates, And Gold Warrants.
Ethiopia wants to follow the steps of Kenya and convert its USD debt to Yuan. 2/17 Ethiopia's main exports to China include coffee, oilseeds (like soybeans), and sesame seeds. China also imports other agricultural products and raw materials such as cotton, dried legumes, and leather from Ethiopia.

1/25 PRIVATE EQUITY ZOMBIES PART I:

THE BIG FAT REGULATORY ARBITRAGE BETWEEN BASEL II BASEL III

How the Boiler room of procyclical mark to model under Basel II in banks leading to the GFC was stopped in banks by Basel III but moved to NDFIs - private equity not subject Basel 2/25

It all started in 2000 with IFRS accounting. The EU endorsed those procyclical standards even though bankers and politicians in Germany and France were against it, as they fear that accounting procyclicality would promote “irrational bubbles...

1/20 PROVING THAT BITCOIN IS A LIQUIDITY DECOY WITH SIMPLE DIFF EQUATIONS.
“HODL” on to your socks. (a bit technical)

ALSO The Fed is semi-lying, in fact, about “We would lose control of interest rates without IOR.”

docs.google.com/document/d/1n1… 2/20 Well, the opposite is true (long term), in fact, when the portion of interest-receiving reserves converges to 1.
IOR is convenient in the short term but lethal long term.
(Patience)

1/25 Can a push in a new tech prevent a credit correction in bad credit areas?
Maybe, but there is a precedent in 1885 2/25 After the 1873 Franco-Prussian war, there was first a credit expansion. The beginning is the prosperous part but this credit extension as usual ends in degenerations in Minsky asset. The Funny thing is that people today even claim “degen” as an basis for investing!!

1/15 UST Bonds Stuffing & National Security
Moreland, in his presentation about Morgan Stanley, shows how much the bank has been stuffing into UST and explains how, typically, “banks,” for some odd reasons, have an ability to predict rate cuts.
Here? Fiscal dominance twist... 2/15 Morgan Stanley is not the only one to be stuffed with U.S. Treasuries,
BUT this has had ZERO impact in reducing the 10-year UST.

1/22 YIELD-PIGGING AND BUGS IN THE WINDSHIELD
Credit problems in history are almost ALWAYS due to yield pigging BTW.

(There is evidence of that when looking at investment-grade private credit versus CCC private.)
But let me explain first.
What is yield-pigging? 2/22
Say you are operating in a strategy like risk arbitrage, where you have to arbitrage merger-arbitrage spreads (the difference between the current price and the deal value).

1/25 The GraphCall Credit quality vs spread metric

Watching the consumer delinquencies rise is worrying but it is not per se at a very high record (although some adjustments in those calculations are coming and BNPL have data silo issues)....

Are the credit spreads reflecting that properly? 2/25
Those are the credit spreads

1/9 Shares buy-back are contrarian indicators for the most part.

Bloomberg and other twitter accounts are trying to tell you that share buy-backs are great news for the stock market with a record high level. 2/9 So as a share of U.S. GDP, S&P-500 buybacks were roughly 0.95% in 2009 and 2.0% in 2010 and about ~3.4% in 2025 (using the 12-month Mar-2025 buyback total).

1/8 This chart circulated around is relatively easy to interpret.
Shanghai Gold Exchange, assayed, audited, secure, physical gold warrants volume. 2/8 (quick reminnder context)
YOU CAN SKIP THIS ONE IF YOU ALREADY KNOW ABOUT IT

The FX as reserves had three iterations, the post 1922 system with both GBP and USD politically forced as reserves with a bogus price convertibility (not at all a Gold standard, becausee a Gold standard implies letting the Gold flow and forbids using FX as reserves)

The Bretton Woods system post WWII which is a copy cat of the 1922 arrangement with again a bogus price convertibility but no Gold flow or convertibility just by everyday person.

The Bretton Woods II which severed any link to Gold and politically coerced the G-7 not to dump their exess USD trade surplus into Gold but forced them to do vendor financing and recycle those into UST.