There is another totally false claim that many renowned economists, famed commentators snd other prognosticators have been doing of late which is establishing an ex-post causality between Trump’s JPOW rants and the rise in long UST rates / drop in $

1/4 The bogus claim is that this is creating uncertainty and a fear of debasing and hence investors are requesting higher risk premia.

I really don’t know where to start but let’s start with the fact that market inflation pricing has actually went down not up with these rants.

2/4

This Trump/JPOW feud is complex and while the blame is actually shared, the blame of politicising it loudly on social media lies squarely with Trump. To start off it’s a totally useless war that Trump is waging because the market has already priced these cuts. See chart.
1/4 To move on to why the blame is shared: this is not the 1st time JPOW shows autistic latency. He did it in 18 during the 1st tariffs episode. He did with the infamous transitory post COVID. And he is doing it again as recession settles in. He was wrong in both cases
2/4

The more it goes, the clear it becomes that this administration is totally unprepared and they are literally making it up as they go.

Those who follow know that I have been very open minded about both the approach and the goals.

But now MAGA is starting to look like MAFA

1/5 Make America Fail Again.

The combination of excessively aggressive negotiating starting point with unilateral and sudden concessions that seem to be the product of a both market pressures and CEOs revolting, is a terrible negotiation toxic mix.

2/5

Tariffs announcement did not lead to a rise in long-term inflation, quite the contrary actually, 5 to 10 breakevens tanked. Oil tanked. Commodities tanked. Yes there was a spike in short inflation expectations, but breakevens curve went into backwardation

1/4 The spike in the long end was driven by TP and led to a steep increase in real rates. That clearly threatened a collapse in spending and investment. In the middle of these major moves FFR was on hold while neutral rates were clearly heading down while credit spreads blasted

2/4

I keep reading a ton of hyperboles about the tariffs. What’s happening is pretty obvious though.

Trump chose a pretty aggressive negotiation approach. But it was obvious from minute 1 that whatever these tariffs rates were, they were meant as a starting point.

1/5 There is clearly a 10% universal line in the sand in his mind. Yes that’s a consumption tax. But the US needs to raise consumption taxes if it is to lower taxes on investment and savings. All those going up in arms are oblivious to this critical switch.

2/5

Most of what I am reading about tariffs is misguided. Here is a quick primer on how I understand what’s happening. Using the Casio.

1- I am convinced the calculus backed-up from a desired outcome both on an aggregate level and at country level in the case of China / EZ

1/10 Trump wanted to achieve $ 500 b in revenues and this current architecture achieves exactly this. It’s worse than any worst case + the formula looks wanky but that’s because they solved for a given revenue target. In Trump’s mind, it’s all about the starting $$ point

2/10

As expected this tweet launches the last and final round of admittance into Kittysquiddy, my locked account. I am writing this to explain what exactly is the purpose of the account and what we are looking for. Lezzzzgooooo
1/6 Beyond the obvious fact that kitty is where I share direct and timely insights into my own analysis, views and positioning, it is first and foremost a collective, a social system with it’s own balance and dynamic and my first priority is not to introduce anything alien to it
2/6

Time for a take-down. Believe many have paid attention to this hysterical tweet. Let’s break it down and see if DB is actually as sick as our friend here is claiming it to be.
1/4 1- DB is profitable and has over a third of it’s deposits insured. CS had 15% insured deposits and was pissing money
2- DB’s RoTBV is in line with Citi and better than SG
3- DB has no issues with mtm of it’s AFS and HTM portfolios as % of CET1
2/4

You’ve all seen this low lifer chime in with his usual indecency begging for a handout. Am sure everyone is interested in understanding his lowly motives. Here they are.
1/4 Ugly truth is that allocators, not banks, are the guys who will be getting deluged with capital calls now as liquidity dries up (VCs trying to triage their portfolios!)... on top of that a lot of Shit Valley loans were collateralized with their crap private stock...
2/4

Getting a ton of panicked DMs about risk of contagions given large drops in banks yesterday. Here are some thoughts. Every hiking cycle ends-up creating some banking stress. This one is no exception. Silvergate and SVB are the weakest links by the virtue of their asset base
1/4 But issues facing them are now common issues for the sector. After a long period of having too much deposits to the point of pushing them away, competition for deposits came all too quickly just as asset quality risks are surging and lending standards are being tightened.
2/4

Surprised no one asked the most obvious question: how did the #bigflip epiphany come to be? I mean before the data started to make it pretty obvious to me. Well, here’s how. I started to be puzzled by how naive the assumptions that market expectations were feeding on in Q4 23
1/4 Clearly this naivety was fed by narratives peddled by unsophisticated economists, journalists and investors. First level of naivety was to over-estimate the effects of the hiking cycle when private savings were so high. This was bluntly wrong to the naked eye.
2/4

Can I have everyone’s attention? What’s happening in Turkey is a humanitarian disaster of large proportions. We can’t sit here in our comfort and be indifferent. Death toll passed 11 K and collapsed building are of same magnitude. There are over 40 K S&R deployed.
1/3 We have pre-screened 3 non-religious well vetted charities that are doing a lot of impactful ground work. I am opening a RoaringMeows enrollment window through charity donations to any of these 3 charities. If you have benefited from my alpha, this is a good way to pay back
2/3

Current macro landscape is a landmine to read correctly, even for the most prescient. Big issue is that an unusually large sequence of exogenous and policy shocks and shifts in the last 3 years have created an unusually large cluster of various lags at almost every level.
1/4 Because most noise clusters around headlines, and because it takes a lot of tedious and granular work to understand the nature, and mostly duration of each lag, pretty much everyone is lost in translation. This is blurring the understanding of the current macro landscape.
2/4

We’re teetering on the edge of the new year and I was thinking about sharing something that could reach largest amount of audience to help in the festive preparations. So figured a wine thread to help everyone chose what to drink is fit for purpose. Let’s go
1/11 When you don’t know what to drink or what goes with what, here’s a tip: pop a bottle of Champagne. It goes well with a much broader spectrum of flavors than you might think. It is also a very vast world that you would be advised to invest time to discover.
2/11

Important: I want to address this absurd campaign of FUD. As you know a social medium is an important venue for many people, in various states of isolation and fragility, to connect. As you also know, I have a large following.
1/6

https://twitter.com/nytimes/status/1593586086000750592

More importantly, I have a large community of friends, about whom I care very deeply. Every one of them. And I know it’s important for them to remain connected to me and to others. I woke up at 5 am this morning to some really alarmist warnings of imminent Twitter breakdown.
2/6

Interesting summary from the one and only financials guru re $CS especially relevant with the stock price relief rally along and a 5Y CDS 30 bp easing. Here are some of my thoughts classified as : the good, the bad and the ugly. Let’s go!
1/7

https://twitter.com/jeuasommenulle/status/1577082887937015808

The good: There was no systemic stress, as advocated by myself and many, the collapse scenario was pure hysteria. This shrug was evidenced in the synthetic indices with a compression between Fin-Main yesterday, while all main were tighter.
2/7

I love the current Fintwit polarization between the usual know it all (nah 5Y CDS of 250 is a low default probability, this is just CVA desks buying protection) and the hysterical alarmists (CS is defaulting on Monday). And the funny thing is both groups have no fucking clue
1/5 Let’s start with latter. Risk of default is very low on CS (as is reflected in CDS curve) not because they are fine but because their potential capital hole is too small not to be manageable. There is no reasonable default scenario here. But there is lots of uncertainty
2/5

At a great cost and without any prior preparation or planning, EU has taken the advantage in it’s stand-off with Putin. Let me explain.

EU paid out € 43 b to Russia in energy imports between March and August. That literally bankrolled all their war budget.

1/6 By escalating it’s economic standoff through the threat of price caps, EU pushed Putin into the corner of the « nuclear option », namely shutting down NS1. That did hurt EU considerably as explained previously. But will also shave circa € 10 b from Russian coffers in 22.

2/5

Just to lift some of the confusion that’s been spread by cumlord takes in last few days. TTF DA drop reflected the build-up in storage. With NS1 running at 20%, models were indicating a continuation of the drop towards 170 €/mwh. By shutting down NS1 completely,
1/5 Putin did a very calculated move, as is often the case. As a result, the drop was halted and despite a 90% storage fill, it’s path going forward will be entirely a function of demand destruction measures. That said, current plans which will entail industrial shut-downs
2/5

To all the cumlordz claiming EZ energy crisis can be solved by having people freeze this winter, which is not only idiotic, but also misses the crux of the matter, here are some stats to focus minds:
1- Rising energy costs => insolvency proceeding were up 26% in DE in Aug

1/3 Source: IWH Economic Institute

2- More than 1/3 of German companies say their existence is under threat, up from 23% back in February.
Source: BDI survey of 593 companies conducted mid-Aug to early Sep.

2/3

Defeating Putin. The offensive.

After having gathered my état-major for a strategy session, we finalized our counter-offensive plans and launched the attack.

A thread.

1/N Gathering the troops

2/N