Global market mechanics. Male. STIR & market plumbing. Serious works can be found via https://t.co/s5n2gkwveT. Writing a (hand)book. Not financial advice.
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Apr 20 • 30 tweets • 8 min read
Following multiple market panics, officials have enacted their latest plan to strengthen the U.S. repo market. This will not only rewire its plumbing but also relocate trillions of dollars in highly leveraged trades. The Repo Market Exodus™ has now commenced... 1/
Upon announcing various deadlines on December 23rd, 2023, America's regulatory establishment has enforced rules to not only fortify the U.S. Treasury market but every other market that could threaten its stability...
The shift to a secured monetary standard is now complete, with trillions in dollar loans priced using rates in the repo market. But after multiple mishaps, the secured standard has proven faulty. With leaders vowing to fix its flaws, the Repo Market Rewire™ is approaching... 1/
On December 13th, 2023, U.S. monetary officials announced sweeping changes to the Treasury market, not only to strengthen America’s sovereign debt goliath but enhance its major liquidity greaser: the repurchase agreements market, or “repo” for short...
After a year of neutralizing losses on banks’ underwater assets, the Federal Reserve’s BTFP is about to expire. But the U.S. central bank is not only about to commence an “emergency phaseout”. It's about to devise the latest version of its primary rescue mechanism... 1/
In March 2023, the remnants of COVID-19's speculative boom came back to haunt the banks and monetary leaders that enabled it. The failure of Fed officials and Silicon Valley Bank (SVB) executives to address the risks of holding vast amounts of flighty deposits ended in crisis...
Jan 9 • 30 tweets • 6 min read
After numerous episodes, monetary leaders have unveiled measures to fortify the U.S. Treasury market. The internals of the most systemically important market, already undergoing rapid change, will once again transform. The Treasury Market Evolution™ is about to begin... 1/
In the mid-2000s, the complexity of the secondary Treasury market was almost nonexistent. Major dealers dominated volumes in the interdealer segment, where they traded among themselves, while distributing most of the liquidity to clients in the dealer-to-customer region...
The excess cash era is ending, with trillions of reserves once trapped in the Fed's RRP being deployed into financial assets and the banking system. As the RRP hits zero, the status quo in repo markets will transform. The return to an "excess collateral" era awaits us... 1/
In April 2021, the Federal Reserve began unwinding measures that enabled its largest monetary expansion on record. During the COVID-19 panic, the Fed allowed banks to absorb vast flows from QE by exempting reserves and Treasuries from its SLR (Supplementary Leverage Ratio)...
Oct 31, 2023 • 35 tweets • 7 min read
After decades of enabling runaway speculation, Chinese leaders have deflated a once-giant shadow banking system without widespread turmoil. But as the global economy begins to stall, China’s elite may encounter a resurgence of monetary alchemy in the shadows... 1/
On the 15th of September, 2008, Lehman Brothers collapsed, revealing the most intricate network of financial instruments ever assembled. Decades of hidden experimentation in America’s banking golden age had risen to the surface. The U.S. shadow banking system was unveiled...
Oct 14, 2023 • 30 tweets • 7 min read
While rumors of the dollar losing its dominance have been spreading quickly, behind the scenes, monetary leaders have been taking steps to strengthen its global hegemony. Now, with the Fed’s Final Frontier™ in operation, the dollar’s grip has grown stronger than ever... 1/
Since the Great Financial Crisis (GFC) of 2008, the Federal Reserve has operated a system, not built on sound pre-planning, but on its reaction to a seemingly endless number of crises in increasingly complex markets...
Oct 4, 2023 • 30 tweets • 8 min read
Despite the Federal Reserve’s stealth easing programs persisting, dollar strength has begun to accelerate. Yet as liquidity drains, the world's response will not be to de-dollarize but to seek more dollar liquidity. The Fed’s global swap network is set to expand... 1/
Back in 2019, before the Fed unleashed trillions of dollars to stem COVID fears, global markets had entered a lengthy “excess collateral” era. The Fed’s RRP (reverse repo) facility, a shock absorber for excess cash and the defacto measure of surplus liquidity, lay empty...
Monetary giants have united to transform the largest, most opaque financial system on the planet: the market for foreign exchange. This has not only reduced the power of dominant players but rewired the global monetary plumbing. The FX Market Evolution™ is here... 1/
In early 2017, shortly after joining forces to create the GFXC (Global Foreign Exchange Committee), monetary authorities and global financial giants unveiled a new prototype for the $7.5 trillion-a-day FX market...
A risky, elaborate trade, one infamous for blowing up everytime, is growing in popularity in the world’s most systemic bond market. When turmoil inevitably emerges, only the Fed’s volatility suppressor can come to the rescue. The Treasury Market Unwind™ is looming... 1/
Early in 2018, a series of events formed an exploit in America’s sovereign debt market. After large U.S. Treasury issuance, a fall in foreign demand, and regulatory changes, asset managers began to shift out of Treasuries and into long positions of associated Treasury futures...
Sep 3, 2023 • 29 tweets • 7 min read
The most significant shift in global finance is almost complete. By moving onto a secured standard, monetary leaders have tried to destroy systemic risk. But risk has only been transferred, not eliminated. The Fed's Volatility Suppressor™ is about to be unleashed... 1/
After the subprime bubble burst in 2008, a paradigm shift in banking unfolded. While banks no longer wanted to lend to each other or take excessive risk, the global regulatory complex set out to prevent a repeat of the crisis. The death of the unsecured standard had commenced...
After easing financial conditions via a series of covert actions, monetary leaders can no longer pretend to tighten. The dark side of Quantitative Tightening (QT) has been unleashed, not by the Fed itself, but by the U.S. Treasury. The Stealth Liquidity Squeeze™ is here... 1/
In early winter at the start of 2022, the Federal Reserve announced it was undertaking the monumental task of unwinding its $9 trillion balance sheet. The U.S. central bank’s second Quantitative Tightening (QT) program had officially commenced...
Jul 25, 2023 • 34 tweets • 8 min read
Monetary leaders are about to uncover the inner workings of an obscure $2 trillion market, the most opaque ecosystem within the U.S. dollar funding complex. This, however, is not the much-hyped Eurodollar system. The Repo Market Blindspot™ is about to be unveiled... 1/
In the midst of the 2008 crisis, the Fed and the U.S. Treasury received an abrupt wake-up call. The failure of Lehman Brothers started a run in every major market for dollars, from FX swaps to money market funds to commercial paper, not only onshore but globally...
Jul 5, 2023 • 29 tweets • 7 min read
After neutralizing trillions in excess liquidity, the Fed’s “shock absorber” has begun to decompress. $2 trillion stored in the RRP is trying to re-enter the banking system, further threatening the US central bank's tightening stance. The Fed's Plumbing Dilemma™ is here... 1/
As Conks anticipated last month, the U.S. central bank’s inaction and silence around its longstanding hawkish stance has caused equities to soar further, while bond yields and the U.S. dollar have unexpectedly (to most) continued to rebound...
The liquidity drain has begun, with hundreds of billions in reserves set to leave the system. But this reduction could not only fail to subdue risk assets. A squeeze in a covert market will allow the Fed to ease, again without a pivot. The Repo Market Put™ awaits us... 1/
Recently, we've witnessed the full effect of a "Transitory Pause", where the Fed's silence and inaction to tighten has caused the financial machine to send risk assets soaring. The "TGA refill" has failed to bring down the most hated rally in history. More tightening is needed...
The most anticipated liquidity drain from markets is here, with many headlines foreseeing turbulence ahead. Yet, its effects might not deliver the impact many believe. Hidden forces have emerged, acting against a liquidity squeeze. The “Transitory Pause” is here... 1/
After an epic rise in stock prices in the first half of 2023, investors are wondering if the second half will produce the opposite outcome. A liquidity-fueled rally has driven the S&P500 up 12% so far this year. But now, the next significant "liquidity drain" is about to begin...
May 25, 2023 • 39 tweets • 10 min read
The Great Sovereign Debt Intervention is here, with leaders now eager to prevent rising instability in America's bond market. Their tools, however, will not only prevent a calamity but stimulate risk assets without the aid of central banks. The "Treasury QE" era awaits us... 1/
After we warned last year about the growing dangers in the most systemically important market globally, America's sovereign bond market, monetary leaders have begun to react. The unintended consequences of past policies, regulations, and interventions can no longer be ignored...
The banking panic is almost over, yet the Fed has already resumed the Great Financial Tightening. This will not only induce another credit crunch but boost the Fed’s global presence. The Jaws of the Fed™ are about to be unleashed... 1/
The GFC (Great Financial Crisis) of 2007/08 transformed the global monetary system forever. Monetary leaders, along with financial giants, sculpted a new paradigm in which the U.S. empire would absorb any systemic risk, especially when it threatened the status quo...
Mar 30, 2023 • 41 tweets • 12 min read
The Great Financial Tightening has thrown the global monetary system into disarray, prompting large interventions by financial leaders. Markets perceived their response as a pivot, but it was just a stopgap. The real hard landing now awaits us... 1/
Ever since the great financial crisis in 2008, the system has been sculpted not by sound pre-planning of monetary policy, but by a series of experiments created during a myriad of crises. The response to the latest banking panic was just a taster of the Fed's financial alchemy...
Mar 19, 2023 • 43 tweets • 9 min read
An unreported battle has been brewing deep in the most critical market globally, a struggle for power within America's sovereign debt market. Now, after recent events, this battle is approaching its most critical moment... 1/
In December last year, Concoda warned about the rising hazards in the largest, yet most obscure, money market. An estimated $2 trillion or more in dollar loans had built up in the shadows, growing to become the most significant part of the repo market...
After the most euphoric January in recent history, hopes of a new bull market have arisen. But the latest market bonanza has set the stage for increased intervention. The Great Financial Tightening™ is about to begin... 1/
After a disastrous end to 2022 for risk assets, where tax-loss selling and worsening economic data fueled a sharp market selloff, the start to 2023 couldn't be more different. Buoyant economic data, enormous liquidity injections, and bullish narratives drove an epic meltup...
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