The SUM Report | QPOL Issue #14
"Stuff U Missed" - A Brief Summary of the Week's Top Events in Macro/Geopolitics
Truss Gets Sacked
Yellen Buy-Backs
Snider Has A Heart Attack
Bye-bye, Liz
As I mentioned on twitter, Davos just sacked the UK’s last pro-Brexit PM. Their WEF-backed troll will run the UK into the ground, try to force a false flag to cause WWIII & drag the US to fight it for them (as they’ve done in the past) forcing a Fed pivot. They’re that desperate.
Now there are even rumors of Boris Johnson getting back in charge. What’s clear is that the powers that be at Davos want to prevent any chance of Brexit from manifesting. Liz Truss’s reassignment and “resolution” of the UK’s “horrific budget “ of tax cuts was not and option for global commies. The UK will remain a piggy bank for the Davos to exploit and plunder as they sell it off to prop up the Euro. This is Confessions of an Economic Hit-Man strategy 101.
YELLEN
Wait, isn’t that just QE?
Nope. it’s the opposite. Similar, but different. It’s the opposite of QE because it’s the treasury performing this task, not the banks. QE is the banks swapping reserves for collateral, adding liquidity into the market.
What Yellen is proposing is an action by the Treasury Department. They issued them (the bonds) to the market in the first place. So in a way, it’s like Yellen and the treasury is saying,
“Yo here’s your money back. You don’t want that bond right now. Inflation is wild right now.”
So it’s almost like pre-MMT but the treasury handles it and not the Fed. Yellen is doing a end-run around the Fed by creating a Treasury mechanism of QE without the banks, and in effect manipulating the 10-year yield curve. This is yet another prime example of the division between Team Fed and Team Davos. The powers the be (global Davoc commies) are desperate for a Fed pivot and will try their damndest to get it one way or another.
SNIDER
Once again, Jeff Snider revealed his disingenuous and in denial take on LIBOR vs SOFR, and the longevity of his precious eurodollar system.
I only skimmed this video, but had to restrain from pulling my hair out when Jeff said that shadow banks didn’t even have/nor did they need reserves to “print” their infinite amount of dollars…
How the HELL can he say there are NO RESERVES in offshore banks when they’re being sucked into foreign Reverse Repo facilities (RRP)?? I mean, technically there now there might not be reserves in the banks because they went to RRP.
*Remember, Powell raising RRP rates 5 bips above FFR (Fed Funds Rate), gave banks and non-financial players the incentive to park reserves at these RRP facilities because nowhere else in the market could you get this much yield on your money.*
BASE MONEY (M 0) HAS FLED those banks into RRP because the FED RAISED RATES. I kept asking myself “is he just lying or am I missing something here?”
After an online discussion with some compatriots with experience in the markets, Jeff is simply lying through omission. In their own words, “there are no reserves of pristine collateral that would be utilized in eurodollar transactions besides banks & hedge funds hugging the RRP market like a tic.” And i couldn’t agree more.
There’s a reason why the US banks stopped accepting trashy euro-debt as collateral from foreign banks in exchange for reserves. This goes into collateral transformation that makes a junk Italian debt trade in the market place as 50-75 bip premium just as a German bund would. Now participants are saying no to it, and the triparty repo contracts are going default since the counter party can not get adequate collateral reserves to get dollars.
As I’ve mentioned before, the ODM and LIBOR markets are qickly drying up because people are as TL describers “Biblically short dollars” and want to trade and profit in something that is real (collateralized debt/SOFR). Davos is being bankrupt in real-time, and if I had to guess, so is Snider (or at least his Eurodollar thesis).
~ Phil Gibson