Chillin into "CANNABIS MAIN STREAM " 2022
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#JNUG: THE $USD IS PEAKING...115 SHOULD BE IT.......!
It looks like the U.S. #dollar rally is over. We just had another decisive outside reversal week in the U.S. Dollar Index, where the index traded above the previous week's high, then closed below the previous week's low. If so, U.S. #inflation is about to get much more painful.
— Peter Schiff (@PeterSchiff) October 21, 2022
#CANNABIS_NATION: FLYING LADY BOAT TOURS....
NEW COMPANY FOR THE NEW SEASON...2022 - 23
https://flyingladytours.com/
https://flyingladytours.com/contact/
https://flyingladytours.b-cdn.net/wp-content/uploads/2022/09/flying-lady-boat-tours-new-v2e-horizontal.png
#JNUG: Mike Maloney time...
#JNUG: GOLD MINERS HAVE THAT LOOK AGAIN..... $23.50
Last time this ratio chart had this kind of very large, red positive divergence, the massive bull in mining started.
It now has that look again.
#
Last time this ratio chart had this kind of very large, red positive divergence, the massive bull in mining started.
— Graddhy - Commodities TA+Cycles (@graddhybpc) October 21, 2022
It now has that look again.#gold #silver #platinum #palladium pic.twitter.com/kP1iicum5A
#DMAN: THE GHOSTS ARE ALL-OVER HERE... READY OR NOT...!
#MDMP: READY TO ROCKET... $0.034
#DMAN: INSIDERS LOADING... $0.0065
#CANNABIS_NATION: "LETS GO Brandon"
#BKRRF: TIME TO LOAD AGAIN.. $0.35
#DMAN: JUST WHEN YOU THINK ITS DEAD..... BOOM
#JNUG: LOADING AGAIN.... $25.23
#SQQQ: PETER SCHIFF KNOWS WHATS NEXT...!
#DFCO: BIN THERE AWHILE NOW... 0.10
#DFCO: LOOKING FOR GREAT NEWS THIS WEEK...!
#CANNABIS_NATION: #SQQQ: $3.1 B LAST WEEK...$6.3 B THIS WEEK...SNB....!
https://www.zerohedge.com/markets/cue-dollar-squeeze-panic-fed-sends-record-63-billion-switzerland-swap-line
Cue Dollar Squeeze Panic: Fed Sends A Record $6.3 Billion To Switzerland Via Swap Line
BY TYLER DURDEN
FRIDAY, OCT 14, 2022 - 01:42 PM
BofA Chief Investment Strategist Michael Hartnett (whose latest weekly note we will dissect shortly) has a favorite saying for when critical phase (to avoid the most hated word in the world "paradigm") shifts take place in the market, one which may be the only word a trader in this day and age needs (or rather hopes for): "Markets stop panicking when central banks start panicking."
So in what may be the best news to shellshocked bulls after the worst September and worst Q3 in generations, in a harrowing year for markets, and on a Friday which is set to reverse much of yesterday's historic intraday reversal, the 5th biggest on record, central banks are starting to panic more with every passing day. First it was the BOJ, then the BOE and now, for the second week in a row, it's Switzerland's turn.
Recall that three weeks ago after the (first) panicked pivot by the BOE, when global markets were in freefall, we said that markets desperately needed some words of encouragement from the Fed, or failing that - and with the dollar soaring to new all time highs every day - the Fed had to make some pre-emptive announcement on USD Fx swap lines, if only to reassure global markets that amid this historic, US dollar short squeeze, at least someone can and will print as many as are needed to avoid systemic collapse.
Fed has to issue FX swap line press release before open
— zerohedge (@zerohedge) September 26, 2022
So fast forward two weeks to October 5, when there still hasn't been any formal announcement from the Fed, but ever so quietly the Fed shuttled $3.1 billion to the Swiss National Bank to cover an emergency dollar shortfall, as we first reported a few days ago.
Remarkably, this was the first time the Fed sent dollars to the SNB this year, and the first time the Fed used the swap line in size (besides a token amount to the ECB every now and then)!
But it certainly won't be the last time - as we have warned, expect far wider use of Fed swap line usage as the world chokes on the global dollar shortage - and sure enough overnight the Fed announced that as of Thursday it doubled the size of its USD swap with the world's most pristine economy and its central bank, the Swiss National Bank, sending some $6.27 billion to avoid an emergency funding crunch.
Remarkably, this was only the second time the Fed sent dollars to the SNB this year, and was also the largest single USD swap transfer in history!
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SNB%20swaps%2010.14.jpg?itok=iJje8lvQ
The next logical question obviously is: why does Switzerland have a financial institution needing a record $6.3 billion in cheap (3.33%) overnight funding for the second week in a row. We don't know the answer, but have a pretty good idea of who the culprit may be courtesy of Goldman which earlier this week issued the following note:
And speaking of the coming crisis, recall what we said at the start of September: the coming Fed pivot will have nothing to do with whether the Fed hits or doesn't hit its inflation target, and everything to do with the devastation unleashed by the soaring dollar (a record margin call to the tune of some $20 trillion) on the rest of the world.
And speaking of the coming crisis, recall what we said at the start of September: the coming Fed pivot will have nothing to do with whether the Fed hits or doesn't hit its inflation target, and everything to do with the devastation unleashed by the soaring dollar (a record margin call to the tune of some $20 trillion) on the rest of the world.
BBG dollar index 1300, back over covid panic highs, and new record as dollar margin call sweeps emerging markets. Pivot will not come from "inflation target is hit" but from devastation across ROW pic.twitter.com/C3h15bko0B
— zerohedge (@zerohedge) September 1, 2022
Today, none other than Bob Michele, the outspoken chief investment officer of J.P. Morgan Asset Management, told everyone that we were right: as paraphrased by Bloomberg, Bob said "the relentless dollar could forge a path to the next market upheaval."
Michele has been in de-risking mode, sitting on a pile of cash which is near the highest level he has held in 10 years. And he is long the dollar. While a market crisis sparked by the greenback is not his base case, it’s a tail risk that he is monitoring closely.
Here’s how it could happen: Foreigners have snapped up dollar-denominated assets for higher yields, safety, and a brighter earnings outlook than most markets. A big chunk of those purchases are hedged back into local currencies such as the euro and the yen through the derivatives market, and it involves shorting the dollar. When the contracts roll, investors have to pay up if the dollar moves higher. That means they may have to sell assets elsewhere to cover the loss.
“I get concerned that a much stronger dollar will create a lot of pressure, particularly in hedging US dollar assets back to local currencies,” Michele said in an interview. “When the central bank steps on the brakes, something goes through the windshield. The cost of financing has gone up and it will create tension in the system."
The market probably saw some of that pressure already: as we noted at the time, investment-grade credit spreads spiked close to 20 basis points toward the end of September. That’s coincidental with a lot of currency hedges rolling over at the end of the third quarter, he said -- and it may be just “the tip of an iceberg.”
So far so good: and where we agree especially with Michele is what he thinks happens next: as Bloomberg writes, "the central bank will be so committed to combating inflation that it will keep raising rates and won’t pause or reverse course unless something really bad happens to markets or the economy, or both. If policy makers pause in response to market functionality, there has to be such a shock to the system that it creates potential insolvencies. And a rising dollar might do just that."
And the fact that the Fed is already quietly shuttling billions of dollars to various central banks to plug dollar overnight funding holes, confirms that the rising dollar has already done just that. One look at the meltup in FRA-OIS is enough confirmation.
As for what happens next, we suggest that you i) quietly panic if you are still short USD, which so many since at last check (which was March 2020) JPMorgan calculated that the global dollar short was $12 trillion, some 60% of US GDP, a number which has conservatively grown to about $20 trillion as of today...
... and ii) keep a very close eye on this particular hotel.
https://investorshub.advfn.com/uimage/uploads/2022/9/28/vostsagoura_bull_horns_whitehouse.jpg
#SQQQ: $3.1 Bil. LAST WEEK...$6.3 Bil. THIS WEEK...SNB....!
https://www.zerohedge.com/markets/cue-dollar-squeeze-panic-fed-sends-record-63-billion-switzerland-swap-line
Cue Dollar Squeeze Panic: Fed Sends A Record $6.3 Billion To Switzerland Via Swap Line
BY TYLER DURDEN
FRIDAY, OCT 14, 2022 - 01:42 PM
BofA Chief Investment Strategist Michael Hartnett (whose latest weekly note we will dissect shortly) has a favorite saying for when critical phase (to avoid the most hated word in the world "paradigm") shifts take place in the market, one which may be the only word a trader in this day and age needs (or rather hopes for): "Markets stop panicking when central banks start panicking."
So in what may be the best news to shellshocked bulls after the worst September and worst Q3 in generations, in a harrowing year for markets, and on a Friday which is set to reverse much of yesterday's historic intraday reversal, the 5th biggest on record, central banks are starting to panic more with every passing day. First it was the BOJ, then the BOE and now, for the second week in a row, it's Switzerland's turn.
Recall that three weeks ago after the (first) panicked pivot by the BOE, when global markets were in freefall, we said that markets desperately needed some words of encouragement from the Fed, or failing that - and with the dollar soaring to new all time highs every day - the Fed had to make some pre-emptive announcement on USD Fx swap lines, if only to reassure global markets that amid this historic, US dollar short squeeze, at least someone can and will print as many as are needed to avoid systemic collapse.
Fed has to issue FX swap line press release before open
— zerohedge (@zerohedge) September 26, 2022
So fast forward two weeks to October 5, when there still hasn't been any formal announcement from the Fed, but ever so quietly the Fed shuttled $3.1 billion to the Swiss National Bank to cover an emergency dollar shortfall, as we first reported a few days ago.
Remarkably, this was the first time the Fed sent dollars to the SNB this year, and the first time the Fed used the swap line in size (besides a token amount to the ECB every now and then)!
But it certainly won't be the last time - as we have warned, expect far wider use of Fed swap line usage as the world chokes on the global dollar shortage - and sure enough overnight the Fed announced that as of Thursday it doubled the size of its USD swap with the world's most pristine economy and its central bank, the Swiss National Bank, sending some $6.27 billion to avoid an emergency funding crunch.
Remarkably, this was only the second time the Fed sent dollars to the SNB this year, and was also the largest single USD swap transfer in history!
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SNB%20swaps%2010.14.jpg?itok=iJje8lvQ
The next logical question obviously is: why does Switzerland have a financial institution needing a record $6.3 billion in cheap (3.33%) overnight funding for the second week in a row. We don't know the answer, but have a pretty good idea of who the culprit may be courtesy of Goldman which earlier this week issued the following note:
And speaking of the coming crisis, recall what we said at the start of September: the coming Fed pivot will have nothing to do with whether the Fed hits or doesn't hit its inflation target, and everything to do with the devastation unleashed by the soaring dollar (a record margin call to the tune of some $20 trillion) on the rest of the world.
And speaking of the coming crisis, recall what we said at the start of September: the coming Fed pivot will have nothing to do with whether the Fed hits or doesn't hit its inflation target, and everything to do with the devastation unleashed by the soaring dollar (a record margin call to the tune of some $20 trillion) on the rest of the world.
BBG dollar index 1300, back over covid panic highs, and new record as dollar margin call sweeps emerging markets. Pivot will not come from "inflation target is hit" but from devastation across ROW pic.twitter.com/C3h15bko0B
— zerohedge (@zerohedge) September 1, 2022
Today, none other than Bob Michele, the outspoken chief investment officer of J.P. Morgan Asset Management, told everyone that we were right: as paraphrased by Bloomberg, Bob said "the relentless dollar could forge a path to the next market upheaval."
Michele has been in de-risking mode, sitting on a pile of cash which is near the highest level he has held in 10 years. And he is long the dollar. While a market crisis sparked by the greenback is not his base case, it’s a tail risk that he is monitoring closely.
Here’s how it could happen: Foreigners have snapped up dollar-denominated assets for higher yields, safety, and a brighter earnings outlook than most markets. A big chunk of those purchases are hedged back into local currencies such as the euro and the yen through the derivatives market, and it involves shorting the dollar. When the contracts roll, investors have to pay up if the dollar moves higher. That means they may have to sell assets elsewhere to cover the loss.
“I get concerned that a much stronger dollar will create a lot of pressure, particularly in hedging US dollar assets back to local currencies,” Michele said in an interview. “When the central bank steps on the brakes, something goes through the windshield. The cost of financing has gone up and it will create tension in the system."
The market probably saw some of that pressure already: as we noted at the time, investment-grade credit spreads spiked close to 20 basis points toward the end of September. That’s coincidental with a lot of currency hedges rolling over at the end of the third quarter, he said -- and it may be just “the tip of an iceberg.”
So far so good: and where we agree especially with Michele is what he thinks happens next: as Bloomberg writes, "the central bank will be so committed to combating inflation that it will keep raising rates and won’t pause or reverse course unless something really bad happens to markets or the economy, or both. If policy makers pause in response to market functionality, there has to be such a shock to the system that it creates potential insolvencies. And a rising dollar might do just that."
And the fact that the Fed is already quietly shuttling billions of dollars to various central banks to plug dollar overnight funding holes, confirms that the rising dollar has already done just that. One look at the meltup in FRA-OIS is enough confirmation.
As for what happens next, we suggest that you i) quietly panic if you are still short USD, which so many since at last check (which was March 2020) JPMorgan calculated that the global dollar short was $12 trillion, some 60% of US GDP, a number which has conservatively grown to about $20 trillion as of today...
... and ii) keep a very close eye on this particular hotel.
https://investorshub.advfn.com/uimage/uploads/2022/9/28/vostsagoura_bull_horns_whitehouse.jpg
#DMAN: LOOK AT THAT 600K BID AT $0.0049....! go cuckoo
THAT WOULD BE THE DOUBLE BOTTOM....
#DFCO:.......TGIF.......$0.09....
#DMAN: THE PROMISE OF RICHES DOES Exist....$$$$$ $0.0014 - $ 0.0423...
#DMAN:...... $TGIF...... $0.006 ....ANY DAY NOW...!
#KOS: Kosmos Energy Provides Further Update on Greater Tortue Ahmeyim FPSO $5.63
https://www.kosmosenergy.com/
https://pbs.twimg.com/profile_images/2226982413/kosmos-twitter1__4__400x400.jpg
09/27/22 06:00 GMT
PDF Version
DALLAS--(BUSINESS WIRE)--Sept. 27, 2022-
Kosmos Energy (NYSE/LSE: KOS) (“Kosmos” or the “Company”) reported on September 15, 2022 that the floating production, storage and offloading vessel (“FPSO”) for the Greater Tortue Ahmeyim project (“GTA”) had drifted approximately 200 meters off the quayside following the impact of Typhoon Muifa.
Kosmos has been informed by BP, the operator of the GTA project, that the FPSO has been returned to the quayside of the COSCO shipyard in China.
Inspections conducted to date have not identified any significant damage. The forward plan is to complete all inspections and incorporate the findings into the remaining work scope prior to sailaway. Kosmos will give a further project update alongside its third quarter results in early November.
About Kosmos Energy
Kosmos is a full-cycle deepwater independent oil and gas exploration and production company focused along the Atlantic Margins. Our key assets include production offshore Ghana, Equatorial Guinea and U.S. Gulf of Mexico, as well as a world-class gas development offshore Mauritania and Senegal. Kosmos is listed on the New York Stock Exchange and London Stock Exchange and is traded under the ticker symbol KOS. As an ethical and transparent company, Kosmos is committed to doing things the right way. The Company’s Business Principles articulate our commitment to transparency, ethics, human rights, safety and the environment. Read more about this commitment in our Corporate Responsibility Report. For additional information, visit www.kosmosenergy.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Kosmos expects, believes or anticipates will or may occur in the future are forward-looking statements. Kosmos’ estimates and forward-looking statements are mainly based on its current expectations and estimates of future events and trends, which affect or may affect its businesses and operations. Although Kosmos believes that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to Kosmos. When used in this press release, the words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will” or other similar words are intended to identify forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Kosmos, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Further information on such assumptions, risks and uncertainties is available in Kosmos’ Securities and Exchange Commission (“SEC”) filings. Kosmos undertakes no obligation and does not intend to update or correct these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except as required by applicable law. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.
Management does not provide a reconciliation for forward looking non GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of our control or cannot be reasonably predicted. For the same reasons, management is unable to address the probable significance of the unavailable information. Forward looking non GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
https://investors.kosmosenergy.com/news-releases/news-release-details/kosmos-energy-provides-further-update-greater-tortue-ahmeyim
#KOS: https://www.kosmosenergy.com/
https://www.stockscores.com/chart.asp?TickerSymbol=KOS&TimeRange=180&Interval=d&Volume=1&ChartType=CandleStick&Stockscores=1&ChartWidth=1100&ChartHeight=480&LogScale=&Band=&avgType1=&movAvg1=&avgType2=&movAvg2=&Indicator1=None&Indicator2=None&Indicator3=None&Indicator4=None&endDate=&CompareWith=&entryPrice=&stopLossPrice=&candles=redgreen
#MDMP: Peacock oil and gas well.... $0.03
https://www.mdmpermian.com/
https://www.nutechenergy.com/
https://www.nutechenergy.com/images/masthead_logo_nutech.png
https://www.otcmarkets.com/stock/MDMP/news/MDM-Permian-Inc-Acquires-Well-Interests-and-Drilling-Locations-for-Its-Operational-Subsidiary?id=317824
The company has also entered negotiations for a 320-acre lease in Jack County, Texas, with a producing gas well. This well also has behind pipe potential and will be evaluated by our engineering partner, NuTech Energy, for future development.
MDM Permian, Inc. Acquires Well Interests and Drilling Locations for Its Operational Subsidiary
Press Release | 08/24/2021
Carrollton, Texas, Aug. 24, 2021 (GLOBE NEWSWIRE)
-- MDM Permian Inc. (OTC Pink: MDMP) today has announced continued good news and advances in our overall business plan in the Permian Basin with the transfer of assets to MDM Energy, Inc.
“Today we have received the executed P-4’s for the transfer of the Peacock oil and gas well in Wise County and the Brown Lease in Nolan County.” Stated Michael L. Rafael, President and CEO.
The Peacock well is a gas well that also produces a small amount of oil from the Conglomerate/Barnett Shale. NuTech will be analyzing the logs for the best procedures to increase production.
The 308-acre Brown lease has 2 oil wells. Both have been evaluated by NuTech Energy, and we have identified an overlooked Strawn section at a depth of 6314 ft. in the Brown #1. We have designed a frac for this well based on several computer simulations, the slick water frac is proving to be the most effective for this zone and the job is out for bid. NuTech simulations indicate a 100 BOPD initial production rate with the possibility of 220,000 barrels of production over the life of the well.
MDM Permian, Inc. will be the beneficiary of the immediate offset locations of this well at a 75% net W.I. MDMP will also have 1/8th carried working interest in the Brown #1 and #1-A.
The company has also entered negotiations for a 320-acre lease in Jack County, Texas, with a producing gas well. This well also has behind pipe potential and will be evaluated by our engineering partner, NuTech Energy, for future development.
About MDM Permian, Inc.:
Based in Carrolton, Texas, MDM Permian, Inc. is a publicly traded energy company with interests in oil and natural gas wells, mineral prospects. The Company’s business plan includes building value through reserves and production in the Permian Basin of Texas. MDM Energy, Inc. (the wholly owned operating subsidiary of MDM Permian, Inc.), has been actively involved in the oil and gas industry since 1981 with offices located in Carrolton, Texas. Michael Rafael has 40 years of experience in the oil and gas industry, serving as founder, President and Chief Executive Officer of MDM Energy, Inc.(“MDM”).
Mr. Rafael has been directly involved in the drilling, completion, and operation of over 300 oil and gas projects, primarily in the Illinois Basin, and directly supervises and oversees field operations. Mr. Rafael works directly with contract geologists, petroleum engineers and geophysicists from start to finish.
For more information about the company, please visit https://www.mdmenergy.com Follow us on Twitter: https://twitter.com/mdmpermian
Safe Harbor Act: This release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involves risks and uncertainties including, but not limited to, the impact of competitive products, the ability to meet customer demand, the ability to manage growth, acquisitions of technology, equipment, or human resources, the effect of economic business conditions and the ability to attract and retain skilled personnel. The Company is not obligated to revise or update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
For additional information, view the company’s website at www.mdmpermian.com or contact MDM Permian, Inc. at (214) 651-9900.
#CCWF: ON SALE TODAY... $0.009
#DMAN: LITTLE LOW VOLUME LOVE TODAY...
#AGQ: $19 HANDLE MAKES ME HAPPY...
#CANNABIS_NATION: $SQQQ: Funding Panic Imminent? Fed Quietly Sends $3.1 Billion To Switzerland Via Swap Line....!
https://www.zerohedge.com/markets/funding-panic-imminent-fed-quietly-sends-31-billion-switzerland-swap-line
The next logical question obviously is: why does Switzerland suddenly have a financial institution needing $3 billion in cheap (3.33%) overnight funding. We don't know the answer, but have a pretty good idea of who the culprit may be.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/CS%20sell%20options.jpg?itok=Abz8LX9F
BY TYLER DURDEN
TUESDAY, OCT 11, 2022 - 03:34 PM
BofA Chief Investment Strategist Michael Hartnett has a favorite markets phrase that may be the only one a trader in this day and age needs: "Markets stop panicking when central banks start panicking."
Well, in what may be the best news to shellshocked bulls after the worst September and worst Q3 in generations, in a harrowing year for markets, central banks are starting to panic. First it was the BOJ, then the BOE and now, it's Switzerland's turn.
Two weeks ago after the (first) panicked pivot by the BOE, when global markets were in freefall, we said that markets desperately needed some words of encouragement from the Fed, or failing that - and with the dollar soaring to new all time highs every day - the Fed had to make some pre-emptive announcement on USD Fx swap lines, if only to reassure global markets that amid this historic, US dollar short squeeze, at least someone can and will print as many as are needed to avoid systemic collapse.
Fed has to issue FX swap line press release before open
— zerohedge (@zerohedge) September 26, 2022
Fast forward two weeks when there still hasn't been any formal announcement from the Fed, but every so quietly - and just as we expected - the Fed shuttled $3.1 billion to the Swiss National Bank to cover an emergency dollar shortfall.
Remarkably, this was the first time the Fed sent dollars to the SNB this year, and the first time the Fed used the swap line in size (besides a token amount to the ECB every now and then)!
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SNB%20swap%20line.jpg?itok=ekGhaiNL
And speaking of the coming crisis, recall what we said at the start of September: the coming Fed pivot will have nothing to do with whether the Fed hits or doesn't hit its inflation target, and everything to do with the devastation unleashed by the soaring dollar (a record margin call to the tune of some $20 trillion) on the rest of the world.
BBG dollar index 1300, back over covid panic highs, and new record as dollar margin call sweeps emerging markets. Pivot will not come from "inflation target is hit" but from devastation across ROW pic.twitter.com/C3h15bko0B
— zerohedge (@zerohedge) September 1, 2022
Today, none other than Bob Michele, the outspoken chief investment officer of J.P. Morgan Asset Management, told everyone that we were right: as paraphrased by Bloomberg, Bob said "the relentless dollar could forge a path to the next market upheaval."
Michele has been in de-risking mode, sitting on a pile of cash which is near the highest level he has held in 10 years. And he is long the dollar. While a market crisis sparked by the greenback is not his base case, it’s a tail risk that he is monitoring closely.
Here’s how it could happen: Foreigners have snapped up dollar-denominated assets for higher yields, safety, and a brighter earnings outlook than most markets. A big chunk of those purchases are hedged back into local currencies such as the euro and the yen through the derivatives market, and it involves shorting the dollar. When the contracts roll, investors have to pay up if the dollar moves higher. That means they may have to sell assets elsewhere to cover the loss.
“I get concerned that a much stronger dollar will create a lot of pressure, particularly in hedging US dollar assets back to local currencies,” Michele said in an interview. “When the central bank steps on the brakes, something goes through the windshield. The cost of financing has gone up and it will create tension in the system."
The market probably saw some of that pressure already: as we noted at the time, investment-grade credit spreads spiked close to 20 basis points toward the end of September. That’s coincidental with a lot of currency hedges rolling over at the end of the third quarter, he said -- and it may be just “the tip of an iceberg.”
So far so good: and where we agree especially with Michele is what he thinks happens next: as Bloomberg writes, "the central bank will be so committed to combating inflation that it will keep raising rates and won’t pause or reverse course unless something really bad happens to markets or the economy, or both. If policy makers pause in response to market functionality, there has to be such a shock to the system that it creates potential insolvencies. And a rising dollar might do just that."
And the fact that the Fed is already quietly shuttling billions of dollars to various central banks to plug dollar overnight funding holes, confirms that the rising dollar has already done just that.
#SQQQ: Funding Panic Imminent? Fed Quietly Sends $3.1 Billion To Switzerland Via Swap Line....!
https://www.zerohedge.com/markets/funding-panic-imminent-fed-quietly-sends-31-billion-switzerland-swap-line
The next logical question obviously is: why does Switzerland suddenly have a financial institution needing $3 billion in cheap (3.33%) overnight funding. We don't know the answer, but have a pretty good idea of who the culprit may be.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/CS%20sell%20options.jpg?itok=Abz8LX9F
BY TYLER DURDEN
TUESDAY, OCT 11, 2022 - 03:34 PM
BofA Chief Investment Strategist Michael Hartnett has a favorite markets phrase that may be the only one a trader in this day and age needs: "Markets stop panicking when central banks start panicking."
Well, in what may be the best news to shellshocked bulls after the worst September and worst Q3 in generations, in a harrowing year for markets, central banks are starting to panic. First it was the BOJ, then the BOE and now, it's Switzerland's turn.
Two weeks ago after the (first) panicked pivot by the BOE, when global markets were in freefall, we said that markets desperately needed some words of encouragement from the Fed, or failing that - and with the dollar soaring to new all time highs every day - the Fed had to make some pre-emptive announcement on USD Fx swap lines, if only to reassure global markets that amid this historic, US dollar short squeeze, at least someone can and will print as many as are needed to avoid systemic collapse.
Fed has to issue FX swap line press release before open
— zerohedge (@zerohedge) September 26, 2022
Fast forward two weeks when there still hasn't been any formal announcement from the Fed, but every so quietly - and just as we expected - the Fed shuttled $3.1 billion to the Swiss National Bank to cover an emergency dollar shortfall.
Remarkably, this was the first time the Fed sent dollars to the SNB this year, and the first time the Fed used the swap line in size (besides a token amount to the ECB every now and then)!
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SNB%20swap%20line.jpg?itok=ekGhaiNL
And speaking of the coming crisis, recall what we said at the start of September: the coming Fed pivot will have nothing to do with whether the Fed hits or doesn't hit its inflation target, and everything to do with the devastation unleashed by the soaring dollar (a record margin call to the tune of some $20 trillion) on the rest of the world.
BBG dollar index 1300, back over covid panic highs, and new record as dollar margin call sweeps emerging markets. Pivot will not come from "inflation target is hit" but from devastation across ROW pic.twitter.com/C3h15bko0B
— zerohedge (@zerohedge) September 1, 2022
Today, none other than Bob Michele, the outspoken chief investment officer of J.P. Morgan Asset Management, told everyone that we were right: as paraphrased by Bloomberg, Bob said "the relentless dollar could forge a path to the next market upheaval."
Michele has been in de-risking mode, sitting on a pile of cash which is near the highest level he has held in 10 years. And he is long the dollar. While a market crisis sparked by the greenback is not his base case, it’s a tail risk that he is monitoring closely.
Here’s how it could happen: Foreigners have snapped up dollar-denominated assets for higher yields, safety, and a brighter earnings outlook than most markets. A big chunk of those purchases are hedged back into local currencies such as the euro and the yen through the derivatives market, and it involves shorting the dollar. When the contracts roll, investors have to pay up if the dollar moves higher. That means they may have to sell assets elsewhere to cover the loss.
“I get concerned that a much stronger dollar will create a lot of pressure, particularly in hedging US dollar assets back to local currencies,” Michele said in an interview. “When the central bank steps on the brakes, something goes through the windshield. The cost of financing has gone up and it will create tension in the system."
The market probably saw some of that pressure already: as we noted at the time, investment-grade credit spreads spiked close to 20 basis points toward the end of September. That’s coincidental with a lot of currency hedges rolling over at the end of the third quarter, he said -- and it may be just “the tip of an iceberg.”
So far so good: and where we agree especially with Michele is what he thinks happens next: as Bloomberg writes, "the central bank will be so committed to combating inflation that it will keep raising rates and won’t pause or reverse course unless something really bad happens to markets or the economy, or both. If policy makers pause in response to market functionality, there has to be such a shock to the system that it creates potential insolvencies. And a rising dollar might do just that."
And the fact that the Fed is already quietly shuttling billions of dollars to various central banks to plug dollar overnight funding holes, confirms that the rising dollar has already done just that.
#DMAN: BACK ON THE BUZZ CLOUD...
https://investorshub.advfn.com/boards/tcloud.aspx?i=1