Nicks Tennti

Vol trader - Relative Value - Dispersion - Based in Switzerland 🇨🇭

[وزارة الدفاع |MOD UAE @modgovae]

كلمة معالي محمد بن مبارك بن فاضل المزروعي، وزير الدولة لشؤون الدفاع، بمناسبة عيد الأضحى المبارك.

[Becky Anderson @BeckyCNN]

“We will leave no stone unturned to make sure that we do defend ourselves,” UAE’s Minister of State for International Cooperation Reem Al Hashimy tells me after an unprecedented wave of attacks by Iran.

[Nicks Tennti @NicTennti]

@AnnaEconomist Don’t know where it’ll open, but this was on Friday, prior to the strikes…

[Peter Hague @peterrhague]

Nothing is quite as European as demanding that your emergency WW3 meeting must only occur during normal office hours.

[Chamath Palihapitiya @chamath]

Here is some additional data related to my comments…hopefully this helps the cope.

[tom keene @tomkeene]

tweet of the day

[Anna Wong @AnnaEconomist]

The massive downward revisions (-258k) are puzzling. Even as someone who long believes payrolls are overstated by massive amount, these downward revisions are anormay large outside of benchmark month or weather related events.

The downward revision are largest for state and local government, but also broad based.

So far we can rule out the following explanations:

1. Seasonal adjustment. The revisions are mostly NSA.

2. Collection rate of the survey. The collection rate not abnormally low and in fact higher than last year’s may to july.

3. Birth and death model revisions. But BD is for private payrolls not government. Plus the published page got BD shows estimates were unchanged.

Notably government payrolls are not connected from survey but from administrative data. Why the administrative data is missing by so much is a quandary.

[Ray Dalio @RayDalio]

Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur.

[Pentagon Pizza Report @PenPizzaReport]

The closest Papa John's and Pizza Hut to the Pentagon have both surged in traffic.

As of 9:02pm ET

[OSINTtechnical @Osinttechnical]

This is possibly the most insane national security story in the last 50 years. Includes a massive text chain between senior members of the Trump admin gaming out foreign policy and war plans on Signal, and they accidentally added a reporter to the group chat.

[. @jdpoc]

THIS IS MASSIVE.

Portugal has cancelled the order for F-35s from the US and will replace their F-16s with European fighters.

“We have to be able to count on the predictability of our allies, which is no longer the case with the United States."

[Lone Stock Trader @LoneStockTrader]

High achievers often find themselves struggling in #trading.

They’re usually very good at doing things where harder work produces better results.

They find themselves having to learn a completely new skill that’s outside of their frame of reference.
Just grinding and working extra hard doesn’t work anymore. Environment awareness, self awareness & patience are even more important.

[Nicks Tennti @NicTennti]

Quick follow up : the flight is now cancelled ! 😅 That will teach me… #AirFrance #Travel #Fail

[Nicks Tennti @NicTennti]

✈️ Thought l'd break my rule and fly Air France despite fears of delays and strikes. Snagged a low-cost ticket only for the flight to be rescheduled by more than 24 hours! 😅
Lesson learned? Sometimes our
prejudices have a point. #TravelFails #AirFrance

[Elon Musk @elonmusk]

View of the eclipse from orbit

[Nicks Tennti @NicTennti]

#Fed #NFP 🤷🏻‍♂️

[Nicks Tennti @NicTennti]

@gamma_vega @Ksidiii You’re buying a (almost) zero strike call, buying an “ATM” (spot) put and selling upside call.
Payoff is like a call spread BUT :
1) Because forward is higher, your cap is closer than you think
2) long story short, you’re paying 100 for something that is worth 99

[Bill Ackman @BillAckman]

The gov’t has about 48 hours to fix a-soon-to-be-irreversible mistake. By allowing @SVB_Financial to fail without protecting all depositors, the world has woken up to what an uninsured deposit is — an unsecured illiquid claim on a failed bank. Absent @jpmorgan @citi or @BankofAmerica acquiring SVB before the open on Monday, a prospect I believe to be unlikely, or the gov’t guaranteeing all of SVB’s deposits, the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs). These funds will be transferred to the SIBs, US Treasury (UST) money market funds and short-term UST. There is already pressure to transfer cash to short-term UST and UST money market accounts due to the substantially higher yields available on risk-free UST vs. bank deposits. These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these important institutions. The increased demand for short-term UST will drive short rates lower complicating the @federalreserve’s efforts to raise rates to slow the economy. Already thousands of the fastest growing, most innovative venture-backed companies in the U.S. will begin to fail to make payroll next week. Had the gov’t stepped in on Friday to guarantee SVB’s deposits (in exchange for penny warrants which would have wiped out the substantial majority of its equity value) this could have been avoided and SVB’s 40-year franchise value could have been preserved and transferred to a new owner in exchange for an equity injection. We would have been open to participating. This approach would have minimized the risk of any gov’t losses, and created the potential for substantial profits from the rescue. Instead, I think it is now unlikely any buyer will emerge to acquire the failed bank. The gov’t’s approach has guaranteed that more risk will be concentrated in the SIBs at the expense of other banks, which itself creates more systemic risk. For those who make the case that depositors be damned as it would create moral hazard to save them, consider the feasibility of a world where each depositor must do their own credit assessment of the bank they choose to bank with. I am a pretty sophisticated financial analyst and I find most banks to be a black box despite the 1,000s of pages of @SECGov filings available on each bank. SVB’s senior management made a basic mistake. They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs. The @FDICgov and OCC also screwed up. It is their job to monitor our banking system for risk and SVB should have been high on their watch list with more than $200B of assets and $170B of deposits from business borrowers in effectively the same industry. The FDIC’s and OCC’s failure to do their jobs should not be allowed to cause the destruction of 1,000s of our nation’s highest potential and highest growth businesses (and the resulting losses of 10s of 1,000s of jobs for some of our most talented younger generation) while also permanently impairing our community and regional banks’ access to low-cost deposits. This administration is particularly opposed to concentrations of power. Ironically, its approach to SVB’s failure guarantees duopolistic banking risk concentration in a handful of SIBs. My back-of-the envelope review of SVB’s balance sheet suggests that even in a liquidation, depositors should eventually get back about 98% of their deposits, but eventually is too long when you have payroll to meet next week. So even without assigning any franchise value to SVB, the cost of a gov’t guarantee of SVB deposits would be minimal. On the other hand, the unintended consequences of the gov’t’s failure to guarantee SVB deposits are vast and profound and need to be considered and addressed before Monday. Otherwise, watch out below.

[Nicks Tennti @NicTennti]

“Some take particular views, others take other views.”
C. Lagarde, 2023
#ECB

[©️redit From Ⓜ️acro to Ⓜ️icro @Credit_Junk]

If you have a bbg terminal (@TheTerminal) and are involved in credit/equity investing or simply if you are interested in macro and want to spot some new trend coming from micro remain with me, I'll write a thread about a BBG function I learned to use recently.
It's DS <GO>

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