Pepe Silvia

Rampant market speculation, data driven

[Pepe Silvia @PlsFixPepe]

@AndreasSteno Consider what happens if legacy DRAM prices normalize from due to slower consumer demand and additional supply coming on line. Even with HBM, such a scenario easily could imply 60% peak to trough drawdowns. We are well underway already. This is why multiples have contracted.

[Pepe Silvia @PlsFixPepe]

@AndreasSteno NVDA and Micron are very different companies. Memory stock prices always peak before margins peak with prices typically falling 60% peak to trough.

[Pepe Silvia @PlsFixPepe]

@PeterBerezinBCA There is a lot of dispersion in the TMT universe. It would be interesting to overlay the valuation for a basket of AI-related stocks. I assume that would look more bubble-like.

This also says nothing of how aggressive EPS forecasts are today compared to last cycle.

[Pepe Silvia @PlsFixPepe]

@Geiger_Capital Ah yes and everyone knows the historic economic weakness that followed WWII…..

[Pepe Silvia @PlsFixPepe]

@VaeVictis_VV @_AndrewSpurgeon @RealEJAntoni Yes it’s an actual data series, but it paints a misleading picture because the most recent value is a loss that has accumulated for over a year. Before Sep-22 values are weekly cash flows sent to the Treasury. Taken together the Fed has profited over $800bn since 2011.

[Pepe Silvia @PlsFixPepe]

@zerohedge Gotta love vague ominous predictions with absolutely no supporting evidence.

[Pepe Silvia @PlsFixPepe]

@nygamecock @RealEJAntoni I do not think so. The Fed recorded a profit of approximately $100bn per year from 2011 - 2022.

[Pepe Silvia @PlsFixPepe]

@KentanylSoup @RealEJAntoni The loss looks accurate but OPs chart is not reflecting the $1 trillion in profits remitted to Treasury from 2011 - 2022.

[Pepe Silvia @PlsFixPepe]

@_AndrewSpurgeon @RealEJAntoni The OPs chart shows essentially zero in remittances since 2011, but in reality the Fed has remitted almost $1 trillion since then.

[Pepe Silvia @PlsFixPepe]

@VolgareT @ChartingFor @RealEJAntoni Two main reasons for the loss:
1) The Fed is reducing its balance sheet to tighten policy, reducing their income earned.
2) The yield curve is inverted, therefore they pay more in interest in reserves than they receive from the longer durated bonds on their balance sheet.

[Pepe Silvia @PlsFixPepe]

@ChartingFor @RealEJAntoni There are no taxpayer losses here. The Fed books these losses as a deferred asset. Once the Fed returns to profitability it will pay down the deferred asset until it reaches zero, and then will continue remittances to the Treasury.

[Pepe Silvia @PlsFixPepe]

@Inamh_ @TaviCosta SPX is one of the five components of the GS financial conditions index (higher stocks contributes to lower FCI).

[Pepe Silvia @PlsFixPepe]

@dampedspring Worth noting - almost entirely driven by physicians costs and car insurance, which are not cyclical categories.

[Pepe Silvia @PlsFixPepe]

@hockey_walrus @caribwayoflife @Ike_Saul Thanks I appreciate the information.

[Pepe Silvia @PlsFixPepe]

@caribwayoflife @Ike_Saul My apologies I will remove then but it looks an awful lot like the person in this video?

[Pepe Silvia @PlsFixPepe]

@GRDecter Let’s put this in perspective, this is pricing in a greater than 95% probability that they WON’T default.

[Pepe Silvia @PlsFixPepe]

@KanekoaTheGreat Very clearly explained in the article.

[Pepe Silvia @PlsFixPepe]

@AdamDeCicco @CollinRugg Reminder that is less than 0.1% of JPM’s AUM

[Pepe Silvia @PlsFixPepe]

@jeffnobbs Isn’t the obvious culprit more sedentary lifestyles? You show in your own dataset that caloric intake has not changed. Obesity is a simple equation, caloric intake minus calories burned.