From the bleacher seat on Nob Hill in my rundown but vacancy controlled rent limited 300 sq foot studio apartment sited in San Francisco and rooted in Bohemian Splendor, the new market is the rapid economic integration of the planet as an ongoing process of uneven but planned development. Think tanks, governmental agencies, NGO’s all steered by ideology guided by many transnational influential voices of greed. All the global clubs of nations, corporations, oligarchs are ongoing alignment attempts behind the original 19th century Fabian agenda of Technocracy. WW1 to Ukraine, West looks East in hunger with far away eyes gazing upon ALL. No limit gambling here. Staring coldly, facing death, Oligarchs see owning not life and life as a vision of post-modern profit possibility.
Now 10 generations -quibble if you must that we need 40 years to have a generation, pressed at knife point to the throat 20, but I limn the Body Electric, raised after World War 1 and say 10 years to a new generation of THOUGHT. My mother was born in September 1918 somewhat like the American Century and she passed away after the Millennium turned but prior to September 11, 2001, and thus just before the Auto-Golpe.
83 years of embodied American working class history form my family, from the farm to small town, then to Secretarial school after high school, from there to working for the government as a typist, whose husband worked for the government as an Electronics Technician, and whose only child became able to collect Social Security and look for work from home to live to pay the bills Oligarchs impose and WHINE online informing others so situated that even 10 years is in error after the century ended. Now it is 5 years for Reprogramming.
Faster and faster in that gyre. Now commodity markets begin to break.
Recall what Zoltan Pozsar warned two weeks ago, when he said that "we could be looking at the early stages Of A Classic Liquidity Crisis" - according to the former NY Fed liquidity guru, none other than the commodity traders themselves, and their associated exchanges and clearinghouses, will be the drain of liquidity during this period of unprecedented commodity volatility, adding that "if you want to express all this in the credit space, look at what CDS spreads on some bigger commodity traders have done in the past few weeks."
Sure enough, last week's unprececented LME margin squeeze, where a 250% surge overnight in nickel prices nearly bankrupted Chinese tycoon Xiang Guangda whose Tsingshan Holding Group, the largest stainless steel maker, held a massive 150,000 tons nickel short and which resulted in $8 billion margin call which however even the collecting counterparties (one of which was JPMorgan) did not want to collect on knowing they would default Tsingshan, collect nothing and potentially push the LME itself into insolvency.
Another, more tangible example, comes from one of the world's top oil and metal traders, which today we learn has been seeking funding from beyond its traditional group of bank private, approaching even equity investors, hoping to obtain $2 to $3 billion in fresh liquidity to meet what Bloomberg described as "margin calls in the billions of dollars" as oil prices surged to $139 a barrel and nickel soared 250% in little more than 24 hours. Precisely as Credit Suisse's Zoltan predicted.
Now, another bank is on the trail of the source of liquidity crunch observed in unsecured funding markets.
In a note published overnight, Barclays strategist Joseph Abate desconstructs Zoltan's key observation, and asks "could margin calls in commodity markets cause unsecured funding rates to rise as banks and investors scramble to meet demands for cash collateral?"
Taking a step back, Abate first notes that in his view, the pressure in unsecured funding pressure is driven principally by two factors: "a precautionary buildup of cash by banks that are uncertain about the geopolitical outlook and the maturity pileup of CP ahead of this week’s FOMC meeting."
That said, and perhaps eyeing the tremendous sway Zoltan weekly views get, Abate writes that "each week brings a new explanation and a new cause for worry in funding markets. First it was the de-SWIFTing of Russian banks. Next it was fears of a “Lehman-like” spiral of secondary defaults tied to unobservable funding and borrowing linkages. The latest iteration ties the sharp increase in commodity prices to funding markets through margin calls." https://www.zerohedge.com/markets/trafigura-faces-billions-margin-calls-pozsars-margin-call-doom-loop-prediction-comes-true