So, this week, we saw the start of the total collapse of the modern financial system and the end of the Bretton Woods era of international monetary policy.
Bold claim, yeah baby? You're probably thinking this has to do with the war in Ukraine or something, right? Well, it does a little bit, but mostly it has to do with what happened with RSX and LME this week, and a little bit with what happened with Rivian.
TLDR: Wall Street, China, and Russia are all broke and shit is going to get real over the next few months. Or, to put it another way, some dude named Noah moved next door and started building a boat in his backyard, and you're just beginning to feel some raindrops.
Let's start with the biggest shitshow out there, the London Metals Exchange, or LME. A fair number of people are comparing what happened with LME and Nickel to what happened when Apex Clearing turned off the buy button for the meme stocks back in January of 2021. And yes, I meant Apex Clearinghouse, not Robinhood you twits, Apex made RH do it, and a dozen other brokers as well. Vlad was just a fall guy, and not the cool kind that was on TV back in the '80s.
What the LME did can be split into two parts:
1) they had a massive short squeeze that was fucking up prices, amplified by uncertainty from the war in Ukraine, so they completely halted trading. This is entirely normal. It's happened dozens of times in the 144 years they've been open. Complete trading halts occur in all exchanges whenever shit starts getting fucked up. For example, US markets were shut down for a week after 9/11.
2) they fucking canceled 12 hours worth of completed trades. This is the part that should get your knickers in a twist if you were actually wearing any.
Now, I know a lot of you are sitting there feeling smart thinking "I know why they did it! They're criminals and stealing!" Well, you're right, but that's NOT why they canceled 12 hours of completed trades, just like Apex didn't turn off the meme buy button because they woke up and decided they really needed to use their broker apps to get their fuck on with retail in a big 'ol gang bang.
No, they did this for one reason and one reason only: survival. They were dead. LME let the Nickel market get so fucked up that they not only had to stop transactions, or unwind a couple at the end, they had to unwind 12 fucking hours worth of trading. I mean, these people are so goddamned incompetent that they didn't even realize they'd been shot in the head, skinned, and turned into a fucking rug for two whole shifts at Wendy's!
Understand, they just set 144 years of skimming trades on fire. It's not little guys buying FDs on the LME, it's big boys and industrial giants. They all have lawyers and elected officials on retainer, and all of those clients are as done and gone as your made up Canadian girlfriend from grade school.
I can't decide if the best part of all this is the cover story they put out, or how many dumbfucks didn't take three seconds to realize its bullshit. The idea that Xiang Guangda just said "I don't want to pay the margin call" and then the LME was like, "ok, well, I guess that sucks to be us, guess we'll just pour all this gasoline on ourselves and play with matches" is so laughable I just got a hernia from ROFLing so hard. Look, because I know you 'tards are all stuck on the shortbus trying to figure out what I'm talking about, I'll just drive ya'll on over to the explanation:
Tsingshan (the company Xiang owns that has the short position) isn't some kind of nickel producer like the papers are saying. They make steel. They're the second largest (largest by revenue) steel making company in China. You know what that steel is used for? Construction. Know who hasn't had enough money to make a bond payment in over six months now? Every goddamned construction company and developer in China. What, you think they're paying their fucking materials bills?
Here's a quote from the South Chin