Supply chains and macro risks Wall Street won't model properly. Independent research. Disclaimer: https://xitter.cf/t.co/DwpfL6cP8G
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The Indonesian state is literally squeezing whoever can’t fight back. Thats what we argued the other day.
Well Bloomberg just said that executives from Tsingshan, GEM, Lygend and Huayou (the Chinese groups that built Indonesia into the biggest nickel producer) meet this week to agree a coordinated cut at their Indonesian plants.
The current proposal is rumoured to be 30% each.
You might be asking “why now”, but it isn’t so complex. Nickel is down 20% from May meanwhile sulphur (which the plants run on) costs more because of the Iran war.
On top of this, Indonesia has tightened ore quotas and raised the benchmark ore price to “boost government revenue.”
That quote is basically the thesis in a nutshell.
Basically a big FAFO. In @Teo_Sinamin’s words: Indonesia pushed the Chinese out, now the Chinese cut production, "they found out."
The shakedown has two ends. Smelters cut. Banks pay. We went way deeper into this rabbit hole in our new post.
This is insane. “America as the guarantor to the world, for the last 80 years, it is no longer there.” “Everybody’s got to be on their own regional alliances.” - Tom Barrack to a room full of gulf officials.
He was then questioned on whether USA should defeat Irans militias: “That’s not Americas job.”
The US literally can’t guarantee their security forever.
In the meantime, Araqchi has offered to broker talks between the Saudis and Houthis.
When you compare these two offers it’s clear everyone is on their own regional alliances…
Yesterday Chris Wright (US energy secretary) told an event that "we are converting dark tankers to legitimate tankers."
They are trying everything they can.
The dark fleet is around 1,600 old ships that carry sanctioned Russian and Iranian oil outside Western insurance.
Under this proposal, investors will be able to buy blacklisted ships, refurbish them and let them carry legal cargo.
Chris went AS FAR as to say that "dozens" or even "hundreds" of tankers will be added! The mega super oil glut is here!
Has anyone in the administration taken a STEM course? Probably not.
Of the sanctioned ships, 294 carry only US sanctions, so could in theory be cleared (Bloomberg). 70% of these are OVER 20 years old. That's the age range where mainstream traders and insurers won't bother chartering (of course depends on how much they're willing to offer).
That basically leaves us with 75 ships of varying sizes, with 50 being supertankers.
Then there's also incentives. Remember, incentives run the world.
Freight right now pays more than 6x its pre-war level (Bloomberg), thus an owner that earns this doesn't have much reason to sell its ship.
But even if every owner is willing to sell, we won't even know how many can pass teh compliance checks.
Just struggling to see how we're getting '100s' out of a max of 50 here...
Everyone thinks that the panick is over for Indonesia, but they don't realise the forced selling hasn't even started.
Today Jakarta was up over 5.65%. Banks were the leaders here. Mandiri, our pick from yesterday, was amongst the leaders up almost 10%.
So is it over or not?
Well, it's all about length.
The forced selling many fear comes when MSCI takes Indonesia off its emerging markets list. Its decision is due 30 June 2027. Historically, this means that actual selling will come around November 2027, about 13 months from now.
Goldman expects $13 billion in outflow when that happens.
Those 13 months is what lets us benefit from quality companies like Mandiri which pays a 14% dividend.
The risk I'm taking is whether their earnings will hold while the state squeezes.
Generally, I'd skip just purchasing the index fund outright, there's a lot more to it's composition than what meets the eyes.
If you really want to understand how the indonesian market works, I'd read this before it's too late.
Some tickers mentioned: $BMRI $BBCA $BBRI $EIDO $SMSM $KLBF
This hurts my brain. Algos and retail are so braindead.
Iran is deliberately dragging out the talks with USA to weaken Trump before the 3 November midterm elections.
3 senior Iranian officials have said the following:
- Iran is "preparing for renewed Israeli and US attacks."
- "The clerical establishment is determined not to give Trump a political victory."
On top of this, one of the better economists of Iran (Saeed Leylaz) said that Iran "is influencing the US election without taking any unlawful action."
If we're constantly bombarded by peace deals why are they expecting bombs?
Well I'd look at some history. In June 2025 the talks ended with Israeli strikes. In February 2026 the war started a day after a round of talks ended.
You know what they say, fool me once, fool me twice, or whatever.
Even today the market ate up some stupid claim of a deal through Qatar and Pakistan.
Pete Hegseth flew unannounced to Ovda airbase in southern Israel yesterday btw. That doesn't really mimic a peaceful situation. Ovda is where American tankers and fighters are.
Let's watch.
TSCS retweeted
What is happening to Indonesia?
Well, you'd think MSCI responsible for this. They are the firm whose lists index funds copy. And on Thursday they said Indonesia should leave its emerging markets list.
That means every fund tracking the emerging markets list must sell, so Jakarta crashed.
Lyall Taylor, a fund manager who's buying agrees: half the market was "fried stocks," shells pumped onto the list.
If he right? Depends. I think he's right this month, however if you look 2 years before it gets interesting...
BCA, Indonesia's best bank, traded at 24.8x earnings in September 2024, the month before Prabowo took office. On December 2025 it reached 17.4x. This was before MSCI was a factor here.
So who caused the initial sell off?
Well the week the government launched Danantara, a new sovereign fund that now holds the state's stakes in the banks, Mandiri, the second-biggest bank, fell 9% and BRI, the state bank for small loans, fell 14%.
1/3 of the banks value disappeared before MSCI spoke.
We went super deep into Indonesia's rabbit hole in our latest post. Read below.
What is happening to the Bank of Japan?
¥150 trillion has drained out of Japan's banks since April 2024, and the BOJ calls the question of where it stops "premature".
This affects you.
When banks run short of cash, borrowing costs can jump overnight.
And Japan's cheap money sits underneath trades all over the world. When it moved fast in August 2024, markets everywhere felt it.
Indonesia’s stock market is trading like a rugpulled memecoin.
Worst day since 1998 on Friday. Another 3.6% gone Monday. Down 46% from January.
Everyone’s blaming MSCI. MSCI is simply the messenger.
Remember, don’t shoot the messenger.
Jakarta’s been shaking down its own listed companies for years.
Don’t be fooled. Read this post before it’s too late.
WTF, "The Persian Gulf Data Authority is coming. To governments, funds, and firms in the region: you are kindly advised to give no resources to any AI or data company aiding invasions or killing children. No finance, equity, land and energy. Assist them and face our enforcement." - Ghalibaf
We already have Amazon data centres in the UAE and Bahrain already hit, Bahrain's still down 6 months later.
It's funny how it's always strikes first then policy second.
Well, now Tehran has told the Gulf's sovereign funds which asset class is next.
Super ominous here...
Let's watch.
What is happening to Indonesia?
Well, you'd think MSCI responsible for this. They are the firm whose lists index funds copy. And on Thursday they said Indonesia should leave its emerging markets list.
That means every fund tracking the emerging markets list must sell, so Jakarta crashed.
Lyall Taylor, a fund manager who's buying agrees: half the market was "fried stocks," shells pumped onto the list.
If he right? Depends. I think he's right this month, however if you look 2 years before it gets interesting...
BCA, Indonesia's best bank, traded at 24.8x earnings in September 2024, the month before Prabowo took office. On December 2025 it reached 17.4x. This was before MSCI was a factor here.
So who caused the initial sell off?
Well the week the government launched Danantara, a new sovereign fund that now holds the state's stakes in the banks, Mandiri, the second-biggest bank, fell 9% and BRI, the state bank for small loans, fell 14%.
1/3 of the banks value disappeared before MSCI spoke.
We went super deep into Indonesia's rabbit hole in our latest post. Read below.
Brilliant
A trader who’s compounded at 60% a year with a Sortino over 2 on why he refuses to compete with the pods on their timeframe:
Joe Walsh is the Founding Partner of hedge fund Code Partners.
Joe Walsh explains:
“The first thing I think about is time horizon.”
“I don’t want to be valuing a security on a three to six month timeframe where I’m competing against a very well-resourced, motivated person inside one of these firms with way better corporate access, way better short-term information, proprietary data sets.”
“You’ve got to pick your time horizons to be avoiding very good players. You’ve got to pick your sectors where all the pods who used to do that have been shut down and all the investors have given up.”
“The game selection aspect is running away from competition, and that’s where greater inefficiency by definition lives. There are huge pockets of that in the equity market today.”
“If you think you’re going to have a huge edge trading European industrials on a three-month timeframe, I would politely disagree.”
“We have huge edge in timeframes greater than 12 months, in sectors and markets that are just not as competitive. It’s not worth their time, when they’re running $100 billion levered multiple times, to muck around in names with $10, 20, 30 million a day of liquidity.”
“The capacity I could run money with is very attractive, to single digit billions, and still have a huge edge and still remain very liquid.”
Wow. Today drones hit the St Petersburg Oil Terminal.
This is one of Russias largest fuel export sights. About 12.5 million tonnes per year.
There’s confirmed fires at the Ruchyi depot (gasoline and diesel) as well as Kolpino warehouses.
Russia said it’s shot down 127 drones.
On top of this a VK data centre and substation were hit, removing power from 20,000 people.
This is the second attack on the terminal since July and the first week since the “energy ceasefire” that Trump claimed.
The reason this is so important to the diesel market is because USA licensed Russian diesel to get product into the market before 3 November (even if the release is so marginal for global demand), and their diesel leaves through the Baltic.
Strikes like these are “incapable of changing the course of events” according to Peskov.
The course of events is a tanker that can’t load btw.
Let’s watch.
Right so Iran has been pretty firm on the fact that the reopening of Hormuz “is still on the table.” IF washington accepts their conditions.
They’ve said a few times that the route “is obvious” if there’s honesty on the American side.
But everyone knows there isn’t.
So what are the conditions?
Here:
1. Lift blockade on Iranian ports
2. Lift sanctions on Iranian oil
3. End hostilities in every regional front.
4. “amongst other demands”
Iran’s security chief said talks stalled last week because washington hadn’t answered all seven.
USA’s position per Vance is that they want a “meaningful” cut in enrichment first.
Tehran says Strait first, nuclear after.
This is the crux of the dispute.
I think it’s pretty clear that no middle ground can be found anytime soon.
Act accordingly.
On Friday a tanker was hit 68 nautical miles northeast of Jubail. UKMTO warning 174-26.
A 2nd report says that it was caused by a rocket-propelled grenade from a small boat into the aft port quarter, 78 miles out.
That same day the Red Sea cost says they intercepted a ballistic missile aimed at YANBU + 2 cruise missiles over the Red Sea + 3 drones over Riyadh and the south.
FYI, Yanbu is the terminal that gets fed by the EW pipeline (the route that lets Saudi export without using Hormuz). The SAME route Aramco just used to rebuild its European books.
Aden's airport had its second attack in a week from 2 missiles.
Brent reached $110 for the first time since May.
The bypass is now a clear target and these fuckers have small boats with RPGs.
Riyadh built the EW pipeline in 1981 to escape a chokepoint.
Looks like all good things come to an end... How sad...
Incredible. Since February there's been 84 incidents in Hormuz confirmed by UKMTO.
12 happened this week.
What is even more outrageous is that it appears UKMTO is "struggling to accurately report the true number of attacks with the majority of vessels attacked refusing to report."
It apparently knows of further incidents from other sources and can't publish them unverified. And that the US figures for escorted transits "cannot be independently verified." (h/t @BrettErickson28)
So basically every chart of "attacks per week" you've seen this month could be drawn from an incomplete list.
84 is the minimum. Act accordingly.
South Africa mines about 72% of the world's new platinum.
Basically South Africa has this formation called the Bushveld Complex. Platinum miners dig the 'Bushveld reef' which is a band that is under a meter thick and a kilometre down. Then, they use handheld drills to extract the goods.
Output has shrunk 1.7% a year since 2006.
But now we have a shock... The PGM index fell 4.1% year on year in May, then 8.4% in June, 13.4% in July and finally 22.4% in August.
So why hasn't the price noticed?
Well, refiners are covering from stockpiles. Implats ran down 120 koz of WIP. Valterra refined 35% more platinum while mining 4% more.
Then, when does the shock land?
This will likely occur in 2027, when the stockpiles are largely depleted.
Miners are already responding... Valterra agreed to buy half of Tharisa's concentrate from January, taking Sibaye's share.
All I'm gonna say is that nobody fights for ounces in a glut...
Platinum thesis out now:
tscsw.substack.com/p/everyon…
Damn, Friday WTI 2027 calendar strip closed at $85.94. That's a 5 year high btw.
Over 50% above October 2021.
For those who don't know, that's the price of oil for all of next ear averaged.
@CommodMkt who's incredibly respected in his macro takes calls it "the macro repricing of energy," with long-dated oil moving "in tandem with energy equities making new ATHs," STRUCTURAL.
I fully agree. This is what we've been arguing since we released "There Is No V-Shape" 6 months ago.
Brent is $109 now against dated Brent at around $120.
Physical deliverable grades HAVE BEEN trading well over ICE Brent. Flagged copious times by @chigrl.
Act accordingly.
TSCS retweeted
The macro repricing of energy is now underway. Check out today's move in long dated oil - that's calendar 2027 WTI. When long dated oil moves this strongly in tandem with energy equities making new ATHs, financial markets need to listen. This is not a transient spike in prompt oil. It's far more structural. Get long, buckle your seat belt, and hang on for the ride.
