TSCS

Hedge funds are net short palladium and adding 500 contracts a week. Into a 241.93% combined duty wall on Russian imports. In a market one twenty-fifth the size of gold. Four statutory catalysts land in the next eight weeks. No sell-side note has this. tscsw.substack.com/p/dont-short-p…

I find it very interesting how everyone is pricing the ceasefire. What they should price is the day after, yet they don’t. IRGC enforcement this weekend confirmed it. Hormuz is not a light switch. Things as simple as mine clearance in the strait runs weeks. Insurance reprices in quarters. 430 stranded tankers do not fit through a recently demined channel at once. LNG trains that got hit take 3 to 5 years. The crude recovery is a slow ramp. The LNG recovery is an L. Some crackers never restart. The trade is not whether the war ends. It is what is permanently broken when it does. There Is No V-Shape recovery.

The US-Asia polyethylene spread blew from $500 to $1,200 per tonne. South Korean supermarkets sold out of trash bags. Half of Japan's chemical industry is shut. This is not an oil story. It is a petrochemical chokepoint with a 250-day recovery clock. tscsw.substack.com/p/short-the-pa…

The Treasury basis trade has roughly doubled since 2020. Morgan Stanley estimates the notional at $1.5 trillion. Eight or fewer traders account for almost half of all bets against 2-year Treasury futures. In March 2020, the basis trade was $800 billion. Its partial unwind required the Fed to purchase $360 billion in Treasuries in a single week, building to nearly $2 trillion across the year. The Fed also expanded swap lines to $449 billion, cut rates to zero, and temporarily exempted Treasuries from the leverage ratio. In March 2026, the basis trade is double that size. The Fed did none of those things. Not because the stress wasn't there. Citadel's Global Fixed Income Fund suffered an 8.2% drawdown in March. The MOVE index rose 28% in a single session to 108. The Treasury market bent. The Fed didn't intervene because it can't. Buying Treasuries would inject liquidity into an economy facing a supply-side energy shock. CPI at 3.3%. Petrol prices up 21.2% in March alone, the largest monthly increase since at least 1967. One-year inflation expectations at 4.8%. The Fed cannot save the bond market without fuelling the inflation that is causing the bond market to sell off. Primary dealer balance sheets relative to Treasuries outstanding have shrunk by a factor of nearly four since 2007. Outstanding Treasuries: $30.6 trillion. Dealer positions: $820-900 billion. A comparable partial unwind of today's $1.5 trillion basis trade would generate $300-450 billion in selling pressure. Private dealer capacity can absorb an estimated $150-250 billion. The gap between potential flow and absorption capacity is where the Fed becomes the only buyer. The same Fed that cannot buy. MOVE sits at 74. The long-term average is 103. The market is pricing calm while the largest leveraged position in the Treasury market has doubled since the last time it nearly broke. Stein and Kashyap, writing for the IMF in March 2026: "Episodes of Treasury market dysfunction are not a random bolt from the blue. Rather, they are a consequence of a market structure that relies on leveraged balance sheet intermediation to absorb a rapidly growing supply of government debt." The market structure is the vulnerability. And it has roughly doubled. tscsw.substack.com/p/cash-not-bon…

Foreign central banks just dumped $82 billion in US Treasuries in five weeks. Custody holdings hit the lowest level since 2012. Oil importers (Turkey, India, Thailand) liquidating to defend currencies. This isn’t “panic.” It’s exactly what they’ve done in every energy shock since the 1970s. But the secular shift is worse. tscsw.substack.com/p/cash-not-bon…

Q1 earnings for major gold miners start this month: Newmont $NEM Apr 23 Alamos $AGI Apr 29 Agnico $AEM Apr 30 At ~$4,975 realized gold, these will be the best prints the industry has ever delivered at scale. The market is still sleeping on the margins. tscsw.substack.com/p/buy-the-mine…

Two construction-stage gold developers trading at 49% and 77% of NAV on conservative gold prices. Skeena $SKE is already 49% built with first ore in ~12 months and trades 3.9x first full-year earnings. These don’t stay this cheap once the market notices.

Alamos Gold $AGI at 15.3x forward with ~30% production growth coming through 2028. Self-funded pipeline, first-quartile assets, almost no geopolitical risk. Market is pricing it like a flat senior producer. It’s not.

Wesdome $WDO at 8.4x forward earnings. 140× more cash than debt. CFO who built Kirkland Lake into the best gold stock on earth. Eagle River running 13-14 g/t grades. June technical reports could be the catalyst that wakes the market up.

Full article: tscsw.substack.com/p/buy-the-mine…

Gold miners are printing $3,000+ margins per ounce for the first time ever. The stocks still trade like gold is $1,100 and it’s 2015. This disconnect is getting ridiculous.

The dollar is fine. The debt is not. The system survived March because the selling was orderly. But orderly is not a permanent feature of markets. It is a temporary condition. And the detonator is still armed. Full article: tscsw.substack.com/p/cash-not-bon…

The gold-to-long-term-Treasury ratio just hit a record. For the first time ever, central banks hold more gold than foreign Treasuries. The world is telling you which asset it trusts. You can argue with the world. The world does not care.

@LukeGromen and @LanceRoberts went at it on X this week about whether the Treasury market is fine. Both missed the most interesting part of the data. Gromen is right about the direction. Roberts is right the system hasn't broken. The actual story is weirder than either. Thread🧵