Time for a systemic risk update thread from the Cloudbear…

US stocks just don’t seem to release, so only a matter of time until all those puts result in dealers doing their gamma jam higher right? Not so fast…

Morgan Stanley’s CDS seems like it wants to keep going higher. This is weird, because why should MS have a problem, especially since the Fed will never let a failure happen again right?

GS CDS looks uglier, fresh highs today:

Let’s look in on the US financial plumbing - near term funding continues to flash yellow with signs of stress. Here is 3M SOFR ie UST collateralized lending:

Here is 3M Libor - banks not trusting each other so much, shades of 2008?

3m OIS - risk free money getting tighter:

90day commercial paper - still higher:

So near-dated funding markets are tightening noticeably, and the Fed just stopped buying bonds yesterday.

Then there is credit - a rupture is bound to happen here as growth slows and margins collapse due to COGS and wage inflation. US corp junk yields continue to move higher:

And the crackups are not just in the US - many are aware of Hang Seng Tech Index falling apart, down another -8% tonight and accelerating (1y and 5y charts for context):

And cross currency basis swaps, remember when Aussie rates blew out on October 29th? The 1y AUD-USD basis swap is spiking again:

And the 3m basis for AUD-USD has become volatile:

Worth monitoring these tremors as money is getting TIGHT and once confidence is shaken and credit runs into trouble, selling in equities becomes a near inevitability.