Wall Street Stunned By Zoltan Pozsar's Latest Prediction Of What Comes Next

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by Tyler Durden
Sunday, Mar 13, 2022 - 10:39 AM

More than a week ago, when looking at the latest price dynamics in the commodity sector in general and oil in particular, where Russian-produced oil was suddenly toxic and could not find a willing buyer anywhere in the Western world despite record discounts while non-Russian oil hit the highest price since 2008, we summarized this dynamic as "Russian oil bidless, non-Russian oil offerless"

One day later, one of Wall Street's most respected voices, Credit Suisse repo guru (formerly the NY Fed's most erudite expert on market plumbing) Zoltan Pozsar took this analogy and extended it into a lengthy explanation why the disconnect in the commodity world between "Russian" commodities (and as a reminder Russia is one of the world's biggest exporters of raw commodities) and "non-Russian" commodities has set the stage for a "classic liquidity crisis" as the world suddenly finds itself locked out of trillions in commodities that serve as collateral in subsequent monetary transformations which are critical in keeping the existing financial system well-oiled (so to speak) and whose absence could lead to unprecedented shocks across virtually all asset classes (that is a rough summary, for a much more detailed explanation see here) .