Record 6.6 trillion in equity OTC Derivatives at the end of March per the OCC.
July 7th, 2025
Record 6.6 trillion in equity OTC derivatives at the end of March per the OCC. Canada’s debt clock to hit 1.6 trillion by the time of the next election in 2029. 2nd quarter expectations for strong earnings in the mining sector in about two weeks. Covid issued debt matures in August in the US and September in Canada.
Old data perhaps, but important.
511 billion in notional value per the Office of the Comptroller of the currency vs the 906 billion of gold held by the LBMA. LBMA data comes out this week. The number of transfers fell in May after spiking to a record in April in the chart below. GLD is approaching 100 billion in assets.
Number of transfers spiked in April to a record and fell back in May in London.
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I want to make sure you see this chart.
Every year this century it has increased.
Covid issued debt from 2020 is coming due in August in the US and September in Canada. My guess is that will be driving the price action, not the pronouncements of the president. My sense is it will be a buy the rumor, sell the news of the debt ceiling bill that was passed.
SIFMA Research Quarterly - Fixed Income Outstanding 1Q25
Questions raised in the financial sector given activity
Activity, including dividend increases, suggests, that while they all passed the stress tests, not everything is quite as positive as portrayed.
TSB Transaction.
Comes on the heel of a rumored takeover for Metro Bank (UK:MTRO) in the UK.
“Banco Sabadell’s Board of Directors has today agreed to propose to its General Shareholders’ Meeting the sale of its UK subsidiary, TSB, to Banco Santander for £2.9 billion (€3.4 billion) in cash. The transaction is expected to complete in the first quarter of 2026”.
Bank of New York (BK:US)
Northern Trust commits to independence after WSJ report on potential merger with BNY
“Northern Trust is fully committed to remaining independent, the bank said on Monday, after the Wall Street Journal reported that Bank of New York Mellon had approached the asset and wealth manager to express interest in a merger”
Jane Steet
This is actually one of the best descriptions of trading activities of index arbitrage I have ever seen in the internet age. The SEBI order should be must reading for anyone starting out in the industry or for anyone who has ever traded options during options expiry week. Respect for the Indian regulators even if you disagree with their decisions. Important because as we learned in Gamestop, market makers selling options often are naked.
SEBI | Interim Order in the matter of Index manipulation by Jane Street Group
“Entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly”.
Canada
1.265 trillion.
Canada's National Debt Clock : The Canadian Taxpayers Federation
1.3 plus .3 = 1.6 trillion and that is assuming no fall in the real estate market. If, and when, the residential real estate market falls apart it could easily be double this.
I am not a real estate guy but while the focus may be on the greed in the residential market, the commercial real estate is a major portion of index funds, pension plans and banks. This is a major head and shoulders figure on the charts. It should concern you if you hold mutual funds. A sign of liquidity problems, and also a weak real economy.
Canada Office Figures Q2 2025 | CBRE Canada
“This quarter also marks one consecutive year of no starts and two years since any meaningful projects have commenced”.
Canadian special situations
I could see this going for more than 15 in a sale. Third largest REIT in Canada. Three special situations at the moment. Meg, Telus Digital and H&R. Canadian management accepting the fact that they can’t get US valuations for many reasons
H&R Real Estate (HR.UT:T)
Special-Committee-Consideration-of-Potential-Transactions-Final.pdf
“The REIT confirms that the Board of Trustees previously formed a special committee of independent Trustees (the “Special Committee”) in February 2025 to review and consider strategic alternatives after receiving an unsolicited expression of interest. Subsequent to such proposal, the Special Committee has received other proposals for Potential Transactions.
H&R is one of Canada's largest real estate investment trusts with total assets of approximately $10.5 billion as at March 31, 2025. H&R has ownership interests in a Canadian and U.S. portfolio comprised of high quality residential, industrial, office and retail properties comprising over 25.6 million square feet”.
Structured Products
Lots of 424b structured products filings during the July 4th long weekend. Hard for me to explain their impact, other than they are liabilities of the financial institutions. Morgan Stanley issuing a gold structured product. I would like to see regulators give retail investors more disclosure. In time I believe it will erode trust by the investing public which benefits no one.
sec.gov/Archives/edgar/data/895421/000183988225037220/ms9214_424b2-20247.htm
Cleared Margin Report.
Most of the trading is OTC - especially in interest rate swaps, but its worth noting the margin for the exchange traded products. Add in the 920 billion in Finra Margin debt and the 3.3 trillion of speculative crypto assets and pretty soon we are talking big numbers.
Cleared Margin Report - May 2025
Government of Alberta
Fourth year of surpluses ahead of an expected separation referendum.
Given that the province of Alberta has objections to the Canadian Pension Plan and the Federal Transfer Program, why has the premier of the province never converted its oil revenues into physical gold bullion like many other OPEC exporting countries as a hedge against the cycles of the oil and gas industry and given the projections of the CD Howe Institute that the Federal Government will be borrowing over 310 billion more over the next four years? That and the EV transition is a real and growing concern for the oil and gas industry worldwide?
My sense is the mining stocks should report good numbers at the end of July which should drive deal making. The market feels very speculative, especially tech and treasuries. I like the special situations as I could see them getting higher bids. I like LNG and am neutral on oil. I think the market (S&P) will sell off if the treasury market sells off going into the fall - a rise above 5% on the increase in the debt ceiling - essentially sell the news of the bill being signed. The real economy continues to weaken, while speculative activity continues to grow off the charts.
Disclosure
Long Physical Silver, Cash, Iamgold (IMG:T), Western Forest (WEF:T), Barrick (ABX:T), Meg Energy (MEG:T), Birchcliff Energy (BIR:T), Northern Dynasty (NDM:T), Telus International (TIXT:T)
Mistakes
Betapro (QQD:T) – double Nasdaq short, Proshares Triple Nasdaq short (SQQQ:US), Virgin Galactic (SPCE), Volkswagen 1/10 ADR (VWAGY:US).
