10Y assad bonds Dow FX geopolitics oil russia S&P 500 yuan

Bad Moon Rising.

Can you feel the tension?

Recent geopolitical developments have led me to raise my probabilities of trade and other types of wars, such as capital wars, cyber wars (and possibly even shooting wars).

That’s from Ray Dalio’s latest missive and I think it’s fair to say it’s an early candidate for quote of the week. So there are some “principles” for you.

Speaking of “principles” and trade wars, we got more Larry Kudlow on Monday and as noted over at Dealbreaker, he is proving to be remarkably adept when it comes to abandoning his own principles and settling into his new job as a condescending Trump sycophant.

The Syria situation appears likely to escalate further in the coming days/hours. Trump has tweeted himself into a corner on that, so despite last week’s promise to pull out of Syria quicker than he would “pull out” of a hooker named Stormy, the President looks like he’s all set to give Assad a ride on John Bolton’s infamous mustache.


There were some fireworks overnight on Monday and while that appeared to be Israel conducting strikes, it’s probably just a matter of time…

Check out John lurking in the background here over Trump’s left shoulder:

Get ready.

Russian assets plunged on Monday in response to new sanctions against dozens of oligarchs and companies. Russian stocks fell the most since 2014:


Here’s Natasha breaking down the biggest losers:

Just to be clear, this is some foreboding shit right here. “It is important to recognize that the most significantly affected entities of the past weeks’ events are controlled by so-called Yeltsin oligarchs (because they came to power in the 1991-2000 period), rather than other key oligarch groupings such as the so-called Putin oligarchs (came to power after 2000) or so-called state oligarchs (key executives who yield significant control over state-owned companies),” Citi’s Barry Ehrlich wrote on Monday, adding that “if several Yeltsin oligarch controlled companies can be included on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list, as was the case on 6 April based on a US Treasury press release, it reasons that any Russian company can be included [and] other listed companies have much higher levels of free float and if included would be even more adversely impacted, we believe.”

In other words: people are going to start dumping Russian assets across the board. The ruble fell the most since 2016:


And corporate bonds were crushed. Look at ruble-denominated Rusal bonds (think: Deripaska) maturing 2026:


That’s the worst slide on record. Sovereign CDS blew out:


Stateside, things turned around after Friday’s massacre although stocks closed at session lows. I guess shooting wars are marginally bullish whereas trade wars are sometimes bearish, depending on how high Trump’s dementia knob is cranked up on a given day. Any idea what’s going on with in this picture (i.e. is he really three midgets stacked on top of one another and wrapped in a coat?):

Anyway, here’s an annotated futs chart that shows you how things have panned out since Trump’s Thursday evening decision to ratchet things up further:


Although it was a decent day considering how horrible Friday was, the action was decidedly uninspiring headed into the close and this probably didn’t help:



Not sure the following chart from BofAML is great news given the recent tech turmoil, ongoing Trump/Amazon feud and regulatory concerns around Facebook:


Treasurys erased losses with 10Y yields back below 2.80:


Oil surged, rebounding with broader risk appetite and you have to wonder if the “Bolton premium” is priced back in now that Syria is back on everyone’s minds:


Deutsche Bank rose as investors are apparently pleased with yet another management shakeup:


The yuan faded the initial selloff on Bloomberg’s overnight scoop that the PBoC is “studying” a staggered devaluation as a way of responding to U.S. tariffs in the event Trump raises the bar high enough to where a proportionate tariff response becomes impossible (more here):


Don’t forget, the yuan has been steadily appreciating for five consecutive quarters. Here’s the annotated visual on that:


Finally, for your moment of zen, here is an angry soccer mom telling you for the last goddamn time that as far as she knows, U.S. war planes aren’t bombing Assad yet:


4 comments on “Bad Moon Rising.

  1. Anonymous

    Close associates suggest Cohen will be cleared of any wrongdoing and Stormy issue will die on the vine. Need new issue soon to once again energize the forces

  2. Anonymous

    FYI: That is Stormy wrapped around his waist, covered by the coat.

  3. To Anonymous:
    Thank you for your “That is Stormy wrapped around his waist, covered by the coat.
    ” comment………..I haven’t laughed so hard since …………well since childhood.

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