Well, here we are, one day on from Trump’s decision to pull the U.S. out of the Iran nuclear deal and nothing has blown up yet.

Actually that’s not entirely true, but you get the idea.

Hostages are coming home from North Korea, and that’s good to hear although I’m not still not convinced the President is very goodly when it comes to using wordzes:

This went ok, considering what he might have said and if you just kind of ignore the irony inherent in him de-escalating one nuclear conflict just as he starts another one:

Michael Cohen runs a slush fund that took in millions of dollars from large companies and more importantly, from Russian oligarchs. But remember, “THERE’S NO COLLUSION, YOU’RE THE COLLUSION!” (to quote our friends at Wonkette).

Oil was up on a combination of Iran jitters and bullish inventory data out of the U.S. $71 on WTI, new 3½-year high:


10Y at 3% – auction was decent. No 3% coupon though so we don’t get to write headlines about that.


Fourth day of gains for energy shares and that’s helping to buoy the broader market:


U.S. equities were sharply higher on Wednesday supported by [fill in blank with your favorite excuse] + a plunging VIX.

In case EM needed to get a little more precarious, Malaysia’s general election turned into a veritable cliffhanger. That wasn’t great news for the Malaysia ETF, which plunged the most in two and a half years:


It’s over now. And it’s an upset. Mahathir Mohamad won.

The Turkish lira hit yet another all-time low on Wednesday before Erdogan convened a farcical “emergency meeting” with economic policy officials. No one believes he’s committed to helping this situation. I mean for God’s sake, this is the self-proclaimed “enemy of interest rates” we’re talking about here, and if you need evidence of just how hamstrung CBT is, look no further than the weak-willed LLW cut last month and this week’s even more feeble effort to shore up the currency by sucking up some lira liquidity and providing $s to banks.

Following the meeting, the Sultan’s office promised CBT will “continue to use all of the tools in its hands” to help stabilize things, although those “tools” apparently will not include policy rate hikes. Hilariously, Erdogan took the opportunity to tip what sounds like even more stimulus, saying “our country will continue in the future also with growth-oriented economic policies.” No one was impressed with that and USDTRY would rise anew after falling early on:


In Indonesia, the rupiah fell again, hitting a 29-month low – we’ve talked a ton about this over the past several days…


…but mercifully, equities managed to climb, bouncing off an 8-month nadir:


This isn’t great:


Meanwhile, in Argentina, the peso was under pressure again as investors weigh the implications of an IMF credit line. According to Clarin, citing officials, the government reckons it could take more than a month to negotiate. The peso is down some 9% this month alone:


Oh, and the real fell through 3.60 on BCB rate cut bets. And while I’m sympathetic to the idea that the BRL decline is overdone, it’s just week, after week, after week at this point:


All of that said, it’s important to keep perspective and as our buddy Kevin Muir reminds you, recent stumbles are a blip on the proverbial radar screen for EM equities:


Finally, for your moment of zen, Vladimir Putin – a man who knows a thing or two about starting dangerous shit – thinks Trump might have started some dangerous shit…


3 comments on “The Day After.

  1. Why put sanctions back on the Iranians when they are following the accord? How many Americans realize that the CIA actually overthrew an elected president and installed the Shah, who unleashed the SAVAK (anyone remember torture?) and created the gas crisis in the late 70’s by raising prices and boycotting Israel.

    What may follow this act of someone that knows no history, is a tactical thermo-nuclear war against the Iranians, go ask Bolton…creator of WMD’s in Iraq…

    Keep up the good sh*t Sir Walter,


  2. You know trump is jealous of that victory parade for Putin’s May 9th recognition of Germany defeating the Nazis. They even had some cannons – oh boy!

    And have you noticed when the Nobel Peace Prize is mentioned, he lights up with a rare smile — he seriously thinks he deserves it! omg no.

  3. Anonymous

    can you blog on the foreseeable leveraged ETF disaster? Oh they’re going to forward split so more retail investors can pile in

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