“Is this the ‘TACO’ trade Wall Street has been waiting for?” CNBC wondered on Monday morning, as US equities stormed higher and crude plunged after Donald Trump postponed threatened strikes on Iran’s power plants and hinted at a “complete” resolution to the conflict within days.
I can’t answer that specific question, or at least not if answering it entails promising that the early-week rebound on Wall Street will prove durable. What I can (and did) say, though, is that with the S&P riding a four-week losing streak and US gas prices up 25% in March, the pressure was building on Trump.
At the very least, he needed to hint this week that the conflict i) isn’t open-ended, and ii) won’t find the administration stumbling into Vietnam / Iraq optics by, for example, landing Marines on Kharg Island.
At the lows on Monday morning, Brent was down more than 14%, a ridiculous move befitting of a market beholden to a master of the absurd.
Notably, Iran denied not only Trump’s characterization of ongoing diplomacy, but suggested no such talks have even occurred. “There’s been no negotiation and there is no negotiation,” one official told state media, accusing Trump of “psychological warfare.”
If Trump’s describing negotiations that didn’t actually happen, this wouldn’t be the first time. And if Iran’s denying negotiations that are actually happening, this wouldn’t be the first time for that either. So who knows.
All anyone can say is that ultimately this is up to Trump. Regime maintenance requires Iran feign recalcitrance so as not to come across as vulnerable to a restive populace, but they’d rather not live under the threat of invasion. And the “our electricity grid for your desalination plants” bluster, credible or not, is MADcap. They don’t want to be put in that position. Who would?
Typically, Trump claims it’s the other side which “wants and needs” a deal in any and all negotiations. It was thus notable on Monday that, during a call with CNBC’s Joe Kernen, Trump said America’s “very intent on making a deal with Iran.”
If I were Iran, that’s an olive branch I’d be keen to grab. Particularly considering that, as discussed here last week, Trump has no real interest in forcing a democratic transition on Tehran. Delcy can attest.
The regimes are dead, long live the regimes.
Funny how he announces these things right before the markets reopen. Iran issued a denial that any talks exist, yet ‘investors’ still know the T.A.C.O. Trade is alive and well. For anyone else, this would be market manipulation.
Reading there was a $1.5BN SP500 futures buy placed five minutes before Trump’s comments this morning. Do you think the SEC will vigorously investigate?
Ha! The grift continues.
Hey JL – you should be writing for the Onion!
speculation in the london dealing rooms was Baron was front running his Dads’ comments!
Any MAGA accounts on Kalshi placing big bets on any specific outcome? That should be a pretty good indicator of where this is headed.
Personally, I’d be curious to hear what Kalshi is indicating with regards to how many more IRGC leaders will get taken out before Trump gets his Delcy.
Not only did his majesty make the announcement before markets opened but the deadline ends after the markets close on Friday? It ain’t over until it’s over!
Brilliant!
Good morning, Mr. and Mrs. America, from border to border and coast to coast and all the ships at sea, we have a news flash from the White House:
Ladies and Gentlemen, skinny and stout,
I’ll tell you a tale I know nothing about;
The Admission is free, so pay at the door,
Now pull up a chair and sit on the floor.
One bright day in the middle of the night,
Two dead boys got up to a fight;
Back to back, they faced each other,
Drew their swords and shot each other.
A blind man came to watch fair play,
A mute man came to shout “Hooray!”
A deaf policeman heard the noise and
Came and killed those two dead boys.
He lived on the corner in the middle of the block,
In a two-story house on a vacant lot;
A man with no legs came walking by,
and kicked the lawman in his thigh.
He crashed through a wall without making a sound,
into a dry creek bed and suddenly drowned;
The long black hearse come to cart him away,
But he ran for his life and is still gone today.
I watched from the corner of the big round table,
The only eyewitness to facts of my fable;
But if you doubt my lies are true,
Just ask the blind man, he saw it too.
That’s superb!
That is pretty good. Did you write this or is there another source?
The poem is older than Mr. Lucky and me combined and the author is unknown. Maybe Nostradamus wrote it on his iPad ….
Google “Ladies and Gentlemen, skinny and stout” for further info.
“Mummers play” very good, it was a pop song in the 80’s?
Brilliant!
The Iranians lie all the time and trump lies all the time, so this news is mostly worthless. A can of dangerous worms….
Headline Washington:
All hopes of a quick resolution to the war in Iran were dashed this afternoon when it was discovered that Middle East envoys Jared Kushner and Steve Witkoff had in fact been negotiating an Iranian peace settlement with Jef Dunham’s ventriloquist dummy, Achmed the Dead Terrorist. The White House has since denied that they are making any attempts to erect a puppet government in Iran. Mr. Dunham could not be reached for comment.
Silence! I keel you.
We probably now have a hundred years of thriller and comedy material “Trump Noire”.
That’s a cracking characterisation of Trump as the Master of the Absurd! We saw Sonia gap lower yesterday morning, selling off 20 ticks, fully pricing in 4 hikes by years end only to reverse and take out 50bps on his mid morning tweet – incredible. I was trading Bund futures in the 2nd Iraq war and the daily range decreased from 100 ticks to approximately 30; we are now seeing bigger intraday moves in the STIRs than the bonds from then (I know its a poor comaparison but…..)