Montani Semper Liberi
December 20, 2021
–West Virginia’s Manchin has decided not to support Build Back Better, causing stocks and oil to crater. The resulting curtailment of government spending plans has caused several shops to trim estimates for GDP going forward. An avalanche of bad press over Omicron is also a factor, with Biden scheduled to address the nation and further dampen holiday spirits on Tuesday. Nasdaq futures have edged through the low from the beginning of December, but ES has not. TYH at 131-13 is at the high of the range since early October. As expected, China continues to take small easing steps, cutting the one-yr Loan Prime Rate from 3.85% to 3.80%.
–Regarding economic forecasts, I checked to see if the NY Fed’s NowCast has been reinstated, NOPE. Been gone for a year and a half. From the NY Fed site, “The uncertainty around the pandemic and consequent volatility in the data have posed a number of challenges to the Nowcast model…” It has been suspended indefinitely. If the models aren’t working, where are they getting the dots?
–Turkish lira continues to implode, now at 17.5, it’s been cut in half since September. Of course, bitcoin has also had a hard break, now just under 46k and off over 30% from the early November high of 67582. Thin conditions are likely to exacerbate volatility, speaking of which, Dec VIX options expire Wednesday. The 25c has 110k of open interest and has traded 2.00 today, the 30c has 142k open. Jan treasury options expire Thursday.
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..Montani Semper Liberi (Latin for “Mountaineers are Always Free”) is the official motto of the state of West Virginia. Doesn’t quite carry the punch of New Hampshire’s “Live Free or Die” but it’s not bad.
