Risk reassessment
August 19, 2021
–Stock market pullback yesterday (SPX -1.1% and Nasdaq -0.9%). Headlines from Bloomberg, Reuters and WSJ attribute selling to taper discussion in FOMC minutes and reduced growth prospects due to covid. My personal assessment is that the administration’s Afghan disaster is the dominant factor, as taper plans have been in the news for several weeks. While taper does represent the onset of a pullback in liquidity, countermeasures had already been put in place, including the SRF (standing repo facility) which has encouraged more buying by foreign central banks. It’s called contingency planning Joe. I suppose there’s a chance the Fed will get the direct blame for a stock market debacle should it continue…”We were surprised by how rapidly it occurred!” The virus is also spreading, though we all know the response to that: more government support.
–Crude oil is also continuing a slide, with CLV1 below $63 as of this morning, for the first time since late May. The only commodity with a bid this morning is gold, which is up around $6 but still $10 shy of 1800.
–Stock futures accelerated their decline after rate futures settled; eurodollars fell by 0.5 to 2.5 from reds through golds. TYU settled 134-045 but is flirting with the 134.5 strike this morning. TYV 133.5 straddle settled 1’29 which I mark at 4.3, seems extremely low given moves in other markets.
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I watched an interview with Clarissa Ward of CNN yesterday, who is in Afghanistan (linked below). She had been reporting from Kabul in a headscarf, thus becoming the target of Ted Cruz. In her piece from the streets of Kabul during the takeover, she said the insurgents were “Chanting death to America, but seem friendly at the same time.” To which Cruz tweeted, “Is there an enemy of America for whom @CNN WON’T cheerlead? (In mandatory burkas, no less).” The line Cruz cited was taken out of context…as Ward said, she was simply describing the fact of the scene.
What an asinine response by Cruz. Watch the interview below. Clarissa Ward is of course, operating in one of the most dangerous places on earth and carries out her job with poise, dignity, and thoughtfulness, and in her interview cites the courageousness of others. If I were stuck in a desperately bad situation (or really of course, any situation) I would one million times over rather have Clarissa Ward by my side than Ted Cruz. Why don’t YOU see what it’s like on the ground in Kabul, Ted?
https://unherd.com/thepost/clarissa-ward-in-kabul-what-the-taliban-are-really-like/?mc_cid=341953a845&mc_eid=85ffecbd64
