The fallout from the Moody’s downgrade is unfolding exactly as I guesstimated it would in my Sunday afternoon post. The 10 Year US Treasury note yield is now 4.54% and 30 year money is now 5.02%. So my 2/10 and 2/30 US Treasury note bear steepener strategy is oozing green – so far. Gold is also a classic haven from the fiscal Frankenstein that is the US Treasury and Congress. Dr. Auric is now up $40 an ounce in Singapore even though ScottyB poo pooed the Moody’s downgrade as a lagging indicator, which is certainty is since I well remember Mr. Market’s cardiac arrest when S&P downgraded US sovereign debt to double AA back in the August 2011 Stone Age. Man, there sure was big time political drama in the Age of No Drama – Obama.
When Marxist-Leninist Dems ruled the roost and Barry Caesar told Wall Street bosses “you didn’t build that”. Nasdaq is down 350. I am hesitant to buy Bitcoin at 103 as it is hugely correlated to a fall in the Nas 100 Index, especially when it experiences a volatility shock, which Moody’s unquestionably delivered to the VIX.
The US dollar is back in sell America mode, even though I fully expect Trump and Xi to blow out the 152 candles on a joint birthday cake at Mar-a-Lago on June 14th as they celebrate history’s biggest post trade war geopolitical bromance. The Moody’s has restored the budget deficit as the central focus of global investors, now that Trump has eliminated the risk of nuclear war in South Asia via a tough love ceasefire between India and Pakistan, lubricated with a $1 billion IMF loan for the uniformed Big Daddy in Islamabad and a down, boy diss for Modi as he ordered Tim Cook not to produce iPhones in India.
It is a pity that Laser Eye Jai Shankar, despite all his stern lectures and global jet-setting, turned out to be as incompetent a diplomat as Krishna Menon/Nehru after the humiliating Chinese victory at Aksai Chin in 1962. To add insult to injury, China has renamed Arunachal Pradesh as Chopsticks and Pakistan has recognised the new name even as 40 countries scramble to train with its ace pilots, who made a mockery of French technology and Indian electronic warfare doctrine. This is reflected in the plunge in Dassault Aviation shares and the 50% rise in Chengdu Aircraft shares in Shenzhen.
Indonesia has already cancelled a multi-billion dollar contract for Rafale, proving that the insane antiques of the godi Media during the Four Day War has only served to devalue India’s geopolitical brand in the chancelleries of power. Too bad Sophocles is not on the curriculum of the odious RSS or Modi would have learnt that after hubris, there is only nemesis. Akhund Bharat is now Absurd Bharat.
Also published on Medium.
