At 8:48 AM I wrote: ”It should be a quiet day.” It was anything but. What looked like another pre-Fed sleeper turned into quite possibly the end of an evil era. Yesterday’s failed nuclear negotiation is a hostage negotiation tonight, figuratively speaking. The hostages, ironically reminiscent of November 1979, being 70 million citizens (80% of total population) oppressed by the Ayatollah and his IRGC.
The Iranian ruling class is estimated at 30,000 clerics and an SS-type intelligence department of 50,000. These core loyalists are reputedly feared and hated, especially by women. If the dam bursts, and many free people hope it does, a surge of fury is likely.
Narratives were fluid, if not mercurial, during the session. Trump tweeted, “Israel has total control of Iranian airspace” shortly after the equity opening, which is tactical speak for victory. At 12:48 PM EDT, Trump called for unconditional surrender. Later in the day, Iran urged Israel to evacuate Haifa and warned of punishing reprisals. For the rest of the afternoon, hawkish pressure bore down on the President to actively participate in bombing Iran. No statements or military reports since.
In the Markets
Crude oil closed on the highs on moderate volume. The tone of trading was gradually ascendant, periodically surging as news developed. A new narrative that there is a floor under oil seemed a bit self-serving; $85 a barrel is possible.
Oil is flowing as well as it was a week ago. Another narrative is that this is not an oil war. Every possible avenue of diplomacy was exhausted to find a peaceful solution. However, once the shooting starts, the action is minute by minute, and wars are won by core values and leadership, not committees and policies.
On January 9, 1991, Iraqi Minister Tariq Aziz and U.S. Secretary of State James Baker met in Geneva, Switzerland, in a final diplomatic effort to resolve the Iraqi occupation of Kuwait peacefully. These negotiations had been going on since August and they terminated on January 9. The U.S.-led coalition launched Operation Desert Storm on January 17.
I was watching TV when the first bombs hit Baghdad, and the phone rang. It was Lehman telling my wife gold was already down $10, and Lou Bacon was selling size. The next morning, oil came in 6 lower and traded down another $7 dollars per barrel. A month later, oil was down 50% from the high on the night of the first U.S. strikes. It stayed there for the next 6 years.
Next up this eveing… Gold is impervious, the dollar is nuzzeling a 5 month T line, the position in stocks is gowing like tumor … and the past is present in the vibe…
Keep reading with a 7-day free trial
Subscribe to market vibes to keep reading this post and get 7 days of free access to the full post archives.