Regular readers are familiar with Richard Breslow, a former FX trader who pens a daily missive for Bloomberg.
Breslow’s commentary is usually spot on and is a morning must-read. Today’s installment finds Breslow decrying the state of markets and bemoaning the fact that whereas traders used to enjoy being “edgy,” now they’re just “on edge.” Enjoy:
Investors like to be perceived as being a little edgy. After all, the skill of getting somewhat ahead of the crowd, willing to take risk and anticipate trends is precisely the persona asset-gatherers try to project. Instead, we have traders who are overwhelmingly on the edge.
- This has manifested itself into alternating periods of unpredictable short-term volatility and long periods of analysis-defying tight ranges. It turns out, apparently, that the yips are contagious
- Traders struggled less in a world where both the present and the future seemed hopeless. Now that was a consistent story to make investors happy. Let the central banks do the heavy lifting and kick back
- We are now in a world where it’s arguable that some green shoots are showing. But the future looms every bit as bleak to most, and that’s a really difficult position to be in when constructing a long-term portfolio, let alone capital investments
- The recent massive surge in merger activity shows companies splitting the difference. Don’t necessarily need to hunker down and preserve cash at all costs. But who wants to go out on a limb and actually try to build something new? And where?
- For the first time in a long time, investors as well as policy makers will have a role in picking winners and losers. And having to decide for themselves if we are talking false starts or new trends
- There have been a number of good trade numbers recently. A happy development. But does anyone think global trade is going in the right direction? It’s measurably shrinking with little foreseeable political will to do anything about it
- Treasury yields are back up from absolute crisis levels and equities are waffling within a well-defined range; and people are already saying we need to keep an eye on a tightening in financial conditions. If yields can’t rise without causing panic, how can there be an economic resurgence you can believe in?
- Inflation is good and bad simultaneously. As are unified oil producers. Traders just don’t know what they want
- One of the most significant changes in the investing landscape that this period of stabilization will provoke is that geopolitical events will once again create trading necessity. A sobering thought given everything on the calendar