It’s Wednesday and former FX trader Richard Breslow is furious.
As regular readers know, the Breslow patience meter starts most weeks somewhere around 50% (I’m not sure there’s a holiday weekend long enough to replenish it to 100%) and it’s usually down to ~0% by Friday.
The problem isn’t so much that Breslow doesn’t have much in the way of patience as it is that you don’t have much in the way of intelligence. Pretty much everything you say is misguided and the way you trade … oh, God … don’t even get Richard started on that.
And while it’s long been clear to Richard that you shouldn’t be let anywhere near your own money let alone anyone else’s, on Wednesday he’s come to the conclusion that you shouldn’t even be allowed to use certain words.
Breslow is particularly irritated with something we noted bright and early this morning. Namely that although USDJPY initially dipped when news crossed the wires that Kim Jong Un had launched an ICBM from his hermit kingdom, traders quickly bought that dip apparently based on the tried-and-true “no mushroom cloud, no foul” thesis.
“On Tuesday morning there’s a nuclear crisis, but by the afternoon, nerves are no longer frayed because USD/JPY found some bids?,” Breslow asks, incredulous.
Is this a nuclear war or isn’t it?
He also thinks there may be something absurd about assuming that Japan is a safe haven when the ICBM in question landed in Japan’s EEZ.
Actually, he thinks we should stop using the term “safe haven” altogether.
Anyway, you can read Breslow’s latest below to find out which words you are no longer allowed to use going forward…
The last thing I want to be doing the day after July 4th is making any kind of assault on free speech. But I’m going to propose a ban on certain words that no longer pass the plain-speaking test.
- As a start, I can no longer stand the word “outraged.” Everyone is absolutely outraged at so many things that they’ve taken an evocative expression and rendered it trite. And it’s a worry because there are a lot of things we should be shouting about. The same goes for “existential.” Not every issue is life or death. And when we overuse the term, we introduce the dangerous notion that events don’t matter anymore other than as short-term fodder to feed the news cycle. Or to churn business. The world’s coming to an end, when should we buy the dip?
- Two other terms that need to be put on suspension are “safe-haven” and “because.” Havens don’t really exist and make for a very sloppy way of describing the world. You can’t selectively find something that rallies and call that a rush to safety while ignoring contradictory moves in other assets because they don’t fit the story. Take a look at where North Korea and Japan are on a map and ask yourself why repatriation sounds like a great idea
- In a true risk-off environment there’s no cherry picking. It’s student body left. And you know it when you live through it. On Tuesday morning there’s a nuclear crisis, but by the afternoon, nerves are no longer frayed because USD/JPY found some bids? Sort of makes a mockery of a really dangerous issue
- So why does “because” make the cut? Because (tee hee) if we are going to entertain the notion that years of suppressed rates are coming to an end, we need to be much more careful in saying X led to Y. To consider that the markets may have very different reaction functions than we’ve gotten used to
- Gold will certainly trade differently to news. Emerging markets will do well on the notion of healthy global growth, but get sick on any hint of a policy mistake. Geopolitics may start to have real market implications again: well beyond six hours of yen strength. There’ll be more differentiation between credit assets and you’ll be hearing a lot of discussion of fixed versus floating. Suddenly we may be able to talk about the pension crisis rather than ignore too scary a subject. The economic numbers that we need to focus on will rotate as well as change
- As far as today’s FOMC minutes are concerned, it’s old news. You’ve heard the core members speak since the meeting and you’ll get Yellen’s Congressional testimony next week. If you think a hint at an autumn start to balance sheet reduction is a huge deal then you should be steadfast in ignoring those who tell you it will go seamlessly–and trade accordingly. If not, don’t get fooled into thinking you should rush into haven assets because there’s no need to be outraged that the Fed has avoided an existential mistake