Ok, so Barclays is out with the latest iteration of their global macro survey and although the results won’t surprise anyone, they are nevertheless amusing for the extent to which they show definitively that investors have been railroaded by central banks into saying one thing and doing another.
Overwhelmingly, the biggest risk is geopolitics:
Of course it goes without saying that in the event someone steps on a geopolitical land mine, the first thing that’s going get hit are risk assets.
And yet true to form in a world where policymakers have turned everyone from macro managers to Target employees into vol. sellers and carry traders, everyone is bullish stocks and emerging markets:
Central banks to investors: “Do as we say, not as you say you should do.”
What can you say? Traders may be shrewd, but they just aren’t well informed critical thinkers. With the recent name calling between KJU and the Dotard – Bitcoin values actually rose as a hedge for these geopolitical risks. It rose even in an environment where well known and successful market celebrities (Dimon, El-Erian, had derided its lack of real value and inabilities to scale.
The fact that KJU has threatened to detonate an H-bomb a few hundred miles above the Pacific (proximity to US mainland unknown). A detonation that would technically suffice to define it as a significant EMP pulse weapon damaging to proximate communication satellites, US Pacific island infrastructure/military interests and possibly the US west coast. These effects have been demonstrated and known since 1960s. (https://en.wikipedia.org/wiki/Starfish_Prime#cite_note-19)
So, traders (mostly millennials) run out and buy cryptocurrency hedges that are electronically dependent on the grid and internet. Really? This is the time to buy Bitcoin? How does it reduce risks if there are major electronic/internet interruptions. I really wouldn’t look to traders for any kind of competent or informed geopolitical risk interpretations, their potential risk impacts and or counter strategies. They may be whizzes on current trends and fads, but not so much in understanding the risks to them.