10Y hft S&P 500

Markets Would Be A Lot Safer If We Wound Back The Clock About 25 Years

But times have changed.

Listen, markets are nervous.

There was global selloff overnight and it’s spilled over into early trading on Wall Street with a number of factors denting sentiment, not the least of which is the ongoing junk bout rout. There’s also significant uncertainty on the tax front and there’s a connection between that uncertainty and weakness in high yield.

Meanwhile, idiosyncratic risk has come calling in emerging markets (although as we’re fond of reminding you, idiosyncratic country risk never goes away in EM, that’s why it’s EM) and with the data out of China already decelerating post-Party Congress, one wonders what the catalyst for risk assets is going to be headed into year-end.

Oh, and oil is suddenly sliding, a development which, when coupled with weaker commodities more generally, only adds to the palpable sense of angst.

One former trader longs for the days when everyone would take this in stride where “in stride” means chain smoking and blowing lines all day and then drinking yourself to sleep after work with your colleagues. “In the olden days, when global markets were all seemingly in play, you’d take a deep breath (on your cigarette), gird your loins and buckle your seat belt,” former trader Richard Breslow wrote this morning, adding that 20 years ago, this would be “just another day at the office” after which everyone would “convene to relive all of the dramatic action with great flourish” presumably at the bar “and the next day, you’d do it all over again.”

But times have changed. No one trades with cigarettes hanging off their chapped lips and coke falling out of their nostrils anymore and I can tell you from personal (and fairly recent) experience that getting plastered after hours can get you into a whole world of shit with human resources should you end up in a drunken dispute with a coworker.

Alas, the good old days are no more, and as if it wasn’t already bad enough that coke has been replaced with RedBull, Marlboros with nicotine lozenges, and after hours drunken debauchery with polite cocktail parties where fist fights and ass grabbing are faux pas, now everyone has to worry about whether they’ll get mowed down by an algo driving warp speed through a fiber optic cable and not stopping for red lights let alone regulatory “speed bumps”.

“Nowadays, it’s hand-wringing, extrapolating, trying to figure out what great policy mistakes have brought us to this impasse and wondering whether the algos would run us over, if we dared to trade, or be shut-off all together along with their over- promised liquidity provision,” the above-mentioned Breslow goes on to write.

I don’t know. Maybe this will all be fine, but somehow it seems like we’d all be safer if over-caffeinated Millennials who were still in high school for Lehman were replaced with seasoned, chain-smoking, coke heads. And as for those fucking algos, there was a time when the machines stayed where they belonged – namely in the break room dispensing coke (the soda, not the drug).


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