Commodus And The Tantrum Tail Risk

Commodus And The Tantrum Tail Risk

Listen, if we get a bond tantrum catalyzed by an unexpected uptick in inflation that forces central banks to effectively revoke the market's license to co-author the policy script in 2018, no one can say they weren't warned. Black swans are by definition unpredictable, so the notion that everyone has identified the "most likely" tail risk is inherently paradoxical. That said, there is almost universal agreement that a sudden resurgence of rates vol. is the biggest risk to markets going forwar
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2 thoughts on “Commodus And The Tantrum Tail Risk

  1. inflation surprise seems to be the most common concern, as common as the knowledge that stocks will go up nicely again next year. automation, the amazon effect, and general underemployment are keeping costs low…no surprise inflation is going to occur.

    this morning kramer claimed an inverted yeild curve will mean nothing. today’s wsj says japan will very much slow their QE program, the fed already is, and the ecb also already is having cut in half their monthly bond purchases. its all relative, going from a nice flow to much less flow is akin to outright tightening…theres just a lag time we need to identify.

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