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A ‘Terrific Explosion’ (Or, Stimulus > Geopolitics)
Over the weekend, I wrote that outside of knee-jerk reactions to adverse headlines, durable price adjustments usually only occur when there’s a clear link between political turmoil and the factors that impact the fundamentals for a given asset class.
Further, I emphasized that the capacity for geopolitics to impact markets has been muted in the post-financial crisis world by central bank forward guidance and accommodation.
Tuesday is a case in point. Stimulus (indeed, even the prospect of st
NK back into the Z. I never knew they left we left in the early 90’s and it was said to have brought a close to the cold war. If NK is returning to the Z, it is a return of the fun and games that come with serving on the Z. Like night patrols just inside the demarcation line, constant artillery shelling across the border. Propaganda leaflets on the wind, 24 hour loud speaker radio on the open air with the occasional “Say you say me” L. Richie thrown in for fun. High alert, two beers a day max, 4 a week max. The potential for increased defections and skirmishes that can end up as international incidents. A hell of a lot of fun for young men.
Interesting that 5G buildout and rural internet is in the proposal for the infrastructure plan after successfully implementing the argument that broadband internet should not be considered a utility. We were told that if we enforced net neutrality there wouldn’t be enough investment by the private sector, but it turns out we are all going to chip in some taxpayer money for it after all, just like a utility.