When ‘Goldilocks’ Isn’t ‘Just Right’
Cognitive dissonance doesn't have to be distressing, although it often is.
You can harbor inconsistent beliefs and exist in a state of relative psychological comfort as long as you acknowledge the inconsistencies.
Reconciling incongruous beliefs and forecasts may seem like a desirable (even noble) exercise, but it can also be painful to the extent some conflicts aren't reconcilable. In that case, you're forced to admit that one (or more) of your beliefs must be wrong if the others are right. T
Those analysts & strategists have their work cut out in this headless chicken market, especially during tax lot selling season. Along with the now normal daily rotations in and out of favor.
H-Man, no one wants to talk about Powell raising intererst rates before the mid-terms.
Actually lots of people want to talk about it. That’s all anyone was talking about today — pulling forward hikes and Eurodollars selling off.
The Goldilocks outcome is probable at least through the summer. It just won’t “feel” very Goldilocksish as volatility will likely be high, with large swings in both directions with a amplitude and swiftness unlike the market has ever seen. Well, except maybe H1 2020. It won’t likely be as deep a dive as 2020 without some exogenous event, but fast down 8-16% followed by fast recovery is likely to happen multiple times next year. It will give a whole new meaning to by the dip as the dips will get much bigger. If things stay on track as they are fiscal and monetary policy wise, Q4 2022 at this point is a cause for concern as the dip might keep dipping for a while. Of course, I’m just guessing like everyone else.