With Apologies
Part of writing about macro and markets in the post-Lehman world is coping with the compulsion to apologize for good news.
It's a hilarious paradox. Typically, expressions of regret accompany bad news: "I'm sorry Mr. Johnson, but that's not a subconjunctival hemorrhage. That's Ebola."
But it's different with macro commentary, which was democratized and commoditized after the financial crisis. Initially, it was a cottage industry. Now it's a pretty crowded space, and because "fear sells," every
“Relatedly, being bearish (perpetually) has become synonymous with being well-informed. Being constructive, on the other hand, is tantamount to being a clueless Pollyanna.” – does this apply to commentary on the future of humanity as well? 🙂
No. We’re doomed.
The market cap and sector performance today didn’t look like a “soft landing / rates down” day. RUT down, cyclicals down, rate sensitives down, etc.
“Small-Caps Crash, Dow Dives Second Day As Falling Rates No Longer Good Enough To Prevent Stock Losses.”
“Stocks Stop Responding To Bonds In Bad Omen For Out-Of-Gas Equity Rally”
Yes, more of a “hard landing / rates down^2” vibe.
I was joking. It was a play on the article theme.
“Stock market risks failure amid the ‘biggest speculative orgy’ in over 40 years”
“The sky is falling” click bait never ceases. Might as well keep leaning into the turn even as you go off the rails.
If you need gloom check out David Rosenberg’s piece today.
I wonder if there is a way to reconcile the observation summarized above and the more positive take by McElligott, as summarized in an earlier article, based on options market positioning? The idea of sentiments being stretched and “everyone’s in the pool” does not seem to be compatible with McElligott’s comment re low percentile of downside hedges simply because not enough exposure on? Is it simply due to difference in the banks’ flows/positioning estimates, or is there a more comprehensive thinking frame that can accommodate both observations?