Ok, well Goldman has some new “top” FX trades for you – because those always turn out great. To be sure, the “time to normalize” trade took a hit on Wednesday when Reuters reported that Mario Draghi is apparently getting cold feet about Jackson Hole. We would suggest that has something to do with escalating…
DRAGHI IS SAID TO NOT DELIVER FRESH POLICY AT JACKSON HOLE:RTRS
“The term ‘fake news’ has been heard a lot recently, usually in the political spectrum, but one can argue that it also has presented itself in financial markets.”
“Whether it is Gross, Icahn, Gundlach, Jones or Marks, there is no shortage of billionaires warning about the impending stock market crash.”
“Deterrence counts on the rationality of the opponents. The build-up of mutual threats and the shows of force in the past weeks have unsettled markets, with risk assets and high-beta currencies underperforming, and it is likely to continue.”
“Left to its own devices your portfolio will grow wildly — not to structural ruin, but to structural inefficiency.”
“Amid a growing stock of assets owned by the central banks on a global scale, the free float of available assets has declined and thus volatility has subsided significantly.”
” I can’t imagine telling my trading boss or one of the limited partners that I’m bearish as all get-out. But instead respond to the logical question, “Great, how many are we short?” with, “No, no, I’m long because it’s the only way I can figure out how to make money.”
” This too produces an ‘irresistible force’ driving spreads tighter, which investors feel powerless to resist.”
“…keep an eye on how Jackson Hole begins to get handicapped as it becomes more imminent. And don’t assume Friday’s CPI is guaranteed to be more of the same.”
“It’s important to remember that this is merely a microcosm of the larger dynamic at play across assets and across regions.”
Ok, well good news: we’ll get a break from potentially market-moving scheduled events this week. Notice I said “scheduled” events. That’s a category that does not include impromptu staff changes at 1600 Pennsylvania, declarations of war made via Twitter, subpoenas for Trump associates, precious metals flash crashes, and/or ICBM launches. One thing worth watching this week…
“So how then might the story line read? That all this nonsense that globally rising rates and widespread balance sheet reduction just can’t be a calm experience. Investors simply own too much toxic “financial products” to make that likely.”
“This was last seen in 2007, just before the bursting debt bubble blew the global economy and financial system to smithereens.”
But we would caution that you have now run out ahead of your fairy godmother…
