Ok, who’s ready to take another look behind the “fourth wall?”
“Either way, you gotta be super smart to run a country and sell vol. buddy, okay? It’s not easy.”
“The truth of the matter is that the market doesn’t know how to interpret the Fed.”
“It’s not crazy”…
“So hang in there, volatility longs. Only three more years ’til it all goes horribly right!”
Q: Will the FOMC hike the funds rate in December?
A: Yes, probably.
Finally, in case you haven’t had enough of “connecting the dots” today, here’s another exercise for you…
“Connect the dots”…
Well for those who had their doom bunkers all prepped and ready, there’s “good” news on Tuesday – the apocalypse is back on.
“With the Fed’s balance sheet poised to contract and financial conditions set to tighten either steadily or abruptly, we fear gold, fixed income, and equity asset prices may suffer a sudden drop.”
Nothing profound, just a retrospective as we wave goodbye to our $4.5 trillion friend…
Good luck out there – your fate rests on the shoulders of a diminutive economist with a pixie cut…
Given the well-choreographed and gradual adjustment, we expect that asset markets will avoid another ‘taper tantrum.'”
Now define “bad.”
Because we can’t do it anymore.
As Bloomberg’s Cameron Crise notes, this is “a particularly acute issue for currency and bond traders,” but given the fact that the fate of the risk rally depends in no small part on whether policymakers exhibit an “appropriate” level of dovishness as they attempt to normalize, one could well argue that it’s even more “acute” for equity investors, especially considering the fact that the retail variety isn’t usually very informed and is thus subject to being unhedged and blindsided.