“This is an environment that is bearish for volatility. It fosters further complacency and encourages continued vol selling.”
Category: geopolitics
Trader: ‘People Are Really Unsettled About Not Having A Clue’
“If there’s one theme running through many of the conversations I’ve had this week, it’s that people are really unsettled about not having a clue where asset prices are going. Every move is portrayed as obvious, meaningful and sustainable–until it’s not.”
‘Believe Me.’
What could go wrong?
Investors Are Scared To Death Of Geopolitics – So They’re Long Stocks And EM
And yet true to form in a world where policymakers have turned everyone from macro managers to Target employees into vol. sellers and carry traders…
Monsters Under The Bed.
“To some extent the market’s resilience is justified; in other cases, however, it looks like a case of when rather than if potential shocks get priced in.”
It’s Hard To Quit.
Because then you’ll be actively contributing to the vol. spike (by selling assets or letting them roll off the balance sheet) and passively contributing to it as well by removing the “put” that incentivizes investors to buy dips and suppress volatility.
The Storm, Manufactured Existential Crises, And Competitive Games
If you’re reading this, you’re probably in the investment industry, or at least have an interest in financial markets. If you’re in the investment industry or in the financial markets, you like to win. So you’re not going to like my answer.
We play. And we lose.
The Selloff That Never Came: ‘Of Politics And Pullbacks’
One of the defining characteristics of the ongoing risk rally over the past 14 months
Don’t Dig Yourself A ‘Hole’: Full Week Ahead Preview
Ok, so strap in, because this promises to be an interesting week. August has proven
‘Playing With Fire’ – Full Week Ahead Preview
“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.”
Fasten Your Seat Belts: ‘A Melting Pot’ Of Risks
“Global political developments have kept us on our toes and will continue to do so through the fall and into next year. Investors should brace for a bumpy ride.”
Trader Reminds You: ‘Volatility Is Not A Synonym For Risk’
“On the other hand, you could argue that, the seriousness of the geopolitical situation aside, it’s not the worst thing in the world. Relearning how to deal with potentially uncertain outcomes is an important step in repairing how capital markets function.”
Einsteinian Insanity, The Chicken Dance, And An Autumn Market Top
But we would caution that you have now run out ahead of your fairy godmother…
5 Tail Risks That Could ‘Spoil The Party’ & Why One Bank ‘Stopped Worrying’
“We continue to stand by the message that a window of opportunity remains open”…
Geopolitics! Won At 4-Month Low, Lira Sinks, Trump Says ‘Very Severe’ Shit Is Goin’ Down
Well, the won is at four-month low against the dollar on Thursday because, well, because
Trader: ‘Risk Assets Are Ripe For A Correction’ And This Gives Them An Excuse
“Many risk assets are ripe for a correction from elevated levels and North Korea’s latest provocation provides sufficient excuse for traders to act.”
Crude Crashes Abruptly, North Korea Vows More ‘Good-Looking Boys’ For ‘American Bastards’
We just hit technical levels that were a bridge too far at this stage. That’s
Fireworks: North Korea Launches “Anywhere” ICBM, Trump Ponders “Heavy Move,” Central Banks Ahoy!
There’s never a dull moment in a world that’s lost its mind. North Korea celebrated
We’re Devolving: “It Used To Be That Politics Only Trumped Econ In Emerging Markets – Not Anymore”
“Yet, the chart which struck me as most relevant in the whole thing showed how market response to either Fed or ECB meetings has become calmer and calmer, whereas the response to the three major G7 political events of the last year (and a bit) has been so dramatic.”
Reality Check: Rolling Back Globalization Is A Really Stupid Idea
“But rolling back globalisation would be as foolhardy as rolling back technological change.”
It’s The Politics Stupid! BIS Flags A “Scary” Change In The Market’s Mindset
“Underlying a number of these changes was a shift of market participants’ attention away from monetary policy and towards political events.”
“Hakuna Matata”?
“In our opinion, this is not dangerous market complacency but a reflection of an abnormally tranquil macro environment, with a benign economic outlook, very supportive financial conditions, and lower political risks”…
Pimco’s Balls On Markets: “You’re Too Relaxed. Raise Cash Now.”
Balls: “We believe that many market participants today are too relaxed, that medium-term risks are building.”
Trader: “We’re Struggling To Understand Why Things Are Even Happening”
“So we function in a world where risk assets keep going up while we couch everything in risk-off terms. It’s not enough that our central bankers think they can play with our heads under the fiction that they are masters of nuance, we do it to ourselves.”
This Has Only Happened 3 Times Since 1984
“…history would suggest markets are likely to perform poorly.”
Storm Clouds Gather As Trump Headline Risk, Terror Attack Battle Econ Data For Market’s Heart
Well, this market’s mettle is being tested. Again. On Monday evening we got what might
“Here Today, Gone Tomorrow,” One Trader Indicts A “Sheep-Like, Cynical” Market
“Last week it was, U.S. is cratering, the legislative agenda is dead, China is tightening at a dangerous rate and Brazil will take down the emerging market complex. So far today, and it’s only Monday, global growth is accelerating, corporate profits are great, China knows exactly when to ease off the decelerator, PMIs are a source of strength not worry.”
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