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 has been its remarkable resilience in the face of epochal political shifts and a world at war. Brexit, Trump, the near-miss in France with Marine Le Pen – all of those events had the potential to do lasting damage to…

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 to be the month that risk assets finally took notice of the exceptionally precarious geopolitical backdrop. Risk assets have reacted unfavorably to the combination of rising tensions on the Korean peninsula and the seemingly terminal decline of the Trump administration. As…

‘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 a mushroom cloud over Seoul isn’t an entirely far-fetched proposition. “The won is under pressure as it appears North Korea is getting closer and closer to its nuclear program and that is causing tension and apprehension in the Korean peninsula,”…

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 from Ole Hansen, head of commodity strategy at Saxo Bank and he imagines that largely explains this: One-minute volume on Brent jumped to ~2.8k lots at 9:52am in London and WTI dropped by a similar amount on one minute volume of 4.6k lots. We’re blaming that…

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 July 4 by launching what Pyongyang says was an intercontinental ballistic missile. The projectile, fired from the country’s western coast at 9:39am local time, flew for about 40 minutes and crashed landed into Japan’s EEZ. According to an “important announcement” (that’s…

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.”