A toxic cocktail of elevated stock market valuations, a less accommodative pivot by global central bankers, wayward fiscal policy (adopted by both parties), a market structure (influenced by the rising dominance of machines and algos) that increase the interconnections among different markets (and asset classes) and a chaotic White House shrouded in random policy actions (e.g., yesterday’s tariff announcement) without a process and that fail to consider the consequences are being served up.This is serving to create a backdrop of unpredictability and uncertainty that is in marked contrast to the calm experience of the last five years." data-reactid="23"A toxic cocktail of elevated stock market valuations, a less accommodative pivot by global central bankers, wayward fiscal policy (adopted by both parties), a market structure (influenced by the rising dominance of machines and algos) that increase the interconnections among different markets (and asset classes) and a chaotic White House shrouded in random policy actions (e.g., yesterday’s tariff announcement) without a process and that fail to consider the consequences are being served up.All these trends can push us into narcissism, as they weaken our sense of awe at the universe beyond our human ego; and what is perhaps more important, they also weaken our receptivity to critical signals from the external reality that might awaken us to our deep ignorance of the potential consequences of our actions, and warn us against hubris.Without this awareness we have a less accurate understanding of how much and what types of ingenuity we will need to meet the future’s challenges.” In our flat and interconnected world, an odious contagion is a much more likely byproduct when decisions are being made by machines and algorithms who worship at the altar of price momentum and correlations and who are agnostic to fundamentals and a sense of intrinsic value.Tariffs (And Other Policies “Done on the Fly”) Give New Meaning to “March Madness”" data-reactid="27"Actions have consequences — particularly policies that are ad libbed and that have no process.The proximate cause for Thursday’s 35 handle drop in the S&P Index was the imposition of steel and aluminum tariffs — a recommendation that apparently was “done on the fly” by the President.“Make Americans Poor Again The White House is living in the past as tariffs will help a handful of companies that provide little value added (and are members of the “old economy”) — and will hurt countless companies and the consumer (H/T Smalls!As a result, the causes of the next market correction and financial crisis are staring us in the face; an interconnected, automated market structure trading overvalued stocks and bonds as central banks tighten policy in a grossly overleveraged world.
Trump declared in a meeting Thursday at the White House with steel and aluminum executives.”No, they wont. We subordinate, alter, and reinvent almost everything around us according to our own interests, from the mountains of Vancouver Island to the Isle of Dogs and the very sky overhead.We now inhabit a world where the very notion of asset classes is rendered obsolete by financial technologies that digitalize all financial instruments into the same basic elements (i.e., 1’s and 0’s). And increasingly machines rather than humans trade these instruments with diminishing regard for their fundamental economic value. Three people are dead after someone opened fire on board an "adult-themed charter bus" early Saturday in Illinois, the Rockford Register Star reports.The driver of the Distinguished Gentleman private entertainment bus called 911 around am in Rockford to report shots fired. Seduced by our extraordinary technological prowess, many of us come to believe that external reality – the reality outside our constructed world – is unimportant and needs little attention because, if we ever have to, we can manage any problem that might arise there.And, in any case, as the pace of our lives accelerates, we have less time to reflect on these broader circumstances.Resultingly, stock market price discovery has been limited — leaving market participants ill prepared for change.It is my view that the hangover of early February is now likely poised to be a long and deeper one — extending throughout the next few months… Investors and traders are now dancing in the dark of unknowns and are being controlled/dominated by automated and passive investment strategies/products, events, narratives, crises and players’ (actions) rarely seen.Since, today, investors and traders seem to be dancing in the dark, I prefer dating, drinking and dancing with C. President Trump slammed his predecessor on Sunday for not crossing his stated "red line" with Syria, amid reports of a suspected chemical attack that left at least 40 dead near the capital, while also warning Russia and Iran there will be a "big price to pay" for backing the regime.