August days in financial markets tend to be quiet. Volumes contract as many investors take to the sidelines. This time offers a chance to spend time with families and friends, read a book, enjoy a beer; in short, it’s a good time to sharpen our axes for the fall.
Just a month ago markets appeared enamored with President Trump’s agenda for deregulation, tax reform and fiscal stimulus. The prospect of protectionism was viewed as mere rhetoric from a president in perpetual campaign mode.
Like greenskeepers carefully tending to the needs of golf course greens with the arrival of spring, central banks face an equally delicate task of restoring national economies showing slower signs of life without killing off healthy ones, and seek stability over wild undulations.
In his new book, psychologist Steven Pinker details how the human condition has steadily improved over the past millennia. His data suggests that we enjoy longer, healthier and happier lives than our ancestors; that we have made significant progress against disease and starvation; and we have experienced a steady decline in deaths resulting from wars, natural disasters and crime.
The last 30 plus days have seen a dramatic unfolding of events involving Russia. The combination of rising political tensions, new U.S. sanctions and another chemical weapons attack in Syria have put investors on edge. The conundrum facing investors is whether this new Syria crisis will quickly fade or linger given other cumulative effects.
Markets are known for offering investors lessons in humility. On the one hand, Warren Buffet suggests that “humility can make you rich.” On the other hand, a lack of humility, typified by chasing unsupportable gains (aka Bernie Madoff), can lead to ruin. The difference in outcomes rests on the ability of investors to gauge the market.
Humans have an innate tendency to discern patterns and connections between otherwise unrelated things. Psychiatrists have termed this ability as apophenia. It’s an essential trait to make sense of an otherwise random world.
These days it is easy to be cynical. Writing this on the eve of a U.S. government shutdown, it seems that our leaders and institutions too often disappoint us. Perhaps the truth about our leaders and institutions was always oversold, yet we chose to believe differently.
The U.S. economy is in the late stages of an expansion, and speculative excesses are beginning to proliferate. Risk assets will probably perform well in 2018 but increasing caution and portfolio conservatism are warranted
Over the course of 2017, we integrated big data analytics into Northwest Passage Capital Advisors’ tracking of global events. As part of our firm’s ongoing “Boots in the Cloud” research initiative, we are actively leveraging the vast data potential of the Global Database of Events, Language, and Tone (“GDELT’’) to gain a fuller and better-informed perspective on world events impacting emerging markets.
December 18, 2017
As 2017 ends, investors are fully engaged in a seasonal event as much a tradition as eggnog or caroling this time of year. It’s forecasting season.
November 30, 2017
While difficult to recognize the signals in real time, most economic cycles follow a recognizable pattern apparent in hindsight.
October 3, 2017
Across Latin America, voters have rejected populism, of both the far right and left variety, moving to a more centrist position. A case in point is Argentina.
July 31, 2017
Results reflect a benign environment for fixed-income assets with EM bond markets tracking the overall strong performance of risk assets.
July 1, 2017
The Olympic motto (“Swifter, Faster, Stronger”) captures the essence of competition; that through competition the best is brought out …
June 1, 2017
Intelligence organizations have historically relied on agents in the field employing well-honed spycraft to collect and report vital information …
May 2, 2017
Fixed-income markets deliver strong returns, ignoring continuing political and economic risk, in a complete unwinding of the “Trump trade.”
May 1, 2017
In policy-making, everyone wants the honey without the vinegar…
April 4, 2017
The recent triggering Article 50 renews speculation over Brexit. Application of basic game theory sheds light on some potential outcomes.
April 1, 2017
Today, Cuba stands at a crossroads. Will it continue to rely on its old allies …