Liquidity worries are so 2015.
In the new year, there are much more pressing concerns.
Like a possibly imminent, overnight yuan float, which would quite simply torpedo every risk asset on the planet even as it would probably be just the thing Beijing’s economy needs to secure long-term stability.
Everyone assumed it would be the threat (or the reality) of international terrorism that would ultimately break Europe’s resolve when it came to goodwill towards Mid-East refugees.
Indeed, we remember vividly when the first reports of a “Kalashnikov assault” on cafes in the French capital hit social media on that fateful Friday in November.
“That’s it,” we assumed, for Europe’s experiment with an open-door migrant policy.
Authored by Paul Brodsky of Macro-Allocation.com,
The Triumph of Politics
All of life’s odds aren’t 3:2, but that’s how you’re supposed to bet, or so they say. They are not saying that so much anymore, or saying that history rhymes, or that nothing’s new under the sun. More and more theys seem to be figuring out that past economic and market experiences can’t be extrapolated forward - a terrifying prospect for the social and political order.
Consider today’s realities:
Via ConvergEx's Nick Colas,
Today we engage in a simple thought experiment: what 3 pieces of information would you need to confidently call the 2016 end-of-year level on the S&P 500?
A brief survey of senior Convergex traders yielded this list: year-end worldwide central bank rates, Chinese GDP growth in 2016, actual 2016 US corporate earnings, the winner of the U.S. presidential race, and the pace of increases in the Fed Funds rate for the year.
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
“Those are my principles, and if you don’t like them… well, I have others.”
– Groucho Marx