Think of it like you have your two Greek gods, the water and the sun, fighting each other and right now it’s not going anywhere.
It’s going to end badly. We’re about ready to make a big move that will happen by the end of this year.
That rather amusing quote is from Andrew Brenner, head of international fixed income at Natalliance Securities in New York. It appears at the end of a recent piece by Bloomberg’s quant queen and New York’s “best Burger”, Dani.
The thrust of the piece will be familiar to Heisenberg readers. Here’s Burger:
With Catalan separatists raging, a cloudy outlook for U.S. tax overhaul and all eyes on who President Donald Trump will nominate to head the Federal Reserve, there are a lot of risks out there for investors. Or at least you’d think there were.
Despite the headlines, financial markets are experiencing unprecedented calm and unprecedented gains.
Yes, “unprecedented calm” against a geopolitical and policy backdrop that is anything but serene. We revisited the disconnect between policy uncertainty and market-based measures of volatility on Sunday in “The Great Disconnect: 5 Reasons Why Volatility Is Detached From ‘Chaotic Uncertainty.” Here’s what that disconnect looks like:
The reason we wanted to bring this up again on Monday (well, other than to talk about one of our favorite subjects and plug Dani’s latest post) is because of the point the Bloomberg piece makes about dissensus. Here’s another excerpt:
Right. Investors are “paralyzed.” Does that sound familiar? It should. Let’s go to the source of all things wise, Deutsche Bank’s Kocic:
Dissensus has emerged as a new paradigm – an absolute inability to form consensus across variety of contexts, accompanied with an onset of a breakdown of conventional frames of reference. So, what does one do when no decision can be made? Well, one waits. As a consequence, the market flows are slowing down and vol sellers emerging. This is where the things begin to develop ambiguous overtones.
