As we all relax into a big, beautiful long weekend, I find myself pondering the state of markets. I am growing concerned again at the possibility of misplaced consensus narratives riding up against growing risks that are 1) lying in plain sight and 2) going completely ignored. The current cartoon of narratives around “run it hot” and “no stopping this train” have hijacked participants’ views of reality, and rather than sleep on it for a few days, I thought better to get some thoughts out there now to see what sort of thoughts you dear people come back with over the weekend. As always, I’m open minded.
Setting the Stage: Consensus Positioning & Sentiment
Liquidity Drains: The Misconception
Credit
Europe
Rollover Trade Revisited
Let’s chew on things together…