Wednesday, 23 December 2015

That's a wrap.

So here were some calls I put out last year for 2015. And it's time to appraise.

- Trends in equities and bonds will end. This is the year of the whip.

I think we can score that as a categoric HIT

- Though general equity indices will see a path of general sidewayness with high volatility there will be large sectoral oscillations.

Again a HIT. SPX closing much where it started in the general scheme of things (even China's SHComp outperformed it by 12% over the year) with sectoral plays having been massive.

- Because of the above, funds will start to move from index trackers towards discretionary as the point above means that GOOD discretionary starts to perform.

MISS. Looking back on it there was a self-inforcing escape clause in it. GOOD discretionary has been good, or it wasn't good. The problem is that discretionary in general has been pretty bad. But then so have most indices. So I am a bit lost on this one.

- Discretionary macro will find they are short of portfolio managers as they have mostly been replaced by quants who are absolutely brilliant at working out value in their space but unfortunately don’t have a clue as to how someone else’s space effects their space, especially if it hasn’t happened before.

MISS, though I’ll claim an assist as Discretionary Macro have indeed found themselves short of portfolio managers but that should have been caveated by ‘GOOD' portfolio managers as performances have been pretty abysmal. The quants are still dominating the world and the discretionary macro has at best had a ‘year of living dangerously’ or at worst completely screwed it up.

- Macro hedge funds that have sold their souls to pension funds and real money investors will feel like straight jacketed loons peering out at freedom from the confines of their asylum as the risk rules imposed upon them by their new masters of dull money mean that they can’t participate in the way they would really like to. Or stay in when under pressure.

Not sure -  Funds have found the combination of lack lustre performance within the confines of rules implied by their investors egregiously restraining, or, ok , their performance was just rubbish but many have decided to hand back investor money and go it alone with just their own. Bluecrest a case in point, but a number of macro funds have hit the headlines this year, handing money back or closing.

- Fast swings will seek out and eat at the edges of risk boundaries. Much as lions will take down the wildebeest on the edge of the heard, funds that can’t move fast enough or are too restricted by process will under-perform as their positions are taken away from them in a steady stream of stop losses on both sides of the market.

HIT - Hard to tell now how much the whipsaw destroyed returns through stop losses being triggered without the agility to get back in in time for bounces, but 2015 has certainly been the year of the whip and stop loss. Either you took them and missed the re-entry or didn’t and wished you had.


2016 - I've been looking at trade recommendations from some houses and the complexity of some of them e.g. GS’s ‘Stay long a basket of 48 non-commodity exporters and short a basket of 50 EM banks stocks’ has me thinking that no one really has any confidence in anything at the moment. The idea that a year that has left many confounded ends with an outlook that is also bathed in confoundedness is not really to be unexpected. As a general rule, forecasts are normally an extrapolation of current mood.

If I was to be completely true to my faith, now would be the time to go for some big calls that sit outside confused tweaks of yield curves or spreads of things that are pretty much reliant on good fortune than real cleverness. I don't want to be fooled by complexity. It may look clever, it may sound clever, it may even be funny, but it can still lose you money as fast as betting that Trump would be out of the running by now.

But I don’t have any brave calls other than thinking that 2016 may see the following

-People will think that the Fed will hike faster than currently discounted, discount that, and then the Fed end up trailing market expectation again.
-The UK and GBP will take a hit as the rest of the world wake up to the fact that the ‘leave EU’ vote is going to be a very close run thing. I would love the UK to join NAFTA instead. If Turkey can be considered part of Europe then why not UK part of the North American continent.
-Europe will continue to politically melt like a lump of fat on a hot plate - From the bottom. The only hope is that economies grow fast enough to defuse nationalistic unrest. Greece will become an issue again in June.
-China will be just fine but relations with the west will continue to cool politically.
-Something will happen in the oil markets to see prices rise, the breath holding contest between marginal producers is going to see drownings. Or someone forcibly goes in to turn the taps off in Saudi.
-ECB will continue to trade Oil. ( i.e. energy and commodity price inputs will be the main sway to EU inflation and ECB will follow the swinging watch chain, hypnotised)
-Iran becomes more of a friend to the west putting further pressure on Saudi Arabia.
-Saudi Arabia will come under someone’s cosh in general. Too many points of interest coincide at Saudi Arabia.
- The West reduce sanctions against Moscow. I don’t know what will be the catalyst, but something will thaw relations.
- Equities will have a shake down at the beginning of the year and there will be the usual 'EM is going to collapse' call (seems a regular feature of Januaries) but then you scoop them up with both hands. Probably on the 19th Jan.
- Banks will continue to morph into old fashioned post offices as they are squeezed between regulation and Fintech. The intelligent output of Universities is now going to where it always should have gone, science, engineering and creativity.
- Inflation will be back. Great for deflating debt but only as long as real rates stay negative while inflation rises otherwise the cost of servicing debt could wipe out borrowers before their debt levels denude through inflation.

I am not going to put any trades on until something sticks. And I dont mean to fur.

Now finally, here are some things I would LIKE to see happen in 2016, but are, unfortunately not very likely.

- Amazon is found to be run by creatures that otherwise occupy the 'Tripods' in 'War of the Worlds' as I gather the way they treat humans is similar.
- SKY TV go bust.
- The road works on the M3 will be finished, or at least finished before the world is engulfed by the sun as part of its natural evolution towards a red giant.
- People will fix your computer rather than telling you how to do it.
- Trump and Putin meet in a cagefight - on the basis that two men enter and hopefully neither leave.
- Politicians are fined for every proven untruth they tell. Check your stats folks...
- Banks will work with retail so that all transactions automatically attach an invoice to your online bank statement which is automatically downloaded into accounting systems.
- A large blank swathe of Syria is secured by international forces and new cities rebuilt to rehouse all the fleeing refugees. Better to rehouse on their own land than in foreign countries.
- A new ‘thing’ is invited that becomes the must have essential item for the whole world, kick starting economies (large TVs, phones and cars have run their course)
- Battery energy density break through.
- Someone events a new class of antibiotic.
- Scotland gains independence whether they like it or not.
- Peak Political Correctness occurs when my offence at your offence causes stalemate in the Ombudspersons judgepersonst
- People reading from 2000yr old books stop trying to change my life.

Friday, 4 December 2015

Nobody expects - ECB more dorkish than expected.

The ECB has added yet another positive data sample to support the theory that the most profitable trade of 2015 is to fade market expectations into central bank announcements. I have produced this simple representation using the Fed as an example before, but it is just as aptly applied to the ECB and their announcements. For the ECB we should replace 'hawkish' and 'dovish' with 'less dovish and very dovish' and apply a slight downward gradient on the black line, but you get the picture

I have seen comments this morning that the market was shocked by the ECB's hawkish tone. It's a funny old world where a central bank moves rates from negative to more negative and can be accused of being hawkish. Dorkish maybe, but not hawkish.

As I keep stressing, the thing that we should have learned over the past few years is that that expecting central banks to follow market expectations is like expecting the Spanish Inquisition. No one should expect it.

The element of surprise that the ECB has once again induced in the market has lead me to shamelessly rehash the post from October when the market was surprised by the ECBs dovish tone.

The latest ECB press conference Monty Python Style  - No one expects such little ECB action.

Market -  I didn't expect such little ECB action.

Jarring chord. The door flies open and Cardinal Draghi of the ECB enters, flanked by two junior cardinals. Cardinal Vítor Constâncio and Cardinal errr the other one at the press conference who never says anything.

Draghi - Nobody expects such little ECB action! Our chief weapon is surprise...surprise and fear...fear and surprise.... our two weapons are fear and surprise...and obscure communication.. Our three weapons are fear, surprise, and obscure communication...and an almost fanatical devotion to inflation targeting.... Our amongst our weapons.... amongst our weaponry...are such elements as fear, surprise.... I'll come in again. (exit and exeunt)

Market - I didn't expect such little ECB action.

Jarring chord. They burst in.

Draghi Nobody expects such little ECB action! Amongst our weaponry are such diverse elements as fear, surprise, obscure communication and an almost fanatical devotion to inflation targeting, and doing everything it takes, - oh damn! (to Constâncio)  I can't say it, you'll have to say it.

Constâncio - What?

Draghi - You'll have to say the bit about 'Our chief weapons are ...'

Constâncio - I couldn't do that...

Draghi bundles the cardinals outside.

Market - I didn't expect so little ECB action .

They all enter.

Constâncio - Er....

Draghi - Expects.

Constâncio - Expects... Nobody expects…such little ECB

Draghi - ACTION!.

Constâncio - I know...I know! Nobody expects such little ECB action. In fact, those who do expect...

Draghi - Our chief weapons are...

Constâncio - Our chief weapons

Draghi - Surprise.

Constância - Surprise and...

Draghi - Stop. Stop there! Stop there. Whew! Our chief weapon is surprise, blah, blah, blah, blah. Read the charge!

The other one - You are hereby charged that you did on diverse dates commit heresy against the Holy ECB. My old man said you didn't follow the curve.

Constâncio -That's enough. (to Markets) - Now, how do you plead?

Market - We're innocent.

Draghi - Ha! Ha! Ha! Ha! Ha!


Constâncio - We'll soon change your mind about that!


Draghi - Fear, surprise, and a most ruthless... (controls himself with a supreme effort) ooooh! Now, Constâncio, their expectations!

Constâncio cites obscure inflation indicators in support of the ECBs lack of action. Draghi looks at him and clenches his teeth in an effort not to lose control. He hums heavily to cover his anger.

Draghi - You....Right! Tie the market down. (the other ECB officials make a pathetic attempt to adjust the market expectations) Right! How do you trade?

Market - Still long Bunds, short Eur/Usd and running long Dax.

Draghi - Ha! Right! Not for long! Cardinal, give their expectations (oh dear) give their expectations a vicious twist.

Constâncio stands there and awkwardly and shrugs.

Constâncio - I....

Draghi -  (gritting his teeth) I know. I know you can't. I didn't want to say anything. I just wanted to try and ignore your crass mistake in leading the market to believe in October that we were going to follow Switzerland

Constâncio - MY mistake?

Draghi - It makes it all seem so stupid.

Constâncio - Shall I, um... Tell them that we'll continue QE until March 2017?

Draghi - Oh, go on, just pretend for God's sake

Constâncio mumbles about the effectiveness of QE and need for its extension. The market looks decidedly bored with this pathetic attempt. 

The doorbell rings. The market detaches itself from the ECB and answers it. Outside there is a dapper Fed official with a suit, slightly detached from reality.

Fed Official - Ah, hello, you don't know me, but I'm from the Fed. We were wondering if you'd come across the pond and do a sketch over there, in that sort of direction... You wouldn't have to do anything - just look as though you expect the Fed to raise rates

Market - Oh, well all right, yes.

Fed Official - Jolly good. Come this way.

Wednesday, 2 December 2015

The Pitch - ‘FiX Up’

The Pitch for working title ‘FiX Up’

After seeing the age of the criminals who pulled off the record breaking Hatton Garden vault heist and at the same time witnessing the outrage at the FX market's fixing scandal, I thought I could marry up the two genres in a typically British film, the pitch of which I have sketched out below. I was wondering if this could actually be pulled together into a film so if anyone would like to talk to me about making this real then please get in contact.

The tale is a familiar one of old criminals (lags) getting together for one last job, only in this case the lags aren't criminals but old school 1980's FX dealers. Imagine Oceans 11 meets Trading Places meets Sexy Beast meets Wall Street (only the Essex version). The old trading lags come together to have one last crack at the markets, but do so behaving as they did in the 1980s causing all sorts of financial mayhem and amusement as they apply 1980s trading skills in an electronic world. (All characters are of course fictitious and any resemblance to ..etcetcetcetc)


Sitting outside the clubhouse of a golf club in Essex, England, supping lagers, two old FX spot traders are discussing how things have changed since their day and despair over the news of FX fix fixing. They reminisce over the old days and decide that the traders of today must be completely stupid to be caught out doing something that they all did but nowhere near as blatantly. At this point a waiter appears and while clearing the glasses catches their conversation and starts to chip in. He tells them that he was recently let go from an FX shop for not being profitable i.e. he didn't rip the clients off enough and regales them with a list of the absurdities of today's markets including algorithmic trading, arrogant Real Money fund desks, demanding Hedge funds, compliance officers and the regulators themselves.

The old lags start to fume at what has happened to their beloved market and decide that if a collection  of young muppets can so nearly get away with the FX fixing, but for being idiots, they would have a crack at showing them how it should be done, fiercing up the market one last time.

As with any good heist movie the target isn’t the public but the other evils in the market. The plot sees the old lags actions end up, Robin Hood style, benefitting the public good whilst taking down the modern evils on the way.

The two originators, Mickey and Danny, hatch a plan to get the boys back together.

The team cast list  (actor suggestions in brackets)

Mickey. ex-trader and now the groundsman at the Essex golf course (Ray Winstone)
Danny. ex-trader, recently made reduntant from the back-office of an Aussie bank (Phil Collins)
Dave and Steve. ex-traders who are approached in one of those green taxi cafes in London as they are now drivers for  FX taxis (the two bald actors from Eastenders)
Bugle (real name Charlie).  As a young guy he was the 'muppet' on the spot desk but now is a corporate FX sales guy at a bank, about to be busted for peddling 'charlie' to his clients. (Lee Evans)
Wayne. Now a compliance officer at a US bank. He doesn’t want to join, but they blackmail him with photos from a 1989 stag party. (Jim Broadbent)
Gerald.  A smooth investment bank type who used to be their boss in the old days who is now treasurer at a small private client bank but is about to be let go (Ralph Fiennes or Jeremy Irons).
Sparks. Ran the primitive IT at the old shop but is now running a porn website. (Timothy Spalls)
Jimmy (but now prefers James).  The old economist cum strategist - nervous and lacking in confidence these days - he is now writing financial blogs and running a failing online private trading advisory service. His character regains its old force throughout the plot. (Colin Firth)
Beverley. Telex girl and everyone’s old fling. Now a house-mum in Romford (Patsy Kensit).
Archie.  An old school french sales guy, always drunk but knows every important name in the European market as he has probably been whoring with half of them and slept with the other half (Gérard Depardieu)

Each one has a scene of them being approached and finally accepting.

When they gather Sparks tells them of a bank’s disaster recovery dealing room he knows of that has been mothballed and as the owning bank is going under due to regulator fines they seem to have forgotten about it.

The lags break in and start to set up. There are scenes of them all larking around trying to understand the new technology (even though it is old by modern standards) whilst Sparks gets angry and Gerald has to read the riot act.

They set up dealing lines with dodgy prime brokers using the credit card numbers Sparks has hacked from the client list of a high class City strip joint.

They start to trade and gain market credence by behaving as normally as they can though they often nearly let slip (such as asking for USD/DEM) which Sparks and Gerald have to cover via IT hacks and Gerald's connected shmoozing. E.g. when starting up they don’t know what an EBS is and nearly cause a flash crash by hitting it in anger (ends with Mickey throwing it out of the window and declaring that from now on its phone only like the old days. Cue more blackmailing calls to old school voice broker types).

As they get bigger  investment bank sales desks hear of the volumes they are doing (facilitated by tip offs from Archie to his sales mates)and start to court their business wanting direct access to this new client instead of via prime brokers. Wayne knows how to fool the Know Your Client regulations and Sparks links their credit references to those of a large Far East sovereign wealth fund, so large dealing lines are obtained.

Once all the credit lines are in place, it all sets up for the sting which is based around a set of data releases, could be non farm payrolls or an important CB rate announcement (a bit 'trading places').

The announcement is way off expectations but instead of doing what would be expected they do everything that theoretically they shouldn’t.  James “ECB cut 1% much much lower than expected.. so boys what do we do with EUR/USD?… well we should sell the sh*t out of it .. so… MINE MINE MINE”. The resulting price action confuses the hell out of the algorithmic trading models and new world theorists (cut to the odd 21yr old quant at a large investment bank muttering 'this shouldn't be happening'),

Cut to shot of the back of a chair in a chic glass office with a young preppy exclaiming to the occupant "We don't understand it sir!" The chair swings round as it's occupant, fingers steepled, quietly utters "I do". It is one of the old school macro hedge fund giants who was also around in the old days and was the lags' old nemesis (probably played by Ben Kingsley). The Hedge fund is called 'Nemesis'

The game then develops into a battle of old fashioned phone trade spoofing with analogies to real battles. It’s mayhem and the weaponry expands as the old lags realise that the Hedge Fund Nemesis has more than they are used to - ‘Shit he's got f’king options, he’s using options! Where the f’k is Willy?" Willy is a retired prehistoric options trader who they call in last minute only to find he is on oxygen in a nursing home, but he starts to help via mobile phone and manages to talk them through countering the option attack via a massive option barrier battle with him directing the spot desk through his oxygen mask (highlights option market manipulation).

It is now 3.30pm and the old sales lags, Bugle and Archie, are preparing for the 4pm fixes. Sparks has hacked the financial chat services of other major banks and the old lag sales guys are now using them to offer all the real money fund accounts reverse spreads on the fixing prices, but only on sell orders.

Cut to Real Money dealing desk hearing this and giving the lags all of their sell orders despite a junior there asking how it can be possible to offer reverse pricing and says something dodgy is going on, but the Real Money traders saying they don't care, as they only have to outperform the fix and get paid themselves on the difference. Thus they fall into the trap.

Come the 4pm fix they manage to coordinate it so the hedge fund Nemesis is about to unleash hell on the boys filling their bids, but the boys pull the bid just as Nemesis screams SELL. The market melts on the back of it right into the fix. This screws the Real Money fix orders and the regulator, now seeing the fast move and receiving screams from the Real Money sector start to track down who was responsible - leading to the Hedge Fund Nemesis.

The rapid move in the fix also triggers regulatory investigation as to how so many orders were effected leading to the exposure of the real money execution desks accepting reverse pricing.

In the background is the battle of the computer algorithms who can’t understand 6 standard deviation moves and there are scenes of barely out of teens quants and their ‘this shouldn’t happen’ cries. As the old lags notice stop losses coming in from the algo sector, they realise they have found the algo’s Achilles heel and crank up their 'do the wrong thing’ trading.

Meanwhile Sparks has hacked into Bureau de Change style holiday money changers via his old porn site dropping viruses into their front offices (cut to bored young FX teller in a Heathrow Bureau de Change late at night surfing porn).

By now the traders are raking it in over the algos but when the team’s profits hit $1 billion they start to transfer their profits back to flat by providing stunning FX rates via all the usual rip off holiday money FX joints (cut to scenes at airports/train stations/post offices of queues of people taking currency out)

 When their P/L is down to zero they plan to pack up the dealing room and scarper. But it’s a race against time as the authorities are closing in having tracked Sparks' hacks and compliance officers finally seeing cracks. They make it out just in time but not until after the police are seen on the CCTV breaking in down below. Sparks shouts that the Feds are in. Mickey shouts “The Fed’s in?” and instinctively buys 300m USD/JPY before being stopped.

There is a resulting huge media storm. Investigators dragging off compliance officers for not preventing it, the Hedge Fund Nemesis for manipulating the market, the real money guys for accepting impossible fix prices for personal gain and the algo shops go bust amid scenes of riots against computer trading. Finally, Parliament rules that Bureau de Changes must provide interbank rates. There are TV clips of embarrassed statements from all.

The final scene is the police breaking into the dealing room the boys have been using to be greeted with a mess and a huge spray painted slogan on the wall - “F'CKING MUPPETS’ (which will become a catchphrase forever linked with the film)

 Fade to Mickey and Danny outside the golf club chinking together their pints of cold lager.


Memorable scenes -

- Old lag calls new US Investment Bank dealer. New dealer -“He’s just given me a 100 and asked how I am left shag, what’s that mean? - He wants another price - But he’s just had one - Make him another - He sold again .. damn .. and again .. and again. Old lag marches the price down but then lifts the new kid in huge at a large loss. Old lag - ‘F’king Muppet’.

- The boys go to the pub for lunch and get legless coming back at 4.30pm - drunk behaviour party scenes, bins on heads etc. but hugely successful trading.

- A bank dealer to his older boss "That's odd, he just said that I am a monkey and put the phone down" Old boss asks "what EXACTLY did he say?", " He said 'you're a Monkey' and hung up" - Boss "SHIT! he said 'YOURS, a monkey'. A monkey is slang for 500, you are now long $500million USD/JPY and as I see it $500,000 underwater"

- Beverly being sent off to Mayfair to seduce the Hedge Fund’s critical quant over lunch in a smart Bistro/Cafe and dropping MDMA in his double espresso so that he goes back euphoric only doing nice things instead of the Hedge Fund God's instructions.

- One of the old lags deciding to be long or short by the way the crane outside the window is pointing.

- The team plan to hit the market on the US trade data. But nothing happens as no one cares about US trade data any more, only to be caught out when Non Farm Payrolls come out “What the f'k was that all about? NFPs? Not F’ing Playing.. that’s what I am ..”

- Old lags trying to visit old city haunts. Flash backs to seedy pubs and omellete shops - all gone and replaced with Starbucks and glassy wine bars. Plus reminiscing lines of past bad behaviours.

- Gerald being told he is no longer needed at the merchant bank as a new US MBA non market savvy geek is being moved in.

- The young kids around one of the old school brokers serving the old lags experiment with the old techiniques gingerly trying to say “and thank you too .. errr Mr… Shag?”

- Willy, the options dealer, in the nursing home asking why the price is spiking every 2 seconds when he mistakes his heartbeat monitor for a trading chart.

- Compliance officers in the investment bank queried about the new customer a/c saying everything does seem to be in order as they have a copy of a passport and two recent utility Bills - shot of one of the passports being that of a FIFA president.

- Old lag's first trade asking for Usd/Spain only to be told it doesn’t exist anymore. He screams "Ok Usd/Mark then". No not that either. He freezes in stunned disbelief.

plus many many others…………

Tuesday, 1 December 2015

I just don't Noah.

Apparently the next two weeks in markets are going to be the most important since Noah predicted the flood crisis. Thinking about Noah for a moment, I can only imagine how absolutely pissed off all his neighbours must have been with him. He was probably the Zero Hedge of his time, but rather than calling for everyone to build a cabin of wood and fill it with gold, he came up with the cunning plan of telling his neighbours to stick all their livestock in his floating cabin so he could sail off with it all.

But Noah is a literal case of survivor bias. 'Literal squared' actually, as he was the one who survived and he was written about. What we don’t hear about are all the other nutters who were building arks for the previous eon calling for doom only to go bankrupt as their long gophur wood positions suffered decay and they died long before their wild predictions of flooding would ever come true. So it is with markets. We have hundreds of financial Noahs telling us to build arks and not to squander our time and wealth on farming, procreating, lying in the sun and generally having a nice time. But as my wife says 'you only live once' so we might as well enjoy the now.

Living for the 'now' is apparently what ‘Mindfulness’ is all about so, with it being so fashionable, I am surprsed no one has launched a 'Mindfullness Fund' where they just spend all your money on the 'here and now', not worrying about future returns as it’s the now we have to be concerned with. Oh, hang on, they have haven’t they. It’s what macro funds have been doing with your money all year. Macro funds - where mindfulness is not mindfulness.

Everyone desperate for something predicatable to happen in the market is telling us that the two greatest predictable events are going to happen in the next two weeks and it is going to result in amazingness, where amazingness equals whatever they are predicting to happen once the two most predictable events have occured. The two most predictable events are the Fed and ECB rate decisions, but the follow-on predictable events depend upon who you are talking to. Spotted the problem here yet? Polemic’s Certainty Principle. 'If you can see how predictable an event is, the outcome is unpredictable. If the outcome is predictable then the event that causes it isn’t'. Back fitting of news stories to fit market moves is a case in point.

On the other hand there is an unpredictable event coming up that is so unpredictable people would rather not talk about it that much because predicting a tradable outcome from OPEC can be as exciting and probabilistically reliable as calling the lottery numbers, most probably because OPEC's decision are as much political as they are economic. Which makes it tough for the great mass of financial research which relies on the quasi-maths we call economics rather than the base cause of human inter-relationships which is called politics. Economics works really well until I smash you over the head and steal your belongings, at which point the supply and demand price curve bypasses price, instead verging into the i-dimension of imaginary economics.  Perhaps someone has written a paper on that, but though many seem to think citing someone else's 'paper' is gospel proof of their own arguments, most papers are only worth what they are written on (and I am not talking about a Macbook Pro).

I am getting pretty bored with markets at the moment. There seems to be an excess of navel gazing with respect to economics with actually very little happening in response. The next triggers to market moves will be via basic politics rather than newly found economic theory. I don’t know what the next trade is. Doom rests upon everything going caput re debt, but one man’s debt is another's asset so these huge numbers being bandied around probably net off to a huge extent. Imagine if there is a Martian life form up there saying ‘Fleep bodudle gweeb, have you seen how much debt there is on Earth? That planet is bankrupt!”. No it isn't, only in this respect are Flat Earther’s correct. Earth as a whole is flat.

Whilst talking about Martians, here's a philosophical question - is it possible to be criminally racist against a race doesn’t exist, but instead is only a figment of one’s own imagination? I bet it is.

As for EM and USD debt, the most likely outcome will be that EM switch to Euro or Swiss funding as close to negative as they can get and then just roll up the FX risk as usual. Bad for Eur and Chf, but then everyone is positioned for that anyway so probably nothing will happen.

Basically, if you don’t have to be trading and you don’t have to be writing about markets then don’t. If, however, you are employed to look busy in markets I recommend you buy a copy of ‘My Big Bumper Soduko Book’, make an excuse about a prawn curry and lock yourself in Trap 3 until everyone else has left for Christmas.