You will all recall how forcefully we argued that the world was coming to a standstill in 2018 based on our core macro view, which we termed 'the Four Horsemen
': • Quantity of money collapsing
• Price of money rising
• The price of energy = a tax on consumption
• Anti-globalisation = reduced global trade volumes
Then in December, we moved to our new theme of 'Global Policy panic'
The Global Policy Panic argument held that, in a world with no business cycle and just a credit cycle in its place, a slowdown or an equity market selloff would be met with more credit and a pause from the Federal Reserve.
This has now come to pass, and January of this year saw a market return in excess of the weighted yearly return normally expected for an entire year!
A new impulse and a new narrative are clearly needed...
(The China-US trade deal will go ahead, but only on the level of a framework... or rhetoric, really.)
What you should be concerned about as you move to manage/protect your portfolio is summed up in these two charts from today's edition of the Wall Street Journal's Daily Shot