Traders Are Drunk On Risk

Stock markets are flying. Credit spreads are tightening in a parabolic fashion. It makes no difference whether it’s investment grade credits or high yield. Presumably there isn’t a risk to be found in the world. Gold prices are showing definite signs of stalling without even testing the next area of resistance the metal was widely expected to blow through. Who can be bothered with safety? The most negative thing you will read is someone saying this is a tactical rather than strategic opportunity to ride carry to first-half glory.

The forecast timing of rate hikes, anywhere, keeps getting pushed back. It is like taking a picture of someone standing at the edge of a cliff and telling them to step back so you can get a better view. At some point, they just end up falling off.