Commentary

Why have markets lately been trending higher? There are two developments which investors perceive as an overall positive for the US economy. 

China’s economy is slowing down, the United States economy appears to be slowing as well, company earnings are being revised downward, and global caution seems to be rising. Is a recession just around the corner?

I’m in Asia today and writing this brief note at 4:00AM local time Thursday as I monitor what’s happening in financial markets. 

Scary

I am asked regularly to comment on why I think markets are volatile. The easy answer is China trade and interest-rate policy. This certainly makes sense but is only half the story. The reality is that volatility is more of a systemic issue than many people believe.