“Is it safe?”
In the movie Marathon Man [a 1976 American thriller film directed by John Schlesinger] Laurence Olivier who plays Dr. Christian Szell a Nazi war criminal straps Dustin Hoffman into a dentist's chair and without any anaesthetic starts drilling into Hoffman's mouth.
Marathon Man - Dustin Hoffman “Is it Safe” - Laurence Olivier as Dr. Christian Szell @carlquintanilla via @Sergiofordy
“Is it safe?”
“Yes, it’s safe. Very safe. So safe you wouldn’t believe it.”
[long pause]
“Is it safe?”
“No. It’s not safe. It’s very dangerous. Be careful.”
That Snippet from that Film seems to me the perfect accompaniment preferably on an eternal loop to the World and the markets we find ourselves in today.
''We are off to Moscow off to Moscow we go to Regime Change The Wicked Witch of the West [or is it the East?] aka Vladimir Putin''
Nancy Pelosi has pronounced She is going further East all the way to Taiwan because real Men and Women go to China and Nancy fancies a Pop at ''Pooh Bear'' and meanwhile Xi has salami sliced his way and snaffled up Hong Kong and Nancy could provide him with the perfect excuse for a Taiwan casus Belli.
“Is it safe?” some of Us ask.
At the end of last week we saw a chink in the ''whatever it takes'' [to bring inflation down] Narrative.
[The] Hike cycle terminal rate cruised lower to 3.28 (Orange) vs 3.49 last week (Blue) @Fullcarry.
The Dollar index came off the boil @dma_2022
and even the seriously beaten up Frontier Eurobond Index managed a small rebound.
After the #ECB hiked rates by 50bps, German 10y declined from >1.3% to almost 1% in a matter of 24h. German 2y down to 0.4%. @COdendahl
When I was a lot younger we used to play a Game called ''Red Eye'' Everyone gets a card and everyone else's card is visible to you except your own. And you bet on that basis. The Question is whether if this were a Game of Red Eye and the market has now seen that Powell and Lagarde are holding the 2 of spades and that this hiking cycle is near done. If that is the case, the Yen is a screaming Buy and the Dollar a Big Sell.
I do not expect Inflation to crash, however, which is a Caveat Emptor to this thesis and therefore the risk of Weimarisation is material.