If the contemporary philosopher Beyonce has taught us all anything, it's that when life gives you lemons, you might as well make lemonade.
That seems to be the case with some of the more interesting financial news of the week. For example, how about when life gives you a presidential candidate like Donald Trump? The lemonade recipe appears, at least theoretically, to be pretty simple: Short the Mexican peso.
That's what a Citigroup strategist quoted in this article said was "the only thing you are certain of" if Trumps wins. And if there's one thing certain about financial markets these days, it's that there is a big premium placed on anything that offers even a whiff of certainty.
As James Mackintosh put it succinctly this week, markets are not necessarily immoral, but certainly amoral. He was talking about the sad, strange scenario in which the murder of British lawmaker Jo Cox seemingly caused two-fisted buying of equities, the pound and the euro on Thursday because of the notion that it would snuff out the momentum behind the campaign for Britain to leave the European Union.
Aftward, campaigning was suspended on both sides of the issue up for referendum next week. Opinion polls and an International Monetary Fund report on the issue were delayed. Dignitaries like David Cameron, George Osborne and Mark Carney canceled or cut short their appearances.
And the markets? Well, they soldiered on in their amoral frenzy, as did the online bookmakers who are handicapping the odds of a Brexit. In a stroke of irony, the Trade of the Week in financial markets was reacting to whatever Brexit signals were being sent by the mercurial betting preferences of online gamblers, in a desperate attempt to prepare for the unpreparable chaos and fear that may or may not result from such "binary bollocks."
Investors may have once listened when E.F. Hutton talked, but these days they seem much more interested in what Ladbrokes and Paddy Power have to say.
Remember the much heralded return of the stock picker? Sure, sure. But this week it was all about the return of the volatility product picker. Trading in five of the most popular exchange-traded funds and notes linked to moves in the VIX index of volatility accounted for more than 4 percent of volume in the last four days, as Lu Wang reported, a level that has only been reached once before this week. Even Janet Yellen seemed spooked.
If only the bookies could give us odds on where the S&P 500 and Treasury yields will end the year. Or how long Microsoft is able to keep all that LinkedIn goodwill on its balance sheet; or whether MSCI will ever let China into the fold.
Maybe we'd all be better off looking elsewhere in the online books and betting on something more predictable, like snooker or darts or netball, whatever that is.
Anyway, in other must-read financial news of the week, Jason Kelly's Q&A with Henry Kravis is very much worth your time. KKR is celebrating its 40th anniversary, which means Kohlberg, Kravis and Roberts kept the band together almost as long as Crosby, Stills and Nash. My favorite part was when Kravis described why Jerry Kohlberg Jr. got to keep his K in the name even though he left the firm in 1987. It seems it was an extended thank you for the fact that, in the early days, Kohlberg "provided a little gray hair," which was something the younger partners lacked.
This is certainly encouraging news to those of us whose gray hair seems to be the only asset that's accumulating noticeably these days.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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Michael P. Regan in New York at firstname.lastname@example.org
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