The fun bit about investing in these weird, rangebound markets - yes there is actually some fun to be had, trust me - is everything seems to be dominated by the big unruly teenager of modern global finance, macro risk.
I have picked on the teenage metaphor because it strikes me most monetary policy of the current QE variety is fairly young in tooth, and frankly a complete guessing game. No-one really knows anything, including those terribly clever central bankers. I spent an hour a couple of weeks back chewing the cud with a leading discretionary manager, trying to work out why cancelling UK debt was such a bad idea. Presumably, my discretionary colleague mused, if the Bank of England holds lots of Treasury paper, it could just cancel it and hey presto, the impending ‘balance sheet’ disaster (more...
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