Hacking the Matrix: A New Era in Risk Perception
"Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance." - Daniel Kahneman Chances are, "global pandemic" wasn't in your bag of quantamental factors; at least not by any name other than slippage. But now that that cat is out of that bag - and, rightly or wrongly, the wheels of a response strategy have largely been set in motion - the least we should do against a backdrop of historically significant uncertainty (aka - risk) is widen our lens as to the new spectrum of future market contagions that have suddenly become more probable... Of particular note, keep your eye on a little thing that isn't widely discussed in polite society: the Fed's balance sheet. As of April 1, the chart below illustrates over a century of total assets for the US Federal Reserve system - ironically, since around the time of the last global pandemic (in 1918). What you are seeing there at the recent end of [...]