The Lights Are On...

Hope you're enjoying the holiday season so far. To all our clients and colleagues in the UK and across Europe, we wish you a very happy Boxing Day!

Trading during the holidays is kind of like bowling with half the pins. Needless to say, results can be rather unpredictable. 

Across Europe and the Americas, even though the markets are open periodically, large investors tend to take the entire week off from Christmas to New Years. In other words, the lights are on but nobody's home.

Many times they'll hand the keys over to their assistant or to the mid-level executives with explicit instructions not to touch anything unless the markets get ugly. Well, this year the markets are already ugly going into the holiday. So the handlers probably have different type of instructions, possibly more detailed, but we can only speculate as to what they may be.

Traditional Markets

Over the weekend, the President of the United States has reportedly posed a question to his advisors, one that stunned everyone in Washington and half of New York. Can the President of the United States fire the Chairman of the Federal Reserve?

The fears have now largely been assuaged as the President in what may be a Christmas miracle has now publicly expressed support for the Fed.

For those wondering, the answer is... probably. Though it's never been done before, if Trump said his famous catchphrase "you're fired" to Jerome Powell, it would probably be binding. However, the effect on the stock market and the economy would be extremely unpredictable. 

The Fed is supposed to be independent of the government and above partisan politics. That's the only way this system works. Should that dynamic be called into question, it would certainly raise harsher questions about the relationship between the government and money.

Steven's Liquidity Issue

In a seemingly unrelated but no less bizarre incident. The US Secretary of the Treasury, Steven Mnuchin published the following very fancy letter.

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Please note: All data, figures & graphs are valid as of December 26th. All trading carries risk. Only risk capital you can afford to lose.

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