Back from a break; market risk aversion remains exceptional

Back after a longish break - much has changed, yet in many respects very little has! Risk aversion is at an exceptional high across the board, but the implications of that are still quite unclear in the markets, and there is a huge amount of short-term flows that is contributing volatility and little else. Even as we grasp for any signs of life in the US economy, Europe is back in the spotlight for sovereign woes and banks debt holdings. The spreads between EU sovereigns have moved to levels that are a make-or-break challenge for EU politicians and central banks. Something has to give, probably starting with the currency.

All this in interesting stark contrast to what I saw in India for the past couple of weeks. Booming, construction everywhere, tremendous amount of middle-class consumer activity, and all this despite the horrendous state of domestic politics – very messy and noisy really!

Two big speeches coming up, at Moody’s Risk Practitioners’ Conference September 27 and at the CFA GIPS Conference Sep 29, both in San Francisco, and at venues that are a couple of hundred feet apart! And I am of course still doing my fire-and brimstone-stuff about paying heed to the lessons learned from this crisis, and at least muting the impact of the next one, since surely we will not avoid one altogether.

So, will be back soon, live. Meanwhile, stay at least risk-aware if not risk-averse