Central to Market Thinking is the notion that there are Three Tribes at work in markets – the short term leveraged traders, the medium term asset allocators and risk managers and the long term investors.

With the long summer holidays and so many elections coming up, there is a feeling of Policy Paralysis going on, but also a recognition that this is about to change. In particular, the failed and deadly collective of ‘Zero’ Policies – Zero Interest Rates, Zero Covid and Zero Carbon

With the slow days of August coming to a close, markets are watching nervously for the seasonally volatile month of September, especially around the options expiry on September 16th – there is much embedded muscle memory of painful ends to Q3 over the years – and are starting to adopt a certain ‘back to school’ mentality, where investors are forced to focus on the – not very attractive – fundamentals.

Markets are asking the same question as bored children stuck in a long delay at Dover “Are we there yet?” The second half of July saw yet another bear market rally and while we are not sure we are ‘there’, this one does look the most convincing to date in terms of putting in some sort of market low.

Governments have been trying to fix markets for over a decade but reality is now biting. This, in fact, is the real “Great Reset’. Free Markets are not about political systems but are those that are free of government interference and monopolistic rent seeking corporates, something those who claim to be free market economies have been embracing for too long.