Newfie wrote:
As to trust that Ibon and Tanada are discussing....I believe that the world financial economy now more than ever relies upon trust to function. Trust and shipping to move the trade that props up the economy. One need not physically start a WWIII to do great harm to the fiscal systems that global trade depends upon.
The issue of trust is not about how honest or accurate any particular data is. It is about investors and the public buying into whatever the narrative is. The system holds itself up based on a tenous assessment that everyone is still in the game and that there is no imminent momentum heading toward the exit. So this trust is really based on trusting that the buy in and participation is holding strong.
In spite of all the stops and hedge funds and purs and market neutral hedge funds and currency hedges and fancy algorhythms once enough momentum of distrust grows there is no stopping the panic.
Two jetliners crashed on Boing's new jet and folks started cancelling flights.
Trust is about a confidence game in all aspects; financial, political, public, civic, corporate, religion, climate science.
We live in this weird world where the savvy know the game is rigged but they continue to play warily watchinh the confidence borometer knowing that at some point if it dips south with a certain momentum then what looks like a correction could get out of control.
Strangely there is also a funny kind of dysfunctional resilience in the system with everyone agreeing to play along. Until some point no one can really predict. There is a fickleness at play as well. A seemingly minor event could prove to be the beginning of the cascade.
Anyone who claims to have a bead on this is a liar.