Too much money chasing too few assets sums up financial asset inflation and declining returns.
A Good and Prosperous New Year to us all!
It's going to be an interesting year…… how many times have I written that before? "This time it's different" is another over-used New-Year opener – to which I respond: "Oh no, its not!"
But first: MiFID 2. We've seen the first few market days under the new regime and the rules and transaction reporting requirements are in place. It's taking a little time for the mechanics to bed down – but MiFID has not closed the market down. Get over it and get used to it. We've still to see the medium term consequences, for instance in relation to double counting dark pools and Systemic Internaliser (SI) effects. At that point we're likely to see more meaningful comment about market effects and potential distortions – we will be watching carefully how this plays out. For now… we're living with it.
What did last week tell us about the prospects for 2018? Lots of amusement value from the must read "Fire and Fury", and Trump's inevitable reaction. Yet, he did get his tax reform passed, and the next big programme, infrastructure, is working its way through. The US is transforming. Maybe that's our first lesson for 2018 – "don't be distracted by the noise!"