Here are 6-7 key points from Michael Every's latest note from Rabobank, aptly titled "Invidious,":
- NVIDIA's Earnings and Market Resilience: "Headlines today are of disappointing earnings at NVIDIA. Yet somehow world markets --and the world economy aside from one firm, in one sector, in one country-- managed to survive, and we didn't see a complete meltdown."
- Geopolitical Risks and US Foreign Policy: "Today, I stress the same solipsistic hubris (dangerous combination of excessive self-confidence and a philosophical mindset) is institutional in geopolitics, which presents terrifying fat tail risks as bad as a burst bubble or Fed policy error."
- Mismatch Between Aspirations and Capabilities: "What we are seeing -in real time- is a violation of the fundamental principle of sound grand strategy: that ends (aspirations) are in line with means (capabilities)."
- Challenges in US Academia and Policy Circles: "The hottest topics in contemporary international relations are 'human rights' and 'environmental protection', rather than 'war' and 'country'... Sadly, very few in US academia do; nor think tanks; nor political circles; nor power circles."
- Defense Spending and Geopolitical Implications: "The US will have to spend far more and more efficiently ahead to avoid increasing geopolitical tail risks, regardless of its deficit and debt."
- Central Banks and Geopolitics: "Globally, the systemic hubris of central banks who 'don't do geopolitics' is challenged by this realpolitik."
- Market Implications and Future Outlook: "So, while the financial markets will happily look away for now, those acting last in this regard will eventually be punished as hard as those acting first today."
Citations: [1] Rabo-Invidious.pdf
Copyright © Rabobank, AdvisorAnalyst
