I’m happy to be back writing again. Nothing has really happened to the markets while I was away for a couple of days. Just as some of my friends in other parts of the world have Halloween, the Chinese have the month-long Hungry Ghost Festival that falls in the seventh month of the Chinese lunar calendar. Based on Taoist beliefs, the gates separating the realm of hell and the realm of the living will open during the Hungry Ghost month.
Wandering ghosts and spirits that are well appeased with food and offerings during this period will not disturb or cause mischief to houses and workplaces. Some Chinese families who follow this tradition make offerings by placing food and burning joss sticks, candles, paper monies, paper houses and paper clothes at designated spaces in housing estates.
Long story short, incidentally, things have been pretty “creepy” in the global markets these past couple of weeks. The global markets have been unusually volatile so far in August triggered by the unwinding of the Yen carry trade, with sharp swings causing significant distress for highly leveraged traders.
Whether you work in money management, are deeply involved in your own portfolio, or simply follow global markets for various reasons, you have likely encountered extensive news coverage and a range of perspectives on the Yen carry chaos.
Market volatility has spiked dramatically as reflected by the VIX: on July 15, 2024, it hit 13.12, then surged to an astonishing 38.57 on August 5 before settling back down to 14.8 on August 16. I wonder what Jeremy Siegel is thinking at the moment.
I’ve been watching markets since 1995, and there has been no shortage of twists and turns over the years. We have seen a lot of action so far in 2024, and we are likely to see more in the coming months or years. A partner reminded me that risk remains with the November election looming.
With a nervous gulp listening to the creak of the floorboards as the shadow looming closer (market volatility began to spike again), I advocate for diversification or pair trade in portfolio management including alternative investments as a key component especially for those who fear Halloween or the Hungry Ghost Festival.