Absurdity

10 Aug

In a move not likely to win him many friends with the Centenary approaching, prominent investment banker Bill Gross elected to describe the current state of the bond market in terms of the Somme campaign of 1916.  Yes, you read that right.

And so:

In his latest investment note – titled Bond Wars – Gross compares the current state of the markets to the aftermath of the Somme conflict in the World War One, when the British realised their traditional ‘horse and saber’ approach could not match the machine guns and flamethrowers used by the German army.

“Now that bonds have suffered a near Somme-like defeat in the past few months, fixed income investors are concerned about their prior conceptions of bonds as an asset class – an asset that has historically provided reliable income and stable to higher prices,” he says

“With yields so low, and with a negative 3–4 per cent two-month return for bond indices – investors wonder if the bond ‘horse and saber’ has given way to the alternative asset ‘machine gun’ of a new era.”

[ . . . ]

“It is an open question whether we are still marching three feet apace with 65-pound backpacks into the face of 1,000 machine guns, or safely burrowed in fox holes with revised strategies adaptive to a new era. Trust me, no investment firm has given this transition more thought,” he says.

“While our strategic execution in May/June of 2013 can and has been publically faulted, we are confident that we know how to win this evolving bond war. We have spent months – indeed years – preparing for this new dawn. We intend for you – our clients – to be surviving veterans of this battle, not casualties. Pimco will not go down at the Somme.”

To say nothing of the crass inadequacy of the comparisons being made, this is a veritable fever dream of mismatched ideas and atemporal connections.  Sabre-wielding cavalry charging into flamethrowers!  Good Lord.

If anyone is still wondering why scholars of the war are in such a fuss about “getting the war right” in time for the Centenary and the vast public involvement that’s coming, well… look to articles like this.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: