Uchronia
“The pendulum of the mind alternates between sense and nonsense, not between right and wrong.” - Carl Jung
Looking at the continuation of the rally in equity stocks (not in Asia) in early 2024 in conjunction with the “risk-on” feeling in the credit space, as well as the evolution of current geopolitical events, when it comes to selecting our title analogy we decided to go for “Uchronia”. “Uchronia” is a neologism, a straightforward synonym for alternate history, a genre a speculation fiction that reimagines historical events going in a new, imaginary directions. The term was coined by Charles Renouver from his 1876 novel “Uchronie”. “Uchronia” can refer to re-imagining a more positive history of a place than the current one. “Uchronia” is using an historical starting point, modifying an event and then imagining different consequences or outcomes. “Uchronia” is a made of “Utopia” and “Chronos”, therefore a time that doesn’t exist: History that could have been but, wasn’t. The oldest example of “Uchronia” was made by Titus-Livius in “History of Rome” written between 27 and 9 BC where he makes the hypothesis that if Alexander the Great had launched his conquest to the West rather than the East, he would have attacked Rome in the 4th century BC. Another famous example of “Uchronia” is 1962 “The Man in the High Castle” by Philip K. Dick. You might be asking yourself where we are going with this “title analogy” but, by looking at the current geopolitical events taking place, sometimes, we feel that current Western leaders, do indeed live in “Uchronia”, thinking that current events are leading towards imaginary directions. In similar fashion looking at the most recent US GDP print, one might wonder if financial pundits are not living in “Uchronia” when it comes to their Fed rate cuts expectations. One would opine akin to “wishful thinking” but we ramble again.
In this conversation we want to look at current valuations and potential for rates cuts disappointment and for a second inflationary wave to materialize later in 2024 as well as some price action we think are of interest in the current set up.
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Synopsis:
“Uchronomics”?
Beware of a potential second inflationary wave
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