Many seem to defend tariffs with the line of reasoning “the world is not coming to an end you’re being hysterical.”

Let’s be clear. That’s true (not the hysteria part). The US economy, companies, and citizens are resilient and will adapt.

It’ll just be worse. The job is to make it better. And instead it will be worse. Another standard defense is “this is just 4D chess, what the president really wants is true free trade (zero tariffs) but he has to play hardball to get it.”

I’m not sure I’d be down with the brinksmanship, but if I truly believed this I’d feel much better.

I do not. A plumb line through the president’s often changing views over time is an antipathy to international trade. If someone has told you for 25 years what they believe, as insane as that belief may be, I think step one is believe them.

I truly hope I’m wrong about this and if we end in a world of MORE free trade I’ll doff my cap (not always fun for a bald man).

Good analysis, though I wouldn’t call this one a quant quake but a momentum crash which is a known risk (sciencedirect.com/science/articl…). As of close yesterday our full model was flat YTD. The momentum factor was down a ton. This is much less about quants than a big non quant reversal.

https://twitter.com/paulomacro/status/1621289453825179648

I don’t think there are enough quants (certainly ones willing to lever) left anymore to cause this!

Also factor vol and correlation has been quite high for a while so the average levered quant would likely have smaller dollar positions than usual, not bigger like in 2007.

Sigh, I kind of knew this was coming but hoped I’d be wrong.

Arnott wrote a paper called “How Can Smart Beta Go Horribly Wrong?” in 2016. In it he argued value was a cheap attractive factor but the rest data mined and expensive.

(1/n) barrons.com/articles/inves… A couple of years later multi factor had a horrible run from 2018-2020.

Because his paper was titled what it was it’s now painted as prescient. It was backwards.

Multi factor suffered 2018-2020 all because of value, the one factor he liked in his attack on smart beta in general

OK, “crumbles” is true if you look at the last two months, but it is kind of an odd thing to say about something still up solidly on the year. But headline writers gotta headline.

Of course I have lots of comments on the article though (surprising!).

bloomberg.com/news/articles/… I know journalists can’t cover all the many (and there are many) subtleties in one article, so this isn’t a criticism. It’s just what I wish were discussed.

First and foremost I’d love to have seen some mention of the still ridiculous spread between cheap and expensive:

Jonah’s right. But, the responses are depressing. Not because they’re threatening (I didn’t see that) but because of many of their stubborn refusal to argue honestly. Jonah made no mention of the left and has called out crazy there forever w/o abatement during the Trump years.

https://twitter.com/JonahDispatch/status/1559384256710852609

Whataboutism is ok if that’s the only point ur trying to make. But it’s not fine when it doesn’t even address the actual point. A murderer on trial saying “but Charlie Manson did worse things” may be correct and, in another context, that might be relevant. Not for the trial.