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*In fact, this is the case across several big strains in financial markets today. “In geopolitics, this is not the 1970s,” said Anton Eser, chief investment officer at Dutch asset manager Robeco. “In AI, this is not the dotcom boom. In private credit, this is not 2008.” He’s right. But we do have, he said, “a bit of each . . . That’s still not great.”*
A senior bond trader in London admitted something unusual to me the other day: he’s scared. It takes a lot to spook really seasoned bankers who have survived more than their fair share of market crises and who know better than to panic. But the current market environment is deeply unnerving for him, not because the financial system is in freefall, but because it’s not. Markets are, of course, on edge. The US-Israeli war on Iran has cranked the oil price higher and knocked both stocks and government bonds off their perch. Some arcane corners of the market ecosystem, like Korean stocks and short-term European government debt, have taken heavy blows and at times, bond trading has faced small interruptions. Still, the key thing is how orderly it all is. This is alarming, the trader said. “There’s a degree of complacency. My biggest fear is the market is still working under the assumption that this will not get out of control.” Everything hinges on whether the oil price sticks roughly where it is, $100 or so a barrel, or bolts even higher. Fund managers are looking to oil traders for answers. Oil traders are looking to geopolitical experts. Geopolitical experts are tracking the volley of contradictory statements from US officials, and wondering where Donald Trump’s limit on the oil price really lies. All of them are coming up with the same conclusion: we don’t know. The key danger, of course, is that unlike the shock of supersized worldwide US trade tariffs nearly a year ago, Trump is not able to switch this off. Iran can very easily choke off global supplies of oil by keeping the Strait of Hormuz blocked, and its new leader, Motjaba Khamenei, has said he wants to do exactly that. Can he? Again, we don’t know.
[https://www.ft.com/content/36474089-8b7e-4fc8-aa76-1643796a57d9](https://www.ft.com/content/36474089-8b7e-4fc8-aa76-1643796a57d9)