After the GFC I was on an investment panel and we were asked what Central Banks should look out for as an early warning of another bubble before it bursts.

The end of October is effectively year end for many funds and a lot of book squaring is taking place.

The $ has lost momentum, as have the major $ bond indices, all of which have had a tremendous run year to date,

The sharp response in markets to assorted mildly positive news items was less a vote of confidence and more a reflection of a lot of hedges (against things ‘ we know for certain to be true’) catching fire if not blowing up entirely.

In our current upside down world of investment, where bonds are bought for capital gain and equities for income, and where an obsession with low volatility has driven a dangerous rush by institutional investors into ‘alternatives’,...