Why I'm worried that I'm the only one worrying

THERE is something worrying me about the market at the moment: no one seems to worry to the same extent as me. The way that the market seems to be perceiving risks appears out of kilter with what might easily transpire. True, there is some concern about an impending global trade war, but it appears limited as if many believe that the current tension will resolve itself with little negative fallout. Perhaps some imagine that US President Donald Trump is simply using hyperbolic language, or that he is using a negotiation technique of pushing to the extreme then allowing a turnaround - which is what he did with North Korea.

My worry is that conditions could deteriorate very quickly, which does not seem to be reflected in any measure of market risk at present. My reasons are threefold.

Firstly, we must not forget that China is centrally controlled. While the country is using a partially free market environment to build its economy, it remains centrally managed and ideologically directed. It could decide to make a stand against what it might perceive as a political attack, and its centralised political structure gives it the ability to withstand a lot more economic pain than most analysts assume it could, should it decide to be confrontational.