Geopolitical events and markets do not correlate linearly

In the following six posts I shall attempt to review as briefly as possible the rash of geopolitical events of early September and their potential market impacts. September was the proof that geopolitical events and markets do not correlate linearly. It was a month when all the themes of my book BREAKING THE CODE OF HISTORY took a lurch towards the dark side and the risk premiums should have increased, as should have the volatility of the markets.

However, although the situation may have been compounded by the soothing balm of the ECB and FED, historically markets tend to ignore the initial signs of geopolitical tensions, as the participants attempt at some level to go about their daily activities and deny their existence. So it is only when an event or series of events become/s so big that they have to be recognized by the markets, volatility then increases and the event becomes an issue for the market.