Buy the rumor sell the fact. It's the second time in a week, I've used that annoyingly misunderstood phrase. The previous time, it was in the context of wondering which side of the equation referred to what part of the news. This time, it refers to the belief being expressed all over the place this morning that nothing is as bad as it sounds because we'll always have climb downs and central banks. It's a horribly dangerous way of assuming how the world works in the long-run.

The trade talks faltered. Equity markets have indeed sold off. The S&P 500 future has fallen to levels not seen since midday this past Friday. The Shanghai Composite acted just the same. Lots of ink has been spilled on the notion that it isn't going to be so bad. After all, it is already Monday and not a single company went bankrupt over the weekend as a result. The parking lot of The Mall at Short Hills was reported to have been bustling.

It's a mistake to view the entire world through the lens of a few stock market indexes and declare a measured truce has been achieved, pending the inevitable peace agreement. It reminds me of how shares traded in late 2007. Although back then it was based on the misguided and naive notion that if you just went back to plain vanilla assets and avoided that mortgage stuff everything would be fine. Never was the concept of ring-fencing more misunderstood.