Markets to geopolitics "We're just not that into you"

Seinfeld fans will remember an episode from the final season where George's parents cut him loose citing "the breakups, the firings and every Sunday with the calls." While the decision for parents to ditch an adult child -- even an annoying and disappointing one -- should be difficult, in typical Seinfeld fashion George was dropped flippantly and without warning.

The relationship between the world's financial markets and the world's geopolitical landscape isn't exactly like that of parents to a child (or vice verse.) But markets and geopolitics have been linked since they've both existed and get more intertwined as globalization shrinks the world.

I traded a financial market in a past life and remember there was nothing more satisfying than parlaying a global political development into a profitable trade or two.

Yet sometime last week there may have been Costanza family-like moment where the world's financial markets, sick of the world's geopolitical shenanigans, suddenly cut geopolitics loose.

The greatest evidence of this is the improbable drop in the price of oil during week when two men who control 17.5 percent of the world's oil reserve made inflammatory and arguably mentally unbalanced statements at the UN -- with one of them going so far as to literally threaten the price of oil.

There was also a coup in Thailand that barely effected the international currency markets, and serious political instability and street riots in Hungary which had little effect on anything at all.

In the past these type of events have sent markets into a frenzy.

I wonder if this is just a development for the week and, like in an episodic sitcom, things will return back to the way they were with the next broadcast.

Or could it be that markets have finally reached a tipping point and will continue to discount the increasing geopolitical hysterics and hand-wringing of the last couple years because so far they haven't been followed with proof of any actual decline in world-wide stability.

If the latter is the case, it needs to noted that on Seinfeld George tried to win back his parents' attention by threatening to sleep with his cousin. One can only imagine what the geopolitical equivalent of a sex-with-the-cousin threat is.

It can't be pretty.

Niall Ferguson makes half of a similar argument in this column.