While reflexive actions such as blinking or flinching can serve us well physically for the very reliable reason that something moving toward your eye can be dangerous, reflexive responses in markets often become self-fulfilling prophecies. These learned responses generally are born out of traumatic events in markets such as the 1987 stock market crash and the massive flight into Treasury bonds immediately following. These responses have become especially acute and distressingly more common in recent years as central banks undertake competitive devaluations of their currencies, add and remove quantitative easings just to see what is going to happen and governments become increasingly dependent on commercial banks holding dodgy sovereign debt blessed with the illusion it is risk-free. Add diminished liquidity to the mix and we have markets bouncing like a ping-pong ball in a risk-on/risk-off (RORO) world.[…]