George Costanza, Hedge Fund Manager?

So this is what it's come to.

Macro Man is considering finding and hiring George Costanza, the hapless buffoon from Seinfeld, to sit at his side as an advisor and general trading guru. For nowhere, in all the books that he's read and all the discussions that he's had over a sixteen year career, has Macro Man encountered a more perfect strategy for trading these markets than that enumerated in the clip below:



Just imagine how George would have traded some of the flamingos that have assailed the market recently-heck, he could even call on the assistance of Clarence Beeks, who makes a cameo appearance at the end of the clip.

* EUR/CHF: "So the SNB has intervened and the equity market is going up 14% in a month? I'd bet my mother's mortgage that we'll be at 1.57 by Easter. So this baby's going down, Jerry! It's going DOWN!!!" EUR/CHF is half a percent lower since the New York close on the day of the intervention, but the intellectual and emotional cost has been more considerable.

* Gold: "So let me get this straight. If equities head lower, gold goes up as a safe haven bet. If reflation works, gold soars because of inflation. No matter what happens, I win? Jerry, this is better than being an architect! Sell 500 June gold!"

* South African Rand: "Wait. You're telling me I can actually trade the currency of a country with an incredibly corrupt leader AND which correlates well to gold? Where do I sign up? 50 million USD/ZAR yours!"
* Hungarian bonds: "Fitch has downgraded the Baltics? You think it's the tip of the iceberg, Jerry? I'll give you a tip, baby: Blue Whale likes yields on a ten handle!"
* Treasuries: "Jerry, Jerry, Jerry. Why do you bore me with details? Yes, I know the Fed is buying Treasuries. Yes, I know the employment situation is dire. And yes, I know there is a wall of supply out there. Of course Treasuries should motor around. Sell 2000 May 122-125 strangles."
While you may fault the logic, the results speak for themselves. Why, just yesterday, Macro Man took a little informal poll of brokers and punters of his acquaintance. Risk asset bulls outnumbered those expecting the rally to top out 15-3. Normally that would ring some pretty severe alarm bells.

Yet had George Constanza been in Macro Man's seat, he would have purchased some Spoos, and been up 2% already for his effort.

Ay caramba! What's the world coming to? When George Costanza is the best macro punter out there, it's usually a sign that markets (or at least Macro Man) need a break. So it's rather fortunate, therefore, that Easter is rapidly approaching. As always, Macro Man will be keeping an eye on things and may even conjure a poem if he has the energy, but it will be refreshing to do something other than watch screens all day and wish that he were George.
Previous
Next Post »

21 comments

Click here for comments
Donlast
admin
April 9, 2009 at 10:18 AM ×

Surely when markets act like this it is not wise to cry, agonise or fume but just to go. Leave it.

Reply
avatar
Manc Trader
admin
April 9, 2009 at 10:47 AM ×

Nice post MM but the whole Costanza trade thing has become a bit of a cliche.
Seems like every couple of years someone has to make that analogy.

:)

Reply
avatar
Donlast
admin
April 9, 2009 at 12:53 PM ×

Bollinger bands on the 30yr have been flat and narrow for the last few weeks. Very often this presages a sharp move one way or t'other, up or down.

Reply
avatar
Macro Man
admin
April 9, 2009 at 1:41 PM ×

Yeah, it looks to me like UST are coiling for a big breakout. Ordinarily I'd have a flutter at buying some vol, but every other option I own has been crammed down my throat so there's no more room at the inn.

Reply
avatar
Anonymous
admin
April 9, 2009 at 1:52 PM ×

lol....and WFC has it's best quarter ever.

It feels like everyone is trying to replay April 2003.

Reply
avatar
Christian
admin
April 9, 2009 at 1:53 PM ×

Nice one MM,

I am a big fan of Seinfeld...

Oh yeah! (finger pointing),
Kramer

Reply
avatar
Anonymous
admin
April 9, 2009 at 2:19 PM ×

Flat is a valid position.

Reply
avatar
Anonymous
admin
April 9, 2009 at 2:29 PM ×

... and be careful the SGD short next week. Tight stops.

Reply
avatar
Anonymous
admin
April 9, 2009 at 3:04 PM ×

15-3 eh

Your really frustrated, eh?


hmmmmm....

My Macroman sentiment indicator alerts.

Reply
avatar
Anonymous
admin
April 9, 2009 at 3:20 PM ×

I'd bet my mother's mortgage that we'll be at 1.57 by Easter. So this baby's going down, Jerry! It's going DOWN!!!


uh, so bet eurchf togo up? 1.52 to 1.57? or its going down? (below 1.52)

Reply
avatar
Anonymous
admin
April 9, 2009 at 3:20 PM ×

I'd bet my mother's mortgage that we'll be at 1.57 by Easter. So this baby's going down, Jerry! It's going DOWN!!!

uh, so its going up? 1.52 to 1.57?
or its going down? as in below 1.52 ?

Reply
avatar
Anonymous
admin
April 9, 2009 at 3:28 PM ×

You have to eat your snickers bar with a fork. It is dessert, after all. And you may end up working for the Yankees.

Reply
avatar
Macro Man
admin
April 9, 2009 at 3:41 PM ×

The point is that he thinks with every fibre of his being that it is going up...ergo, it must be going down (and so it has)

Reply
avatar
flipper
admin
April 9, 2009 at 4:15 PM ×

I'm going with "jerkstore!"

Reply
avatar
Macro Man
admin
April 9, 2009 at 4:26 PM ×

Sadly, flipper, the way I've been trading, I think they've sold out of me.

Reply
avatar
Anonymous
admin
April 9, 2009 at 6:52 PM ×

This was fantastic and I don't usually like what you write. Nice job, really very funny.

Reply
avatar
Towelie
admin
April 10, 2009 at 1:13 AM ×

Wow, I was thinking this exact same thing yesterday regarding my own trades. Well done. Just remember:
"Serenity now!"

Reply
avatar
David
admin
April 10, 2009 at 6:49 PM ×

On the bright side, those spoo put spreads are starting to look good again ...

Reply
avatar
Anonymous
admin
April 11, 2009 at 10:27 AM ×

Maybe you are just wrong...
Dont recall that stoxx make the turn in a recession after the data looks better.

The negative sentiment is widespread, Q1 will look bad but its no secret, this rally will continue for now.

Reply
avatar
"Cassandra"
admin
April 11, 2009 at 11:58 AM ×

So you're saying that even the most thoughtful positions yield...."NO SOUP FOR YOU!!!"

Reply
avatar
Rich
admin
April 15, 2009 at 1:21 AM ×

This is what happens when the fish tank has all sharks and no minnows.
If the market is mostly professionals, there isn't a ton of excess profit due to the lack of sucker money.

Reply
avatar