Thursday, April 09, 2009
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.