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.
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.
21 comments
Click here for commentsSurely when markets act like this it is not wise to cry, agonise or fume but just to go. Leave it.
ReplyNice post MM but the whole Costanza trade thing has become a bit of a cliche.
ReplySeems like every couple of years someone has to make that analogy.
:)
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.
ReplyYeah, 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.
Replylol....and WFC has it's best quarter ever.
ReplyIt feels like everyone is trying to replay April 2003.
Nice one MM,
ReplyI am a big fan of Seinfeld...
Oh yeah! (finger pointing),
Kramer
Flat is a valid position.
Reply... and be careful the SGD short next week. Tight stops.
Reply15-3 eh
ReplyYour really frustrated, eh?
hmmmmm....
My Macroman sentiment indicator alerts.
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!!!
Replyuh, so bet eurchf togo up? 1.52 to 1.57? or its going down? (below 1.52)
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!!!
Replyuh, so its going up? 1.52 to 1.57?
or its going down? as in below 1.52 ?
You have to eat your snickers bar with a fork. It is dessert, after all. And you may end up working for the Yankees.
ReplyThe 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)
ReplyI'm going with "jerkstore!"
ReplySadly, flipper, the way I've been trading, I think they've sold out of me.
ReplyThis was fantastic and I don't usually like what you write. Nice job, really very funny.
ReplyWow, I was thinking this exact same thing yesterday regarding my own trades. Well done. Just remember:
Reply"Serenity now!"
On the bright side, those spoo put spreads are starting to look good again ...
ReplyMaybe you are just wrong...
ReplyDont 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.
So you're saying that even the most thoughtful positions yield...."NO SOUP FOR YOU!!!"
ReplyThis is what happens when the fish tank has all sharks and no minnows.
ReplyIf the market is mostly professionals, there isn't a ton of excess profit due to the lack of sucker money.