Lies, Damned Lies

The London market feels a bit shell-shocked this morning, either because of last night's melt-up in equities or because of the sad deaths of both Michael Jackson and Farrah Fawcett, icons of many a punter's youth. Markets being markets, the tasteless jokes were already flying at 7 am this morning; alas, decorum prevents Macro Man from sharing any in this space.

And so we're left with markets, which at this juncture are hardly more tasteful to talk about. The melt-up in Spoos seemed to be driven by the Fed's announcement of the extension of some of its liquidity programs. That's all well and good, of course, but given that they didn't do a damn bit of good in stopping the SPX from falling more than 50% from December 2007 through February of this year, Macro Man's at a bit of a loss to discover why their extension is met with such good cheer. No wonder so many punters in the comments section seem to have an eye on the beach!

Regardless, VIX plunged below 30 yesterday, taking it to its lowest level since there was such a thing as "Lehman Brothers." Sign of the bull or sign of complacency? Judge for yourselves.
Speaking of bull, Macro Man had a chat with a few punters last night at a leaving do. We shared rather a good chuckle at the, shall we say, slanted viewpoint presented by some banks, disseminating only that information which fits their view.

Rarely has Winston Churchill's (edit: Disraeli's) grumbling over "lies, damned lies, and statistics" been more apt than during this recent wave of green shoots and second derivativism. In fairness, the perversion of truth is often perpetrated by both bears and bulls, but it seems as if certain houses are more prone to pimping a foregone conclusion than others.

So it was no small amusement that Macro Man saw in his email box an analysis of China's industrial profits data, released last night. The quarterly data, which is not seasonally-adjusted, is depicted below.

As you can see, May-quarter profits undershot 2008's by Y115 billion, or 15%. In monetary terms, this was slightly better than the February quarter, which undershot 2008 by Y129 billion, or 37%. That Q2 profits were higher than Q1 is, as you can see, a simple product of seasonality. The y/y profit growth is still pretty clearly down.

So what do we get from our friends at Goldman? "Industrial profits growth rebounding strongly". Uhh......OK. The beach is looking ever more tempting.....
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June 26, 2009 at 10:15 AM ×

Surfing + discounted rates at villas in Bali. I know what I'm getting long for the next two weeks.

CLSA seems to have picked upon Chalco losing money hand over fist at the moment (like the rest of the Chinese metals complex) and zinc imports are down 10% month-on-month. Your metals trade might work out for more than 48hrs this time Macro Man.

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June 26, 2009 at 10:58 AM ×

In other news, I love the name of Gazprom's new Nigerian JV.

http://news.bbc.co.uk/2/hi/business/8118721.stm

I am really, really hoping someone opens the first board meeting / conference call / whatever with "What's up my Nigaz?"

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Anonymous
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June 26, 2009 at 11:19 AM ×

At least at the beach our knees will be safe. How is your recovery going?

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Anonymous
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June 26, 2009 at 11:36 AM ×

nemo that is hilarious

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H(oratio)
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June 26, 2009 at 12:01 PM ×

The borg are screeching about QE and inflation yet again. Perhaps the borg might get the message from the helicopter: it's not reaching ground level. Or how about the German cpi and UK land registry prices. The borg have an army and navy, and if they want to cure inflation for all of us, please address certain beneficiaries of AIG cds overwriting policies, who are floating vlocs of crude in permanent storage.

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Macro Man
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June 26, 2009 at 12:16 PM ×

Nemo, bravo! That's considerably funnier than most of the Michael Jackson jokes circulating. Maybe Snoop Dogg will be named CEO after he's done rapping with Buzz Aldrin?

ANon, the knee's coming along slowly but surely. There's still a bit of swelling and it remains stiff when not flexed, but at least I can do more interesting stuff at the gym, re: building up the musculature again.

Funnily enough, my surgeon told me to be very very careful at the beach when I go in August...don't want a ave or a rip tide to damage the leg!

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June 26, 2009 at 12:55 PM ×

MacroMan-
Doesn't change the gist, but I believe "Lies, damned lies, and statistics" preceded Mr. Churchill.

http://en.wikipedia.org/wiki/Lies,_damned_lies,_and_statistics

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Macro Man
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June 26, 2009 at 1:04 PM ×

Yeah, someone else pointed that out offline, I've fixed the attribution to Disraeli.

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Steve
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June 26, 2009 at 2:59 PM ×

Not sure there's anything more to the S&P meltup than quarter-year end. EUR has been doing the same thing the past few quarters, especially last December when it was up 13 handles in 5 days.

I was short.

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Skptical
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June 26, 2009 at 3:55 PM ×

"slanted viewpoint presented by some banks, disseminating only that information which fits their view."

It´s amazing the way GS&JPM are cheering.

whenever a number comes worse than expected, no matter how bad, they come with something like "although". when it comes in line it´s just the "proof of better times".

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tom
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June 26, 2009 at 5:02 PM ×

that's what I have usually observes as well, esp for banks which tend to disseminate one view via all their economists across different continents, so when barclays goes bullish, every barclays analyst/ economist goes bullish.

contrast that with morgan stanley and some other houses which allow more varied opinion across the board,

and at the end of the day thats what one needs, not all out trading calls (long CHINA), but varied economic analysis which gets you thinking

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Professional Gringo
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June 26, 2009 at 5:41 PM ×

No Michael Jackson jokes? Are you serious?

I'm exploding with them and at some point I'll not be able to hold it in. It's not healthy.

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Anonymous
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June 26, 2009 at 6:05 PM ×

i heard he choked on some 12yr old nuts
-mpm

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Cornelius
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June 29, 2009 at 7:57 AM ×

Apparently he asked to be taken to the children's hospital.

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