Turnarounds

It's been a shambolic start to what should ultimately prove to be a pretty important day. Macro Man normally catches a 6.33 am train from his local station into London Bridge; imagine his horror, therefore, when he opened his eyes this morning to discover the numbers "6:27" on his clock face.

After muttering the obligatory four-letter epithets under his breath, he sprang out of bed and raced through the shower at breakneck speed. If he hurried, he reckoned, he could just about make the 6.46 train which, while slower and considerably more crowded, nevertheless manages him to deposit him at London Bridge 20 minutes later than his normal service.

As he raced to get dressed, however, he heard an ominous rumbling from outside his window. This in turn prompted Mrs. Macro to spring out of bed, offering her own invective; the bins hadn't been put out and the dustmen were already outside. We dressed and jointly raced downstairs, with Macro Man not bothering to tie his shoes before springing out the door....only to find the garbage truck blocking his driveway.

"Which bins?" (recycling or rubbish?) shrieked Mrs Macro.

"Guys can you move I'm late to catch a train and I need to get out of here now!" bellowed Macro Man, in his best stream-of-consciousness technique.

Oh-so-slowly, the rubbish collectors backed the truck up, and Macro Man hopped into his trusty Golf and sped off towards the station, rolling down the window to offer a barely-awake wave to a disheveled Mrs. Macro, who'd managed to get the bins out in time. (Unbeknownst to Macro Man, Macro Boy the younger was, at roughly this time, slamming the door behind his mother, thereby locking her out for ten minutes.)

The station's only a couple of miles away, so after parking up and sprinting (with untied shoes!) to the platform, Macro Man improbably managed to get there at 6.39...enough time to queue for a coffee! In the annals of close morning shaves (in the figurative rather literal sense, naturally), this was close to a record turnaround from the bed to the station.

The rest of the journey, meanwhile, offered its own challenges; the later train is smaller and calls at more stations, so perhaps inevitably, Macro Man got stuck sitting next to some large-boned chap who felt it necessary to hold two large briefcases on his lap rather than stowing them in the luggage racks. His arrival at London Bridge reminded him of why he gets the early train; every ten minutes after 7 am appears to double the volume of passengers milling about the station.

By the time he fought his way to the platform of his connecting train, he was confronted by a mass of humanity commonly found only at major sporting events, the Muslim hajj, or Chinese job fairs. Imagine his shock and bemusement, meanwhile, when the first train to arrive on the platform was.....his usual 6.33 service!!! He isn't sure what happened to it (it wasn't on the board at his station at 6.40, so presumably arrrived and left at the normal time), but it looks like he was gonna be behind the 8-ball no matter what happened this morning. Sort of like the last couple weeks of trading, actually....

In any event, that rather verbose and tortured introduction was merely a way to inject the notion of "quick turnarounds" into today's post. For if Macro Man executed one this morning in gettting out of the house, so too, has gold in recent days, defying gravity (and the general strength of the dollar) to post fresh all time highs. It's up more than $60 in the last six trading sessions, spurred partially by yesterday's news of India taking down a 200-ton print from the IMF, but more clearly by real buying flow.

As is always the case with the yellow metal, there are a dozen stories and theories offered for its performance, and per the usual it is difficult to distinguish fact from fantasy. However, an Occam's Razor analysis might well suggest that someone is taking an (informed?) punt on either financial stability, the maintenance of globally easy liquidity conditions, or both. If the latter, in particular, one would have to posit that the dollar would come under renewed pressure after the Fed (unless punters wish to wait for payrolls).

The last 13 hours or so have also seen a fairly sharp turnaround in risk sentiment. Spoos are up a percent and half or so from the levels prevailing when Macro Man left the office yesterday. Earlier this week Macro Man observed that VIX around 30 was likely to be a critical juncture; for the time being, at least, it has helped staunch the equity market's losses. Similarly, Macro Man's proprietary risk index has recently gone back below zero after six months of risk-seeking readings. The next few trading sessions will likely determine whether this index bounces into year end or sustains a "proper" bout of sustaind risk aversion.
On Friday, September 11, the SPX closed at 1042.73. The following Monday, Macro Man created a reader poll on where the SPX would close at year end. The response was overwhelmingly bearish.

He'd like to repeat the exercise today. This space sometimes gets labeled as a "bearish blog", an appellation which Macro Man dislikes. His paramount interest is in getting things right (the signal, that is, rather than the noise), even if he doesn't always do so. In any event, he has detected a distinctly pro-risk attitude towards some of the punters with whom he speaks on occasion. So he'd like to take the market's temperature on a slightly more statisitically significant scale.



It's 10 am London time, and Macro Man's still feeling a touch groggy from his quick turnaround this morning. He can only hope, by the time he goes to bed, that his trading fortunes manage to execute a similarly impressive 180.