Tuesday, November 23, 2010

Armchair Generals

A large component of the populace of Financial Markets is made up of commentators, advisors, strategists and so called "experts" and they are all there to "help" you make the right decision in your investment process. Whilst their existence can be poo-pooed as unnecessary and a drain on the efficiencies of the market, the very fact that they can survive in one of the most efficient and cut throat of arenas means that someone thinks their services are worth paying for. And for an analyst or strategist his reputation and hence livelihood, is just as much influenced by the success of his calls as is the actual fund manger by his investment performance. Therefore he will try at his utmost to retain that air of authority and "turn to" knowledge.

So today, with the markets attention being blindsided from the Euroblx and China Squeeze by some North Korean fireworks, we predict that every salesperson or broker you speak to will have suddenly transformed overnight into a 5 star Armchair General, trying to sound like WestPoint trained Asian strategic defence experts. But don't be puffed in, remember that these are the same people that only yesterday were Armchair Irish Budget experts and the day before they were Armchair Geologists re: rare earth metals and only a few weeks ago they were Armchair Meteorologists re: Hurricanes in the Gulf and previous to that they were Armchair Seismologists, Vulcanologists, Jet Engine Engineers, and even Epidemiologists when disease is involved. For this is the way it is.

A US Ex-Investment Bank Sales Desk near you awaits your calls:

To be honest it is the fun of the job, the financial markets do broaden your worldly knowledge dramatically and you do get led into studying the workings of things you wouldnt have imagined yourself getting dragged into, but lets just keep a reality check on the pomposity of some of the analysis we are offered up and offer up. Do we know what will happen in Korea? No. To be frank we don't, and our expertise on the subject is so low that it is insulting to offer it up for consumption. All we know is that there are e few outcomes ranging from "all out war" to "will be forgotten about in a few days". And our limited experience would suggest that if we had to make a choice we would plump for the latter.

But of course that doesnt mean that the market cant spend an awful lot of time spewing reams of worthless analysis. And this headline from the ultimate market-lagging arse coverer is winning so far.

**DJ S&P: WILL REVIEW SOUTH KOREA RATING IF IT BELIEVES TENSIONS COULD ESCALATE

No shit, Sherlock! Whatever next? Perhaps:

**MOODY'S MAY REVIEW SOUTH KOREA RATING IF SEOUL WERE TO BE VAPORISED IN A HAIL OF NORTH KOREAN NUKES?

We will therefore try not to be distracted by the analysis but will note what has happeneed to prices. Of course the knee jerk reaction was worthy of Private Fraser in Dad's Army, "We are doomed" but though China stocks were all headed lower during the day interestingly when the news broke Shanghai rallied. HK however continued south, though we would like to believe the points we raised yesterday are just as much a factor.

Finally, on a different subject, one reader wisely suggested that we add a glossary of some of the terms we often refer to in this space. So we are happy to oblige - the glossary can now be found in the sidebar and will be updated when necessary or you can find it immediately here: Glossary of TMMisms. If we have forgotten any please feel free to jog our memories.

14 comments:

Salman said...

Guys,

these are Pakistani generals not the Koreans!!!

For once, we are not in the news, so let it be that way :)

Great entry piece!

Cheers

cpmppi said...

Very well-spotted! We had to make do with what we could find as a picture of a bank sales desk dressed as generals was a tough call. We were actually trying to find a pic of Armchair-seated Spanish generals as this would encompass both major themes of today.

Anonymous said...

just what did you expect the rating agencies to say?? multi-notch downgrade??? that is reserved for the poor sods in EU you moron. You need to dig you head out of arse first.

Anonymous said...

Anon,
Bad day?

Nemo Incognito said...

"Under the Loving Care of the Fatherly Leader" is a good read on the Kim dynasty though it doesn't exactly leave you thinking that these are the kinds of people who make rational decisions. Problem is that almost no one has any idea as to how internal politicking works there which would be nice at a time like this.

And Anon 12:38, sometimes we just wish ratings agencies would give us something other than a penetrating glimpse at the obvious.

Leftback said...

Don't panic, Captain Mainwaring !!!

leftback said...

Don't panic, Captain Mainwaring !!!

C'mon, nobody seriously thinks this sell-off is anything to do with North Korea, do they? How about these apples?

a. Risk reduction ahead of US turkey day.
b. Risk reduction by HFs with FBI agents watching.

Or perhaps the real reason,

c. Continued unwind by dollar shorts, after:
d. More jawboning about tighter policy in China.

I tell you what, TMM, isn't that Sean Connery in the front row?

Charles Butler said...

I was quite amazed last summer at the number of Gulf Coast marine biologists there were hidden in the ranks of all those springtime PIIGS debt savants.

CV said...

He he, so true so true!

Charles Butler said...

Content dictated by google trends, Claus.

leftback said...

Suggest alternate for DPI (dinner party index).
IQ = Islington Quotient.

LB thought a Desmond* was the class of degree usually earned by big money fund managers.

* 2:2 (Tutu)

Anonymous said...

this fishy stuff is starting to stink ... abandon ship !

Polemic said...

Charles - yes why oh why did I forget the Armchair Marine Biologists!

LB .. where do i start .
"welcome back" is a good start , havent seen you around for a bit.

As for reasons to be uncheerful 1,2,3.. Well its really over to Charles' specialist subject today. Spain. Interestingly when looking at what 2yr Portugal had done vs 2yr Spain ( portugal hardly budged) I was was offered the reason was the Chinese may be interested in Angolan mining rights owned by Portuguese state run companies. Now there is a connection.

As for the bloke i the front row .. I'm not sure but I'm sure he muttered "a great day, comrades! We shail into hishtory! " And as for the IQ, well thats a just a specialised hybrid of the G.I... You know what that is I'm sure ( ref your bro)

And hi Claus.

Anonymous said...

"And for an analyst or strategist his reputation and hence livelihood, is just as much influenced by the success of his calls as is the actual fund manger by his investment performance."
Your deadpan delivery fooled me for a minute there.