We kicked off today thinking we had scored our first goal in the TMM 2011 non-predictions with Darth Weber NOT getting Trichet's post at the ECB. But it appears that the decision has gone to the 3rd umpire. We are praying for a goal and, by the time you read this, it will most probably have been announced, one way or another, whether he is not joining the ECB, not joining a large European Bank or not joining a Hedge fund. Or is.
The markets are a mixed bag and we continue to feel that there is a drip function of news around that may well end up turning sentiment generally negative. In fact, let's look at it as a schoolboy chemistry experiment
Titration of a bullish solution with negative news
Make up a solution of Bullishness
3g Bullish equity sentiment
5g US growth
2g of European Silence
6g of cheapness of EM equities to local fx bonds
10g of Trends
2g of Dovish Ben
7g of QE liquidity
in 1 litre of Kerosene
Make up a titrating solution (titrant) of bad news and fill a burette
5g of Egypt
1g of the Wikileaks story about the US government questioning whether Saudi oil reserves are for real
8g of China liquidity tightening
6g of Bond Yields
3g of P/E ratios
7g of threats of protected agricultural prices
2g Hawkish Ben
10g of General Surprises
in 300ml of Toluene
Clamp the burette over the flask and slowly drip the titrant into the flask until a cloudy precipitant of worry appears in the golden solution. This is known as the Doubt Point. Continued titration of the solution will see the cloud darken as the worry increases. Fumes will start to appear as the solution approaches its tipping point when it will instantaneously transform to a solution of pure bearishness. Which is green. This is known as the "What the F Just happened to my P+L" Point.
Your call as to where we are in the process. But we are really worried that instead of gold we end up with "pure green".
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