Tuesday, August 02, 2011
As a friend of TMM said today "This is like picking the best-loooking horse at the glue factory".
TMM have had a terrible July. Probably the worst month for ages. As anyone who reads this blog knows we have been whipped and chopped out of sight. We have expected economics to lead just when politics takes over and we have found the economics then kicks us in the teeth when the politics fades. Which is our own stupidity really, as we got caught up trying to read leads, when of course confidence and hence growth actually lags and self-feeds. If you are a European seeing bonds blow to 6%, are you going to be planning investment and growth? Nope. If you are an American on the edge of making some capital investments or purchases and see your elected good and great ransom the economy for political purposes, are you going to press the buy button? Nope. Which of course means that confidence collapses and the forward looking sentiment indices (PMIs and ISMs) naturally collapse and create a self-feeding cycle. Just as they do on the up swings. If the Western politicians are looking for something to blame for the current gloom they should look no further than themselves. These feedback loops of negativity are being exacerbated as, once they hit the market, the momentum algos and model funds kick in. We are sure we are not alone in noticing that the percentage of the market being driven by human thought and discretionary action has greatly diminished over the past month and now, with August holidays well and truly upon us, any sensible battered and worn human is heading off for beach-based R+R, leaving the battlefields of the market dominated by the machines.
TMM do remember interviewing a candidate for a job once and asking how they would react in a game-based situation to frustration and not being impressed by the answer of "I'd tell them I wasn't playing anymore and leave", but now they sympathise. TMM are looking forward to their own periods of holiday-based relief and as such, after applying arnica and salve to their bruised bodies are not planning on playing until they have rested.
With turmoil in Europe booting off again we would expect to cross paths on our way to the sun with the Eurocrats dashing back from their sunloungers to reinforce their Eurosolution. Indeed TMM were relieved to see that the French are taking this seriously and are recalling ze Gouvernement - until they read the date.
*FRANCE TO RECALL PARLIAMENT FOR EXTRAORDINARY SESSION SEPT. 6.
So with the models self-feeding on momentum and the only bids around coming from Asia, this jungle echoes to the roars of Terminator vs Predator, leaving TMM, like the other humans, running for cover in fear of that nuclear self destruct button being pressed.