You know the world has gone mad when...

When we entitled yesterdays post "Judgement Day" TMM really weren't expecting the final S+P close to be a portentous -6.66%. We are at that point in the panic cycle where omens will be looked for everywhere. Now, being totally honest, we have not gone and checked (because we really aren't that competitive) but we would suspect that the book of charting revelations is right now being scanned Nostradamus style for any backward fitting scary curses that will indicate on coming doom. It's over a year since we heard about that Hindenburg thing, the BattleDeathcrosstar Galactica and all the other "Don't be fooled by randomness" portents about to be thrown our way. But one thing we are absolutely sure of is that this is certainly the first time this has happened since the last time.

Rather than getting worked up in a lather about collapsing stock markets, collapsing yields, burning buildings and ineffectual politicians. TMM are settled back in the cheap seats for the show. For we have little on the books and know that the first drop of rain will have the riots over within minutes. The English NEVER riot in the rain, we don't know whether it's something to do with getting their hair or their designer hoodies wet or whether its just too hard to smash a window whilst holding an umbrella, but it's the best case we know for introducing water cannon. They don't even have to be that powerful, just giant sprinklers. Alternatively, we could just have an emergency Royal Wedding to rebind the nation. There are going to be some interesting mean reversions to 1981 London relative property prices in some areas of recent gentrification that have suddenly found themselves to be in riot floodplains. Hackney?.. Notting Hill '76?

But back to the US collapse. Come on folks, they are only shares, only the values of companies. If they fall and the world screams then they are only screaming because they made the wrong decision. It isn't unfair, it isn't unjust .. it just IS. Asymmetry of emotion to falls in stock markets is almost a self proof that they are a ponzi scheme in which to hide perceived wealth. TMM believe that for every gainer in a market there should be a loser. With Stock markets the press would have you believe that EVERYONE is a winner if they go up and EVERYONE a loser should they fall. That is the sort of argument that got us into the great housing bubble. "X grillion billion wiped off the market value of shares" will be tomorrow/todays headlines (note they never ever say on a rally " X grillion magicked out of thin air to make us all feel richer"). So what if they go down? it wasn't real money anyway it was just a perception of wealth against which to spend, lever, borrow and hope. We are in the age of the great deleveraging for the private sector. First we passed on the debt to the sovereigns and now we pass on the leverage, in return for which we will be made to deleverage.

As for the cry of "what about the pensions!" this can be countered with "If you cared about your pensions why did you stick them in the stock market?". "But we need growth for them to be worth more when we retire". Well TMM feel that the very idea that ALL pensions grow can only be backed by either the young paying for the old or the whole thing being a Ponzi scheme - or both. Perhaps we really should be looking at a $ per $ pay off between what we put into a pension and what we get out. Perceived growth is now being challenged on all levels, why does YOUR pension deserve to grow at the expense of someone elses?

Now back to the markets. Pick a number between 1 and 100, any number, You got it ? RIght multiply it by 9, divide it by 7. Now add your age in years. Done that? Now add that to 1000 and take away the the sum of the day and month of your birthday and we reckon you are now in possession of a perfectly valid target / support/ bounce point in the S+Ps which will be just as good as anyone else's Fibonacci/Elliot whatever based number. Now please file this away and should any of you be within 5 points of the actual base we would like you to call and let us know and we will hold you up as an example to TMMs amazing new theory which will of course be followed, Meredith Whitney like, during the next crash.

Because for now there is no point trying to pick "levels" as the world has gone mad and we know the world has gone mad when (thanks here to contributions in yesterday's comments)..

US debt is downgraded - so it goes UP in value
France has a higher rating than the US
Swiss ESZ1 trades at 100.01
French Sovereign CDS trades 20 bp through Brazil
S+P think they are William 'D-Fens' Foster in "Falling Down.
GBP is a safe haven
French Sovereign CDS trades 35 bp through Panama
You have to pay to give money to an American bank.
French Sovereign CDS trades 10 bp through South Africa
The Chinese accuse the US of taking the piss.
French Sovereign CDS trades 25 bp through Columbia
The Swerve is vindicated in his interest rate policy.
People find it a surprise that Apple has more cash than the US treasury - even WE have more cash than the US treasury.
Greece is financially more secure than Italy (well until the bailouts run out)
TMM think Gold is the only thing to own.
UK petrol prices have fallen only 2p over the past month whilst GBP has rallied and oil tanked.
US debt is downgraded and AUD/USD goes down.
The Facepalming Pit Trader Picture is back
Europe is on the edge of calamity and EUR/AUD goes UP.
Iran urge UK to restrain police.
DM/EM decoupling is AGAIN fooling all of the people all the time
The "3 of 3 of 3 of 3" crowd is back
Switzerland are Quasi QE'ing
Iceland is looking good.
It's only August.