Tuesday, October 25, 2011

The Euro Summit Schedule (maybe).

Tomorrow's schedule for the Euro Summit is said to look like this

12:00 - Merkel delivers speech to Bundestag
14:00 - Bundestag starts voting
17:45 - Leaders arrive for the Summit
18:00 - Working session of the EC
19:15 - Working dinner
20:00 - Continuation of Eurozone meetings
22:00 - Press statements could start to emerge

Now over the years, TMM have attended many management "off sites" with just as impressive sounding schedules. However, from experience we think it will actually go like this -

11.30 - Meet at the venue for first round of coffee and the type of biscuits that go with coffee that you never actually see in the shops. Head straight for the most friendly unthreatening face in the crowd and make small talk.
11.50 - Wander into main hall for opening speech with coffee cup and find all seats too closely spaced, so no shoulder room to lift arm and drink coffee. Leave coffee on floor.
11.55 - Watch as delegate squeezing past kicks your coffee over the pile of papers you found on your chair but moved onto the floor.
12.00 - Listen to speech, guaranteed to be peppered with references to challenges, rising to them, team, going forward, commitment (normally yours to them not theirs to you) and success.
12.15 - Start checking Blackberry in bored manner.
12.30 - Start to regret not visiting a restroom after the 4 bolted coffees in the foyer.
12.45 - Find a Blackberry game in the depths of the menu and start playing it for the next hour.
14.00 - We have to vote?? On what? But I wasn't listening ! Oh jeez. Ask neighbour if it's a secret ballot. Yes? Oh good , doesn't matter which I tick then.
15.00 - Ask someone what you are meant to do now and calculate if there is time to go back to your room for an hours nap as still wearing the pain of the "get to know you drinks" from the night before.
16.00 - Realise, scanning your handout, that you are meant to have prepared a case study, entitled "How you would rescue a European in trouble (with examples and calculations)", ready for the 18.00 working session.
16.05 - Panic and ring a friend and ask for ideas, fending off protestations of "well its a bit late isn’t it”
17.00 - Start writing out a sketchy framework based on what you know from personal experience and from your friend.
18.00 - Rush to the "Working Session"and arrive to realise that you misread the title and they weren't referring to dragging a European from a burning building or out of the sea, but the financial rescue of the Euro Zone. Panic and start scribbling down what you have recently read in the press and seen on TV news.
18.30 - The white flip charts appear and everyone has to present their ideas. You are luckily 5th. Still scribbling, take ideas from last four presenters and build them into your own.
18.45 - Present your ideas on how to save Europe using 3 different coloured pens and the flip chart. Phew, think you got away with it
19.00 - Working dinner - Apparently your presentation caused a stir and they would like more detail.
20.00 - Asked to lead present your idea at the next round of meetings. FKFKFKFK. That wasn’t meant to happen.
20.30 - In for a penny in for a pound, make up the most ridiculous nonsense but present it with a gravitas and air of authority that has your audience nodding sagely. Dispel any questions or criticism with references to papers and studies that you have just made up.
21.00 Your idea is voted the best they have. You protest that surely someone has a better one. They don’t. Your single white flip chart scribbles are rushed off to a PR group for tidying up before being presented to the world. No, this can't be happening!
22.00 You slip away through a back door unnoticed as the two main leaders of Europe take the stage to offer the world the solution to Greece, the recapitalisation of the banks and the indebted structure of the other periphery nations.

The world holds its breath ........


Marshall Jung said...

The most terrifying (yet oddly believable) version of reality yet presented by TMM.

Leftback said...

You forgot this day in the life of a Eurochappie:

7,45 Enter long conversation at hotel about getting a proper English breakfast. Finally get a cuppa Rosie, eggs and bacon, with fried tomatoes and black pudding, cooked just like they do it at the taxi driver caff round the corner from the office. Luvlee. Pay large tip to Aussie waitress who managed to procure this culinary delight.

9,30 Find seat next to smoking hot Eurototty. Fart loudly during opening address but skillfully manage to deflect blame on to Polish bloke who is snoring in front of you. Close call.

11,45 Spot smoking hot foreign totty "Iwana Stonkevic" (Croatian sensation, green eyes, chestnut mane , six foot long legs). Head over there and begin animated conversation about your 1980s package holiday to Dubrovnik. Become slightly light-headed at prospect of Euroshag. Bumped by bumbling Finn, you spill coffee on the Lapp of the Croatian lady, who is promptly rescued by 6'4" blonde Prussian named Horst, who mops down her blouse quite inappropriately with a Handi Wipe. You immediately cease to exist.

2,45 Spot Iwana and Horst locked in fierce combat during International Tonsil Hockey Championships during afternoon tea break. Locate a ginger snap, feel somewhat comforted by its sharp firmness but sweet soggy compliance following dipping.

3,45 Realize you have missed a series of important emails from the office on your Blackberry b/c it was also doused with coffee and has ceased to function. Your personal and professional failings and feelings of inadequacy are co-mingled in this intense moment of self-realization.

7,45 Your boss finally reaches you by text. "YOU F*CKING GENIUS, reads the text, NFLX down F*CKING 35%, we are F*CKING Bertie Bigbollocks in the office."
You immediately order champagne then realize that NFLX was someone else's idea that you had appropriated. Oh, f*ck it. GET IT DOWN YOUR GREGORY...

10,45 Swill seventh glass of obscure Belgian monastic beverage in Bruxelles Euro-bar. Observe that all's well that ends well, even in Euroland. Retire to Eurohotel, replete with Eurocrats and Eurotraders, tastefully appointed in blond wood, but slightly spartan, in the Scandinavian style. Notice text message from Iwana Stonkevic, but wisely ignore due to monastic beverage effects.

11,15 Pass out watching Italian porn channel, having reflected that Berlusconi is probably watching this at the same time.

Anonymous said...

absolute quality !


Anonymous said...

It is really funny. Thanks

Leftback said...

The waiting continues. Spent the morning reading stuff about the haircuts that offer €10 out of 100 in cash and the rest in Greek bonds at 6%. The only problem being, those will be defaulted on later.....

To change the subject for a while, we had all been discussing Q3 earnings a while back, and as some of us had predicted they are clearly not showing signs of imminent or ongoing recession. There are some areas of concern, however.

As we had predicted, industrials have not been very good (except for CAT), financials have obviously been weak, and energy and materials so-so. As we also predicted, tech and retail have been fairly strong, with a few high profile exceptions.

So there have been enough earnings reports now to make some decent estimates of what the US market might be worth at 13-15 x earnings. As cpmppi has pointed out, that spells a target of 1275-1350, which spells a strong end of year rally.

But before we get to that, it is Back to the Macro. Do we see one more sharp squeeze of new dollar shorts, driven by a renewed flight to quality in Europe? Once we discover that the major product of the Euro summit is in fact a schedule for next year's season of Euro summits, we suspect that some toys might be thrown out of the pram. Realistically, a big ECB bond buying program (aka QE Euro-style) is the only answer to this dilemma and that solution would also trigger a USD rally.

I must have been drinking something fairly useful last night, Polemic. When I find out what it was, I will send you a case...

CV said...

Waiting game indeed LB, the European market, and rightfully so, can't really decide whether to break new highs or just sell the inevitable fudge. Two observations here.

1) The EFSF as a monoline insurer of Spanish and Italian debt is madness. Creating a European AIG basically, but well.

2) The ECB continues to be the house puta being forced to scurry in the shadows to do the dirty work. I see no change to this here ... it will not be given a mandate to monetise.

So, where does this leave us?

Well, I am with LB on a year end rally, but(!) I think we might just get one more scare. In general, all money growth indicators are ballooning and the G4 are getting ready to print (willingly or unwillingly).

Interestingly, the Fed is riding at the backseat of the bus here with its operation twist as this is not balance sheet expansionary. So I ask ...

Could the ultimate pink flamingo ensue and see Spoos and DXY move in unison?

We will see.


Amplitudeinthehouse said...

In the not to distant future one may hear..."yeah..I've got an algo to sell ya too"

Novice observation in regard to market|tech analysis around earnings...real sellers ahead.

Leftback said...

LB is going to take the "under" on the upcoming Eurofudge™ and also on tomorrow's US Q3 GDP number, which we have now heard talked up from 1.0% a month ago to 2.5, 2.7 and even 3.0% this afternoon by some lunatic Permatool. Our guess is about 1.9%, and we see a rally in Treasuries on slow growth fears and risk aversion.

We have therefore hedged modestly into this evening's late night tryst between Mangler and Sarko, by being short silver (as a strong dollar proxy), long Treasuries and short the banks (as a generic risk-off trade).

We still like Japan, US high yield and mREITs. A US economy going nowhere fast, low rates as far as the eye can see, and a stable or slowly rising dollar will be ideal for that lot.

Amplitudeinthehouse said...

Fed Thunderbirds must be pleased with Timmy efforts in relation to todays result.


Anonymous said...

C says'
Dare I say this is what we bought for and anticipated and why we were willing to hedge and hold long.
Now I have someone to sell to.You have to love markets don't you.
Buyers might be wanting to ask shortly when is good news already fully priced in.Makes you want to short Santa thinking about how banks are going to have to drive policy going forward.