Monday, December 05, 2011
Friday's US data seemed, like a well balanced budget, to have a little bit for everyone in it. A generally poor set of dissectible underlying components that can keep the bears happy and a stunning headline unemployment rate for the bulls. Not much surprise then that the result was muted with a gentle drift lower.
To TMM, looking at things through cleared heads. it feels as though it's the rest of the market that has the hangover this morning rather than them. Asia traded a dull session and Europe has failed to do much better. News flow is light, scare stories sparce and it's all pretty quiet. Apart from that naughty little beast that got us into the this mess in the first place, the Italian BTPs, which whilst the bears are studiously ignoring it, have put in a stellar performance today with the 10yr yield now lower than those peaks back in August, pre the latest "this is it" meltdown.
TMM know that the BTP market is effectively bust and dead but a ghostly resurrection to the current levels does at least warrant a bit of "Price is News". But No. Chat wires have studiously avoided it. The market appears to still be in a large African river. Overall it still feels as though model accounts are behind last weeks moves and will be playing catch up in an environment of no news, so we are happy to stay pat in our "up creep" til Dec 9th play. Askoxy and Merkels little show of ssolidarity hasnt really gioven uis antthing new apart from telling us that they are in agreement, but no solutionzzzzzz. It all sounds very like Brian Clough's method for dealing with players who disagree - "We talk about it for twenty minutes and then we decide I was right"
So what else is there? Well to TMM it would appear that if you want the world to take your country's finances seriously then you need one of the following to be in place. a) a massive surplus (the proof's in the numbers right?) - b) Bad numbers but a track record of at least owning up to the fact and trying to do something about it (UK) - or c) Bad numbers with a track record so bad that the only way to instil confidence is to kick out the incumbents and install a specialist government of people trained in the necessary fields to solve the problem. A Technocracy.
Now TMM have always been aware that the barrier to installing a technocracy is that it is "not democratic". Which is normally correct. But the debate surrounding the implementation of technocracies sounds similar to a debate TMM was recently having over patient care. If told by a doctor "Well you have been diagnosed with a "X" nasty disease/ cancer. How would you like us to progress?" TMM's natural answer would be "What are you asking me for? I'm not the one with years of experience and training in the field and I don't think my objectives are any different from anyone else's in my position (cure me or make sure it doesn't hurt) so perhaps I could hand the whole process to you?" Ah no. It doesn't work like that. We all have choices these days too many perhaps, as we have to train ourselves in new fields to be able to choose wisely (energy usage, phone contracts, transport connections, schools, nutrition, pension plans, you name it). The alternative is to stick our finger randomly on the choice menu and hope for the best. Either way, the provider has abdicated the responsibility through choice to us.
As such TMM are hugely FOR technocracies as a means of solving serious grown-up painful issues as we feel that a group of people who are the most qualified to solve them will do better than a group of people professionally trained solely for politics, elected from a tiny choice of main parties, by a population with practically zero collective clue themselves. But to make sure we aren't accused of destroying democracy, TMM have an idea. On the base of every voting form should be a box marked "The Technocracy". They don't canvas, they don't spout rhetoric, they don't rip expense accounts, they just DO. It hasn't done Belgium any harm, Greece is off the radar now they have one, Italy's hopes are with one and in TMM's eyes US and UK could really do with one.