Monday, January 23, 2012

Can you feel it?

TMM have been away last week skiing in the Italian Alps. Wow, what a surprise re prices! A coffee up the mountain is cheaper than in a provincial UK town. Yes, cheaper. The snow was great, the sun was shining, the resort was pretty, deserted and delightful, the locals were friendly and accomodating leaving us feeling that it's time to leave the French and Swiss mega-resorts to the Russians. Austria, however, will always have a place in our hearts due to its apres-ski madness. (By the way, US readers, which is the best US resort for apres-Ski? We have struggled to find any in the few resorts we have tried)

Returning to the markets, the last week hasn't really seen any game changing news, just the continued ingress of "better than expected" data dripping on to the fire of bearishness. It appears to be working in extinguishing some of the flames and we have returned to find some of our favorite permabears now wondering what new news they are missing to explain prices being higher. We'd like to suggest,- "What you were missing in the first place". Prices don't have to keep falling on old news. Change is what counts and the change is in the background data vs expectations.

In the immortal words of the Jackson Five -

If you look around
The whole world's coming together now
Can you feel it, can you feel it, can you feel it? (da daa daa dada)

Well maybe the whole world isn't coming together quite like that but the bears are finding it hard to extract value out of their well chewed bear food, unlike the bulls who, as ruminants, find it easier to extract value from regurgitated low quality good news.

Our problem is that we are find it pretty difficult to get excited by anything at the moment. Our long term views remain intact ( as per our slowly apperaing non-predictions for 2012) but short term influences still leave us pretty unexcited. So we are happy to play the upward drift of all things risk, hopefully accelerating thru old highs, until the next tape bomb. But to be honest immunity to tape bombs feels pretty high and it will have to be something pretty nuclear to knock things lower again.

So we hope the "risk on" grind will continue, even if it is doing more damage to some of our hedges than Edward Scissor-Hands on speed.

Knowing what to write apart from "s'goin up innit" is pretty hard, so we'll leave it at that.


Anonymous said...

Quality apres ski is a strictly European and, to some extent, Canadian (I'm looking at you, Whistler) affair. For some reason, the on-mountain house of debauchery never quite caught on in the US. I miss you Mooserwirt...

Steve said...

I'm curious, in terms of purchasing power parity, how would you compare it to your own country? (either in EUR or USD or whatever)

On tape bombs, we're just about due to get one from a high-ranking EC member.

Anonymous said...

What resorts have you tried? Here in Colorado, the two that immediately spring to mind are Vail and Aspen Mountain (Ajax).

Polemic said...


Do you mean Italy ? To be honest its really hard to get a true PPP feeling when you are in a ski resort, but the general feeling amongst us a group was it was on a par with general UK, which, means either the rest of Italy is cheap or that they dont take the piss with the ski-resort mark up that you normally find. Which makes them admirable people in my eyes!

Anon 4.32 .. Ahh the Mooserwirt! And the Krazy Kangaruh come to that.....

Anon 6.07 .. OKOK you caught me .. yes trips to Vail were indeed the most lively ones I had ( probably why I returned ), especially the Chelsea Bar. Oddly I met the lady owner of it in the Mooserwirt ( see above) in St Anton not long back. So yes .. you are right . But Breckenridge apres ski had the atmosphere of a UK cross channel ferry, Jackson Hole was pretty quiet, and Winter Park .. well, that made Breckenridge look like Las Vegas. But I'm very envious of your Colorado lifestyle. Stunning place.

Steve said...

Hi Polemic, yes I was looking to compare the two. The rub is, I think most yanks would agree the UK is pretty pricy so the basket isn't cheap. I was last in France a few weeks ago and my sense was that EUR PPP is getting closer but still has a ways to go. 1.10-1.20 seems about right to me.

Polemic said...

PPP is an odd beast and works least of all at the personal level. For years I've always believed that US / UK PPP should be parity. Everything in the US for a dollar costs a pound here in UK. And as we know, cable only tried that once and only managed 1.03 briefly. trying to guess where PPP should be in europe at the moment has too many errors in it as each region is different. Hence the problem they are in in the first place. Suffice it to say, Italian mountain prices were cheap compared to most places and on an Italian mountain / Greek Taverna Cross... then Greece has a LONG way to devalue.

chancee said...

Someday a book will come out... maybe five years from now, maybe ten years from now... It will reveal difficult and hard-to-understand truths about how the stock markets of the world managed to stay afloat, even rise, during this era.

In a tale of great irony it will tell how the Treasury and/or the Fed were able to re-configure the very same trading algorithms used so effectively by the Too Big Too Fail Banks to wreck the economies of the world just a few years earlier... to then serve in their favor.

Anonymous sources will explain how their number one priority was keeping the S & P 500 index elevated. Knowing once that chore was complete, the rest of the world would follow. Like a mass of European spectators gathered together to see the great Obama, these trade-bots from foreign markets would sing out in praise, knowing not what they sing of, or why. But follow they would. And the Bernank knew this.

Whether it be jamming the US futures higher overnight while the populace slept... or simply strong arming the latest 'software code' out of Goldman through the veiled threat of prosecution... In the end, their job was simple. Do not let the ES or SPY falter.

And this book will not sell because no one cares anymore.

Anonymous said...

the best apres ski in north america is at the glc at whistler. the second best is at le chamois at squaw valley (on mtn) or sunnyside (off mtn). third is pretty much any place at vail village but especially the tap room or red lion.

agree that the current mood seems hard to deflate, but i expect the eurocrats will do something stupid in the next several weeks that re-triggers the fear of a lehmanesque event in europe. the ecb ltro won't be enough to keep the lid on another true panic moment in spreads. the better-than-expected US data at any rate will almost certainly start to turn over in the next couple months. so i think in a lowered-vol environment there are lots of cheap puts to be buying on risk assets ahead of the next plunge.

Nic said...

Best apres ski in North America is Whistler, best in the US is probably Jackson Hole, nothing compared to Austria tho.
Best skiing definately Banff/Lake Louise

& I thought you were hobnobbing it in Davos

abee crombie said...

tremblant? I've heard good things

I think the next bearish argument is when earnings start missing.. maybe 2 or 3 more quarters

ironically the bulls perma-argument (everything is cheap) is starting to lose momentum with less upside surprises. The improving stock market will push expectations higher. But for now I am with TMM

Saul Bollox said...

US readers, which is the best US resort for apres-Ski?

That depends: do you seek drinky or minky?
Aspen if you want to flash the cash, Vail for tail.
Anywhere at Tahoe for drunken debauchery.

Fundamental Lover said...

yes this is a very good day for travelling