Non-Predictions for 2012 -Random

Wednesday, January 25, 2012

But first the markets - Someone threw an Apple into the works last night that delayed  our expected roll over, but it looks as though it is underway and having had that failed test higher we are more confident of our call. As for Apple (So THAT's where all the QE ended up)  TMM are still amazed at the awe within which its results are held. Imagine the outcry if that was a bank, BP or your local utility company -  Vince Cable and his baying mob would explode in a cloud of hyperbole.

But as nothing else has changed. We are still pretty bored but will fill in with some more non-predictions for 2012 . Here are the random ones

Ed Miliband will NOT be leader of the UK Labour party by the end of the year. A rollover bet. the theme of him being pretty useless has not changed but Blair's changes to leader selection during his term has made it pretty hard to push incumbents but we think the pressure will increase for him to go.. Interestingly it was the BBC and Guardian who were the ones earlier this week shouting most about the increasing Tory lead. TMM might be over suspicious but perhaps they are embarking upon a push for change.

And talking  of the BBC, they will NOT stop linking any injustice anywhere in the world to UK Government spending cuts and they will NOT stop generalising anyone working in a bank as evil but will manage NOT to generalise all journalists as phone tapping, family destroying, moral bankrupts.

Consultants will NOT find life easy. Shareholder backlash to senior management pay will NOT leave middle management untouched. A  crackdown in inefficiency will lead to more focus on the production of the final product and less spent on the luxuries of  "corporate awareness" and all the associated "consultants". And as for financial Head Hunters ..

However IT and HR departments will NOT lose any of the control they have over the business lines they are meant to serve. Their cancer is too far progressed to cure.

Obama will NOT lose the US elections. Whilst massive amounts of airtime are being poured into the upcoming US elections TMM really aren't that bothered. OK, if the Republicans get in they will most probably tighten fiscal policy and so growth would be lower but with Romney's tax rate at 15% and Gingrich's general divisiveness we think it very unlikely that either make it the whole way. In general TMM feel that politicians globally are losing their grip as opinion formers and are having to scrabble more and more to catch up with populous opinions forming and swelling through social media rather than main stream press. Whoever gets in as US president will be subject to the same under-pressures and unlikely to be able to drive their own agendas much further than out of the garage.

The Olympics in London will NOT be the disaster many expect yet during them manned flight to Mars will NOT be harder than getting to Canary Wharf. However the Olympic tradition of the host nation losing money on the whole event will NOT be broken.

Greece will NOT stop taking the piss with pricing in tourist restaurants. As shown by their inability to change their macro economy there is little chance of micro Greek economic theory changing.

Kate Middleton, Duchess of Cambridge will NOT announce that she is expecting a baby. Sentiment indices are far too high on this.

The Mayan predicated end of the world will NOT occur in 2012. - TMM are offering believers immediate delivery of ayuverdic tea and Himalayan pink salt lamps against Dec 22nd  delivery of all their worldly goods (excepting their tea, lamps, wind chimes, tin foil beanies and Peruvian woolly hats)

Posted by Polemic at 11:52 AM  


on AAPL, its just a shame the stock is still trading pretty cheap (P/E, P/CF) otherwise it would be a nice short. The uber nerds/city chic/last bandwagon climbers are all over AAPL but andriod phones are pretty slick and so are windows (no dont say it).. Just look at RIMM as an example of what happens if you are not constantly ahead of the curve, at some point aapl will slip, or their monopoly margins will shrink

you never hear occupy silicon valley. the ridiculous valuations for Twitter/Groupon/ FB are just as insane as IB compensation.. developers out there getting paid very well too!

abee crombie said...
1:53 PM  

As much as I'd like to agree with the sentiment (banker backlash IS getting a bit retarded and IS lazy thinking in the first place, and newtech hype IS indeed tiresome), the comparison is a bit meaningless given that Silicon Valley does not benefit from an implicit put. The likes of RIMM, PALM or NOK are slowly dying in front of our very eyes with not many people caring much. Given this, why should anyone be offended by the racketeering margins of AAPL or the silly valuations of social media?

Dee Dee Humberside said...
3:21 PM  

The "implicit put" for Silicon Valley is in fact the eternal willingness to bid up their multiples to insane levels, no?

Anonymous said...
5:09 PM  

RSLF, say the wizards. Rates Staying Low Forever.

Today LB feels less of a tool for stashing 50% of the portfolio in a variety of recently despised US fixed income instruments.

AUD shorts getting the COLD STEEL treatment...?

Exuberance may be somewhat more limited once market participants think about the lousy US data that the FOMC may have just peeked forward at...

Another great day for: don't just do something, SIT THERE.

Leftback said...
6:31 PM  

You have to admit, TMM, it's getting more Japanese over 'ere by the day, innit?

Leftback said...
6:47 PM  

WTF. I go to asleep quite pleased with my meager AUD shorts. I wake up to rates low forever. Happy Australia Day everyone.


Anonymous said...
6:48 PM  

Sorry Alex, at least the Baggy Greens are pounding the hapless and over-rated Indian cricket team....

Anonymous said...
7:28 PM  

Though I enjoyed your random N-Ps and last post on short term bull-bear switch, MM, I am eagerly waiting for your N-Ps on equity and fix income in 2012.

Anonymous said...
8:10 PM  

Anon 5.09, I was obviously referring to the fiscal put. Tech can be retarded at times, but it's not like they went AIG on us either.

Dee Dee Humberside said...
9:00 PM  


That 6 Fed governors are opposed to rate rises until 2015 says it all. That's 7 years post-crisis. That's Japan.

The knee jerk commodity rally is some kind of resurgence in DGDF thinking. Not this time: whither inflation? As for the promise of QE3, you better be hoping for some more demand destruction. But this time there won't be corporate profitibility growth through gouging for margin.

This ain't March '09.


Anonymous said...
11:36 PM  

i thought this is meant to be the land of the FREE,

Dont think so, not with these idiots running the country.

We are screwed people.

Go listen to he has some eery predictions coming true.

Anonymous said...
12:08 AM  

+1 on the BBC jab

The greenspan put exercise in 2001-03, which arguably fed and stoked the leverage and credit boom at the height of the bubble, was a result of the tech bust and the recession that followed. So don't give us the self righteous crap because technology definitely benefitted from the put.

How about: US rates trading will NOT be a growth sector the next 2 years? Yes I know going out on a limb there

Anonymous said...
1:18 AM  

Didn't I just highlight *fiscal* put?

Again I agree with the overall sentiment wrt the lazy thought process behind the pitchforks, but if you are really arguing that tech is collecting the same put payoff as financials, I don't know what to tell you.

Nothing self righteous about that, if we can avoid the name calling (for all the linkage between the housing and the tech bubble, one can always raise those between tech and LTCM right?)

Now, the auto industry ...

Dee Dee Humberside said...
9:56 AM  

TMM is wrong on the will keep rolling all the way to 2015. Getting rid of the leaders is old traditional hobby of the Tory party and even the cuddly sandal wearing brigade of Lib Dims can do it, but it is NOT in the Labour party DNA. They will stick with the LOSER until the bitter end + more. Look at Foot in '83, Kinnock in '87 and '82 and Brown in '10. Actually it doesn't matter who is the Labour leader, the party is ideologically bankrupt - hence all the bollox the reforming capitalism etc.

You only can laugh : they can't name a single cut they would do but they are planning just to overhaul the entire economic system.

Tradebot said...
11:17 AM  

the big question of 2012 : will the short Japan trade finally pay off? It has been the widowmaker for almost 20 years now, so are we finally due?

Tradebot said...
11:19 AM  

whether the tech industry vs the financial industry has a put or adds more REAL value is debatable, all I was saying is that rich 20 somethings in silicon valley are just as common as iBankers/Traders in NYC and London (regrettably, I am neither )

The spoos are relentless, rates low forever (or so the fed would have you think) and the so begins the process of portfolio allocations back into the market

For those who missed the US rally (which seems to pull all risk assets with it) what do we buy? EM equities/debt/currencies? Sell the Yen etc. Frontier markets are my play

abee crombie said...
2:05 PM  

If you got some of the rally, smile. If you missed it, sit tight and don't chase. I am just glad I learned not to trade actively on Fed days. I would rather poke my plonka into a pool of piranhas.

What we should be thinking about, in the aftermath, is what is it that the FOMC expects to happen that would require: a) urgent dollar debasement, and b) rates on hold until 2014-2016?
(Hint: We guess it is NOT robust US jobs growth, US decoupling or European rebound).

Ignore the frothing hyperinflationistas. Bernanke and co. see something coming and it is additional deleveraging, dollar strength and deflationary pressure. Hence the pre-emptive strike.

Leftback said...
2:56 PM  

Did you guys see the report yesterday that CALPERS made 1% in 2011? Not that HFs did much better in a lot of cases, but you can always rely on Real Money to underperform b/c of "committee decisions" and "too large footprints" to allow nimble asset allocation.

Leftback said...
3:08 PM  

Something around the corner coming our way soon...yesterday pre Fed action spoke volumes in some places.

Sitting and waiting mode for now.

Amplitudeinthehouse said...
3:44 PM  

@ Leftback
Don't get too caught up trying to guess the Fed. I would argue a) this wasn't urgent, it has been coming for months. b) dispersion of survey results indicate more hawkish undertones than official stmt would lead you to believe.

As for random nonpredictions how about Barca will win the Champions league! Sorry EPL fanistas.

Corey said...
4:56 PM  

Dee dee - LTCM was the fed getting a bunch of banks together to contribute capital to bail out a common counterparty. The cuts were reversed in 99 and there was no taxpayer money involved.

If its the fiscal put you were alluding too and not the monetary one ( from which tech benefitted in 01-03), then you have point. But the credit creation and maturity transformation banks engage in do have socioeconomic benefits and raise living standards. It's no coincidence that the bill run in all asset classes from 82-07 coincided with an massive increase in total debt / GDP. If you don't think this is the case, then why does every country bailout it's financial system and banks when depositors are on the run? And if you, as a citizen and taxpayer, would rather have Lehman, AIG, Merrill, and maybe Wachovia all go bust in the space of a week instead of put up some money to back the system, then you'd be principled but dumb.

Anonymous said...
6:07 PM  

"It's no coincidence that the bill run in all asset classes from 82-07 coincided with an massive increase in total debt / GDP"

and a concomitant decrease in the USD...!!! You can't create growth out of thin air - except with innovation.

Leftback said...
6:21 PM  

Looking at the opposition I'm sure Obama is happy to let them all get on with it. But isn't the most under priced trade for 2012 alive and well in Europe - the impending French election? It is all very well for Sarkozy to try to be Mitterand, waiting till the last moment to enter the race, but if he looses the whole fabric of Merkozy pact falls apart. Where does that leave the great European experiment?

Anonymous said...
9:05 PM  

Up Shit Creek, without a paddle.
No worries, though, Greek deal "imminent"...!

Anonymous said...
9:20 PM  
Leftback said...
9:28 PM  

Anon 6.07... whether or not I would have left those guys fail as a citizen and taxpayer is irrelevant. You are mistakenly taking my viewpoint as saying it was not the right thing to do... I am just saying that the fact that it was done is the primary difference between Wall St and the Valley.

Anon 9.05, I would fade that big time. If anything the Socialist dude is even more likely to be a Merkel puppet.

Dee Dee Humberside said...
9:36 PM  

Which depositors were on the run again? The fiscally - as if - insured ones? How credible was that explicit fiscal put (not that it wasn't "beneficial" to some of the confused and stessed depositors).

Or the phantom ones perhaps, used to scare some delusional dysfunctional politicians with?

Deposit is but a book entry, evidencing the dumbness of the depositor (in exact quantity and time).

His un-innovation, so to speak.

In ways that far exceed socio-economic aspects of this epistemically confused mystery.


Anonymous said...
12:02 PM  

I'll take another Turnaround Tuesday please, Alex.

Leftback said...
4:02 PM  

As EUR/CHF inches closer to the 1.2 level, would be interesting to read
if you have thoughts on any possible

Anonymous said...
2:24 AM  

I still remember a few month a go when Swiss Central Bank said that they will take an unlimited intervence if Euro CHF take 1.2xxx level.Will they prove what they are said lets wait and see

9:30 AM  

On a quiet fri the electronic order book apparently shows 5-10bn bid @ 1.20. Vol too cheap to make sense selling it but can't get too excited about owning calls either as isn't realising at implied and chances of re-peg higher or discussion thereof seem pretty slim imo thus hard to see us back at 1.23-4 region anytime soon.

Think if you believe the peg will hold then bidding in the 1.2020-30 region with the intention of jobbing out at 1.21ish the best of an unappetising array.

Anonymous said...
4:33 PM  

US employment will NOT recover rapidly....

SF Fed on US Employment (Un)Recovery

Leftback said...
9:04 PM  

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