TMM have decided that we are in a cycle of news where the front 4 pages of national newspapers really ought to be empty as most front page stories really don't deserve to be any higher than page 5. So with this system in mind here is page 23 and the horoscopes -
TMM have woken this morning alert and refreshed after yesterday's gloom and an early night with many hours of sleep combined with a really late night at the pub getting completely sloshed. But that's the pleasure of being more than one person. We can enjoy all modes of evening out in a quantum state and only work out which one we had when we observe the outcome in the morning. And today? We are fine, cheery and ready to go (shut up C, go and get a bacon sandwich, you'll feel better later).
Well it is now officially summer in the UK - It's light before 7am and an official drought has been called, which is good news because when that happens it normally starts pouring with rain, as it did yesterday afternoon. As one great friend of ours said to us after being in the country for a year from South Africa " Ach! England- - Eight months of winter, followed by four months of shit weather". Quite, or it was until the UK Government spending cuts meant no rain. Didn't you know that's what is causing the drought? Have you seen how well it correlates? Go on BBC, we dare you to try that one.
So what are we doing today in the markets. Nothing. One of us decided that enough was enough in the equity rally and whether overcome by a complete attack of cabin fever "Its too quiet I'm going mad I have to do something" or just having ridden such a good up wave, has binned all their equity holdings. Now don't get overexcited, this isn't looking for the big downy, just a last hurrah for the bears as mentioned a couple of days ago and a pre-empt of any LTRO based selling. JBTFD (see glossary) still rules the roost. And those of us with bigger knadgers (cahoonies) are staying in prepared to ride any wave as the wall of worry is about to be climbed.
Other things? Errr.. Horoscopes anyone? It's getting to that point where, as usual with a lack of defining news, technicals are wheeled out and the pick-up-sticks lotto of trend lines and "my pencil line is more important than yours" bravado kicks off. So perhaps we ought to look at the horoscopes too. We mean that if we look at Bradley Siderographs (which we own up to doing now and again, only because a large chunk of players around the table are supremely superstitious and do throw proper money behind things like moon cycles) then why not look at real horoscopes. Complete cock of course, but its surprising how many sane people we know who try to believe in them. Here's a good fact - If the gravitational pull (of the planets) at your birth has an input on your character, then best you make sure the obstetrician is standing in the right place because his gravitational pull on you is going to be greater than that of the furthest planets. Don't you just love the inverse square rule? "Oh I'm a Gemini with water cooler in the upper quadrant".
so here we go ..
Aries - As a Ram you are wooly thinking and have large horns. Buy gold and shout about it a lot.
Taurus - As a bull you must watch out for chastisement in the blogosphere and be prepared to be accused of being a member of the illuminati. Buy SPX.
Gemini - Twinning really isn't good unless you believe American frat house movies. Sell covariance and buy correlation vol.
Cancer - Doesn't sound good. Have you thought of getting your star sign changed by deed poll? Trade spot.
Leo - As either a lion, a 1970s club singer or the 2 year old child in a wealthy family. Buy cattle, gold medallions or a career at a merchant bank.
Virgo - Have you done this before? We guess not so buy CDO squareds on subprime mortgages , trust us, you'll be fine and it won't hurt.
Libra - You are balanced with the scales equally weighted on either side. Become an Economist and don't make any attributable forecasts.
Scorpio - As a large far eastern central bank. Buy what ever you like it will just go up and if it doesn't change the rules.
Sagittarius - your archery skills will come in useful sticking people in the back as the banking pond dries up and you need to survive. Sell your colleagues down the river.
Capricorn - Your goaty digestive system will come to the fore when your hedge fund loses the rich 20% and is forced to survive on the subsistent 2%. Short vol and buy a smaller car.
Aquarius - Waterboarding is not allowed so stick to traditional methods to extract insider information from your contacts. Buy whatever they suggest with their last dying breath.
Pisces - Something fishy going on, expect a call from the FSA but be pleasantly surprised when they just rap your knuckles for not completing your 200hrs of mandatory regulation training and yet miss the 4bio of 88888 account tickets in your bottom draw. Go short your own institution.
With that TMM hope that whatever your talisman or totum, it brings you wealth and happiness - however much bollocks it really is.
TMM have woken this morning alert and refreshed after yesterday's gloom and an early night with many hours of sleep combined with a really late night at the pub getting completely sloshed. But that's the pleasure of being more than one person. We can enjoy all modes of evening out in a quantum state and only work out which one we had when we observe the outcome in the morning. And today? We are fine, cheery and ready to go (shut up C, go and get a bacon sandwich, you'll feel better later).
Well it is now officially summer in the UK - It's light before 7am and an official drought has been called, which is good news because when that happens it normally starts pouring with rain, as it did yesterday afternoon. As one great friend of ours said to us after being in the country for a year from South Africa " Ach! England- - Eight months of winter, followed by four months of shit weather". Quite, or it was until the UK Government spending cuts meant no rain. Didn't you know that's what is causing the drought? Have you seen how well it correlates? Go on BBC, we dare you to try that one.
So what are we doing today in the markets. Nothing. One of us decided that enough was enough in the equity rally and whether overcome by a complete attack of cabin fever "Its too quiet I'm going mad I have to do something" or just having ridden such a good up wave, has binned all their equity holdings. Now don't get overexcited, this isn't looking for the big downy, just a last hurrah for the bears as mentioned a couple of days ago and a pre-empt of any LTRO based selling. JBTFD (see glossary) still rules the roost. And those of us with bigger knadgers (cahoonies) are staying in prepared to ride any wave as the wall of worry is about to be climbed.
Other things? Errr.. Horoscopes anyone? It's getting to that point where, as usual with a lack of defining news, technicals are wheeled out and the pick-up-sticks lotto of trend lines and "my pencil line is more important than yours" bravado kicks off. So perhaps we ought to look at the horoscopes too. We mean that if we look at Bradley Siderographs (which we own up to doing now and again, only because a large chunk of players around the table are supremely superstitious and do throw proper money behind things like moon cycles) then why not look at real horoscopes. Complete cock of course, but its surprising how many sane people we know who try to believe in them. Here's a good fact - If the gravitational pull (of the planets) at your birth has an input on your character, then best you make sure the obstetrician is standing in the right place because his gravitational pull on you is going to be greater than that of the furthest planets. Don't you just love the inverse square rule? "Oh I'm a Gemini with water cooler in the upper quadrant".
so here we go ..
Aries - As a Ram you are wooly thinking and have large horns. Buy gold and shout about it a lot.
Taurus - As a bull you must watch out for chastisement in the blogosphere and be prepared to be accused of being a member of the illuminati. Buy SPX.
Gemini - Twinning really isn't good unless you believe American frat house movies. Sell covariance and buy correlation vol.
Cancer - Doesn't sound good. Have you thought of getting your star sign changed by deed poll? Trade spot.
Leo - As either a lion, a 1970s club singer or the 2 year old child in a wealthy family. Buy cattle, gold medallions or a career at a merchant bank.
Virgo - Have you done this before? We guess not so buy CDO squareds on subprime mortgages , trust us, you'll be fine and it won't hurt.
Libra - You are balanced with the scales equally weighted on either side. Become an Economist and don't make any attributable forecasts.
Scorpio - As a large far eastern central bank. Buy what ever you like it will just go up and if it doesn't change the rules.
Sagittarius - your archery skills will come in useful sticking people in the back as the banking pond dries up and you need to survive. Sell your colleagues down the river.
Capricorn - Your goaty digestive system will come to the fore when your hedge fund loses the rich 20% and is forced to survive on the subsistent 2%. Short vol and buy a smaller car.
Aquarius - Waterboarding is not allowed so stick to traditional methods to extract insider information from your contacts. Buy whatever they suggest with their last dying breath.
Pisces - Something fishy going on, expect a call from the FSA but be pleasantly surprised when they just rap your knuckles for not completing your 200hrs of mandatory regulation training and yet miss the 4bio of 88888 account tickets in your bottom draw. Go short your own institution.
With that TMM hope that whatever your talisman or totum, it brings you wealth and happiness - however much bollocks it really is.
19 comments
Click here for commentsC says'
ReplyGlad to see you off my couch young man (men) although I am still trying to work out my group rate fee .
Gemini are natural pairs traders and as a Bull bollocks is my stock in trade.
As for a Bacon butty ,in my dreams my friends,in my dreams. Search on 90% occluded and quintuple. Post operative is ideal for maintaining a sense of objective perspective on matters .
I should add that these low mom/volatility grinders are renown for shakes and preemptive shorts..buggers up the nerves of the best of people because stops become ludicrously closer as the move progresses and each become more and more protective of usually unexpected returns.And one bad hair day can take out at least a couple of weeks of treding gains with absolutely no warning. I've got a love to hate thing going on with markets like this.
ReplyWell, the 10-year IT/ES has widened 20 in the last couple of days. Something's brewing.
ReplyC says'
ReplyHogging the posts today,but what do I have other than time.
The next macro ,coming out of left field,where we like 'em ,is the much awaited uptick in persistent inflation that has for many been talked of ,but seldom found.
Liquidity supplied will this year finally do it's 'job' and of course bonds will not like it ,but neither will many equity sectors. In fact for some reason I find myself going all japanesy for equity inflation.There must be a reason for that.Perhaps moneyflow JGB to equity for the first time in many a moonseen horoscope.
Why you ask do forsee such an event ? The sheer beadth and depth of this research will astound.It is that my local pub is extremely busy on even a Wednesday evening. I call this a leading indicator for inflation and I am tempted to send it to Sir Merv ,but something tells me it's significance would be lost on his Aries like inability to see past the wool that constantly overhangs his gaze.
Yes,he is an Aries and yes he really does conform to stereotype unfortunately.
Brilliant post after the sadness of your last existential peice. All comedy certainly the way forward.
ReplyFrom a philosphical perspective if you cant laugh at the markets its got you beat.
C says'
Reply"From a philosphical perspective if you cant laugh at the markets its got you beat."
Well if we are going to go all philsophical I would rephrase that that if you cannot appreciate the emotional responses that the market invokes from you then you will beat yourself.
Hate disappoint you TMM in the middle of your mid-trading-career existential crisis, but if we're going to prepare for the next ride up, you want let Fisher know that your saving the best to last. TMM Fund has gone out and invested their 2% management fee in an Feng Shui master in hope of overcoming the inflationistas on teh board.
ReplyC says'
ReplyI am no inflationista. However 7 years into a US property slump and 5 years into a global credit crunch I think the tide is turning for employment and consumption and the liquidity policy in that sense is working.Within that context I look for lagging equity book value and overbought bonds.
I've been through a lot of business cycles and what I know is it is not the absolut levels of anything that matter at extremes it the % changes that occur when even modest change ocur to the numbers.Hence, why I wouldn't want to be a country mile close to bonds at historically low yields regardless of what central banks might say.
Taurus - As a bull you must watch out for chastisement in the blogosphere and be prepared to be accused of being a member of the illuminati. Buy SPX.....
ReplyThey seem to be entertaining, be that at half time in NFL..
ps..I can smell that ticket straight back to Asia already.
real estate in Miami is hot, i mean up 30% YoY hot. Cali is behind but prices going up there as well. Only in the nice neighbourhoods for now but it will spread slowly
ReplyI think ppl will be surprised how quickly some prices rise after foreclosures/REO etc stop pushing the market down
Credit is still too tight though for average Joe. Mostly cash buyers. But it will help confidence. I'd love to load up on a 30yr mortgage right now
I think people will be surprised how quickly some prices FALL after the banks let loose another flood of foreclosures/REO etc and stop artificially propping the market up....
ReplyWe are in the 5th or 6th inning of Price Discovery in housing. See Tokyo area prices, 1990-2012....
"C" said: I've been through a lot of business cycles.
ReplyTrue enough. But what everyone needs to get through their heads is that these are not NORMAL business cycles - none of us (outside of Japan) have been through business cycles in a ZIRP regime before 2008. This is the investing and economic version of Through The Looking Glass. ZIRP/QE regimes suppress volatility in the real economy. Hence the business cycles we are seeing are ± 1-2% and not ± 4-5%. See Japan, lost decades.
This misunderstanding is causing a lot of people to chase commodities, junk bonds and growth stocks at the expense of Treasuries, IG corporate bonds and income-producers like utility stocks. This isn't employment growth, it's a small seasonal bump. This isn't a bull market - it's an equity market squeeze fueled by hot money and some not very smart hedge funds that stayed short at the end of the year and have been receiving cold steel.....
LB is astonished at the amount of recency bias on display in the media. For a good example of what this is, one only need look back at the rolling top of March-April 2011. A glance at the DJT shows that one group of stocks is already rolling over. It's not 100% accurate but recessions associated with oil spikes ALWAYS cause the Trannies to roll over first and then the rest of the market follows.
Trannies
Look And Learn.
Look And Learn, kids, Look And Learn.
interesting thoughts LB, trannies are rolling over, i didnt notice that. but if we are going to be Japan style, then you have to play the cyclical rallies, no? U must be in the ECRI camp
Replyre house prices: Japanese real estate was in the stratosphere, US real estate was never that crazy. Lending standards were. House prices in many parts of the world are over valued now (canada, australia, china, brazil) and intl investors still like the US. I hope I'm wrong bc I dont own anything yet, but low interest rates, a steady economy and affordable prices are good for housing
Absolutely, one has to play the pseudo-cyclical rallies! To be completely clear, I have been long during this rally, was still slightly net long in the last week or so, and now positioned more or less completely neutral.
ReplyWhat one thinks about the rally and how one trades it are two quite different things. What is telling is that normally yields move out quite substantially in a large growth-based rally and that hasn't happened here, although US HY spreads have tightened a lot.
One thing about Japan, they really really do not like outsiders, thus relatively few international investors would consider buy houses in Japan and live there.
ReplyTotal different stories in the US, Canada, and Australia
Yen crosses have some legs into the weekend ...
ReplyClaus
Talking of ECRI, am I the only one to expect Achuthan to say that 'there is always a recession in the banana stand' everytime he is on TV? Look at him more closely...it's uncanny
ReplyFunny post TMM, really good.
ReplyNext week I'll make a new post regarding what my horoscopes tell me about the status of the movement that started past October.
Keep up the good work.
Dan
Sorry,
ReplyForgot to make the handle blue.