Tuesday, September 25, 2012
It's sort of going according to plan. "Sort of" in as much as plans never really go as planned but are a weaving together of many paths that on average hopefully take one to where one wants to go. As we know with markets, a win is a win even if the theory was wrong. Unless of course, you are the boss, or an insurance company, or a fund regulator in which case the win is invalidated as if didn't follow the path exactly described in the prospectus, policy or proposal and the resulting payout goes into the pockets of Mr Boss, Mr Insurance company or Mr lawyer or Mr FSA/SFA fine. But in general a win is a win and we take the pullback in euro things and equities as a "Thang Yow!"
Talking of Yow, TMM's mind jumps to that marvellous "Fast Show" portrayal of a regional Brit displaying those Nuevo-riche tendencies that we all detest and can't help but think of Germany's attitude towards Spain and their ilk "I can't help noticing that I am considerably richer than yow"
With Switzerland being the hotel owner.
So what else is bubbling? With policy-maker bazookas smoking empty, we are back to data watching to see if the rockets have hit their targets. Or, perhaps more apt in war film analogy land would be that the economy is like one of those moments where the stricken fighter pilot (policy-maker) is pulling back on the stick for dear life muttering through gritted teeth "Pull up! Pull up, damn you!" while siren screams gain in pitch as the plane hurtles towards the ground. The audience left on the edge of their seats awaiting either a fiery death or the plane to recover enough to level out and skim the treetops as relief music rejoins the rugged smiling visage of our heroic pilot (if anyone can find such a YouTube clip we'll embed it - we failed).
Right now the markets appear to be doing a "Bosphorus" which has currents at different depths moving in opposite directions. Which leads back to that reference we made in our last post. Markets are the sum of people expressing short, medium and long term views all at the same time. And the currents we refer to in markets are instead of being haloclines (layers separated by saline density) are temporoclines - layers separated by time view. We should of course add finer and finer layers ending with a top layer of vibrating spume representing the high frequency trading models.
TMM currently (oh dear) see 3 currents. Our core subsea current is the move we saw betrayed post QE announcement which is being expressed by those comfortable enough or with pockets deep enough to cope with any chasm between them and their promised land they have identified in the distance. The middle counter-current is represented by those that see problems in reaching the promised land and who are strapping on the crampons for some extreme mountaineering through countries like Spain, China and Japan and up US cliffs. The top short term surface current has today effectively gone slack with short term starting to say "errr now what" and that lot together means today prices are really not going anywhere.
So once again its a dull day. But that hasn't stopped the cut and pasting of random headlines around the chat systems in sorts of death twitch seizures. The heads have been chopped off, thought is not being applied but the foul is still flapping its wings and running around the yard trying to squawk. Headlines such as *The U.S. Embassy In India Announces A New Visa Processing System" are being recycled with the sort of implied importance as "Worlds largest oil reserve found in Spain". But to TMM most of the headlines being thrown at them today may as well have come from the backs of German one piece ski suits of the 90s. Remember them? Random meaningless words sewn on gaudy colours - "Ski! Artichoke! Yeah ! Banana!" but now "China! Greek! Less! More!". Meaningless.