Friday, January 18, 2013
TMM have often commented on the PIN (Price is News) function of markets and over the past year that has normally been applied to the self-feeding frenzies of downside moves, where the likes of Portuguese 10yr went to 12% and Spain went on its hikes up 7% mountain. Today we are thinking that the ratio of real news to Price is News on some of the more popular bullish trends is showing similar traits. "Not seen since the last time" comments abound and we feel that it is probably best to stand back, leave our short dated downside hedges in place and go with the flow.
Euribor has been a pain but with Lagarde reminding the market that the European economy isn't out of the woods yet and advising easy ECB policy, we are holding tight (though we can feel the knife steel through the Kevlar of our gloves).Spooz appears to be hung up on 1475 expiries today and each asset market appears to be coping with its own flock of screaming pink flamingo chicks , as core asset reallocations take place swamping micro news. Data really appears to be taking a back seat to portfolio flows.
So on with the Non-Predictions. After charts, graphs and automobiles its time for a more light-hearted look forward, so where better to start than with our annual favourite as its always a sure-fire winner -
5) The BBC will NOT stop linking any injustice anywhere in the world to the UK Government spending cuts and 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.
6) David Cameron's call for an EU referendum will NOT stop UKIP from pushing the Tories into 3rd place in the European Elections. TMM don't believe that the "long awaited / eagerly anticipated /most important" Cameron speech on EU membership will be enough to swing the "disgusted's of Tunbridge Wells" and the other angry old men of the Tory party who are defecting in "Tea party" style. Perhaps the Tories are missing the point as polls suggest UKIP is winning on immigration policy rather than abject anti-EUness.
7) "Blogger" will NOT cease to irritate TMM by screwing up the formatting whenever they try and post something. In fact we might expand that to - The huge technological giant Google will NOT fail to surprise TMM in the shabby, unthoughtout and user unfriendliness of all of their recent products. (e.g. - Google circles, blogger, impossibility to link Android apps to new Gmail accounts).
8) Vanadium redox batteries, despite their clear technological advantages will NOT catch on as a viable energy storage system. A simple call as TMM have had investment in them for many years and have seen squat return so far so TMM really can't see why things should change this year. Though they should.
9) William and Katherine's baby will not have the same first name as a global leader or leader of a UK political party. Or James (Jimmy).
10) It will NOT rain on St Swithun's day in the UK. It's only 9 months ago that the UK was in the grip of hosepipe bans and dire warnings of the most dreadful drought. Back in March TMM remarked that the introduction of the ban was fantastic news as hosepipe ban announcements usually saw the onset of biblical deluges. And so it was. The UK has racked up its wettest year since some other wet year and we are drowning in forecasts of more to come. Knowing how the Press and of course the markets, love to extrapolate (we can remember the predictions ten years ago of "no more snow in the alps" and "plant your English gardens with cacti" articles with wry pleasure) TMM will instead apply their strong belief in mean reversion and will predict a lovely UK summer this year.
11) This year's New Year diet plan will NOT succeed and, which ever new fad it is, will be quickly usurped by another "foolproof" diet which insists on highly expensive books, ingredients, apps and plans. TMM don't know why if people can't grasp the simple concept of "calories in versus calories out" they think they can manage anything more complicated.
12) The UK press will NOT fail to publish a picture of a prat on skis trying to get to work everytime it snows.