Goldiehawks and the Three Doves

When Macro Man first saw that the last four heads of the Federal Reserve were going to appear on the same panel, a thought popped into his head that he had seen such a summit before.   Although he couldn't place it, the idea danced on the edge of his thoughts, seemingly just on the cusp of remembrance but hanging tantalizingly out of reach.  This afternoon, however, he had an epiphany.   The presence of Yellen, Bernanke, Greenspan, and Volcker on the same panel was just like a fairy tale that his mother used to tell him when he was a small boy.  It went a little something like this....

Once upon a time there was a very large old man named Goldihawks.  He had had many adventures in his life, including slaying a mystical dragon called Inflation a long, long time ago.  More recently, armed only with a magic pen, he had fought against a big, bad group of monsters known as Prop Desks.  With his trusty pen, Goldihawks had managed to blame the financial crisis on these nasty Prop Desks and to banish them from the kingdom forever.   All except for the Treasury Prop Desk, whom he decided was actually quite nice and allowed to stay for as long as it liked.

After vanquishing the Prop Desks, Goldihawks decided to relax and took a long walk in the wilderness.   Strolling down a little-used and barely visible path, Goldihawks paused to smell the roses and to see the forest (and the trees.)  Eventually, however, he got quite lost, and soon found himself feeling quite tired and rather hungry.

Just as he started to worry about his predicament, Goldihawks found a small clearing the woods, and what do you suppose was nestled right in the middle of that clearing?   A small office building!  Because he was so tall, Goldihawks was able to peer through the window, but he couldn't see anyone inside the office.   He walked up to the front door and rang the bell, but no one answered.  He tried knocking as well, but there was still no response.   "Hallloooooooo!" he cried.   "Is anybody there?"  However, he heard only silence, save for birds calling in the trees above.

On a whim Goldihawks grabbed the knob on the front door and tried to turn it.  It worked!   Goldihawks turned the knob and pushed, and with the faintest of groans the door opened to admit him.  He stepped into a well-lit foyer that opened into a larger room on his left.  "Hello?" Goldilocks said, but again there was no answer.  Shrugging, he shut the front door and tiptoed into the room on the left.

In this room there were three desks:  one big, one medium sized, and one very tiny indeed.  Goldhawks tried to sit at the medium one, but it was too small.   He then tried to sit at the big one, but it was too small as well.   He didn't both trying to sit at the tiny one, because it only came up to his knees.

Standing over the big desk, Goldihawks flipped on the computer monitor and was surprised to see a financial market chart.    "Hmmmm," he thought to himself, "these Internet stocks are toooooo high."

He then walked over to the medium sized desk and turned that computer monitor on.  It, too, displayed a chart.  "Golly," said Goldihawks, "those house prices are tooooo high."

Goldihawks walked over to the tiny desk and got down on his knees.  By slouching he could just about get to eye level with the monitor.   "Whose desk is this?" he wondered, "a smurf's?"  When he turned that monitor on, he got a nasty shock and had to stifle a little cry of terror.  "Wow," he said out loud, "those bond prices are tooooo high."

As he put his hand on the tiny desk to lever himself up, Goldihawks noticed that a drawer opened slightly.   Reaching in, he pulled out a sheaf of papers entitled The Outlook, Uncertainty, and Monetary Policy.

Grunting slightly, he heaved himself up and walked stiffly to the medium sized desk.  Opening the drawer, he found a book within it called The Courage to Act.  Goldihawks took the book and put it on the sheaf of papers.

Walking to the largest desk, Goldilocks opened the drawer, fully expecting to find something within.   He wasn't disappointed, as he found another tome entitled The Age of Turbulence, which he extracted from the drawer.

Goldilocks took the two books and the sheaf of papers and walked over to a sofa at the end of the room.   Kicking off his shoes, he lay down on the couch and started to read.  First, he picked up the sheaf of papers.    "Hmmm," he said, "this policy prescription is toooo easy."

Yawning slightly, he then opened The Courage to Act and leafed through it.   "Gee," he mumbled, "this bit's OK, but this policy is toooooo easy."

Although his legs were draped over the edge of the couch, Goldihawks found himself struggling to keep his eyes open.  He picked up The Age of Turbulence in the hopes it would be a page-turning thriller.   It wasn't.   "Conundrum, my foot" he mumbled.   "That policy was toooooo eassssyyyyyy...."

Goldihawks had fallen asleep.

The next thing he knew, Goldihawks was awakened by the sound of a shutting door and voices.  Yawning, he stretched his arms and legs on the sofa  and blinked his eyes open.   Imagine his surprise to see three doves peering at him:  a bespectacled one, a bearded one, and a tiny one.

"Who sat at my desk?" asked the bespectacled one.

"Who turned on my computer?" asked the bearded one.

"Who took my speech?" asked the tiny one.

All three of the doves were chewing gum, and after asking their questions each of them began to blow an enormous bubble.   Goldihawks had always had an acute fear of anthropomorphic avian life, and the sight of three bubble-blowing doves was too much for him to take.  "Arghhhhh!" he shouted, scrambling to his feet, grabbing his shoes, and sprinting out the front door in his socks.

He disappeared into the woods and went back to hunting Prop Desks, living happily ever after.


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26 comments

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Anonymous
admin
April 7, 2016 at 10:49 PM ×

brilliant-made me smile after whats been a fairly shite week!!!

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Anonymous
admin
April 7, 2016 at 10:52 PM ×

Great! I should tell this fairy tales to my new born and wish him a wonderful yield for his retirement investment.

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Anonymous
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April 8, 2016 at 4:34 AM ×

"Japan's economy shrank in October-December last year on weak exports and consumption. Many analysts expect it to show another contraction in January-March, posting two straight quarters of negative growth and meeting the technical definition of a recession."

"Japan's business sentiment worsened in the three months to March and companies' inflation expectations weakened, keeping pressure on the central bank to do more. Companies have also been reluctant to boost capital expenditure and wages, clouding the outlook for the success of premier Shinzo Abe's "Abenomics" stimulus policies."

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Anonymous
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April 8, 2016 at 7:27 AM ×

Just right.

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Anonymous
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April 8, 2016 at 8:36 AM ×

Nice to see Japanese buying oil in the Asian session to boost equities. Don't think the bears are gonna get much satisfaction yet...

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Hotairmail
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April 8, 2016 at 9:18 AM ×

Goldiehawk - is that a manga character?

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Trader Mars
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April 8, 2016 at 12:06 PM ×

US markets have continued grinding higher (direct result of Yellen’s flipflop and deliberate weakening of the US$) at the expense of exporting countries like Germany (Dax) and Japan (Nikkei). The weaker US$ is the key here as Yellen has clearly signaled her intention to bail out China by joining the currency wars albeit belatedly.

Unfortunately, the same folks that were bearish at 1800, 1950, 2000 and 2050 are still bearish today. That’s fine, but if you don’t acknowledge you are wrong you continue to fight the trend and lose money. Higher highs and higher lows are the very definition of a trend. The US equity markets have given you NO reason to be short this rally.

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Macro Man
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April 8, 2016 at 12:10 PM ×

...and going nowhere for 2 years is the very definition of "not a bull market." I think you mistyped "ZH" in your search engine when you decided to vent your spleen against a straw man.

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Anonymous
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April 8, 2016 at 1:10 PM ×

Another leg up that provides euphoria or an emotional extreme of some type fits cycle end, but through weak usd only ? Need something more, as we saw price is news could be quickly reversed if nothing else providea impetus.

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Anonymous
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April 8, 2016 at 2:22 PM ×

Oil (and a dovish Federal Reserve) is driving equities higher. Yesterday was a minor pullback only. This rally will continue until we have broken new all-time highs in US equities.

There is currently ONLY financial engineering taking place - no fiscal measure or real productivity anywhere. The US (actually world economy) is broken due to debt and demographics. Having seen the panic in Jan/Feb that a strong USD caused to China and US multinationals, Yellen has fully joined in the currency wars. The Fed are now actively fighting the ECB and BOJ each and every day in the markets to win this race to the bottom. Obviously the Fed and PBoC are bigger and stronger, so they will win. The ECB and BOJ are f*cked.

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Booger
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April 8, 2016 at 3:12 PM ×

Anon 2:22, the Fed got China's back was yesterdays story. Tomorrows story is the Fed realizes they blew up Europe and that could be a bigger mess than China devaluing.

A strong yen is not a huge problem for Japan because they can always do some more fiscal expansion, as they have done for many years. A strong euro is a big problem for Europe because they can't easily do any fiscal pumping. Europe is looking f*%cked.

MM: There is a room in the eccles building where newly minted Fed chairmen/women go and a contraption which completely removes their spinal columns for hawkishness. So each time the market farts or there is a recession they have cut rates 3% below what they were during the last recession. Which is great for making that recession a few months shorter, but has the unpleasant consequence of increasing the private sector debt load. So now we are at 0.5% and Yellen has inherited this prize turd thanks to Greenspan and Bernanke.

At least Bernanke had rates at 5% before the last recession and he still had to use multiple QE's. Don't envy Yellen's situation.

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Anonymous
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April 8, 2016 at 3:13 PM ×

Position management from AnonymousApril 5, 2016 at 11:13 AM

Reducing Brent to 25% short. Price action has me querying short term trade. Tight stop for remainder.

Emini was entered at 2040&60 so in around unchanged. Reducing 50% here as unsure today. Expected some follow on. Tight stop too.

Dax, down to 33% and leaving it on unless there's significant price action change.

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Anonymous
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April 8, 2016 at 3:49 PM ×


MM you are wasted in finance, you should be a writer for Private Eye.

Chris

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Anonymous
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April 8, 2016 at 4:15 PM ×

Booger, you're right - these Fed chairs are turds.

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Anonymous
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April 8, 2016 at 4:41 PM ×

@Anon 2:22,@Booger 3:12

The two of you have pretty much nailed the macro driving forces of the next 18 months.

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Anonymous
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April 8, 2016 at 5:46 PM ×

Second major refinery fire this week currently raging. The first fire damaged the US's second biggest refinery earlier this week. The fact that both fires are "unexplained" and broke out just as crude prices were in free-fall, reversing those prices and causing a MASSIVE rally in crude is no doubt purely coincidental.

After all 2 massive refinery fires in a week is commonplace.

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CV
admin
April 8, 2016 at 7:11 PM ×

@ Chris, I always assumed he was ;).

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Anonymous
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April 8, 2016 at 9:28 PM ×

https://twitter.com/zerohedge/status/718532951173152768

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Anonymous
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April 9, 2016 at 7:53 AM ×

Any comment on M2 velocity.

Art Cashin watching it. Warning, goldbug site:

http://kingworldnews.com/legend-art-cashin-warns-this-may-shock-investors-and-create-panic/

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Anonymous
admin
April 9, 2016 at 8:12 AM ×

What am i missing?

https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-decrease-in-the-velocity-of-money/

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Anonymous
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April 9, 2016 at 12:17 PM ×

Journalists now reporting that senior management at the world's biggets banks knew LIBOR etc was rigged. If this is true, it's imperative that these bank bosses all serve serious time in prison.

http://www.telegraph.co.uk/business/2016/04/08/senior-bosses-at-worlds-biggest-banks-knew-libor-was-rigged/

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Anonymous
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April 9, 2016 at 3:49 PM ×

McClellan finally throws in the towel. (I threw it in last fall LOL!)

https://www.mcoscillator.com/learning_center/weekly_chart/eurodollar_cot_throws_a_curveball/

Rossmorguy

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zhen
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April 10, 2016 at 6:23 AM ×

Is gem like this makes me a voracious MM reader :)

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Anonymous
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April 10, 2016 at 5:35 PM ×

Heta bail in....

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Anonymous
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April 10, 2016 at 5:59 PM ×

"For global equity investors and Shinzo Abe, it’s splitsville. Starting in the first days of 2016, foreign traders have been pulling out of Tokyo’s stock market for 13 straight weeks, the longest stretch since 1998. Overseas traders dumped $46 billion of shares as economic reports deteriorated, stimulus from the Bank of Japan backfired and the yen’s surge pressured exporters. The benchmark Topix index is down 17 percent in 2016, the world’s steepest declines behind Italy."

http://www.bloomberg.com/news/articles/2016-04-10/abenomics-rebuked-as-blackrock-joins-46-billion-japan-pullout

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sportsguy
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April 11, 2016 at 11:24 AM ×

Very creative and well written. . . LOL!

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