Losing one's conviction

Team Macro Man are really struggling. Struggling to find something to say that they haven't said already and struggling to work out why the world is so full of people we just don't agree with. We are not talking solely markets, we seem to be surrounded by them in life in general. It must be us. Perhaps we need to adjust our sense of the new normal and get with the program. But we can't.

It is all too easy to launch into a vitriolic lambast of all we think wrong, but we don't want to rant, so the logical answer is "lay down the cogent arguments for why things are wrong and what needs to be done to right those wrongs". But why bother? There are blogs all over the world with reams of well argued points that stretch to novella length, but does anyone in the blogosphere really read those things fully through, especially if they don't agree with the first paragraph? To this extent a blog post ends up either preaching to the converted or lines itself up for a kicking. So what's the point.

To TMM it appears that the blogosphere is becoming a general armoury for supporting wars that are more and more partisan. You can see it in the markets. Either everything goes to hell in a hand basket (quote ZH all day) or it isn't and quote err... Actually this is another important point -The blogosphere has a massive skew to end-of-the-worldness. Those that have lost all interest just don't even bother with reading blogs at all. How many people actually have their opinions changed by what they read, rather than reinforced? Maybe it's just us but at the moment there appears to be little interest in either reading or writing and opinions of quality are either not being expressed or people have nothing to say. Like us.

So what do we do? We aren't going to write reams of boring research, that's what research people do and get paid for, so we will leave it to them. We aren't going to list our portfolios because that's our business, so we are left either with the light-hearted pieces to fill the time (which, to be honest, are the bits we enjoy most) or we don't write anything. As you might have guessed this is why posts have dried up to an extent.

Since TMM have taken the reins from MM the world has been on one rocky ride, but things are now beginning to settle down. Whether as a calm before Storm II or as a general exhausted flop we don't know, but for now we are at slack tide where correlated trends will drift apart as the flow comes to a halt with the only movement in side eddies. As markets stabilise focus and diversification starts to occur. Investors adventure out of the door of "risk on/risk off" and start to look at nuanced fragile cross trades that aren't going to get torn apart by a global meltdown. Shouldn't be long before the buy-side starts recommending all sorts of exotic stuff designed to lever up some return in an otherwise not moving market. Death by x-axis spawns leverage and leverage just starts the cycle again. USDJPY is a classic example - it does nothing for eons, vols fall, VAR measures fall, options are built around it not doing anything and then BOOM - we have another "where did that come from" moment, accompanied by the normal "told you so's" and "this is stupid's" from those left playing.

Sell vega, buy gamma?

TMM are down and don't know if anything in finance will cheer them up.
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Anonymous
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February 22, 2012 at 2:59 PM ×

Hmmm, pick yourself up TMM, it ain't that bad, maybe you just need a bit of sunshine in your life :) I agree that the blog world is biased, but as you have brilliantly pointed out the "real" world does not seem to care too much just like the CNN propaganda does not have that much impact either. Let's face it, through perspective of time and history we are doing pretty well in our time capsule. I only hope my kids have our "problems" 50 years from now. In any case, there are PLENTY of people who think like you do, and sure it may be confirmation bias, but so what? I enjoy reading your blogs and it would make my world LESS pleasant if you were to stop (and I do read past the first paragraph...) So turn the crystal ball 90 degrees and things will look less bleak :)

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VandalsStoleMyHandle
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February 22, 2012 at 3:15 PM ×

My prescription for the current malaise: long books / short blogs (present company excluded, of course), one month off somewhere sunny (it's been a busy four years, we all deserve it), come back ready to rip up, errr, saplings.

Yeah, this cycle is going to be a hard grind. Rates will be quiet, CB liquidity will fill in any number of potholes. The next few years will really thin out the herd.

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Anonymous
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February 22, 2012 at 3:29 PM ×

C from C says'
Actually I enjoy the philosophical pieces more than those with a market viewpoint etc.
In this one I detect a sense of futility that probably reflects your 'mindclock' as it is set at this time.Wonderfully ,this will pass too.

Moving past that when you put your mind back onto a more objective footing it will occur to you that writing is good exercise for clarifying your thoughts on strategic views.A test if you will of how much thought they contain and conviction they might carry for you.Whether anyone else agrees is moot just as reading other blogs bearing different viewpoints is also moot to a large degree.

Perforce there must be differing views ,or how else would we have a functioning market where so much of the action undertaken is as much to do with being wrong as it is to do with being right and the major difference in performance is no more than being small or large respectively.

On a different day I think you will rejoice that differences are alive and well because if they were not then opportunities would be scarce.

At this time you are (like the market) suffering in part the exhaustion that must come when you try to find something worthy to write daily.Indeed journalists appear to suffer that to a very large degree given the drama they appear to try to make saleable based upon sheer fluff. They like the markets 'die' for ideas when truly the world does not wish to 'move' appreciably on some days.

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Vasastan
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February 22, 2012 at 3:46 PM ×

Well, here is one reader that always appreciates (and reads) the posts here. Whether light-hearted or analytical, frequent or less so, the average post and post-post discussion quality here is hard to beat. Agree that most other sites (and their contributors) have a bias, but that is just the nature of the web and the fight for ad revenue - piles of garbage to wade through before you find a nugget of something else. It is a mark of quality that you have not gone down the same road.

And OK, OK, I'll get around to donating now. Happy Saint Lucia's Independence Day!

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February 22, 2012 at 4:42 PM ×

In the meantime, one can entertain oneself pondering how the chairs will find themselves permanently rearranged in the aftermath.

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Polemic
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February 22, 2012 at 7:59 PM ×

Thanks for your kind words.. All gratefully received. Just one of those days when introspection and mood overcame us. but in general there is a "can't be arsed" feel about in many things. Agree with the point effectively Monty Pythonesque of " shagged out after a long squawk ".

So .. perhaps better cheer ourselves up with some light hearted interlude stuff ... let me see...

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Saul Bollox
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February 22, 2012 at 9:15 PM ×

Yeah, it's all bollocks, lately, innit, TMM?

(USDJPY indeed being a case in point as an example of WTFness).

Never mind, me old china, tomorrow is Thirsty Thursday. Gooooo on son, get it down yer Gregory.

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Polemic
admin
February 22, 2012 at 10:21 PM ×

Oh and Vasastan - thanks very much for your kind donation . Good man. Oh and re your comment on the contribution. I knew her niece!

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Polemic
admin
February 22, 2012 at 10:23 PM ×

saul .. Not a bad plan.

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Amplitudeinthehouse
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February 22, 2012 at 10:38 PM ×

Oh NO!...TPTB have nobbled TMM :)

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abee crombie
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February 22, 2012 at 10:42 PM ×

great thinkers try to find holes in their own arguments and are open to new ideas. I think TMM exemplifies this.

quite times like this are good looking at stock picks, IMHO

I kinda like going home not worrying about what is going to happen tomorrow.

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Anonymous
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February 23, 2012 at 12:25 AM ×

Hey TMM, I came here looking to get a valid perspective and possibly change my mind! That's why I come here, and I respect your brains and your wit. (No, this isn't your mom.)

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Matthew
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February 23, 2012 at 2:58 AM ×

Dear TMM:

I have been reading this blog through two regimes (old guard and new guard) and I have enjoyed every post. Given that the core audience of this blog was forged during strongly up-trending, low-volatility markets (amidst a deluge of doomsayers frantically grasping for affection), I say with supreme confidence that I don't fear another ascension of the Minsky steps (which we are doomed to climb over and over again in our relentless march of progress).

Good ideas and good humour are not exclusive to bear markets. I look forward to more of the same from TMM and the MM blog community.

Cheers,
Matthew

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Anonymous
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February 23, 2012 at 3:25 AM ×

Bored with Internet trivia, I've been reading Human Action by Ludwig von Mises. Observing his rants against the likes of socialism and government interference in general, credit expansion and inflationism, he would have a field day with the current economic situation.

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Anonymous
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February 23, 2012 at 5:55 AM ×

http://open.spotify.com/track/18XtQby8msvIrMJMyqdslI

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SFOT
admin
February 23, 2012 at 6:44 AM ×

Join the linsanity crowd and start following the NBA. Good distraction in this treacherous time.

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Anonymous
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February 23, 2012 at 10:07 AM ×

It has been said that bear markets end in apathy ...

rossco

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Anonymous
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February 23, 2012 at 12:10 PM ×

"we are at slack tide where correlated trends will drift apart as the flow comes to a halt with the only movement in side eddies"

oh, the ghost of Joseph Conrad...

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Steve
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February 23, 2012 at 4:26 PM ×

What a refreshing post, thank you.

I'm suffering from info overload, reading too many blogs, sifting through too much research. To me it boils down to, when (if ever) do we fight LTRO? It comes to a head next week, and the DAX is already up 24% and change.

It's tedious taking on governments. You never know what they're going to do, and often as not it's irrational.

Hang in there, this is a great dialogue. I am a sporadic visitor, as a function of what's on my plate, and I always come back. You know, checking in. It's nice.

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