And The Academy Award Goes To…
Cyprus ? Abe ? Bernanke ? Draghi ?
No need to watch the telly, we have this in real life. The award should go to all of them and drama classes made compulsory for all politician, central banker wannabe.
Bad news last 2 days, good news last forever and happy endings as always is to be expected because the Black Swan is dead.
Do we seriously expect anyone elected or not to a position of power and decision making to say “We are doomed !”. Their terms are only 4-5 years ! Then they are minted for life.
I want to share with everyone this pretty amazing interview I saw on Youtube with Robert Prechter just this week by a lesser known channel. Forget Demark and Stephen Roach on China the Great today, forget Larry Fink and his interview on CNBC calling for another 20% in the Dow. Robert Prechter created the Elliot Wave and socionomics. He is the legend but so far, there’s only been 888 views of it.
Transcript here.
The entire gist of it is “When Social Mood Turns, the Fundamentals Will Follow”. We are all trading in a bull market feeling a little sick in our stomachs because of the contradictions we are seeing. The social mood is rapidly souring in rolling good times for the Dow, at least. Headlines have been nothing but pessimistic and dour if not dire, shaking our faiths in the big banks, big central banks, big governments …
I like this observation of his.
“..first of all as you know the average investor always does the wrong thing. And at the low—on March 9, 2009 on that exact day was the lowest reading ever in the percentage of bulls in the DSI, the Daily Sentiment Index. Only 2% bulls; Ninety-eight percent of traders thought the S&P was going to go lower on the exact bottom day. So, now we’ve had this very long recovery. It’s much further than I thought it would be..”
Then his ominous prognosis that there will be a great low, lower than the 09 lows perhaps sometime next year.
“I think that’s a classic B-wave indication, I don’t think it’s going much higher. And you have to take things in context. In other words, would you want to buy any stock today? I would say don’t touch it with a 10-foot pole. There’s going to be a great low, probably even better than the ’09 low sometime in the next year. Wait for that.”
Then I get hit by another honest to goodness piece out of the FT : Bonds On The Brink – Ghosts of ’94.
It really reminds me of the time during the Asian Crisis then and how unprepared the entire market was.
In fact, in the early 2000’s BoJ was rumoured to have asked banks to submit the CVs of all their repo traders for review because it appeared then, that few of the traders had experienced trading in a rising interest rate environment.
We really have to siphon the noise out these days. There are too many stakeholders with vested interests bombarding our intelligence to dust.
I am still sitting on short S&P at 1540 and long XAUEUR, looking to add VIX as a double hedge. Looks like there is nothing else to do on this Spring day except but to languish and wilt in this insufferable heat.