Market View – Living On Borrowed Time And Thinning Brakes
The trouble I went through to change my brake pads recently was perhaps worth the cost savings of the trip to the wholesale distributor and the additional trip to the workshop, lugging the heavy discs along.
It is definitely not worth the number of traffic jams I have been getting into each morning on the school run which is making me wonder if we should be buying cars not so much for their useless horse power on our roads but the brake durability and engine endurance for a lifetime of prolonged jams ?
My poor brake pads will run thin again soon just as the euphoria over the poor US numbers, good Chinese numbers and dovish Yellen will soon wear off.
Notwithstanding the great rush for Europe which is driven mainly by their impressive data and prolonged portfolio underweightage over the past years, the case for an EM rebound cannot extend beyond short covering. For there is little to cheer about in the EM story with deficits and reforms still rueing the day. Making matters worse is the capital reallocation back into the US and Europe.
Deficits need to be funded and Yellen has made it clear it is not her job to manage what the Fed sees as the most vulnerable economies of Turkey, Brazil, India, Indonesia and South Africa.
Meanwhile we will continue to live on borrowed time and thinning brakes, tormented by good news and relieved when US payrolls dip, as we wholeheartedly cheer for Europe and try to forget about ourselves.
Trades & Tears
My recalcitrant trades were slaughtered in the bloodbath but I was saved by my pineapple tart theory – keeping 1 secret trade to myself – which worked ! (which also means I will not share my personal trades again and only put forth unbiased trade ideas from now). Gold has been a trump card for me this year. Alas, its gains has gone to feed the hungry hordes.
As I write, friends are scrambling to get a leg in to a widely anticipated rally that Goldman has the foresight to predict yesterday (which also means they will be unwinding their long positions to you). Last week, Goldman also predicted Gold at USD 1,000 if you get my point. Good luck, folks.