Todd Harrison: "Truth and Consequence"
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Things we know for sure...
One of two things must occur: either the world reserve currency will debase, paving the way towards hyperinflation, or the dollar will strengthen as debt destruction continues it’s natural course.
Este tipo de comentario e tipico destes periodos de desespero e panico. A conclusao e simples: de qq forma temos um doomsday scenario.
Ora nao ha nada mais falacioso. Todos os cenarios intermedios sao possiveis.
...it’s my opinion that we’ll look back at last week as the 2008 trading low (not to be confused with a market bottom) before a harsher downside comeuppance arrives next year.
No entanto, ele esta bullish no curto prazo.
The sooner we’re allowed to take our medicine rather than being given drugs to mask the disease, the quicker we’ll arrive at a stable foundation for legitimate economic expansion.
A logica dele e simples: quanto mais depressa morrermos melhor. Sim, seria bem, termos 1929 outra vez
... O Todd ou enlouqueceu ou esta deprimido!Digam-me la, e melhor termos hospitais ou e melhor deixar morrer os doentes?...
Parece-me que a humanidade ha muito que ja escolheu o que prefere.
Para alem de que o "Nobody is bigger than the market" e do mais puro liberalismo selvagem...
Nem sei para que e que temos democracias e elegemos governos...
This Too Shall Pass
...
Our goal—as investors and as a human race—is to get there in one piece while being kind to each other during the journey.
Definitivamente deprimido!
Random thoughts,
Eagle Eye
- Mensagens: 458
- Registado: 5/1/2008 22:22
Todd Harrison: "Truth and Consequence"
"Truth and Consequence"
Todd Harrison
Oct 15, 2008 7:15 am
" History will not reflect kindly on recent economic decisions.
“He who learns but does not think is lost. He who thinks but does not learn is in great danger.”
--Confucius
A Chinese philosopher said that when it’s obvious goals cannot be reached, don’t adjust the goals—adjust the action steps. Global central banks have taken those lessons to heart.
The construct of capitalism has forever changed and investors are spinning from the insane volatility gripping financial markets. 20% moves in major market averages—session over session—are tough to stomach regardless of your directional bias.
One year ago, when the writing was on the wall as the Dow Jones Industrial Average probed all-time highs, pundits confidently proclaimed there was clear sailing ahead.
Last week, as perception caught up with the daunting reality of debt and derivatives that we’ve warned of for years, depression was debated across mainstream America.
You can’t blame folks for being confused. We’re past the point where bulls and bears profit or lose. We’ve entered a new world order, a scary stretch where politicians rewrite history on a daily basis in an attempt to escape the devil of deflation.
There are certain things we know for sure. Universal truths, if you will, that can provide clarity amid the confusion. We’ll tackle five themes today with hopes that we’ll shed some light as we together find our way.
The Measuring Shtick
Two trading dynamics considered gospel for many years have effectively been debunked. The first was that lower crude would serve as a positive equity catalyst and the second was that a higher dollar would bode well for stocks.
We live in a Wishbone World with dollar-denominated assets on one side and the greenback on the other. One of two things must occur: either the world reserve currency will debase, paving the way towards hyperinflation, or the dollar will strengthen as debt destruction continues it’s natural course.
The government is attempting to buy the cancer and sell the car crash. The mere perception of “success”—a whiff, if you will—should be enough to shift psychology to the other side of the ride, damaging the dollar and propping stocks higher for a trade.
Fund of Funds
The hedge fund bubble popped this year and the carnage has been pervasive. On top of regulatory scrutiny and operational restrictions, the correlation of strategies has buried the best in breed well below their high water mark.
An obvious concern is the potential for continued redemptions and forced selling. Many macro portfolios are laced with derivatives and won’t be bailed out by the government umbrella, introducing the specter of further systemic risk.
On the mutual fund side of the Street, however, there is an embedded belief that the only thing worse than losing money is under-performance. If the market catches a sustained bid, performance anxiety will percolate as players chase performance in an attempt to keep up with the Dow Joneses.
The Path of Maximum Frustration
Last week, when we offered a more constructive stance on a trading basis, the pushback was palpable. In fact, the variant views were consistent with feedback received after previous against-the-grain stances such as shorting crude in May and shifting to 100% cash at the beginning of summer.
Nobody is smarter than the market and I’ve long ago learned that if you don’t stay humble, the market will do it for you. What I’ll say with confidence is that the tape tends to follow the path of maximum frustration and rarely rewards herds running aimlessly towards a cliff.
While the process of price discovery is fluid—dependent on a multitude of variables including credit, the dollar and geopolitical strife—it’s my opinion that we’ll look back at last week as the 2008 trading low (not to be confused with a market bottom) before a harsher downside comeuppance arrives next year.
Nobody is Bigger than the Market
Following the attacks of September 11th, the lines of distinction between patriotism and bullishness ceased to exist. Alan Greenspan juggled bubbles, Wall Street financially engineered the markets and the mere mention of recession was considered anathema.
It’s not wise to mess with Mother Nature and that introduces profound risk for future generations. Just as the grand experiment at the turn of the century created cumulative imbalances under the seemingly calm surface, history won’t be kind when it judges our current course of action.
There are two natural paths for financial markets—time and price—and an unenviable destination, that of debt destruction. The sooner we’re allowed to take our medicine rather than being given drugs to mask the disease, the quicker we’ll arrive at a stable foundation for legitimate economic expansion.
This Too Shall Pass
There is no denying we live in difficult times. Social mood is shifting, risk appetites are abating and societal acrimony is percolating stateside and abroad. The easiest thing to do is run and hide but alas, that’s not a viable option.
Minyanville earned a bearish reputation the last few years when we highlighted systemic risks in the system. As imbalances cumulatively built in magnitude and consequence, we championed capital preservation, debt reduction and financial intelligence as the hallmarks of any successful investment approach.
We will cycle through this period and arrive at better days and easier trades, although it will take some time. Just as the Internet prophecy proved true—albeit not before the tech crash—so too will the golden age of globalization once debt destruction fully manifests.
The recovery will be led by China, India and other emerging markets and profoundly reward those proactively positioned. Our goal—as investors and as a human race—is to get there in one piece while being kind to each other during the journey.
Fare ye well.
R.P.
(in www.minyanville.com)
Todd Harrison
Oct 15, 2008 7:15 am
" History will not reflect kindly on recent economic decisions.
“He who learns but does not think is lost. He who thinks but does not learn is in great danger.”
--Confucius
A Chinese philosopher said that when it’s obvious goals cannot be reached, don’t adjust the goals—adjust the action steps. Global central banks have taken those lessons to heart.
The construct of capitalism has forever changed and investors are spinning from the insane volatility gripping financial markets. 20% moves in major market averages—session over session—are tough to stomach regardless of your directional bias.
One year ago, when the writing was on the wall as the Dow Jones Industrial Average probed all-time highs, pundits confidently proclaimed there was clear sailing ahead.
Last week, as perception caught up with the daunting reality of debt and derivatives that we’ve warned of for years, depression was debated across mainstream America.
You can’t blame folks for being confused. We’re past the point where bulls and bears profit or lose. We’ve entered a new world order, a scary stretch where politicians rewrite history on a daily basis in an attempt to escape the devil of deflation.
There are certain things we know for sure. Universal truths, if you will, that can provide clarity amid the confusion. We’ll tackle five themes today with hopes that we’ll shed some light as we together find our way.
The Measuring Shtick
Two trading dynamics considered gospel for many years have effectively been debunked. The first was that lower crude would serve as a positive equity catalyst and the second was that a higher dollar would bode well for stocks.
We live in a Wishbone World with dollar-denominated assets on one side and the greenback on the other. One of two things must occur: either the world reserve currency will debase, paving the way towards hyperinflation, or the dollar will strengthen as debt destruction continues it’s natural course.
The government is attempting to buy the cancer and sell the car crash. The mere perception of “success”—a whiff, if you will—should be enough to shift psychology to the other side of the ride, damaging the dollar and propping stocks higher for a trade.
Fund of Funds
The hedge fund bubble popped this year and the carnage has been pervasive. On top of regulatory scrutiny and operational restrictions, the correlation of strategies has buried the best in breed well below their high water mark.
An obvious concern is the potential for continued redemptions and forced selling. Many macro portfolios are laced with derivatives and won’t be bailed out by the government umbrella, introducing the specter of further systemic risk.
On the mutual fund side of the Street, however, there is an embedded belief that the only thing worse than losing money is under-performance. If the market catches a sustained bid, performance anxiety will percolate as players chase performance in an attempt to keep up with the Dow Joneses.
The Path of Maximum Frustration
Last week, when we offered a more constructive stance on a trading basis, the pushback was palpable. In fact, the variant views were consistent with feedback received after previous against-the-grain stances such as shorting crude in May and shifting to 100% cash at the beginning of summer.
Nobody is smarter than the market and I’ve long ago learned that if you don’t stay humble, the market will do it for you. What I’ll say with confidence is that the tape tends to follow the path of maximum frustration and rarely rewards herds running aimlessly towards a cliff.
While the process of price discovery is fluid—dependent on a multitude of variables including credit, the dollar and geopolitical strife—it’s my opinion that we’ll look back at last week as the 2008 trading low (not to be confused with a market bottom) before a harsher downside comeuppance arrives next year.
Nobody is Bigger than the Market
Following the attacks of September 11th, the lines of distinction between patriotism and bullishness ceased to exist. Alan Greenspan juggled bubbles, Wall Street financially engineered the markets and the mere mention of recession was considered anathema.
It’s not wise to mess with Mother Nature and that introduces profound risk for future generations. Just as the grand experiment at the turn of the century created cumulative imbalances under the seemingly calm surface, history won’t be kind when it judges our current course of action.
There are two natural paths for financial markets—time and price—and an unenviable destination, that of debt destruction. The sooner we’re allowed to take our medicine rather than being given drugs to mask the disease, the quicker we’ll arrive at a stable foundation for legitimate economic expansion.
This Too Shall Pass
There is no denying we live in difficult times. Social mood is shifting, risk appetites are abating and societal acrimony is percolating stateside and abroad. The easiest thing to do is run and hide but alas, that’s not a viable option.
Minyanville earned a bearish reputation the last few years when we highlighted systemic risks in the system. As imbalances cumulatively built in magnitude and consequence, we championed capital preservation, debt reduction and financial intelligence as the hallmarks of any successful investment approach.
We will cycle through this period and arrive at better days and easier trades, although it will take some time. Just as the Internet prophecy proved true—albeit not before the tech crash—so too will the golden age of globalization once debt destruction fully manifests.
The recovery will be led by China, India and other emerging markets and profoundly reward those proactively positioned. Our goal—as investors and as a human race—is to get there in one piece while being kind to each other during the journey.
Fare ye well.
R.P.
(in www.minyanville.com)
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