Thursday, September 3, 2015


Maybe I am the only one who figured this out as the equity markets came bounding back again today.  Broad rejection of my thoughts?  I don't think so.  My pal Max used to tell me, "I don't care in which direction it moves just so it moves."  Trader talk and to an extent I think that's what was going on today.  Of course if you want more trader talk mixed in with some techie stuff, September is historically a lousy month for equities.  As has been said before I guess, only time will tell.

Tomorrow is the EU big pow-wow with Mario Draghi the man in the spot light.  What the optimists will be looking for are moderately good thoughts as to the European economy but not so good as to cause Mario to rule out a continuation of his QE or an extension beyond 2016.  Now this creates a very interesting scenario.  The Fed clearly wants to raise rates--not that 1/4% is a "rise" having made clear that any "normalization" will be a slow process--to what real intent I am not certain.  I can't believe that if Mario goes in any direction it can only be lower through addition money-creating mechanisms which puts the two central banks that really count at odds with one another.  Not good for the rest of us but as I have been saying these guys have been painting themselves into respective corners for years and it is becoming increasingly more difficult to get out without leaving a mess all over.  Stan Fisher has it right but he's really up against a very bad moment in time. None of them have any real tools left and the worst part is I think they know it at this stage but still refuse to confront the political establishments with an "Over to you, Gaston," which is what is really necessary.

Tomorrow China is shut for the great, "Daddy won the war" celebration and a show of the PL A's new toys.  There was a wonderful tale out of Beijing today about monkeys having been trained to climb trees and destroy bird nests so the little dears wouldn't fly into the intake of the PL A's brand new jets at the parade tomorrow.  I mean, come on.  Given the air quality, every bird within 50 miles of that place probably died some time ago or is too week to fly, but I guess you can't be too careful.  Which of course gives me no real comfort as to the ability of that bunch to micro-manage the world's second largest economy and to transform it as Chrissie would so dearly wish into a free, market economy.  Funny thing about free markets; they tend to do exactly what you don't want them to do from time to time.  What's even funnier is that some really important people appear to be just learning that.

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