Thursday, October 22, 2015


My Uncle Buck was a French-Canadian from Massachusetts.  Simple guy with simple likes and dislikes.  He liked to fish.  Didn't like much else but boy, could he fish!  I didn't realize it until a few years back but Bucky could have made one of the world's great central bankers.  He had a simple approach to any problem:

                                         "If it doesn't work, get a bigger hammer."

Mario Draghi announced today that the 800 billion or so Euros that constituted his first Quantitative Easing go-around probably hadn't made that much of an impact so he was probably going to do it again towards the end of the year...and oh yeah, he was thinking about the issue of negative interest rates a bit more.  And so, a world sloshing about in liquidity gets a bit more which is certain to change things.   Sure.

The moment the equity boys got a whiff of these goings-on, up went the indexes.  It is so predictable as is the follow-up from the talking heads on "the basic soundness of the economy, blah, blah, blah." So I asked myself today, "I wonder what Uncle Buck would do?"

Well, for sure, he's give it a few whacks with the biggest hammer he had.  But he was a fisherman and a fisherman knows that there are a lot of things that go into putting a fish on the bottom of a boat.  It's called "fishing" not "catching" for a reason.  He'd move location, change baits, change presentation until he found some combination of things that worked.  He was good at what he did and he knew it but he never believed he knew it all.  He used to say, "Every time I go out I learn something new," and most importantly he would admit that, "Sometimes, you have to drop the hammer before you break the thing."

Today's central bankers seem to learn very little as they stumble from one hackneyed solution to the next, swinging the same old hammer they have been using for years.  The engine hasn't started despite repeated blows.  Drop the hammer.

Still feel lousy but eleven hours of sleep really helps.

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