Wednesday, January 20, 2016


Getting old.  I know only one person at Davos this year so my insight as to what is going on is limited...or perhaps not.

I watched Jaime Dimon on CNBC this morning, doing the macho thing with only a suit (sans tie) while Becky Quick and the gang were bundled up to the gills  which is always a no go because having to listen to Becky without looking at her is hard work indeed.  Anyway, Jaime was his usual up-beat self, so to check on things I called Massimo who by the by has been recovering from a bout with the Bad Disease which he says he beat.  How he still manages to still get himself invited to this fish fry is beyond me, but he's there.

"What's the Mood this year.?

"No good."  Everybody they either scared or they worry a lot." (I told him about Jamie)

"So, waddayou expect from him?  Remember, five years ago he not even know where Europe is until he lose a billion."  He say what he say but nobody here is comfortable."

"What's the big issue."

"Issue!  Ha!  There's no issue.  Depend where you be.  Everything is an issue!  But I tell you Charlie, what everybody say is what the hell happen?  Nobody knows what going on.  Nobody know who to believe.  Nobody know what go on with the central banks but everyone want them to do something...I no know what but something, like meebe to say we got this under control."

"What under control?"

"Em beh!  Who the hell know!  But Charlie everybody feel alone.  I tell you this is not like any other time, you know we drink, laugh a lot, tell us how great we are.  No, this different, molto different and there are some people here who lose a hell of a lot of money.  Not like past years, no, not at all."  Not like 2008 when everybody think it be OK...this time nobody know."

"Ah, come on.  2008 was a whole different set of circumstances.  We are no where near that."

"Eh, now you say, but in January 2008, who knew.  Charlie I tell you, if enough people think it bad, it will be bad.  I see this too many times...what the hell you have too.  You know what I talking about."

"Massimo, you have seen far more than me at your age."

" *&^%$ *&^ (*&^%#%& (the Italian is untranslatable).  What happen today?  I no have screens?"

"Catastrophe.  The DOW is down over 500, the 10 year is at 1.96%.  Oil is 26 and it seems that people don't want risk of any kind...they just  want out."  It looks as though it is what the equity boys like to call a capitulation, but I don't know.  There's more out there...I just feel it.  We have seen some bankruptcies and credit issue in emerging markets but there have to be more.  I think we are just at the start of the credit issues.  Maybe I'm wrong--I hope I am--but this has happened so quickly the dust... ah, only a little of the bad stuff has emerged."

People here think a lot like you.  You hear the Chinese guy from the IMF?  He..."

"You mean the former PBOC guy?"

"Si, that's him.  Big worry he say that everybody in the same place and he worry about liquidity if everybody decide to leave at the same time.  Charlie, they ALWAYS decide to leave at the same time! Wadda you think?"

"I think you better talk to Jaime about that."

"Jamie!  Un' altro comme lei est morta %$%&*! (referring to a bodily function)  I see him tonight at one of his bank's parties.  I send him your best."

"Massimo, PLEASE don't do that!"

"No worry, Charlie, no worry.  Ciao!

Now I'm Really worried...

(N.B.  The markets recovered late in the afternoon.  The DOW was down 260  and the 10 year closed at 1.98%.)

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