I had a cocktail--0k, may it was a touch more than A cocktail--with Mad Max after hours one evening in New York. Max was born a trader and most--if not all--traders are nuts. Max was born close to insane but he was and is a great trader. He's had his ups and downs, especially when he was trying to maintain the GDP of two Colombian provinces all by himself about 30 years ago. He quit that as a result of a slight disagreement with an associate over payment for quality which ended up with Max on the wrong end of a TEC 9 which instilled instant religion and a belief that his then present course might be bad for his health. But that's another tale. Max and Glenfiddich remain close friends, however, and Max was never one not to share his friends.
"Charlie, I've been in this business almost 40 years and I have never seen nothing like this. This is Loonie Tunes, an absolute Walt f----- Disney production."
"Wow, coming from you that's saying a lot. having trouble making a buck?"
"What! Are you nuts!? This is the easiest it's ever been. Charlie, I've been really rich a half dozen times and pissed it all away but this time...I've never made so much so easy in my life. Bernanke should run for God. He'd win in a walk. I absolutely love the man!"
"What! you love the Fed? Since when?"
"Since he ended markets. Come on Charlie, don't b.s. me. You've been around long enough to realize that the guy took all the fun out of it. He tells you what he's going to do, he tells you for how long and he even tells you how much! And this is to 'stimulate growth and job creation.' Well, he aint done s--- with that but man has he stimulated wealth on the Street! Charlie, you can't miss; you absolutely cannot miss and when money costs nothing---NOTHING--you can gear it up over your head an laugh. Look at the banks...Morg, Citi, Goldie. They're coining it, man, just coining it. 'Course they'll do something stupid along the line--they always do--but for now it's ride the gravy train."
"Best thing is he's got half the world doing the same thing. You know the Japs, they're great at copying stuff? Well, that little guy Abe's done him one better. They're printing money 24/7! Never seen anything like it! And you ask, 'you still goin' to keep this up?' "Hai" the little guy says so you short Yen and buy the Nikki tell yourself what a genius you are."
"Until he stops."
"Until he stops." And then my friend you had better get somewhere else or better yet be someplace else. This ain't for Wusses, Charlie, because it can move really, really fast but it's easy while the trade is on. And my man, IT'S ON!"
"And does the Fed stop?"
"Sure, sometime. But not now. They've convinced themselves this is going to work because if it doesn't the model or whatever the hell they use is wrong and of course these guys are never wrong. But I see something out there that wasn't there before. The trading range has widened. Not a lot but it's not like 3 months ago. People worried? Maybe. Inflation? Who knows. But no question it's different. The talk about Bernanke pulling back is trader talk. Couple of guys talkin' their book. Don't believe it. Not going to happen, not now. And all the good news on the economy? Yeah, here, we're doin' fine but what's it like where you are now?"
"It's better, even I can see it. But good, much less great? No, not by a long shot. Real estate is better but that's because nobody's built a home in 5 years; and no body's planning on doing so."
"Funny isn't it. All this easing crap is supposed to help the little guy but who does it help? ME, and I'm no little guy! Nobody in this joint is a little guy! We all love Bernanke...and Abe and all those jerks in Europe! One way traffic all over the world! Charlie you got to get back in it, it's fabulous."
"Max, the problem is when I was in it, I always ran into you and that didn't work out too well."
"It did for me!"
"Yes Max, I remember." But seriously, are you in long?"
"Hell no! I'm too old Charlie. I've made a ton the past couple of years, more than I really need. Kids are grown, don't have any more alimony to pay..."
"Really!?"
"Oh, I didn't tell you? Yeah Kristen got remarried around Christmas. Nice guy. I call him my husband-in-law. Anyway, I could dump it tomorrow, hedges and all. What do you think?"
"Max, I just don't like it. We've seen this before...hell we saw this just five years ago. You said it yourself: it's one way traffic. These guys don't learn aything. If I be thee, I'd sit back and watch for a while, then again I'm not you."
"No you're not Charlie, but you've been around a long time. I'll think about it. Another drink?"
"You buying?"
"When haven't I?"
"Max you are a gentleman. You are crazier than a bed bug but a gent."
Max called about three hours ago.
"Charlie. Go down to the booze shop."
"What for?"
"There's a case of Glenfiddich waiting for you. I closed out Friday. Thanks for the advice"
"Aw Max, that wasn't advice, that was just..."
"You want the Scotch?"
"Yes."
"Shut up then. Bye Charlie."
Showing posts with label Abe. Show all posts
Showing posts with label Abe. Show all posts
Wednesday, June 5, 2013
Friday, April 5, 2013
STILL IN THE DUMPS
Couldn't reach Massimo and then out comes the jobs report that was a real howler. I mean there was nothing good about it except for a drop in the unemployment rate which everyone now realizes is a result of people just giving up or taking a part time position. Not even the administration tries that line any more sending out one of their economic advisors to explain all this without a script. Poor bastard. He got slaughtered. It was so bad that the stock market, fully realizing that the numbers solidified the view that Ben will be QEing forever, nonetheless crashed at the open although is recovered well at the close. What with all going on I doubt if anybody, anywhere, has a long or short position of any kind going into the weekend.
The full extent of the ABE plan has now been fully understood and if applied comparatively to the U.S. it would be as though the Fed was taking up $185 billion a month. That's a lot of rice cakes gang and a monumental bet that it's going to work, that they are not going to destroy the Yen forever and that they can get out of it at some point in time. In regard to the latter, there seems to be a goodly body of opinion going around that at a point of time all Mr. Abe has to do is tell the Bank of Japan to burn the stuff and...problem solved! Now that would be the competitive devaluation of all competitive devaluations and maybe that is the plan but forgive me if I can't get my brain around this one. Of course sitting out there is a body of opinion that holds one of the quickest ways to jump start an economy is to militarize and clearly--with a little help from North Korea--the post war pacifism of the Japanese population has been greatly eroded in recent years. Printing money at the same time helps as well and the Japanese, who if they are anything they are students of their own history which will show that Japan did something like this quite successfully back in 1933. Got a bit awkward at the end, however, as the then minister of finance, having declared victory, was shot by the Tojo crowd who felt they needed a few more toys. Next stop, Greater South East Asia Co-Prosperity Sphere. It ended badly.
Not a peep out of Euroland today with the big news being that the UK held on to it's triple A rating from S & P. Gnashing of teeth in the Elysee this evening for sure to go along with the embarrassment that a number of key players in the government were revealed to have stashed away a few Francs where they shouldn't have been in a remarkable release of data from financial "safe havens" that is driving half the continent nuts. I think it's a hoot but....oh damn, now I know why Massimo was 'Non che" this morning. Among other things, Massimo...oh never mind. Have a good weekend.
The full extent of the ABE plan has now been fully understood and if applied comparatively to the U.S. it would be as though the Fed was taking up $185 billion a month. That's a lot of rice cakes gang and a monumental bet that it's going to work, that they are not going to destroy the Yen forever and that they can get out of it at some point in time. In regard to the latter, there seems to be a goodly body of opinion going around that at a point of time all Mr. Abe has to do is tell the Bank of Japan to burn the stuff and...problem solved! Now that would be the competitive devaluation of all competitive devaluations and maybe that is the plan but forgive me if I can't get my brain around this one. Of course sitting out there is a body of opinion that holds one of the quickest ways to jump start an economy is to militarize and clearly--with a little help from North Korea--the post war pacifism of the Japanese population has been greatly eroded in recent years. Printing money at the same time helps as well and the Japanese, who if they are anything they are students of their own history which will show that Japan did something like this quite successfully back in 1933. Got a bit awkward at the end, however, as the then minister of finance, having declared victory, was shot by the Tojo crowd who felt they needed a few more toys. Next stop, Greater South East Asia Co-Prosperity Sphere. It ended badly.
Not a peep out of Euroland today with the big news being that the UK held on to it's triple A rating from S & P. Gnashing of teeth in the Elysee this evening for sure to go along with the embarrassment that a number of key players in the government were revealed to have stashed away a few Francs where they shouldn't have been in a remarkable release of data from financial "safe havens" that is driving half the continent nuts. I think it's a hoot but....oh damn, now I know why Massimo was 'Non che" this morning. Among other things, Massimo...oh never mind. Have a good weekend.
Tuesday, January 15, 2013
MOVING RIGHT ALONG...
The White House announced today that The Leader will do all that is necessary for American Gun Control through the use of 16 Executive Fiats in a tacit admission that the laws The Leader wants passed cannot be passed so what the hell, we'll have them anyway. This is becoming fascinating to watch; We may have a King before we are done! I jest...do I not.
Anyway, the back and forth on the debt ceiling became more heated today with more advice being thrown about on both sides. I think in the back of a lot of minds is this train of thought: we are hurdling along on a pace that will, in a few short years, produce $20 trillion in debt and one of the things facilitating that fact is the absence of any market discipline as a result of the actions of the Federal Reserve which has inserted itself into the process in a manner so immense that the age-old cry of "Don't fight the Fed" has become almost a joke. At this stage it may appear to some that the only way to protect the future is to cause a catastrophe now; an event to which there will be such adverse repercussions as to deny future market access only at levels that cannot be affected by continued Fed intervention...i.e. a default. As long as The Leader and his followers, encouraged by the Krugmans of the world, believe that their dreams for a future America as a European-like social democratic state can be financed indefinitely, there will be no change in current policy, hence the funding train must be derailed despite the clear costs of such an action. Or so the thinking goes. But the absolute faith in the European model is all consuming on the left. Despite the fact that it's state today can best be described in that wonderful old Oz (I think) phase, "Hopeless but not serious" matters not a whit. These are true believers, you see, and will not be outdone. And so it goes.
Anyway, in this week of Bank earnings, I've been thinking about another thing. We have but two real Investment banks remaining on a surface that once gave home to dozens. Goldman and Morgan Stanley. Problem is, we don't call them that any more; we simply call them banks, which raises a number of new issues and results in a number of points of confusion. Are all "banks" the same, and if not why is the funding protection and oversight of the Fed being applied to these two institutions which are not only different from one another but wildly different from the other "banks" out there? Oh, I understand how it came about and why but in this brave new world created by our regulators does it need be so today? This is something else I would like to look at in the coming days.
My final little amusement of the day came as a courtesy of CNBC which likes to refer to itself as the world's leading news network. The subject was Japan and if we didn't look out Japan was capable of starting a currency war as a result of the announced devaluation of the Yen (which today slowed as a result of Mr. Abe remarking he thought it had gone far enough). Apparently, busy with other things, CNBC has missed that the Fed's balance sheet roar past $3 trillion on it's way to four trillion at the tune of an announced $85 billion a month and the devaluation of the dollar against a global currency mix of 12% in the last few years. CNBC apparently works under the same game plan as The Leader: we won, you lost Japan. If we say the current currency war is your fault.......it damn well is.
Correction. I stated last week that the on the run Italian 3 year traded just short of 4%. It actually traded just short of 3%
Anyway, the back and forth on the debt ceiling became more heated today with more advice being thrown about on both sides. I think in the back of a lot of minds is this train of thought: we are hurdling along on a pace that will, in a few short years, produce $20 trillion in debt and one of the things facilitating that fact is the absence of any market discipline as a result of the actions of the Federal Reserve which has inserted itself into the process in a manner so immense that the age-old cry of "Don't fight the Fed" has become almost a joke. At this stage it may appear to some that the only way to protect the future is to cause a catastrophe now; an event to which there will be such adverse repercussions as to deny future market access only at levels that cannot be affected by continued Fed intervention...i.e. a default. As long as The Leader and his followers, encouraged by the Krugmans of the world, believe that their dreams for a future America as a European-like social democratic state can be financed indefinitely, there will be no change in current policy, hence the funding train must be derailed despite the clear costs of such an action. Or so the thinking goes. But the absolute faith in the European model is all consuming on the left. Despite the fact that it's state today can best be described in that wonderful old Oz (I think) phase, "Hopeless but not serious" matters not a whit. These are true believers, you see, and will not be outdone. And so it goes.
Anyway, in this week of Bank earnings, I've been thinking about another thing. We have but two real Investment banks remaining on a surface that once gave home to dozens. Goldman and Morgan Stanley. Problem is, we don't call them that any more; we simply call them banks, which raises a number of new issues and results in a number of points of confusion. Are all "banks" the same, and if not why is the funding protection and oversight of the Fed being applied to these two institutions which are not only different from one another but wildly different from the other "banks" out there? Oh, I understand how it came about and why but in this brave new world created by our regulators does it need be so today? This is something else I would like to look at in the coming days.
My final little amusement of the day came as a courtesy of CNBC which likes to refer to itself as the world's leading news network. The subject was Japan and if we didn't look out Japan was capable of starting a currency war as a result of the announced devaluation of the Yen (which today slowed as a result of Mr. Abe remarking he thought it had gone far enough). Apparently, busy with other things, CNBC has missed that the Fed's balance sheet roar past $3 trillion on it's way to four trillion at the tune of an announced $85 billion a month and the devaluation of the dollar against a global currency mix of 12% in the last few years. CNBC apparently works under the same game plan as The Leader: we won, you lost Japan. If we say the current currency war is your fault.......it damn well is.
Correction. I stated last week that the on the run Italian 3 year traded just short of 4%. It actually traded just short of 3%
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