Archive - Nov 18, 2011 - Story

When at first you don't succeed... At this point they aren't even trying: the main upward moving rumor yesterday, for those who have an HFT algo's memory span, was that somehow the ECB would circumvent its charter, something which was expressly denied by every German involved, and lend directly to the IMF which in turn would lend to troubled countries. Because nobody would see through that particular ruse.  Well the rumor is back, sending the EURUSDS a good 60 pips higher in no time almost breaching 1.36. Just to make the rumor that bit more credible, the unnamed source added some amusing details: "Germany, ECB still opposed to idea but may be willing to consider it according to sources, and if consensus forms a deal may be reached at December 9th EU summit according to sources."  And just like yesterday we expect that the official German denial will be out in seconds. In fact, it appears that today the denial came in before the actual rumor.

From Reuters:

• GERMANY'S SCHAEUBLE-NO PRESSURE FOR ECB TO UNLEASH ALL ITS FIREPOWER TO ADDRESS CRISIS, AS THIS NOT PROVIDED FOR LEGALLY- RTRS
• GERMANY'S SCHAEUBLE-IF WE DID DO THAT, CALM ON MARKETS WOULD LAST FOR A FEW WEEKS AT MOST - RTRS

Well, when the China white knight, pardon EFSF, pardon US bailout, pardon ECB lending to IMF rumors no longer work, it's time to start recycling. In the meantime, the chart below shows how stupid this market is. Oh well, thank you for the shorting opportunity.

Presenting, with little comment, Whitney Tilson's disappointing underperformance for October (and YTD):

Our fund rose 7.0% in October vs. 10.9% for the S&P 500, 9.7% for the Dow and 11.2% for the Nasdaq.  Year to date, it’s down 24.5% vs. +1.3% for the S&P 500, 5.5% for the Dow and 1.9% for the Nasdaq.

It is just us, or does it seem manager performance is increasingly negatively correlated with the frequency of appearances on CNBC?