It appears that more and more people are finally waking up to the sheer farce that calling a kleptofascist crony capitalist system with socialist overtones because "deficits don't matter", a democracy, has become.
News & headlines from the day
Just as Patton surveyed Rommel's battlefield of Panzers and assumed he knew his plan (since he had 'read the book'), so UBS' Art Cashin reminds us that traders trust implicitly that Bernanke is an assumed tactical genius - capable of deploying his monetary troops at will and in a perfectly timed manner. This trust (and hope) is based on Bernanke's early speeches and one in particular - “Deflation: Making Sure 'It' Doesn’t Happen Here” (here). It was delivered back at the National Economists Club in November 2002 (Before Bernanke became Fed Chair). As Wall Street ponders what form or format the next level of quantitative easing might take, Cashin is taking time off from the fermentation committee to sift through the speech, looking for clues to the next Fed move. The primary complication is the turmoil in the European banking system. That may force Mr. B to include things like currency swap facilities in any new comprehensive easing effort. While QEx is certainly coming, we remain highly cognizant of the reflexive market reaction to any 'decent' dip as hope remaining too alive-and-well that the Bernanke-Put strike is considerably higher than it is in reality.
The pending three-day rally that has seen European and US markets soar smacks of a short-covering squeeze, notes UBS' Art Cashin, as some of the biggest percentage gains came in the most heavily shorted stocks. While this is hardly surprising in this increasingly schizophrenic economy market, it is the long-term consistency and prophetic consternation of Margaret Thatcher's view of the Euro as "perhaps the greatest folly of the modern era" that sits uncomfortably with the Merkel comment-driven rally of this morning (for now).
Reflecting on yesterday's monetary-policy-hope-driven rally, UBS' Art Cashin prefers to focus on Richard Fisher's very frank (and succinct) speech on the limits of monetary policy and the importance of fiscal policy. Urging everyone to read it, and send it to your Congressman and Senators, he reminds us that Fisher is the only Fed policymaker to have been a banker and a money manager, and in the words of Richard Fisher, he worries that: "there is a growing sense that we are unwittingly, or worse, deliberately, monetizing the wayward ways of Congress."
And now for some Monday morning poetry with the Chairman of the Fermentation Committee.
The avuncular Art Cashin opines on the roller-coaster of unreality that has been the equity markets for the last few days as outcomes become increasingly binary and investors increasingly herded from one direction to another. His sage advice - as if spoken by the most-interesting-person-in-the-world - "Stay nimble", my friends.
When it comes to clear, concise, comprehensive forecasts of the future, nothing beats Art Cashin... even when his crystal ball is admitted a little cloudy.
One for the "You can't make this stuff up" folder...
You saw it all unfold here blow by blow yesterday. Now Art Cashin gives the post-mortem.
If there was one analogy we had not heard so far to the deplorable European situation, it was that to P.T. Barnum's infamous "Egress." Following this morning's Art Cashin note, that is no longer the case. Granted, since it references a museum exhibit, such as what the EUR, not to mention European socialism which recently ran out of other people's money, will soon be, it is about time...
Many floor types think that there is a kind of “rationality put” in the markets. It evolved in the post-Lehman chaos. The premise goes something like this: world leaders were shocked and stunned by the scope and size of the nearly instant damage from Lehman’s fall. That shock caused them to rescue AIG, a far, far bigger project than Lehman. Since then, central banks and governments have stepped in quickly as each new crisis emerged. However, as UBS' Art Cashin notes somewhat ominously, the Greek exit / Euro-breakdown risk has made it hard to exercise a “rationality put” if things turn irrational beyond your control.
While everyone's attention is focused on Dimon-related puns and trying to comprehend what actually happened at JPM (while at the same time pretending to be an expert in CDO trading models and VaR), UBS' Art Cashin provides some 'fact is better than fiction' on Greece (ah yes the other tempest in a teapot). Between the PASOK defense minister's money-laundering charges and the fact that British bookies won't take any more bets on Greece exiting the Euro (which given no CDS market has started on GGB2s seems to have become the market of choice for that trade), it seems, as the ever-prescient father-of-fermentation notes that "Europe still lurks".
Short, sweet, and cutting right to the chase.
There are only a few market prognosticators who can look to the stars for sage advice and not come away being giggled at. Art Cashin, UBS venerable trader-in-chief, notes that this weekend will see the biggest full moon of the year from the perspective of the Earth. This so-called 'Supermoon' will exert 42% more tidal force than normal and given the human body is 70% water, one can only imagine the bipolar impacts that this extra-terrestrial 'pressure' will create on the tiny minds of traders. What is more spooky is the fact that there is an unusual astrological configuration, not seen since 9/11, also occurring this weekend and rather worryingly The Times of Israel is noting the call-up of Emergency Israeli Troops in response to the worsening situation in the Sinai. So our minds will be wondering from an out-of-world experience and at the same time developments in the already unstable Middle East crank up one more notch on the Spinal-Tap-amplifier of sabre-rattling.