Think "all is fine" in Europe after today's largely irrelevant Italian bill auction (the auction was for 6 month debt - even Greece can raise that kind of money)? Think again. Here is the Fermentation Committee Chairman explaining why Europe is so hard pressed to create a fake sense of calm, allowing those who know the real story to take advantage of the situation while they still can, and sharing the behind the scenes truth you won't get anywhere else. Certainly not SWIFT.
As the year grinds to a close, we bring you the most poetic ending possible. That of the veteran trader artiste-cum-fermentation committee chairman himself...
One of the most idiotic concepts we have heard to come out of the current depression has been the completely meaningless "muddle through" which we took to the toolshed back in September (together with presenting BCG's proposal for a global financial tax - a concept which we believe will see far more play in 2012). Today we were delighted to hear the chairman of the fermentation committee also agree with us, by quoting none other than the ECRI's Achutan who said on 'muddling through' - "I would point out that that’s never happened. We never muddle through." Correct: the current economic situation merely continues to be the eye of the hurricane which has been made artificially and untenably larger only courtesy of the world's central banks. And in the battle of central planning against the laws of nature, we know who our money is on.
Art Cashin On The "Rumormonger Convention" And Why Traders Have Put Santa's Picture On A Milk CartonSubmitted by Tyler Durden on 12/14/2011 10:09 -0400
With fundamentals, technicals, and now even headlines out of Europe largely irrelevant, it only leaves one market-moving thing: rumors. And yesterday was a terrific example of precisely this. Art Cashin does a "rumor by rumor" expose of the key "events", however unfactual, that moved stocks yesterday. If history is any indication, and it is, today will likely see the rumor brigade unleashed all over again shortly.
It is always amsuing to listen to market narratives, however goal seeked they may be, when presented by market veterans such as Art Cashin, who in this case deconstructs the violent clash between reality and post-summit hype as represented by yesterday's amusing market action.
Confused why Tim Geithner has seemingly booked a weekly round trip ticket to Brussels to give the Eurocrats their weekly pep talk (much to his endless humiliation as Europe Tells Geithner To Take His Advice And Shove It reminds us)? Art Cashin explains not only this, but why the biggest threat to Obama's reelection chances is not who the GOP candidate is in November, but what happens in the EURUSD as early as today. Lastly, by implication, Cashin shoots down any hope that US decoupling from Europe is even remotely possible... something anyone who actually has seen a full business cycle, which automatically excludes 90% of all traders today, will know too well.
As usual some highly pragmatic observations on the roller coaster stock market from the Fermentation Committee chairman.
Art Cashin On The Possibility Of A "Christmas Rally", And The Certainty Of "The Post Christmas Crash" That Will FollowSubmitted by Tyler Durden on 12/06/2011 10:09 -0400
Are we going to get a Christmas Rally in stocks? Perhaps. So thinks Art Cashin quoting Tom DeMark (whose predictions lately have all been about as good as those of another Tom: the infamous Stolper from Goldman Sachs). Either way, any fake rally for purely Career Risk purposes (most hedge funds still underperform the market with two weeks of trading left in the year) will be met with an even more aggressive sell off in the new, "no fiscal stimulus" year. Aka: "the bill."
Nassim Taleb rants against it all the time: the propensity for the media to frame a narrative, or a plotline, to explain market moves. His contention is that for the human mind it is always far more reasonable to have a cause and effect relationship to what is effectively an engine of chaos at the margin, especially these days when the margin is defined 70% by various algorithms, all of which engage in often times illogical feedback loops (such as the ES is high because of a high EURUSD, which however is high due to stressed French banks liquidating USD-assets and repatriating the funds to shore capital) and/or with levered synthetic products such as ETFs, amplifying the noise. On the other hand, sometimes a narrative fits: what Art Cashin describes today as the "post hoc" syndrome. Is he right, or is the human mind desperately grasping to attribute a pattern, and thus pretend it is in control, when faced with the strange attractor that modern capital markets have become. You decide. Here is Art explaining the basics of "post hoc", aka Monday Morning quarterbacking.
Forget any overly complex and meandering explanation you have heard about today's market action. The real reason for the bounce is simple: oversold market coupled with yet another short squeeze (NYSE Group biweekly short interest data showing shorts spiking in the first two weeks of November due out today). Art Cashin explains.
The FoF Chairman speaks.
One can always rely on Art Cashin and the Friends Of The Fermentation (FoF) to provide a novel perspective on pretty much everything.
As usual, nothing but pure concentrated essence from the Fermentation Supercommittee Chairman
The best thing about veteran traders, such as Art Cashin, is that they have truly seen it all, not just one or two gyrations of the business cycle, or in most cases, half. Which is why we are delighted to share this anecdote from the grizzled UBS trader and Fermentation committee chairman, of his personal remembrances on this anniversary of the day in which the Dow Jones plunged than 22%, and has since entered popular folklore as Black Monday.
Art Cashin shares this amusing market "performance" anecdote which should come as no surprise to anyone who follows the uber-volatile chaos that the stock market has become.