All The World's A Stage

Tyler Durden's picture

Via Peter Tchir of TF Market Advisors,

I can’t help but feel that we are watching a performance this week.  It feels like the actions, the meetings, and the statements are all very scripted.  It seems reasonably clear which ending they are going for, but many of their actions also fit the “alternative” ending so it remains imperative to be cautious.


Roles for “bit” players have been cut


Last week, for the first time, the EU seemed to be able to muzzle the minor players and even limit the lines of the big players.


The Finance minister summit was a failure.  Nothing useful came out of it.  EFSF was a total flop.  The bank backstop plans are at a national level and revolve around the idea of getting banks to borrow even more in the short term and not extend their maturities.

In spite of the obvious failure, there were relatively few comments.  Rather than getting headlines of disputes, or even headlines of bigger and better ways to leverage, they seemed to let it die a relatively calm death and move on.  This was a chance for every finance minister to get their quotations in the news, but they seemed reasonably constrained.


There were far fewer comments about the ECB or even from ECB members.


To me, it seems that the big players (Merkozy and Draghi) have taken control of the play and are trying to get it to the ending they want.


The “Script”


Germany took great pains last week to distance themselves from ECB decisions.  The speeches made it clear that the ECB should be “independent”.  This has been taken as a sign that Germany is relenting on letting the ECB print.  By affirming the ECB’s independence, Germany can, in theory, explain that it wasn’t responsible for the printing.  There is also a chance that this is a way to take the blame off of Germany if the ECB decides not to print.  That seems less likely, but not everyone, especially at the ECB, believes printing is a solution, so this could be a way for them to take the focus off of Germany’s “nein”.


According to the script, Merkel and Sarkozy will become the Merkozy again tonight so that they can ride into this week’s summit with a “renewed joint focus”, blah, blah, blah.  There is no way that they don’t act as though they have some agreement (even if they don’t).  We won’t know what is discussed, we won’t know  how much time is spent working out plans for a summit failure, all we will get is another handholding moment meant to encourage the market.  I suspect that more time “off screen” will be spent discussing preparations for a failed summit, but all we will see is smiling confident faces.


At this point, I will give the politicians some credit.  For the first time in months they seem to be writing the script.  They aren’t just taking whatever script Wall Street hands them, and trying to act that out.  The Wall Street scripts haven’t worked and have been unbelievable.  The  politicians are finally taking control and trying to develop their own plan, and selling Wall Street on how viable it is.  Since they are politicians, they are actually trained at figuring out what can get done and selling it to the people.  It probably won’t work, but at least they are doing what they are good at, and it would be hard to do worse than listening to another round of self-serving Wall Street advice.  On a refreshing note, at least we have agreement on something, Wall Street and politicians now both think the other group doesn’t understand anything and has no sense of timing.


The “puppets” are pushing through austerity in Italy and Greece.  They can be held up as shining examples to other countries of what needs to be done.  They aren’t the heroes of the story, but are there so that the Merkozy can point them out and show that i) it can be done, and ii) when it is done, the EU and IMF will come through with additional funds.  The “it” they got done won’t be well defined (but this is a movie, not the real world anyways) but the reward those good countries receive will be highlighted.


So the meeting will have Merkozy telling the smaller and problematic countries what a great future lies ahead for the eurozone.  They will talk about the sacrifices they are making to ensure the viability of the future.  There will be no criticism of the plan as only “friends and family” reports will get the inside scoop, and the “trailer” will be played over and over as part of the advertising campaign.  We, the audience, will suspect that all the best parts of the play are in the “trailer” but we won’t be able to dig deep enough to argue against it.


The puppets will tell the other countries how happy they are that they have finally adopted austerity with growth to move forward and that they are excited about this opportunity to be part of the renewed commitment to the eurozone.  Anyone who tries to figure out how austerity and growth work together, or where the money is coming, or any other details,  will be escorted from room, and will be Clockwork Oranged into reading “fringe blogging websites” until they accept that details are bad, and only vague notions and slogans can “solve” anything.


At the end of the day, any holdouts will get invited to special meetings with the Merkozy.  This is where they will be asked what they want to get in order to support the agreement, and reminded, that it is only an agreement in principle so they might as well say yes now, and they can always reject it later.  These dark little meetings where the bribes are given and the futility of the agreement are discussed will only be available on the director’s cut, but will make people cringe when they realize what went on.

So in the end, according to script, everyone will get a chance for a joint communiqué and photo up where they talk about their commitment to implement these progressive changes.  Every person who truly thinks about it for more than a minute, will know that it is a sham.  They will see what has gone on, but it won’t matter.  The “critics” will fall all over themselves to proclaim the success of the summit and that we are witnessing the birth of a new and better Euro.  For a few days at least, the airwaves will be filled with the excitement that the “great leadership” exhibited by the Merkozy, and the diligence of the puppets, has led to such a monumental agreement.  The future will be so bright, some might even “wear shades” when they discuss what has been accomplished.  Tears wouldn’t even shock me.


Then before anyone can complain that the positive reviews were bought, or that the script is flimsy, we will see the next wave of activity.  This will be like a giant publicity machine, trying to turn a horrible movie into an Oscar winner through the sheer strength of publicity and graft.


The ECB will cut rates by 50 bps.   The ECB will announce further participation in the secondary markets and hint at the ability and willingness to print money.  The IMF will announce some new programs.  The EFSF will start participating in the primary market.  Even the Fed might hint at future QE (if not actually doing anything).


Then the leaders can sit back and hope their magic works.  Hope that their story has been bought and that the markets can take off and that they won’t actually have to implement much.  Yes, I think this is the key here.  They know that the treaty agreement changes are unlikely to be implemented.  They know the ECB has limits, that the IMF is going to struggle to do what people seem to believe they can do, they just hope that this is enough to give the markets so much confidence that they don’t have to do anything.  A market that can swing 6% on a 50 bp rate cut, might be manipulated into going so high that confidence is regained, long enough to buy time.


The “alternative ending”


So far, the directors have rejected the alternative ending.  They don’t think that America in particular is ready for a non Hollywood ending, but they are filming some scenes just in case.  Fortunately many of the scenes are exactly the same as in the preferred ending.   In the alternative ending, Merkozy and the puppets can’t convince everyone to go along with the communiqué.  They can’t convince them that it is really meaningless so there is no point to disagree.  Somehow the summit ends without the decision to move forward.

If there is no agreement, then there will be no photo op, but the ECB will cut rates by 50 bps.   The ECB will announce emergency actions to maintain stability in secondary markets while more discussions occur within the EU The IMF will announce some new programs.  The EFSF will start providing capital to banks.  The Fed will announce QE3 in an effort to fight deflation arising from the failure of the eurozone.


The alternative ending may actually be the right solution.  Bank share prices would be hit hard.  Countries will restructure their debt at the expense of banks and pension funds but could manage the new debtloads.  Pension funds, after the losses, will have no choice but to cut benefits to reasonable levels.  Somehow in this era where bank share price declines are equated with Armageddon, I don’t think we see the alternative ending yet.  Extend and pretend is just so much more appealing.


We will go through the motions of the planned scripts.  Many will shake their heads as the markets respond, but sooner or later (probably sooner), even those who fell for the media blitz will realize nothing is resolved.  The problems are bigger than ever, and we will have to revert to a new plan.  A plan that will have far less ability to contain the problem than it would now, because too many resources will have been wasted again.


Some strange “sub-plots”


There are a couple of sub-plots, that so far seem to be more like loose ends rather than being incorporated into the main plot.  Neither fit in very well with the script as planned, but would take a prominent role in the alternative ending.

The Italian budget, which is helping today’s rally, includes provisions for Italy to guarantee new issues for its banks.  So a plan that is meant to allow Italy to tap the market for its own, already large, needs is adding more potential debt?  Sooner or later, the fallacy that guarantees don’t count has to end.  If we were on risk-off mode, or afraid that the ECB wouldn’t just print, this news would be distressing.  How can Italy really guarantee debt for its banks when its ability to issue debt remains in question?  This is so unbelievable as to border on ludicrous, but it doesn’t fit into the main plot, so for the moment we are using the “suspension of belief” technique to move past this issue, but really, this is concerning, and shows how little true agreement there is amongst countries, and how willing they are to use words like guaranty as a “costless solution” to anything, in spite of the fact that a guaranty is neither costless nor a solution.


The other little side-plot is at the IIF.  According to Bloomberg last week, Hung Tran, deputy managing director of the IIF said that a Greed deal “may be used as a prototype or a template for potential situations in other countries”.  This was at a presentation he was giving at a hedge fund’s offices (which seems weird to me).  Since no one on Wall Street with P&L responsibilities had ever heard of the IIF until a few months ago, we can only assume that most people view this as Tran’s attempt to extend his 15 minutes of fame into 17 minutes or a job offer.  That is reasonable, because in spite of the big sounding titles this is largely a lobbying group that carries no weight with the banks.  On the other hand, this little speech fits perfectly with the alternative ending theory.  As mentioned above, each country would restructure to a certain degree, and the banks would bear the brunt of their own bad decisions.  The comment that the Greek deal (which isn’t close to done, and I’m not sure the IIF is still involved in) could be used as a template, is very different than what Sarkozy said last week, but is truly scary if you think about it.  Right now it is a dangling loose end in the plot and is probably meaningless as the character who said it, is so minor, but….


Watch the movie, but don’t buy the ending.


The play or movie will play out according to plan.  We may get some brief dips in the market before the finish, but you probably need to accept the plot for now and go along for the right.  Too many forces are pushing too hard for this not to play out according to the script.  At some point it will be time to short the rally, but so long as the words of politicians and actions of central banks can drive the market higher, it is still too early to short, because we will get words from politicians and actions from central banks.

Any sense that the photo op scene at the end of the week is going to be cut, then get ready for a huge sell-off.  If they cannot create the photo op at the end of this week, we will hit new lows.  Vol is down, options are cheaper than they have been in awhile, so deep out of the money puts is best way to play the unlikely, but realistic alternative ending.

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spiral_eyes's picture

the market is trading on hot air. it's very sad. when i was a kid i thought markets were about fundamentals, profit and loss. sadly, today it's all about government interventions. tragicomedy.

the bust was inevitable.

the real question is whether or not the west wil start a load of new wars to (ahem) "raise aggregate demand" 


Oh regional Indian's picture

Scrip Scripts. Plain and simple. It is a dance and a 3D movie rolled into one. Which seems the emergent reality anyways.



Pladizow's picture

If all the worlds a stage, who's in the audience?

TSA gropee's picture

Dunno, but I'll be real money they're a captive audience.

YBNguy's picture

Sorry, this is one flick Ill skip as I already read the book.



w a l k - a w a y's picture


Teddy Turner

This is the most important video you will ever see


302 views   4 thumbs up    3 thumbs down

Boy I tell you whut. What I wouldn't give to stop people from postin unidentified vidyuhs from that "Yhou Tube thing." /Hank Hill
mktsrmanipulated's picture

i have called cnbc and spoken to the news desk multiple times and blamed them for irresponsible journalism...not reporting on the Paulson hedgie story...and their ability to only pull out the pom poms for a rally and yet they do nothing but pump the mkt...maybe we should all call and continue to complain

DormRoom's picture

your liberty is an illusion. TPTB have chosen coordination to protect the ogligarchs.  prepare for stagflation in the West.  And hyperinflation in the BRICS as your life savings is eroded through high-hyper inflation for the 0.1%.


Once we reached the tipping point of runaway inflation in 2012  Central Banks can do nothing, because they have created a weapon of financial destruction from their monetized balance sheet.


And if you're a cop--think of how pissed you're going to be when the 0.1% raids your pension, and your life savings is gone, in that inflationary world.  Why do you protect them.

Tsar Pointless's picture

Because they pay them.

Pinkerton, bitchez!

TruthInSunshine's picture

This week's playbill:


Sarkozy as Pinocchio

Merkel as Brute (et tu, Brute?) and or Judas

The Bernank as Irving Fisher & The Kaiser (dual role)

Obama as Nero fiddling in Maui

Jamie Dimon as himself

Timmay Geithner as Rodney Dangerfield


Makeup! Wardrobe! Has anyone seen Banzai?

DaveyJones's picture

I don't know, with a little makeup, Timmay makes a better Redd Fox 

slewie the pi-rat's picture

well, at least you guys are awae that timmah is involved, going to meet, not w/ the finiMinis, but w/ the heavy hitters b4 the summit this week

most likely he'll offer them 'm0repo bridge financing' till they can get their "treaties" aligned w/ endless fiat via runaway printing

haven't seen tyler or peter.t mention this trip, which was annonced friday afternoon, yet

EZT's picture

where is the pullback..!?

mktsrmanipulated's picture

isnt going to be one....this is all manipulated i wouldnt be schocked if the fed buys ES futures overnight to create these f'd up bs rallies they are buying euros thats for sure

oogs66's picture

they seem to be making one last effort to push stocks in the thinking that somehow that fixes the economy

EZT's picture

Thats (demo)crazy

Temporalist's picture

On a similar theme of the world "stage":

Overweight in Metal, This Band Tries to Play Tunes in Forex Metallica, Other Rockers Go Hardcore to Master Currency Moves; 'a U.S. Export'

"Metallica's longtime manager, Cliff Burnstein, is accelerating the band's tour plans to avoid getting sucked into Europe's debt troubles. With the gloom among investors spreading to richer countries such as France, Mr. Burnstein is worried that the euro will tank, making it harder for concert promoters in the 17 countries that use the currency to pay Metallica's fees."

Bansters-in-my- feces's picture

I see there is a record of a crime scene on the Kitco gold charts over night,and this morning.

Timmy sucks Benny's cock.......

You fucking faggotts....

Tsar Pointless's picture

Now that's classy.


And you can't even spell the damn word. There is only one 't' at the end.

Whoa Dammit's picture

There's not enough budget for this to be a movie. But they could possibly fund an episode of "Murder She Wrote" with Merkel playing the Angela Landsbury role of Jessica Fletcher. ;-)

lunaticfringe's picture

This whole thing is world wide and systemic. I am seriously thinking of taking a stand. An old retired lawman, engaging in purposeful tax evasion. Really.

DosZap's picture


Won't matter a whit to them, they will take all you have, your pension,retirement, your home,your car/truck.

Anything of value, and throw away the key.They also will keep track of what you owe, and add penalties and interest to it, until you decide you want to live in somethingbesides a tent.

And they will print regardless if any taxes are collected or not, they have NO choice.

valley chick's picture

Does this "show" ever end?

TSA gropee's picture

Nope, it's now in syndication.

mktsrmanipulated's picture

all logic and reason have left the building....dollar cost averaging the Ponzi scheme of the century-----u will see

firstdivision's picture

POMO's will be relentless this week.  I lost on my weekend short bet, but c'est la vie!

P.S.  we've averaged +17 point days the last 6 trading days, and that is counting today.

mktsrmanipulated's picture

this is why they wanted algo can easily manipulate the can say what you want but when there were pits there was order

oogs66's picture

yup...price action drives all over the short reward for thinking

mayhem_korner's picture

All the World's A Stage


Some other, appropro Peart-isms:

You can twist perception, reality won't budge...

All puffed up with vanity
We see what we want to see
To the powerful and the wise
The mirror always lies

Who can face the knowledge that the truth is not the truth?

Don't annoy us further!
We have our work to do
Just think about the average
What use have they for you?
Another toy will help destroy
The elder race of man
Forget about your silly whim
It doesn't fit the Plan!

Peter K's picture

"Anyone who tries to figure out how austerity and growth work together, or where the money is coming, or any other details,  will be escorted from room, and will be Clockwork Oranged into reading “fringe blogging websites” until they accept that details are bad, and only vague notions and slogans can “solve” anything."

Got to hand it to Peter, for an American, he seems to have a great feel for how Euroland works.

mikmid's picture

If ten years ago you told me this shit would happen I would have laughed. Now It's hard to know what to do!!

Think for yourself's picture

Prepare. Fear is not a solution but preparedness is a sane state of mind yet does not necessitate a total withdrawal from the system. It only implies insuring a hardened state in which you will not be devastated by over-dependence on the system should it crash/go through hard times.

According to your means get some cash on hand. Enough to last a few months. Get a physical PMs stash started to last you a year. Diversify your assets into real commodities of value. Start building up a food supply to last for an extended period of time, especially if you are in a region where there is no thriving local economy or where food supply depends a lot on large scale logistics (big cities away from any agrarian territory, for instance - I'm living in rural central america, on the other hand, so I dont feel overly threatened here: there is a lot of local, independant food production means that will be unaffected in case of systemic collapse). Start with a few months, build up to 6 months, a year, ultimately 2 years but do it progressively so you don't feel overwhelmed (and to avoid getting caught in a stupid situation, i.e. 2 years of rice and beans yet no method of access to potable water). Don't brag or gossip about your preps, yet get to know your neighbors. Offer to help with problems you can solve and spot which other neighbors are resourceful and prepared, what their skills are, what they can offer.

Visit prepping forums. Divert some of your liquidity and longterm assets into tools of all sorts, from woodworking to electronics. Develop your hobbies into life-sustaining skills. Having the tools and know-how to build a shed, purify water, fix cars, growing a small liberty garden etc., are infinitely useful skill in a destabilized economy where relying on yourself and on the local community gains increased importance.

But I'm just saying this for the sake of other people like you who are wondering about the same question that you are. You have already been hanging out here for a year so you should already have heard all of this, now it's (past) time to integrate it in your lifestyle.

Edit: Oh, and get in touch with your inner spirituality, whatever your religion or lack of it. It will show you how to become stalwart and to stay unaffected by the harsh circumstances that are quite probably coming. That should actually be the prime objective while the other preparations around it are only for material/physical safety. 

DaveyJones's picture

"At this point, I will give the politicians some credit"

yes, they took the credit, we took the debt.

the 300000000th percent's picture

Its getting sickening, I now almost puke every time I see Merkel and Sarkosy meet and almost make out when they have to do that kiss each cheeck BS, and then they pose for the awkward hand shake and then they talk flor a minute using hand gestures and then they dissapear through some double doors. How amny times are they gonna have to meet before we have a complete multi currency collapse. I hope its soon.

Temporalist's picture

They only kiss because the other option is a "Heil!" salute.

oogs66's picture

it is such BS what these guys do, but they control it all...insanity!

Village Smithy's picture

Let's not be so naive. This market is being manipulated up in order to give the manipulators better exit points. At the same time they are keeping the PMs in check so they can get in at good levels. Although the printing presses are not yet running at full production they are all at least warmed up and churning out limited production runs. This should have gold tearing but it isn't, so why not. Manipulation. 

mayhem_korner's picture



And in this manipulated world, wouldn't you expect a BIG sale on PMs just ahead of the BIG print?  How much Au would free up (for CB consumption) if S&P and gold were both at 1,350?  I'm not predicting it, just sayin' that equity levitation provides nice cover for back-alley bullion accumulation.

pmcgoohan's picture

This is so blatant.

FTSE 0.42%

Gold -0.25%

EUR USD 0.58%

HYG 0.43%

SPY 1.71% !!!

I might look to get out of my equity shorts for a week or so- but not until SPY gets off the laughing gas

benb's picture


“World events do not occur by accident: They are made to happen, whether it is to do with national issues or commerce; and most of them are staged and managed by those who hold the purse strings.”

~Denis Healey, former British Defence Secretary and Secretary of the Exchequer


DaveyJones's picture

I always think it's a wrestling match between that and the fallout that even the best conspirators can't control

Amused2Death's picture

Don't fight the colluders!

earleflorida's picture

Y didn't U C that when the bottom was "666" ,... had 2 tell U, OZ was fine. Now where is OZ today? 1 clue is all ye get - it's somewhere in neverland,... 

Theosebes Goodfellow's picture

Peter my man, you left one possible, (probable?), act unmentioned. And that's the rousing one, filled with patriotic music and much flag-waving. There's nothing like a good old-fashioned war to distract the masses. One only has to remember the last refuge of scoundrels...

Peter K's picture

To fight a war one needs and army. But the Eurolanders disbanded theirs to pay for their socialist nanny states.

Come to think of it, knew socialism must have been good for something, just did know what. Now I know:)

But it's still muerte:))

DOT's picture

Well, at least the writing has been pretty good.  Some allowance should be made for the advancement of technology, as the stage has been replaced by Video 24/7.

" All the word is a reality tv show "  

What happens off camera on one show is the basis for a new one on another "feed". 

Computers vie with each other over logic puzzles that loop around and around, replacing actors with animation and analysis with opinion that is hard wired and Branded.



Time to pull the plug.



goldfish1's picture

"excited about this opportunity" lol


Clive Maund says the commercials are massively long the euro.