Guest Post: It's Only A Flesh Wound

Tyler Durden's picture

From Peter Tchir of TF Market Advisors

It's Only A Flesh Wound

I prefer to quote Shakespeare rather than Monty Python, but the Black Knight scene just keeps popping into my head lately.  We have been in a period of intense volatility, have hit levels on the SPX (1100) that very few people thought we could.  Yet, the perma bulls have been back in force over the past few days. Armed with 5 days of decent performance and year-end forecasts of 1,400 or more, those perma-bulls were out in full force with their usual arguments.

"Transitory", "temporary", "just a soft patch", "decoupling" (I have lost track of who is decoupling from whom, and when that decoupling is good), "contained", and "oversold".  For the past few months, if not longer, the perma bulls cling to every EU plan as an excuse to rally.  Virtually no attention is paid to whether the plan is feasible or if it would even work, it is just assumed to be good and that Europe will finally be fixed.  Any scrap of positive economic data is instantly glommed on to and is repeated ad nauseum.  Bad data is pushed aside or blamed on something - weather being a favourite scapegoat.  Anyways, as I see and read this daily denial of the real problems that still exist, I just keep thinking about that knight insistings "It's only a flesh wound".   

While I am ranting,  I have to admit that I can't stand hearing how  "fundamentals" are good even if the macro picture is weak.  My understanding of the definition of fundamentals must be wrong.  I would think that multiple countries at risk of default, the biggest economies mired in debt, weak banks stuffed to the gills with bad, unmarked exposures, and clear signs of a slowdown with GDP weak across the board, ARE FUNDAMENTALS!  I am not sure when "fundamentals" became defined as last quarter's earnings.  In any case, the global macro picture eventually affects earnings and effectively becomes the "fundamentals", even as defined by the diehard bulls, so ignoring them is a big mistake.

It looks like the volatility is here to stay.  The US is waking up to the weakness many expected to see yesterday.  I did write yesterday that the market had felt "reachy" again and that whoever was selling MAIN at 139 would regret it.  It has moved steadily wider since then and is currently back to 146.  I think many investors will be reluctant to put back on hedges they just scrambled to take off, but if the data (and there is a lot) is bad today, we could get ugly in a hurry, as the market is definitely not oversold anymore.

The other curious aspect to yesterday's news flow was the FED dissenters taking the time to speak their mind.  I am not sure what it really means, but it does seem like they are trying to stop Ben from announcing some big new agenda at Jackson Hole. 

It has been the Euro

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DormRoom's picture

jobless claims, and leading indicators soon.  1-2 TKO for the bulls today?

ZeroPower's picture

Lower claims # might turn rout around though, shit started in EU this morning but no really substantial news was out... S&P sheepishly reiterated France is "AAA". Whatever, credit always tells the story despite the equity fanboys.

papaswamp's picture

Probably not on the jobs numbers. There would have to be a big rise in NSA (+20,000) to null the multiplier and print above 400,000. I think September will be the ugly month.

rwe2late's picture


Joblessness? Wars? Recession?

"Tis but a scratch" to those who set the stage.

Think "Disaster Capitalism" and "Shock Doctrine".  This is all bullish for empire-builders.

StychoKiller's picture

TKO = Technical Knock Out, or TOTAL Knock Out?

papaswamp's picture

Yea bring out your dead might be the mantra later in the day if this nastiness continues.

weinerdog43's picture

'elp!  'elp!   I'm being repressed!    signed, Silver

spankfish's picture

Something wicked this way comes...

The Wolf's picture

if you are to use a true analogy with the Black Knight... the US economy is hopping around on one leg threatening to bite your ear off right now...

bigdumbnugly's picture

does he still have his nads or did they already lop those off too?

scratch_and_sniff's picture

alright, we'll call it a draw.

disabledvet's picture

Forward looking indicators suck while the backward looking ones are all being downgraded. Once europe collapses taking half the planet with it it will be discovered that the USA has been in recession for 9 months but "it was mild and we are coming out of it." Stop listening to them! Follow the bailouts!

KnightsofNee's picture

You must chop down the biggest tree in the forest with...............(wait for it).......A HERRING!

Bicycle Repairman's picture

Being able to quote the entire film "Monty Python and the Holy Grail" is all I got out of college.  That, a degree in art history and $250K in debt.  Actually I made it up, except for Python.

Snidley Whipsnae's picture

Dow futures off 202 at Bberg...

Gold $1816.20

a picture is worth a thousand words... Budda... er, no... maybe it was Poloroid

AnonymousMonetarist's picture


REALITY: You fight with the strength of many men, Sir BULL.
I am Reality, King of the Markets.
I seek the finest and the bravest traders in the land to join me
in my Court of Capitalism.
You have proved yourself worthy; will you join me?
You make me sad. So be it. 
BLACK BULL: None shall sell.
BLACK BULL: None shall sell.
REALITY: I have no quarrel with you, good Sir BULL, but I must
make new lows.
BLACK BULL: Then you shall die.
REALITY: I command you as King of the Markets to stand aside!
BLACK BULL: I move for no man.
REALITY: So be it!
[parry thrust]
[REALITY chops the BLACK BULL's left arm off]
REALITY: Now stand aside, worthy adversary.
BLACK BULL: 'Tis but a scratch.
REALITY: A scratch? Your arm's off!
BLACK BULL: No, it isn't.
REALITY: Well, what's that then?
BLACK BULL: I've had worse.
REALITY: You liar!
BLACK BULL: Come on you pansy!
[Top banks are insolvent and there are still over 5 trillion in off-balance sheet assets in US alone
[parry thrust]
[REALITY chops the BLACK BULL's right arm off]
REALITY: Victory is mine!
We thank thee Lord, that in thy merc-
BLACK BULL: Come on then.
BLACK BULL: Have at you!
REALITY: You are indeed brave, Sir BULL, but the fight is mine.
BLACK BULL: Oh, had enough, eh?
REALITY: Look, you stupid bastard, you've got no arms left.
BLACK BULL: Yes I have.
BLACK BULL: Just a flesh wound.
REALITY: Look, stop that.
BLACK BULL: Chicken! Chicken!
REALITY: Look, I'll have your leg. Right!
[With just health care counted as a proper percentage of GDP and the same adjusted for health care inflation we'd be considered contracting...unemployment properly measured is too scary to properly measure.]
BLACK BULL: Right, I'll do you for that!
REALITY: You'll what?
BLACK BULL: Come 'ere!
REALITY: What are you going to do, bleed on me?
BLACK BULL: I'm invincible!
REALITY: You're a loony.
BLACK BULL: The Black Bull always triumphs!
Have at you! Come on then.
[It's a Great Depression until it's agreed upon and then things get better:)
[REALITY chops the BLACK BULL's other leg off]
BLACK BULL: All right; we'll call it a draw. Oh, oh, I see, running away then. You yellow bastards! Come back here and take what's coming to you. I'll bite your legs off!


oogs66's picture

joe "it's just a flesh wound" lavorgnia must be due out any time to explain why things are going to get better

Stuck on Zero's picture

Wall Street has always been the land of Bulls and optimists.  Since Wall Street took over Capitol Hill our government has adopted the same attitude.  Instead of fixing any problems the government just expresses rosy optimism and glowing confidence.

sullymandias's picture

"Transitory", "temporary", "just a soft patch", "decoupling" (I have lost track of who is decoupling from whom, and when that decoupling is good), "contained", and "oversold".

Here's one I haven't heard before: "perfect storm"

ElvisDog's picture

Europe is fixed in the same sense that my dog was fixed when we adopted him.

asteroids's picture

Notice who the futures started down way before Europe opened. Co-incidence. Hardly.

bid the soldiers shoot's picture

Did someone say Shakespeare?

Mercutio, when asked if he wanted a couple of vicodin after his fight with Tybalt.

"No, 'tis not so deep as a well, nor so wide as a
church-door; but 'tis enough,'twill serve: ask for
me to-morrow, and you shall find me a grave man. I
am peppered, I warrant, for this world. A plague o'
both your houses! 'Zounds, a dog, a rat, a mouse, a
cat, to scratch a man to death! a braggart, a
rogue, a villain, that fights by the book of
arithmetic! Why the devil came you between us? I
was hurt under your arm."