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Quantifying Animal Spirits

Tyler Durden's picture




 

If you have ever wanted to "quantify" animal spirits, yet lacked the sheer imagination of how to goal seek an infinite array of numbers into a tidy little "ready for clients" package, despair not, for here is Citi, with the appropriately named "Quantifying Animal Spirits" in which Vikram's bank tries "to quantify this effect by looking and measuring periods when the market is focused on a small handful of broad (often macro-oriented) themes rather than “fundamental” analysis. Though not always apparent, these shifts in focus can have profound implications for alpha and risk." While the report is about as useful as parsing binary voodoo entrails through the magic punch card-based 8 ball of a Princeton economist, it sure does provide for some candid laughs at what passes for "analysis" at the bank which, while falling about as much as BofA (and which Paulson is still three quarters pregnant with) in recent weeks, has seen hardly a peep out of any media outlet: captured or otherwise.

 

 

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Tue, 08/30/2011 - 22:49 | 1617679 toxic8
toxic8's picture

is this a joke?

Tue, 08/30/2011 - 22:54 | 1617690 williambanzai7
williambanzai7's picture

That is the name of the era we live in.

Tue, 08/30/2011 - 23:29 | 1617817 navy62802
navy62802's picture

Touche!

Wed, 08/31/2011 - 04:22 | 1618165 spiral_eyes
spiral_eyes's picture

I drifted off trying to read this bullshit.

Tue, 08/30/2011 - 22:54 | 1617693 uno
uno's picture

without the Fed's bailouts we wouldn't have this wonderful insight

Tue, 08/30/2011 - 23:34 | 1617838 navy62802
navy62802's picture

Give it time, my friend. Give it time. Cancer doesn't kill in a day.

Tue, 08/30/2011 - 22:57 | 1617705 wisefool
wisefool's picture

Not if it ends up being the post-animal spirits talking points on CNBC for  the next 6 months. (the only time I have ever heard "animinal spirits" is on CNBC)

Wed, 08/31/2011 - 00:44 | 1617986 Mauibrad
Mauibrad's picture

...and collegiate economics classes.

Tue, 08/30/2011 - 22:57 | 1617707 11b40
11b40's picture

No, but it was written while looking in the rear-view mirror.

Tue, 08/30/2011 - 23:19 | 1617783 russki standart
russki standart's picture

No Toxic8, this is just the typical  academic garbage published before the labor day weekend. Print it out and use it as kindling or to roast a marshmallow.  Better yet, hit the delete button and save a tree.

Wed, 08/31/2011 - 00:28 | 1617947 rocker
rocker's picture

Nothing Here. Let's Move On.

Tue, 08/30/2011 - 22:54 | 1617691 disabledvet
disabledvet's picture

Given that Citi looks like prey I would think they might title their piece "qualifying animal spirits." However let's see how these prehistoric beasts behave when interacting with humans:
http://www.youtube.com/watch?v=fwVwUvKaLtg&feature=player_detailpage

Tue, 08/30/2011 - 22:55 | 1617698 Thunder_Downunder
Thunder_Downunder's picture

Brought to you by the makers of CDO, and the new improved CDO*2! 

 

 

Tue, 08/30/2011 - 22:58 | 1617714 Cake Please
Cake Please's picture

I thought Keynes' point was it's a casino and that "animal spirits" defy analysis and accurate prediction.

Tue, 08/30/2011 - 22:59 | 1617722 besnook
besnook's picture

how about: when the street acts like th giant boilerroom it is to push totally illogical investing strategies managing to convince a critical mass of investors of its merits animal spirits take over from the crowd that should know better to the crowd that has no idea leading to an exponential ramp that is turned back down a similar steep slope by the crowd that should know better realizing that they should know better but led by a group of people who may not know much realizing the emperor has no clothes.

Tue, 08/30/2011 - 23:02 | 1617732 Melin
Melin's picture

this is off-topic but I'm trying to donate dollars to ZH thru Paypal but I get an error message saying it's an unauthorized transaction. What gives?

Tue, 08/30/2011 - 23:07 | 1617752 indygo55
indygo55's picture

I think they only accept gold bullion.

Wed, 08/31/2011 - 09:46 | 1618589 Melin
Melin's picture

my vice-like fingers aren't yet cold and dead

Tue, 08/30/2011 - 23:28 | 1617813 zorba THE GREEK
zorba THE GREEK's picture

@Melin

 Recently, I made a donation to ZH and received no confirmation and cannot find any record of it in my history.

Maybe ZH has made the big times and receives so much from advertising and outside sources that they no longer

need donations. Or they just could be so busy adjusting to increased viewer volume that their staff is having trouble

catching up all their responsibilities. I would like to know what is going on behind the scenes of the site before making 

further donations.

Wed, 08/31/2011 - 09:43 | 1618583 Melin
Melin's picture

Thanks for responding.  I thought it was perhaps a Paypal security level issue.  

Tue, 08/30/2011 - 23:11 | 1617766 zorba THE GREEK
zorba THE GREEK's picture

What Citi mistakenly qualifies as animal spirits and following the herd mentality (which since 2008 even the most naive investor has realized is a 

foolish endeavor) is in reality investors betting on the QE effect on equities. Good news drives markets up. Bad news increases the chance of

future QE which in turn drives the market up. The markets have become convinced that the Fed will print if the economy turns down so 

investors seem to be willing to take more and more risks which Citi interprets as animal spirits but I contend it's just savy investors putting

money on a sure thing.

Tue, 08/30/2011 - 23:24 | 1617799 Too Late To Cancel
Too Late To Cancel's picture

Tyler,

Nobody seems to realize that a Priceton Econ. A.B. is probably the most rigorous program in the world.  The faculty attempts to misdirect and obfuscate at every turn.  Only the best minds can traverse that curriculum intact. 

Meanwhile, Party On Garth '78!  Party On Wayne '81!  while I ease myself out the back door...

Tue, 08/30/2011 - 23:30 | 1617822 navy62802
navy62802's picture

If I had my money at Citi and got my hands on this glorious piece of work, I would immediately withdraw all deposits and investments from Citi and run as quickly as possible in the opposite direction.

Wed, 08/31/2011 - 00:40 | 1617978 Mauibrad
Mauibrad's picture

Boy, that's B.S.  Leave it to the Aussies and Kiwi's to try to come up with a numerical yet overly simplified (square peg in round hole) 'analysis' on a matter such as this.

Wed, 08/31/2011 - 00:43 | 1617981 dwdollar
dwdollar's picture

A bunch of thugs took your money to stay in business, then write an 'analysis' blaming you and 'animal spirits' for their problems.

Meanwhile, the SEC jacks off to porn.

America... F'ck Ya!!!

http://www.youtube.com/watch?v=sWS-FoXbjVI

Wed, 08/31/2011 - 00:49 | 1617991 Milton Waddams
Milton Waddams's picture

LOL 20% of the report is comprised of disclosures.  So for whom is this marketing material targetted?  A cursory glance at the charts presented lead me to conclude that this is nothing more than someone(s) attempting to justify their paygrade.  How can a citi-broker use this to convince a potential to put some money to work with them?

Wed, 08/31/2011 - 01:12 | 1618028 digalert
digalert's picture

 

 

Through exhaustive analysis I've determined...

The markets are rigged

Wed, 08/31/2011 - 03:07 | 1618123 XRAYD
XRAYD's picture

'The phrase “Risk On/Risk Off” has been used and abusedcontinually since the GFC began.'

So it is the "GFC"! Which they helped conceive and create. Then transmitted and infected the global economy with for their bonuses. Sort of like financial AIDS.

Wed, 08/31/2011 - 03:31 | 1618140 Coldfire
Coldfire's picture

That is some mighty smelly horseshit, Citi.

Wed, 08/31/2011 - 06:12 | 1618203 Sathington Willougby
Sathington Willougby's picture

chopper on / chopper wrecked

 

http://www.youtube.com/watch?v=z4xGZdpWcK4

Wed, 08/31/2011 - 08:51 | 1618417 Downtoolong
Downtoolong's picture

Well, you can’t blame them for trying. Nothing makes Wall Street happier than distilling some market phenomenon down to a single index measure so that they can write $10 Trillion in OTC derivatives around it and trade them on an electronic exchange, thus controlling and manipulating the entire market. But first, they have to sell the idea to industry under the guise of risk management. 

And don’t blame the MSM too much for not picking up on this idea just yet. They’re actually risk averse too:

“For God’s sake, do you realize what might happen to our ratings if we let our viewers take their eyes of the DOW index for five seconds?”

Wed, 08/31/2011 - 09:57 | 1618616 Clowns on Acid
Clowns on Acid's picture

Teacher, teacher, teach me nuclear physics,

teach about the structure of man,

but for your endless calculations....

you can't tell me why I am.

 

- Ray Davies - The Kinks - SchoolBoys in Disgrace cd.

Wed, 08/31/2011 - 11:18 | 1618943 NotApplicable
NotApplicable's picture

So, what's the value of "fuck it" squared, again?

Mon, 09/05/2011 - 09:26 | 1633998 shacai
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