May 16, 2015 — The year has flown by already we are done with Q1 earnings season. The energy sector reported the largest year over year sales decline. Markets remain range bound, frustrating for many, choppy. We’re still reading daily articles about when we all believe the Federal Reserve will “lift off” and begin the path to a return to normal rate regime.
We’re still watching CNBC guests comment on the impending collapse of equities, bonds, and european sovereigns balanced with the never-say-never perma-bulls who won’t ever admit to ever taking a loss and parade the “why worry, only price pays” — bullshit argument. Did price pay 10/15/87? BTW the USD has given up all its gains for 2015.
The regular media puts out daily articles on the 2016 US Presidential election even though they are still 541 days away. Especially Vox. Not sure when that website became relevant, but they do a damn good job or stirring the pot, pondering the most vexing issues facing America such as… Who will run, who won’t run, does Marco Rubio drink bottle water from unicorn tears, who donates to the Clinton foundation? The usual regurgitated political arguments #TeamAmerica — it is what it is politics.
The usual AAPL giddy fanboys are out breathlessly commenting on TV and in print publications about the Apple Watch. I mean, if aliens invaded earth and they were to ask humanity what have we accomplished, what will we show them? We can send them our heartbeats via the watch… please. No.
The latest iPhone, Apple Watch, iPad or the Periscope app? Show them the Sistine Chapel? Read them the tragedy of Faust, play them Beethoven’s 5th, show them Van Gogh’s Sunflowers?
Don’t embarrass me… AAPL.
Dr Bernanke in a recent blog ripped Senator Warrens bill on limiting the Federal Reserve’s emergency lending powers in the event of a financial crisis. It’s a beautiful thing seeing the former Fed chair have more flexibility to speak his mind and how he really feels. For better or for worse flexibility of the Fed has been one of the institutions most enduring tools in the tool fit.
There’s a belief from some that only they are privy to news. We still need humans running capital that much is clear as the algos everyone loves to bash got fooled the other day by the fraudulent bid for AVP. Back to the news its career suicide to believe that no other investor, fund manager, except you knows the news.
If it’s in the news, it’s already been traded. Now if you know something about next year’s news, something that no one can has considered, something that everyone has overlooked, then you should place a bet, and let us know too on TWTR of course. The fact is Wall St has invested billions to update all parameters with every piece of news as it comes through the wire, and that I suppose that is, “Old Wall.”
There’s still a few blogs ripping on the banks. Ok. The bailouts happened 7 years ago. To quote the great Neil Barofsky, “Treasury’s mismanagement of TARP and its disregard for TARP’s Main Street goals — whether born of incompetence, timidity in the face of a crisis or a mindset too closely aligned with the banks it was supposed to rein in — may have so damaged the credibility of the government as a whole that future policy makers may be politically unable to take the necessary steps to save the system the next time a crisis arises. This avoidable political reality might just be TARP’s most lasting, and unfortunate, legacy.”
Hopefully we learned from the experience and are better institutions and better people for it. Inaccurate financial mathematical models should not pose a threat to humanity but somehow they do.
Humans are arrogant, and believe they can explain everything, (self included here). Reality always wins over human perception of reality. Markets are indeed engaging but nothing they offer in the capital markets is a prerequisite for life.
On mixing politics and markets… it would be wise to take politics out of the markets. If you have an issue with the banking system take it up with the system, not the price that I agree to exchange shares with someone.
On bonds… it’s a bit wild some of the moves. But I’m no expert on bonds. We all know the Fed has bought up trillions. However, I don’t think they are too concerned about shrinking the balance sheet before any potential hike. The Fed is the last dealer standing. Frank-Dodd wanted to divest all TBTF desks, all trading, radically reduce revenues from FICC trading, and go back to “boring banking.”
On social media… I believe we have built internal add-blockers and are immune to clicking on them. On twitter how many times do I have to click “tweet offends me, or tweet is not relevant” for the damn thing to go away? TWTR with horrible earnings is really struggling. Facebook on the other hand many are saying it’s gonna take over the internet. I’ve seen Facebook break up families and I’ve seen Facebook reconnect families.
Personally Facebook belongs to the vast world of things that bore me.
As with life there’s an important distinction that we shouldn’t forget, about the events that life hands you: Some events you have near full control over, if you run across a freeway, getting injured comes with the territory. There’s an easy solution: don’t run across the freeway. If you do you have no right complaining about getting injured.
But it’s the events that you have minimal control over that are often the toughest to handle, especially as they pile on. The market you have no control over. It’s gonna do whatever it want to is and make a mockery of a good deal of us while it’s at it.
By way of example, let’s say you’re driving and get a flat tire. Well it sucks, but most can handle it no big deal. Then let’s say you are late and you speed, and you get into a car crash, okay well more hassle not the best day, but most can handle it. Then let’s say you get a call from you boss that you have lost your job. Well that’s bit tougher, especially if you have a family that you have to support.
At this point you may experience a minor set you back for day, or a colossal fuck up, defending on your tolerance level. But wait let’s say the day is not over yet. Let’s say within minutes you receive a call from loved family member having been diagnosed with cancer. I think most can still juggle that many issues, but you are not having a good day.
Then let’s say you get a call from (God forbid) your Father is having a heart attack, and you have to get over there somehow, you struggle to find a bus, and it breaks down. You need to get the situation under control, cause it’s your duty and family expectation. But then let’s say you get there but you realize you lost your wallet, and your father has no insurance, but you do have $20 in your pocket, and you go to the bank get some cash, but then someone robs you, on the way back to the hospital… well I can go on with examples forever…
The point life is so bizarre, and there are some many unexpected turns. I think most of us have a breaking point, no matter how tough, it is just how much stuff you are handed and how fast. Of course some would say that isn’t fair.
Seems like we go about assuming there is a law that says life should be fair, well that is not reality. We made up “fair”, and try to impose it on the world, but if the world is not “fair” you can’t blame the world. Maybe instead we should re-evaluate our perceptions. That’s life… Life is fleeting. Try to enjoy it while we’re still here.
Truth is not in the crowd ~ Søren Kierkegaard