Wednesday, December 12, 2007

No One Expects The....


....Spanish Inquisition. Yes Macro-Man has been rhetorically asking why the Fed did as the Fed did, conjuring Grinch-like allusions. Now, when speaking of Xmas, the Grinch and FInancial Markets in one breath, the comparative bar is set rather high with The Saturday Night Massacre being the meanest of feats to all the Who's down in Whoville. Everyone knows the Fed is between a rock and rock, being buggered and slagged whatever it does. Yet, despite my own oft-cynical view of US FOMC, their inherent biases and asymmmetries, and the "Catdog"-like objectives with which they are charged, they remain economists, highly-educated economists and, of course, human beings. As such they are not only fallible, but subject to vascillation, distraction, whim, happenstance, and arm-twisting by this or that.

That may or may not be part of the explanation, but if I were a central bank, I would be doing everything in my power to wrong-foot, trip-up, up-end, hurl cattle from trebuchets perched in their castle, and fart in the general direction of BOTH leveraged specs AND spineless and fiscally-blaspheming elected representatives. SO what would such an FOMC resemble? No, not the Grinch, but a softer slightly-more cuddly version of Python's Cardinal Jiminez&Friends whose watchword was "Fear & Surprise". For... "No one expects the Spanish Inquisition....". That'll make 'em think twice about leveraging the farm to short Yen in favor of Icelandic Kronor...

8 comments:

Macro Man said...

While I would concur that it is not the Fed's job to bail out markets, by the same token I don't think it's the Fed's job to take the market to a "Love motel" either and give it a proper shagging.

I am wondering if, in the wake of the market volatility incurred by the bungled timing of these policy announcements, we will see a new help line coming from Paulson & Co.

1-888-STP-LOSS, which will provide counselors and compensation to those short gamma and/or stopped out of trades over the last 24 hours.

Sally said...

... too much! Cassandra thanks for the chuckle.

Anonymous said...

MM, btw 888 is a very bullish number if one is Chinese =P

Cassie, do you know what is going on in Korea? Koribor (KRBO12M Curncy) and yields on the Korean 3 year bond (KEA Comdty) are shooting up...

"Cassandra" said...

Sorry, regretfully, no. My experiences in things Korean are limited to getting stupefyingly rat-arsed with my local host at the Silla (Korean Style), and wondering why all the pretty ladies in some district called "Itae-won" kepting smiling at me, and calling me "Joe". I reckon that whatever the norm for entertaining guests and marital submission was, my host got a right bollocksing from his wife when he got home...IF he ever got home...

OldVet said...

Stopped out of my Puts on S&P one day, stopped out of my longs in CHF the next, go figure.

O O, sellchek on blink. Kin Ah hev my Krispmus presunt urly?

Anonymous said...

Cassi,

wow you seem really clever. how much money are you managing and what is your fund's performance?

"Cassandra" said...

Anon...be careful not to confuse cleverness with a sense of humour. If you're truly interested, e-mail me your actual particulars, and the nature of your interest
and we can discuss "offline"
rusol1@yahoo.com

Charles Butler said...

Ah Cass, sad Cass...

You really do fail to get it. Having, yes, now long ago crossed through the vale of tears (conveniently, in defiance of Kierkegaard's conundrum, located in 1989 at the corner of Friedrich- and Zimmer-strasse), we are all now free to:

1). Borrow $1.80 at the bank with which to buy a $2.00 show ticket on the 1-20 chalk which, in turn, always makes the board;

2). Continue to happily make the Leafs the most profitable team in hockey, despite the unending presence of Harold Ballard's ghost in the building;

3). Listen to Lenny Breau playing 'On Green Dolphin Street' even though his wife drowned him in the pool one languid summer night a quarter century ago;

4). Publish a widely-read and -loved column for nigh on two years without the assistance (finally! Yes, there is a God!) of a spell checker.

Please remain in your seats until the plane has come to a full stop.