Jack the Pipper

Central to a full understanding of dissipative systems, and especially those in symbiotic relationships, is the concept of system feedback (Stear, 1987). Complex systems with feedback loops that allow for self-renewal are called autopoietic structures.

I read with interest the decision by Stanley Druckenmiller to close his global macro hedge fund. The guy was good–very good. He quietly went about his business of thinking about how the world works and positioning in front of capital flows–in or out–and got it right most of the time.

There has been a lot of double-dip talk in the market, and a lot of it from us. But, we remain open to being very wrong. Quite possibly, if the recovery is back on track, the US dollar will get smoked on yield and growth differentials; a couple of key factors that not too long ago appeared to favor Mr. Greenback.

Swissie on a tear for sure against the US dollar…hesitating at the 61.8% retrace from Nov ’09 low today, as speculators take the SNB seriously it seems, especially after this move…

Go Google news on “China labor strikes” and you’ll find plenty of recent articles about the latest worker strikes throughout the country (notably at the Honda plants).

Three drivers of yesterday’s big sell-off and we are back to that again. Another non-farm payroll report is due out on Friday. It seems every month we keep hearing that “this is the biggie”, i.e. it will make or break markets and recovery expectations. Maybe this time there will be a lot of truth in that assessment …

Typically when Goldilocks emerges from her bunker, sees her shadow, and returns to the bunker, we can expect six more weeks of recession. But I’d suggest she re-stock her canned foods supply – she could be in there a while.

You may remember that the US dollar soared in value in the midst of the worst fears during the credit crunch. It peaked in March of 2009; which not coincidently is when global stock markets and risk assets began to soar in value.

Interesting that just as the American people may have reached the point of government spending fatigue, as its government heads into the G-20 to tell other countries they need to spend more.

Martin Wolf of the Financial Times recently referenced a paper that made the case that fiscal contraction will actually stoke consumer confidence and induce consumer spending that is necessary towards achieving a healthy recovery. Cut spending and taxes, so the argument goes.