“But I don’t want comfort. I want God, I want poetry, I want real danger, I want freedom, I want
goodness. I want sin.”
― Aldous Huxley, Brave New World
Commentary & Analysis
Broken clock theorists unite…
I think you know what I mean by the phrase “broken clock theorist.” If not, let me give you the short definition.
These are the gurus who have called about 15 of the last zero stock market tops; and have groused endlessly about the US dollar demise—but right they may be someday just as a broken clock is right at least once in 24-hours. But being consistently wrong doesn’t deter our pugnacious prognosticators—it only seems to allow them the chance to grow increasingly strident. Now that the Dow is dumping, the “broken clock theorists” are circling the wagons for a giant “I told you so” party. The fact is some of their rationales make a whole lot of sense. Is this their moment?
Granted, I have plenty of earned guilt of my own, as I have made a couple broken clock calls as it relates to stocks during the Great Central Bank Reflation Cycle, and never expected it to run this far. But I have avoided being wrong on the stock market for a while now—likely because I stopped talking about it.
But lest you think I have been resting on my laurels, I assure you, and of late my subscribers can attest, I have plenty of mini-broken clock calls of my own in the currency market to keep me busy. Of late, this huge run higher against the US dollar among the Europeans is a bit perplexing. With the gift of hindsight over the last two days, good rationales abound—hedge lifting, repatriation, short closing, emerging markets protecting their currencies, etc. But is the euro really the go-to safe haven currency of choice? Or is it currency traders have decided the Fed will move later rather than sooner? Will that multi-week correction in the dollar materialize and run deep, allowing Mr. Market to wipe away all those bulls? We will discuss that and more on Tuesday.
The chart blow (which I will explain at the webinar) is a sneak peak of where we will start—a magical mystery tour of global macro past in an effort to shed some light on global macro future, or at least allow enough light for reasoned conjectures.
S&P 500 (green), US$ Index (white), 10-yr yield (blue), Fed Funds (gold) Weekly: I have spiked out five global macro periods we will consider and how these major asset classes reacted:
- Asian Financial Crisis,
- Deflation Scare & Nasdaq Bubble Pop,
- China/US Symbiosis period,
- Credit Crunch, and 5) the Great Central Bank Reflation…leading us into period
- …the multi-trillion dollar question….
My goal with this webinar is not to make brilliant sounding forecasts—if a few of those slip out, that’s fine—but to have a discussion in hopes we can develop reasoned alternative scenarios about the future of
key asset markets, especially currencies. If that is achieved, hopefully you will consider our services. And not to be left out, Dan Uslander, at JH Darbie, will explain how his firm can make trading our ideas easy for you through the Letter of Direct ion Program.
I hope you can join me.