This week this market has a date.
It is a blind date. For the subject, the market has chosen an idyllic figure. She is beautiful, she is thin with pretty eyes and teeth not only pristine skin. As of today her figure has been generously enhanced and her seductive power has been emboldened. She does not smoke, she does not stink…she does not even drink. She is the savior, she is the dream, she is the single most attractive thing ever seen by this very lonely and isolated market.
The irony is that many of the attributes that are so boldly now part of the psyche of her vision were created with photoshop and the whole thing was arranged on Facebook or match.com…what’s more is that when the market meets her this week, it will be even better than could ever be imagined…she will arrive on horseback and prepared for an evening of joy and passion.
Geeze…this is getting just plain silly. One thing after the other is being promoted about mystery illusions that will NEVER satisfy the expectation. The reality is that if there is just one pimple or scar, if there is a rather less sumptuous figure or potentially even an equally sumptuous one but perhaps anything less than a obsessed Pamela Anderson 2X…there is going to be some pretty big adjustment to expectation. This blind date is starting to smell pretty much like Village Voice ads for hookers that used to walk 10th avenue in New York in the winter in the 1980’s - someone is not only going to be rather likely to be disappointed, even if they are on the inebriated side, but they are also likely to get some sort of disease.
To this blind date, I have to say today was remarkable. The rumors coming out of the woodwork just pump up expectations so powerfully, so perfectly and persuasively that even a slight reality will likely be a large disappointment - photoshop notwithstanding. To anyone, who has been on blind dates before, especially highly hyped ones - I suggest not investing too much into it.
To wit, the dollar is near it recent swing highs, as are quite a few risk markets…Treasuries are looking rather bullish after bouncing off the levels I posted last week and it looks like theose levels will continue to be powerfull support and the equity market has made nearly no headway since last week…(it has held in there longer than I thought it might however) something has to give and it is probably going to be the place with the highest capacity for disappointment. A lot has changed in the last week and none of what changed really matters - the situation is still getting worse not better and the illusions are now bigger and more profound that real. Any expectations that remain when the date happens should quickly turn to disappointment. In fact the odds that the EURO stays together are now dramatically lower than the odds it makes its voyage to oblivion I have discussed on thesse pages years ago.
Perhaps, the genius, Trichet wishes that he had not insisted on raising interest rates which now need so much downward adjustment and have cost so much for the ECB? But I think Tritchet was clearly focused on the welfare of 300 million and not the few…yeah right!