Wednesday, March 23, 2011

Fear Threshold Extremely High

I had a good head and sinus cold brewing this weekend but I thought I had pushed it off. No such luck as my head is killing me and breathing is a conscious effort through my nose. I am exhausted and cranky so as I ponder the pros and cons of Rhinitis medicamentosa to try and be able to sleep, just a quick note.

Fear Threshold Extremely High
Given all the bad news out in the world one would think financial markets would be some kind of worried, nervous, or fearful. It's not happening. What do the markets fear? The Dark perhaps?:


The latest "correction" was brought on at first by buyer exhaustion and then the multi gut punches of:
-Egypt
-Libya
-Bahrain, Saudi Arabia
-Japan Earthquake and nuclear issues
-Oil prices
While any one is pretty big, all together the picture is very bad. So where is the fear?

You have to first know what the market fears, then you can answer.

If you jumped up at the question like Arnold Horshack:

Sit the heck back down, you are most likely wrong.

The old line "the market fears uncertainty" applies, but not in the way you might think. All of the above issues are monster unknowns, but the market could give a hoot.

The last time real fear existed was last summer when the liquidity pump of QE 1 was dry and markets were left on their own. That was the only time I saw any real concern. Even now, what I am looking at are mobs angling to cash in on said above issues, not run from the market.

QE 2 ends this June. Either markets are willing to party right up until then, or they are pricing in more intervention (via QE 3 or some other pet invention of central bankers).

Japan is only an issue if Japan will not print. Portugal and Ireland bond yields at record highs are only an issue if they cannot be rolled over by the ECB by printing. You get the idea. The reason the market is not afraid is because they have no reason to be.

Have a good night.

3 comments:

GawainsGhost said...

Hey, GYC, way off topic, but check this out.

http://news.sciencemag.org/sciencenow/2011/03/long-neglected-experiment-gives-.html?ref=hp

I remember studying that experiment way back when I was in high school. I found it fascinating then, and now it only confirms my belief that life, like all complex systems, is self-organizing.

Of course, at the end, the reporter has to throw in the amino acids came to Earth on meteorites canard. I think that's ridiculous, because it's a circular argument and it's stupid. On what planet did the amino acids form? I mean, they certainly didn't form on a meteorite. And how did they form on that planet? How did they get on the meteorite?

If a scientist can form amino acids in a laboratory, why can't amino acids form on Earth in nature?

Anyway, I just thought you might find that article interesting.

getyourselfconnected said...

Hey Gawains,

I am today hoping I can see my doctor when he opens up in a bit.

Great article, I remeber the older one and many complained that lack of methionine meant it was no good. I see the newer one shows Methionine as present. I love this kind of stuff. Thanks for the point out.

GawainsGhost said...

Here's another on how economists misunderstand biology.

http://scienceblogs.com/mikethemadbiologist/2011/03/when_economists_misunderstand.php

Personally, I am not a Darwinist, because I do not believe mutation is random. But that's another story.