Friday Fun : Armageddon is a nice place
It has been a while but with the current cocktail brewing, we feel that we are approaching the ultimate moment of truth. And most of us would agree that this implies the end of days, the big one coming up and where every one should seek for shelter if even remotely possible. Briefly, (economic) history will be written only moments from now. The paradox might be that when everyone believes this is the case, the self-fulfilling prophecy will actually take place, Keynesian mechanics in motion, full circle and the paradox complete.
Yesterday and courtesy of SocGen, we received the following overview of what might be expected the coming days and its potential impact on markets :
Notice anything funny from the chart above ? Well, it tells you one side of the probability distribution but not the side of "Grexit", "EMU break-up" etc, most likely not the desired scenario for the buy and sell-side desks of a majority of brokers and investment banks. A sentiment & game changer nevertheless.
But how would Armageddon look/sound like ? What's the sound of the big reset or big Copernican revolution, whatever you want to call it ? It can go either way but chances are we are in for some nasty surprises in the short term, and most likely in the medium term as well. By means of music, It's difficult to describe the feeling of "when the going gets tough, really tough". I would like to start with the "unheimliches gefuhl", meaning a large degree of unquantifiable uncertainty by a song of Noordkaap. In this song, we have some one very scared, manic depressed and scared from the world outside, and totally overwhelmed by everything what happens. Briefly it's too big to digest or comprehend, briefly "Giant". And with the prophecy at the end : "the higher the fence, the bigger the fruitcake on both sides of the fence". This does not only apply on geopolitical situations currently taking place all over the world but also on our current sovereign debt/financial crisis : Ever since this crisis broke out - and by postponing solutions - we have been lifting the stakes, regardless of the efforts of the fire brigade :
Over now to the real actors of this final scene. "Dear Angela (Herman), do you have the ace of spades and how are you gonna play this particular hand ?". Whatever Angela decides, things can become pretty unpredictable for all players on the market involved, meaning long and shorts on EUR/USD, equity, commodities etc. So the next song should grasp something very aggressive, brutal or sudden impact. I considered the Pixies (debaser) but came up with a Pixies squared : A good idea (she said) by Sugar. For those feeling uncomfortable with guitars making some noise, please skip to part 3 ; For those feeling adventurous and more daring, let's go all the way !
"Temptation, so much for creation", dixit Bob Mould. Creation, creative destruction, may be in the end we shouldn't be so pessimistic after all. If disaster strikes and there is nothing we can do about it, it's better to accept our fate and put on our dancing shoes in view of the weekend coming up. So let's put on a big smile and shout out loud in chorus with Michael Stipe : It's the end of the world as we know it (and I feel fine !). It's only money after all.
Cheers and have a nice weekend