This note was originally published December 30, 2014 at 08:08 in Early Look
“You only have a full-year target if someone pays you a lot to have a full-year target”
-Keith McCullough on market dynamism & quixotic sell-side pursuits
We start every morning missive with a quote. Sometimes it’s inspirational, sometimes it’s intentionally flippant but, hopefully, it always carries real-time relevance and helps distill some signal from the global macro noise.
Alpha is Early Look modus operandi number one, but if it makes you laugh or re-think or get angry, it’s served its purpose.
Anyhow, with the 2015 market prognostications piling up into year end, we thought we’d lighten the tenor in today’s note and look back a bit as we look forward to the new year.
Neils Bohr famously quipped that, “Prediction is very difficult, especially if it’s about the future”.
The short selection of some of our favorite misadventures in #TimeStamping below bears witness to that reality and provides a potent reminder that imagination remains a scarce resource, conventionalisms box can be hermetic and humility oft follows hubris.
If you have favorites of your own, feel free to pass them along. They will, at the least, be tweeted.
***********************************************************
“We see no serious broader spillover to banks or thrift institutions from the problems in the subprime market…We believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.” - Ben Bernanke, May 17, 2007
“We don’t know what we’ll be doing a year from now. It’s a mistake to try and get too precise…you can’t expect the Fed to spell out what it’s going to do...because it doesn’t know…Year after year we have had to explain why the global growth rate has been lower than predicted.” - Stanley Fischer providing a little 2014 FOMC truth serum
“In all likelihood world inflation is over” - Per Jacobbson, IMF, 1959
“I believe the fundamentals of our economy are strong. Very Strong” - John McCain during run for President, 6/5/2008
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies” - Senator Barack Obama, 3/16/2006
“There is no doubt that the regime of Saddam Hussein possesses weapons of mass destruction. As this operation continues, those weapons will be identified, found, along with the people who have produced them and who guard them.” - General Tommy Franks
“Everything that can be invented has been invented” - Charles H. Duell, US patent office, 1899
“Who would want to use it anyway?” - President Rutherford B Hayes on the telephone, 1876
"The world only needs five computers" - Thomas J. Watson Sr, President of IBM
“They couldn’t hit an elephant at this distance” - General John Sedgwick moments before being killed by enemy fire.
"I will say that I cannot imagine any condition which could cause a ship to founder. I cannot conceive of any vital disaster happening to this vessel. Modern shipbuilding has gone beyond that." - Capt. E. J. Smith of the Titanic, a few days before it sank.
“If I had asked people what they wanted, they would have said faster horses.” - Henry Ford
And, of course, perhaps the pithiest prediction from one of the Great Moderation’s foremost prognosticator’s…..
My Prediction?...PAIN! - Mr. T, 1982
***********************************************************
We’ve #TimeStamped 2,969 signals in Real-Time Alerts since 2008. The historical data is there to see and download on our website and in the Chart of the Day below we show the return distribution across RTA’s 6+ year history. In our attempt to further the evolution towards an investing meritocracy, we feel we’ve built a better Risk Management mousetrap.
As always, you are free to disagree. We happily accept and consider all (thoughtful) criticism as we work to continually evolve the process.
”You have two ears and one mouth, use them in that proportion”. I’m not sure to whom that’s attributable, but Hedgeye would sign off on its sageness.
Our immediate-term Global Macro Risk Ranges are now :
UST 10yr Yield 2.06-2.23%
SPX 1981-2122
RUT 1145-1240
KOSPI 1888-1937
Oil (WTI) 52.56-55.79
Gold 1168-1196
Happy Birthday Lebron James & Tiger Woods and Happy Tuesday - the humpday between Monday and humpday
Christian B. Drake
Macro Analyst
