Ticker Guy

Karl Denninger is a hero!

Karl Denninger - Mr Market Ticker

Several times a week, I drop into Karl Denninger’s blog The Market Ticker.  While frequently the articles are too technical for me, it’s still, nonetheless, possible to get the drift of Karl’s messages.

As his overall theme is strongly coincident with my own views on my pension investments, and which have served me proud over the last 10 years, especially the last 2 years, it’s natural that I like what Karl does.

But the point of this Post is to underline just how much time and effort Karl puts in to his work, all of which is free to the world at the click of a mouse.

Are there others who devote equal amounts of time to their Blogs and websites?  Yes, many!  And many of them are also heroes (and heroines!)

Of course, I have no doubt that The Market Ticker is part of Karl’s business strategy but, again, he could choose other ways to make his income without sharing, for free, so many valuable ideas.

Here are a couple of examples to underline my deep respect for this man. (Taken from Market Ticker on the 13th May.)

The first – on how markets are misreading the European Central Bank

Small extract to give you a flavour:

To follow up and expand upon my other writings regarding the ECB/Euro bailout package of last weekend, I want to focus on why I believe the markets responded to the north as strongly as they did – and why believing in this may be dangerous to your portfolio.

Markets try to suss out the impact of events based on history.  The more recent the history the more impact that event has in the collective consciousness.  This is true in all human endeavors where psychology is a factor, and the equity markets are the epitome of human psychology interacting with money.

About 18 months ago the United States Congress passed TARP, and The Fed opened unprecedented policy actions (many of which I have argued were illegal, and still do.)  But the markets, at least initially, did not respond.  Indeed, it was not until about six months later, when FASB changed mark-to-market accounting rules and thus allowed financial institutions to lie about balance sheet values in the United States, that the “recovery” of the markets really took hold.

The second – on how markets are disconnected.

This is a technical post from Karl and there’s much that I don’t understand.  But the charts and the commentary are, again, invaluable and …. free!

Here’s how that article closes:

The entirety of the rebound this week has been predicated on the “stability” of the European situation.  I see no evidence for that.  Beyond the fact that the European “package” has to be ratified by parliaments and they’re trying to bail out broke nations with contributions from those very same nations (which is clearly an insane plan and is almost certainly doomed to fail) there’s the fact that the market has already called “NUTS!” on the so-called package in the place where it matters – in the currency markets.

Beware the belief that the skies are clear folks.  We did this two years ago with Bear Stearns and SocGen, and everyone called for you to “get back in the pool” post those events.  But the respite you earned was only a few months in duration, after which the underlying idiocy came to the fore and overwhelmed the sell-side ToutTV pushers.

If you listened to those of us who were calling for you to run far away and seek high ground in January of 2008 when the first cracks in the credit picture appeared, you were safe when the tsunami came ashore in the fall.  If, on the other hand, you viewed the water pulling back after SocGen and Bear Stearns as an opportunity to run out into what was formerly water-covered sand and pick up some “free fish”, well……

A real hero in my mind!

By Paul Handover

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.