Category Archives: Past the Post


The former chief executive Chuck Prince hit the nail on the head with his astute observation in 2007 that “as long as the music is playing, you got to get up and dance.”

And, bar minor ‘wobbles’, the party has now been in full swing for the last 6 years – virtually without any interruption. The markets have, of course, long been completely detached from any economic fundamentals and, indeed, the rising threat of geo-political risk. Herd instinct, or to use the more academically minded term “pro-cyclical behaviour”, has dictated the direction of equities and bonds since the collapse of Lehmans in 2008. Fuelled by well-orchestrated and beautifully-timed injections of heroin (also known as QE), followed by a subtle, almost unnoticeable switch to methadone (also known as QE in disguise), the champagne has been kept flowing and the partygoers, drugged up to their eye balls, happily raving along. And who can blame them? After all, with a guarantee of a virtually unlimited supply of cheap finance and the promise by policymakers to keep up clearing any potential mess, there seemed little point of betting against momentum: Surely a contrarian play too far?

So what’s all the current fuss about?  Tabloid headlines screaming “Market turmoil causing panic amongst investors” and at the same time “professional advisors” urging market participants to “hold their nerve” and to stay “calm and rational” have badly unsettled the revellers. One of the most hilarious comments that of Patrick Connolly, financial planner at Chase de Vere: “If your investment strategy was right before this recent bout of market volatility, it is probably still right for you today.” Or in other words: Let’s keep f******* up!

But then, why worry when the world’s central bankers have once again united, offering reassurances for interest rates to be kept at historically low levels as long as need be and this helping to boost declining sentiment. The message to investors is clear: No party poopers, please! The steady drip of methadone with the occasional ecstasy pill thrown in for free, should continue to keep the jamboree going for a while yet. However, when the music does stop, the Betty Ford Center will be a crowded place.

A Short View and a long party!

Today, James Mackintosh of the FT, published his third successive ‘Short View’, analysing in great detail the current stock market turmoil. As one would expect from the author: Extremely well-researched and convincingly argued. All this on the basis of fundamentals and charts. But then these have been ignored for a hell of a long time: The ‘herd instinct’ prevailed or, to use the new more ‘academic’ and benign sounding term: “Pro-cyclical behaviour”. In fact, what seems to matter more than anything in today’s post-Lehmans markets is sentiment. It’s all about sentiment! Is this finally turning or just another false alarm? Well, perhaps the party really is over? It would have taken a very long time, indeed!