LookBack Securities look ahead – March 27 2011

March Market Madness –

Just like the final four – the worlds leading Economic themes are down to the final four of modern Finance: We have the Fighting Keynesians, lead by all star bleeding heart Paul Krugman. The Frugal Austrians, lead by Frau Merkel, who suffered a minor injury over the weekend.The Tea Bagger Surprise looks to be The Laffer Curves, with their tough cut tax & spend defense has proven hard to defend against. And last but not least, the Black Swan Grave Dancers, fresh off their successful Japanese shocker, always ready to get the crowd incited over something or other.

All four teams have a rather fickle following, depending on whether their fans are long or short, and can change teams at a whim. Adding to this confusion is the messages out of Europe & the Middle East this weekend, which to the best of my ability, comes down to the following:

Rebels winning in Libya: Good, Rebels winning in London: Bad

Wisconsin democrats, fresh off the Unions vs. Government mess, on seeing this weekends protest in London where secretly glad as hell that there’s no Ritz or HSBC in Madison

Meanwhile – the roles were reversed in Libya as news junkies stayed glued to Aljazerra or FOX watching various jets knock out tanks – not very sporting if you think about it – but I am sure a lot more fun than target practice with lasers.

The US dollar has seen been highly correlated to that of Charlie Sheen –  the recent dollar “Winning” is seen by FX players as short term at best, most likely a reaction to the news that its still worse in Europe than it is over here.

That said, the wild card for the week looks to be OB1’s address to the nation vis’a’vis Libya / Syria / Iran and all those other places that don’t like us, which could send volatility a bit higher in the currencies if he chooses to respect the coalition members wishes to remain anonymous  (at least Bush had Blair to joke around with, personally, I would need all the Jager in Germany before I would want to sit down with Merkle)

Other than that we have Treasury Auctions at the beginning of the week, followed by ADP & then the ‘official’ jobs number out on Friday. Could be a fair amount of window dressing / catch-up at month end if we start out strong tomorrow.

Please remember that it is month & quarter end this week, so expect overnight money to be tight as the banks play their month end hide-the-repo game with their balance sheets.

Good trading to all – and to all a good night.


About bohicaman

Former Trader, Risk Manager, CRO, COO, etc. Global experience in all forms of listed and OTC derivative markets Citizen of the world Resident of the USA Favorite color is blue
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