hiatus
no surprise here, but i am currently engaged in matters market related and doing much travel…should be back on deck soon!
awww, isn’t that cute…
I laughed when I saw this…reminded me of the ever-present, ongoing dance between equities and bonds.
I thought the kitten to be very much like the equity market. The German Shepherd very much like the bond market. And whilst the kitten is cute, it is also completely oblivious to the fact that the big dog is likely to monster it the second it wakes up.
In finance, as in nature, cute counts for very little. On the other hand, fundamental relations on the food-chain count for quite a lot. The bond market has very big teeth – and it’s usually about as friendly to equities as dogs are to kittens. Money flow dominates everything, and bonds have been expressing fairly notable displeasure at the party going on in equities.
Let’s see what happens next.
image courtesy of fffound!
credit derivatives in bankruptcy
The ever insightful credit slips has begun a great series of posts on the treatment of derivatives in bankruptcy; a topic of great relevance to anyone who has been / is a counterparty to such an agreement with Lehman Brothers.
Seems like more and more of these cases are going to pop up. Almost all of them will address some very interesting legal questions. Helpfully, the post explores some of the relevant issues and arguments by detailing the current action brought by the Chicago Board of Education :
[For example], the Chicago Board of Education has filed an adversary proceeding to stop Lehman’s attempt to assume and assign an interest rate swap under which Lehman is currently owed (after netting) more than $1.1 million. The swap was one of several the Board entered into in connection with a debt offering, and was to have run until March 2034, with a declining notional amount after 2017. As interest rates have fallen since the swap was signed, the swap has become valuable to Lehman. If interest rates had risen, Lehman would have been subsidizing the Board’s debt payments…
Essentially the Board is trying to develop a form of early termination that is not recognized by the Master Agreement (the “no payment termination”). A fine common law argument, but for the contract itself.
This bears watching. A ruling in favor of the Board would give non-debtor counterparties a huge windfall – essentially an option to ignore bad bets on derivative contracts simply because of a bankruptcy filing. That is an even greater power than the option to end the deal,contained in an ipso facto clause and now clearly enforceable because of the safe harbors.
I think this series of posts will reap handsome dividends for those who pay attention to matters credit. Plenty of actionable insight to be gleaned from the good folks at CS.
Sorry for less frequent updates – I have had some major travel to hack through. No promises, but may be able to begin stepping up the posting tempo soon.
testing for cointegration in R
I love R. I strongly encourage any trader with a statistical bent to climb the steep learning curve and teach themselves how to use this great statistical language.
I know I’ve sometimes found it hard to find good trader-specific “how to” guides on the net. However, this introductory guide to testing for cointegration by Paul Teetor (via Ernie Chan) is exceptionally helpful and clear. It should have you up and running in no time.
By the way, the little graphic here is from Mathematica, not R – though R has a great graphics platform all ts own. I think Mathematica is a truly amazing product, and highly encourage its use – once the basics are down, it can become your own home thought-experiment laboratory. Its visualisation functions are incredible.
For those bereft of funds, you can get a watered down version by using its nephew, Wolfram Alpha, on the web.
Enjoy!
can’t stop the huddle
These “huddle” stories in the Journal made me laugh. Once again we’re expected to believe that poor, innocent institutional investors are being screwed by the GS gang. This time the culprit is not some funky algo, but rather the manipulative and sinister weekly trader / analyst “huddle”. Given recent trends in financial journalism, I don’t think this sounds nearly sensational enough…it would be far more titillating if the subbies replaced ‘huddle’ with ‘cabal’. Anyway, I’m straying off mission. Here’s a couple of quotes to kick off the discussion:
Securities regulators are examining weekly meetings at Goldman Sachs Group Inc. in which research analysts give tips to traders and then to big clients, as the Wall Street giant considers disclosing these so-called trading huddles to all its clients…Examiners at the Financial Industry Regulatory Authority, the industry self-regulatory body known as Finra, and the Securities and Exchange Commission intend to ask Goldman for more information on these weekly get-togethers, people familiar with the matter said…
In the Monday Journal article, a Goldman spokesman said ideas that arise from the huddles are simply “market color” and “always consistent with the fundamental analysis” in published research reports. “Analysts are expected to discuss events that may have a near-term or short-term impact on a stock’s price,” he said, even if that is a different direction from an analyst’s overall forecast. Goldman’s published research reports include a disclosure that “salespeople, traders and other professionals” may take positions that are contrary to the opinions expressed in reports. But the firm doesn’t disclose the trading huddles.
It’s a quiet news cycle when one of the most banal aspects of trading floor life becomes news. Worse still, has anyone at the SEC actually logically considered this situation? If these kind of meetings are considered worthy of regulatory intervention then surely – when taken to its logical extreme – the whole concept of the sales morning meeting must count as racketeering?
Actually, come to think of it, that’s not a bad proposal….
Anyway, I believe there to be a number of good reasons why the SEC, FINRA, and/or your mother-in-law need not care about the deadly trader analyst ‘cabal’. Indulge me for a while:
Reason 1: Traders and Analysts Don’t Mix:
These stories miss a hugely important point: there is an inbuilt safeguard against abusive “tipping” – the relationship dynamic between traders and research analysts. Quite simply, many institutional traders find analysts to be harmful both to sanity and P&L. More often than not, traders will go to unusual lengths to avoid analyst crap – after all, the idea of trading is to try and actually *make* money – a concept somewhat lost on analysts (google scholar has a ton of examples. See this academic study from the FAJ as an example).
Secondly, I find it hard to believe that analysts actually *want* traders to take their tips. Doing so forces analysts to make falsifiable predictions – not their strong suit. Worse still, making a strong call to a trader might leave the analyst with some kind of performance track record – again, not something the vast majority of analysts are keen to embrace . In my experience analysts tend to hem and haw around traders quite a bit; they are often decidedly unconvicted about their ”conviction” ideas.
In fact, I think it’s only a slight exaggeration to say traders in a typical bulge bracket are probably just as likely to fade an analyst pick as to run with it. On the other hand, the salesforce usually love analysts – the presence of research bodies prevents sales people from having to do any homework of their own. This conveniently frees up a considerable amount of time for the sales team to do their hair, practice tying their double windsor knots and chase their PA’s to process their expense claims from Daniel. This neatly leads to my second reson.
Reason 2 – Broking Runs on Volume – Not Necessarily Quality – of Ideas:
Follow the logic with me: Banks love commission businesses because they generate reasonably risk-free revenues. One of the most fruitful commission businesses is institutional broking. Hence sales MD’s want their minions writing tickets 24/7. Of course, selling an idea to the buy-side actually presupposes the existence of an idea worth marketing. Unfortunately, sales minions aren’t known for their propensity toward independent thought, so the bank pays people to do the thinking for them. These poor lost souls are known as research analysts.
Research analysts believe themselves to “add value” to the investment process. They also have the luxury of never really having to face the consequences of opinions gone wrong, although some banks incentivise their analysts with a P&L. On the whole, their lot is to produce fairly boilerplate reports with boilerplate financial models adjusted for a few industry specific metrics. Of course, such “value adding” research takes time, so these reports are produced relatively infrequently. The sales minions, however, have to play a numbers game to justify their existence. More calls = more potential business. Therefore, to have a reason to call their clients, brokers need a constant stream of ideas to jam down PM’s phones and Berg MSG screens. Thus they constantly pester analysts to “give color” on some obscure non-significant bit of fluff. This is the true reason for the “huddle”.
So the scam isn’t (so much) in the content of the research or timing of its dissemination; no, the real scam is the Vig the banks extract via promoting overtrading thru research. Banks like brokerage revenue -> brokerage comes from writing tickets -> tickets comes from call volume -> call volume comes from idea generation -> idea generation supposedly comes from analyst research -> research notes are static, while opinions are dynamic -> clients like “new news”, not 3 week old models -> the practical workaround is the “huddle” (apparently).
So, let’s not conflate “trader” with “salesforce” or – worse still -that most curious oxymoron, the “sales trader”. Equally, let’s not conflate “research” with “colour”. The two are separate things and a question of common sense, not legislation! Learning about a rating change before the piece is published is clearly wrong. Hearing opinion from an analyst on some insignificant widget news is not. Price sensitivity should be the rule of thumb..
Reason 3 – Prop Desks Don’t Need Sell Side Analysts:
Were these inconvenient realities not damning enough the “analysts tipping off traders” concept is especially laughable at GS. Everybody on the street knows that the main GS prop trading activities are warehoused in specific teams: GSPS in equities, the SSG’s / PIA in debt/property/PE, the various quant desks and so on. Equally, everyone knows that these units have their own groups of top-flight researchers and analysts…why would they need the sell-side guys? If you really want to talk turkey on conflicts, compare the views of the sell-side guys with the buy-side desk research.
Reason 4 – You Get What You Pay For:
These articles seem to take issue with the fact that certain clients get better access to analysts than others. Well, duh. This is not a problem in almost any other professional advisory situation. Law, accounting, medicine…dare I even say it…management consulting all work on this model. You want a better opinion, you pay more to get access to it. Same in broking. The issue here is whether the analyst spouts off one thing to good clients vs something else to the regular schmoes.
If a Government agency really wants to help prevent the hapless corporate world succumbing to piles of BS, they should really regulate much of the fluff produced by the good folk at McKinsey, Bain, BCG et al. Witness the following tongue-in-cheek prod at Bain, courtesy of Leveraged Sellout :
live from berlin
Well, something a little different today…. You’ll notice I’ve given a link to the Berliner Philharmoniker’s Digital Concert Hall in my essentials section. If you love music, you will go and visit.
The concert hall allows you to watch Sir Simon Rattle and the Berlin Phil either live in concert or in archived recordings. The DCH also has extensive interviews with conductors and performers for most all of the performances.
You don’t even have to be Steve Schwarzman to afford a subscription: I subscribed last year for the full season and it was easily the best EUR149 I have ever spent. They also allow you to purchase a single concert – or even a single piece – for just EUR3.
For the record, the quality of the DCH is brilliant – hook your laptop up to your TV with an HDMI or DVI cable and make sure your home theater is on full blast; the experience is breathtaking.
Simon Rattle explains the move in a clip I’ve posted below. He actually makes some interesting comments on the technology and the philosophical underpinning of why they’re going digital. In short, he feels that art is going to be another service piped on demand into our homes – just like water, gas, electricity etc. Reflecting on it, I think he’s right: Apple TV has already convinced me to kill movie channels and physical DVD rentals at introspectica HQ. Still, nothing will beat actually rolling up to a concert hall and being fully absorbed in the process.
You can view some highlights from last season at the BPO’s YouTube page.
lovely liz
More news circling today about Elizabeth Warren and the COP.
She’s a very clever lady and a great scholar – no two ways about it. To add to her many achievements, she’s done a great job digging through the wreckage of the credit crunch and I heartily applaud her work on the COP.
I think one can only understand Ms. Warren’s aims with the whole TARP / COP oversight process if they understand her academic views…something that probably hasn’t received much play in the media. Fair enough – uncovering that view only comes by researching her past academic work in bankruptcy law – a topic not known for its page-turning qualities. However, you can view much of it at her SSRN page.
A couple of key pieces stand out in particular as the key to the Warren lock (especially a 1987 article called “Bankruptcy Policy” from the U Chicago Law Rev – unfort not on SSRN). If you’re less inclined to spend your commute wading through papers, you can get much the same effect by looking at her interviews on matters such as Enron. The net-net is that Warren has previously argued that bankruptcy law ought to reflect more than just pragmatic issues of priority and security. She suggests that bankruptcy must take into account more subjective issues; if memory serves, she picks issues such as workers rights, or the impact of bankruptcy on a community’s largest employer. The essence of her reasoning is that those sorts of issues may be equally important for consideration in the financial graveyard; that it’s almost immoral to just fight over who has the “right” to a given piece of the carcass.
My own particular opinion on the merits of that view are meaningless; but I know her work has received fairly significant and sustained critique from within academic circles (especially from Douglas Baird). More often than not, I think her detractors would argue that she’s too concerned with the community aspects of bankruptcy at the expense of understanding the harder economic issues at the center of borrowing and lending. For what it’s worth, I would echo those sentiments when it comes to bankruptcy law and policy – but not when it comes to oversight.
So how does this all relate to her TARP / COP role? I think it is very positive for the American taxpayer. As always, she’s gunning to make sure the ordinary man doesn’t get screwed and, as it’s the ordinary man who has the most to lose here, we should all be pretty thankful she’s running the show. If there’s something fishy, she’s going to get pretty close to finding it. It’s evident in her reports, evident in her guest blogging and evident from those who’ve seen her doing her thing in Detroit . She may not be your best friend if you’ve got super-priority in LEH. Nor would you be particularly thrilled to find out she’s managing your distressed-debt fund…but she surely is the person you want arguing your case if you want to feel confident your tax dollars aren’t entirely being burned on fluff.
And now for something completely different: thanks to all who stopped by to read signal vs noise. Your comments, emails, links etc were all very much a surprise; and greatly appreciated. On a similar topic, I’d point you to a great post by Emanuel Derman over at his blog; always very entertaining, but I loved this line in particular:
EMH, if you don’t take it too literally and get carried away about axiomatically defining strong, weak and other kinds of efficiency as though you were dealing with axiomatic quantum field theory, does recognize one true thing: that it’s #!$*ing difficult or well-nigh impossible to systematically predict what’s going to happen. You may think you know you’re in a bubble, but you still can’t tell whether things are going up or down the next day
Of course, someone of his intellect only takes ~200 words to say what I did in 1500!
signal vs noise
I’m a fairly prolific consumer of market commentary – brokers, research houses, blogs: you name it. However, it must be said that there is a lot of dross out there. In fact it amazes me how many blogs gain traction with mainstream news agencies; even when the material they offer is clearly salacious, sensationalist bollocks. I would’ve thought the offending news agencies and trading desks knew better.
Anyway, it’s fairly obvious to a professional trader which gunslingers in the blogosphere know their stuff (e.g: AccruedInterest) and which ones don’t (I’ll resist the temptation). For a pro reading another pro, “insider” status shines through clearly . Credibility is also fairly easy to adduce and ascribe. Yet there are several high profile blogs where it seems the authors have had very little exposure to the pointy end of a trading turret. And, worse still, those authors garner more audience than the guys who know their stuff! Yet, if you don’t trade or invest for a living, it would be well nigh impossible to glean which sources are worth listening to and which ones are…a little over-exuberant and suggestive. I don’t have a perfect answer but there are some techniques to help distinguish signal from noise. Read on…
Market Pundits vs Delphic Oracles
The Education of a Speculator (EdSpec) provides a helpful discussion of this very issue. In a chapter entitled “Delphic Oracles and Science”, the author – Victor Niederhoffer - sets out to debunk many of the methods commonly used by commentators and newsletter pundits to persuade the hapless fool of their sagacity. Never one to shy away from a brilliant bit of original research, Niederhoffer compares our current market charlatans to the Oracles of Delphi in Ancient Greece.
For those not au fait with their Classics, the oracles were mystics who provided “forecasts” and advice concerning future events. For nearly 2000 years, the Oracles were greatly respected and highly sought after by kings, military leaders and citizens alike. Unfortunately for the truth seeker, the oracles set forth were formulated with utter ambiguity. Indeed, they almost never contained any sort of actionable, predictive information. Should the prediction have panned out poorly against reality, whatever was predicted was then easily manipulated to maintain the illusion of foresight.
Citing an historical study, Niederhoffer categorises and quantifies the prophetic ramblings of the priestesses. 40% of oracles were simple statements, 30% were commands, 25% were prohibitions, 3% were non-predictive future statements and only 2% gave some kind of clear, falsifiable prediction. Helpfully, he provides a table of direct comparisons between both market and delphic oracles on page 64 of EdSpec. I thought it helpful to reproduce it here:
| Oracles vs Bloggers | ||
| Type | Oracle | Blogger |
|
Command |
Where the old men have long taken baths, and where unwed maidens dance in chorus to flute accompaniment, in the halls of womanish men, worship Hera |
Reduce your investment in bonds by 5% of your portfolio and increase by 5% your present investment in precious metals stocks |
|
Statement |
The gods forgive all uncontrollable acts [ said to a priest who got drunk and had intercourse with a woman ] |
Volume is very bullish. The stock markets rises on rising volume |
|
Prohibition |
Restrain yourself, Roman, and let justice endure, lest Pallas bring a mightier war and empty marketplaces upon you and you return home with loss of much wealth |
It is so far from its 50-day moving average (29) and its 200-day (18) that it’s just too risky for my taste |
|
Non-predictive Future Statement |
If he [Kallastros of Athens, who was fleeing a death sentence] goes to Athens, he will obtain the laws. [He went, and was executed] |
We bought XYZ at 24. (current price 14.25 – a 38.4% loss) XYZ fell on meaningless news that the company may have to pay $100-$200 million in compensatory damages for breach of contract. XYZ’s CEO has called the ruling “absurd” and has filed an appeal |
|
Clear Prediction |
Honorius will have a glorious reign |
Given ideal upside targets and these support levels, the Dow should fall at least 91.5%,, but no mre than 98.3% from its high |
Source: V Niederhoffer, The Education of a Speculator, 1997, John Wiley & Sons, p.64
Sound familiar? I thought so, too.
Niederhoffer goes on to give an extensive critique of these methods. To him, the solution lies in the use of the scientific-method as a myth buster. For one, I can attest that such critical analysis is certainly a great deal better – both for the soul and the P/L – than blithely accepting the untested assertions of others. Unfortunately, it seems many pundits successfully ply their trade by deliberately avoiding such methods altogether – and find an audience all too willing to believe their hype.
At bottom, the simple fact is that many market bloggers and commentators make statements and predictions that are so vague as to be completely non-testable . By operating in such a manner, they provide for themselves a delphic illusion of credibility. They have, in the formulation of their conjectures, hedged themselves from almost any outcome that might make them look less than brilliant. Don’t believe me? How many services, researchers, traders or blogs do you see posting audited returns of the outcomes of their ideas (along with their exact entries, exits, costs etc)?
Worse still, almost without fail, all such stories seem to follow the same formula. The alleged perpetrators of market violence are shrouded (and perhaps even venerated) in a type of secrecy and elitism far beyond their merit. Such treatment must make the gang at eighty-five broad feel significantly sexier and more important than even they had previously countenanced.
My personal view is that these stories are really just another strain of barely disguised class warfare. Most of it is veiled in fairly disingenuous ad hominem attacks. The rest is presented with a few Bloomberg graphs and some kind of “statistical” proof. Don’t believe me? How often have you been presented the following picture? The extreme and unfettered malfeasance of a crafty, white-shoed, Ivy League brainiac (armed with all sorts of Secret Trading Weapons™) over against the innocent and hapless ES punter or main street taxpayer ( who, of course, is armed with nothing but goodwill, an IRA and an IB account). Give me a break…
I would hypothesise that the vast majority of individuals in the market lose money once costs are factored in… we certainly know that most fund managers struggle to beat the index every year. I feel equally confident that result would hold true in almost any era, not just the last 18 months. The real story is the laziness and unwillingness of people (lay and professional alike) to take responsibility. People simply don’t do homework and research commensurate with the risks they take.
As I mentioned earlier, Niederhoffer found it best to hold such people accountable under the scientifc method – observation, classification, measurement, hypotheses and testing; it’s not perfect, but it sure as hell beats the pseudo-science and breathlessness of the alternatives. Don’t get me wrong, I think many blogs have uncovered some very important, very real, very concerning aspects of market microstructure and economic policies. But I fear the signal from the informed few is now giving way to the increasing noise from the peanut gallery.
How to Spot the Charlatans
So what are some giveaways for sites and commentary you should avoid? If any of the following appear to be typical of your favourite commentator/ newsletter / broker / analyst / research service, take your wallet and move as fast as possible in the opposite direction:
Irving Langmuir’s five symptoms of pseudoscience (quoted in EdSpec, p.77)
- The maximum effect that is observed is produced by a causative agent of barely detectable intensity, and the magnitude of the effect is substantially independent of the intensity of the cause
- The effect of a magnitude that remains close to the limit of detectability; or, many measurements are necessary because of the very low statistical significance of the results
- [There are] claims of great accuracy
- Fantastic theories contrary to experience
- Criticisms are met by ad hoc excuses thought up on the spur of the moment
Vic then translates these symptoms to the market as follows:
- Appeal to authority
- An absence of counting
- A framing of predictions in a form that cannot be tested
- A tautological prediction guaranteed to be true under almost all conceivable circumstances
- No allowance for chance variations; any randomly formed groups exposed to varying conditions will show differences in means and variability. But the differences can be due to sampling variation rather than the true effects of the conditions. That is what statistical analysis is about
- A paranoid mien
- Disregard of alternative explanations
- Self-evaluation of accuracy
- Retrofitted systems
Returning to the Classics, we find Croesus ignored these warnings to his peril. After testing six of the best known Oracles, Croesus once inquired of the oracles, “Dare I go to war, to challenge the growing might of Cyrus the Persian?”. The answer came back, “Croesus crossing the Halys will destroy a great empire”. Niederhoffer comments on the result:
“True enough; the trouble was, Croesus’ empire turned out to be the one that was destroyed. When Croesus sent an envoy to demand an explanation, the Pythoness took the offensive. “Nor,” said the oracle “has Croesus any right to complain…He ought, if he had been wise, to have inquired which empire was meant, that of Cyrus or his own; but if he neither understood what was said, nor took the trouble to seek enlightenment, he has only himself to blame for the result.”
introductory introspectica
What makes you tick? Do you ever really think about it?
There are a lot of superficial answers; we can all point to people, items or situations in our lives that provoke a certain type of deep response. Of greater importance – at least to me – is why we have those responses at all. What is it about a situation, a relationship or a particular object that has the ability to elate or crush us? Why are we so torn between head and heart? Can we deal with uncertainty and its associates in a rational way? How can one get equally passionate about both the deeply scientific and the profoundly theological – sometimes at the same time? The underlying ethos of those questions is, at bottom, the key theme of introspectica. introspectica is a celebration of the non-linearities and complexities of life.
From a slightly different angle, my aim is to garner some insight on the relationship between the rational and the aesthetic by watching how they play out in various domains – I may even attempt the odd synthesis along the way. My plan is to explore and tease out some ideas by writing a collection of essays, brief commentaries and reviews that – to varying degrees – look at different aspects of life at the sharp end of the knife.
Most times you check in here, you might find a short piece that discusses a current event or perhaps reviews some cultural item – a little bit like notes or journal entries; it might be about a movie, a restaurant, a book or a scientific idea…anything really. Other times you may find a fairly lengthy spiel about something market related (i make my living in the market). In short, the notes will be entertainment value. You are just as likely to find a good idea for a trade as you might a good wine recommendation or inspiration for some opening gambit in your next conversation. Who knows…
Every now and then, though, you might log in and find a feature essay. These essays will, I guess, be the culmination of all the prior notes and reviews. I plan to be fairly eclectic in the topic range, but the over-riding themes will usually be the same. I hope that’s where you will find the good stuff that makes you think: time will tell.
Being a buffoon by nature, I plan to have a little fun along the way as well. As one of my great guiding lights, Nassim Taleb, writes at his website, “My major hobby is teasing people who take themselves & the quality of their knowledge too seriously…you may not be able to change the world but can at least get some entertainment & make a living out of the epistemic arrogance of the human race“. So, in that spirit, there will be more than a little bit of light-hearted scathing going on here as well… there aren’t too many places on the web where you can find a synthesis of the philosophy of Taleb with the humour of Will Ferrell, but this might be one of them 
.
The last part of commentary will be the technical. As mentioned earlier, I work in the market, so you have a better than even chance of finding the odd Bloomberg graph, a swatch of code for R or Mathematica or discussions about the philosophical problems of trading. Every now and then, I might also poke some fun at the ridiculousness of faux elitism in investment banking culture…I’m only human after all.
Finally, a little bit of disclaimer. I realise that it’s the height of arrogance to assume that anyone might actually want to read what I have to say: so be it. I’m starting this from scratch as a bit of an outlet for my thoughts so, if it takes an audience, fantastic. If not, I’m equally fine with that. If you do read this, I hope you comment along the way…comments will remain private, but I will do my best to respond individually where merited.
PS: Why the Paris picture? It will become clear over time, but let’s start by saying it’s a great example of a city that combines the rational and aesthetic in many ways….more on this later.
paris, fashion week and pierre soulages
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I love this city – it’s so cliche, I know, but Paris really is magnificent – even after the umpteenth visit it still resonates with an energy that captivates the aesthete within.
On that note, I caught an article in the weekend FT about Pierre Soulages and his “black art” currently showing at the Pompidou Center. Now, visual art has never captured my imagination – I guess I’ve never found a work that “speaks” to me the way that say Beethoven, Bach or Rachmaninov do – but reading this article piqued my curiosity. I hit up some of his work on Google images and, perhaps for the first time, found some art that really grabbed my attention: these works have a visceral – but thoughtful – hard edge to them that I find very appealing. So much so, I may make my first voluntary visit to a gallery while I am in town.
I also enjoyed reading some of the thought process behind Soulages’ work – especially the process by which he came to discover and refine his technique:
and
That whole contrast between light and dark – and the concept of light emanating from darkness – seems quite compelling to me. For some reason these seem like particularly appropriate pieces to go in a trading room…is that total sacrilege? Anyway, I will try and get along before heading back to London…
Actually, this is how the classical music bug bit me: more or less by accident. Maybe art will finally get a run in my (desolate) cultural repertoire? Any suggestions from those in the know would be very much appreciated (introspectica – at- gmail) For those who have interest in such things, masteroftheuniverse has a prodigious collection that he loves dearly and writes about reasonably often. His commentary will, no doubt, provide great pleasure to those who share his passion.
On a final art-reated note, It seems I’ve arrived for the end of Paris fashion week. introspectic-ette is with me, and I think she will enjoy trying to catch some of the events surrounding Madames Wintour and Coddington’s agenda-setting junkets. For me, this is an entirely painless proposition; models are an art form that I have very little difficulty appreciating!
The current state of the market still makes me nervous, though the past few weeks have been very profitable ones. Many of the correlations I routinely use to find good setups have returned after a period of complete uselessness. I must say, chatting to different fund managers and brokers – especially those of the high yield and municipal fixed income variety – has yielded some interesting insights: the wild moves seen in high yield seem to largely come from guys not being able to sit on the sidelines anymore. I suspect the same is also true of the equity market brethren. I am debating the level of action I’m willing to take the next few weeks. Part of me thinks it is worth staying on the sidelines for all but the most pure and automated arbitrage situations. Certainly the circus of earnings season will mess up any kind of non-quant style trade I would otherwise have on. Anyway, enough of such mundanities.
So – my brief respite by the balcony in my hotel room draws to a close – the rain has disappeared and it is time to enjoy another stroll around the city. Looking forward to this evening while Paris is all lit up….more light out of the dark.
Written by introspectica
October 10, 2009 at 2:07 pm
Posted in Commentary, Editorial, Uncategorized
Tagged with art, credit markets, fashion week, high yield bonds, paris, pierre soulages, pompidou center