Recap 4-15-13: Terrorists Suck


Wow, Terrorists suck. My lovely wife ran the BostonMarathon a few years ago. I was at the finish line with her, so I have a personal recollection of the scenes there. It’s hard to come to terms with the alternating feelings of anger and sadness. At times like this, it’s easy to feel that torture is acceptable.

Trying to move on to markets – obviously, we got deleveraging galore today. The gap-piness of some moves today at odd times was somewhat disconcerting, especially going into the close. The price action today undoubted will have a substantial impact on intermediate term investor sentiment.

Having said that, there is a possibility that things stabilize a bit here, at least for a short while. Multiple assets are now near reasonable intermediate term support here. The S&P is near the 1550 level that has supported downside over the past few weeks. USDJPY, at 96.5, is now near the March highs. Front month Oil futures are sitting at the lows which held throughout 4Q.

Furthermore, these exogenous events that does not impact aggregate growth or monetary policy tend to be short lived. 9/11 is not the best comparison, since the US economy was already in a recession then. But Katrina, and well before that, the Oklahoma City Bombing, were both broadly non events with respect to asset prices.

The goal of the terrorists is to disrupt the lives of American citizens, and to maintain an atmosphere of fear. Well, they are not going to win.


  • NAHB Index dropped to 42 in Apr vs 45 exp and 44 prev
  • GDP in China increased 7.7%, below expectations of 8%. Industrial production increased 8.9% y/y versus 10.1% expected. Fixed asset investment increased 20.9% versus 21.3%
  • JPM said positioning in Japanese equities has become extreme. Foreign ownership is at 28%, close to the all time high in 2007.

Upcoming Data:

  • Tue: UK CPI, German Zew, US Housing Starts
  • Wed: BoE minutes, UK Jobless Claims, BoC, Japan Trade Blance
  • Thu: UK Retail Sales, US Jobless Claims, US Philly Fed,
  • Fri: Canada CPI
  • Mon: Canada Existing Home Sales, China HSBC Flash Mfg PMI