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The MacroTourist was stuck in bed all weekend with back problems - not fun, and sure made for a crappy Thanksgiving. But that wasn’t as bad as finding out the legendary Dennis Gartman was recommending a short Euro currency position. Given that the ‘tourist is short Euro against my dud of a long GBP position, having Gartman goocher the short side of my trade was terrible news.

For those unaware of Dennis Gartman’s reputation, let’s just say that Gordon Gekko summed it up best when he said, “Jesus! If this guy owned a funeral parlour, no one would die!” The financial twitter sphere loves to make fun of Dennis’ trading record. And I have to admit he appears to be the ultimate contrary indicator. The amount of ridicule Gartman suffers as his recommended trades inevitability sling shot back against him is almost painful. I often feel sorry for him. I am filled with pity until I remember that Dennis charges over $600 a month for his newsletter service and probably has thousands of subscribers. So as Dennis grabs a big tumbler and pours himself another glass of 20 year old scotch with just a dash of water, he is the one getting the last laugh. He doesn’t need our empathy regardless of how bad his recommendations are.

Although we all have bad calls (witness my foolish attempt to bottom tick the recent GBP plunge), at least Dennis and almost every other living human being can feel better knowing they are probably better than George Friedman at Stratfor.

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This 1991 tome is just typical of the “terrific” calls George makes. I know Wall Street fans all over Stratfor, but over the years, they have only cost me money. If Stratfor says something, it is almost money good to go the other way. Here’s another great prediction from August 2009:

“The probability of Bernanke being reappointed to the Fed is near zero,” Friedman said during an interview on CNBC’s Aug. 11 “Squawk Box.”

“Bernanke presided over the events leading up to the greatest financial crisis we’ve seen in quite a while,” Friedman told CNBC’s Steve Liesman. “The best that can be said is that he didn’t make it any worse than he already made it. The president is not going to be wanting to reappoint the man that most of the country regards as responsible for the problem.”

That near zero probability was hit when Obama reappointed Bernanke…

As I lay in bed digesting the news Dennis Gartman believes the Euro is heading to par, I wondered if maybe Dennis was “due” for a winner. After all, only Friedman can get it wrong each and every time.

I have been shocked at the violence of the recent decline in the pound. It sure has a panicky feel to it. And I am not talking about retail puking out their positions. Rather it feels like a big Central Bank removing it from their reserve balances.

Although I understand why a “better safe than sorry” attitude might drive short term decisions to just get GBP off the sheets, the market is thoroughly underestimating the problems in Europe. They are one vote away from the whole thing coming unraveled. Not only that, but their entire financial system is based on an unstable equilibrium.

Both the political and economic situation is untenable, yet because Britain is actually dealing with their problems and taking control of their financial destiny, the market is busy selling pounds and buying Euros.

Well, all I can say to that is, bought from them.

My back is still hurting, and I know today’s post is light on charts and actual analysis, but I just wanted to put it out there - maybe, just maybe, Dennis might get this call right. Maybe making fun of him and taking the other side of his short Euro trade is not the right play. God help me, but I am sticking with my position, and actually adding a little short EURUSD to the mix. I think the pound is merely a couple of months ahead of the Euro.

I will still take my time shorting the Euro, after all it is Dennis we are talking about - I am sure I will get a face ripping rally to sell into…

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Thanks for reading,
Kevin Muir
the MacroTourist