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Cross-Asset Cacophony

Posted by: Tom Keene on October 5, 2011

Stocks rose after the Financial Times quoted Olli Rehn, European commissioner for economic affairs, as saying there is an “increasingly shared view” that the region needs a coordinated approach to halt the sovereign debt crisis.

Regan & Nazareth, Bloomberg News

There you go again. Coordinated. It’s a shared view, and increasing. Consider the shorts stopped out!o

I have no clue on the vector of the “markets” other than to suggest that a VIX of 40.82 suggests a less-crowded trade and a mean, mean-reversion towards 20.50 sometime before Chris Christie runs for President of the New Jersey States of America.

Meanwhile, back at the data-check ranch….how to keep up, how to measure, how to gauge where you are?

Enter the cross-asset data check. Cross-asset means equities, bonds, currencies and commodities. For global Wall Street it is best sequenced currencies, bonds, commodities and equities.

I digress. Within the present VIX-above-40 ark, which animal should you follow? Connect the dots from state of equities (futures) to yield movement, 10-year and 2s/10s spread dynamics, to oil and gold delta to the tripod of EURUSD, USDJPY, EURJPY and the secondary noise of say DXY, copper and the 30-year bond yield.

Confused? Like your 201(k), it’s more art than science. It is, in a time of maximum epsilon, a cross-asset cacophony. Discuss.

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EconoChat captures Tom Keene's thoughts on economics, finance and investment. He is editor-at-large for Bloomberg News and hosts Bloomberg Surveillance and Bloomberg on the Economy on NYC1130, Sirius 129 and XM 130 and Surveillance Midday on Bloomberg Television. His complete interviews are at Tom Keene on Demand. Look for Tom on twitter @tomkeene

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