The Dangers Of A Three-Year-Old’s Attention Span

“Hello everybody – welcome to the island of Sodor. Time to flip your positions’


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By John Richardson

MY three-year-old son has, quite rightly, an incredibly short attention span. A child of that age should be overwhelmed with the excitement of lots of wonderful experiences and possibilities.

But I would argue that some of those who write about and analyse financial and commodity markets should be able to retain a consistent thread of thought for slightly longer than it takes my son to switch from wanting to play Thomas The Tank Engine train tracks to screaming, stamping his foot and demanding a splash-around in the swimming pool.

There’s a lot more money riding on effectively playing the deception game these days, though – for example, $20bn was invested in the oil futures markets in the first half of last year compared with $8bn in H1 2008, according to a commodities consultant.

So the motive to talk up good news or amplify bad news from one day to the next is incredibly strong, thanks to a ludicrous waste of government money that should have gone into creating real jobs in real and worthwhile industries.

To give you an example, the world was all doom and gloom late last week on tightening credit in China, poor economic news out of the US and the wider implications of Greece’s government-debt crisis. Commodities prices across-the-board had been softening for several weeks.

And then on Tuesday of this week, whoosh – we had been saved by bullish global manufacturing data and manufacturers’ sentiment indices.

Oil prices, as a result, had bounced back by earlier today to $76-77/bbl from around $73/bbl late last week.

Benzene bids for March loading were at $965/tonne FOB Korea and offers for April material at $980/tonne FOB Korea at noon today, according to ICIS news.

Benzene had been assessed at $910-935/tonne FOB Korea by ICIS pricing on 29 January, $115/tonne lower than the week before.

This is not a criticism, by the way, of my colleagues at ICIS pricing as their job – and it’s a very difficult one – is to reflect the day-to-day shifts in sentiment in highly liquid markets such as benzene.

Short-term benzene price direction is increasingly being driven by erratic intra-day movements in crude – reflecting the huge capacity to gamble in oil futures. Every scrap of contradictory macroeconomic news and trade data is being seized upon to make a fast buck.

Perspective is what’s needed and a big, deep proverbial breath, provided by journalists such as those who write the excellent Lex column in the Financial Times.

In Tuesday’s column – on the release of all that bullish trade data etc – Lex wrote: “Surveys can be disconnected from reality. In the US, for example, the Institute of Supply Manager’s survey (the latest figures from which were very strong) excludes small companies and therefore half the workforce.”

If only all the front-page headlines on that same day had read something like “Surveys Can Be Disconnected From Reality”.

One can but dream….

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