Family Doctor

I remember we all had family doctors. They are a dying breed now. This note is not about the destruction of a venerable profession but about how those doctors used to treat us. Go to them with a fever and invariably one would get some white pills and a bottle of red colored water. I assume the white pills were some form of paracetamol. Even after 3 days if the fever did not subside then the doctor would prescibe some mild antibiotic. Even then if the fever did not go would he think of some blood tests and a higher drug. If the patient ever got impatient in the earlier stages of this process, the doctor would simply smile and remind him that it pays to let nature take its time.

Do you notice the similarities between this and the statements of Big Ben and Trichet. They have been treating the markets and economies for 2 years now with increasing doses of medicines. As the economies show no signs of improving they keep telling the patient that they have many more medicines up their collective sleeves which they will use at the right time. Till now, the markets seem to be responding to such statements positively. How long before the markets start wondering what is it that prevents these two good doctors from using those super drugs if they indeed do have it? Is it because those supposed drugs will destroy more than it cures? Or is it because those drugs are in an experimental stage and even they do not know what the net results will be? Or is it because their statements are simply a bluff and they do not really possess any more drugs? I do not know but in these times of instant noodles, I do not think that they have much more time left before the patient simply runs out of patience.

In the case of natural illnesses we knew in the back of our minds that it was sometimes indeed best to let nature take its time and were willing to give the doctor the required time to heal us. In the case of man made problems like the economies, I doubt whether time can heal it. We might actually be running out of it now.                                                                     I am now short on the market after Nifty broke below the first hour's low yesterday. The gap down has created a situation where my stoploss for this short trade is very far off. I will cut my short and go flat only above 5175 levels as of today. This level can come down in the coming days.