Moby Dick, from Victor Niederhoffer

March 6, 2008 |

In Herman Melville's Moby Dick there is a fine chapter about the monkey rope. Many of us are on a monkey rope with others where their fruitfulness and indeed life force are intimately tied with another both going up or down together. I wonder what markets or components are tied on a monkey rope together these days. The bond insurers and the banks comes to mind. The bonds and the stocks always. The dollar and the grains. What else comes to mind?

Jim Sogi:

EU, Japan, US at varying times.

I would often jerk poor Queequeg from between the whale and the ship-where he would occasionally fall, from the incessant rolling and swaying of both.

Monkey ropes from todays news: The drop in crude futures dragged gold along with it just as the precious metal approached a record near $1,000 an ounce. Dollar also turned higher against the yen late in the day as U.S. stocks trimmed losses.

Matthew Alexander:

Gold and oil.

Lon Evans:

Gold is, and historically has been, a hedge against the perfect irrationality of the human genome. Oil, relative to history, is but an infant in the same game. At no time in recorded history has a commodity been susceptible to the geometrical acceleration of an intelligence necessitated by the very same genome.

John Tierney:

We all share, and live or die in the market, by the same components: fear and greed. We all possess an abundance of both and the really fortunate make it back on deck alive and whole. But Melville's real point here is not how skillfully we joust with Fate and, if fortunate, prevail. No, the message is what we can expect as a reward; certainly not a fine cognac, but a dismal flagon of ginger. Surviving the monkey rope is its own reward, indeed a great conquest just in balancing two such powerful forces.

Should we expect more? And if we get more will we not risk it all again tomorrow? For what?

Andrea Ravano:

Stocks, and currencies such as Aud and Nzd.

Denis Vako:

It would appear that roughly speaking it is Commodities vs Financials, and East vs West.

Sam Marx:

Fuel Oil Prices and Airline Stocks

Pitt Maner III:

Oil Prices vs. Drill Rig Count, Oil Service Companies

Economic Slow Down, Stress — Cold and Flu, Defensive Stocks, Funeral Service Companies

Consumer Spending as a case of Melville's Bartleby — "I would prefer not to".

Alan Millhone:

Ahab knew the value of Gold and so did his crew: on board ship while chasing the great whale, Ahab took a Gold coin and nailed it to the mast for all to see.

Phil McDonnell:

Some more coterminal monkey ropes. Things lashed to the Dow Jones Transports include: bonds, notes, oil, the yen and VIX. The aforementioned all are lashed in a negative sense. Surprisingly oil services are lashed positively along with most world stock markets and financial services.

Tied to the S&P we have oil services but not particularly oil itself. Naturally most stocks are tied together with the S&P - no surprise there. But one finds that US paper of substantial duration, VIX and the yen are negatively linked.

Riz Din:

Commodities prices and currencies. I'd previously looked to the commodity prices to get a better handle on the likes of CAD, NOK, AUD and NZD. However, according to a recent paper by Ken Rogoff summarized in the WSJ, I may have been looking in the wrong direction, and it is currencies that provide predictive insight on the commodities, not the other way around.

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