May

7

 One of my martial art instructors emphasized when facing an adversary a practice of never fixing your eyes, focus, or thoughts on any one specific attack. The thesis is that attention to a particular area leaves you vulnerable to secondary attacks. For example, when you are solely fixated on a potential blow to your right rib cage the real threat might be a spin kick to your head. The attention to one area delays both your reaction time and distracts your mind from other threats. Rather, the objective is to deal with the opponent in a more general sense, using peripheral vision and react spontaneously. Years of practice hone these skills to a point where they are intuitive. A chess master will recognize patterns on the board in similar fashion.

In fact, the saccadic movements of our eyes compress time subjectively. Saccadic eye movements as described by Neuroscience magazine are "rapid, ballistic movements of the eyes that abruptly change the point of fixation…..Saccadic eye movements are said to be ballistic because the saccade-generating system cannot respond to subsequent changes in the position of the target during the course of the eye movement. If the target moves again during this time (which is on the order of 15–100 ms), the saccade will miss the target, and a second saccade must be made to correct the error." . Scientific work by Concetta Morrone, John Ross and David Burr and others have shown that subjective time and space are compressed prior to saccadic eye movements. The remapping process of the brain is the likely cause of the distortions in time and space.

The lessons can be carried to the markets. In terms of multiple attacks and space compression a few things come to mind. The combination of factors such as the FOMC meeting in March, market positioning, sentiment, and economic data in Europe, Greece, and the United States that may have contributed to the recent selloff in the US dollar The rise in interest rates over the past fortnight and the feedback mechanisms and knock on impact to other markets. In terms of space compression others come to mind. The similarities between bond market reactions and timing to quantitative easing's actual implementation in both the US and Europe. In terms of the future how might similarities between the old Argentine Peso peg to the dollar at 1.0 and the current Euro currency regime play out?


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