"I have the sense that in the last 10% of the short term credit cycle, their focus slowly shifts from the value machine ( where they have extracted every last drop out of the expansionary phase), to the cycle machine where they aim to preserve capital and in some cases extract as much as possible out of the short contractionary phase, in ultimate preperation for commencement of the next expansionary phase where they switch their value machine back on to full power."
That all hinges around the critical presumption that they know where the last 10% of the credit cycle starts and ends.
If they have a proven ability to get that call right on a sustainable basis, then they are indeed the most rare of creatures.
Why, not even the smart folk who are ostensibly the smartest guys in town - the ones who actually push and pull the levers on the credit cycle, viz., the economists at the Federal Reserve - can get it right: six months ago they were zigging, today they are zagging.
But either way, what chance have us mere intellectual minnows of getting right the call on the turning points in the credit cycle?
"Maybe it should be something like "timing the market is a mugs game until the market calls time"
Again, there's that implicit presumption that when the market is going to call time is something that is able to be known.
