This might sound like superstitious nonsense but these things have been very good to me. Like picking the '87 market crash - my wife got call from her mother all a flutter with their new, huge and unexpected paper wealth from the share market and I instantly understood that this was THE END. And I had a new share market tool called 'the mother-in-law index.' Kind of like the 1929 legend about Rockefeller the Elder being touted RCA between floors at $125 a share by the bell-boy.
Sure enough about three days later the punters were sweating blood as their retirement dreams evaporated. Similarly the 'tech wreck' - I was working on construction in a Sydney high rise and the lunch room conversation was about share holdings. I knew- again - and said 'This is the first job I have ever been on where the tradies ever mentioned or even had share market holdings. This is the top of the market and you are all going to get your arses burned." They were not impressed in the least. But again, within the week and they had.
So that's the thing about prophecy. It's about marketing the desirable, and anyone who actually knows anything can't get a look in because public approbation is made touting high cotton in the sweet bye and bye.
This time it was an offer whereby I, little Joe Bloggs can now trade OTC derivatives for $10 a pop against the likes of Goldman Sachs, the 'Vampire Squid' and fabulously wealthy Fed-backstopped Morgan-Stanley with their hundreds of young computer jockeys with Nobel laureate designed 'black box' trading programs that operate at the speed of light. And further - there was no counterparty risk (which of course is the faint possibility you and the markets might break someone's bank and thereby go hungry yourself 'cause they won't be able to pay you) because the originators of this 'trading platform' who would collect my $10 were themselves the counterparty issuing their own 'synthetic' derivatives as required; priced as per the 'real' ones.... its not just 'whew, that makes me feel so much easier about it' but yes! the void in the plexus aka greed or lust, like maybe there really is something in this for me. Anyway, his obvious confidence in the face of mere $10 commissions suggested that perhaps I was in line to be plucked as well as serviced.
When they get to me it is the final barrel-bottom scrape for patsies. OK I haven't yet been touted to by the mail lady but there is a quadrillion nominal dollars 'worth' of this crap out there somewhere, on a million corporate books; hanging over our heads waiting to bring our way of life to a crashing end. Might be nice to at least have a few extra tins of beans in the pantry.
Update: August 3/2014
Last Wednesday the shares of the worthless Twitter went up 120% after hours on news that profits were twice expectations, ie 300 million dollars. If that doesn't qualify for the unexpected seminal moment I don't know what the hell could be even crazier and it's the crazy things I notice and file affectionately. On Thursday and Friday the markets swooned. And maybe 'worthless' is just a bit of hyperbole; someone is paying them, after all. It certainly isn't me, not having an account. In fact I thought I had never even seen or heard a 'tweet' but my wife says those are the little comments that come underneath the TV screen during Q&A.
I won't say I am going short here on any uptick although I really think I ought to. But its like this. Not only is it a bet against all the fools in the world, you are betting against the power of government as well. And even if they can't stem the inevitable tide they can make it uncomfortable for contrarians - in a panic they will simply hold off the great QE taper and you are whipsawed out of your position, and there is yet another ever-more- dubious upward leg to this juggernaut even if it means the vaunted recovery was only a dream after all. But even that might be universally embraced as positive proof that bubblemania will be funded at zero interest into outer space. And that goes on forever. As H L Mencken said; "No-one ever lost money underestimating the taste (or was it the intelligence) of the American public."
Ideally I would like to see a short- lived recovery here where there is a low- volume tussle at a new high on the major indices. And be touted to face to face by someone I know of low intelligence.
Finally if you nail your colours to the mast publicly you have an ulterior motive, like you want a great call so people will buy your newsletter or think you are really smart and then they will follow you and then when you lose your own overconfident arse in the next hiatus, so will somebody else. And then it isn't just that the universe is unfolding as it should for fools, YOU will get the blame.
Update September 14/2014
The pattern of the US market has completed as above and begun its reversal, Thursday probably marked the end of the line. After the initial decline a recovery to barely new highs, then a flat and thin market with ever thinning breadth even while iron ore, oil, copper, gold have been falling, falling. All textbook stuff. But as for short - The Aussie dollar has fallen several percent in that time which means that 'short' wasn't a bad idea (in one's own market and currency) but EVERYTHING has been going down simultaneously so it would have been a neutral exercise IF you won and not only did nobody notice, there was much hand clapping as the celestials will want even more of our corpse.
Anyway on Friday I penned the sheep for worming, podiatry and marking the lambs. The young rams were in clover, taking advantage of the tightly packed ewes or anyone else. Its the off-season and they don't care.
And somehow it all coalesced in a poem. QE ends in October - or will it after all?
The Rape of the Flock
The feast is spread and like a leaden turd the bread upon the table liesAnd should'ring guests are lurching through the door, the wine already drunk
With raucous lazy speech and glittering eyes.
The scheming coyote in mid-air; one pregnant moment - blissful, unaware
The pricked balloon or crumbling promontoryThat highlights each banal installment of the story.
And so the elbowed throng, each finally in his place to feed the beast
Ignores the squeaking, cornered cabin boy whose cries of “Rats de-shipped!”
Mean nothing to them in the least
And roundly curse the cook: “Fool -but better late than never!”
“Where's the yeast?”