Over the last few years I have written many articles on the financial markets. I focused very heavily during and since the financial crisis of 2008 since I, like many of you, watched in utter amazement as the markets crumbled while simultaneously the so-called “pillars” of Wall Street analysts went right along with it.
Once I began looking at the markets in a far more serious manner than I had ever done before. One theme became self-evident. Nearly all the so-called “smart crowd” that is paraded across the financial media landscape were not only wrong in most of their assumptions – they were clueless.
For the last few years again I (like many of you I would venture) have watched talking head, after talking head share their intellectual prowess across the media landscape. Over and over again that prowess has been nothing more than clueless blunders or guesses. All of it has been hogwash. Literal unmitigated bull crap.
I know I’m painting with a broad brush, and yes, I am fully aware there are very smart people who are willing to state or show this debacle for what it is. However, unless they fit the narrative where the “financial media” needs to appear as if it still has any semblance left of an unbiased opinion. You won’t see them. At one time this was amusing. Now, it’s disturbing.
I myself have been very candid on why I feel the way I do. And have written extensively on what I believe is the reason for this markets rise. Although it may not need repeating for some I’ll state again: It’s because of the monetary interventionist policies of The Federal Reserve. Period.
Unlike all the “smart crowd” on TV and elsewhere, I have written ad nauseam if it wasn’t for Ben Bernanke instigating and following through on his pledge of figuratively “throwing money from a helicopter,” we wouldn’t be at the levels we are today.
We are here not because of anything except “Free Money” from the Fed.. There isn’t a market based reason (as in a roaring economy) for why we are at such lofty levels. It’s a bubble – and all bubbles pop sooner or later.
For me, listening to these business school professors or Nobel prize-winning economists or _________ (fill in the blank) giving their reasons why A+B=C, only cements my early reasoning of why I quit school at such a young age. If these people are the best and brightest – Heaven help us.
As of this writing the U.S. government is in what is now termed “Shut Down” mode. Services, people, and many other things are hanging out “closed until further notice” signs until agreements can be reached. The market’s reaction to all this? Up, up, and away
Once again back to the highest levels ever. Levels never before seen in the history of the financial markets. Why? No, not fundamentals, that would be crazy talk from only someone who is insane. No, we are here because of “free money.” And this is being spun as “the new normal.” Well, if this is the normal bus – let me off. This is crazy!
And why is all this bad so good? Well (wait for it…): Once this crisis is resolved “we’re going to explode even higher” with “more money pouring in from the sidelines.”
If that’s true then casino is the correct term for the markets today. All this along with High Frequency Trading (HFT) domination where the zero sum game is to front run orders as to milk billions upon billions of dollars out of the markets and investors. This is downright deplorable for anything resembling a financial marketplace. Which in my opinion it does not represent any longer.
These HFT programs are designed to hunt and run stop-loss orders as to fuel unwarranted moves in price discovery. This is now chalked up to “liquidity.” If this was done like in the old days, in real-time, by real people, in some back room, only to be discovered by the authorities – charges would be filed and people would be jailed.
However, that’s the old days. Now – if it’s “technology” then it must be legal. Which seems to be the new war cry from Wall Street. Or at least – that’s the term they’re hiding behind.
Another factor today that is just as troubling is how many new entrepreneurs (those in and around 26 years old) view business in general. Far too many see Silicon Valley as the “dream template” as to start or run a business. Viewing business through this lens will turn most budding entrepreneurs visions into down right nightmares.
Most of the current crop of Wall St. darlings such as Facebook® and more are surging in stock valuation not because they are hitting numbers on their bottom lines that warrant such appreciation. Rather, it’s just speculation capitol looking for somewhere – anywhere – that might have a chance at seeing a profit. Problem is when you live by this type of valuation based model – you die by it also. The issue is knowing the difference. Today – most don’t. And, that’s a problem.
Without this incessant pumping of free money into the financial markets via The Federal Reserve, there wouldn’t be any need or want to rush back to the Valley as there is today. There’s not a gold rush mentality rather, it’s a lottery ticket chasing mentality. The activities taking place there once again is more reminiscent of the 1990’s when all one needed was a web domain or mascot. Now, it’s get a concept – start hawking for a Series A.
There will come a time where this will come crashing down around us. When is anyone’s guess. Personally I thought it would be sooner than later but as I like to say, “Here we are.” What I do know is this. I have decided there is nothing left for me too see. I’ve seen enough. What happens from here on in is anyone’s guess. Nothing makes sense any longer, nothing seems real, 1+1 no longer equals 2 on Wall Street.
This is now inescapable for anyone with half a brain. Everything is an illusion. The only thing to do is no longer look. Which is exactly what I’ve decided to do.
My time is better spent finding ways to keep my money as far away from Wall Street as possible. Along with everything else I have that is, if not more precious than money.
© 2013 Mark St.Cyr