“You know what the difference is between an Economist/Analyst, and a Business owner? When a Business owner makes a prediction on his or her business and is wrong – the business could wind up in bankruptcy. When the Economist/Analyst makes a wrong prediction about business – they just make another prediction.”
I may not be the first to express it, yet it seems more relevant today than ever before in light of what is now becoming abundantly clear to near anyone with the slightest hint of common sense. Most of the so-called “experts” paraded across the financial media as to espouse their wisdom on either financial markets, or the global economy: are blatantly naked for anyone to see.
They expose themselves and their true acumen when they’re parsing out their rationale for what is taking place in the global markets. The only article of cloth (I would equate it to a drop cloth as opposed to actual clothing) that shields the masses from seeing the truly pornographic theater the markets have become is the cloak now provided by the Central Banks of the world.
Today it has become far too obvious that numbers no longer matter or state a true value. What a number is, or what it now represents, is no longer what we grew up learning as in 1+1=2. That’s now considered old math. Today numbers represent connotations with abstract meanings, or better yet – clouds in the sky. What you see is what they are.
Remember when “give me the facts” meant just that? Or, “the numbers don’t lie?” How old-fashioned that is. Today’s experts recite figures, and facts ad nausea, but those facts mean nothing because as we’ve all found out over the last few years: numbers now have more in common with what the definition of is – is. Rather than having an actual knowable understandable quality.
We see the premise of this way of thinking play out in many ways across the financial media at large. One glaring example on CNBC™ was recently brought to light on ZeroHedge™ where one has to wonder if the “economic expert” truly understands that without the unchecked, unmitigated, relentless debt spending that’s buying up all this other overpriced debt with money printed out of thin air backed by nothing more than an IOU is actually not debt as one once knew.
What’s taking place as far as “debt” was once known by the another name: Ponzi. So is now Ponzi a good thing? If we use most arguments made today by many economists one has to conclude: yes. Just don’t say Ponzi, that’s bad. They now say, “quantitative easing,” or “asset purchases.” That’s good. Remember what the meaning of is, is? That’s today’s new math and boy is it making a whole lot of other so-called “experts” rich at the same time.
Remember when investment managers, and hedge fund managers had to really, really, really know about the markets while understanding and having prowess in all that technical junk like spread sheets, income statements, cap-ex, and the myriad of other technical jargon that made most people feel inferior, or down right dumb as these soothsayers would belt out analysis with such vibrato one would think they were across the desk from Pavarotti?
Well they still do that, and they are shown on television giving free concerts to any and all that will listen. However, if one truly listens closely, it’s not actually them singing. It’s a lip synced recording set to the beat and tone of the Federal Reserve and their bandwagon band. For without the central bankers continual harp playing: the cloaks get lifted and the naked truth is there for all to behold.
Again this was brought to bare (pun intended) by another one of the financial medias favorite hedge fund managers. This is not a slam of him or of all fund managers. He just happened to illustrate the other day what is becoming abundantly clear for a great many.
Who needs to be market savvy or financially astute or, in actuality, know anything if the only thing one needs to know is what the Fed. or the other central bankers will do. All that other minutia be damned.
If one listens carefully that “is” what investing is in today’s adulterated markets.
Today what seems to be the investing advice worth paying 2/20 for is: If the Fed. stays in – buy the SPY™. If you’re worried about “a taper tantrum” stay in only as long as another central banker will pick up the ball where this one left off. “Worries” averted. Rinse, repeat.
Well that’s surely worth the price of 2/20 for advice like that isn’t it? The only thing a single investor can’t do that the “experts” can is throw up the proverbial “gate” on everyone else’s money if it all goes wrong. But that’s why they’re the “expert” and we’re not I guess.
Let’s be honest (or as one of my favorite comedians would say, “Can we talk here?”) what good is having any acumen in deciphering numbers and what they mean to both the economy as well as the financial markets if it’s been shown ipso facto the numbers you need as to base those decisions are going to be either changed, made up, or negated as unreliable?
All you need to know about any number is whether or not that number means Central Banks will stay involved. Period. And it has been demonstrated over, and over, and over again: the numbers will be manipulated to make sure they will.
Need a survey number to get an idea of what people are thinking in the economy? No problem, unless they didn’t like what they had to say. Then they’ll just “seasonally adjust” the survey. I mean this takes “what is is” to a whole nother level.
How does one “seasonally adjust” (or outright change) something that for all intents and purposes is just a possibility or hypothetical?
Imagine if you took part in a survey where you knew the majority of the participants responded to the question, “What would you do if you won a million dollars?” With the answer, “I would give it to charity.” Then to hear on the morning news it was reported the results of that survey showed most would use the money to buy a vacation or second home.
As you searched out the cause of those results you find they were “seasonally adjusted” based on “the weather” being cold. And the reason stated was: “People are more charitable in cold weather. So what it really showed is we should expect a housing boom because if it were warmer that’s what they would have said.” Welcome to today’s “seasonally adjusted” survey equivalent.
The above is bad enough. Yet couple that with the releasing of those numbers (or false narrative) into today’s market which is brimming with an algo fueled, HFT enabled, quote stuffing, short killing, stop running, market sanctioned stampeding bonanza: and welcome to your latest version of the so-called “un-rigged” market.
We ended the week once again on never before seen in the history of the financial market highs. All this within a shrinking economy as our reported GDP went from positive expectations – to a negative reality. But once again remember the “is is” comparison. Bad – is good.
It’s not like we’re as bad as some of the European countries adding in hookers and drug sales to manipulate the numbers. That would be nuts right?
It would – if you thought their bonds yields reflected such foolishness. But they don’t. Matter of fact they even have some sporting lower yields than the U.S! Just wait till that meme fills the hallowed halls of our government filled statisticians et al. 10% GDP – here we come! Buy, buy, buy!
Crazy you’re thinking, yet, in today’s Central Bank dominated environment: all bad – is now good.
Parse this with Mario Draghi now showing his “Full Monty” and releasing his own bazooka, well, bad bonds mean good bonds if the ECB is going to get into the act now similar to our own Fed. Once again, another potential crisis solved, or avoided, or kicked down the road, or ___________ (fill in the blank.)
European GDP should now skyrocket even higher since hookers and drugs will be used even more plentiful than before. Heck that’s a “win win” or “is is,” or, whatever. Who cares hedge fund managers can rejoice. “Worries” averted. This is what’s needed now as “expertise” for investing. Screw acumen – bring on the Monty! Are the markets open yet? I need to back up the truck!
It is an amazing thing to behold. I never knew the reasons all those great looking suits I see today on Wall Street are so much in fashion not because of the cut of their cloth, but rather for the quality of their dyed colors.
Seems tulips come in more shades and uses than one ever imagined. At this rate we’ll need even more to keep everyone clothed. Maybe we should invest in some. Surely they can only go up from here. Right?
© 2014 Mark St.Cyr