Within the last 90 days there has been more convoluted messaging coming from the financial media, the main stream, as well as academia than I can remember. The more one looks or tries to find relevant, useful, actionable insights – the more they get conjecture.
Tag onto this the obligatory covering of arses as one’s told “It’s a great time to buy stocks!” Followed with “It will probably end badly.” Or, that other gem for the legend books “The Fed’s got your back” analogy.
So prevalent are these today it makes a politician marvel in its usage for audacity or speciousness. And that’s saying something in my book.
Let’s take a few examples that really give the tenor and tone of what I’m trying to express. They are far from the only ones, yet they give what I believe are true representations on why people are not only confused, but why they’ve walked away from both the markets as well as other activities in ways that have all the supposed “experts” flummoxed.
These are in no manner of importance, just the most recent. I would love to say egregious – but there isn’t enough paper nor computer memory to list them all. These just stuck out in my head and are in my “front of mind” as I type. Nothing more.
Like many I was listening to a business show when the retail sales figures were announced. As the data came across one pundit commented or implied in his usual snarky “knows more than you” tone that the “numbers” showing a drop of -11% was something that should be disregarded “for its inherently flawed.”
Fair enough. However: How does one square that circle when the so-called “data” which people like himself point to as reasons one should “not go by their feelings and look at the data” (for if you do you’re and “Idiot”) a 5th grader can see doesn’t add up?
The math now used along with the “seasonal adjustments” made to not only hard numbers, but “opinion surveys?” Would make that same 5th grader wonder how they got an “F” on their math tests. Ever! For if one can seasonally adjust an “opinion” – who needs to know math or even school for that matter if the numbers are “what ever you say they are.”
So don’t laugh (or cry) when your kid comes home in the not too distant future proclaiming “But Ma – Really. It does mean fantastic!” Just resolve yourself to the idea that maybe they’re just training for a career on Wall Street.
Then we have what many would proclaim as “market top signals” that not only confuse the average drive-by market participant – but can drive them crazy, as well as insane. For they seem to come precisely at the time the so-called “smart money” is heading for the exits as they “hold the doors open” and “give the bags” to the uniformed.
These are the ones believing “this is a great time to get rich!” as financial books touting memes on how to “invest like a billionaire” from Tony Robbins along with the front page articles parroting Barron’s™ “Crash? This time it’s different” make their appearances expressing how one should perceive treading within these markets as to take hold of one’s financial future.
Speaking of “financial future.” What happens if this bolt-out-of-the-blue styled sell off when everyone (and I do mean everyone) was calling for a “Santa Claus rally” into the year-end; turns into a “Santa came but left with all my profits” type affair?
Who will be to blame for this? Santa, or The Federal Reserve? For if they “had your back” every other time during a sell-off – how could they sit and watch your profits go up the chimney during the holidays?
It seems the markets which were once again atop “never before seen in the history of mankind heights based on fundamentals” crowd are nervously waiting to see if there will be even more reasons for concern (or panic) as the market goes lower, and lower; as the collapse in oil prices seems to be sucking it down faster, and with more vigor, than a saber-toothed cat caught in those very tar sands.
Just a few weeks back in October it appeared the markets fell precariously hard and fast when a Fed official made a public comment that maybe it was time for less Fed. involvement.
Suddenly the markets that were “fundamentally” sound on good economics plummeted. Some wiping out all their gains for the year. And that slide looked as if it was picking up steam until that same Fed. official did what many feel was a mea culpa and reversed his previous statement insinuating that the Fed possibly should do more.
Currently that recovery is identified as the “Bullard bottom” and since we have not only regained all those losses – but have gone even higher! But remember you are told this market is based on “fundamentals” not just Fed. policy.
Well one had better hope that truly is the case, for not only do people who are laughed and scorned as “tin-foil” types think these markets aren’t based on fundamentals, but rather, on the interventionist actions of the Fed.’s monetary policies. So too does the Central Bank of Central Banks. aka The Bank For International Settlements.
As reported by ZH in their article Why James Bullard Won’t Bail Out The Market’s Next Correction. One doesn’t need to take anyone else’s word (or opinion) that something just isn’t right within these markets. The bankers themselves are coming out as publicly as they dare warning other bankers to put a nix on things.
This is a very rare occurrence in both the timing as well as the messaging. Too not pay attention to the implications as well as the inference that the markets are tied far too close to the Fed – is a lesson in willful ignorance in my book.
You can’t mention bankers today without also mentioning politics and what is taking place once again.
Today what many are calling the “bail-out bill re-do” has just passed congress in the form of a budget bill. aka “The CRomnibus.” (This has nothing to do with an R – D – or I. This is just the observation in the obvious and conflicting. Nothing more.)
Suddenly we wake to headlines that congress has finally worked together to pass something both sides wanted to shut down the government in opposition to its passing.
On one side you have the R’s that couldn’t get a budget bill passed that would make it passed the Senate finally doing so with the help of the president who basically stands against the very ideas contained within it. And it was he who helped get members of the D’s to sign on or it would have failed.
Then you have Sen. Elizabeth Warren calling for its defeat because it is said to contain once again “Wall Street bailouts” and if the government is to be shut down – so be it. And the main stream press is singing her praise and tenacity. However, it’s this same “main stream media” that held anyone else that may even hint at the suggestion of a government shut-down as contemptible.
It’s near laughable for any thinking person at the obvious hypocrisy. In actuality – it’s breathlessly stunning rivaled only by Wall Streets claim of the markets “un-rigged” status.
So as we get ready for this joyous holiday season one has to ponder: Is there a chance that maybe – just maybe someone knows what they’re doing in these markets? Or, are we once again, at the cusp of another glaring point where the world wakes to find out once again: the so-called “smart crowd” hadn’t had a clue.
Personally I’ll take my chances with not gambling at all or looking to any of the so-called “experts” for clues. It keeps becoming abundantly more clear by the day: without the “Chair” behind the curtain. OZ is more attainable than following the road to financial freedom these people want to point out.
© 2014 Mark St.Cyr