There are at least 5 things I wanted to discuss tonight, but one item in particular has bothered me all day so I will go with that and leave the heavy stuff for another post. It is Friday night after all.
Part of the Problem, not The Solution
I do not know what it is; perhaps a heady 75% stock rally off the lows, a general feeling that everything is guaranteed, or just good old fashioned grandstanding but it seems the victory lap tour is gaining steam across the financial world. The FED, Treasury, President, and many writers have taken time over the last month to preen in the glory that is a stock market rally as if that was all there was in the world. Which is fine, when you have one thing going for you you tend to highlight it.
What has rubbed me the wrong way today was a series of articles by Barry Ritholtz, who pens The Big Picture (TBP) blog, that are not only a victory lap of sorts but serve as an illustration of what ails the system we have.
Leading off, TBP notes:
Retail, Jobs Suggest Stronger Recovery
Highlights include better than expected (by whom?) same-store sales and some job growth data. This is fine, I know parsing the numbers to see the effect of massive store closings affecting the same store sale numbers (see Kid Dynamite and Mish here) is not a big deal if you are headline watching, so no big deal. My aggravation starts near the end with this:
The data continues to impress, yet many people are fighting both the economic numbers and the tape. Professionals who miss a 75% generational rally risk losing clients and assets. The danger for both bulls and bears is bringing their bias to the table, and missing the risk or the opportunity of the moment.The data is impressive? Impressing who? Anyways, what was with the quip about missing the 75% move? I have no idea. I was willing to chalk it up to "whatever" but TBP ends with this:
I still expect a 20-30% correction — eventually — but until the market internals get uglier, our bias remains to the long side . . .Huh?
Everything is getting better but the coming correction will be 20-30%? Confusing indeed. That is a weird type of recovery. Still, I have no idea what time frames TBP was talking about (he does not say) so it was a piece of information.
In the comments section some folks were pointing out the same store sales effect mentioned above as well as remarking on the enormous amount of FED/Treasury liquidity that has bought this "recovery". Some of the remarks were pretty nasty and I can understand that TBP may have been annoyed.
A bit later comes this post:
10 Psychological, Valuation, Adaptive Investing Rules
Most of it was "go against the crowd" kind of stuff but a few were pointed directly at the more bearish observers:
-After a a 55% market sell off, most of the terrible structural news that existed before the collapse is reflected in prices. (Let it go).What is confusing here is that I have no idea what TBP means. Were stocks valued correctly with the SP500 at 700? If they were and that was indicative of the structural issues in the economy, things are 75% better now? The banks are that much better off? Really?
-Market Pros simply cannot afford to sit out a 75% rally; Individuals that miss that sort of move should reconsider their investment strategies immediatelyThere is that "get with the guys that bought his rally" speech again? Looking for new clients? I have no idea. While TBP manages money for big players I would submit most small timers rode the entire 75% move up along with the smart guys, they just also rode the 50% down wave first!
These two caught my eye as TBP is a huge believer that markets can see ahead:
-Whether a premise is fundamentally true or false is irrelevant as to whether it is actionable. If enough fools believe something is so, it will impact the marketsSo which is it? The market is smart or the market is dumb? Both at some times? Again, not consistent at all.
-The markets frequently diverge from the macro economic environment. This can be both long lasting and maddening; Your job is to be aware of how wide the gap between the two is
To end the day we got this one:
Buy What You Hate (WTF?)
TBP notes that buying Citigroup, Bank of America, and Fannie Mae was/is a bold way to make a trade. While true, I was pegged at redline on the annoyance meter.
Part of the problem with Wall Street and our whole investment/gambling culture is the chasing of money at all costs. Here we have a writer that penned a book entitled "Bailout Nation" (which I read and recommended) which detailed the moral hazard that comes with government salvation of markets when they screw themselves. To turn around and join hands with that process to make a buck is indeed profitable, but just feels wrong.
A monkey throwing it's own poop through a cage at the stock ticker section of the newspaper is up 75% from the March lows. At least he could not use leverage! Everything is up and even Pets.com is coming back with an IPO (kidding, for now!). I mean BFD. A few Trillion spent has that effect.
Like zombies walking around moaning "Brains, we need brains to eat!" investment players are moaning "returns, we need returns!" Saddle the taxpayers losses for years via Fannie Mae? Buy FNM, it's backstopped! Citigroup is the worst bank in the world? It went from $2 to $3, $4 is on the way!
In my article on the Panic 1907 I noted that people fled a set of banks because the brother of one of the CEO's was involved in a failed short squeeze that lost big money. No one then wanted a part of that kind of stigma. Today we line up for the bailout and buy shares. Nothing is going to change.
As far as "fighting the tape" I would hope everyone has stopped that a long time ago. I have no positions right now (other than my long term metal portfolio), but I made out pretty good in 2009 and I did not buy one share of the bailout crowd to do it. I was not up 75%, but I also did not contribute to the flawed scam that is our "free" markets. To me a buck is not everything.
It's Friday Night Live!
Well that ran a bit long! Off to the fun!
Picture Comedy Relief
Some laughs to start out.
Yes, cats are indeed this smart:
see more Lolcats and funny pictures
This must be for medicinal purposes:
Take short quiz to find out:
What is your Superpower?
Mine was "invisibility". That would be sweet!
The "How Crazy are You" test seems useful. Big shock, I am "Kind of Crazy". Like I needed a quiz!
Quiz 3: Who remembers "The Dark Crytsal"??
Some music to get you started this weekend on the right note, pun intended!
A request from an indirect source was for the classic rock cover of "I Heard it Through the Grapevine" which I have to think was the Creedence Clearwater Revival version, which rocks:
Was that the version?
There were some Madonna requests! I actually like plenty of Madonna tunes. I used to wait for the video for "Open Your Heart to Me" for the alluring fishnets..., I mean lyrics and vocal work, lyrics and vocal work! Anyways, my favorite song is "Live to Tell" but I thought a more party time tune would be "Into the Groove":
And yes I have heard "La Isla Bonita". Who has not?
Sticking with the ladies, let's try "Girls Just Want to Have Fun" by Cindi Lauper:
See, I can do non metal songs!
My dad used to play this song on a 12 string guitar and it was awesome. Try out Kenny Rogers and "Ruby":
You know, doing these posts for years has limited the music left to play. I try to search my blog before I post a song to make sure I have not played it recently (I try for over a year, but make exceptions). How many really wonderful songs are there that I can play? I guess a lot, but I do get a block some times. Lets see what we can do.
I always loved Duran Duran's song "Ordinary World", here is a nice live version:
One more? Two more? Well I guess two for the road and all.
A little Tone Loc? Get loose with "Wild Thing":
You know you love it.
Last call! Have a drink? Check. Have a plan? Close enough.
Come on! You know I am closing with an 80's rocker tune! Get wild with Skid Row and "Youth Gone Wild":
Wundaful! Close second for the close was Tesla and "Signs".
Have a good night.