Looking past the many current crises…
The guys on TV say we’re supposed to be talking about the S&P downgrade of the US debt. The newspapers say we’re supposed to be talking about Spain and Italy and whether or not the ECB, and the World Bank can redistribute enough wealth upward to the elite and bank shareholders and lenders that they “save” the EU. Wall Street analyst reports tell us that the markets might or might not be pricing in a new global or US recession.
And certainly, we do need to talk about these market crashes over the last week. But just how sure are we that these guys are focusing on the right things? That anybody’s even looking at the primary catalyst for this sell off?I got this instant message last night at 1am from a friend of mine in Iceland:
these riots in london are scary… the youth is so selfcentered and lacking of ethics and compassion
same with the norwegian terror attack in Oslo..very scary and hitting home…
you getting any news about this over in your end? —Cody here. She’s in her mid 20s and was active in stopping the bank bailouts in her own country. Iceland, to review, had a bunch of corrupt bankers who created and invested and gambled on a bunch of crappy mortgage securities and needed a huge bailout and drastic austerity cuts to their social services to avoid bankruptcy and default. The youth in the country revolted and the markets and economy tanked for a couple quarters…and then the resurgence started. Turned out that when the country forced corrupt bankers and the government they owned out and allowed smarter, more ethical managers to take over that things improved. And fast. And now the Iceland government is already back borrowing from the global markets are low rates and the country’s economy is expanding once again.Contrast that to the approach that we took here in Ireland and Greece. Where they propped up the bank shareholders and lenders with welfare money, allowed the banks to continue fraudulent accounting practices by institutionalizing them, kept the corrupt bankers and traders and managers and regulators in place, and allowed them to pay out record bonuses with that welfare money while making drastic cuts to generations-old social services. You know, sort of like the Republican/Democrat Regime did here in the US. And like they did in England. And in Norway and every other country that’s allowed the EU to pervert its mission of uniting the currencies and countries to one of simply looting for the elite and banks.And people are pissed. And now they’re taking to the streets and doing exactly to the establishment what the establishment has started explicitly doing to them — looting.Likewise, the average American is also freaking out over the news that the same guys who took out Bin Laden were themselves killed over the weekend. One of the guys had recently told New York magazine that they had been ordered to take Bin Laden out from the beginning, in contrast to what the Republican/Democrat Regime leaders had originally told us. People, even those like me who don’t consider themselves to be conspiracists or even-conspiracy-minded, wondered about the way Bin Laden was killed and disposed of, and now this? It rattles people to the core that our own soldiers are dying. When heroes/elite soldiers like the Green Beret guys who were taken out this week are killed en masse in one ugly attack like this, it’s horrific.The upshot of all this is that whatever the reason for this current trashing of our stock markets, it’s the kind of ethereal, intangible catalyst that is truly the hardest kind to work through. It’s not going to be quick or easy because solutions to all of these issues are not going to be quick or easy.But all that said, let’s also look past these issues. Unless you truly think that both the US and EU economies and therefore societies are about to implode upon themselves and that we are headed into a Great Depression or something worse, then we’re likely already closer to pricing all off these problems into the markets already.More likely, the reactions to these issues — US debt downgrade, flash looting, mortgage title anarchy, EU/Euro debt crisis, threat of recession, etc — will be yet more corporate welfare, monetary easing, tax tricks for the biggest companies with the best lobbyists…in other words, more bubbles.We added WFC last week and the stock dropped 25% in the next few trading days, as the broader markets also tanked (though not quite that badly!). Our many smartphone/tablet/cloud stocks also took a big hit. But our overall positioning of getting long for a new tech bubble while getting short for collapsing banks and other sectors that would be insolvent without ongoing welfare has has helped us wildly outpeform the markets since launch. And that continues to look like the right positioning.
