May peace be with you!
"A good conspiracy is improvable. I mean, if you can prove it, it means they screwed up somewhere along the line."
--Jerry Fletcher, Conspiracy Theory
The afternoon jig has started to dig as traders attempt to lasso this pig. The traction in the financials and action in crude has been the story thus far, although a more interesting topic of debate emerged on today's Buzz. I strive to be politically correct but that has become increasingly difficult in a world where politics has become a self-serving mechanism. Indeed, with agendas to the right and agendas to the left, the straight shooters are few and far between.
I've asked myself many times if these last few years have been particularly corrupt or if I'm simply maturing to the point of recognition. The seed of discontent was planted early last year when the markets massively diverged days before the Iraq invasion. I've been staring at the tape for 15 years and had never seen such disparate price action as I did then. Equities, fixed income, crude and the dollar violently and simultaneously wishboned in a manner that, quite frankly, shocked the schvitz out of me.
I tempered my tongue at the time as I didn't want to say anything emotional as a function of getting steamrolled. Off-line, I had a ton of discussions with John Succo regarding the validity of my concerns. John ran the derivative operations at major financial institutions and if I was missing something, he would likely set me straight. I found that John not only shared my instincts, he often fanned the flames of my inner fire. Could it be that the world's largest thermometer was being used to shape the collective psychology in times where public perception dictated policy?
Intervention is as old as the markets and it's used throughout the world to buffer situations and provide liquidity. One could argue that this is the role of a central bank and I wouldn't disagree with that assessment. When it occurs without communication, however, it morphs into the manipulative arena and that's where I think we are. I'm not smart enough to tell you how it occurs but I have never been more sure of something in my professional life.
This diatribe isn't a function of bitterness. I mentally prepared for a pre-election crude spill (and attendant equity rally) and managed to get out of the way of the upside fray. And yes, I'm aware that oil was massively overbought and a pullback was not only healthy but necessary. Two different conversations. But keen market observers will note the convenient buy programs and curious TICK readings at times when the market has needed it most. And while this concept is too "out there" for most to acknowledge, perhaps that has set the stage for the pin prick to the psychology bubble that we're all now a part of.
Minyanville isn't here to shape your thought, we're here to provoke it. And while I know this view may hurt my credibility in some arenas, it's something I feel strong enough about to share. I may be wrong--it certainly wouldn't be the first time--but I don't believe you can entirely discount this belief. With the stakes so high and so much on the line, it would be myopic to underestimate the motivations of self-interest or the methods used to attain it. Or, at least that's how I feel.
Thanks for listening and have a peaceful night.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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