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Young Turks vs. the Blind Herd

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Editor's Note: Minyanville is a community of people who share an interest of fiscal literacy. As perspective is an important aspect of our daily routine, we share this exchange with hopes that it adds balance to your process.

Professor,

The whole state of the market reminds me a lot of Richard Pryor's "who are you going to believe, your lying eyes or your beloved husband?"

Pretty much everyone would acknowledge that we are in a liquidity driven market, where the principal "catalyst" for upside acceleration would have to be sentiment, not fundamentals.

We hear little about options expensing, GAAP accounting,corporate pension underfunding (gotta believe DAL's a whopper), as well as the perhaps more important municipal and state pension shortfalls. The Federal budget has morphed into something resembling Enron, where 'projects' like Iraq and Afghanistan become special purpose entities.

All of us have the choice to believe 'our beloved Wall Street' or our
'lying eyes' and those of guys like Richard Russell and Jeremy Grantham, and some younger Turks...

caveat emptor...

Best,

Minyan Ron (2 days and counting) VIX above the 200 day average...

MR-

I hope you are including Minyanville in the "young Turks" category.

Your point being this is how markets work, how major secular tops are
formed. The consensus becomes a "blind herd" that worships ponzi.

This is how it was in 1980. No one wanted to own financial stocks. The
Hunts cornered silver just in time to see an explosion in financial assets. As Volker crushed interest rates and the end of the Iran oil embargo crushed oil prices, the consensus ran for the exits. Up until then the consensus scoffed at the idea that stocks could ever go up again.

And today they scoff at the idea that they could go down or that interest rates can go up.

No positions in stocks mentioned.

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