Hoofy in La La Land
Bless the market's pointed little head. It's La La Land - get with it.
Try to steal your mind's elation
And little girls from Sweden
Dream of silver screen portation
And if you want these kind of dreams
It's the edge of the world
And all of Western civilization
The sun may rise in the East
At least it settles in the final location
It's understood that Hollywood
-Red Hot Chili Peppers
Instigated by Wall Street, fueled by the Fed, and exploited by the media, the torrid pace of the Bullish trend and the DJIA's recent win streak – 24 gainers in 27 days – is unmatched by any period since 1927. (Interesting that 1927 marked a real estate crash in Florida in the midst of a roaring Bull market.)
I'll simply say that when these three get together anything can happen.
Of course, no one suffers much from an absence of cultural, political, economic, financial, psychological and historical perspective – until it matters.
My concern is that we have come full triangle and may be condemned to repeat history. To once again repeat a boom and bust cycle.
As with all booms, most participants believe this time is different. Indeed, this time IS different.
First, a fact. A hundred monkeys with a hundred computers over a stretch of a hundred years could never come up with a wave like this. The last time this happened was never.
There was the DJIA in the 1920's driven by the leading edge stocks in the new era industries of auto and aviation. This paralleled the technology bubble in the new paradigm stocks in the NAZ in the 1990's.
There was Japan in the end of the 1980's. Of course, there was Holland and the tulip-mania, which peaked 360 years before 2000.
Recently, there was the real estate bubble. But, there has never been a worldwide synchronous wave like this, where nearly every asset class everywhere is a bubble. Globubble.
Intense, exhilarating, whipped-up with a fistful of debauched dollars and yearning-to-be-invested yen, and done so well it tastes real. A cosmic cappuccino, frothed-up and topped with a big head of equity foam. Bless the market's pointed little head. It's La La Land – get with it. Line up for your ten-dollar espressos.
It's words and money – lots of stories connected to lots of money with a lotta low people in high places on opium – or OPM in the vernacular, other people's money.
It's thousands and thousands of words (but just because this is the age of information let's not confuse information with enlightenment) and cheap money wheezing and bursting into the marketplace in a bipolar kung-fu kaleidoscope of derivatives, yen carry, ETF's and private equity. It's a codependent latte of liquidity, oozing speculation spearheaded in China where the Shanghai index has tripled in the last twelve months.
China, where incidentally I understand 1.5 million retail brokerage accounts were opened in the last week alone. I promise I won't ask you to do this again, but read that last line once more.
They say the Chinese love to gamble (all you have to do is ask the maestro, Steve Wynn, about the proof in that pudding) and this is really the first green light to gamble in stocks they've had. That's a lotta pent-up speculative juice.
But if everything is so Peking ducky in Macao, why did Wynn Resorts' (WYNN) better than expected earnings after Monday's close crap out on Tuesday? WYNN was up seven points to 108 in after hours trading Monday night, but closed at 99.94 on Tuesday, down 1.91. Odd that the gaming stocks, including Las Vegas Sands (LVS) and MGM Mirage (MGM), which are ripe to the lichee of red hot Chinese wealth aren't so spicy in here. Where's the "cooler?"
As legendary trader, Bernard Baruch, said, "Successful speculation is about anticipating the anticipators." The question is, who is the anticipated and who is the anticipatee? It's La La Land meets Tape Town. Wall Street meets Disney. After all, the market is where New York and California two-team, and take their hustle to Main Street. Hollywood sells the show, but New York is where serious men with serious coin want to do business and set the hook. New York is where hedgie gunslingers cruise main streets, cooing investors 24/7 for 2 & 20, and shoot at anything that moves. It's easy money/no risk - their music and lyrics: "I'm the player, I'm the house. I'm the master of the universe. I get paid when I win, and don't lose when I lose. I just find another door, hang another shingle and hunt down another billion."
They say the news breaks with the cycles. Well, it certainly is La La Land meets Wall Street now. Literally. It's hard to bet on anecdotal parallels, but on Monday the sequel to the 1987 movie Wall Street, was announced. As Mark Twain said, "History may not repeat exactly, but it often rhymes." Yea, there's always a twist – this time Michael Douglas plays – you guessed it – a hedgie. Blue Horse Shoe lives.
They say the news breaks with the cycles, and it's ironic that in the last week alone, Dow Jones (DJ) received a bid from News Corp. (NWS) while Thompson Financial (TOC) bid for Reuters (RTRSY). The financial news industry is certainly in a sweet spot. Does it mark a cherry on top?
It's ironic that an insider trading case has grabbed headlines in the Dow Jones bid. Shades of Blue Horse Shoe and 1987 when insider trading permeated the tape.
Let's see, 1987 was five years from the 1982 low. 1987 saw a pretty important top. 1937 was five years from the 1932 low. 1937 saw a pretty important top. 2007 is five years from the 2002 low. Additionally, every year ending in seven since the mid-1800's has seen a serious setback, or a panicky decline. Ah, that's just Californiacation. Shucks, cycles don't exist. Move over Boo, it's time for Hoofy's head shot.
It's La La Land meets Tape Town. And the blow by blow is scrolled on Minyanville's Buzz and Banter like nowhere else. Since I joined the MV circle three weeks ago, I've been illuminated by, and gleaned profits from, the insights therein. Let's roll.
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