Monday Morning Quarterback: Back in the U.S.S.A.!
The government has changed the face of the financial world.
While we don’t “do” rumors in the ‘Ville, my source is well respected.
Further, it makes intuitive sense as the goals of terrorism are economic destruction and social upheaval. The stock market is the world’s largest thermometer and “breaking” the capital market construct—as some would say they did last week—would effectively achieve both goals.
Whether or not that proves true, I would expect a coordinated agenda to emerge from
During that period, the lines of distinction between bullishness and patriotism blurred and it was considered un-American to be a bear.
What we saw last week was in many ways an extension of that as it’s now illegal to bet negatively on a select—and growing—segment of the market.
That’s phase one, I believe, and phase two will emerge as a growing chorus that if you’re not part of the solution, you’re part of the problem.
I will be very clear. Minyanville is as American as apple pie. We love everything this country is supposed to stand for. We love capitalism. We love small business. We love the notion that you can invest in what you believe in and be rewarded for your efforts.
We have been critical thought leaders into this crisis and we will continue to offer our very best vibes as we edge through it. This is bigger than the next best trade or a quick little schnitzel. It’s about preparing for the future with integrity so our children will have a country they can be proud of.
We, the people, must persevere and it’s incumbent on us all to do just that, independent of whether we agree with the steps that are being taken.
History Doesn’t Always Repeat but it Often Rhymes
Following this profoundly stressful stretch, I pulled an old fashioned Friday night face plant at the end of last week. When I arrived home, I cracked a bottle of Pinot, ordered some Chinese food and searched pay-per-view for some mindless entertainment.
I stumbled upon Dog Day Afternoon, the story of the 1972 bank robbery gone awry. As there are no such things as coincidences, the similarities between past and present day began to crystallize.
Societal acrimony was running rampant. Tensions were running high.
Heck, the scene when Sonny lobbed gobs of money under the helicopter and the masses scrambled for it was eerily reminiscent of Ben Bernanke.
I bring this up for a few reasons.
First, it’s a pretty good movie—even though Jack Nicholson and One Flew Over the Cuckoo’s Nest won the statues—and secondly, it segues nicely into an analog fished out by Professor Kevin Depew.
The present day path continues to track the period from 1971 through 1976. While there are dangerously different structural underpinnings now, I thought this warranted a mention.
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Kevin also drew our collective attention to the following historical perspective on Friday’s Buzz & Banter.
“Attached is a chart of a market, Pakistan's Karachia 100 (KSE100), that back in June banned short selling for what was supposed to be one month.
Click to enlarge
Some things to keep in mind.
1) The ban, initially for 30-days, is still in place.
2) The limits/collars on trading were set at -1% and +10% (all trading halted for the day when stocks go down 1% or up 10%).
3) Those collars were taken off on July 14.
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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