The United States Blues
235 years old and feeling it!
"Red and white, blue suede shoes, I'm Uncle Sam, how do you do? Gimme five, I'm still alive, ain't no luck, I learned to duck."
As aware as we've been through the years -- proactively seeing this financial monster build from the inside out -- the fact that a US debt default is even on the table is a testament to the sorry state of our union.
I'm not talking about being bullish or bearish, right or wrong, although there's certainly a place for that. We're witnessing the devolution of the capital market construct, and the societal implications are profound. It's uniquely sad.
Put yourself in China's shoes, or slip on a pair in Eastern Europe. In their view, the financial crisis was born in the USA and outsourced in kind. And while they're force-fed a bitter pill of austerity, stateside politicians are grandstanding and using this phase of the crisis to further their own self-benefit. All the while, the U.S dollar -- the world reserve currency and the measuring stick for global asset-class success -- is down 40% in the last decade.
The first step in solving a problem is admitting that you have one. Despite all the finger-pointing currently in play, I've yet to see anyone accept culpability, offer a mea culpa, or reference past mistakes they've made or learned from. There would be no shame in that. In fact, I (and I imagine everyone else) would appreciate a humble dose of candor.
We don't "do" acrimony in the 'Ville -- that's long been our mantra and yes, it's easier said than done -- but I will share that I find the whole thing disgusting. I understand that some of these players weren't responsible for the enormity of our economic condition, but many of them (us) were in some way, shape, or form.
Regardless, rather than using this as a battle cry to unite our fractured financial fabric, they seem intent on grinding it to dust.
To be clear, I believe we'll navigate this and emerge better, stronger, and more learned. But until we stop the nonsense and take our medicine, it's compounding the problem in cause and effect. It's akin to telling a fib; once you lie, it creates an increasingly tangled web with a thinning margin for error. The half-truths and dark corners have been a long time in the making. It's almost as if policymakers now believe their own bull... case.
Societal acrimony indeed; whereas once that was a foreign concept, it's now edging from the exception to the rule. I will ask you to keep your mind clear and your thoughts lucid as this historic juncture unfolds. One thing is for certain, there will be fewer and newer players when we chew through this pooh. The goal, as always, is to get there together.
The Crash Indicator Strikes Again?
We interrupt this seriousness to bring you an important (albeit nonsensical) update: The Crash Indicator, which has demonstrated an uncanny knack for predicting market slides, is again on the move.
While this information should have been shared on Monday (mea culpa), I wanted to be "serious" (said in a deep voice) given the wicked global crosscurrents in play. Still, my hope is that it may yet prove useful or at the very least, lend some levity to an environment that sorely needs it.
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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