Monday, August 22, 2011
Another Sucker's Rally Today
Now that the retail investors have been all but driven from the markets and all we have left are the algo driven HFT computers we can expect yet another irrational (if not short lived) rally in the markets today. In part the delusional will interpret the fall of Kaddafi as the harbinger of some new stability for North Africa. The TV pundits have already started with the lollipops and roses meme for the aftermath in Tripoli. I wonder if In-Trade has a bet on how long it will take for it to fall apart into chaos if not outright tribal warfare.
But never mind that, everyone is anticipating the DJIA to be up today following the European markets and a lowering in the gold price on the London markets. The flurry of emails filling my in box on all the supposed “hot buys” has become one of my favorite forms of entertainment. They all can be summed up in one sentence: “This is the bottom you have to buy now or get left behind by a resurging market!” I guess they would have us ignore that each new “rally” has a half life even shorter than the previous one and is followed by an even larger decline. They’re trolling for suckers but I’m not one of them. As far as I’m concerned the fine print disclosure statement, or as they see it “get out of jail free card” is no pass for the criminal nature of this activity of preying upon the scared and uninformed.
If one willingly jumps into a tank full of sharks knowing full well that you might get eaten it’s one thing, but when the sharks are chumming the waters to entice the unwilling and uninformed to jump right into their greedy jaws it’s quite another.
But then it is just this kind of criminal fraud that got us into this mess and not a single one of these rapacious monsters of Wall Street has seen a single day in jail never mind in court, why then should we expect them to change their behavior. The SEC and the CFTC are staffed with former and future employees of the very institution they are allegedly regulating so don’t expect any justice any time soon. And when the pressure does begin to mount you can bet that the worst of them will already have left and be residing in Liechtenstein or someplace else with no extradition treaty and safely out of reach.