What's All This Then?
Friday, September 05, 2008
THE MARKET AND THE HOCKEY MOM - FLIM FLAM TIME IN SEPTEMBER
Having been away from the blogophere for a full two weeks, you’d think that I couldn’t wait to resume my comments on the passing parade by diving headlong into the world of politics - but there was something else that intrigued me while I was taking my break and that was the connection between the kind of flim flam that we hear year round from so called stock market analysts and what we heard from John McCain a few days ago.
Abraham Lincoln, one of our greatest presidents, whose "experience" prior to his election is similar to that of fellow Illinoisan Barack Obama - spoke truths that have held up over the years - not the least of them was that you could fool all of the people some of the time and some of the people all of the time - and the last couple of weeks provided two stand out examples of that truism. Take what some people are told and fooled into believing all the time about the stock market..
I’ve commented on the crazy quilt gambling casino known as the stock market before, but the last couple of weeks have truly been one for the books - with the Dow bouncing all over the place for absolutely no logical reason. .Nonetheless, "reasons" are always given. I think I once opined that somewhere in the bowls of the New York Stock Exchange, there is a wizened old man, bent over a roll top desk, green visor pulled down to his eyebrows - whose job it is to dream up the day’s "reason" for "movement" in the market. His daily work is then sent by telephone, telegraph, e-mail and carrier pigeon to every newspaper and radio and television station in the country, so that it gets incorporated into newspaper and broadcast news reports - as though "experts" at those media outlets had determined the reason for those movements.
For example, on one day the week before last, the Dow was down some 240 points. I don’t recall what the wizened old man had selected for the reason of that day’s movements - but then a day or so later it was up more than 200 points and the headline in the business section of that day’s Chicago Tribune was Positive GDP Report Makes Investor’s Smile. Then the next day , checking the online Tribune, I found this little note. Dow Down 150 on Consumer Concerns. Well, I’m a consumer - I assume you are too - and I wasn’t particularly concerned that day - except perhaps about the more than forty bucks I shelled out to put some gas in my car. How about you? Were you smiling when the Dow went up 200 points and concerned when it was down 150? Or weren’t you, like me, nowhere near the market where the manipulators move the indexes up and down?
There may not be silliness in market movements. They can be downright serious if you’re holding stocks that are fluttering like a newly hatched butterfly. But what is silly is the perceived need to come up with a logical explanation of why they fluttered. The futures price of crude oil dropped so the stock market went up. So said the little old man with the green visor. But then oil bounced back and the market did nothing, calling for an outpouring of creative juices to explain that anomaly. Market movements might make sense to the market makers at the various exchanges - particularly if they’re the cause of the movements - but the explanations for those movements that we are supposed to believe - in my opinion - are mostly hogwash.
The late Richard Ney, one time actor , long time stock market guru and author of The Wall Street Jungle, The Wall Street Gang and Making It in the Market, maintained that it was the market specialists - the persons responsible for matching buyers and sellers and maintaining a fluid market - who controlled market movements. Over the years he accused them of all kinds of manipulative monkey business - and none of them ever called him a liar or took him to court for defamation of character - so he may have been right For sure his explanation was as good as the "reasons" churned out daily by that little old visored man in his cubby hole buried somewhere under the intersection of Broad and Wall Streets in New York. Then again there’s Burton Malkiel’s Randon Walk theory which says that stocks move in ways that can’t be predicted - which could be interpreted as saying that market movement makes no sense at all - that they move without reason. I think I prefer his theory - but there will always be the " reason" of the day and there will always be some people who will believe it - who will - as Lincoln opined - be fooled by it.
I think I’ll assign myself a project. I’ll track major market movements - at least three figure movements - and correlate them with the daily output of the wizened old man in the bowels of the NYSE. We’ll see how many times he contradicts himself and how close some of those contradictions are to each other. I’ll report back somewhere down the line - but I can tell you now that the first entry in my log of market flim flam will be yesterday’s market. The Dow dropped around 350 points because of "lousy retail sales, lousy earnings and an expected rise in the unemployment rate." Sure it did!! So it should drop some more today, right? And indeed it did, more than 100 points. But then it went in the other direction and finished up 33 points. Not enough for the little old man to create a "reason." But just wait ‘til Monday.
But the stock market flim flam is with us all the time. The selection of Sarah Palin to be John McCain’s running mate is a once in a lifetime affirmation of Lincoln’s warning. Some people are going to be fooled. If there’s enough of then, we’ll be heading for a disaster of unprecedented proportions. If you can believe the pundits, McCain wanted Joe Lieberman or Tom Ridge - maybe one other. But the far right nuts wouldn’t hear of it. If he wanted their support - financially and in the voting booth, he had to pick one of them. So, without knowing who the heck this woman is or what she believed, he presented us with this Hail Mary surprise.
And so - as Sherlock Holmes might have said - the game was afoot - the PR campaign to turn the sows ear that Palin’s nomination presented - into a silk purse - to convince voters that her selection was for legitimate and defensible reasons. It is of course a nonsensical task - and one that is providing many moments of amusement as we listen to one Republican stalwart after another struggling to persuade us to believe that she was the best possible person to be ready to assume the office of President of the United States in the event that grandpa McCain got elected and keeled over from all of the inaugural excitement.
There are of course people who are legitimately delighted to see Sarah on the ticket. I listened to an interview of conservative icon Richard Viguerie the other day - and he was almost delirious with joy over her selection. This has energized the Republican base, he said, as no other person or position could have done. To support the reason for his joy, he of course joined in the chorus of audacity and hope about the wonderful credentials of this woman - and the shining tower on the hill this nation will become if she is elected vice president - and who knows - one day president?
I won’t bother to examine her "credentials" and her nutty - further to the right than Attila The Hun beliefs. Ban sex education from schools but teach creationism. The invasion of Iraq was God’s will. You can find her nonsense all over the Internet. But these few words are about what McCain’s handlers are now trying to do - pull off one of the biggest flim flams in American political history - a soap opera as reason - and the scary thing is that they just might pull it off.
It is so blatant - so obvious - so over the top - you get to thinking - surely McCain isn’t that stupid to think that he could pull this off - to keep saying with a straight face that Ms Palin is the best person in the entire country to be his second in command and - if fate should dictate - to assume the leadership of the free world. But then it dawns that this man who claims to put country above self - who accuses Obama of being willing to lose a war in order to win an election - has put self above country in a desperate attempt to rein in the right wing "base" of his party and to hoodwink unthinking female voters into supporting his "diversity" ticket. And it says that he - or his handlers - or both - are fully aware that there are enough people out there with a right to vote but who, in a rational society, would be barred from exercising that privilege - the masses who Lincoln knew could be fooled at least some and very likely all of the time and to whom this flim flam is being directed.
As I listened to the announcement of Sarah Palin’s selection, I couldn’t help thinking about that little old man with the green visor under the sidewalk at Broad and Wall. For years he’s been feeding us the daily "why" of market movements - even when they make absolutely no sense. But whatever he says gets picked up by all news media and gets repeated without question. Such a talent. What if the idea for Sarah Palin for Vice President came from him or from what he has pulled off all these years? How does that grab you this far in advance of Halloween??