Thank God it’s Friday. As I suggested earlier today stock market doom is not happening this week, but I’m not expecting or accepting any brownie points for that one, because correction is a multi-stage process that involves regular rallies. Most of the people who take even a passing interest in bourse behaviour know this; in fact, I’d wager that a sizeable proportion of the hibernating chysalis population grasps it too.
Every pack species has its hierarchies, and when it comes to wealth management ours goes like this: The Top 1%, The Toady 4%, The Decent Sane 7%, Business Media, ‘Quality’ media, The Smug 25%, The Shrewd skilled artisan 10%, The RightOn 20%, The Fluffy Green 3%, The Couch Hybrid 30%, and the Tabloid Media.
Does any useful cultural insight come out of this? Yes actually, I think it does. This is that the Decents, Shrewds, RightOns and Fluffies – total 40% – seriously question the economic model that so far dominates the 21st century. However, they are divided on almost every dimension of their opposition to it.
This is I know a tediously recurrent theme at The Slog, but then ‘tediously recurrent’ is simply another phrase for ‘consistent’. In 1943, after consistently launching Wallis’s bouncing bombs at the Ruhr’s Moehne Dam, RAF 617 Squadron watched in awe as huge splits suddenly appeared, and the apparently impregnable Dam fell apart. Cue Frank Sinatra singing “High Hopes”.
Why on Earth do I still, now and then, retain some high hopes? Because the Cover Story used by the pernicious 5% is so completely irrational – and unable to survive even the cross-examination of a rookie Attorney – it is only Resistance tribalism that lets them get away with it. Call me mad, but I think the foundations of that dam holding back the pure waters of reason could be destroyed by just one coordinated raid. It requires nothing more than the elements of the Maquis – from Occupy to WASPI – to create a joint op.
That’s a big ask, but as the poor in the West – growing through the rabbit-like procreation IVF techniques of globalist monopolism – become increasingly desperate, I suspect they will demand such an alliance….and, if ignored, turn to anarchic extremes of violence.
Lightening up now, I want to try and outline below just how risible the Cover Story is….through the medium of Davos Week.
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Sometimes, the things that give away the cover story are blatant, and at others they’re smile-inducingly ironic. The former make one angry for all the ‘real’ people being left out by the gorgons, but the latter are more satisfying because you just know they didn’t even realise they were doing it themselves.
It’s very easy for this kind of mendacity-reveal to happen, because the grinning crocodiles change the nature of the alibi every day – and quite often, yesterday’s demon alibi can turn into tomorrow’s shining ally.
Last Tuesday, an oil price heading towards $25 (almost exactly 20% of what it had been a year earlier) was being explained away by markets that were ‘deciding’ there was an oversupply problem, with everyone casually ‘explaining’ how wise the markets were being because the markets must always decide….and there’s a silver lining because carnsoomers get cheap gas at the pumps, right? In an attempt at expectation management, a string of CEOs came before the Davos cameras and said they fully expected the price to go to $15, what with the Iranian oil coming on stream again an’ all.
Come Wednesday, lots of news station jocks were using words like ‘bloodbath’ and ‘bear territory’, while expressing the view (shared by many of us) that the whole system is far too multifaceted, random, complicated and generally bewildering. This too was batted back by one robot after another, who said this was why we needed so many fine brains with sector specialisation and anyway globalism wasn’t as connected as some detractors might suggest, for example take China, I mean hell, it’s not really relevant. It’s all pretty straightforward really.
A commercial break then followed in which SOB asset management, Bank of Plutonia, Boombust Brokers, Pastimes Futures and others all gave out variations on the same theme, along these lines:
“In today’s world of uncertainty and fast-moving change, everything can seem infinitely complex and impossible to call. We at Upside Downwave Wealth Management call this the multiple paradigm imperative, and we’ve dedicated our entire lives since our formation in 1278 to guiding our clients through the heavily-mined jungle that is the global investment, forex and unrepayable debt market. That’s why, all over the world, really smart people say, ‘Thank fuck for Updowem'”.
Accidents do happen (even in media buying) and this was for me the banana-skin pratfall of the week. But before we knew it, Thursday had unexpectedly replaced Wednesday, and now it was time to find another patsie to blame for Things Screwing Up.
“I think the markets are being myopic,” said seven more people with shiny heads and button-launching waistlines, “You know, we need to take their antics with a pinch of salt hahahaha, I mean the funnamendles jess aen’t theyah for this level of selloff”.
Suddenly, the universally sage and clinically decisive markets were really just a bunch of monkeys wearing thick spectacles, chucking teapots around and waving their arses at the cameras. But all this got lost in a sudden wave of euphoria in the wake of ECB boss Mario Dragartist saying absolutely nothing while promising almost everything. It stopped the rot. The FTSE ended steady, the Dow made a small gain, and even the Shanghai managed a tiny rise overnight.
Today, for no reason whatsoever the oil price stopped unstoppably falling towards $15, and – in an unprecedented rally – shot back to $31.06. WhyTF, asked the adorable Stephanie Ruhle of Bloomberg, did that happen. Without blinking, four more smiley bonces intoned, with the best impression they could manage of gravitas, “oil was obviously oversold, and the markets spotted that”. These were the same Magoo markets who’d been entertaining families at London Zoo the day before.
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Not only is the Cover Story a sort of serial perjury merged with mercurial contradiction, it’s going to get increasingly incredible as one systemic flaw after another pops up with unsettling unpredictability in the months and years ahead.
Crash2 corrections 1&2 were primarily to do with massive PBOC interventions in China, and the biggest commodity drop in history – led by oil. These flaws involved essentially very bright but hopelessly inexperienced Communist officials trying to make sense of neoliberalism, and US anti-Russian geopolitics combining with OPEC pottiness against a backcloth of global trade slowdown.
Here are just a few contestants bidding for fame down the line in The Titsup Factor:
* Credit problems (among bourse traders and commodity brokers) and the consequent exposure of specialist banking firms to their insolvency
* Deutsche Bank mismanagement (check out the €6.7bn loss they made today)
* Italian Banking scandals from Monte dei Peschi downwards
* ClubMed and East European defiance of EU fascism
* Japanese QE insanity
* Draghi promises turning to dust
* South American Bric dollar-denominated debt fallibility
* Australian dependence on unrefined exports in general, and Chinese economic slowdown in particular
* A major Sunni-Shia conflict in the Middle East leading to very expensive US/EU involvement in sorting out the Saudis from the Jihadists from the Iranians from the Syrian/Russian nexus from the Saudi debt mountain
* The ponzi scheme formerly known as the Turkish economy finally coming to light
* Flaws in the Indian fiscal and financial model bubbling to the surface
* An inescapable EU banking collapse involving RBS, Spain, and a French bank I’m not allowed to mention.
If you think all these can be handled with yet more cover stories, then fine: but you need to go beyond the PR sector. What you’re going to need in order to explain all those away is a 24/7 stream of Hollywood action-movie screenwriters capable of inducing disbelief suspension on an industrial scale.
Enjoy the weekend.
The Slog 