Ah, the bad old days of 2008, back when people thought that The Pussycat Dolls actually qualified as music just because it was playing on the radio and America fell back in love with serial miscreant-turned-sitcom star Charlie Sheen.
One of the most notable features of that year for investors was the stockmarket’s utter captivation with guessing and gaming each bailout or rumored bailout, subjecting the investor class to one of the jerkiest environments imaginable. Every rumor that Lehman was getting a lifeline was good for a 200 point Dow rally – and then a 300 point sell-off once the Koreans or whatever came out to deny it.
My pal Trader Mark is seeing signs of a return to the Guess That Bailout game:
Much like 2008, and to a degree early 2009 where speculation about governmental, central bank interference into markets added a 4th dimension into what is an already difficult 3 dimensional puzzle, we’re back at it again. Futures are up smartly on “relief” that moral hazard reigns supreme and a new can will be kicked down the road.
Does this have anything to do with investing? Fundamentals? Technicals? Not one bit. It’s a whole new variable that is simply 50/50 coin flips in terms of timing. It’s truly a new world where we now take government / central bank intervention as a course of normalcy. And as we did in 2008 & 2009 the speculator class will celebrate. Because their timeline is one where “long term” is next week, so whatever keeps the party going for another 24 hours, 24 days, or 24 weeks – whatever the cost – is all good.
Get over to his site for the rest, a trip down memory lane indeed…and a warning.