The more I think about the events of the last two weeks, the more I think that we’re simply at an all-time low. The meltdown in Europe, the quick 8% savaging of US stocks after a fairy tale Q1, the utter failure of Facebook’s IPO to do a single fucking thing for the markets or the retail investing public…it’s all just garbage.
This Dimon guy – the last banker that anyone had any confidence in whatsoever goes and lets his firm blow up. And lest you’re unaware, the New Math for bank losses is pretty brutal: JPMorgan copped to a potential $4 billion loss and we ripped $40 billion off its market cap in the last week. That’s 10X, kids.
In an episode last year, an investment banker from Citigroup was introduced to Jamie Dimon at a party and Jamie mockingly said to him “Why don’t you get a job at a real bank?” And I loved that. It screamed confidence and competence (and arrogant asshole). Competence used to be such a big part of this culture. Swagger used to be a by-product of success and getting shit done and taking care of business. Now we have “swagger coaches” hired by little popstar fairies like Justin Bieber, nobody earns it anymore.
And in the place of competence and confidence and swagger is failure. Everything now is about failure. Stepping Down is the new Getting Hired. An energy executive running his own hedge fund and drilling programs alongside the activities of his company. A tech executive with lies on his resume gets the CEO gig at Yahoo, lays off ten percent of the company before being unmasked. Boards are clueless, shareholders are trampled under foot. The culture of our corporations is shot through with the type of stupidity that only Ivy Leaguers possess. Smidiots – smart people doing idiotic things with other smidiots’ money in broad daylight.
My favorite album title of the Spring comes from the Minnesota surf-rock band Howler. Yes I recognize the absurdity of a surf-rock band from Minnesota but stay focused here. The album’s called ‘America Give Up‘. How perfect is that? I can’t tell if they mean it as a command, like “America, give up already,” or as a noun for the national mood – the America give-up.
Tyler’s talking about this moment as a tear in the fabric of the illusion. This has been a great two weeks for Zero Hedge as 2 out of 3 country stock markets are now in bear territory (ask Meb). The euro bank runs they’ve been predicting and salivating for over the last three years are now underway, it feels like the ground is shifting beneath our feet and that things are speeding up. China is crashing, Russia is crashing, Western Europe is disintegrating…
But Tyler’s not gloating here:
Some look at today’s FaceBook IPO flop, the ongoing market rout, and the situation in Europe with disenchantment and disappointment. We, on the other hand, view it with hope: because more than anything, the events of the past few days show that the truth is getting out – the truth that capital markets simply can not exist under the authoritarian rule of central planners, the truth that the stock market is a casino in which the best one can hope for a quick flip, and finally the truth that our entire socio-economic regime, whose existence has been predicated by borrowing from the uncreated wealth of the future, and where accumulated debt could be wiped out at the flip of a switch if things go wrong in the process obliterating the welfare of billions (of less than 1%ers), is one big lie.
Stocks are oversold. They will bounce for a week or so, they are overdue. The technicians will read far too much into the rally, the fundamental guys will scream about how cheap things have gotten.
It’s not going well. You can forget the latest economic datapoint released from the government or the price of the Dow Jones average; we really are at an all-time low.