Much Ado About N E Thing

I am not saying that the S&P downgrade doesn't matter. I am not saying that the symbolic slap in the face has not and will not be felt. I am not saying that the American economy is proudly stomping through its finest hour. I am certainly not showering praise on Washington, Wall Street or Main Street, right now.

I do, however, think that it is a good time to look at things objectively and with a detached perspective. Working in a PE shop whose assets just took a heavy tumble or being a prop trader watching six-months of gains disappear in a single morning doesn't exactly lend itself to stoicism. But as much as these words are ridiculed and despised by so many. The markets really will figure it out themselves.

After the wipe out of over $1 trillion, markets rebounded sharply yesterday are stumbling again today and so on and so on... Clearly, all is not well, but the rampant Treasury and (even) Fannie Mae debt purchases yesterday told a different story than the one served up by apocalypse speculators. The MSCI All-Country World Index rose 2.1 percent in its biggest gain of the year. Though it is plenty possible for the pendulum to swing back the other way, that isn't the issue I am addressing.

My concern is the way we have become large, sluggish and stupid as a market oriented organism. Our niche oriented speed and nimble decision making abilities have been substituted for the illusionary comfort professed by huge governments, transnational economic interests and overly respected ratings agencies. Though this is nothing new, we should (at least in our minds) remember that it is investors and the quagmire of markets themselves, making the final call.

As much interventionism as is involved in today's markets, those governments, rating agencies and multi-national financial concerns cannot ever overcome the simple impetus of markets makers and actors to buy and sell to their own profit seeking advantage or risk averse profile.

We are three full years along into this shhhh...don't call it what it really is event. Ground floor interest rates, bailouts, printing presses and a whole lot of hoopla used for nothing more than increasing the authority of the few and incompetent who got us here in the first place.

Markets are all we really have left to remind us that reality is dynamic and not linear. Even though they too have been pervaded by the panic will cause order syndrome, they are oddly enough...a place to seek refuge from the chess games of idiots unfit for playing checkers with parakeets.

Read this last line again and take a guess who tomorrow's post is about...