When I was young lad in my early teens, I read a book titled, None Dare Call It Conspiracy. If memory serves, the premise of the book is that a cabal of rich folks run the country. At the time, the book impressed me enough that I continued reading whatever I could about conspiracies. Funny thing about reading a lot on a specific topic – one begins to apply the common theme to just about everything. And so I did. I began to see conspiracies for just about everything.
As we all know, time marches on, and, if we are paying attention and we care, we will gather wisdom along the way. Well, after more than a few years gathering wisdom, I came to the conclusion that most all major conspiracy theories had little basis in fact. The commonly reasoned belief is that for a major conspiracy (think Kennedy assassination) to actually work, all the multitude of people involved have to keep it secret, and this seems almost impossible. Okay, it makes sense that it would be difficult for hundreds of people to keep their traps shut about one of the most notable events in American history (Kennedy assassination). However, the wiser I have become, I now think an even larger reason major conspiracies don’t exist is that it would take more than a few powerful and influential people to be really, really smart. And, frankly, one piece of wisdom I have gathered through the years is that a lot of influential folks in powerful positions are not really, really smart.
So, why then, is it beginning to appear that a major conspiracy is attempting to move the market these days? Why is it that in May, the end of the recovery was the European debt crisis? In June, the end of the euro and the euro zone was upon us, and if the euro collapsed, the recovery would be over. In July, a double-dip recession was inevitable, which meant the recovery was doomed. In August, more double-dip talk, lackluster employment numbers, and the burgeoning U.S. deficit and debt spoke to a market breakdown that would hasten in September, which, as we told over and over again ad nauseum, is, historically, the worst month of the year for the market. Now, in October, the bugaboo is the growing mess in the mortgage market.
Whoa! I just found myself slipping back into a mindset long repressed – powerful people are out to get us. Thank goodness I remembered my wisdom regarding this subject – there are not enough really, really smart influential and powerful to pull off a major conspiracy. Thus, a cabal of people moving the market in one direction or the other is ridiculous. As evidence, I present September and October. If the goal of “the cabal” since May has been to drive the market back down to the market lows of 2009, that cabal has failed.
Wow! I am relieved that I thought through this one. Hmmm … If no conspiracy exists, why did all that supposed “bad” news since May drive the market down through August? Well, attached to the actual news was rampant speculation about how bad things were going to get. Then why has the market rallied in September and October? The answer is that the collective market (us) came to our senses. We saw the train leaving the station and we hopped aboard before it left. Okay then, what about this mortgage market debacle? This is a tough one. Unfortunately, this issue is truly one of concern, as the tentacles of this nasty creature reach deep into the housing sector of our economy; however, this issue is further evidence of my premise about influential and powerful people trying to pull off a major conspiracy. Think about it.
Trade in the day; invest in your life …
