Man, do I live a good story, especially one that begins with the phrase, “Once upon a time …”
Once upon a time, a two-notch credit rating cut by Moody’s or Standard & Poor’s was disastrous; an unambiguous sign that your proverbial ship was headed for the rocks.
I also love it when a wish comes true in a story that starts off with the most quoted story beginning in all of history …
But those days may be gone for good. Late yesterday Moody’s finally dropped a fresh batch of downgrades on 15 global banks. The move is being called ”backward looking,” ”absurd,” and “belated.”
Ah, the words above ring like fine chimes in a soft breeze. I can see myself sitting next to a pond, the air is warm, the morning sun is laying hands upon my face, and the gentle sound fills the space all around me. I open my eyes and read on …
But the best review of all is today’s market action trading off this is a contrarian indicator.
I stop reading, close my eyes again and lay the book flat in my lap, my hands gently cupping the edges, a finger on one page to keep the page from turning in the gentle breeze. I think, “What a great story.” My thoughts drift to a time when the power of ratings agencies controlled the destiny of the whole financial world. I remember a time when the ratings agencies gave exceptionally good ratings to absolutely worthless bonds pedaled all over the world. I start. Opening my eyes I remember the financial collapse of 2008. I remember that the fraudulent selling of those bonds could have never happened without the complicity of the ratings agencies. I think, “Either the ratings agencies were greedy partners or they were completely inept. Either way, they are irrelevant …”
Could investors express their contempt any more clearly than bidding up the price of all 15 banks today that Moody’s downgraded last night?
Ah yes, the chiming sound, the warm morning, the sun on my face, and the beauty of a story that ends not with a “happily ever after” but with imagery that sates my desire to strike at the villains in the story, that fills the mind with possibility that maybe, just maybe, the investment world is coming to its senses about these utterly defunct relics from a time when they actually mattered, a time long before they openly demonstrated their callous disregard for any sense of responsibility to the investor …
The rally in banks is not only a blatant spite trade but is the equivalent of Wall Street flipping off Moody’s and the entire rigged and antiquated rating system that they despise.
Some days just begin with a good story, and when that happens, I find it difficult to do anything but dream about a utopic world in which the forces of fairness and justice conquer and relinquish the dark forces of excessive greed, and in that conquest, the likes of Moodies, Fitch, and S&P evaporate into the air, disappear into the ether, banished from the world forever.
Oh yes, I do love a good story …
Trade in the day; Invest in your life
