Call it the rigor mortis of the robo-machines. About 430 days ago the S&P 500 crossed the 1973 mark – – -the same point where it settled today. In between there has been endless thrashing as highlighted below.
Surely most thinking investors have left the casino by now. So what remains is chart driven trading programs, racing madly up, then down, then back up again – rinsing and repeating with ever more furious intensity.
***
Accordingly, it goes without saying that the central bank driven casinos which now pass for financial markets are no place for savers, investors, rational speculators or any other known type of carbon unit. More than 80 months of ZIRP and nearly two decades of central bank financial repression have destroyed free market price discovery and eviscerated all of the normal mechanisms of stability and discipline that govern functioning markets.
Long ago short sellers were destroyed by the Greenspan/Bernanke/Yellen ‘put’ and the endless cycle of buy-on-the-dip upswings that took the market averages to ever more lunatic levels. At the same time, speculators came to realize that their free money carry trades were not at risk because the academic pettifoggers who have usurped control of the central banks promised to give them months and months of warning before tampering with their guaranteed cost of carry by even so much as 25 basis points.
This post was published at David Stockmans Contra Corner on September 1, 2015.
Recent Comments