Revisiting The Wisdom Of Randolph Duke: ‘Something’s Wrong – – Sell! Sell!’

‘Mortimer: That’s not right. How can the price be going down?
Randolph: Something’s wrong! … They’re selling, Mortimer! … You, idiot! Get back in there at once and sell! Sell!’
Billy Ray, we are not looking good this morning.
S&P 500 futures were some 35 handles lower at last check following aNorth Korean nuclear test and a dismal Chinese non-manufacturing PMI report. We appear likely to test Monday’s lows on the opening.
‘What we have learned from history is that we haven’t learned from history.’ – Benjamin Disraeli
Let me underscore this morning that rationality wilts and gets sedated in the market when large doses of effortless money are administered (i.e. Federal Reserve stimulus).
At best, a calm occurs. At worse, an unrealistic ‘bull market in complacency’ forms. Investors come to believe that central bankers will indefinitely prevent our markets from returning to normal ‘price discovery.’ A new paradigm emerges in which players convince themselves that history doesn’t matter.

This post was published at David Stockmans Contra Corner by Doug Kass ‘ January 10, 2016.