Tuesday, November 13, 2007
Might over Right - Who Runs the Show
"I will end with some fodder for conspiracy theorists. Let's recall that our Treasury Secretary was the Chairman and Chief Executive Officer of Goldman Sachs and had a storied career there for 32 years. Goldman Sachs was the only major brokerage to recover from August's swoon to hit all-time highs. Our President was a former oil man, and oil is effectively at record highs a year before his Presidency comes to a crashing end. Hmmm....do you think our Treasury will just sit back and let our banks and brokers crumble into dust? It's not just bad for the economy, it's bad for the friends of the government! Do you think that the White House (and Republicans in particular) will just sit back and let the economy crumble and reduce America's ability to afford ever higher oil prices? It's not just bad for the economy, it's bad for the 2008 elections and bad for the oil business...and bad for the friends of the (former) ruling party! I only mention these to remind us that even as darkness appears to descend on the bullish thesis, you have to keep in mind what MIGHT go RIGHT. For example, somehow, we might manage to postpone the day of debt reckoning yet one more time. We have bounced twice already this year from rampant credit fears, and if the August lows hold, you have to prepare for another bull run - even if relatively short-lived. The market has chosen to ignore the on-going credit crisis longer than it has chosen to care about it. To this end, I am still expecting a strong finish to the year, just from lower levels than I first thought. Yes, I know that provides little comfort after the market has suffered such serious technical damage. 2008 will be a whole new ball game, and I am definitely not hazarding a guess (yet) as to what fun awaits us around THAT corner." - Dr. Duru - http://www.drduru.com/
P.S. When I was growing up - my father used the expression "Might over Right" when discussing something we were observing - knowing that a "wrong" was being committed -
he related - "Might over Right" - don't react to that which is "bigger" than you are. - 50 years ago. ("Train up a child in the way he should go...") It is a father's responsibility to "raise" a son to the obstacles of life - I still get pissed off! We were raised watching movies of Flash Gordon, Superman, Batman, The Lone Ranger, Hop-a-long Cassidy - believing there were individuals "greater" than the evil power - Why do they sell such fantasy to children - once in awhile, real people like Teddy Roosevelt, Winston Chirchill and Harry Truman - approached the fantasy.
I guess after the discussion of power, might, fantasy, etc - I honestly believe "mass emotion of the population" overrules all. I believe we are almost at that stage. The Major Indicator that makes me feel this way- is the "lack of effect" that the Federal Reserve Board's corrective adjustments, to interest rates, have had in the overall change to the intended direction of the markets and the economy. There is a powerful negative "tide" which is fueled by good (?) intentions, being applied to benefit "power, greed and selfishness."