I guess we have to break sentiment into 2 different categories; The median trader and your average Civilian.
Median Trader:
Bear Market Rally
Financials will make a new low
Money printing
The attacks on bonus payments are unjustified and Washington is going to be after all bonus payments.
Some of the current AIG-FP traders were not involved in running the company into the ground.
The administration is showing a Bias to protect the Banks vs the Auto-companies but that is the way it has to be to get credit flowing.
The new Treasury/Fed programs are only about 30% understood.
The banks are going to rip-off the The Private-public investment program.... and this is more "money printing".
There is Capitulation on the idea that Wall street needs more regulation.
Traders continue to Try and top tick the market.
50/50 on the "Systemic failure" "too big to fail"
Median Civilian:
It's all AIG's fault.
The Inflation Caused by the money printing, is unjustified is a Wallstreet Giveaway and the Deficit will be devastating to our children. But 65/35 they are willing to Trust the president that it is the right thing to do.
10/90 there is a Goldman Cabal, and they are the puppet-masters behind all of this.
Pay for non-performance on wall street is ridiculous and must be put right by the administration.
All of the AIG-FP participants are the same people who ran the company into the ground.
The Administration has a Bias for the Banks in the Bail out, and it's unfair to not give the same Bias to the Auto manufacturers.
The general understanding is this: Every dollar of the "bailout" was a giveaway to the Wall streeters(not a loan), The money is being spent buying "toxic Asset derivatives" whatever those are.
Other notes
There seems to be an attempt by economists to be the "uber-bear"/ Dr. DOOM! My read is there is a ton of Jealousy, as the economists are clawing over each other, and all want to be referred to as "The one who 'CALLED IT' ". Stigletz today, looked to be trying to get one up on the rest of the Economist Bears. It almost feels like this is a Hail-Mary pass in the last seconds of the 4th Quarter.
The MEME on a "Spending Freeze" or to contract government spending in a severe contraction is unusually strong. Most people think that contracting spending in this situation is the right thing to do. But as was discussed in the hearing on "Lessons from the New Deal" in the senate on Tuesday, worse than the move early in the great depression by Hoover, was how muted the spending by FDR was because of the 50 Herbert hoovers that sprung up from all the Gov. of the 50 states. It's obvious that if it was pushed to a vote, that the populace would definitely support a spending freeze.
(HEY TONY!!!! I WANT SOME FEEDBACK ON THIS post!!)
Thursday, April 2, 2009
Median sentiment.
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5 comments:
Excellent summary of the sentiments expressed. Very impressive, really.
I read the Chess dialogue and shrugged it off, what do Chess geeks know about investing? Heck they're probably still living in their parents' basement. (kidding.)
This post, however, does pretty much catalog the emotional response engendered by people I talk to and also I can relate personally.
As with all paranoia, there is a kernel of truth in every one of the points listed in both categories. In dealing with any crisis, the key to being a successful trader or civilian as opposed to an unsuccessful one is it to realize that we have a lot of emotion involved and not let that cloud our rational judgment.
I know people who rode this all the way down and then went to cash on March 10th. I know a guy who bought guns and Spam (literally) and is buying as much firewood as he can find. I know people who are clinically depressed and exhibit uncontrolled rage due to this economic crisis.
These are emotional feelings... I'm not saying they are fake or unjustified, I'm just saying that we can choose our response to these feelings. People are grieving the loss of their wealth and retirement and going through the 5 stages in classic fashion.
When I posted the chart the "SPY looks like crap" or when we both rant about Kudlow or Eugene V. Debs or lemon socialism (well, that's you not me), we are emoting. We joke about Costanza. But we don't act on those emotions necessarily.
Trading and investing can be a true growth experience because we have to learn to process all the items on your lists, and then we have to act. If we act irrationally, then we lose money. It's quantifiable.
The lists are complete as far as I can tell. I would add that Obama
is handling this thing as well as I could ever imagine. Hell, I have no idea if all the stimulus and TALF and TARP and whatnot will work-- and neither do Geithner or Obama-- but I do know that they have just as good as chance as anything else. The choice of doing this or doing nothing is clear.
Obama seems to make an attempt to answer the fears and paranoia that you listed, but yet it has not stopped him from going ahead with the proposed plan.
As for all the bear market prognosticators, my only comment is that we live in a culture where we are programmed to constantly try to prove our worth to society, whether by being smart or cute or funny or rich or successful or whatever.
In the cacophony of everyone yelling and pointing to themselves, sometimes we don't realize that nobody is really listening anyway. Dr. Doom, Marc Faber, George Soros, Jimmy Rogers, Barry Ritholtz, Meredith Whitney, Arthur Laffer, etc, etc, etc... they are all trying to convince everyone that they are the smart one, if only we had listened to them...
I don't think it's the money either, it's the ego.
At the end of the day, we are still controlled by our reptile brains to a large extent.
I'm Fried Buddy!! just on the edge. You have to take the chess guys for what they are. Smart... but...
And they can be assholes, just playing. they arn't Median samples, defiantly fringe, but smart sentiment.
I'm trying to leave "opinion out of it"..
The spending freeze meme is rampant.
http://www.youtube.com/watch?v=iPDWGT6guAQ
It's called cognitive dissonance. You can tell them over and over that we need Keynesian stimulus and they will always say it's wasteful spending.
You can point out that kids need to be educated or that health care is paid for no matter what we want or say, but these AynRandians will refer to bootstraps and balanced budgets. It's the part they play in the psycho-drama. Fortunately they have been relegated to bit players for the time being.
It's classic game theory at this point.
I wish I had the energy to verbalize my read on progressive behavioral economic's in a secular pattern...
but at this point it's just fatigue ridden Blather.
roughly it's that we have progressive negative sentiment in 3 secular waves starting with 87/90's then 2000, then 2007 being the final wave(break that into an EWT cycle)... and that regardless, in a behavioral way... Maybe this was just destined to happen this way. 100%predictable, and in now way based on fundies... but then it gets into K-wave cycles....
and suddenly I'm talking gold bunkers and Black Helicopters...
Like I said... I'm beat!!!
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