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Blowback, The Law of Unintended Consequences: AKA The High Cost of Big Government
Mr Market seems curiously quiet along the Eastern Front, while big private money unloads in the dark in the park with market volatility at 16 month lows.
A deep public desire to get back into gold and eschew the dollar as quickly as possible ignores the big picture of deflation with a +6.9% Nov Energy PPI cricket chirp.
It seems too many were excited to get back aboard the Inflation Polar Express again.
How slowly we learn and how quickly we forget the long painful lessons of economic history.
Uncomfortable Fact:
Big4 Banks, possibly BAC, C, JPM or WFC, are still very short precious metals, big stocks, bonds, most commodities and long the dollar.
Titans do not casually or quickly reverse positions because of their size. They must act under cover of widely held misconceptions, selling when most are bullish, and buying when most are bearish.
The Big4 short trend may continue down with the astonishment of most until it changes, perhaps in two more years, perhaps in 20 more years.
Most ignore the Big4 and lose big money trading against the primary trend. They prefer to follow the wrinkles on their own noses and trust misinformed hunches instead of cold hard facts.
We are surrounded by the collective cognitive dissonance of Goldilocks CNBC cheerleaders like Larry Kudlow and his good TV pulpit buddies debating Inflation like clerics discussing angels on a pin head.
Ken Heebner et al promoted 5% Q1 2010 GDP and +100% YOY Q1 profits and at least two more years of a bull market in stocks and real estate. They cited a record steep positive yield curve as proof of recovery. They ignored the possibility we are not recovering from Recession, but deepening in Depression.
Somehow media people and the wise men also missed the tops in 2000 and 2007.
