In financial markets, as in sex, humour and volleying a ball home from just outside the area, timing is everything.
The superslick who are way ahead of the curve self-compress their future profits through their inability to appropriately time market entries and exits.
The bewildered who are reactive to the curve simply exist to provide the rest of us with our future cash.
So it is with blogging about markets.
We never release information that we are currently utilising to make gains in the markets unless we are sharing knowledge and information on a Consultative level.
We just do not write about certain matters.
Until the time is right.
And, the time is now most definitely right for the release of the second half of our dichotomous Xmas Freebie Bet.
The first, the opposition to Liverpool having even the remotest chance of winning the Premier League this season is already a winner.
If we had delayed the release of this particular Freebie, the price (and any value) would have long since disappeared - short-selling Liverpool around 5/2 (3.50) pays the bills; short-selling at 100/1 doesn't.
Timing again...
The remainder of this post should be read in conjunction with the earlier deconstruction of the free market capitalist system contained in the post "In The Lap Of The Big Bang".
Much of That Stuff underpins This Stuff.
Yesterday, it was officially announced that the Recession is over.
On an important day for hyperreal news, it was also announced that Cinderella is to become president of the EU, Barack Obama antihumously was beatified by the pope, and Dirk Kuyt reckoned that the United win will have fired Liverpool's title chances.
The Recession is not over.
It has hardly begun.
From the "green shoots of recovery" nonsense all the way through to "the recession is over" garbage, we are dealing with a purely psychological market here.
This has been a journey of pure psychology.
There are virtually no fundamentals supportive of this pseudo-recovery.
And, until a year ago, the majority of neoclassical economists denied that behaviouralism had any impact on the markets at all.
We, ie myself and my trading colleagues, used to think of ourselves as market analysts.
Then things became too hyperreal for such a job description and we all simultaneously became scenario analysts, as Reality no longer had any part to play in the new phase of the image.
Then even the scenarios became Dali-esque in their perturbations and bifurcations and what-not, and behavioural psychologists within a psychopathic system became the new name written on our brass plates, so to speak.
Self similarity mathematics ensured that the 'financial nuclear waste' buried away below ground, from earlier exercises in market hyperreality, would leak and worse over time in a repeated tsunami of Mandelbrot waves, as we became Fractal Chaotists.
And all this then must be set against the various super-systemic risks associated with man-made climate change.
So we are now Behavioural Market Analysts and Strategists, attempting to predict Fractal Scenarios, with Ecosystemic risk.
We are Arbitragers of the Hyperreality!!!
The people who created this Depression are those selected to lead us out from it too.
Take Gordon Brown, the British Depression Creator General.
The champion of the "light touch" regulation that he established with the FSA, he gave bank bosses plenty of room provided they seemed to know what they were doing.
The resultant "slightly heavier hand of regulation" is still attached to the same people.
Quantitative Easing (QE) has been the Harry Potter/Hank Paulson Magic Solution.
QE has never worked - in Weimar Germany, it led to hyperinflation, in Japan, stagflation, and in Zimbabwe, neohyperinflation and a chance for the British Isles to revisit the glories of imperialism.
Let us use an analogy by Dave Ransom at Wainwright Economics.
Quoting from The Economist: "Cars need two types of oil; petrol for fuel and engine oil for lubrication. The liquidity that the central banks inject is engine oil; without it, the engine would seize up but put in too much oil and you get problems too. It is not, however, petrol and does not make the car/economy go any faster."
Too much oil is misallocated and leaks all over the pavement, and produces inefficiencies and exhaust pollution, before eventually flooding the engine.
The Bear Market Bounce is a Fake Thing.
It began with professionals closing out their short positions against the system itself and it warped into a media-inspired construct of irrational thinking that was based on the intellectually flimsy foundation that the printing of an extra few trillion dollars is actually a good thing.
But the Real State of the financial system was already parlous.
As Mike Platt of Blue Crest HF) stated at the time: "It [QE] is the only policy option left."
The toxicity remains in the system as this jobless pseudo-recovery grinds to an engine seizing halt.
Some estimates reckon that there might be as much as $1.4 quadrillion of toxicity just waiting to surface.
Let us examine the psychology of the bankers who hold onto these toxic assets.
The banking industry, as well as being the cause, is acting as a magnifier of the Recession in free markets.
As one investment banker slithered earlier in the year: "Capital is like heroin, once you go down the capital intensive route, you can't go back."
Addiction drives the psychopathy.
And toxicity is the opiate residue mainlining around the life stream of the system.
The Economist evaluated the self-interested psychology of the banker earlier in the year: "A good bank will have recognised the problems of the really toxic assets and marked them down on their balance sheets accordingly; a bad bank will not. So if the bad bank sells assets into the scheme, it may be forced into making a write-down in capital; the last thing it wants at the moment... The whole scheme seems to assume that the problem in the markets is liquidity - these assets are priced at artificially low levels - rather than insolvency - that these assets are largely worthless."
And still in the system, waiting to erupt in a series of Mandelbrot waves of the next phase of the Depression.
This crisis is catastrophic because it infects the top poker table of the Rampant Ponzimonium that is Friedman's nightmare system.
But systemic banking crises elsewhere in the pyramid scheme are commonplace.
The IMF estimates that there have been 124 systemic banking crises since 1970.
These are episodes in which bad debts soared across the economy and much of the banking sector was insolvent.
And that's where we have to leave it for today, boys and girls, as I have to do my proper job.
The remainder of our latest deconstructions of the free market edifice will be trichotomous in their triptychity.
* 2. Swipe On The Moment
A Diary Of The Disaster To Date. How Market and Media Disinformation fed the Psycho-Bubble. Why Markets can never be Efficient. Forget Fama.
* 3. And Forget Friedman Too
"We've Murdered the Soul with Dismal Anguish" - Scrap the Free Market Capitalist System under the 'Clash For Clunkers' Scheme.
* 4. The Future Depends On Knowing
A Diary Of The Disaster To Come - What The Markets Are Going To Do In Neohyperreality.
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