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The Gods Of The Marketplace

Tyler Durden's picture




 

Submitted by Mark J. Grant, author of Out of the Box,

"It's the lure of easy money. It has a very strong appeal."
 
                 -Glenn Frey, Smuggler's Blues
 
Investors borrowed $384.4 billion in April, a 1.3% gain from the previous month and a 29% rise from the same month last year. This is an all-time record for margin debt and it exceeds the previous high mark set in June 2007. Some may see this as an increased sign of investor confidence but I am not one of them. To me this is a giant red warning flag blowing in the financial breeze indicating the leveraging of dumb money making very risky bets.
 
"Every swindle is driven by a desire for easy money; it's the one thing the swindler and the swindled have in common."
 
                     -Mitchell Zuckoff
 
Substances based upon some sort of white powder are quite dangerous. They can overcome your good sense and then they it can be quite difficult to extricate yourself from them. The Great Depression was caused, in large part, by massive leverage utilized in the equity markets. This was the white powder of 1929. It took a decade and a World War before America was able to loosen the grip of the stuff.
 
The white powder of 2008/2009 was easy money provided by the American banks. It wasn't the subprime mortgages that caused the problem but the leverage that was used to buy them and then various securities that were appended to them. It took the coordinated efforts of the world's central banks to stop the carnage. Money for nothing, money from nothing and checks for free.
 
Chicks were still expensive but at least we could afford them once again.
 
"I came to a stark realization: chronic surpluses could be almost as destabilizing as chronic deficits."
 
              -Alan Greenspan
 
The economies of Europe are in recession by any definition that you would like to use.

America is sputtering and barely above the red line.

Japan is now on steroids and the recent volatility in their equity and bond markets is astounding if not scary.

All over the globe the white powder is being dispensed once again but this time there is far more of it than ever in history. It is being made by the central banks and so people think it is sanitized but let me tell you; there is no such thing! We are once again in the crack house of substance abuse!
 
In each age the gods of the marketplace show up once more. The packaging may be different but the powder is the same. Each dealer uses the same line, "Nothing addictive here."
 
"With the Hopes that our World is built on they were utterly out of touch,

They denied that the Moon was Stilton; they denied she was even Dutch;

They denied that Wishes were Horses; they denied that a Pig had Wings;

So we worshipped the Gods of the Market who promised these beautiful things."
 
           -Rudyard Kipling

 

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Sat, 05/25/2013 - 10:36 | 3598261 otto skorzeny
otto skorzeny's picture

The grabbing hands grab all they can-everything counts in large amounts.

Sat, 05/25/2013 - 10:36 | 3598264 fonzannoon
fonzannoon's picture

including bottles of champagne for 30k delivered by a skydiver.

http://www.nypost.com/p/pagesix/high_end_hamptons_bubbly_bdKLJuMAvTisUm79I7jP2I

When are people really going to get sick of this shit?

Sat, 05/25/2013 - 10:40 | 3598268 gmrpeabody
gmrpeabody's picture

I could give it up anytime I want...

Sat, 05/25/2013 - 11:09 | 3598302 fonzannoon
fonzannoon's picture

tremendous.

Sat, 05/25/2013 - 11:19 | 3598310 markmotive
markmotive's picture

From fad to fad. Craze to craze. Bubble to bubble.

We are human. Few will learn.

Muddy Waters Research says China where the massive bubble exists today.

http://www.planbeconomics.com/2013/05/muddy-waters-research-china-is-mas...

Sat, 05/25/2013 - 12:43 | 3598423 DaddyO
DaddyO's picture

Hi my name is DaddyO and I'm a Central Bank junkie...

I'm powerless over Central Banks and my investing life is unmanegable because of them...

DaddyO

Sat, 05/25/2013 - 12:50 | 3598434 Freewheelin Franklin
Freewheelin Franklin's picture

Hello DaddyO. Welcome. Keep coming back.

God, grant me the serenity to accept the things I can not change.....

Sat, 05/25/2013 - 14:08 | 3598547 James_Cole
James_Cole's picture

Every swindle is driven by a desire for easy money; it's the one thing the swindler and the swindled have in common." -Mitchell Zuckoff

Succinctly sums up human nature. 

Sat, 05/25/2013 - 12:28 | 3598398 kito
kito's picture

fonz fonz fonz.....this is AMERICA............nobody gets sick of this shit.............they STRIVE for this shit!!!! its THE AMERICAN DREAM, BABY!!!!!!!!!!!!!!!!!!!!!!

Sat, 05/25/2013 - 12:41 | 3598419 PontifexMaximus
PontifexMaximus's picture

Never

Sat, 05/25/2013 - 15:22 | 3598637 U4 eee aaa
U4 eee aaa's picture

What better example of "sowing the wind" than to be buying things that will be gone in a few minutes, hours or days?

Sat, 05/25/2013 - 10:37 | 3598265 reader2010
reader2010's picture

When dust settles, how many new Roman Empires we have to end up with?

Sat, 05/25/2013 - 11:08 | 3598297 OneTinSoldier66
OneTinSoldier66's picture

How many Central Bank are on this planet?

Sat, 05/25/2013 - 11:24 | 3598313 Yes_Questions
Yes_Questions's picture

 

 

+1

Good Questionswer right there.

Sat, 05/25/2013 - 10:40 | 3598266 razorthin
razorthin's picture

The fucking stupidity never ceases to astound me.

And tell me how this is principally different on the Fed's part than bank predatory lending of the early 2000's.

Sat, 05/25/2013 - 10:40 | 3598267 Bastiat
Bastiat's picture

 

Bernanke:  the gods are dead.

 

Sat, 05/25/2013 - 15:23 | 3598638 U4 eee aaa
U4 eee aaa's picture

Gods: Look behind you Mr. Bernanke

Sat, 05/25/2013 - 10:43 | 3598273 yogibear
yogibear's picture

When eaiser lending standards occur borrow all you can and buy hard, portable assets. Leave the country and default. Leave the lenders holding the bag.

It's especially temping for those overseas temps. 

Everyone can play the fraud game with loose money and lending standards.

 

 

Sat, 05/25/2013 - 11:07 | 3598299 dick cheneys ghost
dick cheneys ghost's picture

Great advice...........fuck the 'moneychangers' if they cant take a joke

Sat, 05/25/2013 - 13:03 | 3598449 booboo
booboo's picture

Roid rage bitches

Sat, 05/25/2013 - 12:00 | 3598355 FreedomGuy
FreedomGuy's picture

Make sure it is a no-extradiction country.

Sat, 05/25/2013 - 10:46 | 3598280 Disenchanted
Disenchanted's picture

later on in the Kipling poem...

 

 

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four —
And the Gods of the Copybook Headings limped up to explain it once more.

. . . . . . . . . . . . . . . . . .

As it will be in the future, it was at the birth of Man —
There are only four things certain since Social Progress began: —
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

..................................

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!

Sat, 05/25/2013 - 11:56 | 3598345 Svendblaaskaeg
Svendblaaskaeg's picture

Thank You for posting, this line always make me think of Homer

"And the burnt Fool's bandaged finger goes wabbling back to the Fire"

Doh!

Huh?

Doh!

Huh?

etc...

 

 

Sat, 05/25/2013 - 13:28 | 3598485 Its Only Rock N Roll
Its Only Rock N Roll's picture

For a moment I thought you were going to quote something relevant from the Iliad or Odyssey but then I realized it was the other Homer you had in mind...

Sat, 05/25/2013 - 23:56 | 3599216 Central Ohio
Central Ohio's picture

Nice post.  

Sat, 05/25/2013 - 10:49 | 3598282 IridiumRebel
IridiumRebel's picture

"I cannot think that we are useless or God would not have created us. There is one God looking down on us all. We are all the children of one God. The sun, the darkness, the winds are all listening to what we have to say."

-Geronimo

Let's see what we inherit from these self proclaimed Gods.

Sat, 05/25/2013 - 12:05 | 3598365 FreedomGuy
FreedomGuy's picture

The arrogance of the elites will undo us all. Proclaiming themselves gods we will find they are rather mortal and even mediocre. Unfortunately, we will go down with them.

Sat, 05/25/2013 - 10:54 | 3598284 shovelhead
shovelhead's picture

"If you're really stupid, then we have the right loan for you." ©

Sat, 05/25/2013 - 10:55 | 3598286 Atomizer
Atomizer's picture

Former World Bank President James Wolfensohn: Big Shift Coming

 

Old news or new news. Depends on your awareness.

Sat, 05/25/2013 - 10:56 | 3598287 Spastica Rex
Sat, 05/25/2013 - 10:56 | 3598288 yogibear
yogibear's picture

Best time to leave lenders hold the bag and commit fraud is when their throwing money at you.

Bernanke and Fed are doing exactly that right now. All they can do is inflate larger and larger bubbles, with more and more debt.

Offer worthless IPOs, penny stocks.

Ah, this feels like the dot com environment again. Nobody big went to jail. Multiple ERONs supersized.

Sat, 05/25/2013 - 10:59 | 3598293 Yes_Questions
Yes_Questions's picture

 

 

Investors borrowed?

 

Huh.  Then what are the lenders in this case?

 

Who Run Barter Town?

Sat, 05/25/2013 - 11:06 | 3598298 Barnaby
Barnaby's picture

Gold Man run Bartertown.

Sat, 05/25/2013 - 11:16 | 3598309 Professorlocknload
Professorlocknload's picture

"Huh.  Then what are the lenders in this case?"

Pimps.

Sat, 05/25/2013 - 11:28 | 3598317 buzzsaw99
buzzsaw99's picture

Lloyd run bartertown.

Sat, 05/25/2013 - 11:09 | 3598301 Lordflin
Lordflin's picture

Every so often a generation comes along that epitomizes hubris... if ever there was such a time that time is now.

We will rediscover that man has a nature that must be respected... else disregarded at his own peril.

We will rediscover that truth is absolute... and that lies have consequences that must be paid.

God grant that we also discover that we are not alone in the Universe at such a time as this...

Sat, 05/25/2013 - 11:28 | 3598319 Yes_Questions
Yes_Questions's picture

 

 

We're not alone and they prefer we remain in quarantine til such a time we for once discover that which MUST be respected.

Good Post

 

Sat, 05/25/2013 - 14:33 | 3598577 freewolf7
freewolf7's picture

Everybody has a plan
until they get hit.
~Sir Mike of Tyson

Sat, 05/25/2013 - 11:09 | 3598303 Barnaby
Barnaby's picture

For every Market God there's a Prometheus. He should be arriving promptly with the Killer App that changes everything.

That or Bust. either way it'll be fun!

Sat, 05/25/2013 - 11:12 | 3598306 whoopsing
whoopsing's picture

The strip-mining continues.........

Sat, 05/25/2013 - 11:48 | 3598334 Temporalist
Temporalist's picture

Gods are irrelevant.  The markets have electrolytes.

Sat, 05/25/2013 - 12:02 | 3598350 q99x2
q99x2's picture

Its the greed gene. You can always tell who has one by letting a hundred or 500 EURO stick out of your pocket. It is that cheap gleam of happiness that appears in their eyes. Right there you know they are animals more dangerous than a venomous serpent and less evolved than a ground hog. They are the deviates of the world that have surfaced to the top through large groups of social systems that lack evolutionary components (laws that protect their kind from naturally being exterminated by the grand order of things) They are the sociopaths in Congress, the Senate and Judicial branches and executive branches of federal government. Often the vermin have survived through the transfer of family wealth and interbreeding and have the look of John Kerry with an elongated head and serpent tongue or are slightly retarded like George W. Bush. Still others have established themselves through the Military Industrial Complex and survive by killing the meek and the harmless. They are the unenlightened ones that fail to see the rapid changes taking place in their victems. The war sissys have rapidly produced a race of kamakazi humans that are naturally inclined to wait a successful and prosperous lifetime until the shaking of a Warren Buffet hand to fulfill their life's purpose--to die a martyr that their children and relatives will life on. This is the blindness of deletarious genes in general. They bring about their own extinction unless the consciousness of the individual and the individuals associated morality rises above their base drives and accepts the human condition.

Sat, 05/25/2013 - 12:15 | 3598378 FreedomGuy
FreedomGuy's picture

I think it is more related to what Bastiat said over a hundred and fifty years ago when he stated that plunder is easier than the pain of productivity. Whenever and wherever possible men will endeavor to live by plunder if possible. The only recourse is to make plunder so painful that men must resort to productivity.

I think greed, properly defined as well as the lure of "easy money" through any avenue are all related to this nature.

Leftism-collectivism the welfare state feeds this desire. It says that the government will plunder others for you. No need to carjack that guy at the redlight. No need to B&E to get the nice TV in that home, the government will do that for you. Just thank the elites, vote regularly and show up occasionally for a protest. Look miserable and victimized if a TV camera comes your way, too.

It is why I say "Socialism is for losers and aspiring autocrats."

Sat, 05/25/2013 - 13:04 | 3598450 Hohum
Hohum's picture

FreedomGuy,

 

Interesting point.  And who are the productive people?  What percentage of the world's people are productive?

Sun, 05/26/2013 - 00:34 | 3599249 FreedomGuy
FreedomGuy's picture

Interesting question. Potentially, 100% can be productive. Even in the poorest areas of the world where there is no collective redistribution you can set up a means to be productive such as a low cost garment factory and people will beat down the doors for a job. I think only in the West are there large long term nonproductive populations. This would not be a terrible problem except that they are actually a net negative in that they consume vast amounts of resources while producing nothing. It is a credit to the enormous productivity of Western societies that they can afford this.

Faced with starvation, we all find ways to become productive.

Sat, 05/25/2013 - 14:10 | 3598550 Jack Burton
Jack Burton's picture

freedomguy, My reading of history supports your views. In particular I have studied the experience of Roman Britian. They were able to hold back the plunderers for centuries, but every so often they broke in to rape and loot a very productive society. The neighbors did little other than sharpen their knives and stare across the wall and the Irish and North Sea waiting for their chance. Only armed force held them back. To loot instead of produce was the occupation of whole societies. This looting mentality also pretained in their homelands, where looting eachother when Roman Britain was too strong kept them in practice.

The modern world is filled with the looters. Many are in the suburbs of Sweden at present. This is a fact.

Sun, 05/26/2013 - 00:40 | 3599253 FreedomGuy
FreedomGuy's picture

You know, Jack, I was thinking along the same lines. The old Empires did a little of both. They looted others they conquered and usually enslaved parts of the population but they also produced things in enormous quantities compared to "barbarians". Rome built the finest road and trade systems anywhere and set up some sort of laws by which to trade. They knew how to make things most of their neighbors could not. Forward a few hundred years and the Spanish were raiding the Americas for gold which had far more value to the West than the peoples they conquered. But in the meantime they also set up trade, literacy, metallurgy, engineering, roads and things that laid a foundation for technical advance and progress.

You might like my new comments which precede yours when thinking of Sweden. It addresses this aspect of Western society.

Sun, 05/26/2013 - 04:57 | 3599366 MeelionDollerBogus
MeelionDollerBogus's picture

"left" and "collectivist" are no more compatible than "right" and collectivist.

The entire left/right false war is a theater meant to put slaves at each others' throats instead of defeating the overlords.

Sat, 05/25/2013 - 12:25 | 3598394 toadold
toadold's picture

I was reading about the reality of parasites having parasites and those parasites having parasites and etc.  They laid out 5 levels of parasites in one instance; insect, to muliti-cellular, to single cellular to virus, to virus on the virus, to prion.  What we have going now is a feast of parasites on parasites. Since the very definition of parasite is an that of organism that harms its host we soon should see toxic levels of dead parasites clogging everything up. 

Sat, 05/25/2013 - 14:38 | 3598586 freewolf7
freewolf7's picture

Dead bankers and politicians
strewn everywhere.

That'll work.

Sat, 05/25/2013 - 12:58 | 3598445 russwinter
russwinter's picture

O Futuro: Gold is All Sold Out;

http://winteractionables.com/?p=2863

Sat, 05/25/2013 - 13:17 | 3598467 Atomizer
Atomizer's picture

It gives me great pleasure when philosophical scholars chime in on valid points. Extraordinary facts were made by many ZH posters above. Well done!

Sat, 05/25/2013 - 14:06 | 3598545 Jack Burton
Jack Burton's picture

Agree! There can really be some good posts on here. Well done folks.

Sat, 05/25/2013 - 14:49 | 3598603 Fake_nation
Fake_nation's picture

I'm not all that worried. Mayor Bloomberg stays we can still borrow an infinite amount of money. CHEATZ ARE ON:

http://www.fakenation.info/please/mayor-bloombergs-video-game-finance

Sat, 05/25/2013 - 16:03 | 3598686 U4 eee aaa
U4 eee aaa's picture

....but not an infinite amount of soda.

it figures.

Which is worse for you?

Sat, 05/25/2013 - 16:52 | 3598742 Kirk2NCC1701
Kirk2NCC1701's picture

I want my MTV.  Money for Nothing.  And the checks for free.  That's the way you do it. 

http://www.youtube.com/watch?v=scsRw7T0Xmk

It's in the DNA of every life form to seek max benefit for minimum effort.  Laws of Nature.  Predators make better use of it than prey. 

Sat, 05/25/2013 - 20:05 | 3598955 Rusty Diggins
Rusty Diggins's picture

Someone said "plunder and pillage?"

 

Sat, 05/25/2013 - 23:09 | 3599158 logicalman
logicalman's picture

Humans claim to be better than animals - then they go out and do stuff that proves that they ARE animals.

Go figure.

Mon, 05/27/2013 - 05:38 | 3600670 SAT 800
SAT 800's picture

That's very interesting note about the margin loans. That was the case in 1929 also; but that worked out alright didn't it? Maybe I'll try shorting that damn S&P500 again.

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