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A Modern-Day Shoeshine Boy Moment
By Pater Tenebrarum of Acting Man
A Modern-Day Shoeshine Boy Moment
There is a well-known – though likely apocryphal – anecdote from the end of the roaring 20s. It involves Joseph P. Kennedy, US ambassador to the UK from the late 1930s to mid 1940s. Before he entered the civil service and politics, he had made a name (and a fortune) for himself as a businessman and investor. On Wall Street he inter alia ran the Libby-Owens-Ford stock pool with a number of Irishmen, a loose association of investors pooling their resources and dedicated to manipulating the hell out of Libby-Owens-Ford stock by deftly using insider information to their advantage.
Today he would be deemed a criminal, but at the time his activities on the stock exchange were perfectly legal and he was widely admired for being a wily operator. Rightly so, we should add.
Meet Joseph P. Kennedy, wily Wall Street operator.
Photo credit: Wide World Photos
As the story goes, Kennedy realized several months before the crash of 1929 that he had to get out of the market. What made him realize it was this: In the winter of 1928, he decided to stop to have his shoes shined before going to his office. When the shoe-shine boy had finished, he suddenly offered Kennedy a stock tip, without having been solicited to do so: “Buy Hindenburg!”
Kennedy is said to later have told people that he sold off his stock market positions shortly thereafter, as he was thinking: “You know it is time to sell when shoeshine boys start giving you stock tips. This bull market is over.”
A member of the anonymous stock tipsters association at work
Photo credit: pa/akg
A Modern-Day Equivalent
The unusual escalation in the stock market’s recent weakness (right into an options expiration – this is practically unheard of these days!) and our brief discussion of the situation yesterday (see “The Stock Market in Trouble” for details), caused us to wonder whether we could think of anything along similar lines that has happened recently.
Of course we are no Joseph Kennedy, but we are continually exposed to market-related information, including assorted spam. Keep in mind in this context that after Kennedy received his shoeshine boy warning, the market still rose for another eight months. So there is a certain lead time involved when the shoeshine boy bell rings, and given the market’s oversold state, it may actually be ripe for a bounce here.
As we also noted yesterday, the current bubble is not comparable to the mania that culminated in the year 2000. At the time, one could actually watch out for very close equivalents to the shoeshine boy, given the huge participation of retail traders in the market. Nowadays we have a “bubble of professionals”, so we must look for something slightly different. And we have found it – or rather, it actually fell into our lap yesterday, or rather, suddenly appeared in our inbox.
What we found there was this ad:
“Capture Top Momentum Opportunities! Investing in securities or asset classes with positive price momentum can potentially deliver higher returns than a traditional buy-and-hold strategy. The Horizons Managed Multi-Asset Momentum ETF (“HMA”) is the first actively managed ETF in Canada to give investors access to a globally diversified portfolio of momentum investment opportunities.”
Just to make that clear, we don’t want to pick in any way on the firm offering this undoubtedly well-managed (if potentially crash-prone) product. We are quite sure countless other examples along similar lines exist, but we were certainly struck by the timing of this offer. It almost screams “shoeshine boy”.
This became even more clear when a friend shortly thereafter pointed us to the following chart published by Bloomberg :
The “momentum trade” over the past 11 months, click to enlarge.
To be sure, the associated Bloomberg article expresses a certain degree of skepticism, which could end up giving this trade another lease of life:
“Virtually nothing has worked better in this year’s thinning equity market than momentum, where you load up on stocks that have risen the most in the past two to 12 months and hope they keep going up. Sent aloft by sustained rallies in biotech and media shares, concern is mounting that the trade has gotten too popular, setting the stage for sharper swings.
[…]
With breadth narrowing before the Federal Reserve raises rates, sticking with winners has been a blueprint for success in 2015.
[…]
Individual investors have noticed. One of the largest exchange-traded funds employing the tactic, the iShares MSCI USA Momentum Index Fund, lured a record $125 million in July, boosting its total by about a fifth. It hasn’t had a single month of outflows since it started in 2013.
Owning it has paid off, too: the fund is up 8.2 percent in 2015, compared with 1.8 percent in the S&P 500. Another ETF, the Powershares DWA Momentum Portfolio, recently saw assets cross $2 billion and has returned more than 7 percent this year. Still, some of the trades contributing the success have been weakening.”
(emphasis added)
All in all we would say that it is probably not the most auspicious moment in time to offer yet another “momentum” ETF to the public – even a “multi-asset” one.
Conclusion:
In recent days, the market’s momentum darlings have suffered a bit. We cannot say with certainty if they deserve to be called “former momentum darlings” already, as there is always a chance that they will rebound shortly. Especially with us poking fun at the concept, they might decide to poke back (good thing we are wearing glasses, so they can’t poke us in the eye).
Readers are more than welcome to tell us their shoeshine boy stories, if they have any to tell. We would certainly consider publishing the best ones (mail us at info@acting-man.com, or alternatively use the comments section if you need to get it off your chest right away).
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The Shoeshine Boy
This is fofoa. Worth a read. And a reread.
We live at least 2-3 times faster then people in 1920's, so it wont take 8 moths...
Hi-Ho Silver! Break JP Morgan!
few little factoids: joseph p. kennedy was the first chairman of SEC. he outlawed the (insider) tradings which had made him rich. during the great depression he increased his wealth tremendously, mostly by investing in real estate. from 1929 to 1935 his wealth rose from $4 million to $180 million.
Back when silver was $45 an ounce in 2011 and paytriots living in trailers where giving me unsolicited advice to run up credit cards and buy silver at all time highs, I knew it was time to get out!
It's so funny to see silver at $14 again!
That's my shoeshine boy moment.
When broke ass "patriots" living in a trailer calling their old mosin nagant and their cans of beans "wealth" tell you to buy something, it is actually time to sell.
> When broke ass "patriots" living in a trailer calling their old mosin nagant and their cans of beans "wealth" tell you to buy something, it is actually time to sell.
Careful. You're getting close to home.
I can agree that dorks buy mosin nagants, but a quality Mauser is not a bad thing to have in your portfolio, and you can still get ammo.
And, you got a problem with living in a trailer?
I think that the modern shoeshine boy actually is Wi Hung Lo in rural China who takes a break from the rice paddy to add to his Ourpalm position with leverage.
What were you doing hanging around trailer parks? Visiting you mamie?
Didn't a lot of that wealth come from rum running?
Bingo. The whole clan's wealth is built on illegal activity.
"Illegal" is an irrelevant distinction made by tyrants who believe you are their property and that they have the right to dictate your behavior.
The black market is the only free market
Go get your fuckin shine box!
CNBC is 24x7 shoe shine boys touting stocks. So I'd say that indicator is useless.
My ss boy moment would be when someone on ZH has a bullish comment. Since robot trader disappeared there are none. Every article should just be will the world-ending crash come in 3 seconds or 30 seconds. You would all vote for 3.
No, no, no... Everybody on ZH knows Dennis Gartman is the resident shoe-shine boy. My portfolio is basically an inverse Gartman EFT. Not leveraged. And some physical.
The problem with this missive is that it completely misses the elephant in the room that no one is watching...well...some of the more astute ones are watching...that being the credit markets, which are unstable with liquidity evaporating faster than the Commiefornia drought...this guy is focused on equities when he should have his eye on the credit markets, which WILL destroy the equity markets and everything else in its path.
Won't the capital in a collapsing credit market run to equities?
In a collapsing credit market all commerce grinds to a halt. The corporations represented by equities bleed money, and can't get credit to stave off disaster. You don't want to hold equity in a corporation that's facing bankruptcy and liquidation by its creditors. Equity holders are last in line for payment in a bankruptcy (except for UAW money in General Motors stock).
... and here you can choose what style of Haircut you prefer:
https://www.google.com/search?q=50+%25+haircut&biw=1274&bih=640&tbm=isch...
The Shoeshine Boy
Wow! - Great link, thanks.
Of course we are no Joseph Kennedy
you guys fucking slay me :-)
The only shoeshine boy to listen to today is the one shining the size 2, triple wide, cruel yenta pumps worn by Janet Yellen.
Haha. Too right.
http://www.qupidshoes.com/Qupid-Women-Pump-YENTA-01-p/yenta-01.htm
Just find Johnny the shoeshine guy...
https://www.youtube.com/watch?v=7udsYPVhl6Y
https://www.youtube.com/watch?v=h_19mxj2LME
We don't need shoeshine boys
What could be more obvious than CNBC?
Back then, CNN found a family that owned a small car repair shop, in the back the mechanics sat at computers and day traded, leaving customers waiting for their cars, and even turning people away. They made more money trading with out work, so why work!
When the local mechanic is a day trader, get the fuck out of the markets as soon as fucking possible! Run for the Exits.
The stages of investors for a particular play come in the following order;
First there is the innovator. Then there are the immitators. Then there are the idiots who follows the immitators.
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-------------
Cut and paste from a real email that hit my trash earlier today.
the part that scares me, I know some people can't tell its a scam.
Why invest in an ETF. Just buy stocks like Amazon, Google, Chipotle, and Netflix two days before earnings and sell the day after.
You have a pretty good chance of making 10-20% in one day.
That tells you all you need to know about the bubble market of today.
People like to tell themselves lies that they can believe. A typical lemming can buy this product and argue to his wife that he diversified. Also, plenty of lemmings will look at the past performance (the 1yr average probably), and figure it did well last year, it has a good chance of doing the same thing this year.
Wow, I called it. Someone didnt know it was a scam email and completely missed the point.
Today he would be deemed a criminal,
Today he would be deemed a bankster
next to the Bush family the Kennedys are saints or did Joe also deal in Afghan heroin?
"Intercooled Multi-Asset Momentum ETF"
I'll take that in a Ford F350 Crew Cab.
My year 2000 shoeshine boy moment happened when a barely literate, hard drinking commercial fisherman offered me dot com stock tips. He was trying to be nice, but I didn't need any more proof that it was over. My girlfriend kept trading however and when the crash came she was in Hong Kong and couldn't get through to her stockbroker in San Francisco to sell. She never did tell me how much she lost.
No offense, but the endless stream of buybacks would indicate that many shoeshine boys were offering tips to corporate execs several months ago.
What did you say that lead time was again? :)
My Shoeshine boy moment in 2014 was a newspaper article about a London restaurant selling a $2000 gold leaf wrapped hamburger - the glamburger. New York restaurants are doing similar shit. That should tell you the market has peaked..
No one ever said appealing to the nouveau riche would be a tasteful endeavour.
Things have changed since then.
Most Shoeshine boys can't even get a tip.
[Modern-Day Shoeshine Boy]
I guess it could be argued that Donald Trump having a real shot at the White House is a shoeshine boy moment. But the markets were killed off back in 2007 and all we are seeing now are profit making and taking endeavours. The only thing that could challenge the folks pulling the strings is revolution, so I doubt there will be any real crashes any time soon. Lets face facts peeps, they got us cornered. Only thing to do is run away somewhere they can never find you, or become so insignificant they no longer care. That's why I admire Trump. He has taken a dive into a very dangerous pool. Clearly he isn't one of them so he will either join the team or...
I was working for a Stock Brokerage firm Back in 1999 and was well aware of the nonsense that was going on in the Stock Market.
One day while visiting my parents in Sacramento Ca. Not exactly the investment capital of the world.
Anyway, I went into a 7-11 located in a strip mall on Freeport Blvd to pick up some chips and some soft drinks for a barbecue.
The Arab/Hindu guy behind the counter was on the phone totally ignoring me. I heard him say to the other guy on the phone, "Hey, you hear that Cisco is gonna split?" I kinda thought to myself, this Bull Market just might be over.
I guess you could call it my Shoeshine Boy Moment.
I haven't heard anything as nuts as that lately, though.
my shoeshine boy moment is when my broker writes and says he is concerned that my portfolio balance is horrible and that i should sell bonds and buy mostly stocks.
Good teacher. He really seems to care. About what I have no idea. [/Thornton Melon/
My shoeshine moment is when I don't hear any little people giving tips anymore because they have no bleeding money with which to buy stocks anymore.
One should read the following:
"Momentum is everything until it isn't" by Wile e Coyote.
Dennis Gartmann is my boy
Who the fuck is that?
That aint no Moe.
A shoeshine boy is sitting in a park. Then he notices a very distinguished and dignified executive sit down a few feet away on the grass; he is extremely well dressed in a tailored Hickey Freeman pinstriped suit, silk tie, starched white shirt, cuff links, tiepin, Cartier watch, highly polished black captoe shoes and black silk socks. He places his expensive briefcase next to him and prepares for lunch.
“One of those executives, I’ll bet” thinks the shoeshine boy, and after introducing himself, he finds out he is right – not only a executive, but also an investment banker.
The shoeshine boy glances at the banker’s shoes, glistening in the sunlight; the banker is calling on his cell phone.
shoeshine boy: You have those polished every day, don’t you. Investment Banker: Just about. I have to look good for the clients. The first thing they notice are your shoes. These were handmade in London.
shoeshine boy: What about the poor? A few shoeshines would pay for a lot food. I'll bet that suit put you back a thousand, and that silk tie would pay the rent for a month for some poor family.
Investment Banker: I help them through taxes, but we all have personal responsibility. I have worked hard for my position in life.
shoeshine boy: I'm telling you, the poor only need a chance! We should be GIVING them money; they haven't had our advantages! You in your thousand dollar suit!
Investment Banker: Two thousand ... We all have to work for what we have. I have to check my stocks.
shoeshine boy: Look, poverty can happen to anyone! There's no way you can know that from where you sit! With those fancy clothes and that car and your high-paying job!
"Keep talking if you want to. I have an important board meeting to think about. When I sleep, nothing wakes me ... and I mean NOTHING.
The investment banker sighs, lies down on the grass and falls deeply asleep. Then a barefoot friend of the shoeshine boy appears, and points at the banker: "I wouldn't mind having his money;" he laughs.
The shoeshine boy laughs too, but then he sees the investment banker's wallet in his suit pocket. He slips it out, and hands it to his homeless friend: money, ID, credit cards and all; then he notices that his good friend needs shoes.
Then he has an idea "Why not! This is an executive who needs to give to society! The homeless man needs shoes, and the executive ... He looks over at the feet of the sleeping investment banker.
"Wait!" cries the shoeshine boy. "I'm sure you need these more than he does. "He then starts to untie the investment banker's polished $600 captoes and very carefully pulls them off.
Even more carefully, he divests the banker of his black dress socks, and hands both shoes and socks to the astonished friend. "With my compliments! They are handmade and they were just polished! Somebody told me that the first thing people notice are your shoes!"
The investment banker, now barefoot, yawns, stretches, but continues to sleep; soon he starts to snore again.
"I guess he won't be seeing any more clients today, and he'll have to miss that board meeting", says the shoeshine boy to himself, "but he'll be a much better person!"
Then a mugger runs by, holding on to money he has just stolen "A victim of society!" thinks the shoeshine boy. He slides the keys to the BMW out of the banker's pocket, throws them to the mugger, and points to the car.
The mugger doesn't stop to ask questions - he just drives off.
Then the shoeshine boy sees a sad woman with a baby walking by. "Can I help you?" he asks her. When he finds out that she needs money for her rent, the shoeshine boy again approaches the snoring investment banker and removes his cuff links; then he slips the tiepin out of the silk tie and the Cartier watch off his manicured hand.
He hands them all to the delighted woman. "Sell these!" the shoeshine boy cries. "Oh, thank you sir" says the woman, and runs off. "It's the least I can do!"
The shoeshine boy then notices the banker's cell phone and the password on a piece of paper. He calls the number and sells all of the banker's stocks, and gives the money to a charity.
Next, a man in a janitor's uniform walks by, looking dejected. "What's the matter, my friend?" says the shoeshine boy sympathetically. "I lost my job. I have a chance for a better one, but I don't have the clothes! This is all I have!" and he holds up a pair of old polyester pants. The shoeshine boy sighs, and then sees the banker's navy blue pinstriped business suit.
"Would this help? It's a two thousand dollar suit!" he asks the man, after carefully removing the jacket. "Sure!" cries the man. "A two thousand dollar suit! YEAH!"
"You could use a briefcase, too!" says the shoeshine boy and opens up the investment banker's briefcase. He removes the contents and hands it to the joyful man. He also gives him the banker's cell phone.
Then he looks at the investment banker's expensive silk tie and white shirt. Can he manage it? He has to move the investment banker a few times, but he only snores and sleeps.
Then he undoes the banker's suspenders and pulls them off. Triumphantly he hands the shirt, suspenders and tie to the man, leaving their formerly dapper owner in his t-shirt.
"Wait" the shoeshine boy cries. "You really need the full suit. Give me a hand and I'll need those polyester pants. I'm getting good at this" and with great care and trouble, set to work.
Ten minutes later, the man is holding up the pinstriped suit with admiration while its former owner is reduced to wearing the polyester trousers.
He thanks the shoeshine boy profusely and runs off, who brushes off his words: "I'm always glad to help those who need it! I've always been generous! How good it is to help people!" he says to himself.
Twenty minutes later, a policeman walks up to the formerly well-dressed investment banker, and snaps: "Hey buddy, wake up, no loitering! We don't allow no stinkin' bums to sleep here."
Finally the stripped investment banker wakes up with a start and looks down at himself with astonishment. There is nothing left of the impeccably dressed executive he had been when he left his office. He is barefoot and wearing only cheap trousers and a t-shirt. It takes him a moment to realize that his suit, shoes, socks, tie, shirt, watch, jewelry, money, credit cards, ID and briefcase are all gone.
He turns to the shoeshine boy in astonished fury. "WHAT HAVE YOU DONE? WHERE IS MY SUIT, MY TIE, MY SHIRT! WHERE ARE MY SHOES AND SOCKS!? MY BRIEFCASE! MY WALLET! HOW CAN I GO BACK TO MY OFFICE LIKE THIS!? I LOOK LIKE A BUM!"
The shoeshine boy then tells him about his car and stocks. The banker begins to yell. The policeman then turns to the shoeshine boy and says "Is this bum disturbing you, sir?" and grabs the struggling investment banker by the arm and says: "You can sleep it off in the tank, buddy!"
"How DARE you! A BUM!!" shouted the banker, pulling his arm away angrily. "I am a banking executive!"
"Sure, pal" snaps the policeman. "Vagrancy, disturbing the peace, resisting arrest, assaulting an officer, harassment!"
At that moment, the CEO of the banker's firm walks by on a stroll, sees his employee being dragged away and cries out, "You're fired!"
Three months later, the shoeshine boy is shining shoes in the park as usual, and sees a new panhandler on the corner, with matted hair and a grizzled face, wearing polyester pants and a T-shirt, and a beard.
"It can't be!" he says, as he walks up to him. But it is.
The expensive haircut and the manicure are gone, along with everything else, and the former investment banker is now an unemployed homeless bum with a criminal record; he has been thrown out of his condo and his wife has left him.
It's hard to believe this was the same confident man in the expensive suit and polished shoes he had seen that day in the park.
"Spare change, sir?" says the banker-turned-panhandler, without looking up.
"Forget it!" snaps the shoeshine boy. "Why don't you get a fucking job?"
What's the fucking point of your story? That theft is acceptable simply because one is poor? Two possibilities.
1. The man earned his money honestly. Thus your story is a gleeful tale of the destruction of a good man.
2. The man earned his money's dishonestly. Tell me something, are you honestly of the opinion that poor people can't be greedy bastards as well?
The fucking point of the story is most of us are greedy self-aggrandizing hypocrites.
I heard the story a little differently.
The shoeshine boy lifts the banker's cell phone, and shorts several thousand shares of Twitter. When the banker wakes up, he hears that Twitter has crashed 20%, and the bet pays off $100,000. He takes the shoeshine boy out for steak and lobster, and they both laugh at the suckers who bought Twitter on the way up.
Moral of the story: Thieves of the same mind, seek their own kind.
TLDR
when you have a shoe shine boy in the white house does that mean time to get out of the US?
Now that's one Jooo I never liked.
Our shoeshine boy is a Chinese banana seller. But in our current day of unlimited QE, the market will crash only when the tribe decides it's time.
I'm up at my farm for the weekend. The next house up the road is inhabited by an electrician and his stay at home (never any kids, has only held jobs where fries were involved in the transaction at the drive through window) total bubble head wife. Tonight I'm cutting back some oak trees in front of my property and Mrs. Bubblehead stops while walking her dog to yammer for a few minutes. First she brings up Trump then she decides to let me in on the fact that her electrician husband has made the profound decision to get back in the market on Monday for the first time since he got out in late 2008 and suggested that I should go all in as well. I smiled and asked her what his reasons were for thinking that the markets are going to the moon from here and she said "well, look at how much things went down last week... they can't go down any more from here!" There you have it kids - the shoeshine moment for the great 2015 crash.
Joseph P. Kennedy absolutely did not make any money running liquor from Canada during Prohibition \
" If you're first out the door it's not called panicking."
Shoeshine boy.
Is it a bird? a plane? a frog?
No it's
Underdog!! We need you dude - come save us!
https://www.youtube.com/watch?v=tEVsRLhet2k
For Bloomberg’s information, it’s called a swindle, not a shoe-shine-boy moment. Stealing the public’s money is fashionable in the stock market and the big boys are organized to get their share, with the collusion of the Fed.
Joseph Kennedy was one of the names on the list of men who were notified in advance of the coming October 1929 crash in the stock market. On February 6, the Federal Reserve issued an advisory to its member banks to liquidate their holdings in the stock market. That’s how G. Edward Griffin describes what was to be “The Great Duck Dinner” in his book, The Creature from Jekyll Island.
Paul Warburg gave the same advice in the annual report to the stockholders of his International Acceptance Bank, the advice reprinted in the “Commercial and Financial Chronicle” on March 9, 1929.
Warburg as a partner with Kuhn, Loeb & Co. maintained a list of preferred customers, as did J.P. Morgan Co. “It was customary to give these men advance notice on important stock issues and an opportunity to purchase them at two to fifteen points below their price to the public,” writes Griffin. “That was one of the means by which investment bankers maintained influence over the affairs of the world.
“John D. Rockefeller, J.P. Morgan, Joseph P. Kennedy, Bernard Baruch, Henry Morganthau, Douglas Dillion – the biographies of all the Wall Street giants at that time boast that these men were “wise” enough to get out of the stock market just before the Crash. And it is true. Virtually all of the inner club was rescued.
“There is no record of any member of the interlocking directorate between the Federal Reserve, the major New York banks, and their prime customers having been caught by surprise. Wisdom, apparently, was greatly affected by whose list one was on.”
Good stat JR. Bear and Lehman were not on the list in 2007/08. Of course all banks were bankrupt especially Goldman and Citi. Who did Robert Rubin work for?