Saturday, October 11, 2008

Why it does NOT pay to be a Prophet of Doom.

Think about it. Every single one of the Prophet of Doom turned out to be false or very ill-intentioned, crazy religious loons of some sort who just coveted young pretty underage girls. Really.

So why am I predicting riots, posting an e-mail about commerce seizing up, and credit goes away, civilization at risk? This is NOT professional. You trade, and only trade.

Yes, but you would leave something out.

Trade the tape you get.

What is the current tape?

(Let me get to that after I go out tonight- what little scientific knowledge that I have at this point is NO USE, just to give you a hint. Later.)

There's just no credit out there, man. Thanks to 10 years of supercharged fraudulent lending/insurance. Tapped out. There are two types of insurance out there: One is where you can insure yourself, and two is where you have a chain of people who either passed the bucket along a straight line down to the dumbest/poorest insurer who insure EVERYONE, or one that goes circular where A insures B, B insures C, and C insures A.

A total shitshow.

What was then the fuzz about covering the shorts, like why did I cover Wamu shorts about 20% each time that went south $5 back in the days? I was sure of my numbers, I can read prices correctly, and based off that Wamu is 3x underwater by equity - so why did I cover?

Again, the fear is that all of us with brain saw that this is a crazy inverted pyramid that has been around for all we know, ages. It defies physics and sometimes it shook, but it always, ALWAYS killed anyone who doubted the inverted pyramid's ability to make money. What use was it then, being right, when in the end you will almost certainly get killed fighting the pyramid?

Then it started to change. The inverted pyramid started swinging with larger and larger amplitudes with every failures the whole scam apparently was unmasked. The difference THIS TIME is that somehow the world REJECTED to stand by and continue the scam.


Other than that's the right thing to do in the first place, I don't yet have any explanation. Maybe it was the critical mass. Maybe there's just too many rats leaking balance sheet to investors from inside the company masking as bloggers. Maybe it was never a secret. Maybe everyone is fed up and wanted a non-finance based economy.

This sort of changes are sweeping. Big hurt came to countries that experienced these changes in the past decades/centuries and mass violence was almost guaranteed. The risk of a total meltdown was always 0% in the last 100 years, and then last week it was 1%, and now I personally feel it's about even odds.

Again, I wish we can just accept the frauds as a fact of life and increase the size of the pyramids instead of toppling it. I really am not being cynical here. There was nothing wrong with inverted pyramid for a looooooong time other than being unsightly and immoral. It will be a monumental task to understand why this time it's different, and that was the basis of calling a social unrest and indices going to zero, which happens when "this time it's different".

I have no problem with being wrong, no problem at all. But I will just trade the tape I get.


ARAK said...


USSR went though an implosion that did cause the economy to go through a barter time, but riots did not break out. True that russians go through immense hardship before they revolt, but given the scale of gut wrenching changes they experienced, I'm surprised at your riots call. But then, I don't profess to understand much about the redneck pschye.

I do share your concern about credit seizing up. However, your implosion and riot calls need a little more detail behind them. I know your institution has pulled credit lines with the UK. But how widespread and pervasive is this credit lock up between banks? Is it only between countries at this point or between banks within the country as well?

gler said...

Arak, the majority of USSRians never had the high life... all potemkin villages. Most were used to just getting by.
But not so for the US. The potential drop in quality of life for the AVERAGE American is definitely very large at this stage, much much larger than what the AVERAGE USSRians faced.

Mtgspy, are you serious when you say that you don't actually want this to happen? You sound like someone who hates the way things are.

D said...

Russian men are drunks, end of discussion.

MTGSPY said...

I do not like a lot of things but I started realizing there is a risk everything I have goes poof at this point.
SO maybe fraud is the way out, stay the way it is? Like I said, I am torn between curiousity and fear. So it's really exciting.

MTGSPY said...

the attitudes about UK banks is universal at this point.

Foghat said...

Well, you also don't get the party girls...but you do get those twisted morbid doom types, and really, when it comes to sex, each of those girls is worth at least 50 times one those other silicone jobs.

Foghat said...

PS Fraud is always the only way out....preferably in multiple languages.

MTGSPY said...

Oh, I agree. And the air-head bubble type you think gonna last? I don't think so, goth might be the dominant type for all I know.

I just basically realized and became very tense over the past few days that predicting a meteor hit would not leave me on record as a genius.

I think the best course of scenario is to "rent a year's time" I don't know how so I can be better prepared and then we can go ahead and have the all-out collapse.

Again, remember this, calling this sort of thing is never in the money until T-2 minutes. It's traded solely in your head and your ability to perceive the subtle feelings of the masses.

gler said...

Air heads need some deflating!

D said...

I have told several guys that if they can pay their bills and afford to take a woman to burger king or olive garden once a week they will have the pick of the litter in the years to come.

this will conceivably be the greatest redistribution of p*ssy in our nation's history.

MTGSPY said...

Cool off on the whisky and viagra guys. heheheh. As if last few weeks haven't been enough.

D said...

i'm a scotch guy myself...

ARAK said...

Mtgspy & D,

The greatest redistribution of pussy will happen in Reykjavik starting 2009. Are you guys going to run into each other in Reykjavik? ;-))

D said...

I'm not going to lie...I thought about a trip there, but not at this time of year.