Het Neoliberale Geloof 73

Tevreden snurkt men zachtjes verder in de polderlandse pers:

'Bulls, bankers blind to inevitable bust.
By Doug Wakefield (with Ben Hill)

While observing current events through the lens of history over the past few years, there have been times in which the only conclusion I could draw was that we were beginning a bear market that would prove much more severe than the one from 2000 to 2002.

As fiat currency and money supplies have exploded the world over, we have seen a proliferation of products, with varying acronyms, as the financial world tries to distance itself from the risky loans it originated. My experiences, as a researcher and investment advisor, suggest that the root of the problem is in investors' thinking. Between the autumn of 2002 and the spring of 2003, multiple markets began bull runs. As 2007 comes to a close, the only lesson most investors learned from the US$7 trillion loss of those years is to "hang on" when the market declines.

But while the past five years have produced substantial bull markets in a range of equity classes, they have also produced investors who have failed to read the historic accounts of how rapid credit creation ultimately ends in collapse. The need to slow down and prepare for contracting credit is lost in the fast-paced, unforgiving world of momentum trading. But those who have been reading the headlines since the first of August can plainly see that the world is rapidly shifting from one that embraces risk to one that shuns it. And as historical precedent suggests, since the credit bubble started breaking down just four months ago, our government, as well as those of the Europeans and Asians, have sought to intervene.

With several equity markets set to finish 2007 at or near historic highs, you may be thinking that things are not nearly that gloomy. Two years ago, we released a research paper on short selling, aptly titled "Riders on the
Storm: Short Selling in Contrary Winds". Some thought it foolish to attempt to thwart the gods of modern capitalism, and I must admit it's been a rough ride. Most who hold to my line of thinking have been unheard by family, friends, and associates.

But, once again I write to encourage some and to implore others to suspend judgement for a few minutes until they have critically appraised the evidence. If you come to the conclusion that I am wrong, what has it cost you but a few minutes of your time? But if I am right, it will not matter who wrote what when, but only that, as crowd behavior shifted from greed to fear, you heard an idea that later proved to be extremely valuable.

Heard it all before?
If we see something one time, and extrapolate that the conclusion will always be the same, we stand a high chance of failure. But if we watch multiple occurrences of similar patterns unfolding over months, quarters, and years - sometimes fast, sometimes slow - with different degrees of force and destruction, across different nationalities, cultures, and time periods, then those who ignore such data, do so at their own peril. So as you read and try to gain your bearings in this unfolding market, let me share with you two hindrances, in the form of words we think or say, that are barriers to accurate assessments.

Statement 1: "Hey, if you're so smart, how much did you make in the last 12 months?" With the Dow substantially higher than it was when I released our short selling paper in January of 2006, you know I've heard this statement before. But this statement reveals a fallacious understanding of how the market, and life itself, works.'

Lees verder: http://www.atimes.com/atimes/Global_Economy/IL14Dj01.html