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The Inherent Wisdom of Sheep

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“I have no idea”, said one JP Morgan Chase economist today when asked by the New York Times why the Dow shot up over 550 points on the same day yet more recession indicators piled on. That seems to be the best response under the circumstances, but it belies a more serious problem. For years, we’ve been told to trust the market, to listen to the market. We were told that the market has an inherent wisdom.

The inherent wisdom of sheep more like.

Someone decided that the rally was due and bought. Someone else said “things are bottoming out”, and he told his mates. His mates told their mates, and they all got back in to earn some bucks with someone elses tired, downtrodden money. The herd mentality is not a signifier of great intelligence – quite the opposite. And this level of absurd, illogical, delusional volatility is a signal of worse to come. So please, for once and for all, let’s stop listening to the market – oh, and enough of those images of Wall Street traders watching the screens with panic and despair on their faces.

If I could earn a Euro for every time one of those…

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Written by coolrebel

November 13, 2008 at 9:33 am

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