Nothing New Under the Sun

Humanity was not re-invented in 2000. Many significant events and behavior occurring now are strikingly similar to such from 80 and 100 years ago. Or even 1000 and 2000 years ago.

Some examples.

1. A fixation with apocalyptic outcomes. The fact of civilization is that barring war or political revolution or governmental error, human civilisation moves with slow meliorism. Big changes just don't occur. But human beings have become fixated on apocalyptic outcomes and visions for millenia. None foreseen has happened. Why are so many expecting a armageddon in the financial markets ? This perception existed in the 1980s and 1990s and now again. But what has happened ? A chart of US GDP shows quite a boring uptrend since ... 1933.

2. Financial markets exhibit crowd behavior. This has been so well known for decades. So why is it a surprise when the "markets" basically go nuts in fear panics or greed lust ? Books have been written about this and seers talk with furrowed brows describing it. But in the middle of one, all is forgotten. Simple trend following overwhelms all thought. Facts don't matter any more. Fearmongering and rumormongering runs amuck.

3. When fences are cut, wolves will prey. One purpose of laws and rules is to prevent the ruthless and evil from preying on the common man. This holds true in financial markets. In the 1920s and before, financial wolves manipulated stocks, conducted bear raids, and pumped stocks with impunity. When the SEC and Congress succumbed to libertarian nonsense and payoffs from Wall Street and hedge funds and gutted market regulations in the name of "reform", they just let the same pack of wolves loose again. No surprise they are back doing the same behaviors again as they did in the 1920s and before. The human behavior pattern was always lurking.

So yesterday all three were patterns were at work in the rumors and raids on FNMA and Freddie Mac. And the libertarians like Poole tossed some gas on the fire. Bear raiders spread false rumors about LEH. Sigh....

This is why I stick to Krypto Fund investing for the bulk of my investments. Broad diversification and mechanical asset allocation.

Doing nothing ...

PS: even the horrible 1929-1933 period in the financial markets, when viewed on a 100 year wall chart, are just a pronounced up and down move returning to the long term trend after a decade.

PPS: GE good numbers ... whither recession ?

Word of the Day

“Paraenetic” – adjective [$1000]
“Paraenesis” – noun [$1000]
Paraenetic means of, pertaining to, or of the nature of paranesis, advisory, hortatory.
Paraenesis means exhortation, advise, counsel; a hortatory composition.
Sentence: Thinking about events of the past few months and days, Bunkerman today wrote a paraenetic blog about human behavior in a longer term perspective.