Big Evil Funds - a reprise.

A "Best of Bunkerman" Post - the FIRST ONE !

Originally posted Sunday, January 14, 2007, this post explained the concept of the market actions explained by a bunch of animals nicknamed "beefers". My modification since then would be to include the piranhas, too - those beefers and beefer-like Wall Street financial institutions that feed on others in the markets, particularly their own customers. Goldman, Sachs is the Prince of Piranhas.

***Reprise begins***

Big Evil Funds

To understand stock and commodity markets, you need to know who are the important participants. Today the principal ones are index funds, hedge funds, Street proprietary trading funds, mutual funds, the active public, and the inactive public.

For fun and because the classification works in explaining market activity, I group hedge funds, active trading mutual funds and the Street proprietary trading operations together as the Big Evil Funds. Long Term Capital Management was one, as was Amaranth until they blew up; Janus of the 1990s was one, too. I'll going into the "evil" appellation later.

For now, imagine a large group of wild elephants at a water hole. They drink & drink & drain it, then they stop around in the mud for awhile to decide what direction to go to find another water hole. At some point they decide which way to go, and they are off in a stampede to another water hole. If they get there and it's small or dry, they stomp around more & then go off in another direction. You can see the metaphor at work.

The action in the stock & commodity markets since the first of the year is a fine example of the big evil funds at work. I call them "beefers" - derived from "Big Evil Funds" shortened to BEFunds, hence "beefer" - since "beefer" has humorous secondary meanings. Besides being a country term for cattle - hence the herd stampeding, etc. - see the Urban Dictionary for more.

Early in the year they rolled into tech stocks & out of energy. then after a few days - as they realize tech water hole was too small - they all barge out of tech & mill around. Some barge into retail, some back to energy. Always they are searching for more water. The press daily comes up with nonsense about the "market" thinking one thing and then another. Trying to put reasons on this action is silly - it's just beefers searching for a trend, milling around, stomping in the dust. Don't get confused by trying to rationalize this kind of action.

***reprise ends***

Markets

A bounce. I did nothing. The Green-Red rule came close to being triggered, but not. It's not a bright line rule. The the markets slightly trigger it, but look sluggish at the time, I let it ride a bit.

Obama

More bloviating and lying. Or not ? Here's a quote from FT: "he planned to press ahead with his plans to overhaul the healthcare and financial regulatory systems and introduce a cap for carbon emissions, all policies that business has criticised to varying degrees. ... 'We need businesses to support these efforts,” he said, adding that it was “not about being anti-business or pro-government; it’s about being pro-growth and pro-jobs.' ”

That part is true. he wants to draft (or recruit ?) big business into a crypto-fascist state to rule over the common man. In Nazi Germany, industrialists had a major role in both bring the Nazis to power and in running the state. Part of fascism is its satanic marriage of big business with totalitarianism government.

PS:

I have to thank a reader and oft astute commentor known a Sun Boy for this idea. He thought it mocking when made yesterday, but I recognized the value of reprising good, old posts from a few years ago for the thousands [ ;) ] of new readers of this blog. And some days I have nothing original to say after three years of daily posts. [Daily here means business days, plus a few weekends.]

Word of the Day

"Irrefragable" - adjective [$10]
Irrefragable means 1. (of a statement, argument or person) unanswerable, indisputable.
Sentence: The statement by Bunkerman that, 'credit defaults swaps and beefers were the core of the Panic of 2008', is an irrefragable truth by virtue of the facts of the AIG debacle.

OOOOOOOOOOOPS

Sorry, I used that one last week. I forgot to put its card into the "used recently" pile :((