The Last Pump

Who would have believed it? I didn’t that’s for sure. Many of us felt that after barely escaping a “global catastrophe” in 08-09 that an epic bull market would be the last thing the powers to be could orchestrate unless of course they were willing to completely eliminate free markets and price discovery completely, which is what they actually decided to do. 

Having endured three major bear market one would have thought the clock had finally run out on the Ponzi kings, but instead a very simple decision was made in 2009 and that was One More Ride to Glory. 

I remember like it was yesterday in the run up to the “1987 Crash”. I still remember vividly the announcement of IBM’s stock buyback a few months before the 87 crash. I remember the newly formed CNN business news explaining how bullish this was for the company. In those days on its face the explanation seemed plausible and why would a “business show” lie? There was a steady stream of analyst paraded on the new network showing how bullish the market was in 87 all the way up to the week the market crashed. There were virtually no bears to be found. There was one analyst named Elaine Garzarelli that purportedly called the crash shortly before and gained notoriety as one of the “only” analyst to nail it and rode that pony for years and years and forming her own hedge fund as a result.

2000 was a bubble that seemed even more obvious and the bubble media was in full pump mode for the year preceding that crash with CNBC leading the pump. Analyst after analyst proclaimed how different it was this time as multiples reached unheard of levels as the “internet” was welcomed into the lexicon. IPO after IPO was trotted out with instant billionaires everywhere. The problem was most of the instant wealth was “locked up” after the IPO or just “stayed at the party” too long and when they took the market down every leg was heralded as a “new buying opportunity” and the suckers on the side line stepped in and were slaughtered by the next selling wave. Many of the top flyers were down 90% or more or just delisted and left for dead. I still remember friends of mine leveraging up on stocks like JDSU after it was down 50% and then losing everything as it went down over 90% in just a few months.

Most of you still remember 07 and how Bernanke was constantly trotted out to tell us how there was no housing bubble and no slowdown was seen on the horizon. I still remember my friends relaying these facts to me as I made myself unpopular on the dinner circuit, but I just kept adding to my shorts of SKF and SRS as the 2008 collapse approached. I had Hedgee contacts in late March on a conference call with the biggest of the big boyz that were reassured while in Aspen that “someone” was backing them with liquidity and “hang in there” right after Bear Stearns had collapsed. I still remember telling them Lehman, and Merrill Lynch were next. They thought I was nuts. I continued to short the market while CNBC pumpers literally shouted down the naysayers in 2008 like Jim Rogers, Michael Pento and others. It was hard to calculate the wealth extraction they contributed to but after 2000, I knew the media had a different job than guarding the “public”. 

Miners have been a disaster and may turnout to be the joke trade of a lifetime with this market. Physical gold and silver may be a bust too. I could be 100% wrong and we may have a slow steady economic recovery with sustainable growth and return to free markets and the rule of law because its different this time…right?………….yeah.. sure…  ;-)