The Official Bears Playbook
As a resident of the Chicago suburbs (and a Packer fan) I was excited when I saw a crumpled, muddy document under a METRA seat.
Could one of the Bears have carelessly lost his playbook? But that could not be. Bear players lived in the North suburbs, not in the West. Besides, playbooks are now on iPads. A rookie had his stolen last Spring, and it was quickly erased via a remote feature. So what was this?
Opening the document, I saw a subtitle: Official Guide to Successful Financial Blogging and Commentary. The introduction explained that the fast road to riches was to feed the insatiable public appetite for worries, “explanations,” and confirmation of their fears. This made more sense than a lost football playbook. Some of the “reliably bearish commentators” on my Twitter list also live in the West suburbs. This might be the real thing!
Nervously, I turned to the first page and saw a simple chart of instructions.
|
Event |
What to Say |
|
Stocks moving higher |
This is an extended bubble. It has no basis in fundamentals. This is a sugar high from the Fed and high debt levels. |
|
US stocks outpacing the world |
The US is part of the world economy. It cannot succeed by itself. |
|
Dollar weaker |
This portends stagflation! Growth is weakening and foreign goods cost more. |
|
Dollar stronger |
This threatens the corporate earnings of the many US companies with major overseas business. |
|
An economic indicator misses expectations |
This is just the start of a pattern of economic weakness. |
|
Economic indicators show strength |
The Fed will react by taking away the punch bowl even more quickly |
|
An economic indicator pulls back slightly from a series of great results |
It is rolling over! Produce a chart with a red arc over the most recent data point. It is easy to spot old peaks and put the arc over those as well. |
|
Oil prices move higher |
This signals inflation, faster Fed action, and the end of economic growth. |
|
Oil prices move lower |
Declining commodity prices are an early warning of a weaker economy. Prices have always declined before a recession. |
|
Bitcoin spikes higher |
Demonstrates the overly optimistic, bubble-everywhere mentality of investors |
|
Bitcoin plunges |
Even more evidence of reduced appetite for risk. |
|
Small cap stocks lag in an overall rally |
Shows lack of breadth – no confirmation of the broad market. |
|
Small caps surge |
Classic sign of a frothy market. |
|
New highs in stocks or the economy |
It doesn’t get any better than this. Look out below. |
|
FAANG stocks surge |
Market lacks breadth. Most gains from a few stocks. |
|
FAANG stocks decline |
Market cannot rise without leadership from FAANGs. |
There is more, but it is too muddy to read. I could make out a single line at the bottom:
When in doubt, go for the easiest target around: Blame the Fed!
Not sure if this tale is true or not Jeff but either way it’s brilliant and hilarious.
You’re our needed reality check on the ubiquitous Chicken Littles out there just trying to get their page views up.