Educated Ignorance: A Breeding Ground For Cowardice ~ The Risk Averse Alert

Thursday, November 10, 2011

Educated Ignorance: A Breeding Ground For Cowardice

Think of it. These days sovereign debt of nations backed by millions upon millions of taxpayers is being thrown around by "the market" like some kind of rag doll in acts of extortion following on a setup by a "banking" industry employing zero due diligence while laying a debt trap over the past many years. What are otherwise the most financially secure securities on the planet, tossed around like yesterday's trash.

Then, amidst this backdrop, no shortage of college graduates appear on TV and in all seriousness tell the audience NOW is a good time to buy equities! Really? When securities much higher in the capital structure are being viciously attacked? This is a good time to go long the riskiest asset class of all?

Oh, but that's not bad enough. We have people running for the office of President of the United States saying the nation needs to cut its spending on education!

This raises a couple questions. First, could we possibly get any dumber? If not, then where has all the money gone already spent on education? The same place as "bailout" — feeding fantasies sustaining more devious schemes? Proof is in the pudding: uncritical thinking amidst increasing chaos is making for ever more bold and daring criminal acts, committed in broad daylight, yet only the more left unchallenged, as though days of old might soon return and all offenses might be proven better forgotten.

Plainly, ignorance is anything but bliss. It is a breeding ground for cowardice.

Not to fear, though! "The market" — "old reliable" — as ever, is ahead of the curve, and notwithstanding undeterred prognostications of America's "best and brightest," shows money wisely running for the exits...

$BKX weekly

In a banking system polluted with the present day's sovereign scourge is truth of risk owning equities shown. Assuming a functioning banking system is prerequisite to economic conditions conducive to business growth, a consensus judging the banking system contrarily disposed appears exposed in the bottom panel. A banking index sinking relative to the S&P 500 rather reveals where business in fact is heading.

Sucker a glorified salesmen with high-priced analysis backing glossy estimates made to be beaten, the consensus spoken where the rubber meets the road calls into question the sanity of those who at this late hour call equities "cheap" and/or "attractive." If it were so, then would not the banking system be favorably positioned to benefit? Of course it would. As always, then, salesmen appear to have something to sell. Truth is were there "value" in equities you probably would be hard pressed to find anything but disparaging words.

(Tuck that away for reference sometime in the near future.)

Fast Money
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