The Ayn Rand Bandwagon

In the habits of fragmentary treatment and erratic frequency characteristic of this blog – especially when I find myself here on Saturdays – we continue the analysis of whatever vaguely market-related subject happens to capture my attention within an indeterminate period previous to writing. This time, it’s Ayn Rand.

I alluded to Ein some weeks back as the posthumous perpetrator of a petty mindcrime against a former acquaintance of mine. Still an acolyte, Rand simply convinced him to light candles in front of his own mirror rather than the Pieta.

Those memories were evoked by a randomized turn-of-the-dial listen to conservative talk radio host Glenn Beck during the morning commute: what I heard was veneration of Rand, Atlas Shrugged and WSJ Op-Ed writer Steve Moore for his 01/09/2009 piece “‘Atlas Shrugged’: From Fact to Fiction in 52 Years”.    That column’s abject paucity of trenchant analysis, highly selective treatment of AS and Randian heroine worship were simply terrible.  Beck’s total lack of cognizance that the object of his adulation uniformly averred ethical premises – as sine qua non for the success of capitalism - I’m certain he’d find repugnant was embarrassing; but brought to my attention a fomenting undercurrent I’ve noticed among pundits on the Right and marginalized self-styled philosophers and…traders: that Ayn Rand was magnificently prescient, a grand prophetess and first-rate philosopher who had all the answers half a century ago. 

Goddess Ayn, Progenitress of the Objectivist Faith

I am not an irrational Rand-hater; I know better: nothing would be easier for an Objectivist interlocutor to belittle and neutralize in their customarily supercilious manner.  And yes: Rand’s critique of statism carries important observations.  She was intellectually formidable and a talented writer (though agonizingly loquacious and not gifted) and a fair philosopher in some regards.  

But in other areas (for her, those areas that mattered most), I think she fared quite poorly: epistemologically (UGH!), ethically (GASP!), logically (BLEH!), even (a)theologically (SHRIEK!).  I’ll not go into it, unless someone prefers that I did; but I hesitate to here, because I don’t invite nor do I accept invitations to engage in what amounts to the interminable pissing contests so typical of philosophical pedants on the Internet. 

Perhaps traders don’t care about all of that: they’re simply content to appropriate from and make lists of Rand’s pithy little truisms a la Nietzsche’s Beyond Good and Evil in support of their chosen profession.  As a recent, high-profile example, take Santelli’s “At the end of the day, I’m an Ayn Rand-er” comment during his one of his recent rants.  Really, Rick?  Just what are you actually talking about?  

Maybe intellectually irresponsible, but good because while I’m not out to alienate or anger anyone reading (mostly traders), I’m also going a bit out of my way to convey that as a formerly intensive student of the above philosophical sub-disciplines, I find most of the content of Rand’s oeuvre to be atrocious, and the quasi-apotheosis to which she has been subjected by her superficial admirers and obsessive Objectivist lackeys to be loathsome.  If you’re a big fan of Rand’s “novels” and non-fiction works, think of yourself as adherent of Objectivism, think Leonard Peikoff (or David Kelley, for that matter) are nigh-unto-infallible, believe implicit subscription to Rand’s ideas would revivify our politico-economic system, or are any other variant on the hopeless-sophist-Rand-devotee archetype, “obsessive Objectivist lackey” probably means you.

This all means that as of this moment I’m inaugurating a 30 minute cessation of the Eulogy to lament the decline of the market, which has brought about government intervention (about which I’m ambivalent) and the secondary effect of a resurgence in the popularity of Rand’s work.  Foreclosures, layoffs, and now, perhaps worst of all: increased sales of The Fountainhead by those who will never read it, or who will read it cover-to-cover and then cradle it in their arms as they sleep at night.  I guess we can blame all this on Obama, too.  

Now that I’ve gotten that off my chest, I’ll go back to enjoying a beautiful afternoon.

Lament over.

House Stimulus Package!

A surprisingly quick 647-page read here.

Also, great op-ed from Frank Rich in today’s NYT, consonant with the themes I glanced over a couple days ago.

Maybe not ultimately; but at this point I’m taking the night off.

Inauguration Day

With so much optimism and the great sea-change of policy ostensibly afoot, speculation about the impact of Obama’s inauguration and first days in office (stimulus roll-out?) on markets is predictably high.

Kathy Lien noted yesterday that inauguration day across the last 10 presidencies has been accompanied by more sell-offs than rallies, with no partisan bias apparent. Distribution of volatile days (Johnson’s first-term inauguration was greeted with -2.88%, while Reagan’s second term began with a +2.8% session) also seems mostly random. Even Kennedy (who Obama is often likened to) could only garner 0.31%+ in 1961.

Positive sentiment runs very high; but predicting the response or resultant outlook of the market is a notoriously fickle, perceptual game. Whether or not Obama’s accession to the Presidency sparks a Messiah rally, the same unwieldy problems that existed yesterday will persist into tomorrow: atrocious corporate earnings, bank failures/bailouts and dismal economic releases continue apace. Grand economic plans and initiatives, even if well-conceived, well-laid and well-executed will be of limited efficacy in the near-term; and that assumes they’re positively efficacious at all.

There’s no room for despondency; but whether hope for lasting change begun in the next 100 days (or 4 years) is well-founded remains tentative.

American Recovery and Reinvestment Bill of 2009

The text of Obama’s stimulus package went into circulation a few days ago. I have yet to read it fully, let alone read any thoroughgoing critique of it, though at 21 pages what we have is the master plan only. I’d be glad to hear any reflections on it/appraisals of it in the meantime whether pro, con, mixed ….

2009: Week 2 in Review

The second full week of trading for the year at an end.

Retail sales way down, foreclosures way up, a block in the Senate narrowly defeated to grant Obama the second $350B from the TARP ahead of his inauguration next week, Citigroup broken in two, Bank of America bailed out again ($45B now) citing “severe dislocation in capital markets” (I think there’s a macro floating around for that phrase), Greece downgraded from AAA, Spain, Ireland, Italy under review for a downgrade….

On the other hand, this week brought with it some excellent trading opportunities. While I did sustain an abnormally high 5.8% drawdown after a spate of bad calls early in the week, net performance ended well into the black, bolstered by longs on GBP/JPY, GBP/CHF, USD/JPY and GBP/USD (EUR/GBP did stop out with a -54 pip loss) closing out in profit overnight.

Flat going into the weekend. Pundits are calling for Friday rally in stocks after the BoA capital infusion/backstop. The world continues living in fiction.

Looking Ahead

The market continues to sort through last year’s grand narrative of risk aversion amidst the trackless morass of a politico-economic context formerly well-delineated but now reverted to variables. Even as the flotsam of deteriorated economic conditions rolls in unabated. Pre-inauguration/pre-Messianic realization/pre-Gojira-proportioned stimulus optimism, Santa Claus rallies and the coincident respite from plummeting markets seems to have given way, but to disorientation rather than renewed optimism. Everyone I speak with and every instrument I look at is bear-weary, but whence comes the bullish impetus everyone is looking for? Domestically, tax cuts look like an elaboration of the same old shell game: am I missing something, or is this fundamentally identical to the tactics of Obama’s almost-predecessor?

The most burning question, that continues to pose itself this morning without relent is entirely unrelated: why do I cover my eyes whenever there’s an embarrassing scene in a movie? What is it I have to be embarrassed of? I’ve always done this, and try as I might, stopping is a bit like trying to keep your eyes open when sneezing: it can be done, but when the time comes, it never occurs to you to try.

What, No Sunday Evening Bailout Announcement?

A good day for mucking about with well-established precedent.  And why not?  Things run a little more slowly around the holidays. Mall-going ravenous consumer traffic. Streams of already viscous petroleum, oozing into some unspoiled shallow marine habitat. People who’ve eaten whole fruitcakes.  

You’ll remember every other bailout occurred prior to Thanksgiving/Black Friday.  Coincidence?  I think not.  There’s simply no time to goose Asian markets with a bailout announcement when doorbuster sales necessitate camping out overnight. Confidentiality doesn’t permit poring over GM’s books whilst standing in front of Best Buy, lightly pivoting from one foot to another for hours because caffeine has brought you to a stand-off with incontinence the likes of which you have not grappled with since imbibing 44 oz. of Wild Cherry Pepsi within the first hour of The Return of the King. Or the same scenario, sans the diuretic element; whatever your preference.

Apparently tomorrow is out, as well. Due diligence and all those compulsory obligations of those responsible for the most efficient allocation of taxpayer money cannot be rushed. But did the Bush administration think to develop a contingency plan if Reid and his non-filibuster-blocking Democratic majority could not muster enough bipartisan support?

Evidently not; after all, two weeks is more than sufficient in these circumstances to cobble together a sensible, broadly-supported Plan B, as the dazzlingly adept execution of TARP distribution attests about those at the helm. And things are well in-hand, no doubt; otherwise epsilon semi-moron demagogue Treasury Secretary Paulson would be back in front of Congress panting, smarmy and sweaty-palmed with a shameless oligarchical manifesto two-page document appropriating through crisis-inducing obscurantist rhetoric requesting billions within the week to inaugurate avert the swiftly-approaching financial apocalypse.

So, will equities go down the drain overnight/tomorrow?  The above article and others seem to work on the presupposition that the Bush Administration will act in the next few days; the question turns then from when to what, exactly.  So the implicit tone of advancement toward a resolution will likely perpetuate the hope (it was you wasn’t it, Obambi?) of late last week.

12/15/08: 1915 edit: Now things have shifted, from “not Monday” to “a while”.  How’s that for urgency?  I’m no conspiracy theorist, but are Bush et al. stringing things along?  Speaking of strings, this may just merit more shoe-throwing:

Apparently that bit of Arabic – maybe not the vocabulary, but just the elocution – was mildly upsetting.  But as for Dubya’s reflexes?  That deserves no less fitting a tribute than this (and I really don’t award this lightly):

Nice going; must’ve learned that evading angry bulls in Crawford.

Maybe Obambi didn’t do anything.  Limited omnipotence then, whatever that means.  At least, the apparent triviality with which Perino’s brush-off is conveyed leaves me with diminished expectations.

Dark Days

Reference has last evening and this morning been made (some Yoda-nese word order, eghmm?) by more than one astute individual with underlying positive expectation of a rally in equities today on a technical breakout above the neckline of a reverse head-and-shoulders.

These aren’t quixotic buy-and-hold types now deeply buried, psychologically ravished by the vicissitudes of a market that plummets without relent, clutching tightly to their shares bereft of all reprieve.

Nevertheless, Obama’s inauguration is assuredly the Second Coming of the New Deal and portent of renewed prosperity, consumers have gotten the Christmas retail season off to an auspicious beginning and…and…how much lower can this really fall off to? Why shouldn’t there be a end-of-year rally?

After all, isn’t that what pundits such as Doug Kass are calling for? Oh, wait: that article is from a year ago. It’s darkly ironic that when a rally finally did come in the spring of this year, it topped out almost exactly where the market sat the day Kass wrote this piece.

No, these are traders. But other than a reverse H&S (perhaps), I see no technical rationale for a rally. Granted, I choose to evaluate on that basis rather than vaguely speculative gobbledygook concentrated on pseudo-optimistic fundamentals and a positive shift in sentiment precipitated by the accession of Obambi. Maybe I’ll be blown out of the water here.

So let’s look at that collection of anatomy littering the Dow30 chart:

left shoulder low 11/12-11/13 in the 8250 vicinity (ignoring the shadow on 11/13); head low 11/21-1122 just above 7500, and right shoulder low 12/01-12/02 at around 8150. Neckline breaks at 8800-8850, while there’s a descending trendline that could come under test around 8600.

The only technical support I find is with the positive divergence on the MACD across the H&S. Upside breakout pending, then?

Could that come about? Certainly, but there’s no buoyancy in the market, and with unemployment on tap this Friday, I see little chance of a substantial rally.

Meanwhile, Low’s 2001 release Things We Lost In the Fire, which I’ve somehow missed all these years, is turning out to be an understated lo-fi near-masterpiece.

Also, I’m muddling my way through another piece of media that slipped by a few years back: Capote. By that I mean I put it on with my wife after we’ve gotten the children to sleep, watch it for 12 minutes (that’s an average) before dozing off. Now I know why “older people” do that: exhaustion. When do I become that guy? At least I’m staving off decrepitude; but that’s two consecutive evenings, thus far. Not a bad movie (PSH gives an excellent portrayal of Capote actually, his best work since getting bludgeoned to death by Matt Damon in The Talented Mr. Ripley, which supports the universally-attested truism that those actors who portray a character slain by a gay character will eventually portray a gay character), but chopping it up in 11 or 12 installments is perhaps not the best way to view it.

Trades: GBP/JPY short from 140.64