How extraordinary it is. Now that efficient market theory is officially dead. Now that we have had endless days of black swans. The new black swan is the .0229% change day.
Not that long ago, people were fighting for a piece of the action. Driving oil ever higher, we heard endless talk of how the days of cheap oil were over. Today oil hit a target price not seen for 5 years. Some analysts are projecting something even lower for the future. Where is demand they say?
Dow still seems intent on doing a deal, at an outrageously high price that was considered high when the market was strong. What kind of management would continue to support such a plan? Will the shareholders get a chance to weigh in with their views?
There are some incredibly good buys out there. If I were intent on buying a piece of America, a bit of oil for instance, I would choose this time to buy. Why does no-one think of buying when the price is low? Even if the price goes down from here, it has less far to fall than the drop from the previous lofty heights that put so many assets in play.
This correction has been far harder and far faster than the rocketing market that lulled so many to sleep. That hedge funds, who for some unexplained reason have been able to perfect their craft outside of the normal scrutiny of the SEC, have been unloading at fire sale prices is part of the problem. Shame on us all for letting them get away with their closed shop model after the LTCM debacle.
There are risks now that we will lose our way. We need to look through the carnage around us and set a course for the future. Cheap oil will not encourage the search for alternatives even though not all of them come with a high cost.
How do we want to relate to the wider world? How do we want them to relate to us? How can these ideas filter down to the everyday lives of Americans? In a world where the production of more stuff creates more environmental damage, are our current pricing strategies creating the world we want to live in?
These are big questions. If the market really is telling us something, it is that there are a lot of unanswered questions about who we are and where we are going. In the meantime, where are the buyers? When my husband and I stayed at the Grand Hotel on Mackinaw Island this past summer, we learned that the current family ownership dates from a purchase by an employee during the depression. The day will come, when everyone will be kicking themselves over the markdowns of America’s finest institutions. These companies represent years of history, years of good honest labor for and by Americans and many other citizens around the world. What does it say when we shun what we have spent a lifetime and our heritage building? This is our family. This is our history. It is time to stand by it or we will lose it all.