“There is no real direction here, neither lines of power nor cooperation. Decisions are never really made – at best they manage to emerge, from a chaos of peeves, whims, hallucinations and all around assholery. ” – Pynchon
What madness!
It's a fun kind of madness, especially when we can make a quick 36% cashing in the EWJ calls we discussed in yesterday's post and $1,000 per contract on the oil shorts we also discussed in yesterday's post. What do we care if the markets are fixed as long as we UNDERSTAND how they are fixed and are able to play along with the fixers?
Gravity's Rainbow is a novel about V2 Rockets (and other weird stuff) and the title refers to the parabolic trajectory the rockets take. What's most significant for current market watchers is that the rockets are targeted from the ground, shot in a certain direction with a certain amount of thrust – and then, near the top, the engines cut out and gravity takes care of the rest.
Where the rocket lands is predictable but not certain, following a probability theory known as a Poisson Distribution. In other words, you give the rocket a push in the general direction of your enemies, but you're never quite certain where they'll end up. This leads to a lot of angst among some of the more sensitive rocket men but a sense of fatalistic determinism from most of them. Very much like our Federal Reserve's efforts at stimulus or, as Pynchon said:
“A market need no longer be run by the Invisible Hand, but now could create itself-its own logic, momentum, style, from inside. Putting the control inside was ratifying what de facto had happened-that you had dispensed with God. But you had taken on a greater, and more harmful, illusion. The illusion of control. That A could do B. But that was false. Completely. No one can do. Things only happen, A and B are unreal, are names for parts that ought to be inseparable…”
That is what we have now and that is what the Federal Reserve seeks to impart to us tomorrow – the illusion of control. As we can see recently, there are clearly some doubts creeping into the market participants, which leads to wild intra-day swings – based on the rumor of the…
This article will become free after 48 hours (see below for free content). To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.
