When I was in 4th grade, I was cut from the basketball team. I was devastated and cried after school as I watched my friends walking to the gym for practice. One reason I was so upset: I was pretty damn good. I kept practicing and within a few weeks, some scumbag was off the team and I was in. A couple of games in, I scored 27 points in a 24 minute game. Looking back, I would have to say that incident built my character.
By the 1990s, there were no more team tryouts. For anything. All grade-schoolers made the team. All cheerleaders made the squad. And everyone got trophies. Benchwarmer on the last place team? No problem. At the pizza party, the coach would still find some kind words about your athletic prowess as you walked up to collect your Hustle trophy. No one could fail.
Ben Bernanke has taken the stock and bond markets and basically said all assets get Hustle trophies. MBS worth 10 cents on the dollar? No problem, we'll print and take them off banks' hands at 90 cents on the dollar. And for the stuff the banks want to hold on to, we'll give a Federal guarantee. No one can ever lose. Ever. Unless you bet against Ben, which would imperil the existence of numerous small hedge funds trying to make a name for themselves. So get long. Take risk. And don't worry. The end of the year Pizza Party is right around the corner. And everyone is getting a trophy.
No comments:
Post a Comment