Kruggers - sex and drugs and zero rates. Wherein he notes this chart:
which actually is scary, when you think about it.
I'd add that this chart also shows that a full 85% of wall street traders have never even seen a secular bull market - all they've seen is the doom of the Nasdaq collapse, followed by a tepid market recovery, then a banking collapse with OMG tanks in the streets and America presided over by a Kenyan gay muslim communist sleeper agent.
Then Kruggers gives us this comment by Kevin O'Rourke which seems perfectly believable:
The markets want money for cocaine and prostitutes. I am deadly serious.
Most people don’t realize that “the markets” are in reality 22-27 year old business school graduates, furiously concocting chaotic trading strategies on excel sheets and reporting to bosses perhaps 5 years senior to them. In addition, they generally possess the mentality and probably intelligence of junior cycle secondary school students. Without knowledge of these basic facts, nothing about the markets makes any sense—and with knowledge, everything does.
Yup, I believe it. My god though, Kev: this means that in order to beat the market handily, all you have to be is an even-headed non-coke-addict with some emotional maturity.
Then Kruggers bitch-slaps the clown at Bloomberg who wrote the story:
Side benefit: read the caption on the Bloomberg chart, and note how bad economic analysis — the specific kind of bad analysis one finds on cable TV business news — gets presented, probably unknowingly, not even as opinion but as fact. “Inexperienced traders will have to tackle markets without the central bank’s artificially low interest rates …” [my emphasis]. Who says they’re artificially low? What does that even mean? It might mean rates below the Wicksellian natural rate, which is the rate that produces stable inflation — but with inflation consistently below the Fed’s target, this criterion would if anything say that rates are artificially high, propped up by the zero lower bound.
I love the crotchety, mean-spirited new Krugginator.
Anyway, this whole rate-cycle thing doesn't really matter, considering enough of the Fed seem to want to concentrate on the unemployment section of their mandate and see how low this fabled "NAIRU" really is. And besides, the crappy data we've seen, with the lack of post-winter bounce, must suggest the economy has slowed and the Fed wouldn't have the growth headroom for raising rates for a while, right?
Though of course the cokehead brats on Wall Street will happily believe that Yellen will happily sabotage the US economy, driving it back into a liquidity trap. Because they're cokeheads and paranoia is their thing.