#868 Pulled Short

The market is like a cappuccino.
They talk about those frothy credit bubbles popping and how people feel. They’re starting to use the word that hasn’t been uttered in a long time.
Depression.
Well I’m not worried. There won’t be a repeat of the 30s. They didn’t have any of the drugs we have for depression today.
I am worried about overreacting to this whole thing though, and creating regulations we don’t need that could constipate the market further. Like the other day, they suspended short selling. Fortunately, summer is over so not that many clothing retailers are selling shorts anyhow but this is a prime example of Washington sticking its nose in where it doesn’t belong.
Before that, they said one of the problems that had reared its ugly head in the market was “naked short selling,” and that had to stop. Well I guess I agree with that. I’m not sure if naked shorts were part of the Emperors New Clothes investment bank or what, but the whole idea of naked people hopping around in packed stock exchanges has gotta create a whole different sort of panic.
But they need to back off a bit. The whole appeal of capitalism is risk and gain. If you didn’t have the prospect of losing your shirt, stuffing your pockets wouldn’t be nearly as satisfying.
It’s just that the risk-takers need to invest in manufacturing companies again and start-up technology firms. Not just derivatives of derivatives. Trying to make money off transactions of trying to make money.
The ultimate blame rests on the speed of our culture. We are so entrenched in the instant gratification ethos these days. No one wants to wait thirty years for a turn on his or her investment.
They want it now and they want to be able to pick it up on their Blackberries, reinvest in another 24-hour hedge and move on to the next one. All while driving their Beemer down the freeway, answering three calls and texting in their cappuccino order to the drive-through barista.
Packed hard, pulled short, and full of frothy bubbles about to burst.
That’s depressing.
America, ya gotta love it.