Saying that the stock market’s behavior has been crazy in recent months is like saying the weather has been crazy this summer. The market and the weather always act in crazy ways. Still, at least in the market’s case, sometimes even the folks stacking the deck get a bit queasy about the craziness.
That’s happening now. You look at the financial press and financial web sites, and many recently shameless promoters of an undeserved stock market boom are backing off and suggesting a big correction is overdue. And when even the shameless and undeserving hint this openly, you know a tumble is almost certainly coming.
And why not? The market movers (who some might label market riggers) have all gotten out of this six month super run up what they wanted. The Wall Street bonus piggies have secured their multi-millions. The commodity crowd has pulled off the amazing feat of rendering moot the law of supply and demand by making a packet in commodities when supplies were excessive and demand was weak. Treasury types can pretend their giveaways to bankers have done some good. And even Ben Bernanke, the fellow who made up market losses on assets whose values never really existed with government borrowing that can never be repaid — even he has seen fit to brag about saving us from another Greater Depression (though managing not to take any responsibility for the Great Recession he did nothing to prevent).
With these worthies happily heaped with wealth and/or praise, just one additional ingredient was needed before a big fall became inevitable — the appearance of suckers who would end up taking the big hit. And lo! Just a week or so back a report came out heralding the fact that small investors were finally flooding back into a stock market whose huge prior upswing was almost solely due to institutional buying.
So then. When’s the big dump coming? Will it start before Labor Day, or in September when it’s now generally expected. Or will it somehow hold off until October — the traditional month for the very biggest market drops — on word that the Christmas holiday shopping season will be a total bust this year because so many people don’t earn enough and can’t borrow enough money to spend at Christmastime? Guess we’ll just have to wait and see.