“But Then Who Would Care?”: Explaining The Business Of Being A Market Cynic

I used to work for someone who, like me, is a perpetual market skeptic/cynic.

To be sure, he’s an idiot. But not because of his take on markets. When it comes to anything you can trade, he’s a regular goddamn savant.

Unfortunately, he also happens to have a rather unscrupulous agenda that he (figuratively and literally) papers over with dollars and that he obscures when he meets people in person by putting on a faux (not to mention nauseating) nice-guy routine. It’ll all blow up spectacularly one day which is why I exited stage left, but that’s a story for another time.

Anyway, I once asked him if he reveled in the glory of being right on days when the market was gripped by a palpable sense of fear. His answer wasn’t what I was expecting.

Paraphrasing (that’s the best I can do – lots of bourbon since then), he said this:

Not really. Because if this whole thing truly does come apart at the seams, we’ll be out of business.

Now on the surface that doesn’t sound too interesting. If everything is reduced to ashes in some kind of once-and-for-all-ish purge where every last vestige of misallocated capital is squeezed out, the system will have collapsed and the terminals will go black along with the ATMs. So yeah, “we’ll be out of business” – and so will everyone else.

But he didn’t mean it that way.

Rather, he meant it as follows:

If the global experiment in central bank market manipulation were to stop driving prices into the stratosphere and if modern market innovations weren’t creating epic distortions and anomalies that need to be lampooned and explained, then why the fuck would anyone care what we have to say?

The point: too many people imagine that what you’re seeing across markets “proves” market cynics are wrong.

“Things keep going up,” people will say, before invariably asserting that “the skeptics must be embarrassed.”

That couldn’t be further from the truth. The second the market becomes rational is the second we (the cynics) are out of business.

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