Monday, July 6, 2009

Setting Up the Great Rollover

Sometimes looking at the finance markets through the lense of the Wave Principle (and at the world through the lense of Socionomics for that matter) is difficult (for me, at least). These models intepret events and the "news" associated with them as tags or descriptors used to describe how the mass majority of people act out a herding process - a process that can be described as waves of optimism and pessimism.

For someone like me who was (and still is) a news junkie growing up, breaking loose of the view that the "news" is describing the "true" cause of events is tough. Even though I see, intellectually, how the "news" or "fundamentals" theory is woefully inadequate and how the Wave Principle does a much better job describing the world, it is sometimes hard to shake out of that mindset.

That's why we occasionally do a "memeering watch" here at FutureJacked. I am convinced that some very smart people have a very solid understanding of the thesis of Socionomics - whether they call it by that name or not - and that they do their best to spread memes that will help direct and/or deflect the tides of human emotion down channels that will benefit them and/or their clients (in terms of advertising or high net worth banking) or harm their opponents (in terms of finance or politics).

With that thesis in mind, I am trying to figure out which "emotional outlet" or "excuse" the coming Primary Wave 3 collapse will use to express itself. It will certainly have a markets component to it. With the recent, and virulent, attacks on Goldman Sachs that have sprung up in the blogosphere (see here, here and a good one here just for appetizers) and via a scathing article in Rolling Stone by Matt Taibbi, I'm thinking everyone's finance bogeyman - the bright boys and girls at Goldman Sachs - may turn out to the whipping boy for the next go-round.

A major scandal, if not outright collapse, at Goldman would have enormous consequences. Goldman is not just a major player in bond and equity markets - where they could serve as the scapegoat for a return to negative mood -they have "alums" in government who could serve as lightning rods for anger in politics as well. There will be fury. There will be blamestorming. There will be prosecutions.

Keep your eye on Goldman. I think they may be served up as the main dish for the Great Bear in the coming months...

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