Stocks had a bit of a roller coaster ride today, with techs trying to take the lead on the upside.
The markets are sloughing off quite a bit of exogenous risk. But that ought not to surprise us, because that is almost the very definition of a bubble in assets. The fundamentals and realities are ignored, as pieces of paper become increasingly traded on their own without regard to risks.
September is going to be marked by the biggest IPO ever. The much awaited Alibaba will be rolling out between now and about September 20. The wiseguys are also going to taking a lot of M&A activity out of the trunks and planting them in the killing fields of a toppy market. Why not? Whether you are paying with cash or stock, your currency is debased.
So barring any untoward events I would expect the markets to muddle through to the latter part of September, and then get set up for some sort of correction into October. It will probably not be severe, again unless it is driven by some geopolitical events, because of the midyear elections coming up. Unless of course the financiers decide to engage in some mild form of coup d'état.
I put out an excerpt from a new Harvard Business Review article earlier today that is worth reading here.
Although greed is always a factor in any human activity in our fallen world, there are times when it reaches a peak of activity and predominates, becomes a focus along with power. And then the world is turned upside down as it were. We are in such a time, I firmly believe.
Have a pleasant evening.
