From an investment perspective, it's like a 747 taking off vertically only to have the load shift to the tail in flight.
In marketing terms it's called a "bait and switch". Although Wall Street calls it a "pump and dump".
"Has monetary policy aided and abetted risk-taking? I hope so. That's why we did it"
- Anthony Haldane, Bank of England
Today's self-nominated stock "gurus" can regale us with their Magic 8 Ball derived forward earnings estimates all day, it won't matter. Central Bankers may not admit it in their published meeting minutes, but they all know it's true. Their first mandate is "price stability". Their second mandate is "full employment". Their third mandate is "casino management". At the present juncture - and for the first time in a decade, gamblers are ignoring this lesson at their fatal peril. For their part, the Fed is now boxed in by the fact that they said last week that quantitative tightening is not contributing to recent volatility, but if it does, they will stop. Which means after the crash.
Fourth lesson - and what should have been learned in 2008 - is that you can't trust Wall Street. Shocking, I know. Speculation is by definition a most uncertain enterprise, which leaves the door wide open for all manner of conjecture and chicanery, on ubiquitous display currently. Gamblers are now trapped in the casino by the delusions they've been fed by a Financial Services industry which only gives one type of advice: "buy". The Fiduciary Rule that was shot down by industry lobbyists with the aid of the Trump Administration was intended to put some legal teeth into clamping down on Madoff-inspired investing advice, but alas, some lessons have to be learned the hard way.
The sixth lesson not learned is that Globalization already failed. In 2008. Subsequently, the entire world became Japanified, meaning an old age home refusing to change, instead recycling asinine levels of monetary and fiscal stimulus, as a proxy for real demand. Globalization is inherently imbalanced with respect to supply and demand because it failed to raise the standard of living of the poorest people on the planet. Instead post-debt it has lowered the standard of living of everyone else. In other words, Globalization "equalized" the world, but just in the exact opposite way we were told it would.