As we approach the 21st anniversary of the triumph of freedom and capitalism over oppression and central planning, I keep wondering if we squandered the victory. Political rhetoric aside, you cannot go back in the record book and put an asterisk on it. Free markets are the engine that drives history in “our” direction. The decline in American hegemony corresponds with the rise in computerized manipulation and government involvement in markets. This is the economic equivalent of a generational
snatching of defeat from the jaws of victory.
The real disgrace is the nations on the wrong side of history have learned from the beat down and changed. Russia is the “wild west” of capitalism with the fastest growing number of billionaires (they skipped over the m’s and went straight to the b’s). China has created a strange hybrid of capitalist effort in benefit of the Central Planners. Leaders sleep lightly, however as the masses will not stay down forever.
I expect as we return from Labor day weekend the CEO’s and CFO’s of America’s best companies will lean back against the degradation of capital markets. One decent bond issue by JNJ or P&G could remove half of their shares from the public marketplace. If you worked at P&G and saw your 401k reduced to pennies by the electronic carpet bombing of HFT, would you not support an effort to become less public? With bond rates lower than ever, shouldn’t the concept of taking the upside “private” be tabled at Boards everywhere? I do not “think” we won – I know it. The shocking thing is how we have forgotten what we were fighting for.
Chief Market Strategist