econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 11 November 2015

The Devil's Financial Dictionary

by Chris Mayer

Fall has fallen here in Maryland. And the leaves have turned. Many have fallen.

The market's seasons change too. But not so predictably. There is a lot of uncertainty over when the next winter will descend on Wall Street. People are sure worried about it.

I read in a Bloomberg piece recently about how a Credit Suisse banker flew all over the place to meet with clients. He reported:

"Never have we seen so many clients who just do not know what is happening and have cashed up."

People cash out now because they want to wait until things are "clearer." (What's odd is that the market is just a few percent off its all-time high. It would be a strange bull market where so many people cashed out at the top. Normally, people rush to cash out at the bottom.)

As the Bloomberg piece noted, there is a long list of worries and unresolved questions:

  • What's going to happen to China's economy?

  • What about the slowdown in economic growth globally?

  • What about central banks and quantitative easing?

The list goes on...

Well, those who are waiting for more certainty will be waiting a long time. Certainty is not part of the game.

I read through Jason Zweig's The Devil's Financial Dictionary over the weekend. Here's what he has to say about uncertainty:

"Certainty, n. A state of clarity and predictability in economic and geopolitical affairs that all investors say is indispensable - even though it doesn't exist, never has and never will... Whenever turmoil or turbulence becomes obvious, pundits proclaim again for the umpteenth time that 'Investors hate uncertainty'... "Uncertainty is the most fundamental attribute of financial markets... hating the unknowable is a waste of time and energy. You might as well hate gravity or protest against the passage of time."

I enjoyed Zweig's book, despite the fact that I have a defective first-edition copy with the last 28 pages missing. Zweig wrote his book in the spirit of Ambrose Bierce's classic The Devil's Dictionary. I like Bierce, and I want to share a little something about him.

Ambrose Bierce (1842-1914) was the author of some of the greatest short stories and essays about the Civil War. He fought at Shiloh, Chickamauga, Missionary Ridge and other places - on the Union side.

Shiloh was particularly horrifying. It was the bloodiest battle in U.S. history up to that point. And years later, Bierce wrote one of his most famous essays about it, "What I Saw of Shiloh." At the Battle of Kennesaw Mountain (1881), Bierce had his head "broken like a walnut" and received a furlough.

After going through that, you can see where Bierce might lose patience with the foolishness of his fellow human beings. Bierce was a great enemy of euphemism, hypocrisy and mealy words used to cover up softheaded thinking.

One of his own dictionary entries probably best describes Bierce himself:

"Cynic, n. A blackguard whose faulty vision sees things as they are, not as they ought to be."

As a journalist, he cut down many a reputation often with razor-sharp invective. It earned him the nickname "Bitter Bierce.

" When people complained, he advised them to "continue selling shoes, selling pancakes or selling themselves. As for me, I sell abuse."

Bierce would ride off into old Mexico one day in 1913, and no one ever heard from him again. Quite a way to go out. To this day, no one knows what happened to him.


What is the Income Play Rich Investors Love? (Hint: It's Tax-Free)


For more, I'd recommend the biography Ambrose Bierce: Alone in Bad Company by Roy Morris Jr. And the Library of America has a handsome one-volume edition that collects his best work - including the famous Devil's Dictionary.

Anyway, Zweig takes his inspiration from Bierce to skewer Wall Street, as in the definition for forecasting above. Sometimes he works in other wits, such as Samuel Johnson's definition of a broker:

"a negotiator between two parties who contrives to cheat both."

Sometimes the definitions are short:

"Day trader, n. See IDIOT."

And sometimes he digs up historical origins for words to gain some insight. I like the discussion under the word bear. It includes the anecdote about an English proverb "to sell the bear's skin before one has caught the bear," which is an apt description of selling a stock short. (You sell the stock first and hope to buy it back later at a lower price.)

He also finds obscure words that describe a reality particularly well:

"PAREIDOLIA, n. The compulsive human tendency to see patterns or meaningful trends in random events and images."

A lot of people suffer from pareidolia.

If there is a theme, it is that luck and surprise are indelible and important shapers of events and outcomes in markets. These are powers that most everyone tries hard to deny.

Another theme is that fancy words are a coverup. They hide thefts, lies, cons and ulterior motives. Speak plainly and seek those who speak plainly to you.

As Zweig says,

"No matter how cynical you are about Wall Street, you aren't cynical enough."

This book will help you see a little more clearly through the wordy shroud that hangs over Wall Street. Bierce would approve.

Read on to see why investors in the U.S. oil industry could have used a bit more cynicism and been a lot less certain about its prospects. The industry faces one major problem, as you'll see below.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Opinion


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Case-Shiller 20 City Home Price Index January 2017 Shows 5.7 % Year-over-Year Growth
A Changing Rulebook To Tame The New Global Arms Race
Infographic Of The Day: Chart: Understanding Alphabet's 4 Billion Dollar In "Other Bets"
Early Headlines: Asia Stocks And Dollar Up, Oil, Gold Steady, Obama Climate Policies Gone, US Oil Glut, Euro Surges, Shorts Remain, Trump Into Yemen?, Iran-Russia Deals, Cat 4 Cyclone Hits Oz, And More
March 27, 2017 Weather and Climate Report - Will the MJO Deliver a Nino?
The Most Reputable Companies Worldwide
Gut Bacteria Play A Role In Long-term Weight Gain
What We Read Today 27 March 2017 - Special Public Edition
Is Less More In The Smartphone Market
Average Gasoline Prices for Week Ending 27 March 2017 Statistically Unchanged - Again
What We Read Today 27 March 2017
Why New Jets Could Destroy Airlines
March 2017 Texas Manufacturing Survey Continues to Expand
Investing Blog
The Dollar's Coming Impact On Markets
The Real 401k Plan Manager 27 March 2017
Opinion Blog
Macron May Lead But Le Pen Remains The Big Story
Is The 20th Century Still The 'Hayek Century'?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
28Mar2017 Pre-Market Commentary: Wall Street Eyes A Lower Opening, Crude Prices Edge Higher, Investors Await Fed Members Clues On Timing Of Next Rate Hike
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved