Lighten Up Baby

Lighten up baby, I'm in love with you
Lighten up baby, I'm in love with you
Lighten up baby, I'm in love with you
I'm so tall and you're so cute,
Let's play wild like wildcats do

"Tall Cool One" by Robert Plant

Robert Plant-Tall Cool One

As we enter this long Memorial Day weekend, with temperatures in the mid 80's, I can't help but smile. It's been a tough month. Actually it's the markets worst May since 1962, with the S&P 500 down about 8%, and EAFE down 11%. How can you not smile? If you're reading this, you're probably vertical, and vertical is a great way to be heading into the weekend. 

We don't have to worry about another oil well disaster in the Gulf, since our President has assured us that the government will not let this happen again. I'm not sure how the government can assure that the cement casing around a wellhead 40 miles off the coast and 5,000 feet below the surface is properly sealed, but I know I won't worry about it this weekend. 

We also don't need to worry about Europe and the PIIGS. All the little PIIGS have announced austerity programs that will get their deficit spending under control. The Chinese have said that they aren't planning to sell their European bond holdings (yet). Not sure that the Chinese would tell us that they were dumping their bonds before they actually sold them, but hey. The Euro has bounced from 1.22 all the way up to 1.23. No worries here.

The Chinese are also flexing a little diplomatic muscle telling their North Korean buddies, to cool it off. No worries here either.

Our government regulators are still searching for a cause of the May 6 "flash crash," which I'm pretty confident they won't find this weekend, since they've never found a cause for the one-day 20% plunge back in 1987. 

No, this weekend is all about "Lightening up," enjoying the company of loved ones, and remembering all those who paid the ultimate price so we would have the freedom to not worry about so many things. Oh yeah, don't forget to have a "Tall Cool One."

Recently I was reading an interview with comedian Dave Barry and he was asked about his fascination with death, he summed it up as a coping mechanism.  "The truth is if you're a conscious human being, you are conscious more and more of two things. First, you're going to die. Second, while you're alive, bad things are going to happen to you and people around you, and there's nothing you can do about it. I formed a theory a long time ago that there are two reactions to that. One: religion. You create an afterlife. Now I think it's a good idea, it makes people calmer. And then there's humor. At its basis humor is a strange, nervous reaction to, you know, death."

This got me thinking. When people aren't worried about dying, they're often worried about their money. They don't want to obsess about it constantly, so like death, they look for a coping mechanism. One: instead of religion they have a myriad of financial "experts" telling them that everything is going to be OK. It's a nice idea because it makes people calmer and allows the financial "experts" to make a good living. Then there's humor. A way to laugh about your insecurities and the knowledge that nobody really knows what is going to happen. I remember way back when I was a young trust investment officer at Mellon Bank during the dark days of October 1987. My cubicle mate and I were making morose jokes about the markets collapse, and I remember saying, "Lighten up, it's only money, and it's not ours!"  At the time, we found that hilarious. And to this day, I constantly prefer to cope with the unknowns of the markets via humor instead the calming wisdom of the financial "experts."

If you do find yourself with a little time on your hands this weekend I would recommend the following;

This link is to today's WSJ Editorial by Mark Spitznagel, the Founder and Chief Investment Officer of Universa (this is Nassim Taleb of "Black Swan" fame's hedge fund). It is by far the best explanation I have read about what is happening today, and its cause is the Fed's zero interest rate policy, not some fat fingered trader. 

The Fed and the May 6 'Flash Crash'

This is a short interesting video of the demand for Gold in China.

Chinese dumping worthless currency for gold (17May10)

Another very good video from Hugh Hendry, another outspoken and often right hedge fund manager.

Newsnight 26th May, Hugh Hendry 'I would recommend you panic'

This has absolutely nothing to do with the markets, it's just a feel good Pittsburgh song:

"Dahntahn Song" Comedian Mark Eddie Sings about Pittsburgh. (lyrics listed)

Be careful out there,

Chris Wiles

www.rockhavencapital.com

This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management.  The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.