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The shoe-shine boy speaks

It is said that Joseph Kennedy got out of the stock market in 1929 – right before the crash – after getting a stock tip from a shoe-shine boy. The theory was that once a bull market sucks in people who have no business being there, some sort of collapse is imminent.

On the heels of the recent financial debacle, I’m sure we all have our hindsight glasses on. I remember a pair of encounters in 2004 with very wealthy, very unpleasant, very stupid dudes (yes, that’s the word) my own age who were making a killing brokering mortgages. In retrospect, a system that rewarded piggishness so lavishly should have been instantly suspect.

Likewise, I remember getting offers from a relation, out of the blue, to take out some sort of really great mortgage on a house with no money down. A good investment, this person urged. Also, the thousands of pink-scrubbed, grinning, crazy-eyed real estate Stepford folk waddling into Costa Rica from California and Florida between 2005 and 2008 should have sounded a fucking klaxon.

Post-bubble, it’s easy to spot the warning signs. The eternal question is if next time, we will spot them before the bubble pops.

I was musing on this very question when CNN broadcast a gee-whiz, woman-on-the-street bit on China, how it’s unstoppable, how they’ve got it all figured out, how look at all these freaking shiny-ass skyscrapers. And I thought to myself two things:

  1. What kind of an idiot gets market analysis from CNN?
  2. ZOMG, SELL!

This guy is apparently thinking the same thing.

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