No, don’t worry, this is going to be another one of those “the indexes look just like the Norwegian Salmon Futures from 1587-1591!” type posts – – it’s a different kind of analog.
It occurred to me this morning the perfect representation of this equity market: the T-1000 robot from Terminator 2. Most of you have seen the movie, and as you’ll recall, no matter what damage is done to the robot, it simply heals itself, whether the assault is performed by shotgun blast, handgun bullets, or liquid nitrogen.
As the Wikipedia entry describes it, “The T-1000 is effectively impervious to mechanical damage, such as being dismembered, riddled with bullets, or attacked with explosive devices. Wounds close almost immediately, and any detached parts simply flow back into the T-1000’s body.”
And that, my friends is what we’ve got on our hands, because the threat of rising interest rates (as exhibited by yesterday’s Fed minutes) was like a series of bullets being fired at the market, which was, for about five minutes, slightly beaten down. But the liquid metal healed up the wounds, and the T-1000 (embodied by Yellen) was as good as new, ready for more action and more lifetime highs. The same goes for what happened this morning (a swift dip that lasted, oh, about 3 minutes).
The weary pledge, trotted out by everyone from Cramer on down (or up……..) is that “this will end badly someday.” As I’ve stated before, I think this is simply a verbal insurance policy on the part of pundits to make sure that, in the year 2398, or whenever it is, when things do end badly, they’ve got a clip they can play to say that they “warned” us. As with the T-1000, however, the “bad” ending will have to come in the form of something so destructive and overwhelming, that even liquid metal can’t put itself back together again. Hasta la vista, baby!