- Money Morning Australia

Why the U.S. Downgrade Matters

Written on 09 August 2011 by Kris Sayce

The global economy is descending into a tailspin… mainstream share portfolios have been hammered… and the Aussie dollar has dropped 10% in less than two weeks.

Just when you thought things couldn’t get any worse…

Get ready, dear reader…

Because tonight the busy-bodies and sticky-beaks are set to descend in hordes… sticking their noses in where they’re not wanted or needed.

We refer, of course to the Census.

Fortunately, your editor and family won’t be at home tonight, so we don’t need to fill out their intrusive form.

Yet, the little Oompa Loompas bashing on millions of doors tonight aren’t the only busy-bodies straying where they shouldn’t.

We noted with amusement the joint statement from the G-7.  You can read the full text here.  But here are a few choice snippets:

“In the face of renewed strains on financial markets, we, the finance ministers and central bank governors of the G7, affirm our commitment to take all necessary measures to support financial stability and growth in a spirit of close co-operation and confidence…

“We are committed to taking co-ordinated action where needed, to ensuring liquidity, and to supporting financial market functioning, financial stability and economic growth.”

Despite everything that’s happened, they still don’t get it.

The whole reason the market is in such a mess is because of “finance ministers and central bank governors… taking co-ordinated action…”

They’ve fiddled with the market for decades and what you’re living through now is the result of that meddling.

Looking to divert the blame

Not that they’ll ever admit it.

There are others to blame… apparently.

Such as… Standard & Poor’s – the ratings agency.

As you know, we’re no fan of ratings agencies.  But it’s pleasing to see they’ve finally done their job – downgrading U.S. debt.  It follows the downgrade of European sovereign debts – Greece, Ireland, Portugal, etc…

But certain people aren’t happy.  As Dan Denning, editor of the Daily Reckoning noted this morning:

“In Italy, prosecutors have raided the offices of Moody’s and S&P and seized documents.”

Meanwhile, in the U.S., the Washington Post reports:

“A Senate Banking Committee aide says the Democratic-led panel is gathering information on Standard & Poor’s decision to issue the first-ever downgrade of the government’s credit rating.”

Hmmm, perhaps the government is getting revenge on S&P for getting revenge on the government!

All we know is it’s a stinking great mess with governments and central bankers doing all they can to hold on to power.  Trouble is, the more they tighten their grip, the more pain is inflicted on the average Joe and Joanne Punter.

Zombie commentators still don’t get it

But don’t worry.  According to the zombie mainstream Australian press, there’s nothing much to worry about.

Our old pal, Michael Pascoe at the Age wrote yesterday:

“The single-notch downgrade of the United States’ long-term debt by Standard and Poor’s makes for lots of impressive headlines, but it doesn’t actually mean all that much in the short-term – just a historic market along the way of a great power’s slide.”

His Fairfax Media buddy, Jessica Irvine must have attended the same briefing yesterday morning.  She wrote:

“So in the short term, the credit downgrade potentially means next to nothing.”

And finally, over at Business Spectator, Alan Kohler had this to say:

“It’s impossible to predict how markets will react to the huge psychological element of Saturday’s downgrade, but the reality is somewhat less huge.”

Since the “Australia is different” crowd published their thoughts yesterday morning, the Aussie stock market has officially crashed.  Let’s not beat about the bush here.  Stocks have taken an almighty beating.

In fact this morning, the S&P/ASX 200 index is at 3,781.  The market is now just 16% above the March 2009 lows.

Make no mistake, the downgrade of U.S. debt is important.  No investment is isolated.  Every investment anywhere in the world is risk-rated to every other investment.

Normally, when one asset class is re-rated it doesn’t make much difference to other sectors (although it still makes some difference).  But when the re-rated asset is the global benchmark for all other assets, contrary to mainstream opinion, it’s a huge deal.

This is Investment 101 stuff.  To say the rating on the benchmark asset class can change without it causing ructions is simply wrong.  The action you’ve seen in the market the past two days proves that.

Investors now have to figure out the relative risks of every asset and work out if it’s overpriced or underpriced.  They have to decide if the U.S. bond market is still a haven for investors.

Some will decide it is.  But others will decide it isn’t.  In that case, where do they go for safety?

We don’t know the answer to that.  We do know two things: first, it creates huge volatility as investors reassess the market.  And second, we can sure say they won’t flock to the Aussie dollar.  The price action in the Aussie dollar versus the U.S. dollar is proof of that – it’s back to parity as we write.

And that’s not all…

Early warning signals going mad

Our Early Warning Signals have gone berserk… the U.S. VIX index soared 50% last night to end the day at 48 – a level not seen since early 2009.

The Aussie dollar has continued to slump against the Swiss Franc – the Aussie dollar’s supposed haven status is looking weaker (and sillier) by the minute.

And the gold price has taken off.  Not only has the U.S. dollar gold price surged through $1,700, but the Aussie dollar gold price has quickly followed.

It’s a good job the U.S. downgrade isn’t significant!  And it’s a good job Australia has China to fall back on!  Not.

Yesterday we wrote to you saying to get set to buy cheap stocks.  This morning, those stocks – including the ones we’ve got on our watchlist – have gotten much cheaper.

The market remains as risky as heck.  And just as we’ve warned for the past two years, it’s not the place to store your life’s savings.

But now you’re flooded with cash, buying a select number of cheap stocks over the next few weeks makes a lot of sense.  But only if you’re comfortable taking risks. If not, stay in cash and bullion and wait for the volatility to ease.

The way we look at it, if you don’t like taking big risks there’s no harm staying on the sidelines.  If you miss the first 5-10% of a rally, it’s not a big deal.  At a time like this, capital preservation is more important for the risk averse.


Kris Sayce
Money Morning Australia

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40 Comments For This Post

  1. Beauner Says:

    Where is the “Gold is bad” crowd?

    They must be nursing the bandages on their reamed arseholes.


  2. meandring40 Says:

    Looks like the conservative Aussie consumer wasn’t so silly after all. Despite being berated by MSM commentators for their caution, they knew in their bones that something BIG & BAD was looming on the horizon.

  3. M&M Says:

    This is the funniest thing ever!

    It’s clear the CNBC & Fox chearleaders (including Switzer) have no clue. Why do people rely on these fools. How can you not know that a correction is comming. Aren’t they experts?

    Why rely on stock markets that increase 30-40% in quick fashion? Has anyone’s business grown 30-40%? Has anyone’s personal income increased 30-40%? A decrease in shares is warranted – they shouldn’t have gone up in the first place.

    Thanks for all the advice – my super has been safe in cash for 6 months and my gold and silver has gone up markedly. Come the new year I’ll be back in shares awaiting the next rally, underpinned by all those chearleaders.

  4. Fergus Says:

    I think Kris is overreacting a smidge to the ‘zombie commentators’. I’ve thought, on balance, that some of them—eg Kohler, Padley—are generally fairly measured in their commentary. (If you’ve read Marcus Padley’s book you’ll know he’s something of a stockmarket iconoclast himself). Irvine covered her backside by stating the U.S. credit downgrade ‘potentially’ meant next-to-nothing. And that MIGHT be true… in THEIR context. (It’s NOT, after all, the first effective U.S. default). What is Kohler comparing his ‘reality’ to when he describes it as ‘somewhat less huge’? I think their comments are simply not rabid enough according to Kris’ standards. I don’t think the comments should be taken as them saying ‘…the rating on the benchmark asset class can change without it causing ructions…’ as Kris accuses. I agree with a lot of Kris’ ongoing argument against the content and message of the ‘mainstream’ (which I think includes the banking/finance/political industries) but I wonder in this case if they’re not the victims of some degree of overreaction.

  5. J.C. Says:

    Well if you’re referring to PF, I’d say he’s waiting for the “risk on” day to make his point. The biggest fear of the Goldilocks army is for someone/something to fail; for risk to be priced accordingly; and for asset prices to represent reality (especially their sacred houses).

  6. J.C. Says:

    I would think that commentators being “measured” is part of the problem: they’re only prepared to repeat what their peers in the establishment say. EVERYTHING they say is said under explicit/implicit assumption, yet they rarely seem to focus on inherent risk with the gravitas it deserves.
    So yes, their comments are not “rabid” enough. Much of the time, their words are empty and meaningless.

  7. Peter Fraser Says:

    Hi Beau, You’ve come to gloat about the Bledisloe AND gold I presume, that is rubbing it in a lot.

    We have to let the gold bugs win occasionally (and the All Blacks). However I’m not totally opposed to gold, just being overweight in it, although right now that doesn’t look like a great play, but all things even out eventually.

  8. Peter Fraser Says:

    JC – they are measured because we have a little thing called litigation. Absolutely no-one gives advice anymore, just general information because of that.

    Anyone who did would burn like a candle for 15 seconds and then snuff it financially.

  9. Peter Fraser Says:

    The all ords have now recovered to be above yesterdays close.

  10. J.C. Says:

    Oh, is that it. If so, can I sue Pascoe for his missives on gold and the SMH for calling AUD a safe haven?

  11. Fly Me to The Moon Says:

    PF @ 8

    “Absolutely no-one gives advice anymore, just general information because of that.”

    ..and then charge Joe Soap for this “general information” whilst calling themselves financial advisors! It’s a no lose situation… take a commission then shrug their shoulders when the “general information” turns out to be crap.

  12. Peter Fraser Says:

    Fly Me @ 11 – Yes, as it stands your financial adviser will try everything to get out of giving any direct advice, because people sue when they lose money, so all “advice” is dumbed down and “vanilla-ised” so that they are less likely to be sued if money is lost.

    Our overzealous legal system has caused that. It’s not that they wouldn’t like to give you more adventurous advice, but they can’t stick their necks out too far.

    If you want insurance, or any financial product you will be given a “Product Disclosure Statement” or something similar, which mostly confuses people because they can’t understand the legal speak, but they rarely get real advice, and certainly not in writing.

    That is why everyone has to be educated in finance, so that they don’t just accept the vanilla options. You need to know how it works, and make decisions for yourself.

    I assume you understand the position a stock broker is in if they recommend stocks that tank – they are on shaky ground if they don’t have some solid analysis behind their recommendation, with general industry agreement. Gone are the days when someone can tip a “hunch”. That is why everyone is doing the same thing, the advice is herd advice, which will work generally because the herd has its own momentum, but you can’t rise above the pack, or fall below it – you have to do that for yourself.

  13. bb Says:

    Gone are the days when someone can tip a “hunch”. Well your self serving post about the market recovering today is being reported by the msm commentariate as being based entirely on a ‘hunch’ that the Fed’s tired old QE show is coming to town tonight with the third installment! Great post from another blogger seems to sum it up – The junkies have momentarily stopped selling their furniture because the dealer has promised them a line of new credit.

  14. J.C. Says:

    Yup, the launch of QE3 and it’s game on again. AUD back to its rightful pole position, resumption of the property party, the msm redeemed, and a bit of lip service to caution. As Kris Sayce often reminds us, it’s a traders market. After every shock, the global economy jumps into the ring like a battered boxer pumped up on performance enhancers.

  15. Peter Fraser Says:

    bb – yes the media can report that, but it is general, they can’t say “bb we think you should invest in stock “X” or buy this property, or put money into “Z”.

    Read the comments here, and on other similar sites, it is always general because no-one can analyse just what risk someone should take on without a lot of investigation of that persons finances.

    That isn’t a criticism by the way, everyone has to be careful due to the threat of a lawsuit over advice that loses money. Really the best stock analyst in the world must give tips that lose money occasionally, that is the nature of the game, as long as most make money the overall result is positive, but what happens when the proverbial hits the fan and a client loses all their money?

    I’m sure you can see the problem. It’s like expecting a doctor to go through a 40 year career and never make a mistake that has a fatal consequence. Luckily doctors bury their errors, and the dead don’t complain loudly.

    Why did you say my post was self serving – I’m not a financial adviser. It has nought to do with me.

  16. bb Says:

    But we all know that eventually the steroids that make them so beefy and solid in their imposing statures will shrink their nuts to the size of sultanas! The US economy and the market is a pumped up Schwarzenegger style with two pairs of Ben Bernanke’s socks stuffed down the front of its pants.

  17. bb Says:

    A question to the posters – what impact would a mass switch of super funds from the ‘growth’ (hahaha) options (aka international & aus shares) to capital stable (aka cash/bonds) have on our stockmarket do you think? I ask because of a poll in the smh showing that many have had enough of the funds gambling – and losing – 9% of their hard earned incomes at the ‘casino’ in these troubled times.

  18. J.C. Says:

    I think that bb was referring to your post regarding the ASX’s “par” performance. When the “right news” was announced this afternoon, markets all over Asia improved. Interestingly, GOLD ETF pulled back only slightly. The die may have been cast on that sucker.

  19. J.C. Says:

    A negative effect obviously. Chris Joye argues that equities are far too volatile and fixed income is superior for super. He has a good point. In many ways, rigging the property market might be a better option for all. The externalities of this kind of central planning will surely have a negative impact, but the name of the game seems to be illusory anyway.

  20. Triune Rational Brain Says:

    Been in the bush away from the maddness and panic.
    I see the gold bugs are cocky at the moment wait and see, remember silver was the same?
    Big banks charging for cash deposits really gone mad cash is what you want in a major crash, it tell me we have a long way to go before arrogance is knock out of this debtdeflation system.
    As for QE3 you wait and see what happens this time FED will meet major opposition this time from the Tea Party and the bond vigilantes.
    If Benanke trys QE3 interest rates will rise and game over for gold bugs.
    This is time for gold to skyrocket still not even at $2000 ounce tells me ,we have major shocks on a way for extreme gold bugs.
    Mum and Dads ,Universities are starting to buy gold clear danger sign.

  21. J.C. Says:

    Actually I don’t think the gold bugs are cocky at all. I think that they’re rather dismayed at what’s happened over the last few days. Personally I don’t know any gold bugs who would be surprised at a major correction in the gold price. In fact, quite a few that I know are expecting it. In fact, the dangers of GOLD ETF on the gold price have long been highlighted here. But it’s all beside the point.
    You say QE3 will be bad for gold. I say nonsense. That will ultimately be very supportive of the gold price, not that the mainstream will have a bar of that notion.

  22. macca Says:

    gold $2000 by year end

  23. Triune Rational Brain Says:

    JC you think QE3 will be bad for gold is nonsense.
    Well J.C. welcome to counter intuitive thinking QE2 gold went nowhere as you well know.
    J.C gold went nowhere in GFC of 2008 please no nonsense it was not a safe haven US dollar was!
    All you gold bugs think QE3 is going to push gold higher then J.C. should be buying more put 100% of your assets into gold if you are so sure.
    Many people have said my comments are nonsense J.C. then I know I’m on the right track, all you gold bugs think FED is in control going to keep money printing, you never stop and think just maybe Mr Market had enough of the Benanke side show time to really discipline the nutters with higher interest rates.
    I say J.C. bring on the bond vigilantes,Tea Party and a minsky moment a perfect storm.

  24. KP Says:

    The demand for gold will push the price up it appears, never mind the devaluation of the pieces of toilet tissue. More demand but no way of increasing supply-


    Everyone sorting out if they’re a citizen or a subject?? Filling in your census forms or burning them? Reminds me of that lovely truism-“”An armed people are citizens, an unarmed populace are subjects””

  25. J.C. Says:

    OK, maybe QE1,2,3,…n is unrelated to the gold price. My gold appreciated during GFC I, but I know the media is happy to report about gold going nowhere in AUD. It went up yesterday though. I’m still happy hanging with the nutters.

  26. The Wolf Says:

    TRB… there you go again banging on about gold going nowhere during QE2… in AUD… ho hum… flimsy argument… if QE3 is enacted, you are simply adding more $T to the already packed to the gunnels financial system… which doesn’t need more $$… it needs to unwind…not be wound up…

    Having had an armchair ride on this latest cratering of markets (living in the US)… it still seems incredible to me that SO MANY “experts” have abso-frikkin-lutely no idea what drives the markets… it has been and always will be about leverage… the sell off is not a “S&P downgrade” panic… or a “debts we can’t pay back” fear… it is ONLY about the leverage in the system borne out by government debt costing six tenths of five eights of f**k all… and then a little fall precipitates one margin call that pulls in another and then another… it is simple…really truly simple… when we encountered this in 2007… ie. too much debt… we fixed it with…adding more debt…

    bb@17… if there was a mass exodus from “risk” assets to “safe” assets within the superannuation system, then bond prices would rise steeply, yields would fall dramatically…and people would be thinking about how they could live off of a 2.5% yielding note, which was previously double that… and the mum and dads would be asking their financial advisor who put their $300,000 into 5.5% paper why they only get chq’s for $7500 each year and not $16500…

    And having missed some of the rugby jibes… PF… got your back… I can say that since 1988…over the last…I dunno… what’s that… 22 or so years…the All Blacks have been probably the most accomplished and polished team ever seen…. in between World Cups… but something about every four years that turns the men from the land of the long white cloud into meek mice… :-)

  27. The Wolf Says:


    From our friends at ZH…

    Bloomberg has come out with the most succinct and descriptive chart summarizing the “Central Bankers’ dilemma” in which everyone is currently caught in either of four states: inflation, stagflation, recession and debt trap. Nobody wants to be in the lower left or the top right. Unfortunately, America’s future is precisely one of the two, and anything the Fed does will only accelerate America’s adverse transition appropriately.

  28. J.C. Says:

    Maybe TRB has a point and isn’t the first to note that there are periods where AUD outperformed gold during the last few years. There does seem to be popular support for AUD as some kind of ultra-currency due to the economy’s commodity base and trade relationship with China. Before this latest shock, that seemed to be the prevailing view among the mainstream.
    Perhaps gold is simply driven by myth making and its exalted status as a store of value is absurd at best. I, for one, most definitely don’t discount that view. But while the mainstream continues to promote that position, I’m happy to hedge my bets.

  29. The Wolf Says:


    Awesome read…

    JC…understood… the price of gold as measured in AUD was not considered in the remit of QE2… I could say that my stockpile of $2kg frozen banana’s outdid gold in AUD terms during QE2… it means about as much…

  30. The Wolf Says:

    JC… in hedge fund / banking terms… the AUD is considered a play on China… nothing more nothing less… it is also a nice place to park some capital and pick up reasonable interest rate…however that market is tiny in the overall scheme of things (c’mon Swannee… print a few $T !!)

    Everyone (countries, ppl, companies, etc) suffers from delusions of grandeur… in Australia, we naturally attribute outperformance to something we are doing differently… and the attribute underperformance to the “international markets”… we are but a mere pimple on a gnats ar$e…

    Am with you 100% on PM… have been in the accumulation phase… and will continue to be…

  31. J.C. Says:

    Actually, in terms of transactions in currency markets, Australia is a super power in terms of volume. I don’t have a problem with that at all, but I do have a problem with AUD strength as representative of a relative store of wealth.

  32. Peter Fraser Says:

    JC – almost everything can be a store of wealth, why not the $AUD?

    When you talk about “risk” for the $AUD you should really be referring to the risk of global trade reducing, and thus a fall in sales to our asian partners as their trade reduces.

    It isn’t risk of default by the Australian government on public borrowings, or risk in our banks borrowings. You of course may have a different view on bank borrowings, but that is the general market view whether we agree or not.

    To me that is the important distinction between us and other countries. Look at Greece, Ireland, Portugal, Italy – there are some genuine concerns that the governments of those nations may reach a point when debts cannot be serviced, and certainly can’t be paid back. I don’t know if we are there yet, but the concerns are real. Even the UK, France and others are facing some question marks.

    Our higher interest rate and solid trade gets us a premium, and that premium may be in doubt when our future trade is in doubt, but the underlying currency is sound. Frankly I would prefer that we fall to below par, about 0.85 would be good, and less would be better, but inflation would go through the roof in the transition period.

    You constantly question the Aussie, but even in the worst moment of the GFC it only fell to 0.60c and it was oversold at that due to the sheer panic selling of everything.

    It is true that some of the gloss may come off the base value if we do see a major global slowdown, but in what period of history since the industrial revolution, did basic commodities ever fall to zero value?

    In a world with a growing population (from 6 billion to 9 billion is the rough estimate) what would cause the world to want less iron, coal, aluminium, zinc, lead, gas, uranium, etc etc. The major risk for a total devaluation surely is military.

    I just think that you tend to undervalue a continent with rich natural resources, little public debt and a small population. The private debt may be larger than we would like, but if a company falls over that isn’t a death knell for the country as a whole, and in that case the lenders/investors take the haircut, without it affecting the nation.

    If the country is bankrupt, then every citizen suffers via increased costs of money, and rampant inflation on all imported items. You can’t buy anything when trading partners lose faith in your currency. Even Russia had major problems during the cold war years when the Rouble had no credibility in the market. In nthose conditions the black market flourishes, and everyone else suffers.

    It’s that underlying security that make the Aussie a store of wealth, but the premium above that base will ebb and flow as the global situation changes.

  33. J.C. Says:

    You missed the point. The value of AUD is only partially related to trade. Currency flows related to trade are miniscule relative to the total trade in AUD crosses. As for AUD during GFC, no developed country currencies fell further than AUD and NZD. Furthermore, if there is a direct relationship between a nation’s currency and its commodities, one would expect a relatively high currency to negatively impact trade flows (as an aside, Australia has always relied on capital inflows to extract commodities). Furthermore, JPY is now relatively strong compared to most other currencies, yet the general consensus is the aggregate economy of Japan is kaput. Finally, AUD is a debt-based fiat currency which essentially loses value over time. That final fact will be disputed but can be easily shown to have merit.

  34. Peter Fraser Says:

    JC – all commodity producing countries fell badly, which just goes to show how the markets got it wrong. With so much concern about the real worth of many currencies, commodities have become a defacto currency.

    Why do you think China is pulling money out of US treasuries, and buying mines around the globe.

    There is risk in paper, but a tonne of iron ore is worth a tonne of iron ore every day of the week, and when you have a demand for iron ore it is not a difficult concept to think of the ore as currency.

  35. J.C. Says:

    Nonsense. China is not pulling out of U.S. treasuries, neither is Japan. If anything, their purchase of U.S. debt is increasing. Yes commodities are a currency to some degree, but that is entirely irrelevant to why AUD gets trashed during “risk off.” The market doesn’t “get it wrong.” You and the masses get it wrong. The market is the master. Not you.
    Nevertheless, your argument fails to explain why JPY is appreciating when Japan has neither resources or a vibrant economy.

  36. Drood Says:

    You can talk all the pseudo utter bollox re the market at the moment that you like.
    Australians need to think ahead, something they aren,t very good at.
    China, BHP, Fortescue et al are all busy buying mining rights in
    Africa , South America and old eastern bloc Asia.
    When those ventures take off, (sooner than you think ), the Australian resources market will almost disappear due to domestic labour costs and health and safety laws.
    When that happens what will Australia do to prevent itself from becoming another third world country?

  37. The Wolf Says:

    JC@31… in terms of volume… are you talking about govt. debt…or corporate debt…or both ? I had read that Australia has about $200B of govt. debt… which is about what the US Treasury has been auctioning every couple of week now for the last year or so…

    Agree 100% on your concern with the Aussie as a store of wealth.. if the world continues towards the next “recession”…and/or China falls over this time (I don’t think they have another $700B to build more vacant cities and empty highways…considering about $500B of this stimuli will never be repaid too…), the AUD will plummet… and if Glenn “The Cranium” Stevens responds with a large cut to our Treasury dictated interest rate, all bets are off, the AUD will be back down to 0.65 in no time…

    Interesting times ahead…

  38. Peter Fraser Says:

    JC – the markets did get it wrong when they sold commodity currencies to run to the USD in 2008. I;m not just talking about Australia, they did that to the loony, the real, every commodity currency.

    Japan has increased its holding, but China has decreased its holding.

    Wolf I suggest that JC is referring to the volume of currency traded, and not purchase of debt, be it private or public. One of my family worked for Reuters London until recently, and they are a conduit for currency trading. The volume of $AUD traded is very high. A lot of it is a speculative overnight trade, as JC suggests.

  39. J.C. Says:

    Yes, I was referring to the volume of currency trade. The appreciation of AUD is just another diversion in many respects. I don’t really understand how commodities are paid for, but like any export, I can’t see how a high dollar is good for the resource industry. Secondly, I also think that China has Australia by the balls in that the mining industry relies on China more than any other customer. China has immense power on the price and how they will pay for resources.
    The market did not get it wrong. Positions have to be covered; margins have to be met. You also need to understand that traders make money when markets rise and fall. Are you suggesting that shorts on AUD were “wrong”? My bullshit barometer is sensing that no matter how you see it, the feel-good factor is your primary driver.

  40. Peter Fraser Says:

    JC @ 39 – minimg contracts were once almost solely written in $USD, but now the contracts are written in a number of curencies including $AUD. I don’t know the breakup though, I suspect that is a matter of ongoing change at the moment.

    Yes some traders do make money when market move down, but some lose. Not everything is fully covered.

    The way you phrase your argument, you lead me to believe that it doesn’t matter which way the trade goes, all traders will make a profit, but we know that isn’t so. In a falling market most traders will lose.

    I suspect that your bullshit barometer is poorly calibrated. It would make a great paperweight though.


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