Taunting the Gods of the Markets

Oh my, this is not good.

Here is a headline staring out at me in this morning's New York Times business section — "Awash in Liquidity." The piece examined the amount of institutional funds sloshing around the world looking for yield.

Why does this make me tremble? This is why.

To recap the above link ever so briefly, I have had prior run-ins with a prominent declaration that "The world is awash in liquidity" . . . only to see shortly thereafter a dramatic and dismaying drying up of that so-called "excess liquidity."

The example cited in the link above that last made me extremely fretful happened in December 2008. It caused me to suggest at that moment in time that any board should warn its CFO to run for cover and any investor to think about bulletproofing his or her portfolio.

A good call indeed. Within weeks, the market plunged scarily, hitting a low on March 9. It was a gut-punch of a first quarter of 2009.

Will history repeat? Is it again time for boards to tell their CEOs and CFOs to batten down the hatches?

October has been a good month for investors. Call me superstitious, but it sure seems to me that, upon hearing the intrepid claim of a world awash in liquidity, the gods of the markets are then moved to swiftly and ruthlessly vacuum up said liquidity.

If you don't go to cash (or even more cash than is now sitting on your corporate and personal balance sheets), then maybe Bette Davis's legendary line in the movie "All About Eve" is your next best move, now that the gods have again been taunted: "Fasten your seatbelts, it's going to be a bumpy night."

No Paper Left Behind

A tea leaf of the future for the newspaper?

I took Amtrak from Philadelphia where I am based to New York yesterday. Normally I buy a copy of the Wall Street Journal at Philadelphia's 30th Street Station before I hop on the train. I didn't this time, as I cut myself too closely on making the train to stop at the newsstand. No problem — I would just pick up a copy left behind by a fellow commuter when we got off in New York.

It didn't happen. When we pulled into Penn Station, I walked the length of my car for a left-behind paper. No Wall Street Journal. No New York Times. No Philadelphia Inquirer. No Washington Post or Wilmington News-Journal (this being the Washington to Boston run). Nada.

Come to think of it, I now don't recall anyone reading a newspaper during the hour and 20 minute ride. As for me, I caught up on some manuscript reading and editing that I haven't been able to do in the office. And the fellow next to me? I was a good Samaritan — since he was sitting on the aisle, he asked to plug his computer's cord into the window outlet next to me, so I had his PC cord dangling on my tray table the whole way into Newark where he got off.

This never happened to me before — not a single paper left behind for my retrieval when a whole carload of Amtrak commuters departed the premises. That did not make me feel good setting out on my day into one of the newspaper capitals of the world.

Illustration: "Evening News" by Francis Luis Mora (1874-1940), oil on canvas, displayed at the James A. Michener Art Museum, Doylestown, Pa.