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Hedging the Coming Wall Street Apocalypse

Stock-Markets / Financial Crash Jul 06, 2010 - 05:48 AM GMT

By: LewRockwell

Stock-Markets

Best Financial Markets Analysis ArticleBruce Watson writes: Predictions of the end of civilization are nothing new, but the direst prognosticators have, traditionally, existed on the fringes of society, where their dark visions can be comfortably attributed to an excess of libertarianism or a shortage of Prozac.


In the last few years, however, something strange has happened. While there is no lack of survivalists stockpiling cat food and rifles, some of the direst thinkers are now working on Wall Street, where a combination of fear and foresight has many of the country's money men contemplating their escape routes.

Patron Saint of Dire Predictions

The patron saint of the Wall Street apocalypse society may be Barton Biggs. The leader of Traxis Partners, a multibillion-dollar hedge fund, Biggs has gained a reputation for his dire predictions, particularly those of his much-quoted 2008 analysis of World War II, Wealth, War and Wisdom. At the end of the book, Biggs offers his conclusions from his brief study of history, suggesting the likelihood of a future era in which "People with wealth" will face "another time of cholera when the Four Horsemen will ride again and the barbarians unexpectedly will be at their gate."

Biggs offers some interesting advice for hedging the apocalypse. In addition to prescribing a highly diversified portfolio heavily invested in equity instruments, Biggs also advises that his readers buy farms to which they can retreat when the hammer drops. The hedgie touts the joys of the natural life, noting that "landowners seem to find considerable psychic satisfaction just from the knowledge of possession. There are few things as fulfilling as having drink [sic] in the sunset and looking at your fields and cows."

This bucolic perspective seems to owe more to Little House on the Prairie than to any actual experience on Biggs's part. Although the author briefly worked as a schoolteacher and a semiprofessional soccer player, his New York-Yale-Wall Street career track doesn't seem to have left much time for tilling fields and milking cows.

Stock Essentials Like Food, Medicine, Wine...

But this doesn't stop Biggs from telling his readers what they need to do in order to wait out the end of the world: "Your safe haven ... should be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc. Think Swiss Family Robinson." He goes on to suggest that, when the post-apocalyptic hordes attack, the survivalist money man should shoot first and ask questions later: "A few rounds over the approaching brigands [sic] heads would probably be a compelling persuader that there are easier farms to pillage. Brigands tend to be cowards."

It's amusing to contemplate Biggsland, where starving gangs of "brigands" can be frightened away by a shot from his boom stick and precious food space can be taken up with wine. For that matter, while it isn't hard to imagine Barton gazing upon his fields and cows, the image of the soft-palmed money man slopping out stalls or picking cabbage stretches the imagination.

Ayn Rand and Jim Rogers

In Biggs's dark suggestion that wealthy people build rural fortresses, he references another popular Wall Street touchstone: Ayn Rand's Atlas Shrugged. Towards the end of the book, as frightened mobs become feral, one of the "looters" runs away: "'[Chick Morrison] has a hideout all stocked for himself in Tennessee,' said Tinky Holloway reflectively, as if he, too, had taken a similar precaution and was now wondering whether the time had come." While Wall Street's objectivists don't see themselves as villains, many seem more than willing to follow the lessons of Rand's demonic bad guys.

Read the rest of the article

Copyright © 2010 DailyFinance

http://www.lewrockwell.com

© 2010 Copyright Bruce Watson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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