Late last month my interest in hiking the Appalachian Trail took me to Bear Mountain, NY. A year ago I did a well-received instablog from the eponymous peak in Connecticut, and having reached that bad eminence yet once more, I have further insights to report.
Convicted Wall Street fraudster Sam Israel, when last in the area, abandoned his vehicle on Bear Mountain Bridge, to fake his death and avoid imprisonment. He was eventually apprehended, and his sentence increased accordingly.
I left my own car in the parking lot at the Inn, and registered with the police, before setting off to cross the bridge on foot. It's an awesome view, looking down on the Mighty Hudson as it flows to the open arms of the sea, meanwhile passing through the heart of New York, New York.
I'm afraid of heights, but staunchly crossed the bridge twice, in order to reach the point where the trail turns up toward Anthony's nose.
From there I went to the trailside zoo, where the bear cage is the lowest point on the AT. The bears were lobbing around quietly, and a horde of children clustered around the enclosure, waiting for action that never occurred.
At the summit of Bear Mountain, on a clear day you can see the skyline of New York. It's a propitious place from which to take an overview of the Market of Stocks and pontificate on the excess of fear and greed that manifests in that milieu. The trail to the top has been extensively engineered, to make it safer and control erosion. I made good time. Regrettably, it was somewhat hazy, and the view and anticipated insights failed to materialize on demand.
Continuing southward, I got caught in the rain. I donned my rain jacket, covered my pack, and pressed on. I was rewarded by a series of rainbows and double rainbows, a promising omen, if ever there was one. The rainbow ends in the woods somewhere, as shown.
I finished the day at the West Mountain Shelter, where I enjoyed a tasty repast of rehydrated food, hung my bear bag, and settled in for the night. I had the place to myself. There was a whisky bottle, Kentucky bourbon abandoned by a previous occupant, who had left his last swallow. I poured it out. The place itself is old and shabby, without either a water source or a privy. However, the view is extraordinary.
As darkness fell, I saw the lights of Gotham, and pondered the fate of various unpaid interns who have toiled long hours, burning the midnight oil, to find a place among the large and prosperous firms that operate in the area. When I awoke next morning, at 5:30, the rising sun reflected off the clustered skyscrapers, showing an alabaster city, gleaming, just like the song. The camera in my phone couldn't handle it, but the memory remains.
Taming the Forces of Nature
Bears, in the wild, are fierce, wily, hungry and tenacious. Behind the chain link fence, they are lazy, slothful and vaguely humorous, if you could only get them to dance. The mountain, in its natural state, is a challenge, to cross the rough terrain and reach the summit. When properly manicured, it can be reached by car, or by ascending the stonework steps and gravel pathways, an easy hike even for couch potatoes.
Much of the pollution that plagued the Hudson has been cleaned up, and still it flows to the sea, to the open arms of the sea, yeah. So too, the flood of money flows from the Fed, to the open arms of the financial community. And the market keeps rising, inexorably.
The wild fluctuations and panics have been tamed. The Fed has mastered them. Never again will the bears prowl Wall Street, chowing down on the fruits of thrift and industry. For that matter, the economy, stabilized by QE, will sluggishly meander forward, enriching us all. Depressions and even recessions will be a thing of the past.
The alabaster city will gleam, undimmed by human tears. That 800 number posted on Bear Mountain Bridge will never be needed by Sam Israel, Harry Madoff, or anyone else. Fear and greed will be stilled.
Good Luck with That
It doesn't work that way. The Sorcerer's Apprentices at the Fed will have to deal with the excess of liquidity. The economy will slow, bad debts will weaken the financial system, and the market will crash. The Bears will have their day.
Hussman and Grantham will be vindicated, but they won't make enough to compensate for the opportunities lost while cowering on the sidelines.
Life will go on. Well-managed companies will still make money, and deploy their free cash flow on behalf of investors. Those who have dry powder will find an abundance of value, and vultures will swoop in and feed, same as it ever was.
As for me, when there is no privy, I make like a bear, and defecate in sylvan surroundings.
Disclosure: I am long SPY.