Earlie from Earlie:
Ever tried body surfing in big waves? I did ONCE, while in Hawaii.
From the shore, the 12-15 foot waves looked innocuous enough and heck, ten year old (native) kids were making it look easy, so out I went.
Those waves sure got a bunch bigger as I swam out to meet them. In fact, even before I got near them, the forces of their spent brethren banged me around in the shallow water. Swimming out, I suffered deep feelings of unease, as even before entering the water, I had noticed many participants nursing cuts, bruises and worse on the beach. But a fool has to learn his lessons the hard way, so I worked hard and managed to get out beyond the break where I observed the shore-side carnage for a few moments before summoning my nerve and swimming hard into an approaching "biggie".
No problems in the early going.... just arch your body and surf down the ever rising wall of water. Nothing to it. Oh, oh, this thing is cresting and I just don't seem to be able to drop down the wave front fast enough..... I'm being carried up higher and higher on the wave's face... and it's curling over on top of me.......
Suddenly, my world changed. My whole body was smashed countless times against the bottom, tumbling end for end, limbs being pulled in a thousand different directions. I became a tiny piece of flotsam in a giant hydraulic washing machine..... and I came perilously close to running out of air.
Luckily, the wave dissipated, spit me up in the shallows and retreated.... leaving me clutching a dozen wounds, but thankful to be alive.
Several stitches and much picking of sand from open cuts later, I returned to watch the continuing fun. More big waves, and more walking wounded spat up on the beach. It confirmed a long-held belief….. things that look like they can hurt you, probably will do just that, if given the chance.
Why the analogy? Because the current market reminds me of those waves. There is nothing invisible about their ability to crush and destroy, and the beach is increasingly littered with battered bodies, yet still large numbers of amateurs swim out to try their luck, even as the winds increase and the wave peaks grow higher.
Current Weather Observation From The Beach
For close to two decades, I have tracked the health of the tech sector, primarily via a “backwards” approach:
 monitor actual end market sales conditions (no sales equals follow-on problems).
 maintain a feel for the flow through the distribution channels (tennis balls in toilet bowls cause nasty back-ups).
 Keep track of the views of the involved engineers rather than those of the CEOs/CFOs (engineers know what’s going on in their industries and they rarely lie).
 Above all else, keep abreast of “the big picture”.
During that lengthy period, I have never witnessed so violent a deterioration in all of the above as was noted this past few months.
Have we reached “critical mass” yet in this deflationary spiral? I don’t know, but my sense of the matter is, “if not yet, then soon”. The global economy has been slowly heading downhill for the last four or five years with only the purchasing power of the U.S. fending off a cathartic event. Now that the U.S. economy is plainly withering, the chasm can’t be too distant. Not a time for casual body surfing in my opinion. In fact, the visible evidence sure suggests a move to higher ground.
Best, Earlie |
