Economic Old Age, Part 4: The Mother Of All High Water Marks

Caterpillar’s management committed an unpardonable sin during the company’s Q1 conference call. It was in the nature of admitting that beanstalks do not grow to the sky.

As it happened, CAT had posted another “blow-out” quarter by the lights of the head line reading algos. The instant this “beat” crossed the tape, CAT’s already hideously over-valued shares instantly jumped by another 2%—only to get monkey-hammered when the CFO uttered three words with respect to Q1 results that are about as welcome on Wall Street as a skunk at a garden party.

Them numbers are the “high water mark”, said he.

That will cost you $7 billion in market cap, said they (the robo-machines and day traders).

Needless to say, one of the great evils of monetary central planning is that it has turned Wall Street into a petulant, demanding, entitled horde of gamblers who believe, in fact, that stock prices do grow to the sky; and that they are entitled to “buy” signals always, truthful bad news never.



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