Yesterday I had the very rare and delightful opportunity to visit with market legend Richard Russell. Now in his 80s, his mind is sharp, his hearing is excellent, and he writes daily for his thousands of subscribers. As a longtime reader of his work, I respect him for neither being bullish nor bearish, preferring to let his market indicators tell him which way the wind is blowing.
He’s been writing his newsletter since 1958 and has not missed a single month. His home is crammed with books and monitors as he constantly surveys the landscape for clues and guidance. He’s been in the game for a long time, has paid attention every step of the way, and has seen all of the ups and downs, fads, and real wealth trends across all of those decades.
His daughter recently came across the Crash Course book and invited Adam and me to visit should we ever be in the area. As luck would have it, that offer came 24 hours before we were due to be in Southern California on other business, so we jumped at the chance.
One of his famous sayings that I repeat from time to time is The purpose of a bear market is to take as much money from as many people as possible. The corollary to this is that bull markets make the most for those who identify them earliest. Left to their own devices, this is what markets will do. In today’s world, the difficulty of being right is massively compounded by the most interventionist central bank policies in history, which have left no safe harbors for anyone.
Instead, the central banks have made it clear that they want everyone in financial (paper) assets but have removed safe returns from the landscape to goad investors into taking on additional risk. Treasury bonds now have negative real returns, as does cash, so this leaves only highly risky bonds or equities as places to chase returns.
In our conversations, Richard Russell made it clear that he thinks a market crash is the likely outcome of all this money pumping into equities. When I countered with the idea that HFT (high-frequency trading) computer robots gave the authorities an incredibly powerful tool for market interventions, he replied, Nothing moves as fast as fear. As fast as the computers are, markets are still dominated by greed and fear; they always have been, and they always will be.
by quercus-bicolor-2 
