Danielle Chiesi who had "intimate relations" with 3 of the prosecution witnesses is an archetype that deserves drilling and generalization– one hopefully will not be remiss on this front from the coasts to Midwest.

Her activities are part of the general tendency for older executives to wish to retire to a life of romance rather then making money. Such a tendency leads to all sorts of unintended consquences including the heightened tendency of older CEO's to be takeover targets, and the reduced premiums that their stocks acheive when they are bought out. It is reminiscent of the general tendency of older people of substance to be vulnerable to delegating work to their trusted subordinates and turning them on an instant when it will hurt their romantic life in the future.

The general utility of cane buying is illustrated by the moves in the stock market the last 25 fearful days of Friday the 13th, and on the even more fearful day of the open market meetings when the average moves of the market on these terrible days, 123 observations in all, is 0.4%.

Since the upside down man has issued his bearish call for bonds, they have very quietly risen 5 percentage points. They are now in a situation where when the economy is strong, buyers appear for bonds on the grounds that the accompanying strong commodity prices will weaken the economy, (how could the economy be strong with oil above 100?), and they go up when the economy is weak on the grounds that the Fed will not reduce its balance sheet or take back money from the cronies.

The influence of romance on markets is a field that needs to be studied in much greater detail. The performance of companies should be stuided classified by the age of their CEO and their marital status, and the frequency of their past divorces. Always to be kept in mind is the Sorosian adage that you should never cement bonds with a partner that you wouldn't wish to divorce.

My general point is that old CEO's delegate all their dirty work to their trusted subordinates and then turn on them when the paint hits the wall, and then call up the chief enforcement officer the same day to exonerate themselves. This is part of the more general point that the older CEO's are all too interested in sex a la the golf player at the silo company and let the business slip as they take care of their romantic proclivities, and I still say that any young attractive reporter is not safe in the corn belt.

Rocky Humbert responds: 

Perhaps you should therefore limit your investments to the following 15 Fortune 500 companies: Sara Lee, Yahoo, Wellpoint, Xerox, Sunoco, Western Union, Reynolds American, Avon, Dupont, TJX, Pepsi, Kraft, Rite Aid, BJ's Warehouse, and ADM. The commonality of these large enterprises vis a vis your observation is left as an exercise for the reader.

(This is neither an endorsement nor a rebuttal of your theory.) 

Anatoly Veltman writes:

Is it at all odd: Bunds and T-Notes are rising at seemingly equal pace, while the FX rate is fluctuating significantly? I understand that arbitrage is impossible 10 years out. Still, this may be a tip toward a simple explanation: that investment money is passively (and massively) reaching for miniscule nominal yield improvement, without a care to speculate on other variables.


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