We’ve all heard people compare Wall Street to a casino, even a rigged casino, but a crack house is a new one. More or less, Hussman, in his weekly commentary, is saying that Wall Street still hasn’t taken its medicine and only keeps racketing up the risk and the greed. I’m guessing this is perhaps related to high frequency trading and the surge in ETFs of all kinds playing a large part in the glorified crack house analogy:
“Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums.” (Hussman Funds)
As you’ve just read, the crack house wasn’t the only analogy though. He also threw in the Lollipop Guild from the Wizard of Oz.
What do you think? Do like the crack house analogy or the Lollipop Guild?
Hat tip to David Schawel for pointing me to the quote.