In distant centuries particularly interesting forms of social exclusion have been created. Archaic and republican Rome he elaborated the figure of homo sacer (sacer, which we translate as sacred, originally meant separate, apart). It was homo sacer who, having sworn falsely, was deprived of human rights and reduced to an animal. He could be hunted and killed by anyone, but he could not be offered as a sacrifice. By swearing, in fact, he had summoned a divinity and had therefore become his. No one could therefore offer it to another deity. Another interesting form of marginalization, practiced in the Middle Ages in the Germanic world and in Venice, was that of embarking the insane on rafts and barges and letting them drift in rivers and at sea.
Since rivers often demarcated the boundaries between one jurisdiction and another, the insane found themselves in a condition of extraterritoriality and, within that sphere, they could do as they pleased. Like other once-oppressed minorities, the insane have come a long way from the Middle Ages to the present day. For example, they infiltrated physics, starting by saying that it was the earth that revolved around the sun and continuing with relativity and quantum mechanics. Today, from their university chairs, they explain to us that most of the matter is invisible, that two particles separated at birth and miles apart remain in correspondence with each other for life, that there are antimatter, antienergy and the antiuniverse and that you can travel in time because spacetime is collapsible.
Mad people have also made their way into logic with Gödel and into geometry, where parallel lines have begun to meet and the number of dimensions has risen to 26 at the latest survey. fatty foods make you lose weight and who gets fat sleeping with the light on. The healthy, on the other hand, are besieged from all sides and almost caged in their narrow three-dimensional space, where they persist in eating lettuce leaves and removing the fat from the ham. Economy and finance do not escape the general trend. The sane are cornered and the mad go crazy. The law of supply and demand, like the Ptolemaic and Newtonian paradigms, is being confined to increasingly narrow spheres. In fact, the madmen have taken control of many sectors and are the masters in mining and oil, where they increase production every time the price drops. In this way they bring down the price again and can thus produce even more. We know that crazy people have their own way of having fun. The healthy, on the other hand, still study in their universities that a falling price reduces the offer.
So they stay long of oil and lose money. While the sane invest in real assets, only go long and don't use leverage, the crazy, who enjoying extraterritoriality are not subject to Mifid, combine all sorts of things. It is fashionable among their strategists to offer balanced portfolios (actually unraveled) in which the core part is short on two-three-year German government bonds and the satellite part is short on oil and long on Argentine bonds. The two-year Schatz, they explain, have a negative yield of 0.40 which becomes positive if one turns upside down and, instead of buying them, sells them. But how do you sell something you don't own? It is borrowed. Yes, but by whom? Not from the ECB, which keeps them close and buys them every day, but from some other madman who, for example, keeps them in his wallet (together with the Swiss francs) as protection against the risk of redenomination. After all, healthy people look alike, but crazy people are all different from each other and there are those who are willing to pay the 0.40 negative rate just to be sure they are on the right side (and get brands back) the day the euro were to dissolve.
The Eurosceptic nut, however, will want something to lend his stock to the nut who wants to go short. If they were to do half by one, the short mate would be left with 0.20 which is in any case quadruple what the healthy ones who go long of three-year BTPs get. The oil short, for its part, is not a short tout court, but a curve short that exploits the contango. In fact, it happens that the madmen who produce too much are reaching the point where they no longer know where to put their crude oil and therefore have to sell it off at the last minute by making a generous discount. The physicist then treats at a discount (which is called contango) which has reached 3 percent over the 30-day delivery. Basically, then, the nut that is short on oil is making 3 percent a month even if the price stands still. If the price then falls, they earn twice. And they won't even go to hell for it, because crazy people are possessed by a demon and have no free will.
As for Argentina, which cannot even be named in the homes of respectable people, the madmen have been wallowing in it for months, that is, since a historic defeat of Peronism was looming. The fact that bond coupons are still frozen and that the new government needs to find a solution to the holdout problem before releasing them (it's the first thing I'm going to do, Macri said) didn't stop the Buenos Aires stock market, which was up by 50 percent (in euros) from the beginning of the year. The rating agencies, which fearful people wait before buying, will they wait for further hikes before giving the green light? If so far we have given space to the anti-wallets of crazy people it is because the season is approaching in which the strategists of the healthy have the task of preparing the investment menus for the following year. The task is a bit thankless because you always have the same ingredients at your disposal, cash, bonds and stocks, and because bonds, at least in some varieties, are starting to wither while profit margins, at least for American companies, are starting to be under pressure.
Luckily in 2016 there will still be a way to earn something even with grandma's ingredients. The ECB is studying about twenty measures to boost inflation and the economy. Expectations are very high, rumors chase each other and the only one we haven't heard yet is the adoption of prison sentences for bank executives that jobs will not increase. At worst, those who can't find anyone to lend money to will be forced to keep liquidity in dollars, causing the euro to fall and thus making its contribution to the rebirth of Europe. With the euro falling hand in hand with rates and oil, the European stock markets will have a positive tone for some time on the sole condition that Wall Street manages to absorb without falling the double blow of rising rates and the strong dollar.
Let us also recall that if the stock markets go up it will not be only because they are driven by liquidity but also and above all because the European economy will improve further next year. Those who don't like the stock market will still be able to nibble on the spread of government bonds in the periphery and on corporate bonds in euro. Even on the dollar it will be possible to bring something home, but with modest objectives. A dollar that is too strong risks jeopardizing American growth, to frighten Wall Street and drag all the world's assets into a correction.
