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Of Black Helicopters & Such

Posted By Barry Ritholtz On October 20, 2004 @ 2:39 pm In Finance | Comments Disabled

Some interesting conspiracy theories out there on the fringe. Here are four currently circulating from the tin foil crowd:

1. George Soros will destroy the dollar before the election to hurt George Bush.

Soros may not like the President, but he knows that you cannot fight the tape. If there is money to be made on the short side of the dollar — a trade Warren Buffet said he made with his fund’s money last year — then I would expect many currency traders to make that bet anyway. If not, they — and Soros — won’t. This theory was put forth earlier this year in a few conservative [1] publications [2].

2. Soros Manipulating the Presidential Futures Exchanges

I received a PR mailing from Intrade.com, which repeated a variation on the theme. They claimed that a sudden spate of Bush sells in the Iowa Presidential futures market were being investigated by the firm, and they repeated the internet rumor that Soros was behind that.

As mentioned previously [3], I think “presidential futures” have little if any predictive value. Further, Alan Murray of the WSJ and CNBC does himself and his viewers a disservice every time he mentions these teeny tiny exchanges. Just as you cannot foretell the U.S. economy from a few micro-cap stocks, you cannot predict the outcome of the U.S. election from these even smaller, micro-mini cap exchanges.

3. October Surprise comes not from Karl Rove, but from NYAG Eliot Spitzer

I’ve read in some of my favorite political blogs a criticism that Spitzer (a Democrat and possible candidate for NY Governor or U.S. Attorney General) purposefully brought these charges against MMC et al this close to the election on purpose.

The suggestion that a law enforcement officer should delay a prosecution because it is politically inconvenient reveals a poor understanding of the prosecutorial process. It is naive to think that something as complex as the Marsh McLennan investigation could be so precisely timed — it began quite a while ago, and as these things tend to do, it developed a momentum and timeline of its own. I also agree with Rev who observed earlier that “the market is already in weak shape and more vulnerable than usual to negative news.”

James Cramer told a story at TheStreet.com’s stock seminar this weekend, and it reflected the absolute integrity and commitment to the law of Eliot Spitzer. While I highly doubt that Spitzer is a crass political operator — i.e., not Rovian — I defer any questions about that to Jim Cramer. But the bottom line is that the guys who ran MMC were corrupt, stole from their fiduciaries, and got caught.

End of story.

4. Secret 9/11 report blames both sides

Finally, the latest conspiracy theory [4] making the rounds is that the final “9/11 secret report” — that names names and assigns blame — is being suppressed. Some people think that it is equally as hard on Clinton as it is on Bush (not me), and both parties are working to suppress it (again, I’m not so sure both parties are equally opposed to its release). The chatter is that the ranking Democratic and Republican members of the House Intelligence Committee had demanded the report, and that its release is being stonewalled by the White House.

Of these four theories, this last one is the one I find most persuasive, as I suspect there is plenty of blame to go around.

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URL to article: http://www.ritholtz.com/blog/2004/10/of-black-helicopters-such/

URLs in this post:

[1] conservative: http://www.newsmax.com/archives/articles/2004/2/1/132047.shtml

[2] publications: http://www.insightmag.com/news/2004/02/03/Politics/Will-George.Soros.Panic.The.Market-582258.shtml

[3] mentioned previously: http://bigpicture.typepad.com/comments/2004/10/presidential_fu.html

[4] conspiracy theory: http://www.latimes.com/news/opinion/la-oe-scheer19oct19,1,6762967.column?coll=la-util-op-ed

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