Equity Crash, an Allegorical Approach

By: Deric O. Cadora | Tue, Jan 23, 2007
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This tale is a sad one, for it describes the woeful results of disillusionment. Our victim, a fine young woman by the name of Equity, was infatuated with her deceitful boyfriend, Fiscal. You see, Fiscal was a handsome, alluring man who inspired fanciful dreams in Equity's mind by providing unrealistic expectations for the future. But Fiscal had no intentions of fulfilling those dreams. He was too self-interested, carousing and cheating, defying accepted principles simply to get what he wanted. Fiscal was quite the rascal.

For a very long time, poor Equity remained blind to the hollowness of Fiscal's promises. Despite subtle clues to his lack of values, Equity grew more and more elated by his charms. One could call her myopic joy downright bubbly. Equity would grow light-headed and be easily swayed by Fiscal's pet name for her... Goldilocks... despite the fact she donned short, brown hair.

As the months passed by, Equity's friends tried to enlighten her to her reckless path, but she would have none of it. Fiscal was a promise of a new era in her life, a chance for things to be like they had never been before. The release of such dreams would be no easy task. In her eyes, there was no dark side to her ambitions.

And then one early summer day, the relationship stumbled. Equity was prancing about with the monotonous expectation that each day with Fiscal would give her a greater high than the last when she saw him in a corner cafè flirting with another woman, named Aura. The spirits of both women took a tumble. Now, Aura was a bright woman with a dignity that could not be debased by the improprieties that guided Fiscal. She would recover her spirits on her own accord... but that is a tale for another day. Equity, on the other hand, suffered a steep decline in her mood. Perhaps now she would see Fiscal's faults and understand her misjudgments.

Alas, it was not to be... not now. After some time, Fiscal, exercising unrivaled mendaciousness, was able to sway her into believing his old promises of an unwaveringly blissful future. Equity's spirits rose once again, slowly, but steadily. Ironically, the aftermath of her discovery of Fiscal's liaison lead her to even higher spirits since she felt the mending process would make the basis for their relationship much more unreproachable.

However, Equity's friends feared the inevitable: that once the extent of Fiscal's misdeeds became undeniable, her spirits will fall harder and faster than during her last bout with reality. In fact, some would say she faces a psychological dislocation... and end to self-delusion that can only be resolved through a severe revaluation and self-assessment. Such is the future for Equity and other victims of Fiscal's irresponsibility, and so ends our sad tale.



Deric O. Cadora

Author: Deric O. Cadora

Deric O. Cadora

Deric Cadora

Deric O. Cadora is the editor of The DOCument, a daily newsletter offering equity and commodity market cycles analysis, macroeconomic discussion, and general market commentary. Deric is a professional trader and a General Partner of The Rutledge Group, a managing partner of a commodity-centric investment partnership. His investment and trading experience spans two decades, during which time he formed and served as principal of a broker-dealer, managed a long/short book on the proprietary trading desk of Citi Capital Markets, worked as an independent trader, and currently serves as Chief Portfolio Manager for a commodity-centric investment partnership.

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