Taking Stock / The aliens have landed
An e-mail arrived in the office this week. "Shalom. A few minutes ago, a UFO flew over my house. An alien disembarked and talked about lofty matters. There is life beyond the planet Earth! I will send TheMarker pictures in a day or two. You will be able to prove the pictures are perfectly authentic and can decide whether to publish them. I purposely do not append my e-mail address: I don't want my real name to get bruited about, you can guess why. Wait a day or two, the pictures are going to leave you in shock."
The editor filtering the incoming e-mails wasn't in shock; he was in hysterics. Done giggling, he continued scanning the incoming missives. But the grizzled capital market veterans on news desk realized immediately that the message was on the money. It was true.
We don't need pictures of the alien squatting on his roof. Over here at TheMarker, we have accrued a critical mass of evidence that aliens from outer space have landed. Now the news is getting about, and it's time to put the evidence on the table.
1. Only the arrival of aliens who had never before visited Earth could explain the wild stampede for Tel Aviv stocks in the last weeks. Only people who hadn't been around in 1982-1983, or 1993, only people who had never before seen a newspaper, could show that much gusto for the shoddy securities on parade as initial public offerings swamped the exchange.
2. Only aliens never before exposed to humans could consider touching securities being distributed by people whose businesses crumbled just three years ago, leaving battered and broken creditors and bondholders clutching worthless pledges.
3. Only unidentified flying idiots could line up at the underwriters bringing people an exclusive chance to invest in bonds being offered by entrepreneurs who cheated the public the last time they hit the market; entrepreneurs who milked their companies dry, who broke their promises, and who lied through their teeth to investors.
4. Only the arrival of cortex-crushing zap guns from outer space could explain why high-tech companies and startups that nobody would touch three years ago are raising tens of millions of dollars in the space of weeks.
5. Only the arrival of a flying saucer stuffed with investors from Mars could explain the interest by anonymous buyers (we know who you are!) in corporate bonds issued by hugely leveraged companies, bearing interest only slightly above that of comparable government bonds. Two or three years ago, nobody would lend these companies a sou, even for three times that interest rate.
We admit, at first we didn't get it, either. When we saw the stampede for the latest stocks and bonds, we assumed the buyers were Israeli institutional investors - people running provident and mutual funds, insurance companies, pension managers, you know the type.
But a quick round of phone calls had a strange result: All these institutional managers, to the last man, vehemently denied buying these dubious shares and bonds. They only buy the choicest merchandise! they growled, only securities bearing the bluest-chip ratings, for the lowest of prices.
When that e-mail arrived Monday morning, the answer suddenly became crystal clear. The mystery buyers are from outer space.
The problem with aliens, as any aficionado of the Twilight Zone can tell you - they disappear as quickly as they appeared, blinking their great pupil-less eyes, and you can't even find the spoor where they were.
The IPO market will shut down one morning at the same transgalactic speed at which it had opened. Junk securities will collapse, and it will transpire that moments before the aliens vanished into space in their flying saucers, they telepathically transplanted all that junk they'd bought into the portfolios of our provident and pension and mutual funds, and there will be nobody around to sue.
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