There were a couple of items
that caught my eye today that may seem unrelated, but they fired a few synapses
in my brain and I thought that I would relate them here.
First, Bloomberg ran a couple
of stories on the ever-inflating asset bubble. Of course, they don’t outright call it this,
but they reported on a home on offer in Los Angeles by a spec builder for $500
million. In the story no one is screaming “top of the market,” because the
market has been so stupid for so long that things like this are becoming
normal.
The second story that they
reported on was the torrid returns being generated in Chinese stocks. Today, in
just a single trading session, 250 companies listed on the Shenzhen Exchange
were limit up 10%.
The third item that caught my
eye was an obscure swimming story where Hungarian swimming sensation Katinka
Hosszu was implicated in a doping scandal by Swimming World Magazine.
Of course, I have no
knowledge of Hosszu’s guilt or innocence other than to say that her performance
over the past two years has been so superlative that it has people wondering.
If she is innocent, I hope
that she is allowed to compete. She has passed all her drug tests, but there
gas been enough smoke in terms of incredible athletic performances in past
years being drug fueled that questions are bound to be raised.
So, instead of talking about
Ms. Hosszu, let us turn our attention to East German State Plan 14.25. This was
the directive issued by the East German government to utilize steroids on their
international athletes during the 1970s and 1980s.
The introduction of systemic
doping made the tiny GDR a world athletic powerhouse, and nowhere was this
power more visible than in women’s swimming.
Starting in 1973, East
Germany’s women swimmers became the best in the world, surpassing their chief
opponent, the U.S. By the time the 1976 Olympics rolled around, there remained
a bright hope for U.S. women’s swimming in Californian Shirley Babashoff. It
was hoped that Babashoff would be the new Mark Spitz, but it was not to be. The
East Germans thoroughly dominated the 1976 Olympic swimming competition and
Babashoff left with four silver medals and one gold. In each instance where she
finished second, Babashoff lost to an East German.
Babashoff, then a teenager,
did not go quietly into the night, however, as she openly accused the East
Germans of cheating, citing their masculine voices and incredible musculature.
Without any proof other than the startlingly obvious physical make-up of those
East German women and their coming from nowhere to dominate the sport in just
three years, the press mercilessly laid into Babashoff, nicknaming her “Surly
Shirley” and a sore loser.
Babashoff was correct,
however. The doping scandal involved at least 10,000 East German athletes and
all of their female swimmers. Of course, this information all came out decades
after the damage was done to Babashoff’s career, a career that should have her
remembered as one of the greatest female swimmers in history. Instead, she is
largely an afterthought, an asterisk.
What I love about her story
is that she had the courage to speak the truth, to call a spade a spade. Yes,
she paid a terrible personal price for her integrity, but her integrity remains
intact. Sometimes, having the courage to simply state the obvious truth, the
one staring you in face, is all that is required to maintain your integrity,
and Shirley Babashoff had it!
The East German athletes, it
appears, were largely unaware that they were being fed massive doses of steroids
and many have seen their lives destroyed as a result. The physical damage for
those athletes of such massive, long-term steroid use has been terrible: Leukemia,
sterilization and birth defects were just some of the consequences.
Now, back to our $500 million
house and 250 Chinese stocks on a single exchange surging more than 10% in a
day. As easily as Shirley Babashoff could just look at her 1976 Olympic
opponents and understand that something was not right about the appearance of
those East German “women,” so too should we be able to look at the increasingly
obvious distortions in the financial markets and understand that something is
seriously wrong.
Babashoff could rightly have
asked, “Do these women look normal to you?”
Today, we should we be asking,
“Does a $500 million spec house and 250 companies in a single market going up
10% in a day look normal to you?”
Sometimes, all you have to do
is open your eyes and accept the truth. The markets everywhere are loaded up on central bank
administered steroids and the consequences will be, over time, as disastrous
for market participants as they were for East German athletes.
Just open your eyes people. You
can’t miss it.
Disclaimer: Nothing on this site should be construed as investment advice. It
is all merely the opinion of the author.
