The Curious Logic of Macroeconomic Bears

 | Mar 26, 2013 | 3:21 PM EDT
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So they were poking fun at my Bristol-Myers (BMY) analysis at "The Half," at least my pronunciation of it. But if you ever again doubt that, in the end, American money managers are buffaloed as to why they should care about Cyprus, because it has nothing to do with the price-to-earnings ratio of Bristol-Myers, I will refer you to the 10 days that Cyprus allegedly shook the world.

When this contretemps broke out, there were people in every capital of Europe talking about the breakdown of banking because the confiscatory plan that the E.U. came up with. It was pretty ugly initially, but it ultimately morphed into what happened here in the savings and loan crisis, where investors in the banks lost their investments, and those who had more than the guaranteed money lost their investments, too.

No one questioned that similar denouement with the S&L crisis. If you reached for yield with some dumbass bank that was getting away with kiting the system, you deserved to lose money, especially if you were stupid enough to put it all in one ridiculously capitalized Southern California or Texas bank.

But the initial plan seemed to encourage you to pull your money out of the bank and put it in your mattress. And that's not going to be forgotten anytime soon, nor is the now-discredited notion that the crunching of a bank in Cyprus that's brimming with laundered Russian money is somehow going to be the template to handle Spanish and Italian banks that have tried to play by the rules after initially being reckless lenders.

What mattered, though, is, how to translate the European desire to pull money out of Europe and put it here, with the idea that Americans should pull their money out of our stocks and put it who knows where? That's the subtext of the Bristol-Myers principle. Why do you have to sell Bristol because of a Cyprus bank? Why? I never heard a reason why from all of the Cyprus-infused bears, because they tend not to trade stocks and instead like to blast in and out of the futures.

That's why it is so tough to reason with those who thought that we should be trading roughly on par with the Europeans after Cyprus broke. They can't head-on answer the Bristol-Myers question, because they don't even know what BMY stands for. They don't know that there are companies out there that get bought on global tension, not just indices that should be sold.

Now, I am convinced there will be many Cypruses this year, spontaneous eruptions of outrage that cause our futures to get clubbed on Sunday night and sow fear into those who think they have to sell because others will sell if they don't or beat them to selling.

All I am asking you to do is ask yourself, what is the actual tie-in, not just to Bristol-Myers or Merck (MRK) or but also Kimberly-Clark (KMB) and Colgate-Palmolive (CL)?

If you know of an answer, an actual linkage, let me know, because for the life of me I still can't get one out of the people I talk to.

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