Alessio Rastani Three Years On

Three years ago today, the BBC interviewed a trader named Alessio Rastani who told them that the stock market was toast.

Rastani’s comments were ridiculous and ill-informed. Nevertheless, this got a great deal of attention at the time and many people viewed him as a hero. Occupy Wall Street had started just a few days before. Rastani was clever enough to play to his base, “The Governments don’t rule the world, Goldman Sachs rules the world.” Yeah, right.

Now, with the benefit of hindsight, we can see how wrong he was. The October 3rd low was just days away. The S&P 500 is up 69% from the time of his interview. Rastani’s remarks were so absurd that some people thought it was a joke. The BBC even released a statement saying that he’s really a trader.

Here’s a transcript of the interview with the BBC:

Alessio Rastani: …it’s gonna crash and it’s gonna fall pretty hard. Because markets are ruled right now by fear. Investors and the big money, the smart money …I’m talking about the big funds, the hedge funds, the institutions, they don’t buy this rescue plan. They basically know that the market is toast. They know that the stock market is finished, the Euro as far as they’re concerned they don’t really care, they’re moving their money away to safer assets like Treasury bonds, 30 year bonds, and the US dollar. So it’s not gonna work.

Maxine Croxall: We keep hearing that whatever the politicians are suggesting — it’s all been rather wooly — isn’t right. Can you pin down exactly what would keep investors happy, make them feel more confident?

Alessio Rastani: Ah, that’s a tough one. Personally, it doesn’t matter. I’m a trader, I don’t really care about that kind of stuff. If I see an opportunity to make money, I go with that. So for most traders we don’t really care that much how they’re going to fix the economy, how they’re going to fix the whole situation. Our job is to make money from it and personally I’ve been dreaming of this moment for three years. Personally, I have a confession to make, I go to bed every night and I dream of another recession. I dream of another moment like this. Why? Because people don’t seem to maybe remember, but the ’30’s depression, the Depression of the ’30’s wasn’t just about a market crash. There were some people who were prepared to make money from that crash and I think anybody can do that. It isn’t just for some people in the elite, anybody can actually make money, it’s an opportunity. When the market crashes, when the Euro and the big stock markets crash, if you know what to do, if you have the right plan to set up you can make a lot of money from this. For example, hedging strategies is one, then investing in bonds, Treasury bonds that sort of stuff.

Maxine Croxall: If you could see the people around me, jaws have collectively dropped at what you’ve just said. I mean we appreciate your candor, but it doesn’t help the rest of us does it, or the rest of the Eurozone.

Alessio Rastani: I will say this, listen. I would say this to everybody who’s watching this, this economic crisis is like a cancer. If you just wait and wait thinking this is going to go away, just like a cancer it’s gonna grow and it will be too late. What I would say to everybody is get prepared. This is not a time right now to wishful think that the Government is going to sort things out. The Governments don’t rule the world, Goldman Sachs rules the world. Goldman Sachs does not care about this rescue package neither does the big funds. So actually, I would actually tell people, I want to help people. People can make money from this, it isn’t just traders. What they need to do is learn about how to make money from a downward market. The first thing people should do is protect their assets, protect what they have because in less than 12 months, my prediction is that savings of millions of people is gonna vanish and this is just the beginning. So I would say, be prepared and act now. The biggest risk people can take right now is not acting.

Maxine Croxall: Alessio Rastani thank you very much for talking with us.

If you read this closely, you’ll notice he doesn’t say anything substantive. People are afraid because people are afraid, markets are going down because they’re going down.

To be perfectly clear, I’m not opposed to having negative voices in the media. Nor am I opposed to having people with terrible track records in the media. People who have been wrong are wrong, but can be right on the big picture.

What I’m opposed to is having frivolous voices in the media. Rastani had nothing to say. It’s cynicism dressed up as wisdom masquerading as investment advice. The dance of the perma-bear never ends. They always have an excuse and never have a time horizon. “It’s even worse now.” “The Fed has only delayed the pain.” And their rotten calls always find a way to slip down the memory hole.

Posted by Eddy Elfenbein on September 26th, 2014 at 10:42 am

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