July 22, 2012

Dow 20,000: Hubris, Catharsis and Crybabys

The phrase "Dow 100,000", which I believe was the title of a book published with exquisite timing sometime in 1999, has become code for market hubris. The market gods have punished that type of hubris with a devastation to behold, as is their wont. My knowledge of Greek mythology is shamefully poor (I hope to do something about that one of those days and will be sure to add any future worthy book I read about the subject to the long list of books I have read and enjoyed featured on this blog - I would be very grateful for any recommendations by the way) but I believe the following principle: hubris angers the gods who then make sure predictions of the type "Dow 100,000" get ridiculed with, in this particular example, the brutal fact of Dow 6,500 (March 2009) - is Greek Mythology-compliant.

So is this New York Times article titled "The Long-Term Argument for Dow 20,000" going to meet with the same fate? Maybe or maybe not. After all, we've had about 10 years of angry gods unleashing their wrath on markets, banks, sovereign nations, etc... The wrath even seems to swell and frenetically ensnare more and more institutions and people lately (see J.P.Morgan, Jamie Dimon, Barclays, Libor, HSBC etc..., to name just a few items). It appears that any entity or person who, at any time in the recent and not-so-recent past, has harbored an arrogant or at the very least a self-satisfied thought in the face of this never-ending crisis for even a fleeting instant has been, is being or will be punished harshly. The process has seemingly become relentless. Getting back to my very hazy knowledge of Greek terminology, hubris appears to have morphed into some kind of (self)-destructive catharsis in the course of which anyone still standing is asking for punishment, ridicule, or worse. Laying low, keeping one's predictions to oneself, preparing for the worst and not even bothering hoping for the best, etc..., all start seeming like viable survival strategies.

That's it, I'm done rambling, lest Paul Krugman files this post under the "crybaby plutocrat symptom" (note: I'm neither a plutocrat nor a crybaby...OK, I may be a bit of a crybaby). About that Dow 20,000 call, all I'll say is: stranger things have happened.

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