A Family Portrait of Financial Mania
11/21/2006 4:40:56 PM
The stock markets finished slightly higher today, Tuesday, November 21
By Alan Hall
I write from the catbird seat here at EWI, with access to the best technical market analysis in the world. In the space of an hour I can read forecasts of commodities, currencies, stocks, metals, and interest rates, and compare them to socionomic observations of news and events. Nowhere else can you grab such a broad, detailed snapshot of the clockworks of the “engine of history.”
Today’s digital snapshot is a family photo of a resurging financial mania.
Uncle Albert, a portly lawyer, is Mergers and Acquisitions. He stands front and center in a dapper pinstripe suit, holding a cigar and grinning broadly after announcing deals worth $52 billion in just the past 24 hours. This year will be his best ever -- $3.46 trillion -- already surpassing the previous record of $3.33 trillion in 2000.
Elegant Aunt Grace, in the gloves and giant hat with feathers, is the Art Market. She is smiling sweetly, having sold art for a record $1.3 billion in November, astonishing her New York dealers. She holds a hanky, sniffling a bit from a case of affluenza, after seducing a fresh pool of buyers from Russia, Asia and the Middle East, as well as handsome hedge fund managers.
Callow cousin Calvin from California, squinting through wire rim glasses, is Silicon Valley. He got rich with an Internet startup, but needed therapy when he got “Sudden Wealth Syndrome” and began feeling paralyzed, guilty, undeserving, isolated, and obsessed by the stock market ticker. He was cured when he lost most of his money, and now he’s working on a new, smaller deal.
Mousy cousin Ethyl, in the gray shift, is The Oil Market. She still has a terrific hangover from a wild party earlier in the year. The lampshade she wore is on the ground, stained and dented. She’s a bit bi-polar, but when she is up, she’s the talk of the town and in demand. They just don’t make ‘em like Ethyl anymore.
Mom and Pop, the Baby Boomers, traded their rusty Chevy for the Toyota they’re leaning on. They’re afraid they’ll have to postpone retirement since Pop lost his factory job. Mom’s hope for a second home is fading fast, and Pop has begun quoting Malcolm Forbes, who said, “Retirement kills more people than hard work ever did.”
Finally, Horace, their blue-collar son with big forearms is the Housing Market. He looks haggard and nervous because he’s sitting on three huge spec houses on the lake, which they half-drained. Copper thieves stole the new air conditioners. Horace quit the fitness club after they ejected him for grunting. Even so, he’s still sweating as he watches interest payments eat his profits.
There's always more to a family photo than meets the eye -- but in the case of this family photo, what doesn't meet the eye includes much of the U.S. today. The future of this cast of characters is our future too.
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