Sunday, June 05, 2005

Double, Double Toil and Trouble

"Double, double toil and trouble; Fire burn and cauldron bubble" (from William Shakespeare's Macbeth).

These lines of Shakespeare are a perfect accompaniment to today's New York Times Magazine article by Roger Lowenstein entitled "See a Bubble?". Like the three witches in Macbeth Americans today are anxiously watching the financial cauldron bubble, hoping to brew a potion that will ward off imminent disaster.

Here's Lowenstein's opening paragraph:

"It's a good time to be a financial-disaster writer. Disasters abound, and even when they don't, people are eager for your opinion on when the next bubble is going to pop. Scarcely a day goes by without a warning of some dire calamity - in the dollar, in housing values, in pension funds. The way people crave financial info, we must be the best-informed, most economically literate society ever. But we do not sleep any better for it. Is all the anxiety warranted, or even productive?"

My own answer to Lowenstein's (rhetorical) question is that all the anxiety is NOT warranted and is NOT productive. That Lowenstein can write this article and the New York Times publish it is ample evidence of my basic contention, one I have repeated on the blog many times: people are very worried about the future and bearish in general on financial assets. Under such conditions I think there is no chance that the stock market averages can drop over the next six to nine months.


Anonymous said...

You have a decent record at predictions, but your ability to synthesize newspaper articles is atrocious. The point of this article is not that there is a bubble, though that is what you imply in your posting. Moreover, the paragraph you quote is entirely misleading.
You may feel more comfortable with less nuanced articles. May I suggest The Post or maybe People?

Carl Futia said...

My posting implies no such thing. In fact I assert that people are worried about the future, hardly the stuff of a bubble.

The paragraph I quote shows Mr. Lowestein's perception that the public is concerned about potential problems and disasters, not that he thinks there is a bubble.

Perhaps english is your second language?