Dark Bilious Vapors

when we read James Wolcott say this:

I'm fascinated with the stock market, not just as a money-making (or money-losing) proposition, but as a laboratory for sentiment and a theater of folly. One of the things I've learned about the market is to heed one's elders. They know best. When every hotshot was predicting a Nasdaq to infinity and beyond in the late nineties, it was the wise owls--Richard Russell of Dow Theory Letters, Warren Buffett, Sir John Templeton, Seth Glickenhaus--who warned of stocks burning up on reentry into the earth's atmosphere. They were discounted at the time as stodgy, outmoded, stuck in the transistor age as information technology made traditional metrics and industries obsolete--Buffett in particular was chided for not holding tech stocks--and the business magazines splashed one young startup stud or portfolio manager after another on the cover along with articles that cried RETIRE RICH! and FIRE YOUR BOSS!

Then, in March 2000, Nasdaq crested above five thousand and snowballed downhill, currently resting at 3000 points--3000 points!--below its all-time high. I have friends, we all do, who got caught up in the euphoria and had retirement money and college-fund money in zoom-zoom Janus funds or others heavy in semis and dotcoms and lost anywhere from 50 to 70% of their holdings and still haven't recovered.

The market isn't dizzily high now, you're not hearing the same hyperbole, but the elders are again full of qualms and forebodings. A year ago in an interview, Sir John Templeton said he had never seen so few investment opportunities in all his 91 years. Buffett has also said he's sitting on a mountain of cash because there's so little worth buying. Today, former Fed chairman Paul Volcker, a man of true stature (literally as well), wrote in the Washington Post today, "[U]nder the placid surface, there are disturbing trends: huge imbalances, disequilibria, risks -- call them what you will. Altogether the circumstances seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot. What really concerns me is that there seems to be so little willingness or capacity to do much about it."

...

There's a pattern here. As with Peak Oil, global warming, the real estate bubble, and the various US deficits, there's a general awareness of Trouble Coming and yet no sense of urgency or battle plan. It isn't that the media, the political class, and the media are paralyzed by fear or overwhelmed by alternative solutions, it's as if everyone is assuming that we can sleepwalk through the next crisis and muddle through as we always have with only minor hiccups, if any, in our lifestyles. As Stephen Roach and others have warned, the American consumer is now so indebted and lacking in savings that there's little cushion for the next reversal of fortune. Almost any soft landing could turn hard.

As James Kunstler, author of the forthcoming The Long Emergency, wrote today on his Clusterfuck Nation chronicle:

"I notice lately that there are two kinds of hubris operating among the 'forward-thinking' classes in America (which is to say, those who are thinking at all). One I call techno-hubris. It represents the idea that there are really no limits to our powers of innovation and it is obviously the product of our experience in the past century, especially of our victory in World War Two and of the 1969 moon landing. The other kind is organizational hubris, the certainty that we can organize our way around the oil bottleneck, global warming, and population overshoot. What both modes of thinking have in common is that neither recognizes the probability that we are moving into a period of discontinuity, turbulence and hardship. Both modes of thinking assume that we can negotiate a smooth transition from where we are now to a new-and-improved human condition.
"There is a remarkable consistency in the delusional thinking at every level of American life these days. When Americans think about the future at all, they seem to think it will be pretty much the way we live now. The buyers of 4000 square foot McHouses think that they will be able to continue heating them with cheap natural gas, not to mention commuting seventy miles a day. The stadium builders assume that major league sports will continue just as it is today, with chartered jet planes conveying zillionaire athletes incessently back and forth across the continent. The highway engineers and the municipal planners are focused like lasers on providing more roads and more parking spaces for evermore cars. The architects are designing more skyscrapers, despite the decrepit condition of the electric grid and the frightful situation with our depleting natural gas supply. We're so confident, so sure of ourselves.
"When you combine the seven deadly sins with high technology, you get some really serious problems. You get turbo-sins. It's dreadful to imagine what goeth after turbo-pride."

But we may end up living what is too dreadful to imagine.

Len on 04.13.05 @ 08:41 AM CST