What in the World Is Going On?
Historic precedent need not apply.
We've danced around some delicate topics through the years; subjects that many didn't want to hear, much less accept.
We flagged Fannie Mae (FNM) and Freddie Mac (FRE) in 2005 before most folks blinked an eye.
We mused in 2006 that seeds were being sown for something "entirely more depressing than a recession" as the markets climbed a slippery slope.
When we offered that Wall Street was technically insolvent in 2007 -- as financial stocks were near all-time highs -- we didn't make many friends.
We argued that an invisible hand was responsible for the unnatural bid to the tape and people thought we fell out of our tree.
When we poohed crude in the midst of the 2008 mania -- prior to the 75% oil slick -- and shared the variant view that lower energy prices would be equity negative, you could almost see conventional wisdom wince.
Indeed, we've made a lot of prescient observations -- along with our fair share of mistakes -- as we navigated the twists and turns of this wild world.
One of our mainstay observations the last few years has been the percolating societal acrimony and an emerging class war between the "have's" and "have not's."
As I wrote in my 2008 Themes:
"The middle class steadily eroded between the lifestyles of the rich and a struggle to exist. Structurally, my sense is that this dynamic continues. The wealthy will endure on a relative basis as the "other side" gets squeezed. What will change, in my view, is the perception of wealth. Black cards, fast cars and private jets will be frowned upon while philanthropy and other acts of selflessness will be embraced.
Channeling Kevin Depew, I continued, "If the 90s were about wealth, accumulation and consumption, 2008 will continue the mean reversion toward something altogether more austere, if not more sensible. Debt reduction and the rejection of (and guilt projection toward) materialism will continue what began in 2006 and 2007 as meditations on not just doing more with less, but doing less... period."
I continued that thread of thought in this year's themes when I shared:
"The age of austerity has officially arrived and we'll see a steady stream of social strife as the rejection of wealth increases in size and scope. While societal acrimony began to percolate last year, this dynamic will manifest through social unrest and geopolitical conflict as we edge ahead."
Now, please understand I'm an optimistic person at heart. The mission of Minyanville is to effect positive change through financial understanding, not beat a steady drum of dire predictions.
It's not always fun -- and not always right -- but as I told a producer in September 2008 when she whispered in my ear to be "more optimistic," immediately preceding the financial meltdown, my opinion isn't for sale.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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