slaughter of the bulls is nigh
must have been ten-thirty on Friday night when the doorbell rang. Normally,
it would just be a joke by a bunch of drunken currency dealers from
the merchant bank taking a short-cut through the lane, or maybe Joadja,
who had mislaid her keys, but there was a short ring, two long rings
and a short ring so I knew who it would be.
walked down the stairs and let Old Possum in. He measured his tread
up the stairs with a careful pace.
extracted a six-pack of cider from the fridge and motioned him to the
comfortable chair. "So how are you, old timer?", I asked,
twisting the top off a couple of bottles. There was a chuff of liberated
gas and tiny bubbles began to rise from the bottom, sparkling in the
light of the desk lamp.
pretty good now", he said, reaching out a grizzled arthritic paw.
He looked pretty much the same as the last time he had visited, which
was probably a year before. He carried on his ears the scars of many
fights and big chunks were missing from his pelt. His prescription sunglasses
were old and scratched and one lens was cracked.
at the same place?" I asked.
to move again, but I fell on my feet this time. Found a nice sunny garden
shed in one of those Federation houses down by the park. They have an
apricot tree and an old China pear in the back yard. The library is
just around the corner and there are no dogs."
nice dinks. He's some sort of functionary with the Nature Conservation
Council and she's a high-powered lawyer, but awfully sweet." He
took a long swig from the bottle. "He even gave me a hand to move
my books around. This place will see me out, I think".
was a long companionable silence. Raucous laughter drifted up from the
pub on Sydney Street.
sense the end is coming fast", he said quietly.
... you'll see us all out", I muttered.
I mean the post-war boom. I have seen all these things before, in 1929",
he replied. "This is madness now on the stock market. Millions
of small investors are playing the market. Investment trusts and superannuation
funds are playing the market on behalf of millions more. Millions will
be ruined. A great slaughter of the bulls is nigh. It will be worse
than the last time".
they keep saying the economic fundamentals are sound", I said,
"The American politicians say it all the time. Peter Costello says
it every other day. Is that just the big lie technique?"
they really are mystified. They really do believe the fundamentals are
sound. All the things they've wanted for years are there: nearly zero
inflation; very low interest rates; tariffs low and falling; maximum
competition; vast sums of money available for investment; maximum international
mobility of capital; government regulation has nearly been done away
with ... and now they have this haunting feeling that doom is upon them
and the bull market is going to collapse ... that it's just looking
for an excuse. It's almost a law of nature: the market inevitably collapses
when all the fundamentals are sound."
there certainly are eerie parallels. Listen to what I found the other
day", I said, picking up a copy of The Day The Bubble Burst.* I
flicked through my battered copy till I found the place.
writing about 1929, a month or two before the Wall Street crash and
they say: '... Australia was being governed by a coalition government,
and the country was in the grip of a growing economic crisis; there
had already been a serious slump in exports, the coal industry was in
trouble, the price of both wheat and wool was falling while unemployment
was rising. The stock market, behaving erratically, accurately reflected
the situation', and this: 'In the election due later in the year, there
was little doubt Australia would follow Britain's lead and elect a Labour
possum nodded, sipped his cider, and spun a bottletop on its edge, "What
was happening was that as the economy faltered in country after country,
money flowed from all over the world into Wall Street, looking for a
safe haven, looking to make a quick killing on the market, either by
speculating in blue-chip stocks or as loans to stock market speculators
on the call money market. I know, I saw it, I was there. The conditions
were very like today", he said.
relentless influx of capital drove the blue chip stocks up and up. They
had long since passed the point where anybody was buying them in the
hope of earning a meaningful income from dividends. Dividends meant
nothing in relation to the purchase price. Everybody was counting on
selling out at the top, cashing-up and getting out. Everybody thought
they were going to be very clever".
Japan was in the grip of a terrific crisis in '29", I said, "They
had a mountain of bad debt, and endless political scandals, and banks
were failing one after the other, sounds very much like today ... but
what in the hell were you doing in New York in '29?"
was just a kid -- sixteen and a half, I think; but I looked more than
my age", he said. "I got a job on an old freighter running
to San Francisco. I jumped ship there and got the train across to New
York. Just wanted to see the world. I arrived in New York on a Friday,
early in October, the fourth, if my recollection serves me.
know the characters of those days are almost forgotten now, except by
those who cherish books and read history. When I got to New York everybody
was talking about Roger Babson and Professor Irving Fisher of Yale.
was just a month after what they later called the Babson Break. Babson
was a natural bear, a sort of Max Walsh of those days. He was an obscure
financial advisor who had been predicting for two or three years that
a crash was coming. Then one day he was the guest speaker at a financiers'
luncheon -- it wasn't even in New York. He predicted again that a crash
was coming and it was a slow day for news so they put a report of his
speech on the financial news ticker and it was read by people in the
brokerage offices all over America and the market suddenly nosedived.
Hundreds of thousands of investors knew he was right and they all decided,
simultaneously, it was time to get out."
took another sip of his cider.
was flogged in the press of course. The champions of the endless boom
made him a whipping boy. Professor Fisher who was the Ross Gittins
of the twenties -- said that the stockmarket had reached a permanent
high plateau, and for a few days it recovered, but then it crashed again
on the 24th of October -- Black Thursday. I'll never forget those scenes
of panic and desperation. The bankers got together and poured in funds
to try to rally the market but the following Tuesday it crashed again
and kept going down, and it never recovered for a quarter of a century.
all psychology now; all perception; all greed and guesswork. All the
economists are trying to guess what all the other economists are thinking
the market pundits are thinking that the other market pundits are thinking
that the investors are thinking that all the other investors are guessing
... what the 'market' will do ... if you get my drift".
how do you reckon it will happen, what will trigger it?", I asked.
can tell you that. The capitalist economy is a huge, objective, independent
thing -- ultimately uncontrollable and bigger than any central banker
or any government or any political force. That is our problem. It is
really an ecosystem which doesn't notice the needs of people, let alone
animals or plants -- the natural ecosystem on which we all ultimately
depend. But when the inevitable financial holocaust is near, mob psychology
and chance determine its timing. It could be anything now: an assassination,
the collapse of a single Japanese bank, a default, a devaluation, a
small war, a sybiline pronouncement by Alan Greenspan.
this whole mad, erratic, system sits on top of the ecosystem of nature;
parasitises it. It just doesn't see the natural world or its needs at
all. It has no rational relationship to it. It will pollute and sterilise
a river system or drive a species into extinction or destroy a benign
productive industry as long as there's a buck in it for somebody. The
driving force of the economy -- the objective need for profit -- acts
automatically, relentlessly, constantly, unconsciously. The forces acting
in defence of the ecosystem and the wellbeing of humans and and the
rest of us are weak, secondary, terrorised, and they rely purely on
a conscious will to do the right thing -- on the very weak forces of
rationality and self restraint and decency and science."
was right of course. I opened a couple more ciders and walked to the
window. The rain was still drizzling down and the merchant bank building
loomed against the sky like a huge malevolent spaceship in a cheap sci-fi
flick. They were working late. A smattering of lights were still on
and the neon McBANK sign glowed red through the mist. It had been a
was a good talker and he talked on and on ... of the days of panic and
ruin ... of Wall Street packed shoulder to shoulder with distraught
investors ... of bread lines and soup kitchens, hunger marches ... of
desperate struggles against fascist demagogues ...
woke me when she came in around two-thirty. He had let himself out and
shuffled off into the night. Old possums are like that.
* Gordon Thomas & Max Morcan-Witts, The Day the
Bubble Burst, Arrow Books, London, 1980.