backwards, looking forwards
light of a half moon twinkled on the black waters. A clear luminous
evening had descended into the crystal blackness of an autumn night
as Old Possum and I rode the ferry to Manly to meet Joadja for dinner
at the Café Tunis.
leaned on the rail with the wind in our fur and soaked up the night,
for life is too short to waste a trip on the Manly ferry.
skein of crazy seagulls flew alongside. We could almost have reached
out and touched them. They were using the ferry's lights to spot small
prey in the water, but some of them flew all the way without getting
anything. It seemed awfully futile.
what do you think will happen to the economy next?" I asked. "We
aren't hearing much talk about 'the greatest share-owning democracy
in the world' any more. A lot of simple folk who invested in things
like Telstra have lost a lot of money already".
backwards, history is a cartoon. Looking forwards it's a movie running
in slow motion", he said, leaning back to duck a surge of spray
that came over the gunwale as we dipped into the swell.
back, everything seems simple and clear-cut, logical and obvious. The
way things unfolded to the participants loses its confusion and its
detail and mythologies fill the vacuum.
repeats itself, but not exactly, and people seize on the new features
to calm their fears. You know how you hear them say: 'It can't happen
again because ... ', or 'Things are different now because ... 'or even
'They know how to stop it happening nowadays'. As often as not, the
things they think will crash-proof the economy are really making it
more susceptible to disaster.
what's the mechanism? What drives a market crash?" I asked, for
I have always had an investigator's fascination with the mechanics of
no better example of the mechanism that the 1929 crash. The market goes
down step-wise and at each slump more investors get wiped out, but a
new wave of optimists enters it, thinking it's reached the bottom and
they'll buy in cheap, and it'll go up, and they'll make a killing.
each time, the optimism is more brittle. The investors get spooked more
easily, and suddenly they panic again -- anything can trigger it --
and millions more are wiped out.
then it feeds back into what they're now calling -- with unconscious
irony -- 'the real economy'. Suddenly consumers get cautious. People
decide it would be prudent not to borrow for a new car or fridge or
whatever. Trouble is brewing, and it would be better to put some dollars
in the bank, so shops are left with stuff they can't sell and factories
lay off people".
thing to realise is that we are all participants in this out-of-control
ecosystem we call capitalism. That applies to the market analysts and
business journalists too. They aren't just neutral scientific observers
of reality. Ninety-nine per cent of them believe implicitly in capitalism
-- otherwise they wouldn't be where they are.
the market is ramping up, most don't want to look like doomsayers. They
don't want to be 'irresponsible' or 'negative', so they go along with
the mysticism of the boom. Some of them (it will soon transpire) are
even accepting favours to boost certain stocks. Then, when things start
to go wrong, they suddenly switch sides in droves. They start ringing
the warning bells -- now they don't want to look irresponsible if it
really is a crash -- and that feeds the general uncertainty."
other words there's negative feedback loop, a chain reaction downwards",
ferry slid in towards the wharf. Yes, I thought, if you hadn't been
here before, you'd never guess that the great black Pacific Ocean lies
just beyond this blaze of light.
in Whispers from the mean streets
-- Best of 2000