Market Speculation Is So Last Year

From America’s inception, the country’s economy has operated on the concept of speculation – a method of prognostication based on applying the past to the future.

To “speculate,” in the business sense, has always been to predict an outcome with the benefit of history – a guided guess, but a guess nonetheless.

The American economy was built on these careful symbiotic semiotics – hindsight and foresight, and the dependent signs and symbols of both.

Until now.

Financial speculation has – like a transparent tranny – disappeared, undergone a sex change, and reemerged as ostensibly “the same on the inside” as before, asking us to ignore that it’s just not the same at all.

Speculation, and with it the entire economy, has become exactly the opposite of what it has been, the opposite of what’s worked all along.

Where before it was all about the future with a guiding eye towards the past, it’s now all about the present. There is almost no regard for the future, nor any deference to the past.

Not quite getting it yet?

Behold some headlines about stock market performance from the past couple of weeks:

“Stocks Mixed on Retail News”
“Wal-Mart Sends Dow South”
“Stocks Plunge on Job Numbers”
“Dow Dips 81 on Autos, Building”
“Stocks Slide on Auto Fears”

At first glance, these headlines probably look bland and benign, but it’s just that we’ve come to expect this sort of reactionary trading – trading that is, for the first time ever, contemporaneous with the news.

The markets plunge or soar with the news – not because of it, as conventional wisdom dictates, since financial cause-and-effect just doesn’t manifest with such immediacy.

In fact, there is no cause-and-effect at all, there’s only news and nearly simultaneous shotgun trades in response to that news.

It’s an intensely reactionary way to do business, doing away as it does with all manner of initiative, forethought, or – and this is not a small point – hindsight.

It’s no wonder the markets have so spectacularly sunk. Market speculation has no basis in reality anymore, because speculators refuse to speculate.

Instead they react to the days’ headlines with the distilled binarity of a robot: good/bad, buy/sell.

And that reaction leads, naturally, to another reaction – equal in severity and opposite to simplicity.

The name that particular reaction is given by the very people who caused it?

Financial Crisis.

And just the mention of that phrase – just the phrase, without regard to data or reality, analysis or elaboration – sends stocks plummeting.

Which is just my point.

Comments