Doomsdays Past and Present

RBS issues global stock and credit crash alert

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.
A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
Such a slide on world bourses would amount to one of the worst bear markets over the last century.

I love British understatement (“very nasty period”), but I think their metaphors are a bit mixed up. Chickens can’t come home to roost while the contagion spreads. Perhaps Chickenpox could spread, but certainly not roosting chickens. If the chickens were paralyzed, well…that just seems rather cruel.
Of course, predicting crashes is a great way to get attention. It’s also not so new. Nearly 151 years ago, on June 27, 1857, the New York Herald predicted a market panic (which indeed began in August).
The founder and publisher of the Herald, James Gordon Bennett, editorialized: “What can be the end of all this but another general collapse like that of 1837, only upon a much grander scale?”
What did he mean by “all this”?

Government spoilation, public defaulters, paper bubbles of all descriptions, a general scramble for Western lands and town and city sites, millions of dollars, made or borrowed, expended in fine houses and gaudy furniture; hundreds of thousands in silly rivalries of fashionable parvenus, in silks, laces, diamonds and every variety of costly frippery are only a few among the many crying evils of the day.

Yes, we’ve always had purple prose Doomsday writers. It sells better than balanced reporting.
By the way, 1857 is a…Fibonacci Number…dun..dun…DUNNH.

Posted by on June 19th, 2008 at 4:33 pm


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