Thursday, June 05, 2008

The Conjuring of Alternate Realities

Some time ago, when I was about the age of 10, I fell out of a tree and broke my arm in several places which was placed in plaster and duly casted to the orthapaedists liking. My father has warned me about the perils and likely outcomes of constructing a reasonably-sized clubhouse rather high in the crotch of a tree without either the proper tool or engineering experience - not that deterred me, or the construction of "Fort Ralph", named as it was after the one amongst us with a tad more hands-on experience than the rest of us. That snippet alone from my past could be crafted into an analogy of today's boom-bust. But there is a more apt epilogue that may be deserving of your attention.

The cast itself was fascinating to a youngster. People stopped to "sign-it", pretty girls drew cute pictures on it, parents did things on one's behalf that they might otherwise NOT do. Only bath-time was troublesome. Oh yes., and "the itch" and its subsequent quenching, which despite the doctor's warning was usually achieved with the assistance of a wire coat hanger.

Now, after a while of more or less continuous fascination with the cast, one eventually turns their their attention to what's inside the cast. The mind forgets what the arm looks like, and conjures up images of what it might look like. Will one's arm, and the skin upon it emerge soft like a baby's bottom, or will it be green and scaly resembling the serpent from the dungeon beneath Hogwarts? Maybe all that digging inside with hanger will cause it permanent Frankensteinian scars? The point is, you don't know, but the mind nonetheless continues to conjure and each imagined image is stored somewhere in the brain such that by the end of the requisite six weeks, the mind has retained and filed quite literally millions of images. All this is quite true, by the way.

All seem reasonably agreed that we've entered a recession. But as with the child with an arm in a plaster cast (a give-away of MY age), attention now turns to conjuring images of "what the recession will look like when it arrives in earnest. And here the disagreement among economists policymakers and pundits are as far and wide and my mind's conjuring mind-images of my arm. Global? Deep and long? US-centric and Decoupled? Shallow but inflationary? What of unemployment? Where will NOMINAL house prices finally settle, and what will become of equity prices, and the remaining Wall Street Investment Banks? Will GM even exist in 2011? The mind races with images and alternative scenarios.


Eventually, the cast must be removed. I went to my doctor reasonably unconcerned until I saw and heard whirring or the ominous-looking circular saw he would employ to cut the plaster. He assured me it wouldn't break my skin, and sawing - the tool kicking shredding it with dust and bits flying everywhere. About halfway through, I started feeling decidedly light-headed. Three-quarters the way and I began to feel nauseous as stored images circled in mental purgatory waiting to meet reality. Finally he cut through the last bit, brushed it off, and my eyes set upon it. My head whirled as a seeming tidal wave of stored images simultaneously liberated flooded a brain searching for the one that matched reality - the one of a pale slightly scaly arm, whiter-than imagined, with hair dark from not having the light of day for six weeks. The I tumbled to the floor as dizziness from the trauma over-whelmed a normally stoic disposition.

This is where the analogy ends. For in the markets, the reality is that it's never over, with prices and positioning in constant realignment on the basis of new information arrival and feedback loops galore. But the burning question remains to be pondered: What Will This recession Look Like??? Please feel free to use whatever palette you fancy to paint your own picture for further discussion...

6 comments:

rahuldeodhar said...

My lil sis had a plaster cast on her foot. I know that after a while she got used to it. She used to tap her foot on the floor/table and make some sort of music - (she was really young 6yrs). Now that you draw this analogy, that parallels people "toying" with ideas of recession. Markets moving up - anticipating a sharp recovery - commodities rising as if it was Space shuttle Discovery- no Columbia. We need to recall even Space shuttle Columbia crashed! all it needed was a loose tile!

By the way you are going - you will soon be Aesop of Financial world. Fantastic wording!

woland said...

Remember what Claude Rains' face looked like when he unwound the bandages, in a film made (perhaps)
before your time? Maybe it will look like that.

OldVet said...

This recession will be like peeking under the armpit of a hairy not-quite-yet-female Russian weightlifter and screaming "It's a Bush." Which of course it is, as a judgement on ravenous Bush consumerism policies and debt-instead-of-wages dreamed up by the limousine crowd of elitists who have been running the US since 1980.

"Cassandra" said...

old vet - I still feel stupid using the dreaded "D" word.

1930s america had lots of people on the land in one form or another, and still bountiful untapped resources.

Ohhhhh this one could be so much nastier for the urbanised world is finely tuned with just-in-time inventories, optimised logistics, and most people dependent upon the merry-go-round for a living wage, and no land to run back to.

I think that by the time this over, few sportsmen will be playing "under the lights", and no one will be playing ice-hockey in Miami or Texas. As for the Winnebago's and the cigarette boats, one can only wonder what alternative uses they may have...

burnside said...

Oh I see a globe relieved of the American traveller, who remains nearer home, slimming. I no longer hear the Gm7 cry of the Hummer Rampant. I anticipate home cooking and the ascendancy of the House of Maxwell. I anticipate a revival of 'going into town day.'

etc said...

I think a 1980 style, deep consumer recession will happen, but no d due to a variety of government programs that didn't exist in 1930 (e.g., social sec, medicare, minimum wage, school lunch, EITC, loose monetary policy). And since I think we'll have a recession that rhymes with 1980's, for my metaphor, I'll pick John Carpenter's satire on Reganomics, the movie "The Live".