Larvatus Prodeo

The stock market has lost 51% of its value since its peak, a decline we’re told now exceeds the destruction of value seen in 1987. On the ABC News tonight, Alan Kohler grimly pointed to an index (tradeable, I think, but don’t quote me on that) of future sentiment which is apparently dire, and which apparently depressed that reified hive mind “the markets” even further. On Lateline Business, a British fellow in a very smart three piece pin stripe suit bemoaned the fact that all rationality in terms of valuation had departed from equities market, and what was left was “pure human sentiment” which apparently “isn’t pretty”. I think John Maynard Keynes might have had something to say about all that.

The stock market’s fall may also have had something to do with evidence of a growing deflation in consumer prices in America, or so opinionators opined. Well, I guess we don’t have the “inflation dragon” to kick around anymore.

And we’ve had another outpouring of deficit aversion, bipartisanship at last (!), in response to Glenn Steven’s expression of the belief that the government had a responsibility to “borrow to invest”.

And, yet, we’ve had a piece of prime silliness – to put alongside all these other signs of the times – in Crikey’s editorial:

There’s not a lot politicians can do. The Government handing money to low income earners who’ll have virtually no choice but to spend it makes sense, but there’s only a limited number of times a $10b heart-starter can be administered to the economy. Even the Opposition has been doing its bit lately, prefacing virtually every statement on the economy with the mantra that Australia is best-placed to weather these difficulties.

And there’s not much businesses can do without demand. It’s actually up to us consumers to realise Australia’s economic fate is in our hands, and act accordingly.

Righteo. Continue reading ‘Spend, spend, spend! It’s your patriotic duty… or something’