Opinion: With Trump in the Rear-view we are shifting to the Economy, Corona and Climate
The wheels are already spinning towards new challenges brought on by Trump’s actions
With so many challenges facing the US and, in many ways the entire world, even as the bizarre political drama recedes, it may be hard to find even a moment of neutral footing before the next crisis phase begins.
In fact it is in the most “positive” areas, endlessly touted as a triumph, where the first fireworks could be set off. Although many believe that the stock market is in a bubble phase, as extreme if not more extreme than either the “dot-com crash” of 2000 or the real estate collapse on 2008, this is truly the first time a bubble was inflated during a time when a triple threat – political, medical and climate emergencies, was in various phases of unfolding at the same time.
But it’s the forth “leg”, the lone bright spot as it has seems, that could carry a very big danger. With the pandemic still not showing any signs of abating, although there are vaccines being distributed, and the political madness of 2020 looking to begin to fade (at least partially), it is the possibility that the stock market bubble finding it’s “pin” that could trigger the next challenge to Biden and the country as a whole.
Perhaps the various stimulus funds being planned for dissemination can postpone any reckoning for at least a few months, but if that is not the case the situation could become extremely dangerous very quickly.
How the current stock market climate compares to 1999 and 2007
Looking back at the history of both of those bubble-crash cycles there are some notable differences. But there are far more similarities. All the various sentiment metrics and herding behaviors are present in forms, just as extreme, potentially more so.
The actual peak may be in the future, as SPAC entities are joining with traditional VCs to ride the avalanche of FED funds flooding into the money supply.
As was the case in 1999 there’s a momentum – a reflexivity as George Soros termed it, that begins as a smooth wave and eventually a tsunami of self-perpetuating belief in the absurd.
That moment could already have come and gone, it’s only in retrospect that the over-heated irrational exuberance becomes obvious to all. Perhaps the folly of WeWork will be the pastor child, or perhaps something that is just now happening.
Once the tsunami hits the shore, however, it will make landfall on an already devastated geography. After four years of corruption and devastating lock-downs (underplayed just enough to extend the misery) and so many challenges and messes to clean up, there will be a shock to the financial system that is unlike anything seen in 2000 and 2008.
A trillion plus dollar bail out after several (three?) have already been set in motion for other rescues and attempts to reinvigorate the economy, will be a hard and dangerous method to use, although it “worked” in the first two bubble-crash scenarios.
The big picture may look endless grim but the hope is in the change
Without a doubt the one thing that would like arise from such a nightmare scenario, similarly to the pandemic and the climate crisis, is that deep and irreversible change on a massive scale will be needed to begin a new phase of recovery.
Just as there’s a “bottoming out” that has to happen when a person finally confronts addictions and other self-destructive behaviors, humankind as a whole will be forced to make severe and lasting changes in order to overcome what will seem like an escalation of woe, at precisely the moment that a happy, sunny return to “normal” is anticipated
While all of this sounds dire, there are few today, who are paying attention, who would not say that massive change is needed. In politics, in business, in the economy, in healthcare and, of yes, in our response to existence level threats such as the climate crisis, we need, more than anything else to change.
Perhaps a downturn in a fantasy filled stock market bubble is just the pin prick that we need to wash away the negative trends of the past and begin from a new perspective that recognizes just how different our organizing principals need to be, as a species, in order to not only survive, but to do so in abundance.
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