Eeyoreism and brimstone
A WHIFF of brimstone hangs in the air over the world's markets. Their profession- als have to decide whether this is a turning point, when the markets' working assump- tions have to be discarded and replaced. As a paid-up member of the Eeyoreist tendency, I am looking on the glum side. I never expected to get rich quickly on the peace dividend. Others did, but once again that dividend will be passed. The money to be saved on arms within Europe will now be spent further down the road. In our own economy, I think that the outcrop of bad debts and company failures is telling us the truth, and that the banks, who professedly cannot see why these figures should be so bad when we aren't in a recession, need not wait long for the answer to present itself. I hear unpleasant echoes of the first oil shock, back in 1973. It is true that we are not now net importers of oil, but we have made up for that as importers of everything else. We may catch a chill in export markets, healthy until now, where they do have to import their oil. Now, as in 1973, the banks are overlent and the property companies and service businesses overborrowed. What goes for our banks goes double for the big US banks (Morgan always excepted.) Anyone who still thinks that all our troubles can be cured by a quick fix of the European Monetary Sys- tem is living in Cloud Cuckoo Land, which is no place for Eeyore.
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