This too shall pass
The stock market in perspective
WE THE People’s fickle attention span was captured the other day by a dramatic fall in stock indices—the Dow Jones Industrial Average, Standard & Poor’s 500 Index, the NASDAQ composite, the Russell 2000 index of smaller companies . . . All went down, down, down as the market had its worst day in years. Then it fell again yesterday. But it was about time.
Because what the economists discreetly call a “correction,” instead of a panic, was overdue after the fat years of Americans’ gorging on growth. Or as J.P. Morgan’s David Kelly commented:
“It’s like a kid at a child’s party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge.”
Philip Blancato, another stock-market analyst, took an assuring view of this short-term clip in a market that remains long-term: “Today was a classic risk-off day when so much of the selling is going to be program trades based on technicals. It cleans up some of the people who are on the fence. You got the irrational exuberance out of the market.” In plainer English, the market’s bad day or two was like somebody just beating a carpet to get all the dust out.
Profits come and go in a dynamic economy, and in this case they went. Stocks hadn’t been struck such a blow since the British voted to leave the European Union. But, lest we forget, those losses were made up within days. So steady as she goes, Gentle Reader and sage investor. This isn’t the end of the world; it may be the beginning of a better one.
What goes around still comes around, sometimes for the better. Henry Kissinger, the now gray eminence of American foreign policy, was heard from the other day unpacking great questions as one would uncover Russian nesting dolls, each of which fits neatly into the one before until only the smallest is left. As he was telling the Wall Street Journal’s Walter Russell Mead, no mean analyst of world affairs himself:
“You must never forget that the unification of Germany is more important than the development of the European Union, that the fall of the Soviet Union is more important than the unification of Germany, and that the rise of India and China is more important than the fall of the Soviet Union.” All those globe-shaking events should be put in context and seen in perspective. Indeed, when asked by Mr. Mead what opinionators should provide readers, Herr Doktor Kissinger replied with a single word: “context.” Whether the subject is a fall in stocks or that of nations great and small.
Dr. Kissinger can be a cool customer—just a disinterested observer, whether the subject is the fall of stock markets or of great nations. But on one subject he can be wholly self-interested: his reputation as a seer and his image as a molder and shaper of this country’s and the West’s geopolitical strategy. For he seems to have pictured himself as the Metternich of his time, remaking the world in his own distinguished image.
But note that Prince Metternich fashioned a concert of Europe that was supposed to follow the Napoleonic age. This new Metternich would reconstruct the whole world. So heaven help any little nation that may get in his overweening way, whether Kurds or Israelis or you name it. There are so many candidates to choose from for Dr. Kissinger’s long list of victims. By now history is littered with them.
So sail on, O ship of state, strong and great, mindful of the wind and tide, but never letting them sink our craft, knowing that all this too shall pass.