Here is the last paragraph from a financial pages essay. I think we should pay attention to it.
I’ve maintained throughout our time together that the mother of all bubbles – debt — would be the final frontier before free market forces shocked asset classes back towards equilibrium. With total debt-to-GDP stretched towards 400%, we reached the zenith of that elasticity in 2008 and the system unwound with great vengeance and furious anger; the gig was up.
It’s hard to say what would have happened if we let the market do what the market was in the process of doing. It could have created a domino effect that toppled corporate America from J.P. Morgan Chase and General Electric to Target Corp. , Goldman Sachs Group and AT&T ; the commercial paper market was frozen, payrolls would have halted and citizens may have taken to the streets to feed their families.
We’re talking potential anarchy here and I’m not prone to hyperbole.
The alternative scenario — the one the created a chasm of discord throughout the land — was the evolution of the last gasp bubble, that of Government.com. We’ve got $800 billion here, $1 trillion there, numbers so enormous they seem silly; the reality is they’re anything but.
While we remain in the eye of the storm — the relative calm between the banking crisis and the cumulative comeuppance — a simple yet scary truth remains. We haven’t cured the disease; we’re simply masking the symptoms.
I will again remind you that the opposite of love isn’t hate, its apathy. We’ve noted the lower volume during rallies and the higher traffic during the declines — a sign of distribution — but a simpler truth may be emerging, that of burnout. After four — or five, or six — bubbles and bursts, folks are both bitten and shy by the gamesmanship in the marketplace.
Perhaps that’s a function of financial fatigue or maybe it’s an intended consequence of the war on capitalism; to be honest, it’s tough to tell. As the machines take over and the secular bear chews through victims, it’s hard to blame the average American for wanting to walk away.
I’ll simply say this; the greatest trick the devil ever pulled was convincing the world he didn’t exist. While financial markets seem docile or worse, backstopped by the powers that be for the foreseeable future, the time to pay attention, remain engaged and prepare for what’s to come has perhaps never been more acute.