I am worried, but I have just returned from an interesting place, so that worry is tinged with enthusiasm for possibilities. The worry which visited me last night was a comparison between early nineteenth century naval tactics and shortselling.
When you were outgunned in the age of sail, the last desperate measure was to throw everything overboard in hope of achieving an extra knot or two of speed or, as in "Pirates of the Caribbean," a newfound agility--you'll recall that the fleeing ship in that movie attempts to turn around its own anchor and so bring its guns to bear in a surprising manner. (This maneuver, called club hauling, was a last measure for getting off a lee shore. I doubt it was often used in the manner shown in the movie.) It seems to me that currently short sellers are like predatory ships. There's nothing personal in their attacking. They are trying to make money for investors. One way to make money is to spot a company that has a weak share price and to bet that a piece of bad news will cause the price to go down. When the price goes down, you keep the momentum going until they are forced to do something that suggests they will be able to succeed in the future. That something is to throw some people overboard. The problem with this tactic, of course, is that it destabilizes the ship and so the company falters. More short selling, more people over the side. Eventually the share price may be so low that another company moves in to break the company up and strip its assets.
Thus the market adjusts. Sometimes it is the weak that get eaten. But sometimes it is just the unlucky.
(Pause while I help people and cars who are sliding on the hill outside our house. Yesterday was warm and sunny. Today we have snow and ice.)
So what I was trying to say is that once you are past some point in an outgoing tide of belief, economic casualties can be disproportionate to the fundamentals of the situation. Money is about facts but like tides in battle it is also about directional belief. Once people begin to flee, chaos can quickly follow. We currently need a force to appear over the horizon and to give us at least the illusion that the day has changed. Hence all the reaching for microphones. "Don't panic. All will be well."
Enthusiasm for possibilities? I was just in Trinidad. My impression--and after a week in a country one can only guess--is that there is something not right in the sums. I was told that the natural gas field off Trinidad supplies ten percent of U.S. consumption--it comes to us in liquid form in tankers. Trinidad is also still producing some very good quality oil. But where is the government spending from these nationalized income sources? Barely in sight. There are some low income housing projects under construction, but that's about it. The roads are in poor shape. Among the best are ones which were constructed by the U.S. army corps of engineers during the Second World War, when Trinidad was a large military base.
Gangs and shootings are a problem, particularly in Port of Spain.And yet the way people get along with one another, the richness of Trini--a mixed up language that is shared by all ethnic groups, the general politeness and goodwill, the literacy rate, the well-turned out school children, all give cause for hope.
Thank you, BTW, for kind comments about one good line in the last poem I posted. One good line is a start, right?
David Ritchie, Portland, Oregon ------------------------------------------------------------------ To change your Lit-Ideas settings (subscribe/unsub, vacation on/off, digest on/off), visit www.andreas.com/faq-lit-ideas.html
