Oil? America's addicted to everything!
$this->bbcode_second_pass_quote('', 'O')il? America's addicted to everything!
And our denial is sabotaging the economy and markets
By Paul B. Farrell, MarketWatch
Addicted to oil? Just oil? You're joking? No, we're a "nation of addicts," doing what addicts do best: Denying reality.
In denial the brain can rationalize anything. The more self-destructive an addict's behavior, the stronger their denial, louder their protests, arrogance, bravado, even optimism: "I'm fine, everything's under control!"
...
Flash forward. New addictions: credit cards, obesity, massive deficits, iPods, plasma HDTV's, McMansions, SUVs, outsourcing to India, buying plastic from China. Go deeper: We have a near-religious addiction to rationality, logic, data, numbers, stock quotes, productivity, interest rates, GDP, etc. Our brains gorge on an endless diet of numbers from cable's talking heads, online breaking news, print reports.
...
First: Economic modeling. ...
Second: Market forecasting. ...One commodity trader showed me how his models predicted his day-trading, "but I don't have a clue about next week."
We are a nation of addicts, in denial, and our mastery over the economy and markets is an illusion, crating a false sense of security.
Wall Street, Washington and Corporate America are all addicted to computer models that minimize or eliminate unpredictable threatening variables: Global wars, pandemics, terrorist attacks on American soil, the very things that could do the most damage to the economy and markets are not included. Meanwhile, Main Street is focused narrowly on getting the next "fix." Denial blinds us to many dangers. Like the coming Iranian Petro-Euro Bourse threatening the American dollar's position as the world's reserve currency, a threat potentially more catastrophic than a nuclear arsenal.
We deny it.
And recently, we learned of an even bigger threat: about World War III. ...
Get it! We have ideological fanatics on both sides, like two alcoholics itching for a bar fight. ... Both pray for an irrational first blow triggering the "End of Days," a WW III nuclear conflict between the world's greatest cultures.
We are a nation of addicts, in denial of so many threats external to our bubble world. Mentally we are at greater risk than with the irrational exuberance of 2000. Except this time the threat is global, systemic and potentially catastrophic, far outside the box of our mega-rational economic models and market forecasting systems. Soon your denial system may no longer work, reality will implode.
So please, be prepared for market losses far greater than the $8 trillion we lost between 2000 and 2002. Plan conservatively.
Remember, when any addict "hits bottom," the big thing they lose is their freedom ... the same holds true for an entire nation of addicts.