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Paul B. Farrell
Sept. 21, 2010, 12:01 a.m. EDT · Recommend (6) · Post:
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'Goldman Conspiracy' helps China beat U.S.
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Dow Theorist believes buy signal is imminent
By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) -- "During the past decade America went from being an essentially optimistic nation to being an essentially pessimistic one, and finally one that seems to be just plain angry all the time. We are now defined more by what we don't like rather than what we do like," says Graydon Carter, Vanity Fair editor.
Result: That mind-set is not only killing Main Street's investment returns, it's setting up another catastrophic Wall Street meltdown, dead ahead.
"In some ways Herbert Hoover got a bad rap," says David Stockman in an interview with Alan Murray. The former Reagan Administration budget director lays out a plan for economic recovery by cutting spending, raising taxes, and allowing for years of austerity.
"The list of what we don't like is long and getting longer," says Carter. "Conservatives define themselves more by their hatred of liberals than anything else and, conversely, liberals by their distaste for conservatives.
"What else don't we like? Wall Street, Google, and BP for a start. We don't like pro-abortion nuts or anti-choice nuts. We don't like pro-mosque-at-Ground-Zero people, or the anti-mosque faction. We don't like New York or California, Hummer drivers or Prius drivers. We hate Obama, Bush, and Cheney. (We've all but given up on Congress.) We hate big media, big oil, big China."
Hatred defines us, driving us headlong into a fast-paced decade where hatred is feeding on itself "¦ where democracy is dead, capitalism is deader and the "American Dream" deadest "¦ where Wall Street will lose another 20% of our retirement money in the decade ahead "¦ where the majority already believe their kids will do better than their parents "¦ where we're all trapped in a relentless countdown not just to another catastrophic meltdown coming soon but on to the 2020 decade, a deadly new era predicted by the Pentagon of "desperate, all-out wars over food, water, and energy supplies," where "warfare will define human life" across the planet.
Yes folks, in 10 short years hatred has transformed America, already blowing a new bubble. Can we stop this death-spiral? "Irrational Exuberance" author Robert Shiller warns that "until we understand and address the psychology that fuels these bubbles, they will keep forming. We recently lived through two epidemics of excessive financial optimism, we are close to a third episode "¦ another meltdown ... another depression."
Understanding begins by asking: When did this shift into hatred begin? The timing is painfully obvious. No, not the new Tea Party. America's hatred surfaced a decade ago when we arrogantly labeled an "Axis of Evil," then went to war under false pretenses. Real bad move: With the unfortunate and unintended consequences of strengthening the "evil" Iran, an enemy that Iraq had been keeping in check.
That historic foreign policy blunder was the beginning of America's psychology of hatred. This truth encouraged me to reread Ernest Becker's classic "The Denial of Death," which I first read shortly after joining Morgan Stanley years ago. In Sam Keen's introduction, Becker's message is clear: The fear of dying is so terrifying humans deny their mortality, suppressing it deep in our unconscious.
Then, as part of this mental cover-up we engage in "heroic ventures," illusions that help us believe that "we transcend death by participating in something of lasting value:" raising families, writing books, doing good deeds, becoming celebrities, or building fortunes, expanding global businesses, conquering empires, waging holy wars against evil ideologies.
Our brains trap us in this bizarre paradox, a classic double bind: We can't escape death nor escape our illusions. So we deny both, carrying within us these dark secrets hidden even from ourselves.
And yet, our secret dark side yearns for relief, searching for scapegoats, for someone to blame, to redeem us. So we often project our dark inner world onto others, someone we can label "evil," someone we can bully, fight and conquer, someone to prove we are indeed good souls when we succeed in our heroic ventures.
But here's the rub: All illusions inevitably backfire. Listen to Keen: "Our heroic projects that are aimed at destroying evil have the paradoxical effect of bringing more evil into the world "¦ my gods against your gods "¦ Our desire for the best is the cause of the worst."
As a nation we are trapped in the illusion we're the world's sole military and economic superpower. As a result our "terror of dying" keeps breeding and recruiting more and more real live terrorists, and our "Axis of Evil" grows stronger, gets bigger, feeding on our anger and hatred, whether projected onto China, the Taliban or Goldman Sachs.
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
A Dow Theory buy signal could be triggered as soon as the close of trading today, according to the interpretation of this particular follower of the Dow Theory, perhaps the oldest market timing system still in widespread use today.
1:24 p.m. Sept. 20, 2010 | Comments: 118
- OldYeller | 6:14 a.m. Today6:14 a.m. Sept. 21, 2010
"Hatred is killing your profits, retirement http://on.mktw.net/dkQKi9" 11:27 p.m. EDT, Sept. 20, 2010 from MKTWFarrell
"'Goldman Conspiracy' helps China beat U.S. http://on.mktw.net/dnGQYL" 11:26 p.m. EDT, Sept. 13, 2010 from MKTWFarrell
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