Cyreenik Says
One hundred years ago the Titanic struck an iceberg and went down in the Atlantic. It became the most memorable disaster of the 20th century. This month the Italian cruise ship Costa Concordia ran aground in the Mediterranean and sank. There are a lot of similarities in these two disasters. The interesting Cyreenik Says question is: How similar will be their memorability? This is a topic that was one of my first essays long, long ago: The Anatomy of a Memorable Disaster.
Let's cover some of the similarities and differences.
Similarities
o both were huge passenger ships for their day
o both took about three hours to sink
o both went down at night
o both had a lot of survivors (700 on the Titanic, 4000 on CC)
o both are disasters that can be recounted in enormous detail after the fact
o both are fingering the captain for an error in judgment
Differences
o One went down in mid-ocean, the other close to an island
o One lost many rich and famous people, the other lost a few
So, how memorable will the Costa Concordia be?
My prediction is quite memorable. It won't be Titanic class because it's a repeat, but its memory will be quite lasting. Why? Because the event happened in a leisurely fashion so lots of human character and emotion could come into play, it has lots of survivors, and many of those are rich and famous. We are already seeing signs of its lasting memorability in the extensive media coverage it's getting and the micro-level interest in what happened during the disaster.
2012 promises to be exciting for many reasons. One of those that has been getting a lot of hype for many years is the end of the world as predicted by the Mayan Long Count calendar. This 2 Jan 12 Huffington Post article, 2012: Here Comes the Apocalypse (Again) by Mathew Gross and Mel Gilles, gives some details on where the 21 Dec 12 date comes from.
The media build-up on this looks a lot like the media build-up on Y2K in the late 90's. This means that there could be economic consequences to this. (Here is my 2003 essay on this "Mania and Markets" topic.)
When an "end of the world" is coming, some people get excited -- they get emotionally involved. One way is what the media portrays: The doomy-gloomy side. But there's another side that also builds up. That second side is people get excited about investing in business enterprises of various sorts. This produces a noticeable up-tick in business activity as the end of the world date approaches. Sadly, this investing is as emotion-driven as the doom and gloom, so the foundations for these investing activities is shaky.
When the big day passes, the community then experiences a hangover -- a let down -- and so does the community business activity. What we then experience is the Post Non-event Bust. After the Y2K mania we experienced the Dotcom Bust.
Repent and Invest! The End of the World... Mania... is coming! (It's here, in fact. What is coming is the bust.)
I'm calling it now. Watch for it.
Update: This 12 Mar 12 WSJ Heard on the Street, Explaining the Bond Yield Conundrum by Richard Barley, describes what may be End of the World mania affecting finance market values. As he describes it,
"Are safe-haven bond markets on another planet? Risk appetite has come roaring back in 2012 as central banks have provided huge amounts of liquidity, economic data have been better than expected and the euro-zone crisis has receded—with Greece avoiding a disorderly default. But there has been no corresponding selloff in German bunds, U.S. Treasurys and U.K. gilts.
That is surprising given the huge rally in risky assets. The MSCI World equity index is up 9.2%. Global investment-grade corporate-bond spreads have tightened 0.6 percentage point, Barclays Capital indexes show. Italian government bonds have returned 12.8%. Yet 10-year German bund yields fell to 1.76% Monday, a fresh low for the year."
This can be end of the world mania quietly stoking an appetite for risky investments.
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