“Buy the dip!” v “Beware the dead cat bounce” – the dissonant chorus of newly minted experts are shouting into the market confusion of recent weeks.
While the tariff row is behind the current market chaos, the separation between the financial markets and the real economy goes far deeper. Financial capital has been deceptively stable for years – quietly sucking the life out of all other forms of capital (social capital and natural capital – our people and our home). The cracks appear as crashes and conflicts, but it patched itself up by extracting from somewhere else.
Until now.
Because the cracks now are revealing something bigger than the tariffs and trade “crisis”. The threat to stability isn’t from the “reverse-King Canute” pastiche with a would-be world emperor goading countries into submission with self-defeating trade policies. The real danger is that we’re at the end of financial markets being able to extract forever; they’re hard-wired to cause their support systems to implode, taking economies, society and nature down with it.
Look long enough at what is happening and you’ll see what we are facing is one-way collapse, not a crash episode in a long cycle. You’ll see the programming error in the flawed Ponzi-algorithm of perpetual financial growth. And you’ll recognise that next dip is a cliff. And nobody’s buying the cliff because there’s nothing on the other side to buy into.
Who can we trust at a time like this? Perhaps we should start with ourselves. Rather than blindly trusting those who are generally employed to make money out of selling financial products, let’s start by lifting the lid on everything. Let’s try to draw our own conclusion about how value is being created – and how it’s extracted. The rolling news stock-market plunges obscures the view of most real value on-the-ground, remaining unaffected. The sun is still shining (increasingly converting to energy that people use), people are still providing services (that help others in their community), and food is still growing out of the ground. But often, regulatory barriers prevent investment into community-scale impact ventures, making it more difficult than having money siphoned off into more abstract financial markets. Why? Because it benefits a small minority of people for it to work like that.
Now’s the time to pull the plug on the failed extractive algorithm. To recognise the illusion of ‘market benchmarks’ in a world that disregards most forms of capital. To design investments based on a regenerative basis – in other words the opposite of extractive – like how nature operates. Where human society is not continuously exploited in order to paper over the cracks of financial extraction.
It’s not only a world with actual financial stability, it’s one which makes more sense. To everyone. Not just those screaming to buy the dip *(or the opposite).
‘Buy the dip’ vs ‘beware the dead cat bounce’
