Tweet
The Fed’s 0.75 percentage point cut is a late step towards official recognition of the serious nature of the current situation. US monetary and fiscal authorities are desperately scrambling to save comatose Achilles. If Greek mythology is any guide, die he will in the end.
What else do musty archives teach us about the current economic situation? According to Aristotle, a good tragedy’s plot contains three elements. First peripeteia, i.e. the reversal, or the turning point. The reversal usually occurs contrary to the audience’s expectations, nonetheless being an inevitable outcome of the preceding actions. After the reversal follows anagnorisis, i.e. the recognition by the tragic hero of some truth, or “a change from ignorance to knowledge”, according to Aristotle’s Poetics. After recognition follows pathos, i.e. suffering, pity and fear.
Peripeteia happened last year; it is apparent in the reversal of many important financial time series. As in any good tragedy, the reversal was certainly unexpected at the time, although it is obvious by hindsight that something had to give. We are now in the midst of anagnorisis, with some people (Fed Funds futures traders, for example) being at a further stage of recognition than others (central bankers, especially those from the ECB, for example). It is an open issue whether monetary and fiscal stimuli can postpone pathos, but if life is indeed a stage, pathos will follow in the end.
Source: www.economicreason.com
What else do musty archives teach us about the current economic situation? According to Aristotle, a good tragedy’s plot contains three elements. First peripeteia, i.e. the reversal, or the turning point. The reversal usually occurs contrary to the audience’s expectations, nonetheless being an inevitable outcome of the preceding actions. After the reversal follows anagnorisis, i.e. the recognition by the tragic hero of some truth, or “a change from ignorance to knowledge”, according to Aristotle’s Poetics. After recognition follows pathos, i.e. suffering, pity and fear.
Peripeteia happened last year; it is apparent in the reversal of many important financial time series. As in any good tragedy, the reversal was certainly unexpected at the time, although it is obvious by hindsight that something had to give. We are now in the midst of anagnorisis, with some people (Fed Funds futures traders, for example) being at a further stage of recognition than others (central bankers, especially those from the ECB, for example). It is an open issue whether monetary and fiscal stimuli can postpone pathos, but if life is indeed a stage, pathos will follow in the end.
Source: www.economicreason.com
:mad:
Comment