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Maybe The Business Press Maven was asking for it so the folks at
, those little wisecrackers, gave it to him good. You want historical context, Maven? We'll give you historical context. Take that.
And ouch is all I can say after reading the
on Harvard professor and now apparently part-time financial oracle and -- don't forget,
did -- political operative Niall Ferguson.
has already picked up on the interview this morning, hemming and hawing about what might have been wrong with it (something obviously was) before backing off the criticism by concluding that Ferguson was looking at things from 30,000 feet, meaning he was taking the long view.
But mistakes can be made from up high. Let The Business Press Maven wrestle a couple dozen of them to the ground. Some high-profile articles are important to kill in the crib. It won't be good if some of the notions set down in this one are allowed to grow and fester.
I've enjoyed listening to Ferguson in the past from a purely historical perspective. He is provocative and entertaining which, as far as the stock market goes, tends to translate into thinly reasoned and inaccurate.
Ferguson says that the stock market is going to hell in a handbasket, drawing a parallel between the current era and the period (1880-1914) that preceded World War I. His basic thesis is that the stock market is ignoring global developments in an increasingly dangerous world. But he sees no specific trigger for a world war. Still, Ferguson warns that if we leave Iraq, it'll be "really bad," he said, just like Central Africa in the 1990s.
Where to start? First off, if your hypothesis is that the market is ignoring "something big," you are -- at least outside a classroom of inky-haired 18-year-olds -- obligated to identify what it's ignoring. French aggression, perhaps?
Iraq? Well, we don't seem to be ignoring it. And if we do leave and it does become what Ferguson predicts -- a Central Africa circa 1990s -- then purely from an equity-play standpoint what's the difference? Central Africa, to be sure, was a humanitarian disaster and I pray nothing like it happens again.
But for the purposes of the stock market, we must put it into coldly analytic terms. And in those frigid terms, Central Africa was of no strategic importance, causing no difference in the stock market. Hate to spoil your prediction party, Niall. But for American equities, Central Africa was a nonevent.
There's more to Ferguson's notions about Iraq that bear mentioning.
reports up high in the piece that Ferguson is getting a gig as an adviser to John McCain, but leaves it at that. It doesn't question whether his alarm bells about the effect on the markets of U.S. troops leaving Iraq might be a function of the fact that McCain's signature issue in the swelling presidential campaign has been support for the troop surge.
Is Ferguson doing the bidding of a new boss? The question, considering the space and prominence given to a man with no financial experience to speak of, should have at least been asked. Trust me, there was room.
did, as far as criticism go, mention that the 880-page tome Ferguson wrote could have been better edited.
As Ferguson sees it, the news pages are filled with bad news and the business pages with good. This comes right after news pages spent two weeks filled with false predictions of ultimate doom coming from a correction in the Asian markets and long-anticipated trouble for subprime lenders. For years, I thought a housing crush was coming. But if I had to read one more article about the bubble bursting, I'd scream.
The point, as any Business Press Maven loyalist knows, is that the business media are
too negative or too positive. Their problem is always overreaction and wrong reactions, never
Ferguson also draws a fictional parallel between now and 1880-1914, calling both periods eras of globalization. True, there were more dealings between countries in 1880-1914 than there had been in the past. But, uh, my grandfather came to America during that time riding steerage in a cattle boat. That era of globalization was due to have a few more growing pains and a little less upside than this one.
Now, television has linked cultures, while computers and jet planes have sped interactions to a degree that almost defies definition. To say that the current era of globalization won't have its challenges is inaccurate. But to draw any parallel between this phase of the process and that one is an exercise that can elicit interested nods only in a room full of tenured faculty.
On that note, Ferguson says in the article that he likes talking to sophisticated investors because "it gets me in contact with financial practitioners. "It's a reality check." Financial types, he notes, are much less deferential than university students.
Yes, Niall, those in the financial field tend to be a little less worshipful than someone whose fate you hold in your grade book. That this is expressed as a revelation probably means
could have made a better choice for a cover story. Call me a fusspot, but I say that in order to predict stock market doom in a cover story, you should have a better-supported thesis and more experience with the financial markets. And you probably shouldn't be headed toward a politician's payroll.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.