Apocalypse Not Yet

Kurtz: I watched a snail crawl along the edge of a straight razor. That’s my dream; that’s my nightmare. Crawling, slithering, along the edge of a straight razor…and surviving. – From Apocalypse Now

It doesn’t take much to awaken the bears on Wall Street. A couple of weeks of fairly routine stock market activity to the downside and every website and magazine is sporting a bear. That’s right, routine. The stock market – if the S&P 500 is considered “the market” – is down now almost 12% (as of late Friday) from its intra-day high set last May. Predictably, we’ve been treated to a parade of bearish articles telling us how to invest in a bear market, how to avoid a bear market, why the bear market has a long way to go, why the bear market is almost over already, how to skin a bear like David Bowie and most important, how to steal pic-a-nic baskets like Yogi. It’s an ursine takeover.

We’ve also been treated to a litany of reasons for the global stock sell-off. Emerging markets are a favorite bogey man with the Chinese playing a starring role. The narrative goes something like this:

I don’t mean to be flip about the stock market correction – and that’s all it is right now – but some of the explanations offered are, at best, incomplete. In that narrative above, which is remarkably accurate despite having my tongue planted firmly in my cheek when I wrote it, no where do you see mention of where that capital fleeing China and the other emerging markets might be landing. It is as if it just disappears once it crosses the Chinese border, making me wonder if there might be some bank in Hong Kong with a booming safety deposit box business.