“Prophecy is a good line of business, but it is full of risks.”
~Mark Twain
These words ring a bell as we approach the end of a decade after Lehman. Predicting almost never brings glory to the person doing it. Even if, by the twist of fate, the prediction is spot on, there will be enough people who will find ways to negate its veracity. Nobody likes accurate predictions as they are glaring reminders of what we failed to do about them.
So, we don’t even hesitate to lie to ourselves. We embark on an elaborate exercise of self-deception, by distorting the sequence of past events, altering narratives, and creating a new spin around inconvenient facts. But history remains objective.
Financial history has an indelible empirical trail. Numbers don’t lie. New narratives surrounding Lehman are mostly excessive personal indulgences. In a nutshell, the world got greedy, American capitalism lost its way, and that led to the meltdown. America can ill afford to simplify macroeconomic risks once again. The pervasive thought process that America needs to save, invest, and borrow sensibly still seems a long way off.
Today, we need to recognise that we can have another meltdown if we refuse to learn from history. Uncontained speculation makes real business look uninteresting. A stock market simply shouldn’t look better than businesses.
Prophesying that good times will last forever is never sensible. With that sombre prophecy, here is a solemn moment to the ghost of Lehman.