One Song Glory

Anyone out there ever seen Rent, either the stage musical or the movie adapted from it?
Rent is a modern recasting of La Vie Boheme, concerning a down-and-out group of New Yorkers, living and loving and dying on the dirty streets of Avenue A. It's inspiring and dispiriting in equal measure: an occasionally light and frothy tragedy packed with life lessons.
One of its characters, an AIDS-afflicted former rock star named Roger, is obsessed over the course of the play with writing one final tune encapsulating his short, bittersweet life. He laments, in part

One song (glory)
One song before I go (glory)
One song to leave behind
Find one song, one last refrain (glory)
From the pretty boy front man, who wasted opportunity
One song--he had the world at his feet

The lyrics to that particular tune came to mind today, unbidden, as I considered the state of the world...and shuddered.

There are a lot of people out there in the world pushing doom and gloom of late. Doom and gloom has become a multibillion dollar industry, operating on many fronts. Right now climate change is merely the most visible front for that industry, a warm front, as it were. But there are many other problems facing the human race behind the scenes, both natural and man-made (well, since we're part of Nature, perhaps it's fair to say they're naturally man-made). I've discussed s few of these issues before and don't really want to get into them again here and now.
No, what I find more interesting than constant warnings of imminent collapse is the unrelenting optimism pervading the world lately in the very face of it all.
I've taken to calling the stock market Pamplona. Today notwithstanding, it's deep into the kind of prolonged running of the bulls not seen since, well, 1929. For those of you not up on your history, in October 1929 the stock market came back to earth with a horrific thud that reverberated for decades. Indeed, the market never made it back to pre-Black Thursday levels until 1954!
Now they say hindsight's always 20/20 (depending on whose hind you've sighted)...but in order to reap the benefit of hindsight you have to be willing to look behind you. Our society doesn't often do that. For that matter, it doesn't look ahead much, either. No, most of the time we're too busy looking around at the glorious present. Stuck with our heads up our assets, in other words.
It all brings summer 1929 to mind rather forcibly. Then as now, people were in hoc up to their eyeballs, swimming in a sea of speculation. In 1929, bankers cheerfully lent people up to two thirds the value of the stock they were so eager to acquire. Nowadays, similar tactics are in play when it comes to home mortgages. There are millions of people in the United States holding what are strangely called "sub-prime mortgages" (the rates are well above the prime lending rate), and many of them have faced or are facing foreclosure on their homes as they are unable to meet the terms of their loans--which were freely distributed like so much confetti, often without the most basic due diligence.
Why would a lending institution take such risks? Two reasons I see. One, because if they didn't, somebody else would. There's money galore in this kind of predatory practice, at least in the short term (borrowers often find themselves unable to even touch the principal, forking out payments covering nothing but interest). God forbid some other bank should be reaping all that short-term profit.
And reason two is simple: the housing market's been on a tear for so long that somehow we've convinced ourselves that it'll just keep inflating indefintely. Irving Fisher, arguably the world's first celebrity economist, stated a few days before the crash of '29, "Stock prices have reached what appears to be a permanently high plateau".

An aside: in the wake of that famously disastrous prediction, Fisher suffered from a virulent cancer of the credibility. Ever-observant hindsight suggests his prescription to cure the Great Depression could well have worked--except that it was greeted with howls of derisive laughter. Lesson: one screwup does not a screwup make.

A minority of attentive shareholders saw Black Thursday coming and got the hell out in time. A few fortunes were made in the middle of so many being destroyed. (Believe me, they were careful in subsequent years not to appear too rich.)
It's hard to abandon a bull market, it really is. But history suggests that this one's unsustainable. If you're heavily invested, you might consider how much money is enough.

But a stock market crash is small potatoes to what else might be in store. A thank you to Jim Kunstler for driving a few points home.

I've been paying close attention to the oil industry lately. They're awash in glorious profits, of course--they've got the world at their feet--and it seems like they can pull excuses out of their asses for the ever-increasing price of gasoline. Here's the thing, though: at least a few of their excuses hold, uh, oil.
Refineries have been running at 90 percent capacity or above for months on end, just to meet demand--which is still growing. The huge demand for their product limits the oil companies' ability to slow or shut their plants down for required maintenance...all but ensuring glitches and foulups. The only answer would be to build more refineries--which Big Oil's loath to do, as it costs money better suited to the wallets of stakeholders and oh, yeah, nobody really wants an oil refinery in their backyard anyway.
So demand's going up and price is going up and not to put too fine a point on it, but supply is not going up. Oh, there's lots of oil left, but it's increasingly difficult and expensive to get to--not to mention recovery operations wreak utter hell on the surrounding environment.

Look around you. I defy you to find something, anything, that did not involve oil in its manufacture or subsequent transport to you. Once the supply of oil really begins to get pinched, I suggest most of us lack the imagination to adequately predict the flow of events.

It'll make 1929 look like a minor and temporary correction.