Mr Market would like to consider himself something of an historian. Having never studied history, and barely remembering what happened yesterday – let alone obscure facts about the Ancien Régime – he may not seem the ideal candidate for a detailed history of any event. However, Mr Market has never been one to let minor details like a lack of ability deter him from proselytising outrageously. In this, as in many things, he is no different from any other financial journalist.
When news that equity markets had entered near-correction territory, Mr Market’s mind naturally turned to the Roman Empire. How the mighty are fallen! American, European and Asian markets were all hit; the price of oil decimated; and bond yields collapsed. The bond yields were particularly troublesome, as they triggered hedge funds’ emergency provisions and so forced the selling of billions of dollars of assets, exacerbating an already horrendous week and providing succour to the circling bears. As Edward Gibbon once wrote: “revenge is profitable, gratitude is expensive”. A once great edifice is now made low through mismanagement, excess, and the price of gratitude. Mr Market, enthused and rabid through intense schadenfreude, loves the fall of an empire.