How good are markets in predicting real-world developments? Reading the record, it is striking how many calamities that I anticipated did not in fact materialise.
Financial markets constantly anticipate events, both on the positive and on the negative side, which fail to materialise exactly because they have been anticipated.
It is an old joke that the stock market has predicted seven of the last two recessions. Markets are often wrong.
When I have fears that I may cease to be
Before my pen has glean’d my teeming brain,
Before high piled books, in charact’ry,
Hold like rich garners the full-ripen’d grain;
When I behold, upon the night’s starr’d face,
Huge cloudy symbols of a high romance,
And think that I may never live to trace
Their shadows, with the magic hand of chance;
And when I feel, fair creature of an hour!
That I shall never look upon thee more,
Never have relish in the faery power
Of unreflecting love!—then on the shore
Of the wide world I stand alone, and think
Till Love and Fame to nothingness do sink.
All I insist on, and nothing else, is that you should show the whole world that you are not afraid. Be silent, if you choose; but when it is necessary, speak—and speak in such a way that people will remember it.