8/8/11- Fear Trumps Hope?

Tomorrow, 8/8/11, may be the day historians pinpoint as the day that fear trumped hope in America, and the day that America lost its place as the center of the world. But let's hope not.

The symptoms?

Internal politics of fear, trumping hope. Market devaluations. A restless world without a central axis. Domestic troubles shaking world confidence.

Here's the detail:

At dinner, a friend commented, a few times, that his phone was blowing up. Messages to make sure to be at work early, by 6 AM.

"It's going to be crazy. The next couple of weeks look rough," was as analytical as things got, but what other words would one need to hear?

My friend is a banker. Fixed income guy.

Tomorrow, American markets will take a massive hit. Credit de-valuation "adjustments" will rock the entire world.  And as many know, markets are more indicators of basic animal motivations like fear and lust, than rational behaviors oriented toward the common good. (Despite Republican arguments that markets should regulate rather than be regulated.)

To me, it's less an "adjustment" than it is a symptom of  "climate change." And at the root of that climate change, is a domestic shift from hope to fear.

If money is like water, then the big thaw is coming. The elevated vaults of frozen assets will soon evaporate into the ether of the global market.

Just as global warming means more hurricanes, the dramatic alteration of rain fall patterns, record levels of flooding, and refugees searching for safety, a landmark day on Wall Street will mean similar things for emerging and established markets. Changes in long held patterns, washed out markets, record spending on "safe" commodities (gold for instance), and the search for new "securities"- (maybe companies lke Apple and Google.)

The symptoms are clear: a markdown to AA+ due to Tea Party shenanigans around the US debt. A weak President trying to create consensus instead of setting an agenda. World wide markets (Japan, greece, Spain) standing on artificial legs, propped by national banks.

The evaporation of capital will sadly dim the hope that underpins "recovery", leaving the psychological driver of fear to dominate in the days that follow.

Sadly, "Hope" was once Obama's mantra, a slogan and sentiment that drove him into office. A 2000 era vision of prosperity, equity and peace firmly motivated Obama's base.

Our hope doggedly chased  his every negotiation and compromise, until his voter mandate for change had suddenly disappeared.

What are we left with then?

A weak President. A Tea Party intent on making the poorer parts of the world suffer more than they already do for its benefit. A world without a vision of hope that can hold it together.

Perhaps we will look back at 8/8/11 as a day that the markets, and all who look to them as measurements of our world's motivations, were over-run by our basest animal instinct.

Perhaps Obama has some backbone we have not yet seen; certainly he is capable of becoming great. Certainly the man is the most intelligent, articulate, and genuinely good person we have had in office in my lifetime.

But now is the time to deliver.

I'm looking for, yes, a market meltdown, but also a sign of that latent greatness.

Because I'm too fearful to truly let go of hope.

Bring it Obama. Time to kick some ass, and remember what you were elected for.