Old Mother Shipton and the Mystery of the Markets

“The future will be better tomorrow.” – Dan Quayle.

America has its groundhog. France has Nostradamus. Morgan Stanley has Teun Draaisma. Now we can exclusively reveal that Harrogate’s very own prognosticator of prognosticators, wise woman and seer Old Mother Shipton, may have foreseen this year’s credit crisis and much more. A fragment of parchment recently recovered from Knaresborough’s Petrifying Well alludes darkly to some of the arcane secrets of the modern market which may have been written some 500 years ago. Scholarly interpretation and explication is included in the footnotes below.

“..And now a word, in simple rhyme

Of what shall be in future time¹.

A span of green² will lose control³

Time to buy bituminous coal.

Greenbacks then will flood the street

And barbarous metal6 will compete.

In the east the hordes will rise7

Seeking out yet more supplies.

The price of crude oil will rise fast

(That Citigroup’s oil team won’t forecast.8)

The housing market will grow ill

From Pembroke Pines to Primrose Hill9

You know me as Old Mother Shipton;

Word to the wise: avoid the Skipton.10

For lenders big and small shall fail,

And credit analysts end in jail.

A badger11 will take quite a knock

From overseeing Northern Rock.12

Credit traders, take your time

Short ABX and short subprime.

In 2007, as it is writ

Banking shares will be worth nothing.”

So there we have it. The perfect tour d’horizon of the 2007 macroeconomic environment, pausing for consideration of all the major themes: emerging market growth and inflationary pressure, the decline of the dollar and the associated rise of gold and precious metals, the housing market and interbank lending crisis, and the merits of infrastructure investments. Not bad for an old woman who lived in a shoe!13

¹A particularly crass rhyme. You can tell this woman lived in a cave.

²Likely a reference to Alan Greenspan, former chairman of the Federal Reserve and now fulltime annoying blow-hard.

³(of the dollar, presumably)

Intriguingly specific; more likely a blanket recommendation to invest across the commodities and natural resources complex.

Again hints darkly at some form of money and fiat currency crisis, originating in the US.

6Probably a reference to gold, cf. John Maynard Keynes’ “barbarous relic” jibe.

7Likely a reference to the 1.3 billion population of China and the 1.1 billion population of India, the next line anticipating their inflationary impact upon the prices of foodstuffs and raw materials.

8The inability of Wall Street in general, and Citigroup in particular, to make accurate predictions about the price of oil is well documented, notwithstanding the fact that they have been known to maintain multiple price targets from different departments just to hedge themselves and confuse everybody.

9i.e. from the US (Florida) to the UK (London) and elsewhere. One has to admire Old Mother Shipton’s eerie pre-emptive grasp of the international scope of the 2007 real estate bubble.

10Old Mother Shipton anticipated the late summer credit market and interbanking lending crisis but sadly chose the wrong building society.

11Thought to be a reference to UK Chancellor Alistair Darling, who does look a bit like a badger.

12Though she later identifies the right one.

13Cave, actually – Old Mother Shipton.

Comments

[Bill]

It’s good that Citigroup is taking bold action to reorganize itself. The NewsVisual article http://www.newsvisual.com/newsvisual/2007/11/robert-e-rubin.html on Citigroup gives one hope for a turnaround, since it shows that Robert Rubin, the interim leader, has experience in both the private and public sectors. Rather than merging, however, they will probably be shedding some of their assets.