RELATED TERMS:
A narrative of the ‘past’ is taking shape in the ‘present’ in contrast to which other narratives of the ‘future’, in the form of ‘bets’, are developing. The historical or hindsight narrative suggests that the 30 years from the 1990s to the early 2020s constituted a ‘golden’ age, a period of steady growth and stable inflation. The futuristic or foresight narrative suggests that what is coming is an era of instability. A simple duality is orders this transition: from stability to instability.
However, instability narratives which can serve as the basis for investing are difficult to sustain, as Martin comments:
“The horror show in stocks is dragging on to its third consecutive quarter, and the stories fund managers tell themselves to try to understand the world (‘narratives’, to use the grander term) are just constantly failing to stick. Rabobank describes it as ‘the maddening market pendulum’.”
(Martin, 2022)
Thus, a ‘bet’ on a coming recession in the United States in 2022, itself a replacement for a failed ‘bet’ on inflation having peaked, has already come ‘unstuck’, to use Martin’s metaphorical vocabulary.
Discourse provocation: Are such ‘narratives’ more properly ‘theories’ since they succeed or fail in relation actual movements in markets, that is, in relation to actual outcomes of ‘bets’ placed? A ‘narrative’, particularly if it is ‘speculative’, may feel no need to prove itself in relation to actual outcomes within a defined place over a defined temporal period (Branston, 2000). Is this simply to say that financial market speculation differs from narrative speculation which, in turn, differs from theoretical speculation? Can they be so easily separated, given that, “a compelling narrative is as important as what technocrats call reality” (Garton Ash, 2022).
[We can only speculate…].
References
Branston, G. (2000) ‘Why theory?’, in Gledhill, C. and Williams, L. (eds) Reinventing Film Studies. London, UK: Arnold, pp. 18–33.
Garton Ash, T. (2022). Britain must reset relations with Europe. Financial Times Weekend, 9/10 July 2022, p.13.
Martin, K. (2022) Era of Great Exasperation has arrived for investors. Financial Times Weekend, 16/17 July 2022, p.20.
Incomplete ... 