Website review: Minyanville -COMMUNITY-Exchange - D...
laodan discovered this in Economics
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finance
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laodan discovered 4 months ago- The Crisis of the Real in Minyanville.com by Kevin Depew
In 1981 French philosopher Jean Baudrillard wrote a book attempting to theorize the post-modern, titled "Simulacra and Simulation." Successive Phases of the Image: 1) Era of the Original. The image is the reflection of a profound reality (price "means" something profound with respect to the security). 2) Era of the Counterfeit. The image masks and denatures a profound reality (price disguises a profound reality - the value investor's dream) . 3) Era of the Produced, Mechanical Copy. The image masks the absence of a profound reality (2000 Dotcom Bubble. for example) . 4) Era of the Third Order of Simulacra, where the reproduction displaces the original. The image has no relation to any reality whatsoever; it is its own pure simulacrum, a copy without a model (the continuous supply of credit to market participants with no underlying attachment to any "thing" real, pure transaction that supercedes the act of exchange itself). ... "From the standpoint of the final phase of the image (price), we now witness securities markets that have no relation whatsoever to anything - they are solely existent as a pure simulacrum from which higher and lower are relations to something without meaning; in other words a hyperreal market." ... The bottom line is this is all part of a readjustment that has profound consequences for society. What does a revolt against the displacement of the "real" entail? From a consumption standpoint it suggests a shift in focus, a change in patterns of accumulation and the valuation of material objects. The Crisis of the Real The Price Simulacra It seems to me that Baudrillard's cycle of the image works well at describing the evolution of societal perceptions within the boundaries of economic cycles but not the passage from modernity into postmodernity as it was initially meant to do. The cycle starts with something real, original, that is then being spinned out of bound by market speculation that transforms the real into an aberration, a simulacrum. The cycle that Kevin Depew illustrates is the cycle of growth corresponding to the introduction of Information Technology (IT). The reality of IT was valued into investor's dreams and by 2000 investor's dreams of value were masking the absence of reality they had plunged the IT field in. To counteract the observation by the markets of this absence of reality in the IT field the FED came up with the stratagem of free credit that acted as powder thrown into the eyes of investors. The illusion worked for some time but the simulacrum is now being eviscerated. The market king is going to appear absolutely naked. The time has come to run away into real things again. Into material objects instead of paper.
- The Crisis of the Real in Minyanville.com by Kevin Depew
