This is the year of the question: why is this bubble different from any other bubble?
I’ve pondered this. I’ve watched the stock markets in the U.S. follow Trump’s every word like ducklings following a big quacking duck. This, in spite of the fact that Trump’s every other word contradicts what he just said and will say again at the next opportunity. If there was ever an unreliable speaker, Trump is that speaker. Meanwhile, the price system, with its shaky grasp of reality, is showing a lot of spikes for a lot of those goods – petroleum, helium, nitrates – that constitute the global infrastructure.
If the theory that sought to deduce, from the financial markets, the sum total of information as it is quotidianly recognized, the goslings would not be following Trump.
But that theory is only right when it is right, which makes it less a theory than the economist’s dream. A dream at the basis of that vaunted thing, microeconomics.
I could batter on, but I’ll stick to one mania at a time, here.
So I began to think, what does this pattern remind me of?
Looking around, one sees the same odd trust in rhetoric over reality in every company Musk touches. From the point of view of mere profit and loss, Musk’s central company, Tesla, should be in big trouble in the market. Well, suckers, it is flying higher than ever.
Every time Musk issues another insane pronunciemento – for instance, that Tesla is gonna be king of a trillion dollar market in (human) driverless taxis, the goslings line up. The goslings invest. And then, poor forgetful ducklings, they see that Tesla is making a very pisspoor effort to enter a market that already has driverless taxis and there is no reason to think he has a plan for that. And they look to the next golden opportunity Musk announces. For instance, after loosing 18 billion on Space X, he’s set to IPO it, and the company is valued at a cool trillion dollars.
Why is this bubble different from any others?
It has come to me that what connects Trump and Musk is social media. Musk’s purchase of Twitter, from the business point of view, has been a disaster. The exodus of companies and the entrance of Nazi bots is impressive. But what if that purchase was, actually, great for Musk’s other companies? What if the valuation of Tesla, and the valuation of so many other “tech” companies, was a matter of fan fiction?
That, I think, is the key to the financial market in this visibly declining U.S. today.
Fan fiction is a very interesting genre. It takes some fictional celebrity – often a character from a video game or a movie – and it encloses that character in a fan’s fantasy. It quickly, of course, gets sexual, but what is more interesting is that the fiction is built on a sort of claustrophobic mandate: just that mandate that makes a fan actually fantasize about a character. This attraction is, of course, hard to build; and mostly fan fiction, of which there is floods on the internet, dispenses with the difficulties that went into really building the video game or the movie, and takes the props as givens.
What makes this bubble different is that it is a fan fiction bubble. And the “characters” in it have lent themselves largely to fan fiction construction. Trump is his own biggest fan, and his nightly visits to AI are definitely forms of fan fiction. Pomo, if you will, since the fan and the celebrity are one and the same. Similarly, Musk’s cult following is built on Musk’s own fandom for Musk.
What seems to be irrationality outside the sphere of fan fiction – narcissism, obsessiveness, Sadism of the saddest revenge porn kind – is fully justified and celebrated in fan fiction. The eerie parallel with the stock markets in the U.S. makes it impossible to construct a rational path towards investment or even towards gambling. It is all sucked into the fan’s dark hole. Outside the hole, we don’t, well, feel it.
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