I have been wrestling with an idea over the last week. It is that the best model for the dynamics of epidemics of bearish propaganda about the stock market, that we are periodically visited with, comes from Zombie Movies. In particular, I've found that the Night of the Living Dead, is a great model for the typical sequence of events. The plot here, which most know much better than I, since it's the most released Internet Archive film, is that the dead come to life and eat the living. The humans become helpless; they fight among themselves; they kill each other, and eventually the hero, a Black man, is killed by his own men. The movie is generally seen as in indictment of everything American - the capitalist system itself with the dead eating the living, sexism, racism, and of course , militarism.

I find the uprising of the dead, to feed on the living, perfectly apt for mainstream events that seems to come up when a meme like subprime losses, or declining profit margins, or weakness in the economy. The same applies when Chinese problems are floated as a trial balloon to see if the living can provide food for the dead. Previously dead and buried humans, like the shorts during the past five years, slowly come out of their graves. They enlist ghosts, like our friends, to come out from a cemetery not in rural Penn, but from Trinity Church, to try to get the attention of the living members of the system. They are joined by old zombies exhumed who, if there is a nice decline, can be seen on the television stations with headlines like, Every Bear Has a Day.

The bond maven, who has previously tried to feast on the living, is called out from his yoga sessions to appear again, to predict Dow 5000. The former big speculator who lost 99%, and his ilk, are deputized to fan the flames with talks about biological viruses, natural disasters, or weakness in this or that rural area or sector. There is always a forum for some centenarian in the weekly financial newspaper, and ever more fanciful reasons for being bearish are given. Other examples are the various Presidential hopefuls who are going to do much more legislation than usual, or that there is just not enough bad news to worry about. The sage is always bearish for everyone but him, as is the Palindrome, and they can be called upon for interviews at the height of the carnage, especially if there are some declines to help their positions along.

Those who resist the decline can expect to find themselves suffering the same fate as Ben, and perhaps Abbey from Goldman, who is always bullish after a big decline, and presumably an opportunity for the bear traders who opened the cemetery gates to get out of their positions.

I don't know enough about films or epidemics or the sequence of events in these periodic visitations of horror in markets and film to provide all the technical details. And I would appreciate help from my colleagues and readers to flesh out the gory and destructive sequence.





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