Inside Out | The skies are falling, the skies are falling and George Soros calls it “reflexivity”
Now we have talked ourselves into a black funk over the state of the world economy, over stock markets, over oil, over China, over commodities, over the future of the world as we know it, George Soros appears to have come up with a very dull word for it – reflexivity.
I am sure that was not what Chicken Licken ran around shouting as he felt the sky falling in on him, but the principle is the same. The herd has panicked. All have decided that dreadful things are happening around them. And they have flocked to sell shares.
The collapse in share prices then panics everyone afresh, and more selling cascades. Reflexivity. I wonder how long before it happens in the property market?
This is not what everyone here in Hong Kong had been expecting of the year of the Monkey.
Reflexivity may seem a big deal to George Soros and colleagues on the world’s equity markets, but in the bigger scheme of things, this is barely a bump in the night. Perspective is a wonderful thing
Monkey years are supposed to be good years. Timothy Lau, head of the Heung Yee Kuk, last week picked an auspicious fortune stick for 2016 – the first lucky stick picked out for years. And yet Hong Kong’s market had its worst open of the new year since 1994. And if you take our calendar year, most markets across the world have seen their worst start in decades. Even last Friday’s God of Wealth Day, with lavish distribution of Yuan Bao (golden ingots), could not preempt a further 1 per cent fall.