Chaos! Capitalism Collapses! Read All About It! Extra! Extra!

On Friday afternoon, May 17, 2002, a butcher named Edwin Lopez was alone in his downtown Los Angeles butchery. He was about to close shop for the weekend when he accidentally locked himself in a walk in freezer. He spent hours yelling and banging on the door, but to no avail. There was no way to open the freezer from the inside, and he quickly realized that he would freeze to death. He had a clipboard, some paper and a pen, and started writing messages to his loved ones as he surrendered to his fate. His letters ended with a final passage: “I can’t write anymore, my fingers are frozen stiff. Tell my darling wife I love her.”
Temperature Guage
Photo:tilaneseven, Creative Commons, Flickr

On Monday morning his workers found him dead. Not only do they find his final letters, but they also found out that the temperature in the freezer never went below 50. The tragic death of Mr. Lopez demonstrates the incredible power of the mind – he literally psyched himself to a freezing death.

Just in case you didn’t know, this story is an urban legend. Did you like the “Tell my darling wife I love her” part? Yes, I agree, it was over the top, but it teaches us a very important lesson about the current chaos unfolding on Wall Street. Before you read on, ask yourself why you decided to click on a blog titled “Chaos! Capitalism Collapses! Read All About It! Extra! Extra!”

Would a sensationalist blog about impending doom and gloom have grabbed your attention? I wanted to write about the dramatic correction the U.S. economy faces while drawing parallels to the Great Depression of 1929. I would have warned you about the upcoming jobs data that will paint a bleak picture of the labor market. I wanted to tell you why bond insurers with top-notch AAA ratings will be downgraded before the end of the year, and how such an event could lead to the end of the credit market as we know it.

Scared yet? I wanted to scare you some more with stories of a U.S. dollar free fall, maybe throw in a paragraph on the inevitable economic war between China and Uncle Sam. Oh yes, before I forget, I would’ve taken a few cheap shots at Fed Chairman Bernanke, tell him what a sissy he is for bailing out greedy fat cats that can’t tell their heads from their arses. But that would be such a cliché, and the sensationalist media have given enough coverage to the four horsemen of the apocalypse by now.

Let’s not forget that the (recent) good economic news is tangible, while the bad news is (merely) an ominous possibility. Goldman Sachs is doing fine, the weak U.S. dollar is boosting exports at a time when it is desperately needed, the jobs market remains solid, and Wal-Mart (a.k.a. America’s economist) has reported upbeat results. But Wall Street is afraid of the unknown – have we only seen the tip of the credit crisis iceberg?

Wall Street is trapped in a walk in freezer. The data shows that the temperature hasn’t dropped below 50. Let’s not psyche ourselves to a freezing death.

Disclaimer: I have no exposure to the current market turmoil.