Cool article in yesterday's French newspaper Le Monde by Pierre-Antoine Delhommais. It sort of deals with one of my favorite subjects, contrarian thinking and more generally market psychology.
After noticing that most leaders (Nicolas Sarkozy, Gordon Brown and Barack Obama) have been brutally honest lately about how bad the economy was and wondering if they might be exaggerating just a little bit (each one for different political reasons), he moves on to the fascinating subject of self-fulfilling and self-defeating prophecies. As an aside, I wasn't aware until I read the article that it was sociologist Robert K. Merton (Nobel Prize winner Robert C. Merton's father) who coined the expression "self-fulfilling prophecy".
As an example of self-defeating prophecies, he gives us the positive example of the Y2K bug (remember that?). Everybody was so scared, the media made such a big deal about the potential dangers that, through widespread mobilization of private and public resources, the problem was prevented. The main thing about Y2K is that nothing happened, which made it seem so anticlimactic.
Along those lines, the journalist is wondering if this current wave of official pessimism isn't an attempt at mobilizing all the ideas and all the resources so that 2009 is not a repeat of 1929. He muses: It could be " a self-defeating prophecy to avoid the defeat and the destruction of the global economy".
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