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Why We Need a Roaring Bear on Wall Street

Image result for Adam Levitin

There is a kerfuffle underway about a statue called "fearless girl" recently installed in the financial district of Manhattan.

It isn't the biggest of controversies, but it does have some symbolic significance, and there is a pragmatic lesson here about how markets work. 

Since 1989, the financial district has featured the "Charging Bull," a statue by Arturo Di Modica. He originally located it directly in front of the New York Stock Exchange, but it was subsequently moved to a small park in the neighborhood.

In March of this year, a four foot tall bronze statue of a grade school aged girl (pigtails and billowing dress) standing in the path of the bull in the usual stance of defiance (legs spread, hands on hips, face forward toward the danger) made its appearance. Fearless Girl is sufficiently close to Charging Bull that they appear to be a single work, which has Di Modica furious.

The link above will send you to a WaPo story on the controversy, with an apt photograph. Bulls are of course masculine, and the face-off suggests female empowerment.

Personally, I take no position on the legal issues. I do think that if the original statue were going to be complemented, it would have made more sense to complement it with a Roaring Bear. This goes beyond the cliché that bulls and bears are the usual iconography of the financial markets, representing respectively buyers and sellers, longs and shorts, optimists and pessimists, prices rising and prices falling. No, there is a deeper point here. One that involves mass psychology and the way markets work.

American culture loves the bull, we're a culture in love with its own optimism. We tend to think that any price rise (at least an increase in the price of something that we're not dependent on buying) is a good thing. News programs on television regularly include a market segment which usually consists of a talking head reading off numbers of price index changes on a given day, with some interstitial text indicating happiness about an up move, discontent about a down move.

Of course the little girl is fearless in the face of such a bull. She's growing up in Manhattan, ingesting the presumption that bulls are wonderful.

This is all nonsense. As Adam Levitin (a fine representative of the econoblogosphere whose countenance I have put at the top of this blog entry) has put the point, "We should want market prices to be right, which should mean an indifference between short and long positions."

Indeed. Bears play as valuable an ecological role as bulls. When there are too many bulls vis-à-vis the bears, we ought to be fearful.


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