‘On the cusp of such as shift’

When people act on these emotions and beliefs, and experience confirms them, it often leads to a self-reinforcing cycle. During an upswing, such a process, which George Soros many years ago dubbed “reflexivity,” can boost growth and generate big rises in asset prices. When things turn, the same process can convert downturns into slumps and market corrections into crashes.

At the moment, we seem to be on the cusp of such a shift, although even that is uncertain. It is conceivable that the optimists will be proved right, and that this is just a passing phase. If so, the post-Davos model will survive for another while. It is also conceivable that the pessimists will be proved right, in which case there are rough times ahead for the world economy, and someone will eventually have to construct a post-post-Davos model. The system will demand it: capitalism can’t run on pessimism.

-John Cassidy ‘What Is the Post-Post-Davos Model of the World?‘ The New Yorker


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