MMI: We're All Icebergs Now
Dr. Krugman has inspired me to get back to the Muddled Metaphor Index. Longtime readers will know that the MMI emerged last summer as one of our blog's tools for measuring distress in the credit markets. The MMI is calculated by plotting the disintegration of metaphoricity in reports of credit market events against the general unwillingness to recognize reality until it bites you on the shoulderblade, and then chortling over the results. Some people question the science here, but we tell them to go jump in a desert.
Today's text is the reliable New York Times on Thornburg Mortgage's problems. Personally, the thing I like best about this article is that it makes no sense whatsoever to anyone who doesn't already know what Thornburg's business plan is...
They may be onto something here - socionomics informs us that magical thinking takes over from rational thinking during downswings in social mood. I personally still regard the "magical thinking" period as a transition state that spans the final leg of the social mood upswing (people begin to believe impossible things because conditions have been so good for so long by then) and the early days of the downturn. Rational thinking returns, but only near or at the bottom, which allows a society to clear the debris of the old system and ready itself for the next wave up.