The Joyful Suspension of Belief

Charles Payne
Posted: Jul 19, 2012 12:01 AM

"The willing suspension of disbelief"

This term was put forth by Samuel Taylor Coleridge in 1817 with the publication of Biographical Sketches of my Literary Life and Opinions.

"In this idea originated the plan of the 'Lyrical Ballads'; in which it was agreed, that my endeavors should be directed to persons and characters supernatural, or at least romantic, yet so as to transfer from our inward nature a human interest and a semblance of truth sufficient to procure for these shadows of imagination that willing suspension of disbelief for the moment, which constitutes poetic faith."

Of course this term now applies to all arts including poetry, art and theater. Sadly, we have to suspend disbelief and all intelligence, too but it applies to movies as well. But, now the term applies to the stock market and all facets of investing. We have to suspend disbelief that regulators are really looking out for investors. The LIBOR scandal just underscores this notion. If indeed the Fed knew about this then why didn't everyone with a mortgage, stocks, or a 401K. Damn, every citizen understands the idea that if you see something say something. The bellyaching about the need for more funds rings insincere as these government agencies simply keep dropping the ball.

The biggest game of suspension of disbelief, however, is the tango between Wall Street and Ben Bernanke.

The market sank like a rock when Ben Bernanke made the common sense observation yesterday that there wasn't much room to lower rates anymore. Yes, once you get to zero, then there is no rate of return. The market swooned but then Bernanke came to the rescue with talk of other tactics and bragging about his tool box. Bang!!! The market reversed its losses and the higher it moved up the further back into the recesses of our minds went the notion the Fed is out of bullets or that more central bank shenanigans would actually be detrimental longer term.

Pantisocracy & and the Modern Opium Den

At one point in his life Samuel Taylor Coleridge and a friend decided to create a modern utopia called Pantisocracy- meaning equal level of government by and for all. Interestingly, the idea was for the "common good" to dictate society not unlike how Elizabeth Warren and Barack Obama see America. There would be general ownership or everything but unlike the new democrat twist on the idea there were also to be few regulations to make sure no man would gain too much power. For some reason the White House isn't down with that part of this utopia. Of course when it comes to mankind such a society would involve massive suspension of disbelief.

Like so many artistic talents, Coleridge had his own demons and died at an early age from complications more than likely caused from an addiction to opium. Fast forward 178 years after his death and the New York Stock Exchange might be the new opium den. Without a doubt traders are hooked on the drug of cheap money, as they should be, as it's lined their pockets very well. The problem is coming off that high into a harsher reality where suspension of disbelief isn't an option. On that note I must say America isn't done being a pillar of strength and the greatness nation in the world.

Yes, our lyrical ballads are fading and new ones aren't allowed to blossom because of the war on success. I guess the tactic might be to crush assets and hopes, then sprinkle them to all without protest.

Poetic Faith & Justice

For all the yapping about outsourcing and finding a way to shake down large American businesses it is those very businesses that keep the nation powerful.

While there is no doubt interpretation that Ben Bernanke is mounting the troops to save the day, which moved stocks higher, I also think corporate earnings played a part, too. In fact, we are being reminded this earning season that Americas' large multinational companies are best positioned to take advantage of the growth of the rest of the world. Yes, that means they have to hire people in those countries but it also means riches that eventually could find its way home.

I laugh when people point to the stock market as evidence of economic prowess at the White House. It's the exact opposite. It reflects an America standing still, bracing for an onslaught of regulations and higher taxes while the rest of the planet gallops ahead. Sure, all those nations will hit speed bumps and air pockets but make no mistake and don't assume they aren't focused on what we have - they want it, especially if we're willing to give it up.

Check out how great Coca Cola (KO) did around the world. Volumes overall up huge (see table), and you should see volumes for Sprite and Fanta ... yes, Fanta! People around the world look up to America via our products - much better than bowing for respect.